Massive Homevestors Fraud - 15 Years Prison

A previous "We Buy Ugly Houses" franchisee was just sentenced to 188 months in jail, that's 15 years for orchestrating a 40 million dollar fraud that affected over 100 investors. You've seen the billboards all over your city -"We Buy Ugly Houses" spends about 86 million dollars a year on ads. This is the company you call when you want a cash offer on your house that may not be in the greatest shape and you either don't want to wait, or can't wait to sell traditionally or work things out with the bank. Many people don't know this but "We Buy Ugly Houses" is actually a franchise, it's called "Homevestors" and individual franchisees operate a territory in their city. At about 860 franchises across the country franchisees are paying between $107,500 - $477,250 to buy a franchise. So Charles "Chas" Carrier was the man who was just sentenced. And he wasn't just some little player in the Homevestors ecosystem. He owned four territories — Dallas/Ft. Worth, Johnson County (Texas), Nashville, and Chattanooga. He had won the franchisee of the year award, even apparently led training sessions for Homevestors and the company described his franchise as “the largest and most successful HomeVestors franchise in the United States” These are the accolades I could find about him, there might be more. You need to know that one of the main advantages to buying this type of franchise is access to financing. Many private investors get involved because you can get some pretty decent returns. Investors put in money, the franchisee buys, sells and rents houses, investors get returns and everyone is happy. Usually. Now in most cases like this investors will verify all transactions with a title company, check for liens, make sure the deed was in order. But for many years things had gone smoothly, investors were getting good returns and they trusted him, and stopped checking. Remind you of anyone? As time went by Carrier ended up relying more and more on private investors. Many were retirees with modest nest eggs they couldn't afford to lose, and many had been referred by professional investment advisors claiming their investments were "protected". Hey, this guy is a top franchisee in an iconic franchise system, a prior CEO of a 250 million medical company with a Wharton MBA, people are making money, dozens of testimonials - what can go wrong? Most investors were happy for years which added to the credibility and attracted more investors. But suddenly payments started coming late. Investors started noticing, and then complaining and by fall 2024 payments to investors had stopped completely. Eventually two of the largest investors in Carrier who were in it for over 13 million, met with him, and for some reason Carrier fessed up that he was indeed a fraud. When the news came out things started to unravel. Carrier's franchise license was pulled and the DOJ and FBI became involved. It was determined among other things that Carrier was taking loans for houses he didn't even own and never even bought. He would also take multiple loans for the same house. He was just taking the investment money like a old fashioned Ponzi scheme and using it himself. After a while he was so deep in debt he must have realized there was no way he could ever buy enough houses legitimately to keep the business afloat. The question that is burning in my mind is whether this high profile case will awaken investors in other franchises around the country who now want to look more closely at their own investments. Start asking for deeds and title checks. Is it possible there are more Charles Carriers in the franchise system? It appears the checks and balances were not in place to prevent this from happening. If that is the case we may see a domino effect with multiple franchisees being called out to prove titles and deeds that never existed. Now full disclosure we've had Homevestors here on the channel for an interview before. We've seen people do very well and in an ethical manner, at least we think so, and in Homevestors defense they called the authorities the moment they heard about it. BUt I do expect that there will be a clamping down of systems to ensure this isn't happening and doesn't happen again because even though "We BUy Ugly Houses" wasn't directly involved or charged, this was a golden boy franchisee and that reflects poorly on the company. Free Book Download "The Dark Side of Franchising" Outlines the shady tactics used by unscrupulous franchise sellers and shows why thousands of buyers lose their investment. https://franinspect.com/dark-side-of-...