The perfect gift for Cooch (Lowell - 10/25/2007 9:19:13 PM)
Today, I made public some research I had done that it appears that State Senator Ken Cuccinelli was involved in a land transaction where in 2005...he bought 1/3 interest in a home in Vienna...on December 1, 2005. On December 6, 2005, five days later, he conveyed that interest back into the trust of that family that owned it before they started. And then, he put a lien against that property for $185,000. Now, he paid...it appears he paid, based on the documents and the land records...approximately $160,000 for it, for that 1/3 interest. He turned around and got a lien for $185,000 for the lien that he filed...at 10 1/4% interest. So he did that on December 6. On December 15, he went to the Clerk's office, Mr. Frey's office, and recorded his conveyance and failed to pay grantor's tax, the tax that you and I have to pay when we sell our house. Senator Cuccinelli didn't pay. And he asserted that he didn't have to pay it under an estate planning law that said that if you don't make any money on the transaction or if you are a trustee to the trust, then you're exempt from paying taxes. Well, he didn't meet that criteria.
(There's lots more on the "flip")
Now, that property was later sold in March of 2006, just a few months later, for $600,000. And at that time, it appears that Sen. Cuccinelli was paid off that $185,000... So, from December of 2005 until I believe it was March of 2006, Sen. Cuccinelli had an interest in this property and he was owed this $185,000 which he was deriving income from because he was paid that in March, he was paid off.Now, here's the rub, when this information came forward -- and this is NOT the normal transaction, this is an amazing series of events -- but when we found out about this, I asked some of my campaign aides to do a little bit more research and to find out whether Sen. Cuccinelli ever paid or ever disclosed to the state his interest in this property or that he was getting revenue somewhere from besides just his law practice. And so they pulled his disclosure form that he's required to file in January of every year -- every elected official, every candidate for office has to file this disclosure form -- and on there they asked 'Do you have an interest in real estate other than your primary residence?' He marked yes, then scratched that out and wrote no. And it says 'have you derived any income from anywhere other than your practice of law,' and he said no. Both of these cases are not true, it appears, based on these documents. He did the same thing in 2007 when he still technically had an interest in the property because he didn't file the paperwork showing that the loan of $185,000 had been paid off, until spring of 2007. So, over this period of 13 or 16 months, whatever it is, over that period of time, twice he had a chance to disclose to the state his interest in this property and twice he didn't do it.
Now, that's Sen. Cuccinelli, and he can talk to the voters of his Senate district about that. What I'm focused on here is the fact that the Clerk didn't collect the grantor's tax...$1 per $1,000. I have to pay it, you have to pay it, Sen. Cuccinelli asserted he didn't have to pay it. On the face of these documents, it appears that his assertion is wrong, that he should have paid that money. That's serious...
...One of the things we wanted to know is, you referred to the person who filed for this seat back in the spring of this year to run for Clerk of the Court at the Democratic nominee. He withdrew because of financial improprieties. This is an allegation...certainly questioning the financial [propriety]...
Secondly, the Clerk has strong political ties with Sen. Cuccinelli. We have video of the Clerk endorsing Sen. Cuccinelli for reelection and saying he's a friend.
Thirdly, the fact that it happened while Mr. Frey is Clerk and he's a supporter raises issues...
In sum, what we have here is a highly questionable Ken Cuccinelli real estate deal, avoidance of paying (grantor's) taxes, and possible financial improprieties (including a failure to properly disclose income as required by law). Does this reek to high heaven or what?
But I'm confused about the real estate deal. They bought the "interest" in the property from the trust of the family that owned the house, then "conveyed" it back to them, and then levied a lien against the house?!?? WIERD STUFF.
Sure, he may not have made a profit off of the real estate transaction, but why the complicated scenario? What was the scheming here? Maybe I'm just not a crooked, OOPS, I mean savvy enough investor, but what exactly is the purpose for doing all this tomfoolery?
Is this a normal way to invest in real estate?
Something is very fishy, methinks.
We used to file liens in court against homeowners who refused to pay their quarterly assessments in my homeowners' association because they were legally obliged to pay. They were meant to secure our association monies in any future transaction.
Not anybody can just walk in and file a lien--there has to be a legal merit for doing so. IS THIS WHAT JOHN FREY DID FOR KEN CUCCINELLI!??!?!?!?
More expertise is required.....where is Not Harry F Byrd Jr when you need him!?
Is this even possible? Is it legal?
I think you've hit the nail on the head. The concept here is that there's an agreed sales price, but one which can't be made "now".
So you sell for less, take a mortgage for the difference, and make it up when the property is flipped.
My question is this:
What financing did Cooch's purchaser get? Did it depend on an artificially low sales price?
I'm not sure that anyone cares much about a couple of hundred dollars in taxes, but honestly, it would be a good idea for all the details of this transaction to be laid out.
It would be so much cleaner then, don't you think?
You mean there's a Republican who is not interested in collecting taxes?
How many Grantor's tax cheats has Frey ever outed? I'm willing to be the answer is ZERO.
Didn't Cooch just vote to raise the Grantor's tax (or give the NOVA Trans. authority the authority to raise the Grantor's Tax)???
Is this a normal real estate investment process?
Is it legal?
How could he file a lien--on what legal basis? Wouldn't John Frey's office have to verify that the lien is legitimate? How would that be done?
How does one buy an "interest" in a property without actually buying it? Did Cooch and his partners actually buy it and then convey it back to them in another transaction---shouldn't that have been two instances of grantor's tax paid?
Someone help sort this out.
What, he couldn't have waited another month or two for some real cash?
As I understand the sequence, Ken "bought" a 1/3 interest in the property, so presumably he paid a sales price of $160,000 to the owners of the property... who exactly WERE those owners, who was in that family trust? Perhaps a friend of Ken's, a relative of Ken's, a contributor to Ken's campaign? One wonders, was the money being laundered somehow, because Ken almost immediately re-conveyed the part-interest back to the people who first "sold" it to him, in exchange for which Ken now held a lien against the property for $185,000.
IMPERTINENT PERTINENT QUESTIONS:
When did the parties involved learn that the property was going to sell and settle for $600,000 (1/3 of which would have been $200,000, not $185,000 or, for that matter, $160,000--- why did they choose those amounts? Did Ken's name show up on the HUD-1 settlement statement for that $600,000 sale, and if so, in what capacity--- part-owner, or a line item payoff of lein, which was described--- how? Was this a way of paying Ken back for what amounted to a LOAN on the original, initial conveyance? Why not use a simple second trust if the original family trust wanted some money in the meantime, and were willing to pay Ken a handsome vigorish (Mafia term for usury)?
Why go through the contortions described--- except to give Ken an enormous short-term profit or rate of return on his "investment." Had the owners of the property already given Ken money, and wanted to conceal an additional donation? Or, was Ken merely helping out a friend with a short-term loan? Hmmm I feel I'm missing something crucial here.
Had the owners of the property already given Ken money, and wanted to conceal an additional donation?
I had not even thought of that. Now THAT is some shady stuff if it's true.
Wow. What a mess.