Tax Lien Investment Company, PIP West, Responds to Criticism

January 30, 2014  //  By:   //  Op-Ed  //  Comments are off

Not much has been written about the secretive world of tax lien investing. Perhaps that’s because the arbitration agreements which are required to be signed in advance of making this type of investment virtually gag any sort of criticism of the process, cost or parties involved once any legal process is started.

SEE MORE: ARBITRATION 101 – HOW IT AFFECTS THE EVERY DAY CONSUMER (VNN – Sam Schoenfeld)

Our source for the complaint against a tax lien investing firm, PIP Group, has documentation, in their possession, which alleges fraud. This is a serious assertion to be sure, by the source is very confident in their position.

One person who gladly says she refers a lot of business to PIP Group goes by the monicker, “The Tax Lien Lady.” Her real name is Joanne Musa and her website asks, smattered with bold type,

“Do you want to make double digit or high single digit returns on your money without the risk of the stock market?

Tax lien investing is commonly portrayed as “can’t miss,” which raises red flags in the eyes of discerning investors. When Musa was asked for comment about our previous piece on this subject, Are Tax Lien Investments the Latest Real Estate Ripoff?she had this to say in an e-mail:

“They (PIP) have many satisfied clients and they always make it clear about the differences in investing in the states they go into. They do different types of investing – redeemable deed investing and lien investing, and they make it clear that you are very unlikely to foreclose on property in Illinois where they invest in liens. I would want to see the proof of what you are saying”

Almost immediately, we received another email, this time from Charles Sells, one of the principles of PIP Group, with an obviously angry tone:

“The claims and clearly one-sided liberal views (of your article) stink of a clear lack of any sort of accuracy related to the industry and certainly that of PIP.  Although I do agree there are scams in ANY industry, we are not one of them.”

Sells also threatened to turn this matter over to their attorney “for review.” Sells and Don Fullman are principles of PIP Group, which sometimes goes by “PIP West” and “Platinum Investment Properties Group.” We reached out to Charles for elaboration on the email sent to this writer and have not seen a response. For Sells first instinct to be that he needs to get an attorney involved and then to not respond to the request for further comment, lends itself to PIP Group having a larger problem at hand and some dirty laundry they do not want to see the light of day.

As Sells mentioned in his email, there certainly are scams in any industry and his is no different. In fact, stories about scams in tax lien investing are becoming more and more common as some of them have had time to run their course and be reported. One such scam just netted a Federal Indictment for 6 investors in New Jersey. From a November 2013 News Release by the US Department of Justice [link]

According to the indictment, from at least as early as 1998 and continuing until as late as February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on.  The indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

With unclear laws from state to state, a somewhat secretive profit strategy that some claim is immune to the risks of investing that, say, the stock market is subject to, the buyer should definitely beware of this type of investment. If one could make a comparison, it’s somewhat similar to options trading, which is a very advanced form of investing in contracts that bet on the price of a common stock. If the contracts turn out to be unprofitable, they are then rendered valueless and the investor is out all of the money they put in, with nothing in return but worthless paper.

Buyer beware indeed. (Gord Brody – VNN) (Image: actioncoach.com)

 

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