real estate

Graceland Fraudster Does the Jailhouse Rock

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Riley Keough, inset, with Graceland

Lisa Findley, a woman from the Ozarks with a known history of petty crime, was sentenced to 57 months in federal prison last month after pleading guilty to mail fraud. The charge stemmed from a bizarre scheme in which she attempted to secure a $3 million payoff using a fake loan backed by a fraudulent mortgage on Graceland, the former home of Elvis Presley.

Using at least four different alter egos, Findley attempted to convince lawyers for the estate of the late Lisa Marie Pressley1 and of her daughter, actress Riley Keough2, that a non-existent company called Naussany Investments & Private Lending, LLC, had loaned Lisa Marie $3,800,000 secured by the iconic home.

Findley supported the scheme by forging the signatures of Lisa Marie and a real Florida notary on fake loan documents. She even went so far as to threaten foreclosure. While attorneys for the Presley estate grew suspicious minds, Findley escalated her efforts by filing a creditor’s claim against the estate in California and separately recording a fraudulent Note and Deed of Trust in Tennessee land records. Despite making little progress, she pressed the matter by publishing a Notice of Foreclosure Sale in the Memphis Commercial Appeal.

While the Pressley attorneys rushed to obtain an injunction to keep the Jungle Room in the family’s domain, reporters and law enforcement began to close in on what proved to be an easy web to unweave. Perhaps feeling caught in a trap, Findlay’s alter egos abruptly disclaimed any connection to the loan and directed attention to a third alter ego.  After some token resistance, this alter ego confessed in an email written in Spanish – don’t ask me why – to that he was really a Nigerian scam artist and that the authorities should seek him in that fine African nation. 

This final effort to by Findlay was … not successful. Despite asking the judge to don’t be cruel, she will now spend a blue Christmas in a federal penitentiary for the next several winters.

In all seriousness, this scheme highlights both the growing prevalence of “imposter” frauds and the lengths and doggedness which fraudsters will pursue them. While this imposter chose very poorly in her attempted fraud target, the methods used should be a warning to all real estate professionals of what kind of methods they might run across in a scam. You could see how a less ambitious scheme could have been a little more credible and come closer to success.  

[1] Daughter of the King of Rock and Roll, and wife to the King of Pop, Michael Jackson! Plus, her mom was on Dallas! Pure royalty. 

[2] Keough was great in the Amazon mini-series ‘Daisy Jones and the Six.’  Definitely worth the watch if you have not seen it.

[3] Foreclosures can proceed non-judicially in Tennessee, which means creditors may in many circumstances sell property without court oversight.  

It’s the little things

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Most real estate practitioners can relate to the experience of getting that call or email from a real estate agent, saying that a nice little deal is coming our way. The buyer and seller have already signed a contract and set a closing date. There may be some “little issues” that will need to be worked out before closing, but that should not be a problem. Right?

Often, a lawyer has been involved in preparing the contract or advising the parties before that call comes in. As often as not, those “little issues” turn out to be significant, and some can even derail a closing and pit the seller and purchaser against each other. The South Carolina Court of Appeals recently issued its opinion in the case of Anderson v. Pearson, Appellate Case 2023-001897 (Ct. App., 2025) discussing a case where there were, in fact, some big issues. We are left to wonder how different the outcome might have been if an attorney had been consulted in drafting the contract and advising the parties as to its terms.

The basic facts of the case are that Pearson (together with some family members) owned acreage in Spartanburg County, on Lake Cooley. This consisted of one parcel which Anderson agreed to buy (and which the parties chose to refer to as the “twenty-acre parcel”), as well as another nine-acre parcel next to it. Anderson (who owned property adjacent to Pearson’s) and Pearson, communicating through a broker, negotiated and agreed to some basic contract terms including a purchase price and closing date. Other details, such as whether the property was to be defined in a new survey, and whose responsibility it would be to get a survey, were not included in the contract. The contract was, however, clear on the inclusion of a “time is of the essence”, merger, and non-reliance clauses. The contract included the (not very helpful) comment that “[b]rokers recommend Buyer have Property surveyed . .  .”

After depositing her earnest money, the record indicates that Anderson continued to communicate with Pearson via the broker, and that Pearson indicated multiple times that he was obtaining a survey of the 20 acres in order to address the placement of an access route that would be needed to get to and from the nine-acre parcel which he was not selling. Communications went back and forth for some time, with Pearson never providing a copy of the survey, and Anderson continuing to ask for updates. Pearson applied for mortgage financing through AgSouth, but the record indicates that she had not provided all the items (such as a title commitment or a survey) that AgSouth would require to make the loan.  Eventually, the contract closing date came and went. The broker told Anderson that Pearson was not returning her calls or texts. Eventually, several weeks later, Pearson told the broker “We are building on the property ourself. We no longer want to sell.”  Turns out the Pearsons had actually gotten a survey but chose not to share it with Anderson. And the Pearsons had determined that they could sell the property to a developer for more than twice what Anderson had agreed to pay.

Some months later, Anderson filed suit for specific performance. At summary judgment, the Master in Equity conducted a trial and entered a judgment granting Anderson’s request for specific performance. Anderson offered evidence at trial concerning communications about the survey, which were not reflected in the written contract. A significant ruling by the Master in reaching her decision was that Pearson should be equitably estopped from asserting the Statute of Frauds to exclude Anderson’s evidence of those communications. Pearson appealed, raising several issues on appeal.

The Court of Appeals reversed the Master’s order, focusing on the Master’s application of the Statute of Frauds and equitable estoppel. Ultimately, the Court of Appeals found that Anderson’s reliance on Pearson’s communications was not reasonable. The Court of Appeals believed that Anderson should have realized that Pearson was delaying, and gotten her own survey. Additionally, the Court of Appeals expressed its view that Anderson did not change her position in reliance on Pearson’s communications about the survey, and since detrimental reliance is an element of equitable estoppel, the Court of Appeals held the Master erred in finding that equitable estoppel should apply to Pearson in his assertion of the Statute of Frauds.

As additional grounds, the Court of Appeals opined that since the contract did not require Pearson to provide a survey, the merger and non-reliance clauses weighed in Pearson’s favor on that point. The Court of Appeals proposed that the Master should have applied the parol evidence rule to Anderson’s offer of communications outside the contract itself. Further, the “time of the essence” clause, in the Court of Appeals’ view, meant that since the contract had expired by its own terms, and Anderson had not demonstrated that she had been able to timely perform her obligations under the contract (i.e. she did not show that she had the cash ready to pay the purchase price) specific performance was not available as a remedy. 

This case may be a good example to mention to real estate agents and brokers (as well as clients) to demonstrate the value of a clearly drafted contract and of legal advice from a seasoned real estate attorney as to contract terms.

For your holiday reading pleasure … here’s another drafting nightmare case, dirt lawyers

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South Carolina’s Supreme Court has invalidated an arbitration agreement in a residential home purchase contract because of a sentence found to run afoul of public policy*. The homebuyers are free to pursue their lawsuit against the home builder.

Amanda and Jay Huskins bought a house from Mungo Homes. The arbitration section in the purchase contract included this sentence:

“Each and every demand for arbitration shall be made within ninety (90) days after the claim, dispute or other matter in question has arisen, except that any claim, dispute or matter in question not asserted within said time periods shall be deem waived and forever barred.”

The Court held that it is undisputed that this clause shortened the statute of limitations for any claim to the ninety-day period. Mungo conceded that this provision ran afoul of South Carolina Code §15-3-140 (2005), which forbids and renders void contract clauses attempting to shorten the legal statute of limitations.

The Huskins brought this lawsuit against Mungo, raising various claims related to the sale. Mungo asked the Circuit Court to dismiss the complaint and compel arbitration. The Huskins countered that the arbitration clause was unconscionable and unenforceable and the lower court granted the motion to compel arbitration. The Court of Appeals held the clause was unconscionable and unenforceable but ruled the clause could be severed from the rest of the arbitration agreement and affirmed the order compelling arbitration.

The Supreme Court stated that the better view is that the clause is unenforceable because it is void and illegal as a matter of public policy. The Court further noted that the contract contained no severability provision and that Mungo’s “manipulative skirting of South Carolina public policy goes to the core of the arbitration agreement and weighs heavily against severance.”

The Court mused that it has been steadfast in protecting home buyers from unscrupulous and overreaching terms, and stated that applying severance here would erode laudable public policy. The Court, therefore, declined to sever the unconscionable provision for public policy reasons. The entire arbitration provision was held to be unenforceable. The case was remanded to the Circuit Court for further action.

Drafting contracts for corporate clients can be tricky, dirt lawyers. Read this case and similar cases carefully!

*Huskins v. Mungo Homes, LLC, South Carolina Supreme Court Opinion 28245 (December 11, 2024).

Richland County passes short-term rental regulations

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Richland County passed an ordinance on April 9 to attempt to regulate short-term rentals. The ordinance requires Airbnbs, VRBO and other short-term rentals to obtain business licenses and pay a 3% accommodation tax monthly.

The ordinance applies only to unincorporated areas of Richland County, but the City of Columbia previously passed a similar ordinance.  Other South Carolina jurisdictions have similar regulations.

Short-term rentals are described as being 30 days or less in duration. The properties will be subject to safety inspections, according to the ordinance. The properties will be required to have at least two parking spaces, and the operators will be required to keep records of all guests who have stayed at the properties during the past two years. The records must include the contact information of the guests.

The County has estimated that it will have no more than 100 short-term rentals particularly since they are only allowed in a handful of mixed-use and commercially-zoned areas of the county. They are not allowed in single-family neighborhoods. The cost of the business licenses will be determined by the annual revenue of the property.

Is your insurance company spying on your house?

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This blog has discussed several times the difficulty of getting and maintaining homeowner’s insurance in some locations, especially coastal areas. This appears to be an extremely difficult issue in Florida, and I have heard similar concerns along South Carolina’s coast.

The Wall Street Journal is now reporting that insurance companies are increasingly using aerial images from drones and balloons as a tool to cancel insurance on properties deemed as higher risk. You can read the article here. Googling the topic also reveals several related stories.

Apparently, angry homeowners are reporting losing coverage because of images reflecting damaged roofs, debris in yards, and undeclared hazards such as swimming pools and trampolines.

Consumer advocates object to this tactic on privacy and other grounds. For example, the images could be outdated or otherwise inaccurate. Time frames for correcting the problems may be too short. And the secrecy of the “inspections” may be deemed to be unfair.

State law may require inspection reports to be delivered to the consumer, and some state laws may limit the reasons insurance companies may use to fail to renew coverage.

According to the articles, insurance companies find the use of aerial images is an efficient way to capturing data. The technology is sophisticated and continues to improve. The companies also claim that weeding out risky properties through visual inspections helps everyone by decreasing claims.

Of course, this issue arises as we are seeing increasing premiums in homeowner’s coverage.  Count on homeowner’s coverage continuing to be in the news.

Should “love letters” in the real estate market be banned?

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The Oregon legislature believes they should, but a Federal Court issued an injunction

Late last year, my son and daughter-in-law decided to buy a new house, mainly to move into the school district where their children attend school and to be closer to their children’s friends. My daughter-in-law is an elementary school teacher who had enrolled her children in the school where she teaches. She’s a great teacher, by the way, as evidenced by being named Richland One teacher of the year several years ago. I’m not just bragging about her, although I am very proud of her. Being a great teacher is part of the story.

They immediately sold their house in our very hot seller’s market and were looking at the daunting process of having to move twice. They got lucky when their real estate agent found the perfect house in the perfect neighborhood. The real estate agent advised them to make an offer at full price, which they did, but apparently several other real estate agents gave the same advice to their customers.

My son and daughter-in-law got lucky again when they learned that she had taught the seller’s children. She wrote a letter to the sellers to make that connection and to express how much they loved the house. They are happily living in that house today.

I learned just this week that the real estate industry has dubbed such attempts to influence sellers “love letters”. And an article published in the oregonlive.com on March 6 entitled “Federal judge blocks Oregon’s first-in-nation ban on homebuyer ‘love letters’” tells the tale of the Oregon legislature attempting to ban these letters. The news story points to a preliminary injunction* issued by the U.S. District Court for the District of Oregon.

The opinion defined “love letters” as “notes, letters, and pictures that buyers may submit along with their offer to purchase in order to create an emotional connection between sellers and buyers – especially when significant competition exists on a given property.” A practicing real estate agent who is also an Oregon legislator introduced legislation to ban these letters because they “perpetuate systemic issues of bias in real estate transactions.”

The legislation, which passed in 2021, amended a statute that enumerates the duties and obligations owed by a seller’s agent and reads:

In order to help a seller avoid selecting a buyer based on the buyer’s race, color, religion, sex, sexual orientation, national origin, married status or familial status as prohibited by the Fair Housing Act (42 U.S.C. 3601 et seq.), a seller’s agent shall reject any communication other than customary documents in a real estate transaction, including photographs, provided by a buyer.

The statute does not define “customary documents”, but Oregon’s Real Estate Commissioner offered guidance: “the Agency interprets (customary documents) to mean disclosure forms, sales agreements, counter offer(s), addenda, and reports. Love letters would not be considered customary documents.”

The plaintiff, a real estate agency, sought a preliminary injunction against Oregon’s real estate commissioner and attorney general against enforcing the statute. The Court said the purpose of the legislation is laudable, to stop discrimination in home ownership based on protected class status, but agreed to issue the preliminary injunction because the legislation “unquestionably” interferes with free speech.

The defendants presented evidence of the history and prevalence of housing discrimination in Oregon, and the Court agreed that considerable racial disparities persist in home ownership. The defendant’s expert opined that the vast majority of “love letters” disclosed the buyer’s race, color, religion, sex, sexual orientation, national origin, marital status, familial status, or disability. He said about half the letters used as evidence in the case included photographs that revealed some information about race, color, sex, and other characteristics. He opined that love letters enable intentional and unintentional discrimination in housing.

The evidence indicated love letters are powerful documents! The opinion cites a study conducted by the real estate company Redfin that found 40% of offers include love letters and that love letters increase the likelihood of having an offer accepted by 52%.  A real estate agent testified that love letters allow her clients to compete with higher offers, including those submitted by investors. The evidence also indicates that real estate agents play a significant role in drafting love letters, including providing templates to their clients.

The plaintiff suggested alternatives to the legislation: (1) greater enforcement of existing fair housing laws; (2) requirement that agents redact client love letters, (3) prohibition on the inclusion of photos; (4) fair housing disclosure requirement in real estate transactions; (5) increased fair housing training for real estate agents; (6) increase the stock of affordable housing; or (7) do nothing and allow individual real estate agents to advise their clients to not send love letters.

The Court indicated the last two alternatives do not merit serious consideration. The other alternatives, however, show that the defendants’ objectives could be achieved in a manner that places less of a burden on otherwise lawful speech.

I am confident we will see more “love letter” legislation and litigation in future.

*Total Real Estate Group, LLC v. Strode, 22 WL 633670, 2022 U.S. Dist. LEXIS 38653 (D. Or., March 3, 2022)

Advice for purchaser clients: obtain a survey!

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Advice for lawyers: paper your file when clients refuse!

On this cold, wet Monday morning, I was wondering what I could write to help my real estate lawyer friends through a February week in South Carolina. Then I remembered this news article from the U.S. Sun an excellent dirt lawyer friend from the coast sent to me. His quote was: “I wish I could get all buyers to read it when they turn down a survey.” Perhaps you can use this article to convince a client or two.

Any of us who are old enough to have practiced in the 1990s will remember a time when lenders and title insurance companies required current surveys for every closing. A current survey is a great tool for a real estate lawyer to review along with the title work. Comparing the boundary lines with the title work and checking for easements, encroachments and such horrible mishaps as sewer lines running under improvements gave the lawyer and client a great deal of comfort.

Our backdoor neighbors were once Steve and Wendy Spitz. Many real estate lawyers in South Carolina attribute our knowledge and enthusiasm for the practice to Steve’s property classes in law school. We both built in a new subdivision, and a corner of the Spitz home, as revealed by a survey, sat squarely on a City of Columbia water easement. That builder’s mistake was corrected prior to closing by negotiating with the City to move the easement. Thankfully, the water line itself was not a problem.

To hold down closing costs, at some point in the 1990s lenders began to eliminate the requirement for a survey in most residential closings if the lender could obtain title insurance survey coverage. One of the title insurance companies agreed to provide survey coverage to lenders without a new survey. There were some requirements back then, like having a survey of record showing the improvements or having an affidavit from the owner that nothing had changed since the prior survey.

Then, for competitive reasons, all the title insurance companies caved. Current surveys were no longer required. Over the years, the requirements were even softened.

My thought was that the title companies had unceremoniously hung the lawyers out to dry. Previously, the closing attorney simply told the client that a survey was required to close. With the change, the closing attorney had to convince the client of the need for a survey despite the added cost. I believe one of the biggest traps for the unwary closing attorney is failing to advise purchaser clients to obtain surveys and failing to paper files when surveys are rejected.

And don’t even mention the surveyors! They were collectively and understandably furious that they had lost a large portion of their business. I remember being the sacrificial lamb who was sent to speak to a statewide group of surveyors on behalf of the title insurance industry. It wasn’t pretty.

Here’s another story from my neighborhood. A kindly preacher friend bought a house several doors down from us. The free-standing garage had been added prior to my friend’s purchase and well after the original construction. My friend did not obtain a current survey. When he sold the house, a new survey revealed that the garage violated the side setback line by more than ten feet, and the purchaser refused to close. Keep in mind that contracts typically require sellers to give marketable title. A setback violation of this magnitude may be insured over by a title insurance company, but the title may not be marketable. This purchaser was within his rights to reject this title.

By that time, the developer, a Greenville based insurance company, had sold all the lots, and took the position that it could no longer waive violations of the restrictions even though the restrictions clearly allowed for developer waivers. The solution was that my friend went door to door to obtain the signatures of the required majority of the owners. Thankfully, my friend was a very nice guy, and the neighbors were willing to accommodate his request by signing the waiver.

Today, title insurance policies have evolved to the point that survey coverage is often given to owners without current surveys. But the example above demonstrates that title insurance coverage may not cure the underlying problem. Title insurance can never create marketable title. And title insurance claims may take time and cause aggravation that clients will not appreciate.

So let your clients read the linked article and advise them to obtain surveys. And, if they refuse, obtain  informed consent confirmed in writing for your file!

Does Facebook’s move into real estate signify the end of the Realtor?

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Social media has long been involved in real state. Aren’t all your real estate agent contacts your “friends” on Facebook? Aren’t you connected with them on LinkedIn? Don’t you regularly see their listings on all your social media outlets?  But the plot thickens!

According to a November 13 story in HousingWire, Facebook announced last week that it is significantly expanding the real estate listings section on its Marketplace, which is Facebook’s attempt to take on Zillow, Trulia, Realtor.com, Redfin, Craigslist, eBay and other e-commerce platforms.

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The HousingWire story, which you can read here, reports that Facebook currently allows individual homeowners to list their homes for sale on Marketplace. The new development is that Facebook is significantly expanding the real estate listings section on Marketplace. The new feature is said to be “rolling out gradually” and is currently only available via the mobile app in the United States.

And, according to the same report, Facebook is going full force into rental listings via partnerships with Apartment List and Zumper.

Facebook plans to upgrade its platform to include custom filters for location, price, numbers of bedrooms and bathrooms, rental type, square footage and pet friendly designations. Also included will be the ability to upload 360-degree photos for individual rental listings. When the potential renter selects a property, he or she will complete s contact form on Marketplace, and the property manager or agent will contact him or her directly.

Facebook says it will not participate in any transactions. It will simply connect the parties. Real estate agents are probably safe for now, but it’s a brave new world out there as social media infiltrates all aspects of our professional and personal lives! Dirt lawyers who fail to embrace social media may be left behind sooner rather than later.

History repeats itself

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Fraudulent mortgage satisfaction schemes are back

We have heard recently that a group is engaging in a scheme to fraudulent satisfy mortgages (or deeds of trust) in California and Florida. We all know that trends in California and Florida eventually make it to South Carolina, so I wanted to make sure South Carolina dirt lawyers are aware of this scheme. This is not a new scheme, but we thought it had died down until we got this news last month.

Here are some good rules of thumb to assist you in avoiding losses and protect clients in this area:

  • Have your title examiners provide you with copies of mortgage satisfactions and releases. Two sets of eyes reviewing the documents should help with spotting issues.
  • Pay particular attention to satisfactions and releases within a year of your closings. The normal schemes involve satisfying mortgages in order to collect funds at subsequent closings.
  • Pay particular attention to satisfactions and releases that are not connected with a sale or refinance. Contact the lender for confirmation that the loan has been paid in full.
  • Don’t accept a satisfaction or release directly from a seller, buyer or third party without contacting the lender for confirmation that the loan has been paid in full.
  • Many of the fraudulent documents are being executed by an unauthorized party on behalf of MERS. Compare MERS satisfactions with others you have seen in connection with your closings.
  • Check spellings and compare signatures against those of genuine instruments.
  • Be wary of hand-written documents, unorthodox documents, cross-outs, insertions and multiple fonts.

The perpetrators of this fraud are sophisticated and will change aspects of the scheme as needed, so remain vigilant and discuss any suspected fraudulent documents with your title insurance underwriter.