Skip to main content
Menu Icon Menu Icon

InfoBytes Blog

Financial Services Law Insights and Observations

Missouri AG alleges housing nonprofit trust deceived members

State Issues State Attorney General Courts Deceptive Consumer Finance

State Issues

On January 2, the Missouri attorney general filed a petition for preliminary and permanent injunction in Missouri Circuit Court against a nonprofit trust and its registered agent (the defendants) alleging the defendants deceived thousands of state residents by marketing memberships in the trust with the promise that the pooled resources would fund “to-be-completed homes.” The AG alleges that the defendants solicited consumers to attend meetings, purchase memberships, and pay monthly dues, and also asked members to provide additional funds to go towards appliances and other fixtures for the homes. However, the agent defendant allegedly admitted that none of the promised homes were constructed or otherwise provided to the members.

The AG further contends that “none of the solicited funds were ever used or invested towards providing a home to any of the members,” and were instead used to cover the trust’s operating expenses. According to the AG, the defendants’ actions violate state law and constitute false promises, omissions of material fact, and deception. The AG seeks injunctive relief “up to and including prohibiting and enjoining [d]efendants . . . from owning or operating organizations that sell or manage real estate that solicit upfront payments for goods or services, or that solicit charitable contributions.” The AG also seeks restitution for member losses, a fine equal to 10 percent of the restitution amount, a $1,000 fine per violation, and compensation for the state’s costs in pursuing the case.

Share page with AddThis