Real Estate

One Response to “Have you bought a home through Regents Realty Group?”

1. Mark Powers Says:
   December 9th, 2009 at 8:02 am

   A Chicago Police Department investigation into a Roscoe Village-based realty firm has already turned up losses in excess of $2 million. The funds were allegedly diverted from the coffers of at least 45 condominium associations managed by Regent Realty, 2130 W. Belmont.

   The losses are affecting everyone from condo owners to former Regent employees to contractors who performed services at buildings once managed by the firm.

   According to Sgt. Phil Cappitelli of CPD’s Financial Crimes Unit, no charges have been filed in the ongoing investigation.

   Regent, according to its now-defunct website, was formed 20 years ago by Jay Strauss and Donald Doering. Services provided by the company included property management, real estate brokerage and apartment leasing.

   In late January, a wave of Regent’s clients began questioning whether their funds were being siphoned by the company.

   Paul Kolenda is the treasurer of one such condominium association, located at 1934 N. Washtenaw in Bucktown. He said he had a six-year relationship with Regent that began at a previous residence in Lake View. Kolenda described Strauss, the company’s head, as “a grandfatherly old man,” and recommended his association hire Regent to manage their building.

   Kolenda began to grow suspicious in December 2007. A vendor complained that a check written by Strauss on behalf of the association had bounced. Estimating the association had saved more than $380,000 for long-term maintenance projects, Kolenda requested his property’s bank records, and was shocked to find their account held a scant $50.

   Kolenda said Strauss assured him that the money was being held in an interest-bearing account and the failure to transfer the funds was an honest mistake, attributable to the stress of his wife’s illness. “He said, ‘it’s just been crazy with my wife,’ trying to tug at our heartstrings,” Kolenda said.

   In early January, Kolenda began contacting the leadership at other Regent-managed properties. “That’s when I realized it wasn’t a little mistake or a one-time thing,” he said.

   He immediately terminated his contract with Regent and filed a police report. Within a week, more than a dozen other associations followed suit.

   It was around the same time that Barbette Loevy, a former Regent employee, received a phone call telling her to come in and clean out her desk.

   “I was out of town and someone called and told me to pick up my things and that they were closing,” she said. “They told me absolutely nothing about why.”

   Loevy says she worked for Regent as a Realtor and was not involved in condominium management.

   Strauss and other Regent employees declined to comment for this article. Their offices remain closed and their phone lines appear to have been disconnected. Mail strewn about in the entranceway and papers overflowing in the fax machine suggest the office has not been in operation for some time.

   As the police investigation continues, the owners of the properties Regent once managed have banded together and formed a listserv to share experiences and exchange information.

   “You can’t imagine what a mess it is,” said Jay Shindler, treasurer of the condo association at 1920 N. Lincoln Ave., another Regent-managed property. “We’re trying to figure out where we are delinquent and how much, and what is paid and unpaid.”

   Kolenda’s building is having a particularly difficult time with that process. “We owe over $100,000 in bills for everything from water to electricity to trash to insurance,” he said.

   “Regent was paid to collect funds from the units, manage the building and pay the bills,” he said. “Now, beyond impacting us, there are all of these vendors out there that are just stuck. You’ve got small business people out there that are struggling because of this, so the ripple effect just goes on and on.”

   Don Wilson, whose law firm is representing the residents at 921 N. La Salle, another formerly Regent-run property, says his clients requested that their handyman be given a Christmas bonus with their savings. “Not only did [Regent] not send the bonus, but they sent an invoice saying they had given him the bonus-when, in reality, they hadn’t even paid him his regular salary for weeks,” Wilson said.

   According to Vincent Lavieri, attorney for 1924 N. Washtenaw, part of the problem is that no one knows what bills have or have not been paid, a problem compounded by the fact that Regent’s management has not given association representatives access to their files.

   Lavieri says all financial records are currently being held by Strauss’ lawyer, Camille B. Conway of Barnes & Thornburg LLP, who has promised to share them with their respective associations, but has stopped short of saying when they can expect to see that happen. Conway declined to comment.

   “It’s causing problems for my client as well as the 45 or so associations that have been managed by Regent,” Lavieri said, adding that they have “no way of knowing what the current state of the association’s affairs are or which vendors are legitimately owed money.”

   The size and scope of this case, Lavieri said, is extraordinary, as is the amount of work it will take the affected parties to get back on their feet. “I’m aware of other cases where property managers have been accused of misappropriating funds, but

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