The Herald Bulletin

June 21, 2013

Real estate broker filed for bankruptcy protection three times in 10 years

Criminal investigation ongoing, APD spokesman says

By Stuart Hirsch The Herald Bulletin
The Herald Bulletin

---- — ANDERSON — Roger Shoot demanded financial accountability from people who bought houses from him on contract.

But the local real estate broker apparently didn’t meet his financial obligations as he sought to build his real estate business, U.S. Bankruptcy Court records show.

In April, the Indiana attorney general’s office filed a civil lawsuit against Shoot in Madison Circuit Court 6, alleging that he ran a “rent-to-own scheme.” According to court filings, Shoot failed to pay insurance premiums and property taxes as outlined in contracts, and pocketed the cash instead.

The attorney general also filed a separate complaint with the Indiana Real Estate Commission to revoke or suspend Shoot’s real estate principal broker’s license, and Madison County Prosecutor Rodney Cummings directed the Anderson Police Department to open a criminal investigation into Shoot’s business practices.

Shoot and his wife, Pamela, have filed for bankruptcy at least three times — in October 2003, November 2004 and September 2006.

The initial filing in 2003 was for a Chapter 11 bankruptcy reorganization, that was converted to a Chapter 13 filing. The subsequent filings were for Chapter 13, as well.

A Chapter 13 bankruptcy involves repaying some debts to have other debts forgiven, according to a U.S. Courts website. Under Chapter 13, a 3- to 5-year repayment plan is worked out with creditors. When that repayment plan is successfully completed, the remaining debts are erased.

Repayment plans were never successfully completed in the Shoot filings, bankruptcy court records show.

Each of the three cases eventually were dismissed when the couple did not make payments required under a repayment schedule worked out with the court. Those payments were supposed to be made to a court-appointed trustee, who requested dismissal on grounds of nonpayment.

The Herald Bulletin reviewed the 2004 and 2006 filings. Records from those two cases allege that:

◆ Shoot wasn’t only selling houses on contract, but buying them that way, as well. He frequently failed to keep up with his own payments, while imposing late fee on his buyers when they fell behind on their payments.

◆ He did not pay federal income taxes for eight years, from 1996 to 2003. At one point he owed the government more than $310,000, according to a claim filed by the Internal Revenue Service. He also owed more than $26,000 in Indiana income taxes, according to the Indiana Department of Revenue.

◆ By 2007, Shoot owed Madison County more than $88,000 in unpaid property taxes; that amount was later reduced to $61,600 in an agreement worked out with Shoot’s lawyers.

◆ In the most recent bankruptcy, filed in September 2006, Shoot reported property and personal assets valued at $704,200, against claims of more than $660,000. Shoot and his wife reported monthly income of $6,913, and $4,381 in expenditures.

The Herald Bulletin spoke with two local attorneys who represented parties in some of Shoot’s bankruptcy filings. They asked not to be quoted by name, but said the effect of these separate, but consecutive bankruptcies was to tie up legal claims for years and create confusion about how the financial tangles were being resolved.

“Everybody was trying to take care of their own client needs and nobody was trying to stop this guy,” one lawyer said of how events transpired in bankruptcy court. “The guy was pretty skilled at gaming the system.”

David McNamar, Shoot’s lawyer, said he was unable to comment on such speculation.

“As to other attorneys’ opinions, I hope that they have facts to support those allegations,” McNamar said.

One creditor, Ray Bush Sr. (now deceased), in a 2005 filing objecting to the bankruptcy plan, complained that he sold Shoot 10 residential properties on land contract, but Shoot became delinquent in making payments. Bush claimed Shoot wanted to pay only about $3,600 on his past-due balance, when the actual past-due balance totaled nearly $60,000.

“All of the contracts contained ‘balloon provisions’ calling for the debtors (Shoot and his wife) to pay in full the contract within three or four years of their inception. All of the contracts are years past due,” the filing states.

Later in 2005, Shoot and Bush reached a settlement agreement for several of the properties. However, because the bankruptcy settlement was later dismissed, it’s not clear whether any conditions of the agreement were met.

The attorney general’s office began investigating Shoot more than a year ago, after receiving a complaint from one of his rent-to-own buyers, Stacey Carnahan.

That complaint led investigators to focus on four properties Shoot managed or owned, and five consumers who entered into contracts with Shoot’s firm, P.R. Properties.

According to the filings, Shoot allegedly collected and then pocketed more than $9,200 from those buyers. The money was supposed to be earmarked to pay insurance premiums and property tax payments.

He allegedly used the money — which should have been held in special trust accounts — for personal expenses at pharmacies, restaurants, grocery stores and gas stations, according to the attorney general’s complaint.

In four real estate transactions specifically detailed in the lawsuit, Shoot was the deeded owner of the properties but failed to record his ownership interest to “conceal and misrepresent the true deeded owner of record” for the properties, according to the filings.

State authorities are seeking an injunction and restitution, court costs and civil penalties. McNamar said he has filed a motion to dismiss the case.

A hearing on the status of Shoot’s real estate broker license is set for July 24, according to Jeanette Langford, director of the Indiana Professional Licensing Agency.

An Anderson police spokesman declined to specifically comment on the case, saying only that the criminal investigation is ongoing.

Find Stu Hirsch on Facebook and @stuhirsch on Twitter, or call 640-4861.

What's Next The Indiana Real Estate Commission is scheduled to conduct a hearing on the status of Roger Shoot's real estate broker license on July 24, at 1 p.m. in Indianapolis. Source: Indiana Professional Licensing Agency