Over a period of approximately 20 years, Kenneth Joseph and Mary Kathryn
Plein, dba Tri-Star Realty, solicited investments from at least 98, mostly
elderly, investors purportedly for the purposes of purchasing, renovating,
leasing, and reselling real estate in the Sun City area. When the real
estate market crashed, however, the Pleins ran out of money and had to
file for bankruptcy.
Now, nearly 100 investors are out nearly $20 million in what the Arizona
Corporation Commission has deemed a fraudulent real estate investment scheme.
According to the Commission, Plein (a licensed real estate agent) and his
wife – neither of whom was licensed to sell securities in Arizona
– fraudulently sold unregistered investment contracts and deed of
trust investments to investors. Allegedly, neither Plein nor his wife
disclosed to investors that they "frequently filed multiple deeds
of trust on a single piece of real estate, which had the effect of either
making the investments under-secured or effectively unsecured."
Many of the investors say they lost everything with the Pleins.
Last March, the Commission ordered the Pleins to pay a $250,000 administrative
penalty and $19,851,868 in restitution. The couple admitted to the Commission’s
findings for the purposes of the administrative proceeding only.