A slew of buyers are suing two Chicagoland brokers, alleging they were part of an elaborate scheme to defraud people via residential real estate investments, many of them in southern suburbs.
Thirteen lawsuits in Illinois federal court allege schemes resulting in tens of millions of dollars in losses and amounting to violations of the RICO Act, the federal law prohibiting racketeering.
Laurena Mikosz and Marcin Chojnacki, who have been brokers for a business called Chase Real Estate, are accused of promising underperforming single-family and multifamily assets could be turned around financially by their property management company and provide passive income to investors who needed only to put up the money. But the brokers were allegedly jacking up the price of properties they had just purchased through LLCs and lying about the performance and ownership of the assets, some of which were mired in code violations or eviction proceedings.
Chase Real Estate is also named as a defendant in the lawsuits.
Most of the suits’ allegations start off the same way: The alleged victim saw an advertisement on social media promising them a great investment opportunity, either from Citypoint, a multifamily investment brokerage, or Flip Chicago, which allegedly dealt primarily with single-family homes.
And that’s how they met Mikosz and Chojnacki, according to the lawsuits.
Mikosz and Chojnacki allegedly owned or indirectly controlled the properties, which were purchased through various LLCs shortly before they resold them to the plaintiffs for a markedly higher price point than they paid, according to the lawsuits.
The alleged victims accuse property management companies and title companies of being in on the alleged scheme. The lies allegedly used to mislead investors varied from case to case and included the creation of allegedly fake entities or shell companies located at nonexistent addresses to deceive investors, according to court records.
Many of these entities had similar names to reputable financial institutions – such as BMO Property Management Inc., similar to the Bank of Montreal (BMO) – but had no relation to the larger more well-known companies, according to court records.
An attorney representing Chojnacki, Citypoint and one of the property management companies, Mainstreet Property Management, said his clients were “eager” to clear their names once the lawsuit concludes.
“Our clients firmly deny the allegations being made against them; they believe them to be unfounded; and they do not accurately reflect their character, their actions, or their business,” the attorney, Eric Shukis, said in a written statement. “Our clients are confident that through the litigation the truth will come out and they will be vindicated. They look forward to having their day in court and setting the record straight.”
The first of the cases is set for mediation in December.
A California-based investor named Umer Malik was the first to sue, in February of last year. Malik saw a social media ad and ended up buying four apartment buildings in Blue Island, a suburb south of Chicago, according to the lawsuit.
Mikosz and Chojnacki allegedly told Malik the buildings he was buying were “underperforming” because they were owned and self-managed by an “old couple who is retiring.” Mikosz allegedly said the buildings would generate significant revenue once managed professionally by Mainstreet Property Management, a company she was affiliated with, according to the suit.
Malik went under contract on the property in November 2022, according to the suit. Shortly after, he asked Mikosz to see the rent rolls for the buildings to confirm that the units were fully rented and current on rent payments, as she had allegedly informed him.
But the lawsuit alleges that Mikosz lied about that, as did Chojnacki and an attorney for the title company on the deal.
“In fact, the building was partially vacant, multiple tenants were in the process of eviction, and others were severely in arrears,” the complaint reads. The property was not owned by an “old couple,” but rather by an LLC alleged to be “indirectly” controlled by Chojnacki, according to the lawsuit. Mainstreet Property Management had been managing the property for almost a year by then, the suit claims.
The Blue Island buildings were purchased in January of 2022 by Prairie Raynor LLC – the alleged shell company named in Malik’s lawsuit – for less than $1.2 million, according to property records. Eleven months later, it was sold to Malik – marked up to $2.1 million.
The total assessed value of the four buildings is about $1.3 million, per the Cook County Assessor’s Office, but Mikosz allegedly told Malik that he would be getting a good deal — “$1 million less” than the building was worth.
Mikosz and Chojnacki also allegedly lied to Malik about repairs needed on the buildings and “numerous code violations” brought against them by the city of Blue Island.
When Malik became aware of the vacancies and the repairs needed, Mikosz and Chojnacki made up excuses and promised him $50,000 in escrow funds — for repairs and potential eviction costs — in an alleged attempt to get him to go through with the deal, the lawsuit states.
Lisa Gaspero, one of two attorneys representing the alleged victims in all 13 cases, said their claims are all based on public records and other written documents.
Most of the alleged victims didn’t know each other before their lawsuits and came from different backgrounds and locations across the country, Gaspero said. They “have all been devastated by this and are hopeful that the court process will help make them whole,” she said.
In another lawsuit, a California-based buyer named Fathi Said allegedly invested more than $5.7 million into purchasing 27 single-family properties through Flip Chicago, also working with Chojnacki and Mikosz as his presumed brokers with Chase Real Estate.
Mikosz and Chojnacki made more than $500,000 between November 10, 2020 and July 30, 2021 through their alleged fraud scheme on those 27 properties, Said’s suit claims.
Mikosz declined to comment on the lawsuits. Attorneys for others accused in the lawsuits also declined to comment or could not be reached for comment.
The attorney representing Prairie Raynor LLC and a number of others who are accused, said his clients “vehemently deny allegations made against them, never had any involvement with the named plaintiffs, and will zealously litigate these claims in the court of law.”
The lawyer representing Midwest Title Company and its title attorney in the Malik case said they believe they have “meritorious defenses” that “will prevail over the claims filed.”
Chase Real Estate tried to get the Malik case dismissed for “failure to state a claim,” on behalf of everyone accused in the suit, claiming that the lawsuit was “heavy on accusations,” but “light on specifics and riddled with contradictions” and not specific enough to meet the legal requirements of the seven counts filed against them.
They included: violations of the RICO Act, fraud, two counts of breach of contract, a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, violation of the Illinois Real Estate License Act and negligent misrepresentation.
Judge Virginia Kendall of the Illinois District Court denied the motion to dismiss last December.
Kendall called the plaintiff’s claims “viable” and “plausible,” and stated that the other lawsuits against Chojnacki, Mikosz and their co-defendants corroborated Malik’s claims.
Chojnacki is listed as an associate with Citypoint on the company’s website and describes himself as a broker for the company as well as the president of EJ Investment Group, which is also named in a number of the lawsuits filed.
Mikosz is a real estate agent with HomeSmart Connect in the suburb of West Dundee, according to the company’s website.