April 14, 2024

The Pa. Attorney General is probing ABC Capital, a former Philly real estate firm accused of scams

The Pa. Attorney General is probing ABC Capital, a former Philly real estate firm accused of scams

A real estate firm accused of bilking investors in numerous home renovation projects in Philadelphia has been the subject of a yearlong, noncriminal investigation by the Pennsylvania Attorney General’s Office, recently released records show.

ABC Capital, formerly based in Northern Liberties, solicited foreign investors for cash to fuel well more than 1,000 house-flipping projects in Philadelphia, Baltimore and elsewhere over the last decade. However, in recent lawsuits, a string of former investors allege that ABC took their money but in some instances never delivered on promised work, effectively operating as a Ponzi scheme.

The company was the focus of a December 2022 Inquirer article that documented numerous tenants living in shoddily renovated homes that were linked to ABC. At that time, a lawyer representing one former investor said he had been contacted by an investigator with the state Attorney General’s Office regarding ABC. The agency, however, refused to comment then.

But affidavits filed this month in response to a right-to-know request from the Baltimore Banner, a nonprofit news site that profiled ABC in November 2022, confirmed that the Pennsylvania Attorney General’s Bureau of Consumer Protection had launched an investigation in response to complaints about the company last January.

The affidavits show that the office has issued subpoenas to substantiate claims of possible “unfair or deceptive conduct” by ABC, and interviewed “witnesses and victims” about the company.

» READ MORE: ABC Capital was one of Philly’s biggest real-estate companies. Critics call it a “big fat nasty scam.”

It also states the investigation was focusing on “alleged unlawful and deceptive business practices” related to families who had leased rentals either owned or managed by ABC. Several former tenants had filed personal injury claims accusing ABC of allowing dangerous conditions to persist in rental units it managed.

The state Attorney General’s response indicated that the office was exploring potential actions to “prevent further harm” to consumers or to “obtain restitution.”

The affidavits indicate the investigation is ongoing. An office spokesperson declined to comment.

ABC declared bankruptcy in November 2022 and, according to ex-CEO Jason “Jay” Walsh, is now effectively defunct.

Walsh, who later spun off another company called IPP USA, has rejected these allegations, saying he has been the target of bad faith lawsuits. Bankruptcy proceedings indicate the company is subject to more than $4 million in judgments as of last month.

Walsh did not respond to a request for comment on Wednesday.