This post was written more than four years ago. The world changes fast, and the information, conclusions, or attributions may or may not still be accurate. Check the sources and links, and email me if you have any questions.

If you do a Google Images search for “North Minneapolis”, you’ll find images of men bloodied by gang violence, slumlord-owned houses in incredible disrepair, police tape next to expended rounds, and a mother hysterically crying over the loss of her child. These images aren’t a fair representation of the strong families, rich history, and beautiful tree-lined streets on the Northside, but they represent issues impossible to ignore; impossible to overcome, for some.

The reasons are many: institutional racism, multi-generational poverty, job opportunities, poor familial support systems, a criminal justice system that looks more like a school-to-prison pipeline, and gaps in educational opportunity and achievement. But the pillar in every single family is a stable housing situation. To that end, I firmly believe that housing issues are foundational to most others.

In recent years, the real estate market surged and then immediately thereafter, the foreclosure crisis hit. It hit North Minneapolis hard. As homes were foreclosed on and families were kicked to the streets, rental property investors swooped in and acquired both beautifully maintained and vacant, boarded homes for pennies on the dollar.

At best, these investors would neglect the properties and give little care to ensuring tenants have safe homes or that tenants met any sort of rental qualifications or standards, plaguing neighborhoods with blight and crime. But at worst, investors would actively participate in mortgage fraud, Ponzi schemes, incredible violations of Tenant-Landlord law, Section 8 fraud, quit claim deed swapping, predatory contract for deed schemes, and aggressive and baseless eviction tactics to retain security deposits.

How housing fraud works

My first job back in college was at a local bank. Every couple weeks, a man would come in and withdraw cash in the afternoon, and then bring it the next morning and re-deposit it. His amounts were always just slightly under $10,000 — any cash transaction over that amount, and federal law requires banks to report the transaction to the Financial Crimes Enforcement Network as a “Currency Transaction Report.” Little did he know that every time he did it, we also filed a “Suspicious Activity Report”, for which there was no requirement other than suspicion.

That man was later indicted and sent to prison on mortgage fraud and money laundering charges. In a large network of fraudsters, his role was to help qualify straw buyer mortgagors for loans by depositing a large sum of cash in their account for account verification purposes at closing, and then he would take the money back as soon as the deal was closed. The big picture of that scheme was that a fake contractor would falsely find significant problems with the house at inspection, demanding more money from the bank. They’d rent, contract for deed, or flip the homes.

These fraudsters operate a racket; it’s organized crime. Every person has a role, and many have otherwise legitimate full-time jobs at highly reputable real estate and closing companies. There’s always a real estate broker, a mortgage lender, a closer, a notary, a property manager — anyone needed to ensure the success of what I’ll summarize as “housing fraud” — they had them at the ready.

A company named TJ Waconia perpetuated incredible economic damage in North Minneapolis between 2004 and 2008: they bought up over 150 Northside properties, fraudulently induced lenders, left homes boarded up and vacant, failed to obtain rental licenses, and more. The principals involved in the scheme went to prison for 7-8 years.

Prior to TJ Waconia, a man set off to build 350 pre-fabricated, crude “dream homes,” an action that led the City Council to put a moratorium on building in all of North Minneapolis. In TJ Waconia’s wake, the same man created a new company that acquired over 50 homes. With delinquent property taxes, nuisance tenants, and terribly blighted homes, a local newspaper called him a “one-man housing crisis.” He declared bankruptcy and lost the homes to foreclosure.

The stories always have the same endings: tax forfeiture, boarded-up homes, foreclosure, demolition, bankruptcy. Every cycle deteriorates neighborhoods, property values, tax base, and sense of community. But when large property owner on the Northside collapses, a Hydra of investors are drooling at the opportunity to jump in.

Today we have dozens of LLCs owning hundreds and hundreds of “problem properties” on the Northside. At best, companies and investors will acquire properties at foreclosure and tax forfeiture auctions, put in a minimum amount of effort to bring the property up to code, and they’ll rent it out to nuisance tenants with multiple violent felony convictions.

At worst — well, there is no ‘worst.’ Every day I see something that shocks me…

There’s the story of an LLC that does contract for deed lending, selling properties to families unable to qualify for a traditional mortgage. They put a big down payment down on the house, and the moment they default — and the transaction is structured to ensure they do — the LLC can snag the house back and keep all the cash. They’re still running.

There’s the story of another LLC that induced a vulnerable adult to forge her grandmother’s signature to steal their home away, and they had a notary go along with it. She got her home back, nobody went to jail, and the notary hasn’t been disciplined.

There’s a few companies — all owned or managed by the same group of people — that will sell a property from one LLC to another on quit claim deeds to avoid adverse rental license action. They’re still at it.

Others will rent properties out with no rental license at all, many of the people behind the scenes have convictions for fraud and theft by swindle, and every single action these companies take hurts low-income, vulnerable, immigrant, and minority families, as well as the community as a whole.

The only reason I know this, and that other neighborhood leaders know this, is because of government records. Northside neighborhood leaders try to keep up; they’re some of the most hawk-eyed citizens in the city. But often times local government can be the worst enemy in untangling the messes left by these companies.

Neighborhood leaders and housing researchers are force multipliers to counties losing out on property taxes and cities failing to enforce rental license laws and ensure livability.

Government should be doing everything they can to ensure that housing researchers have the convenient access they need to help fight fraud and abuse.

Hennepin County has imaged and digitized every deed and filed mortgage — public records — and they’re accessible in a web browser on the internet. But for some reason, you have to be physically present to access the records: go downtown, pay for parking, go through metal detectors, and sit in an uncomfortable chair for hours on end using an old computer terminal running Internet Explorer. Well, you can access them online, but only with a contract executed between your company (has to be a company) and the County Attorney, which involves significant monthly, per-search, and per-viewing fees.

So, I go downtown. Even though the public records are stored electronically, you can’t save them and e-mail them to yourself, nor can you save them on a USB drive — the systems are locked down. If you want to take records with you, you have to print them out. To say that again, it’s 2014, and the only way to get electronic records is to print them out on paper. Naturally, there’s a fee of $1 per page.

Above the computer terminal I was sitting at in the Hennepin County building, a sticker read “Prints to Printer 3.” I found a publicly-filed mortgage document showing a forged signature, and I wanted to take just that page with me. File » Print » select page 20 only, and then the computer sharply alerts “You don’t have permission to print.”

I go up to the front desk, politely asking for help.

Me: “Is there any way to email myself a document or save it to my computer to avoid paying the $1 per page printing fee?”
Employee: “No.”
Me: “Oh okay, I was trying to print a page but the computer said I didn’t have permission. I would very much appreciate your help!”
Employee: “Document.”
Me: “I’m sorry, what was that?”
Employee: “How do you expect me to print it for you if you don’t have the document number?”
Me: “Oh, I’m sorry — here it is… could I only get the last page, page 20?”
Employee: “We don’t do that. You can only get whole documents.”
Me: “Okay, thanks — let’s go with it.”
Employee: “You’re gonna want this certified.”
Me: “Oh, no thank you! I don’t need it certified.”
Employee: “No no, it’s $1 per page for uncertified documents, but certified is $10 per document. You’ll go from $20 to $10 just by me putting this stamp on the first page.”

That is without a doubt the most asinine thing I’ve ever heard. Not only did I, a volunteer housing researcher in this situation, have to drive downtown in the middle of a snowstorm, pay $12 for parking, walk through the skyways, wait in line for a metal detector, and come to this office for something that’s already on the internet but just not accessible… I walked out with some woman’s certified mortgage document. Which I scanned and shredded when I got home.

Now, I don’t have unlimited time to volunteer to this effort. In fact, I don’t have much time at all. But I am lucky enough to be self-employed, so I can be downtown at some point between 8am and 4:30pm. But I’m much more able to invest time into this research while sitting on my couch on a Saturday than I am when all of my clients are working. For those who have a full-time in-person job, it would be impossible to overcome the physical presence requirement.

Now, those county documents are incredibly useful for figuring out who sells properties to whom, but it’s only part of the story. Seven floors down is the court vault, which is actually operated by the Minnesota Judicial Branch. The vast majority of recent cases are also digitized, imaged, or electronically filed, and accessible via the internet.

From home, you can lookup cases and see summary information on pleadings on a system called MNCIS. But when you’re on a public terminal in the court vault — which has signs barking “30 minute limit” and “no photos of computer screens” — all of the pleadings turn into links, and you can view the filings.

If you attempt to save a file on the terminal, you’ll get a permission error. You can’t e-mail yourself the PDF file, nor can you save it to a USB stick. Again, you have to print it. On paper. From trees. In 2014.

The printing cost is $10 per pleading, regardless of page count. I tend to want troves of single-page conciliation court filings, filled with useful information on tenant allegations of landlord lack of maintenance, housing violations, and fraud. I’ve spent a ridiculous amount of money right here. 

Ironically and amusingly, the courts have mandated that attorneys electronically file and serve pleadings, and they have free access to the information from their homes. But the public? No way, pay up.

Next, we move over a few buildings downtown to look at City of Minneapolis rental licenses, rental license violations, and housing violation orders. Until 2013, the City had a public terminal running an application called Kiva, where you could access housing violation orders. Then, the City determined that some of the information shouldn’t have been so publicly-accessible, so they moved the terminal to be physically closer to staff. Then they discontinued that all together.

Now if you want to see rental license or housing violation orders on a City of Minneapolis property, you have to pay a $1 per page fee. This is electronic data, electronically maintained, and we’re once again measuring it as pages, and printing it.

The City has other data that’s useful too: a lot of these properties are magnets for crime, which can be measured in calls for service — 911 and 311 calls. The City has no public interface to perform any type of search, even though it’s legally public data.

There’s a public terminal to access some data, but there’s no search by address feature, so you need to know the case number. However, sitting next to the terminal is a three-ring binder that contains a list of past couple weeks of police reports, for your, uh, searching convenience.

Hennepin County and the City of Minneapolis both have websites with property owner information, but neither have reverse searches that allow housing researchers to lookup properties by property owner name or taxpayer address — incredibly essential tools to track down the footprint of these slumlords and their shell companies. Neighborhood leaders have been asking, begging for these tools for years.

But there’s one last organization that can help figure out the names behind these companies, and that’s the Office of the Minnesota Secretary of State, where LLC organizing documents are filed. They have a web interface that’s actually pretty nice, but it doesn’t contain all the information in filings and there’s no interface to be able to view original paper filings that have since been digitized and imaged. If you want those copies, you have to pay $6 for a filing (single business) and any filed amendments.

Taking into consideration all this inaccessible data, I asked a County Commissioner for help — she valued the issue, but was unable to convince the powers that be to spark any change. I asked a manager at the applicable City of Minneapolis department for help, and she said I’d have to pay for any records I wanted. She offered up the assistance of an intern to run some summary data, which I appreciated, but you can’t analyze summary data, scrutinize details, look for trends, and find missing pieces. If there’s anything I’ve learned through this process, the devil is in the details.

At this point, I was fed up. I spent in excess of $1,200 of my own money on paper copies of electronic records. It was useful at getting some licensed brokers investigated, and I just reported several illegal notarizations. I can identify specific, highly-questionable property transfers, but it’s impossible to scrutinize details without all of the data I need.

Using the Minnesota Government Data Practices Act, the state’s sunshine laws, I sent in requests to inspect all of the data I was seeking, which is free.

When I requested to inspect deed filings with the County, they denied my request, citing that the data had commercial value. I’m most certainly not using it commercially. They actually spent taxpayer money referring the matter to a Senior Assistant County Attorney, who wrote me a novel telling me how wrong he thought I was.

When I requested to inspect rental license violations from the City, they didn’t respond at all.

When I requested to inspect 911 and 311 calls for service, a City employee accidentally included me on an internal e-mail where they were trying to figure out how to circumvent allowing me to see the data.

When I requested to inspect business filings with the Secretary of State, everyone was markedly more professional than on a local level, but they wouldn’t provide electronic records. Instead, they printed out the records and allowed me to scan them while standing at their counter without a fee. An unnecessary waste of paper, to be sure.

I took a break from the research for almost a year out of frustration in the process. It’s deeply saddening to me to see what happened during that year.

But to focus on the now, I’ve identified 580 properties deserving of scrutiny. These all have a direct and proximate connection to known felons, fraudsters, Ponzi schemers, equity strippers, and slumlords. One of them is in bankruptcy right now, about to get away Scot-free. I have serious concerns over one company’s property transactions at absurdly high dollar amounts. Every single person I research has a dark past.

Meanwhile, community blogs document in vivid description and shocking photos the devastating effects these people have on our community, our people, our property values, and our lives. 

What government can do to make data more accessible

We need access to this data, and to be honest, you, City and County employees, need us to have access to this data. We are helping, not hurting, and I’m terribly confused why Minneapolis and Hennepin County have such a terrible reputation for data sharing.

In sharp contrast, the City of Chicago has setup almost 1,000 feeds of automated and machine-readable open datasets for developers, researchers, journalists, and the general public to analyze, build apps on, and solve problems with. Similarly, recognizing that their own datasets had an incredible value to extend their own mission, the U.S. Department of Health and Human Services released almost 200 API-enabled databases. These databases have information like readmission rates, cost of procedures, patient satisfaction, and more. HHS datasets have been downloaded hundreds of thousands of times and have been integrated in brand new iPhone apps, used for research in remarkable journalism pieces in the New York Times, and even used by Consumer Reports to help consumers find the best hospitals.

The three most common reasons I hear for not making data open and accessible involve privacy, technical capability, and revenue loss. If the data is public under law, there shouldn’t be any privacy concerns. And even if there are, they are easily mitigated by intelligently structuring the data. There’s no excuse for not having the technical capacity or capability to open datasets: exporting the database and throwing it on your agency’s website is a great start. Absent that, Socrata is a great company that handles all of the heavy lifting; they power the vast majority of open data portals nationwide.

Finally, I keep hearing the claim that government data — public data — is a revenue stream for government agencies. This is a failure to look at the big picture: to really analyze the lifecycle of the data and how it can be used most efficiently inside and outside of government. There’s a reason that procurement management and open data often go hand-in-hand. Government is really terrible about awarding RFPs to large corporations that will gladly accept $1 million to spend nine months building out a software solution for agency employees using legacy technology.

Having worked in San Francisco with some of the most talented software engineers, it’s not an exaggeration to say that most software solutions that government pays millions of dollars for could be designed and developed by a few developers over the course of a weekend. And the Twin Cities has a great pool of technical talent.

In this case, Hennepin County is under the belief that they need the revenue stream that is deed and mortgage data. I dare Hennepin County to openly and publicly release that data online, along with a list of problems the County needs solving. I know from experience that smart developers will jump at the opportunity to help their government out. And then, instead of paying a company $1m to outsource their efforts overseas, agencies can find local talent with a genuine interest in collaboratively solving problems — and pay them market rate, a very small fraction of their million-dollar contracts of the past. This is looking at the big picture, and no, I will not buy your excuse that you need to “recapture costs from large infrastructure and technology investments.”

So back to that North Minneapolis data: is anyone listening, or do we need to wait for the scumbags to rip off a large financial institution so the feds can swoop in?