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<p>A house for a buck?</p><p>&#8220;For Sale $1.00&#8221; signs have popped up in front of three battered Luzerne County homes, with smaller print indicating the buyer will be responsible for taxes, liens and fines.</p><p>The unusual marketing tactic isn&#8217;t a ploy.</p><p>It was authorized by a federal judge in the District of Columbia as a last-ditch effort to liquidate some of the assets in a major Securities and Exchange Commission fraud case involving Washington, D.C., resident Lawrence Schmidt.</p><p>The SEC filed initiated still-pending legal action against Schmidt in June 2014, alleging he and several entities he controlled defrauded investors across the country in an investment scheme.</p><p>The government&#8217;s complaint said Schmidt created a web of &#8220;seemingly legitimate&#8221; companies to &#8220;entice investment and conceal his misuse and commingling of funds.&#8221; He is accused if siphoning off almost $2 million of investor funds for his own benefit, the SEC says.</p><p>Schmidt ended up with holdings in Luzerne County because he picked up five properties in the county&#8217;s popular main free-and-clear back-tax auction in August 2013.</p><p>The five were purchased under a company named &#8220;FGC Tax Lien Fund #2 LLC,&#8221; which was among those later named as a defendant in the government action.</p><p>Schmidt told the media at the sale that he was planning to sell or rent the properties.</p><p><strong>One property sold</strong></p><p>It&#8217;s unclear if Schmidt had any ties to the area. His online profile said he graduated from Penn State University. County free-and-clear sales, in which back taxes and other liens are forgiven, routinely attract both local and out-of-state bidders.</p><p>One of the five properties &#8212; an apartment building on Swallow Street, Pittston &#8212; was purchased by Schmidt for $14,000. The property was sold for $30,000 the end of 2014.</p><p>A house at 51 Terrace St., Wilkes-Barre, which was purchased by Schmidt for $24,000 at the sale, is occupied by a renter and scheduled for sale to Giant Properties Group LLC for $10,000, according to a court filing by a court-appointed receiver now overseeing Schmidt&#8217;s outstanding assets and liabilities to maximize returns for defrauded investors.</p><p>Although brokers had valued the property between $25,000 and $35,000, Giant Properties&#8217; all-cash offer is in the best interest of the receivership estate because the property can&#8217;t be insured in its present condition and poses a risk to the estate, court documents say.</p><p>The receiver could not find any companies willing to underwrite insurance coverage on the remaining three residential properties that are now listed for $1, court records say.</p><p>These properties, along with the price Schmidt paid to buy them at auction:</p><p>&#8226; 48 Arch St., Newport Twp., $1,500.</p><p>&#8226; 504 E. Northampton St., Wilkes-Barre, $837.</p><p>&#8226; 411 Madison St., Wilkes-Barre, $21,000.</p><p>According to the court filing by receiver Marion A. Hecht, of CliftonLarsonAllen, LLP:</p><p>An alternate strategy was needed to liquidate the three properties because they are in a &#8220;state of disrepair,&#8221; and no prospective buyers have surfaced.</p><p>The receiver contacted several Realtors in the area about listing the properties for sale, but the Realtors would require a minimum, non-negotiable flat-fee commission of $3,000 due to the condition of the properties and the strong possibility they wouldn&#8217;t sell.</p><p>The properties were offered to Habitat for Humanity, but the organization declined.</p><p>&#8220;After inspecting each parcel, the executive director determined that the three properties were beyond the organization&#8217;s scope,&#8221; the receiver said.</p><p><strong>Unpaid taxes</strong></p><p>Meanwhile, the properties have racked up unpaid property taxes for 2014: 504 E. Northampton St., $1,052; 411 Madison St., $2,010; and 48 Arch St., $1,625.</p><p>The receiver&#8217;s suggested strategy, which was approved by the court in April, was to list the properties for sale for $1.</p><p>The receiver wanted to sell all three as a package, rather than accepting piecemeal offers, but it&#8217;s unclear if that is a requirement set in stone.</p><p>Hecht could not be reached for comment on several attempts in recent days.</p><p>The properties will be conveyed by a quitclaim deed with no guarantees, and the receiver will not be responsible for any closing costs, including outstanding taxes and clean-up fees or fines, a public notice says.</p><p>The sale also was scheduled to be posted on Craigslist, but no listing could be found. The signs in front of the properties say prospective buyers should call (571) 227-9688 during weekday working hours.</p><p>Wilkes-Barre recently got involved in some clean-up at the Northampton Street property after residents complained about the condition of the structure, city officials said.</p><p>The receiver notice indicated any buyer must pay additional city health department trash removal costs on the Northampton Street property.</p><p>The Northampton Street property is one half of a double-block. The left half was purchased by a Wilkes-Barre resident for $500 at an August 2014 back-tax auction, and that owner does not have delinquent taxes, county property records show.</p><p>The property was damaged in a 2009 fire that began on the 504 side, which was supposed to be vacant at that time, according to published reports.</p><p>Schmidt&#8217;s case is still winding through federal court. The SEC said he ended up firing all his employees and fleeing the country when &#8220;his scheme collapsed.&#8221;</p><p>The August 2013 back-tax auction that drew Schmidt as a bidder stood out because there were an unusually high number of bidding wars that jacked up some prices.</p><p>Schmidt competed against other bidders for four properties, though there were no other takers for the Northampton Street one, records show.</p><p>Bidders in the 2013 sale snatched up 120 of the 223 listed properties, paying a combined $998,980, prompting one of the regular local bidders to question whether some would regret paying so much once they factored in building code requirements to repair their acquisitions.</p><style>
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<div class="neCaption">This house at 411 Madison St., Wilkes-Barre, is among three Luzerne County properties up for grabs for $1, though buyers will be responsible for back taxes and other liens. </div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2015/07/web1_house.jpg.jpg</photo0><caption0>This house at 411 Madison St., Wilkes-Barre, is among three Luzerne County properties up for grabs for $1, though buyers will be responsible for back taxes and other liens. </caption0><photoCredit0>Times Leader file photo </photoCredit0></div><div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2015/07/web1_schmidt.jpg">
<div class="neCaption">Schmidt </div></div><div class="metaInfo"><photo1>https://www.timesleader.com/wp-content/uploads/2015/07/web1_schmidt.jpg</photo1><caption1>Schmidt </caption1><photoCredit1>Times Leader file photo </photoCredit1></div></div>
<div class="metaInfo"><bylineMeta><p>By Jennifer Learn-Andes</p><p>jandes@www.timesleader.com</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.</p></shirttailMeta></div>

Wilkes-Barre houses for a buck spinoff of Securities and Exchange Commission fraud case