Read about Erik Osborn's legal problems at westword.com/news.
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One Lincoln Park developer Erik Osborn has requested that the public defender's office assign him a free attorney, despite the fact that he continues to live in a home that he and his wife, Angela Osborn, bought three years ago for $6.5 million. That's the same sale price that Angela, a well-established Denver real-estate broker, has currently listed on websites for the 14,841-square-foot, Italian villa-style mansion.
Real-estate records reveal that the property has a curious listing history. The land in the pricey Polo Club was originally owned by Charles Gates, owner of Gates Rubber Company, who split off a parcel where his nephew, Reynolds Cannon, built the lavish home in 2000 for a cost of more than $7 million. But in 2003, in the midst of a divorce, Cannon put the house on the market for $7 million. By April 2006, he'd dropped the price to $5.95 million. Three months later, the Osborns put the house under contract for $6.5 million.
This wasn't the first time the couple appeared to have paid much more than the sellers were asking. In February 2004, Thomas and Carolyn Kling had put their 1991 East Alameda #14 home on the market for $1,925,000. After four months, they'd dropped the price to $1,825,000. But in July 2004, the Osborns came along and bought the property for $2,350,000.
So are Erik and Angela Osborn just really, really bad negotiators?
The Klings could not be reached for comment on the sale of their home. But in a 2006 legal motion filed by Jeffrey Raymond in his lawsuit against former partner Erik Osborn, Raymond asserts that the price of the East Alameda home was purposefully "inflated" to obtain increased financing above the actual value of the property. The tens of thousands of dollars in improvements on the residence that Raymond accused Osborn of stealing from his other projects allowed the Osborns to refinance the Alameda house through Countrywide Home Loans for $2 million — on top of the $2 million mortgage they already had. This debt "encumbered" any recourse that Raymond might have against the property, the motion complained.
Denver County records show that three days before the June 12, 2006, sale of the Polo Club property to the Osborns, Cannon had filed a deed of trust against the East Alameda home for $1.6 million — a loan to the Osborns, essentially. On June 20, the deed of trust was released. But no money actually traded hands.
Contacted by phone, Cannon asserted that "there was no skullduggery" involved with the sale, and a subsequent letter from his attorney pointed out that Cannon was not involved with any of Osborn's development projects or his current legal issues.
The Colorado Division of Real Estate might debate that "no skullduggery" description. Asked about the link between the Polo Club and Alameda home transactions, director Erin Toll, who has focused on uncovering real-estate kickback schemes, says that her office has opened an investigation into the Osborn deals. "When we see this kind of jacking-up of prices in MLS, it is a huge red flag," she explains. "I can best describe what I'm seeing with two French words: déjà vu."
When a house sits on the market for over a year at a certain price "and it's not selling," Toll continues, "that's a pretty good indication of what the market value is. And when it suddenly sells for over half a million dollars more, we know that something went on."
What disturbs Toll the most, she says, is that both the buyer and the seller in the Polo Club sale — Angela Osborn and Ren Cannon — are licensed brokers who should know that inflating home prices is illegal. "If you are not informing the bank that there is another source of money out there," Toll concludes, "that's called mortgage fraud."
For a photo slide show of 7 Polo Club Lane, go to westword.com/slidshow.
