Champagne wishes and caviar dreams

'Apprentice' winner Kendra Todd accused of fraud in lawsuit over homesale Full story here: http://www.palmbeachpost.com/search/content/business/epaper/2009/06/21/sunbiz_thesource_0621.html By ALEXANDRA CLOUGH Palm Beach Post Staff Writer Sunday, June 21, 2009 Remember Kendra Todd? She's the hard-working, telegenic Boynton Beach real estate agent who won the third season of Donald Trump's TV show, The Apprentice. Now she hosts an HGTV cable show entitled, "My House is Worth What?" The show helps homeowners figure out their home's market value. But homebuyer Diane Harris probably wished Todd had a different show - perhaps one entitled, "My Closing Costs Are Worth What?" Harris said Todd used her Apprentice success "to lull unsuspecting victims into her scheme to defraud," according to a Palm Beach County Circuit Court lawsuit filed against Todd by Harris earlier this month. More specifically, Harris claims Todd defrauded her by inducing her to buy a Texas home in a deal stuffed with financial extras for Todd, "including overcharges and illegal charges, none of which were disclosed." As a result of the added closing costs, plus a high interest rate mortgage Harris couldn't afford, the property is in foreclosure and Harris' credit is ruined, the lawsuit claims. Harris is suing Todd, mortgage broker Michelle Caldwell, and Todd's company, Kendra Todd Group, a dissolved Florida corporation formerly based in Hypoluxo. The suit, which includes allegations of fraud and breach of fiduciary duty, seeks unspecified money damages. Lawsuits such as these may be the price of fame, but Todd and her people are adamant that Todd did nothing wrong. "Ms. Todd vehemently denies the scurrilous allegations against her and will vigorously defend herself," said Leslie Jose Zigel, Todd's Miami attorney. Zigel said the lawsuit was filed simply because Harris' investment did not turn out as she had hoped. "This is a case of sour grapes where an investor on her own purchased a property and is now looking to blame everyone involved in the deal, without taking responsibility for her own independent decision and market conditions," Zigel said. However, "I do know that Ms. Todd always acts with the highest of ethical values. She takes her reputation very seriously," Zigel said. Harris, a California resident, says she was drawn to Todd after Todd's blockbuster 2005 victory in The Apprentice, a TV show in which smart young people vie to work for Trump by winning various business challenges. In January 2007, Harris heard Todd speak at a real estate investors' club in California. At the meeting, Todd made a pitch for Obra Homes of McAllen, Texas, the complaint alleges. (in 2005, Obra was named the 87th largest home builder in the country. Today, Obra is defunct.) In her lawsuit, Harris claims Todd called the Obra purchase "a fantastic investment opportunity" and that only a few lots still were available for sale. Swayed, Harris said she gave Todd a $7,500 deposit for the purchase of a $88,820 home, the lawsuit says. Things went south soon after that. Harris's suit said she was told the home would be equipped with appliances. But when Harris went to see the home, she learned the appliances weren't included - but could be purchased through the mortgage loan. So another $1,000 was added to the mortgage, the lawsuit says. (Before it went bust, Obra gained a reputation for luring home buyers in with low-cost home prices and the promise of free appliances.) In addition to the appliance snafu, other nasty surprises awaited Harris, including an extra $2,000 in deposits owed, the suit claims. Harris claims she later learned Todd received "kickbacks" from Obra for bringing buyers to the homebuilder, the lawsuit alleges. But Harris' suit said Todd wasn't licensed as a broker in Texas, and therefore couldn't receive kickbacks - or brokerage fees, as Todd described them in closing documents, the lawsuit says. Harris's suit said she also paid mortgage broker fees to Caldwell, even though she wasn't a licensed mortgage broker in Texas. Caldwell could not be reached for comment, and the company she worked for, Benchmark Mortgage Corp., is listed as a dissolved Florida corporation, according to state records. Todd, who still owns a Boynton Beach home appraised at $219,276, also could not be reached for comment by presstime. Her publicist said she was in Seattle. Zigel, Todd's attorney, said Harris has no one to blame but herself for her money woes. "This investor attended an investor conference because she was interested in real estate investing," Zigel said. "She then flew to the development, viewed the home herself and made her own independent decision to purchase an investment property." Despite the housing market bust, Todd continues to promote her book, Risk & Grow Rich, on her Web site, www.kendratodd.com. She also makes frequent television appearances, including on cable shows Fox News and CNN. For instance, in February 2008, she appeared on a CNN segment entitled, "Markets Set to Bounce Back." The Source is a weekly online column about business and real estate in Palm Beach County and the Treasure Coast. You can read more of Alexandra Clough on Mondays in the Inside Local Business section.