Like the housing industry, real estate guru Mark Bosworth is in crash mode
The widow and the man who cheated her out of hundreds of thousands of dollars come from large Mormon families and lived in the same west Phoenix neighborhood back in the '70s.
Martha Mow, whose maiden name was Judd, is about 13 years older than Mark Bosworth and didn't know him then. But she remembers babysitting young Berne Fleming, cousin to Alan Davis, a man who would later marry one of Bosworth's sisters.
Fleming and Davis are now the managers of GoRenter.com, a property-management company founded by Bosworth that is the biggest of its kind in the state.
Martha Mow's direct connection to Bosworth came later in life.
In the early 1990s, her life took a wrong turn. She had just gotten a divorce from her first husband and was paying child support and alimony to him. She took a job in 1995 as live-in caretaker for two elderly Scottsdale women who, according to Mow, had been companions for 60 years and had no next of kin. The job didn't pay much, but the women agreed that she would inherit the house when they died. Which is what happened, five years later.
Then, on Valentine's Day 2002, she met Richard Mow. They were married inside a month. He moved into the Scottsdale house with her. And he introduced to her to one of his best friends, Mark Bosworth, a fellow Mormon and, like herself, a former west-sider.
At the time, Bosworth's real estate career was taking off — he appeared to Mow to be a local version of Donald Trump. From humble beginnings as a high school dropout, he grew up to become a self-proclaimed Valley real estate "guru."
His success was linked to the monster wave of rising Valley home prices that had drawn investors from all over the country to the area. Boom times of the 1990s had led many to seek out new places to sock their money, and, combined with killer low interest rates, the real estate market in Phoenix was hotter than the weather. Near its peak, investors saw the median home price for Maricopa County leap from $165,000 in July 2004 to $235,000 a year later.
Bosworth boasted in recent ads that his companies managed more than a billion dollars' worth of residential and commercial property, and that he owned at least $70 million in property personally.
Martha's new beau, Richard, was almost like family to Bosworth. He was once married to the mother of Lisa Bosworth, Mark's wife.
Soon after Richard and Martha got hitched, they sold the Scottsdale house.
"Mark indicated it would be wise to liquidate that house and invest in two houses," Mow says to New Times.
It was one of Bosworth's premier tricks of his trade: leverage. Taking money to make money.
And it's always good to use other people's money to make money — Bosworth's mother collected the commission from the sale. Bosworth's parents, Don and Ethel (who also go by Bryan and Leoda in county documents), act as occasional business partners with Mark.
Martha and Richard, who was having terrible problems with diabetes, moved into a Mesa rental home owned by Bosworth with the understanding, she says, that they could live there until he died and that Martha would buy the place a new air-conditioning unit.
The investment deal came within a year. Martha Mow took $57,000 of the roughly $150,000 she had made on the sale of the Scottsdale house and paid it to Bosworth. Based on their agreement, the money served as a down payment for her and her husband's purchase of four small, low-rent condominiums in the West Valley, and also as a down payment for two rental homes Martha purchased on her own.
The Mows arranged to have one of Bosworth's property-management companies deal with the cumbersome task of fixing up the properties, finding tenants, and collecting rent.
"She'd never been a real estate investor before," says Fred Judd, Martha's brother and a California attorney who's also licensed in Arizona. "She fully trusted [Bosworth]."
Judd, who later helped his sister sue Bosworth over the deals, says Bosworth bought the condos from an investor in California for no money down just before selling them to the Mows at a profit. Mow says Bosworth never followed up on his promise to send her the deeds to the condos so that she could record the sales legally in her name, and she says he blew her off when she telephoned him about it.
She says he kept her in the dark about a lot of things.
The rental units were dogs and soon began losing money, but Bosworth didn't notify her about that, she says. Instead, court records show, Bosworth sold all six properties to someone else. Twice.
The first sale became fouled up, and the buyer sued Bosworth to get his money back. In early 2005, Bosworth sold the properties again.
The condos were easy sales for Bosworth; he still held the deeds in his name.
That left the two houses deeded in Martha Mow's name.
While Bosworth was scheming to take her money, Mow says, he never strayed from his image as the benevolent millionaire. She remembers one day when Bosworth dropped by to visit Richard while he was "on his deathbed."
Bosworth threw $5,000 on the bed, Mow says: "He said, 'I won this at the races. This is what you would have won if you had been there.'"
In May 2005, Richard Mow died of complications from diabetes. Bosworth spoke at the funeral — which he paid for. Two weeks later, according to Martha Mow, he called the widow into his office and explained that there was a problem with her real estate investments. Bosworth told her she would have to sign over one of the two houses to him to make things right.
And in her state of mourning, Mow says, she did just that.
"Mark Bosworth sold it two weeks later," says Judd, her attorney brother. An escrow statement provided by Judd shows Bosworth cleared about $150,000 in the deal.
A few weeks later, Mow says, Bosworth told her to clear out of the Mesa home because he was selling it. She took $30,000 she had received from her husband's life insurance policy and bought a mobile home.
Bosworth then managed to sell Mow's sixth and final investment property.
Tired of getting blown off every time she tried to reach Bosworth to find out what was going on with her investments, she complained to her brother, who told her to look at the deeds filed with the Maricopa County Recorder's Office.
As she talked on the phone to New Times from her home in Tennessee, Mow, 60, began to cry as she talked about what she saw on the deed of one of the rental homes sold behind her back.
On the paperwork Bosworth filed with the Recorder's Office to complete the sale of the home, someone had forged her signature.
"I was just appalled!" she says. "Mark had professed to be such a good friend to me; I couldn't wrap my head or my heart around it."
To Bosworth, Mow's $57,000 "had become $300,000" from the sale of her properties, which had increased in value during the time Mow owned them, Judd says. "He didn't give her any of it."
Mow sued, and in March, Superior Court Judge Paul Katz ruled against Bosworth, who admitted to two forgeries involving Mow's property.
Mow received $35,000 from a title company because of the forgeries. And Judge Katz ordered Bosworth to pay Mow triple her original investment. He also slapped Bosworth and his lawyer with an additional $1,000 sanction because they hadn't cooperated in the case.
Two employees of Bosworth's at the time, Bob Bornholdt and Kathryn Watkins, had their notary licenses revoked because of the forgeries. Bornholdt responded to a request for comment by e-mail, stating he notarized the paperwork as a favor to his boss, figuring Mow wanted Bosworth to sign a deed for her.
"After all," Bornholdt writes, "there is no one stupid enough to sign someone else's name on a deed, sell the property and pocket the money . . . or at least I thought that."
As bad as the Mow lawsuit makes Bosworth look, it's the least of his problems these days.
Anybody reading a recent Better Business Bureau report can sum up Mark Bosworth pretty quickly: a big shot with baggage.
The November report lists him as the CEO of Mark Bosworth and Associates LLC, a Scottsdale company. It states he also does business as Property Masters of America, Home America Property Management, GoRenter.com, and other LLCs.
And it lists 52 complaints against him and his companies in the past three years.
The report breaks the complaints into categories: contract, billing or collection, delivery, repair, service, customer service, and refund or exchange. Every category is peppered with unresolved complaints.
Bosworth tells New Times that his is a "messy" business. He contends that he must wade through the whitewater of tenant-landlord disputes on one hand and the complex and sometimes-risky game of real estate investing on the other. He knows there are hundreds of people out there who "hate my guts."
Yet Bosworth's mess has gotten out of control, and it's clear that he is the crux of most of his problems.
As he turned a modest living of flipping houses into a minor real estate empire in the late 1990s and early 2000s, a pattern of unprofessionalism and greed weighed down his enterprises with customer complaints, lawsuits, massive money shortfalls, and bankruptcy.
Ultimately, his business style led to the demise of his short-lived role as real estate millionaire. Barring a legal miracle, "The Boz," as he likes to be known, appears finished as an investment "guru," a title he bestowed upon himself in advertisements.
Last November — which featured signs of both the high and low watermarks of his career — was the turning point.
That was the month when he and two of his employees, Berne Fleming and Bosworth's cousin, Rod Howell, appeared in the Arizona Republic's "Match Me With My Wheels," a feature that appears Fridays in the newspaper's automotive classified ads section.
The other men in the article sport decent rides. But Bosworth shows off a Ferrari F430 Spider convertible.
"[It's] one of the list of things you have to check off in life," Bosworth boasted to the Republic.
By then, Bosworth had left a long trail of unhappy customers and investors. Some of them told New Times they were outraged by the article. (According to Bosworth's bankruptcy paperwork, he collected insurance money on the Ferrari after it burned up while in for repairs at a dealership. That was in October, a month before the Republic feature ran).
Also in November 2007, Bosworth lost the biggest lawsuit of his life.
He had been entrusted to buy and sell rental homes as investments for a client, Ben Magelsen of Salt Lake City. A dispute arose over the deals, and Bosworth sued Magelsen — in retrospect, a major bungle by the real estate "guru."
Magelsen countersued, and a jury returned a whopping $17 million judgment against Bosworth.
Jurors were appalled by evidence of Bosworth's bad business practices — $12 million of their judgment was for punitive damages.
Findings against Bosworth listed in court documents associated with the suit seem out of a property-management horror movie:
• Breach of sales contracts.
• Inflating the cost of homes bought for Magelsen to make more in commissions.
• Forging signatures on deeds and fraudulently altering power-of-attorney paperwork.
• Swiping appliances from rental homes that belonged to Magelsen, then charging Magelsen for their replacements.
• Overcharging the tenants in Magelsen's properties on their rent taxes, then pocketing the extra money.
• Charging Magelsen for maintenance on homes that was never performed.
• Collecting a bogus labor tax on maintenance charges.
A judge affirmed the verdict in January. Bosworth says he'll wage a vigorous appeal.
Meanwhile, like the real estate industry itself, Bosworth's life is in crisis.
On March 25, Maricopa County sheriff's deputies appeared at his $2.5 million Scottsdale mansion and began unloading furniture and art — he was able to stop them only by filing Chapter 11 bankruptcy.
Since then, he's listed his home as a rental for $14,500 a month and says he plans to move into a smaller place if and when he finds a renter.
"Mark Bosworth's Real Estate Seminar at Sea," a 12-day cruise from Monte Carlo to Venice, planned for this summer, has been canceled. (The minimum $5,740 per-room price included two seminars and an "exclusive cocktail party" with Bosworth, according to an ad.)
Lately, Bosworth has become a favorite target of Sam Wercinski, commissioner of the Arizona Department of Real Estate.
The agency has already dealt harshly with Bosworth's brother, Russell, whose attempt at mirroring Mark's success ended in a failed company and sanctions.
To Wercinski and his investigators, Mark Bosworth is the bigger fish.
Though the brothers' property-management companies were run separately, an agency report reveals some merging of the two after Russell Bosworth's company folded.
Investigators are still looking into a slew of complaints against Mark Bosworth and GoRenter.com. Wercinski, appointed to his post last year by Governor Janet Napolitano, tells New Times that the Arizona Corporation Commission has an open investigation of Mark Bosworth.
Wercinski says he has referred Russell Bosworth's case to the state Attorney General's Office for potential criminal violations, but he wouldn't comment whether he has done the same with Mark Bosworth.
In April, Wercinski banned Mark Bosworth from real estate work in Arizona, citing the problems revealed in the Magelsen verdict.
Even if Bosworth avoids further legal action, whether civil or criminal, he may never be able to shed his new reputation as something quite the opposite of a guru.
To his harshest critics, Mark Bosworth is a con man who's finally getting what's been coming to him.
Bosworth confesses that his cultivated image of real estate genius has been stained by his own blunders.
Mark Bosworth's life has had two rags-to-riches stories.
In person, Bosworth is shorter than his ads make him appear; he's of average build, with sharp features and close-cropped blond hair. During an extensive interview at New Times' offices, he appears nervous, talking fast at times, but with his charismatic salesman personality coming through.
While some of the excuses he offers about alleged misdealings don't ring true, at least one thing seems certain about Bosworth: He's anything but a slacker.
Mark Bosworth was born in Idaho to a Mormon family, in the middle of a pack of eight children. He moved with his family to the Valley twice, the first time when he was 10 years old. He claims to have been the youngest person ever to have two paper routes for the Republic, a newspaper from which he would later buy millions of dollars' worth of advertising.
The family moved back to Idaho a couple of years later and bought a gas station, where he spent many hours working while most of his peers goofed off, he says. But the venture failed, and the family moved back to the Valley — this time to Maryvale — in 1978.
At 16, Bosworth says, he got a job at a real estate firm that managed rental homes, getting a taste of his future career. He and his friends helped fix up the houses — painting, mowing lawns, doing maintenance. He was earning money and learning new trades, so he didn't see the need to finish high school. Instead, he started a roofing business.
In addition to not obtaining a diploma, he never bothered to get a real estate license.
The need to make more money became acute after he married a girl he had met at the church he attended. She, like him, wanted to enjoy the finer things in life.
He says a movie changed his life. It was Wall Street, the story of an ambitious stockbroker and a greedy billionaire investor.
"I decided that's who I wanted to be," Bosworth says. "So I became a stockbroker."
He says he made $93,000 during his first year at First American National Securities. He says he was able to work 100 hours a week, because "I'm blessed, in that I only require two to three hours of sleep."
Within two years, he says, he was driving a new BMW and managing 100 employees, earning vast amounts of money for someone in his 20s.
Bosworth admits he "got too caught up in the nice cars, the nice houses."
By the mid-'90s, he had spent most of his money. He admits that this speaks poorly of his financial-planning skills.
"It was horrible money management," Bosworth says now. "Knowing what to do and having the discipline to do it are two different things."
He says the money trouble was secondary, though, to the unfolding problems in his personal life. He says he began having difficulties with his wife, Brenda Sue Bosworth, in the late 1980s. The two were divorced in 1995 after having four daughters together.
Well before his divorce, Bosworth was having an affair with Lisa Capron and fathered two boys with her: Blake, born in March 1991, and Brett, born in June 1995. Bosworth's name wasn't on the boys' birth certificates.
After the second child was born, Capron hit Bosworth with a paternity order to prove he was the boys' father. He says she did it indirectly — she was seeking state aid to help pay for the boys' medical expenses, and the state required the order.
Bosworth was broke by the time of his divorce — he and Brenda Sue had filed for Chapter 7 bankruptcy before they split up, leaving a long list of creditors empty-handed.
"I walked away from that marriage with nothing but an orange crate [full of belongings]," he says.
He married Capron in 1996. She was a much better partner for him, he says, with a head for planning. She insisted that he work fewer hours and stay home with the family more. At first, he says, they lived frugally and saved money, coming up with an idea to buy 10 rental homes throughout the coming years.
It was the start of something big — the beginning of what was to become a mini-empire of property management for Mark Bosworth and, by extension, his new wife.
An accident with Brett happened the very next year.
The 2-year-old drowned during a pool party at the Bosworths' house. His body was found floating just a few feet from other children playing in the pool. Bosworth had been at work that afternoon while Lisa was home with the kids.
"It was a pretty horrific experience," he says. "It put me back into focus of what life's about."
He says he began attending church regularly, which he hadn't done in six years.
He also got busy making serious money.
Ultimately, the Mormon Church profited from his newfound motivation. Bosworth's bankruptcy sheet shows he tithed to the tune of $100,000 last year.
Mark Bosworth's recipe for wealth involved many of the ingredients that led to America's foreclosure crisis, such as no- or low-money-down loans, risky refinancing plans, and the false promise of endless, fast-growing equity.
He described the technique that led to his riches in one of the "Investors Corner" columns he wrote for his advertisements. In the column, which appeared on one of his Web sites in April, Bosworth claimed he owns 147 homes, $40 million in property.
Bosworth's boast of personal-property investments expands in recent GoRenter.com ads from $20 million to as much as $70 million.
For years, he wrote on the Web site, he bought properties for as little up-front money as possible, fixing them up and flipping them at a small profit. Some he would rent out, and on those, he discovered something "magical": The value of the houses he didn't sell right away went up dramatically.
He had stumbled into one of the greatest real estate booms in Arizona history. As housing prices mushroomed in the 1990s, he bought more and more homes, often using money obtained in refinance loans as capital.
The way it worked: When the home went up in value, an owner used extra equity (which is the difference between the estimated home price and what is owed) by borrowing against it. The bank figured if the owner defaulted on the loan, its risk was covered because it could sell the home at the higher price.
Bosworth would then sink the money from refinancing into down payments on other homes, and a few years later, refinance those homes and buy more homes, which would then go up in value. In his Web site article, he gave the example of a Glendale home that he used to fund the purchase of eight more homes in just six years, all through the "magic" of refinancing in boom times.
Bosworth's wife became a partner in Property Masters, a property-management company, in 1997.
Not only did Property Masters help find renters for the Bosworths' investment homes, it serviced about 300 other homes for a clientele of small-time landlords. The Bosworths bought out the partner two years later and, in 2001, changed the name to Home America.
The company grew to manage more than 2,000 homes. Bosworth began teaching seminars on how to invest in the Arizona real estate market by buying and renting homes. And he and his employees found eager investors to purchase homes through Bosworth's companies, which, conveniently, would manage rentals for the properties.
Bosworth didn't feel he needed a real estate or broker's license — he hired others with the proper credentials to do the deals. (Arizona's real estate department would later state in its April order against him that a license was, in fact, required for what he did.)
The plan worked well for a while, but he and many of his investors were devastated when property values started to take a dive in 2006.
One former investor in Bosworth's companies is Larry Hutchinson, a 53-year-old computer programmer and musician from Thousand Oaks, California.
Hutchinson tells New Times he met Mark Bosworth in December 2005 and came to invest nearly all his savings — about $700,000 — in 11 Arizona houses he bought through Home America.
"I lost everything in a year and a half," Hutchinson says bitterly.
Although the bad timing of the purchases seems obvious in retrospect (considering the market plunge that occurred soon thereafter), Hutchinson says he wouldn't have bought the property if Bosworth's employees hadn't lied to him about the strength of the investments.
Three years ago, Hutchinson had wanted to get into the red-hot Phoenix-area real estate market, but he didn't know the best way to go about it. He says a friend who lived here told him about Bosworth, who "had gotten a lot of press, a lot of visibility. He seemed to be one of the big ones [in the Phoenix area]."
His friend talked to Bosworth, and Bosworth hooked Hutchinson up with Steve Van Campen, a top property manager for Bosworth's firm. Hutchinson says he was given the royal treatment — at first.
"Not only did they have the Escalade for driving clients around town, but they'd give you a tour of Bosworth's [fleet of] cars," Hutchinson says.
Van Campen, a private pilot, flew Hutchinson and his wife over the Valley in a small plane, pointing out Bosworth's mansion.
"So you're thinking, okay, Mark's been in this business since the '90s and has made millions of dollars, so this is the way we're going to go," Hutchinson says.
He laments that he didn't heed the advice of his wife, who believed from the beginning that something was amiss about Bosworth. He invested in the homes, though she persuaded him not to risk his 401(k) savings or their own home in the deal, which he had been leaning toward doing.
"Both Mark and Steve were recommending that," he says.
Van Campen tells New Times, "Larry has every right to be upset."
However, Van Campen says, he didn't know as a salesman how bad things would get for Hutchinson and other Bosworth clients.
"I lost 10 houses myself," Van Campen says. "I believed my own advice."
Hutchinson says it turned out he couldn't get anywhere near the rent money on his properties that Home America said he could. That, combined with the drop in housing prices, caused Hutchinson's investment to hemorrhage money.
At the same time, Bosworth's property-management company earned thousands of dollars from Hutchinson.
Home America received $50 to $75 a month to manage each property, plus a setup fee and ongoing fees to advertise and prepare the homes for rental. Bosworth claimed the average rental home managed by his company was occupied by tenants for about three years, with only 17 days of lost rent because of vacancy.
Some of Hutchinson's properties were vacant for more than 100 days, and when he complained that the Home America staff was not doing enough to find tenants, Van Campen told him to consider paying the company's staff members fees to motivate them, Hutchinson says.
"I threw some deals to the salespeople, said, 'If you can get one rented [by a certain date], I'll give you $200,'" he says. "It never made any difference."
Hutchinson became skeptical of the maintenance bills sent to him by Home America.
"They said they would freshen up the places. I don't know what they [did]," he says.
One time, he visited four Phoenix properties that weren't renting and discovered that none had a "for rent" sign out front. Company reps offered him a lame excuse when he complained, he says.
Another time, Home America told him they planned to bill him $3,000 for some painting work at a house. He told them to forget it and found someone to do the job for $300.
Hutchinson showed New Times an e-mail exchange that shows how frustrating it could be to deal with Home America.
The investor had sent the company $5,000 for painting and other work to be done on a rental home in July 2006. On July 25, Hutchinson sent his Home America contact, Cade Galloway, an e-mail explaining that a tenant had moved into the house and did not care whether the house was painted. "Go ahead and send the $5,000 back to me," Hutchinson told Galloway.
By that fall, Home America still hadn't refunded Hutchinson's money. So on October 24, Hutchinson told Galloway that because another home needed $2,260 in repairs, the company should take that amount from his $5,000, have the work done, and mail him the difference.
The repairs were completed, but Hutchinson's balance wasn't sent, despite Galloway's promises. Finally, in late February 2007, one of Home America's top managers, Berne Fleming, ordered Galloway to keep his promise to Hutchinson and pay the balance, copying the e-mail to Hutchinson.
The refund finally came in July 2007, a year after he requested it.
He says the story is just one example of the "heartburn" the company caused him while the market downturn leached equity from his investments. One by one, Hutchinson's properties went into foreclosure.
In April, the last rental home he had bought and managed through Home America went into foreclosure, he says.
"That was my retirement; that was my dream," Hutchinson says of his investment. "Now it's all gone."
A former Bosworth employee says Hutchinson is just one of many customers with a similar experience.
To be sure, the market downturn was a big problem. But the bigger problem for Bosworth's clients was the mismanagement that took place on his watch, according to court documents, former employees, and investors like Hutchinson.
The aforementioned anonymous employee gave New Times a list of investors who, he says, lost more than a combined $3 million in commercial property investments made with Bosworth.
One of the names on the list is Barbara Broyles, who says she worked for Bosworth for about three years.
Broyles confirms that she lost $50,000 on an office building deal that went bad, and tells New Times she lost an additional $50,000 in another investment with Bosworth, Van Campen, and others to buy properties in Mexico. Broyles says she and a group of the Mexico investors, who estimate they lost about $1 million combined because of Bosworth's poor handling of the deal, are considering a lawsuit.
She claims Bosworth often spent his investors' money on "things they did not invest in," like side business deals or personal items.
Broyles also says she saw firsthand some of the same fraudulent activity mentioned in the Magelsen lawsuit. For instance, there was "the air-conditioning scam."
Bosworth cooked up an idea to do bogus "maintenance" on the rental homes managed by Home America, she says.
"He sent an invoice for $79.95 per unit to every customer," Broyles says. "Anybody who complained about it, we removed it off their bill."
Turnover was just another of Bosworth's secrets, she says. Broyles left the company in late 2006, disgusted by something Bosworth told his sales staff during a meeting.
"He said when he first started in this business, he had the idea that you had to treat all of your owners right," Broyles says. "What he quickly learned was that this market was so huge, you can screw over every one of your customers and still grow your business because so many people are moving into Phoenix."
Other complaints by customers of Bosworth's companies can be found, using a Google search, on various consumer affairs Web sites.
One customer, real estate investor Ben Magelsen, fought back hard.
Magelsen bought more than 10 homes through Property Masters in 2001, just before the company changed its name. In addition to bogus maintenance bills, overcharges, and other technical problems that led to breaches of contract, Bosworth profited by "fraudulently altering" deeds and power of attorney that Magelsen had granted the company, court records state.
The changes on the documents allowed Bosworth to sell four of Magelsen's properties, and Bosworth and his wife "pocketed the proceeds for themselves," court records state.
Magelsen tells New Times he's now out more than $500,000 in attorney's fees. And he says he doesn't expect to ever see the damages awarded him by the jury because of Bosworth's bankruptcy filing.
Yet it's still worth it, he says, to have proved Bosworth's malfeasance in court: "My wife and I talked this over. We felt, morally, that someone had to stop him."
Armed with the Magelsen verdict, Arizona Real Estate Commissioner Sam Wercinski set out to stop Bosworth in his own way.
But the cease-and-desist order Wercinski issued against Bosworth in April and the state's concern over GoRenter.com stem from what happened with Bosworth's younger brother, Russell.
Russell Bosworth came to Arizona from Idaho in 2000 and worked for Mark Bosworth doing maintenance and other jobs. But there were problems, and Mark says he "cut him loose."
Mark Bosworth's critics say he taught his brother the ropes of the business, but Mark doesn't describe it like that. He says his brother basically stole his ideas and ran with them in his own slipshod way.
Russell Bosworth got his real estate license in 2002 and opened a hybrid investment/property-management company like his brother's, called Arizona High Performance Realty, two years later. Complaints to the state poured in, and the real estate department opened an investigation.
According to the case file, obtained by New Times through a public-records request, some of the first people to complain were a married couple who told investigators that Russell lied to them about the state of a Phoenix house they had contracted to rent from him.
In late November 2004, the couple paid Russell an $845 deposit without first viewing the inside of the home. When they entered the house later that evening, they saw "the interior walls had holes, the flooring was gone, and what appeared to be carcasses of animals were lying throughout the house," records show.
Russell Bosworth had rented them the home of a crazy cat lady who, the couple later learned, had died in the house, her body lying undiscovered for days. Russell refused to return their deposit. He refunded $500 only after the couple's story appeared in a TV news report, according to the real estate department.
The main problem for Russell was the intense official scrutiny that followed the debacle. When investigators arrived at the Peoria company's office for a scheduled audit in summer 2006, they found it abandoned. Russell Bosworth hadn't bothered to inform his clients, 90 of whom soon complained to the real estate department.
The security deposits of people renting from the landlords were supposed to be held in a trust account by Russell's property-management company. But the money — about $350,000 — was gone. Russell Bosworth had used it to pay the salary of one of his employees and to purchase other homes, the real estate department found.
Office equipment and furniture from Arizona High Performance Realty suddenly ended up at Home America's office. Mark Bosworth admitted to New Times that he and his employees contacted Russell's clients, soliciting them to switch over to Home America now that Russell's business was defunct.
"The day he was out of business, we had a right to solicit," Mark Bosworth says.
But Wercinski says his department has a problem with that.
In notes from a later audit of Russell's business, state investigators wrote that one of Mark Bosworth's top operatives at Home America, Berne Fleming, failed to advise Russell's clients that Home America was owned by Russell's brother, and that both Mark and Russell "each had a financial interest in having Home America obtain property-management agreements" from Russell's former customers.
"This is the starting point for why we are here today," Wercinski says, referring to his department's ongoing investigation into the many complaints against GoRenter.com, formerly Home America.
Wercinski's department banned Russell Bosworth from real estate activities last October and ordered him to pay back his clients' money.
As this story went to press, Russell Bosworth was preparing for his trial on burglary charges — he's accused of stealing carpet, appliances and other items from rental homes owned by Berne Fleming and other Mark Bosworth employees. He put them in his own rented home, a home that Mark Bosworth owned.
After Mark learned what had happened, he informed police of his brother's actions — proof, he says, that he's a straight shooter.
Russell Bosworth could not be reached for comment.
Mark Bosworth's detractors say they would like to know what Russell Bosworth is telling investigators about his brother these days. Some of Mark's former employees say they've been cooperating with investigators from the Attorney General's Office, the Arizona Corporation Commission, and the IRS.
Mark Bosworth has an answer for just about every criticism. Trouble is, a lot of his answers are hard to swallow.
Take what he says about his divorce from Brenda Sue. Bosworth says he began seeking a divorce in 1989. But the divorce didn't happen until 1995 because, Bosworth claims, they were often separated during that period and it was difficult to serve her with legal papers.
Sure, his books at Home America were a mess as of last year, and customers were justified in complaining, he admits. But the problem, he says, was simply a software foul-up that took some time to fix.
That sounds reasonable until he says the software problem went on for eight months.
Bosworth says the Department of Real Estate has a personal vendetta against him, that Commissioner Wercinski is using the Home America case to make a name for himself.
Bosworth says he didn't forge Magelsen's name on documents, that Magelsen "pressured" a company employee (Bosworth has no idea whom) to sign the deeds for Magelsen's own purposes.
"Whoever did that, it was at Ben's instruction," Bosworth claims.
Magelsen denies it, of course, and the jury in his lawsuit didn't believe that explanation, either.
In the Martha Mow case, Bosworth admitted he signed the widow's name on a deed that he then used to sell the property himself. As Judge Katz noted in his recent ruling, Bosworth had "signed [Mow's] name and had it notarized as if she were present."
Bosworth's excuse is that he made a stupid mistake.
At the time, he says, he thought that because Mow had given him power of attorney and wanted him to sell the property (Mow denies both claims), he was legally allowed to sign her name.
No power of attorney from Mow has ever been presented in the case. Bosworth says that is because she stole the file declaring power of attorney while working at Home America for several weeks after her husband died.
But even if any of that happened, it's incredible that the real estate "guru" didn't know that even with power of attorney, you can't legally sign someone's name without noting what is going on. The person with the power of attorney is supposed to sign the owner's name to the document, then sign his or her name with an abbreviated note: "POA."
Bosworth should have known that because that's the way he used power of attorney granted him by client Brian Schofield of Utah in a home sale in 2003. That was more than two years before he signed Mow's name on her property's deed without noting the supposed power-of-attorney privilege.
Bosworth issues a lot of blanket denials:
• He knew nothing about Russell's alleged burglaries and knew nothing of any maintenance fraud or other misdealings at Home America or at his other companies.
• When he was busted by speed-enforcement cameras for driving 110 miles per hour on Loop 101, his brother had "possibly" been driving at the time.
• The changing market is responsible for any losses incurred by his investors.
• His creditors won't be out even one dime — even if he loses the appeal of the Magelsen verdict — because he'll pay back 100 percent of what he owes, even if it takes years.
Bosworth says he has many satisfied customers, and provides a list of some of them to New Times.
But when two people on the list are contacted, the endorsements are short of glowing.
James Telaroli, a former business partner of Bosworth's, says he managed to make "a few hundred thousand" dollars on about 15 rental homes he had purchased through Bosworth's companies.
But that was only because he was one of the few investors savvy enough to sell the properties in 2005 and 2006, at the height of the real estate boom.
Salvador Deluna says he had just gone through a "terrible divorce and had terrible credit" when he moved to Arizona from California in 2001 and found Bosworth through an ad.
"Over a handshake and showing him my pay stub, he handed me a house," says Deluna, who owns a small advertising firm in Litchfield Park.
It's an inspiring tale — until Deluna is probed for more details. He says Bosworth handled a "no-qualifying lease-purchase" agreement for him, which gave him some tax benefits on the sale. The down payment was actually $5,000, plus a pickup truck that was worth about $5,000. He doesn't recall the monthly rent he paid but says it was relatively low.
Deluna did not purchase the house but sold his interest in the home a year later to a friend, who took over the payments. His friend paid him $2,000, he says.
When asked if that means he lost $3,000 and a pickup truck on the deal, Deluna claims New Times is trying to spin the story negatively.
"I didn't lose any money," Deluna repeats a couple of times. But when confronted with the math, he says that — no matter what anybody may be saying about Mark Bosworth — he feels the purchase did him a world of good.
It showed creditors he could make payments, he says, and that enabled him to buy a larger home the following year.
"My experience with [Mark Bosworth] has been very positive, and I've never had any problems with him," Deluna says.
Bosworth is frustrated with the media attention he received after the Magelsen verdict. He says stories about his situation have been sensational and inaccurate.
But he certainly hasn't gotten a raw deal from the Arizona Republic, where he spent about a million dollars annually on advertising during recent years, his former employees say. GoRenter.com places large color ads in the Republic's real estate classified section each Sunday, as well as other ads.
The state's largest newspaper has written only one small article about him in recent months — that he was banned from the real estate industry in Arizona because of the Magelsen verdict.
In an interview at GoRenter.com's offices, company officials appear more nervous than Mark Bosworth did during his later interview. Berne Fleming wears a doleful expression and puts his head on a conference table a couple of times during questioning by New Times.
Bosworth isn't here, but Fleming and GoRenter managers Dan Manley and Greg Dawson agree to comment for this article.
The men admit they're worried about a potentially negative news story on the company. They say they've lost clients with each small story the media has reported in the past few months. And they have a certain spin they want to impart:
Mark Bosworth no longer has anything to do with GoRenter.com!
Asked if they think Bosworth is unscrupulous, they hesitate. Clearly, Bosworth has been accused of many bad things, and Manley acknowledges, "We're not happy with any of it."
The GoRenter guys say Bosworth decided in mid-2006 to retire, something Bosworth also claimed during his interview at New Times' offices. So, Berne Fleming says, Bosworth sold the company (when it was called Home America) to him and Alan Davis; the takeover date was in January.
Bosworth was retained until early April, but only to help transition the company to the new owners, Fleming says.
Now that he's gone, the GoRenter managers say, they've sent a short report to the state real estate department showing that he wasn't doing anything with the company that could violate the April cease-and-desist order.
Former employees appear incredulous that anyone could believe this.
They say Bosworth is still the brains of GoRenter — and that the idea of a sale was invented only after the Magelsen verdict came down in November. Bosworth is trying to protect his assets by making it look like a clean sale, the employees say.
To prove this isn't true, the GoRenter bosses give New Times three pages of paperwork, which they say they also submitted to the Department of Real Estate, that show details of the sale.
The first page is titled "Letter of Intent" and contains a short paragraph stating that Alan Davis paid Bosworth "and/or" Home America $156,492 on June 6, 2006, for a deposit on the purchase of the company.
The next two pages are similar, noting two additional deposits for the sale of $100,000 and $75,000 in late June and August, respectively. All the pages are signed by Davis and Bosworth.
The documents look anything but official, and New Times asks Bosworth during his interview whether it's possible the men picked some random money transaction in 2006 between Bosworth and Davis, deciding only later to call it the sale of Home America/GoRenter.
Bosworth says "no" — the transaction listed was, indeed, for his company.
However, on the list of investors Bosworth's former employee provided, Alan Davis is shown having invested exactly $156,492 in a Scottsdale office building called "Bell 101." The employee tells New Times that the deal closed on June 6, a fact that Greg Dawson confirmed in a later interview.
The list shows Alan Davis also invested $100,000 in another office building; the former employee says that deal closed on June 20, the same day as the second supposed deposit of $100,000 for Bosworth's company.
It's a stunning coincidence.
And it raises the question of whether the sale agreement of Home America/GoRenter between Davis and Bosworth may have been backdated to well before the Magelsen verdict and subsequent bankruptcy filing.
Arizona Corporation Commission records show no official change in the ownership of GoRenter until April 2008, though the records do make it look as if, at least on paper, Bosworth no longer runs his company.
Davis didn't return repeated calls seeking comment on the investments. Dawson did, though. He claimed Davis told him that the money invested on June 6 in the office building must have been soon diverted to the sale of Bosworth's company, but he wasn't sure how that happened.
Bosworth writes cryptically in a later e-mail, "I do not believe Alan Davis or Berne Fleming has ever paid me personally on any of the businesses."
One thing is for sure: Mark Bosworth did not list any income from the sale of his company on his bankruptcy petition.
But perhaps he should have.
GoRenter.com gave New Times a copy of a fourth document, dated January 1, 2008, and titled "Transfer of Membership Interest." It states that Mark Bosworth "acknowledges receipt of $331,492 from about June through August 2006" for the alleged sale, and it's signed by Bosworth, Davis, Fleming, and Dawson.
Even if the sale was genuine, it seems impossible to fully separate GoRenter — formerly Home America, formerly Property Masters — from Mark Bosworth.
His parents work there. His brother-in-law, Alan Davis, and Davis' cousin, Fleming, are the managers.
New Times asks Dan Manley, GoRenter's broker, whether he also has family ties to Bosworth.
"I'm not related in any way," Manley says.
But, in fact, Manley is the father of Steve Manley, another GoRenter employee. And Steve Manley is married to one of Bosworth's daughters, Alisha.
Not only that, Bosworth brags to New Times that he's "being paid very well to be retired" by the "new" owners, because their purchase of the company is being paid out over time. It's as if he continues to collect a paycheck from a real estate company, yet the state has prohibited him from working in real estate.
The managers at GoRenter can try to distance themselves from their founder. But, by all appearances, the buck still stops with Mark Bosworth.
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