Better Housing Foundation deals in Illinois receive SEC scrutiny

The Securities and Exchange Commission and Illinois Attorney General’s office are examining the Better Housing Foundation as investors fret over the uncertain prospects for recovering their $170 million investment in the not-for-profit’s defaulted debt.

The bonds were sold between 2016 and 2018 through the Illinois Finance Authority. Defaults occurred in June on the three Chicago portfolios — Shoreline, Icarus, and Ernst — and in December on the suburban Blue Station and Windy City portfolios. Blue Station was recently put on the selling block.

The apartments managed by DeAngelis suffered from scores of building code violations and overdue property taxes, according to bond filings by BHF. The foundation accused DeAngelis of providing deeply flawed reports on the properties, which needed extensive repairs, and alleged DeAngelis grossly mismanaged the apartments and failed to collect rent.

As a result, the Chicago Housing Authority terminated tenants’ housing vouchers and BHF defaulted on the debt. The non-profit later defaulted on the two remaining bond issues and many securities traded this month for 2 cents on the dollar.

Stifel Nicholas underwrote the bond issues.

If you invested in the above-referenced bonds through a broker-dealer and have incurred losses, please call securities arbitration attorney David Harrison, Esq. at (310) 499-4732 for a free consultation. Mr. Harrison, a former NYC assistant district attorney, and in-house Morgan Stanley attorney has been in private practice representing defrauded investors for the last 20 years.

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