The former CEO of a collapsed Philadelphia real estate company has been fined $350,000 for violating a state settlement agreement. The Pennsylvania Attorney General's office announced the penalty against Jason “Jay” Walsh, whose firm, ABC Capital, was at the center of an $82 million investment scheme that left international investors with significant losses and tenants in dilapidated properties.
A Common Pleas Court judge ruled this week that Walsh breached a 2024 agreement that explicitly prohibited him from managing rental properties in Pennsylvania. The fine comes after an investigation found he continued to oversee properties he owned, communicate directly with tenants, and supply false information to state authorities.
Key Takeaways
- Jason Walsh, former CEO of ABC Capital, was fined $350,000 by the Pennsylvania Attorney General.
- The fine was for violating a 2024 settlement that banned him from managing rental properties.
- ABC Capital was behind an $82 million scheme involving over 1,900 distressed homes sold to overseas investors.
- The company promised to renovate and manage properties but often failed, leading to lawsuits and tenant complaints.
- Walsh was found to be directly managing properties and collecting rent despite the ban.
Details of the Settlement Breach
The penalty against Walsh stems from his failure to adhere to strict conditions set by a 2024 settlement. That agreement, which described ABC Capital's business practices as “deceptive and unfair,” barred Walsh from managing or maintaining rental properties in the state for 25 years. His wife, Blanca Walsh, received a similar 15-year ban.
Court filings revealed that Walsh continued to directly manage at least two properties located in Philadelphia's Northern Liberties neighborhood. One property was his former residence, while the other was held under a company named Nolo Investments LLC.
Walsh had informed the Attorney General's office that an outside company, “My Mega Realty,” was managing these properties. However, investigators found this to be untrue. The owner of My Mega Realty confirmed that while a management arrangement was discussed, a final deal was never executed.
“We are grateful that the Court recognized blatant breaches of this agreement, and imposed a serious penalty against Mr. Walsh,” Attorney General Dave Sunday said in a statement. “We will continue to hold Mr. Walsh accountable under this agreement that clearly prohibits him from managing properties in the Commonwealth.”
Further evidence came from former tenants, who reported to the Attorney General that both Jason and Blanca Walsh were directly involved in managing the properties and collecting rent payments, a clear violation of the court-ordered ban.
A Pattern of Deception
The court found that Walsh not only violated the property management ban but also provided “inaccurate information” to the Attorney General’s office about his activities, compounding the breach of the settlement.
The Rise and Fall of ABC Capital
During the 2010s, ABC Capital built a massive operation centered on Philadelphia's housing market. The company targeted distressed properties in the city's poorest neighborhoods, purchasing them and marketing them as “turnkey rental” investments to a global audience.
Investors from Asia, Europe, and South America paid cash upfront based on the promise that ABC Capital would handle everything: the purchase, the renovations, finding tenants, and ongoing property management. The firm facilitated over $82 million in property sales, involving more than 1,900 homes and 600 different companies in Philadelphia alone.
However, the promises often went unfulfilled. Numerous investors filed lawsuits, alleging that the company failed to complete renovations or deliver the high returns that were advertised, sometimes as much as 40%. Many were left with uninhabitable properties and significant debt.
A Dual Impact
The business model was described by tenant advocates and in lawsuits as a “scam” or “Ponzi scheme” that victimized two groups simultaneously. International investors lost their savings, while local tenants were often left in unsafe and poorly maintained homes managed by the company.
“It’s almost always in poor communities, with high rates of people of color,” Karla Cruel, a former attorney with the Tenant Union Representative Network, noted in 2022. “But they were screwing over the tenants and the investors at the same time.”
A History of Legal Troubles
The $350,000 civil penalty is the latest in a series of legal actions against Walsh. As rising property values made Philadelphia less profitable, his company shifted its focus to Baltimore, where he faced further legal issues.
Last year, Walsh was convicted in Baltimore for acting as an unlicensed contractor. He was ordered to pay $20,500 in restitution in that case, which remains the only criminal action brought against him to date.
The 2024 Pennsylvania Settlement
The original Pennsylvania settlement was brokered by then-Attorney General Michelle Henry in response to widespread complaints from both investors and tenants. The agreement required Walsh and his wife to use a third-party property manager for any properties they owned in the state and explicitly forbade them from having any contact with tenants.
By 2024, reports indicated that the Walshes had relocated to Aruba. Despite this, the recent court ruling confirms Walsh continued to be involved in the Philadelphia rental market, leading to the substantial fine. Efforts to reach Walsh or his attorney for comment on the latest ruling were unsuccessful.
