After more than two years of pursuing a consumer protection case against ABC Capital — a Philadelphia company that ran a Ponzi-style international investment scheme fueled by distressed real estate and low-income tenants — Pennsylvania’s Office of Attorney General has reached an agreement with the company.

The agreement, filed last week in Philadelphia Common Pleas Court, says the attorney general alleged that ABC and its chief executive, Jason “Jay” Walsh, engaged in unfair or deceptive trade practices. But under the terms, Walsh will avoid paying fines or admitting wrongdoing, and he and his partners will be allowed to make real estate deals in the state.

ABC and Walsh will be barred from running a property management company in Pennsylvania for 25 years, but are permitted to operate rental units using third-party property managers. ABC also agreed to a $350,000 suspended fine — meaning it won’t have to pay as long as it complies with the deal.

The attorney general’s case dealt only with the conditions of rental properties and did not extend to ABC’s alleged fraud on investors.

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“The underlying conduct has ceased,” said Brett Hambright, press secretary for the attorney general. “Our focus in resolving the matter was injunctive relief and to keep the actors out of the management business in Pennsylvania.”

» READ MORE: ABC Capital was one of Philly’s biggest real-estate companies. Critics call it a “big fat nasty scam.”

ABC was the subject of a 2022 Philadelphia Inquirer investigation that found Walsh and his partners collected funds from hundreds of investors from more than a half-dozen countries with promises to buy, renovate, and rent out rowhouses to generate steady returns. ABC was involved in the purchase of some 1,900 Philadelphia properties through hundreds of shell companies, before moving on to other U.S. cities.

But investors said that after taking their money, ABC did not complete the renovations. The scheme operated for years at the peril of desperate tenants, who were placed in substandard units where some suffered injury and illness due to poor building conditions.

The Baltimore Banner first reported on ABC Capital’s growing problems, outlining how the company had expanded from Philadelphia to Baltimore with similar complaints ensuing, and first reported on the existence of the Pennsylvania Attorney General’s investigation.

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Karla Cruel, a lawyer who has represented tenants dealing with ABC, said the lack of more aggressive enforcement efforts has contributed to a culture of impunity for real-estate fraudsters. “This encourages people to involve themselves in real estate schemes, [telling them], ‘In the end, nothing really happens to you, so go for it.’”

Walsh is separately facing criminal charges in Maryland for allegedly stealing $20,500 an investor had paid in advance for renovations, The Baltimore Banner reported. Walsh has not appeared for hearings, and court records show the case in “warrant” status. The Maryland Insurance Administration is also investigating ABC Capital and a now-shuttered title company over allegations of forged documents.

He did not respond to a request for comment.

ABC has been hit with more than a dozen civil suits in federal court under the Racketeer Influenced and Corrupt Organizations Act, and has $3.3 million in outstanding judgments against it in Philadelphia Common Pleas Court.

The federal lawsuits are on hold pending bankruptcy proceedings for a number of ABC-related companies, but the various bankruptcy cases were dismissed or delayed after Walsh or his partners, Yaron Zer and Amir Vana, failed to appear at meetings or turn over documents. A contempt motion against them has been pending for almost a year.

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“In our view … the ABC bankruptcies were brought in bad faith, and serve no other purpose but to delay legitimate litigation,” said L. Anthony DiGiacomo III, a lawyer representing investors who say they were cheated by ABC.

In 2022, Walsh told The Inquirer he was still based in Philadelphia, though he was selling his home and maintained only a virtual office with no employees. He said at the time that he was committed to real estate development in the city.

He now lives in Aruba, according to posts on social media, where he markets himself as a guru called the “Real Estate Doctor” — offering online courses and one-on-one mentorship packages for as much as $50,000 to aspiring real estate moguls.

The arrangement with Pennsylvania’s attorney general requires Walsh to make semiannual disclosures of his real estate holdings. An initial submission filed with the court shows the real estate investor still owns 22 parcels in Philadelphia, including 12 rental properties. The latter are all currently operated by third-party rental management companies.

Banner reporter Justin Fenton contributed to this article.

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