Suit targets house-flipping family

Partner's affidavit says Bastasches preyed on unsavvy homeowners in and around Portland.

A new lawsuit accuses a Portland area house-flipping business of engaging in predatory and deceptive practices to take advantage of homeowners and tenants.

The suit is unusual in the level of detail it provides as well as in the source of the allegations of trickery — a sworn affidavit from one of the business partners that is named in the complaint, Jeffrey Divers.

Divers, in the affidavit, says his partners used deception, the threat of legal action and "psychological coercion" to gain possession of homes in Troutdale, Portland and elsewhere.

The lawsuit is just one of several surrounding the Bastasch family, which used to own a number of prominent properties and businesses in the Portland area, including the Sweetheart Bakery on Southeast Stark Street in the Buckman neighborhood.

Real estate investor John Andrew Bastasch, one of five siblings, died in late 2013, triggering a dispute over his management of a family trust. His two daughters, Camille Whitson and Teresa Bastasch, are targeted in the new lawsuit, which was filed in Multnomah County Circuit Court and also names their business, Dahlia Properties LLC.

Both, like Divers, did not respond to requests for comment.

In the suit, Albert Tafoya says he agreed to sell his Troutdale home to be converted into a boarding house for pilots and students while he continued to live in it and provide security. In exchange, John Bastasch and Divers promised to improve the house and make a series of payments totaling $350,000, according to the suit.

In the end, Tafoya received no payments but now does not own his house, according to the suit and county records. According to Zillow.com, the property includes a five-bedroom, four-bathroom, 3,840-square-foot house and is worth more than $700,000.

The lawsuit was filed by attorney Sean Ridell on behalf of Tafoya. It accuses the defendants of engaging in a pattern of unlawful business practices, or racketeering, and says it wasn't just Tafoya victimized. It also mentions Larry Higgs, a Southwest Portland man who has filed his own suit against the family.

For Tafoya's suit to target Divers might seem ironic, as the local man has been trying to blow the whistle on the Bastasch family for at least two years, according to his affidavit. Divers filed a consumer complaint against the family with the Oregon Department of Justice in January 2016.

Jim Bastasch, a nephew of the late John Bastasch, said he was not surprised to hear of Divers' allegations, calling his uncle a "wheeler-dealer type" who left "a lot of unhappy people" in his wake.

Twisted tale

The lawsuits and complaints tell a tangled tale.

Divers, in his complaint to the Justice Department, says he went into business with John Bastasch in 2008, and bought, sold and managed about 20 homes for the partnership.

A sworn affidavit by Divers that is included in Tafoya's lawsuit goes into more detail. Divers says that in 2012, John Bastasch's own relatives began accusing the investor of "misconduct and dishonesty" in how he was managing a family real estate trust.

"John admitted to me that many of the accusations his family were making were true," Divers wrote. "... He had been dishonest with family members, misappropriating their money and transferring it to his friends, immediate family and his own uses for a variety of reasons."

The accusations and scrutiny caused a cash flow emergency, and Divers said the John Bastasch family "attempted to enlist me in what I came to believe was a criminal conspiracy to defraud members (of) the Bastasch family trust and persons doing business with the Bastasch-Divers partnership." Among other things, Divers claims, he was asked to hide assets from members of the Bastach family.

John Bastasch's business model, Divers claimed, focused on working with inexperienced, distressed and first-time homeowners, and offering deals that literally were too good to be true.

"Our sales presentations included several creative proposals intended to persuade sellers to enter agreements with us at greatly reduced purchase prices and interest rates, far below market value," Divers wrote.

In return, the family would share profits, pay for repairs and upgrades, and let the seller continue to live in the home while it was rented.

But, Divers claimed, the family did not intend to honor those promises.

After John Bastasch's death, his daughters, Teresa Bastasch and Camille Whitson, took over the family business, and Divers' partnership with them continued, Divers claims. And he claims the misleading business practices continued.

For instance, Divers claimed his partnership with the Bastasch family by 2015 intentionally subjected building occupants to potentially hazardous conditions "in a more aggressive attempt to drive occupants like Tafoya out or make them more willing to renegotiate their agreements with us."

Tafoya's lawsuit says his complaints grew to include safety concerns, even as not a single payment was made, according to the suit. The complaints included "the defendants' removal of the home's smoke alarms; removal of kitchen appliances; disconnection of kitchen water and kitchen electrical power; defendants' removal of workers from repair projects; defendants' contamination of the home's drinking water and other physical hazards caused by unfinished renovation projects."

Divers says he "took multiple steps to stop the abuse" and says that he was an "unwitting" participant.

Litigation swirls

Tafoya's lawsuit just adds to the dissension and litigation surrounding the Bastasch family and business.

In 2014, John's brother, Frank Bastasch, filed a claim against John's estate accusing him of "numerous breaches of fiduciary duty" against the family trust, with damages totaling more than $600,000.

In May 2016, Divers sued Dahlia Properties for nearly $500,000, saying they'd agreed to sell the 1505 S.W. Upland Drive property in Portland where Larry Higgs lived, but weren't giving Divers his share of the value.

In 2017 Teresa Bastasch and Camille Whitson sued Mary Bastasch to dissolve their partnership with her over the ownership of a property at 521 N. Tillamook St., in Portland.

Also in 2017, Higgs sued Dahlia Properties.

Portland lawyer Jonathan Radmacher represents Higgs and has dealt with the family before.

He faced off with John Bastasch years ago before the Oregon Court of Appeals, persuading the court in 2010 that John had engaged in unlawful lending practices, or usury, against two of his relatives.

It was Divers who contacted Radmacher to help Higgs keep his home.

"He seems like the guy who is trying to do right by people," Radmacher said of Divers.