1.) $5.1 Million
Date: Jan. 26 | Buyer: La Marche Drive Investment LLC, led by Jeremy Carroll | Sellers: Rick and Deanna Ferguson | Address: 22 S. Valley Crest Court | Date Built: 2007 | SF: 14,909
The $5.1 million reported sale price of Little Rock upscale homebuilder Rick Ferguson’s mansion at 22 Valley Crest Court has raised questions about the actual amount paid for the estate.
Even though Ferguson and his wife, Deanna, represented on a warranty deed that they received $5.1 million for the home in the Valley Falls Estates neighborhood, some real estate watchers believe that Ferguson inflated the price on the deed so that it could be used to create comparative valuations for later transactions.
On Jan. 26, 2012, Ferguson sold the nearly 15,000-SF home to La Marche Drive Investment LLC, led by Jeremy Carroll of Washington (Hempstead County).
“Something quirky went on because [La Marche Drive Investment] immediately after buying it turned around and listed it for $4 million,” said Pulaski County Assessor’s Chief Administrator Joe Thompson. “All along we thought there was something a bit strange but we never figured out exactly what it was.”
Rick Ferguson didn’t return calls for comment. Attempts to reach Carroll were unsuccessful.
The 22 Valley Crest home was listed for sale at $3.975 million but was pulled from the market on Jan. 26. The listing agent, Randy Sumbles, didn’t return several calls seeking comment.
This isn’t the first time questions have been raised about Ferguson’s pricing. In a 2009 lawsuit over workmanship problems in a house Ferguson built, Little Rock business owner Steve Wortman revealed that the $1.2 million that deeds showed he paid Ferguson for three lots in Valley Falls Estates was actually closer to $750,000 after discounts were applied to the improvement. Wortman and Ferguson reached an out-of-court settlement.
In La Marche’s transaction, it’s believed that no money changed hands. Instead, Ferguson received 25 acres near Old Washington Historic State Park in Hempstead County as part of the deal. Those 25 acres carried an alleged value of $2 million, or $80,000 per acre.
On the warranty deed, Ferguson filed with the Pulaski County Clerk’s Office for the home, he and his wife “certified under penalty of false swearing” that “the legally correct amount of documentary stamps have been place on this instrument.” The stamps on the deed indicated the $5.1 million sale price.
There are still unanswered questions over who polices the deeds.
“It’s not even our role to make sure there’s enough stamps on there,” said Thompson, at the assessor’s office. “As long as they put enough stamps on it, they can put more if they want.”
But Arkansas Code 26-60-106 seems to anticipate that the stamps match up with the price by saying that the tax “[S]hall be computed on the basis of the full consideration for the real estate transferred.” Section 26-60-111 further provides for a penalty of $500 or 1 percent of the amount of the transaction if any person is found “guilty of providing false information on the affidavit,” which includes failing to disclose “the full amount of the consideration” or failing “to pay the correct amount of tax due.”
The Arkansas Attorney General’s Office has never been asked for an official opinion specifically about whether the law allows the parties to a transaction to buy more revenue stamps than the law requires, according to spokesman Aaron Sadler. However, a couple of opinions concerning revenue stamps make reference to the law’s requirement of “the legally correct amount” of stamps.
Thompson said he didn’t know who would police someone who added more revenue stamps to make the property appear more valuable.
Pulaski County Prosecuting Attorney Larry Jegley said he hasn’t been presented with any referrals involving allegations of inflated representations on deeds.
“Whether it would be something that would be punishable under the criminal code or related provisions is unclear and would require a great deal of research,” he said. “But certainly if there were a provable scheme to defraud or deceive for gain of some sort” that might call for an investigation, he said.
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