Dual agency without consent, RICO claims, and a state AG already involved
A Rhode Island real estate team allegedly stripped nearly $400,000 in equity from elderly homeowners through a foreclosure rescue scheme run out of its own brokerage.
That is the central accusation in a federal complaint filed on February 9, 2026, in the United States District Court for the District of Rhode Island. The lawsuit names Preferred Property Solutions, LLC, its principals Kyle Seyboth and Chris Messier, agent Lowell Williams, Red Balloon Capital, LLC, and Seyboth Real Estate Team, Inc. — a network of entities and individuals tied to a licensed real estate operation spanning Rhode Island and Massachusetts.
According to the complaint, the alleged scheme worked like this: Williams provided Seyboth with a list of properties facing foreclosure. Within days, a real estate agent from Seyboth's team approached the homeowners at their Providence residence. What followed, the complaint alleges, was a series of misrepresentations that led two elderly Haitian immigrants — who spoke limited English and had owned their home for nearly 30 years — to believe they were refinancing their mortgage. Instead, the complaint says, they unknowingly signed over the deed to their home for $100,000, a fraction of its roughly $400,000 value.
The deal allegedly came with a repurchase arrangement requiring $280,000 within a year — terms that the defendants themselves, in text messages cited in the complaint, described as a "loan" carrying 15 percent interest. Later internal emails allegedly show Williams and Messier referring to an additional advance as "an additional loan" and discussing "adding that to the loan." Despite that language, the transaction was documented as a property sale.
For real estate professionals, the most troubling details may be structural. The complaint alleges that Seyboth — who serves as owner, president, and director of his real estate team — listed himself as broker for both the buyer and the seller in the purchase and sale agreement, without the homeowners ever having engaged him or signed any agency agreement. That kind of unauthorized dual agency is exactly the sort of conduct that draws regulatory heat and puts licenses at risk.
There is also the matter of how the transaction reached closing. According to the complaint, the first attorney's office involved refused to proceed unless the homeowners had their own lawyer. A different attorney was then brought in, and the documents were signed and notarized — even after one of the homeowners explicitly stated she did not want to sell the property.
The Rhode Island Attorney General has already stepped in, temporarily blocking the property's resale in a separate action alleging deceptive trade practices. The complaint itself pursues six causes of action, including claims that the deed should be treated as a mortgage, that the transaction was usurious, and that the defendants operated as a racketeering enterprise.
No rulings have been issued. The allegations remain unproven. But the case lays out a detailed roadmap of how licensed real estate infrastructure — agents, brokerages, closing attorneys, and standard transaction documents — can allegedly be turned against the very consumers it is meant to serve. For every professional in the industry, that should be worth watching closely.
