Nicholas Rezny has raised millions of dollars to fuel his real estate empire. Federal and state agencies are reviewing his business practices. Rick Wood/Milwaukee Journal Sentinel
(Photo: Rick Wood, Milwaukee Journal Sentinel)
In 2015, a company linked to Nicholas Rezny, the landlord who City Hall says should be probed by the FBI, bought a Milwaukee home for him to live in and he purchased a potential retirement home in Florida — even though he was already building up a substantial back tax bill, courthouse records show.
In April 2015, Rezny was a partner in a purchase of a $330,000 home in West Palm Beach, Fla., and just six months later a limited liability company created by Rezny and his wife, Emma Rezny, bought their home in Milwaukee’s Washington Heights neighborhood, also for $330,000.
The Milwaukee home was sold to a Rezny friend earlier this month.
Meanwhile, a tax lien filed last year shows that the couple owe the IRS $223,168 for 2014 and 2015 income taxes. In addition, court records show limited liability companies linked to Nicholas Rezny owe about $30,000 for back property taxes and code violation fines dating back to 2013.
“It raises a lot of red flags,” said Ald. Michael Murphy, whose district includes the Washington Heights home. “Most normal people would pay their taxes before they buy more properties.”
The City Attorney’s Office has questioned whether Milwaukee landlord Nicolas Rezny is financing his real estate operation with a Ponzi scheme. Rezny vehemently denied the allegation during a recent interview at his Washington Heights home. Rick Wood, Milwaukee Journal Sentinel
Those transactions are in addition to the real estate moves by the dozens of LLCs that Rezny owns or is linked to. Rezny has an ownership or management interest in about 225 rental units in the Milwaukee area through dozens of LLCs and his American Community ReDevelopment Group LLC. State records link him to about 80 LLCs, though many are inactive.
The Milwaukee city attorney’s office called on federal authorities to look into Rezny’s operations, saying in a letter that Rezny “may be engaged in criminal conduct regarding interstate securities fraud involving real estate located in the City of Milwaukee.”
Assistant City Attorney Heather Hough described Rezny’s operation as “akin to a mortgage Ponzi scheme” in a letter to authorities.
Aldermen and other city officials are concerned about landlords who control scores of LLCs, many of which owe back taxes or fines, and create new LLCs that purchase other properties. A Common Council committee was charged with studying the issue after the Milwaukee Journal Sentinel last year reported the practice and the ways landlords use LLCs to keep their identities secret.
In an email interview, Rezny defended the property purchases and acknowledged that he is looking to raise $600,000 to pay his taxes and other debts. Meanwhile, the 33-year-old landlord who has bragged that he is “the biggest person people haven’t heard of under the age of 40,” blamed his financial woes on lawyers who are suing him, city officials who said his business should be investigated and the Journal Sentinel for writing a story that detailed his business operation.