TAMPA — A Largo mortgage broker who squandered hundreds of thousands of dollars on risky and unlicensed securities has become a fugitive, after his failure to pay back devastated investors led a judge to order his arrest.
John Steve Tsavaris, who attorneys say built his Home Saving Mortgage Corp. brokerage into a spurious investment mill that crumbled during the housing crash, was ordered in 2012 to pay back two small-time Florida investors who lost a total of more than $350,000.
Tsavaris, 67, was not licensed to sell securities, court records show, and the ones he peddled were not registered as required by law. But a judge said that didn't stop Tsavaris from selling the same kind of "toxic" mortgage-backed securities that helped trigger the global financial meltdown.
In late January, with Tsavaris still dodging the court, a Pinellas County judge found him in civil contempt and ordered a warrant for his arrest. The heir of a family who worked for decades in the Tarpon Springs building business, he is now considered a wanted man.
Tsavaris, attorneys said, enticed small-time investors with a boiler room of "smile and dial" securities sellers and promises of unsinkable wealth. He promised the securities, backed by bundles of homeowners' mortgage payments, would net investors dramatic rewards, like 11 percent returns.
April Ruiz de Somocurcio, a Tampa elementary school teacher, was 28 when she met Tsavaris at a "self-development transformation seminar" and invested $225,000 she and her husband had inherited after her mother's recent death, depositions show.
Garnett Staples, a widow in Cocoa Beach, was 81 when she took out a reverse mortgage on her paid-off condo and invested more than $133,000 — all while Tsavaris knew his investment operation was falling apart.
"This guy was a very shrewd salesman, and he knew how to manipulate people," said Jeff Coleman, a Clearwater attorney who represented the two investors. "He put together a program that was absolutely in violation of every securities rule that we have."
Attempts to reach Tsavaris, who represented himself in the lawsuit, were unsuccessful this month. He no longer lives at a St. Petersburg rental home he listed as his address in court records. Emails and phone messages left for his son were not returned.
Paul Weitzel, whom Tsavaris called the brokerage's director of operations, reached a confidential settlement in the investors' lawsuit and has not spoken to Tsavaris in more than a year, said his attorney, Marshall Reissman.
Weitzel contends he "was unwittingly drawn into Tsavaris' web," Reissman said, including being unknowingly listed on documents for Tsavaris' now-defunct home-loan factories.
Tsavaris started in real estate in the '70s as a co-founder of Anclote Property Corp., a Tarpon Springs development firm that was slammed in court for not paying workers and that collapsed in bankruptcy in 1987.
Tsavaris' career afterward continued to show stains. In the '80s, he filed for bankruptcy and his Florida real estate license was revoked. Court records show he pleaded no contest in 1998 to soliciting a Tampa prostitute.
In 1993, after Florida officials denied his request for a new mortgage-broker license, he fought back, court records show. The state ultimately granted him a new license as long as he limited his mortgage activity during a year of probation.
That didn't appear to slow him down. Over the next 13 years, Tsavaris became the Wolf of Ulmerton Road, growing his Largo brokerage to 65 workers and coordinating thousands of subprime home loans and refinancings across the state, depositions show.
During the frothiest days of the housing bubble, his brokerage hosted monthly "Financial Freedom" seminars for novice investors and ran a massive telemarketing operation with a state-of-the-art predictive dialer, a bulk-calling system allowing them to make a quarter million calls a week.
But in 2006, when hordes of home loans defaulted, Tsavaris said "the train wreck started," according to his deposition. Within two years, he had axed nearly all of his loan officers, telemarketers and other employees, depositions show. Attorneys said Tsavaris coached people to invest while knowing his brokerage was in a death spiral.
Tsavaris' firm closed for good in 2010. A year later, he owed more than $100,000 in federal tax liens, Internal Revenue Service records show. But attorneys worry the lasting damage will fall on investors who trusted Tsavaris with their livelihoods.
"So many of these mortgage-backed securities were so damaging, and the most competent and complex firms that had them collapsed," Coleman said. "And here we have this chucklehead in Tampa Bay setting up his own. … It's just inconceivable."
Times researcher Natalie Watson contributed to this report. Drew Harwell can be reached at (727) 893-8252 or [email protected]