Report: Former 'Flip This House' star Sam Leccima accused of fraud
By Steve Rogers and Christopher Rocchio, 06/04/2007
Flip This House, an A&E home renovation reality series that is already the subject of a breach of contract and fraud lawsuit brought by Trademark Properties, a South Carolina real estate company that starred in the show's first season, is now embroiled in a second controversy centered around Sam Leccima, an Atlanta businessman who served as one of the show's second season stars.
During Flip This House's second season that premiered on A&E in July 2006, Leccima -- whose Leccima Real Estate company was one of two real estate firms that the show's second season followed -- presented himself as a real estate investor who was a wiz at renovating homes at flipping them for a profit. However last month, reports of allegations that Leccima -- who didn't return for the show's third season that A&E this March -- was a fraud who made fake renovations and never flipped anything except the stacks of money he allegedly scammed investors out of began to surface in Atlanta.
According to a two-part "I-Team" investigative report broadcast by Atlanta's WAGA-TV Fox affiliate in May, Leccima didn't own the houses he claimed to have sold on Flip This House and also staged some of the renovations depicted on the show -- sparking an increasing firestorm of national media attention on the 36-year-old who presented himself as a successful real-estate mogul with a "passion" for his job.
WAGA reported Leccima didn't even posses a real estate license when Flip This Housewas filming prior to last summer's second season premiere, as it had been revoked by a 2005 ruling in which the Georgia Real Estate Commission decided that Leccima "does not bear a good reputation for honesty, trustworthiness, integrity, and competence."
According to WAGA -- which is scheduled to air another installment of its investigation into the accusations surrounding Leccima on Tuesday, June 5 -- Leccima's fraudulent Flip This Houseactivities included failing to put the finishing touches on renovations that were out of view of Flip This House's cameras, staging at least one fake open house in which some of his now-former friends posed as fake buyers for an as-yet-still unsold renovated home, and claiming to "sell" another home that he didn't own and was actually only renovating for other out-of-state owners to another unidentified pair of fake home buyers.
The station also claimed to have also uncovered police, regulatory, and court records in which a dozen different people, including former friends, allege to have lost a total of more than $400,000 investing with Leccima. According to WAGA, the Georgia Secretary of State's office is currently investigating Leccima for possible violations of the state's securities laws.
Once it was informed by the allegations in WAGA's report, A&E announced that it was pulling Leccima's Flip This House episodes off its broadcast schedule (like most cable networks, A&E regularly rebroadcasts previous episodes of its original programming) and denied any knowledge of the allegations.
"We are dismayed to learn of these allegations. A&E Television Networks is not a party to any of the transactions shown in Flip This House and has not received any formal complaints about the properties or sales," A&E said in a statement released to WAGA. "Based on these allegations, A&E is taking all episodes featuring Mr. Leccima off the air pending further investigation of the claims. After the second season of Flip This House, A&E decided to change direction and focus on different cast members, as we did after the first season, and we no longer work with Mr. Leccima."
During a recent phone interview with The Associated Press, Leccima -- who was apparently merely serving as an investment advisor and renovation contractor for other real estate investors who actually owned the homes -- told The AP that he had never claimed to own the homes he flipped on Flip This House. While he failed to admit his televised renovations were staged -- a claim made by family members and friends used in the ruses, according to WAGA -- Leccima didn't exactly deny it and instead suggested that A&E and Flip This House's production company knew what was going on.
"Ask anybody who works in television how a reality show is made and you'll find that ours was a very typical approach," Leccima told The AP.
During the interview, Leccima also blamed his "high profile" for some of the allegations made against him. "I'm a business person and I think I have as many people that like me as don't like me," said Leccima.
Last summer, Trademark Properties and company founder Richard Davis sued A&E after Flip This House's second season premiered. In their multi-million dollar civil lawsuit, Trademark and Davis, Flip This House's original executive producer and star, charged A&E and the show's Departure Films production company with breach of contract, fraud and seven other charges.
In their lawsuit, Trademark and Davis, who claimed to have not received any financial compensation from A&E or Departure for Flip This House's first season, alleged that they created the show (then called Worst To First) show concept without A&E or Departure's involvement and filmed a pilot on their own in April 2004. The following month, they pitched the show to A&E, which later agreed to produce and televise 13 episodes of the series. Trademark and Davis allege that A&E (which hired Departure to produce the show) verbally agreed -- among other terms -- that although A&E would pay all the show's production costs, the parties would be 50/50 partners in any profits generated from the project and agreed to prepare a written agreement stating such.
However, despite A&E's alleged "repeated assurances" that a written agreement reflecting the parties' partnership terms was coming, the network never provided an agreement that reflected the terms of their alleged verbal agreement throughout the entire period of Flip This House's first-season production. Instead, according to Trademark and Davis, "A&E defrauded [Trademark and Davis] and misappropriated and stole [their] project for A&E's own use and benefit." In addition to their creative and financial claims, Trademark and Davis -- who also didn't get the final creative control that the network allegedly verbally agreed to give them -- also claim to have suffered significant damages to their business reputation and operations and had their trade secrets misappropriated.
According to Trademark and Davis' lawsuit, it wasn't until around March 2006 -- only a few months before Flip This House's second season premiere -- that they learned that A&E had decided to produce and air another Flip This House season without them.
In their initial August 2006 response to Trademark and Davis' lawsuit, A&E and Departure filed a counterclaim alleging that the allegations in Trademark and Davis' lawsuit bore "no relationship to reality" and the parties "never made any agreement that remotely resembles the terms" Trademark and Davis allege. According to the counterclaim, Trademark and Davis had both always understood and agreed that A&E had final creative authority over Flip This House, owned all legal rights in the show, and received and controlled all revenues associated with the show.
According to A&E's counterclaim, Flip This House's first was produced under two separate agreements -- one between Davis and Departure and another between Departure and A&E -- and neither agreement provided Davis, who the network alleges viewed the show as "powerful" free advertising for Trademark, which he allegedly wanted to expand nationally, with any creative control, show rights, or financial compensation.
As part of its counterclaim, A&E also alleged that it only moved forward with a second Davis-less Flip This House season after Davis -- having allegedly already verbally agreed to the terms of a second Flip this House season that would have provided him with "certain compensation" -- refused to sign a written second season contract and instead "announced" that he was launching a new reality show with TLC.
Trademark and Davis denied A&E's counterclaim allegations in their own subsequent court response and the case is still ongoing. In the meantime, The Real Estate Pros, a new reality show that stars Davis and the rest of his Trademark team and originally debuted as The Real Deal, premiered on TLC on April 21, 2007.
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