St. Louis attorney Lisa Krempasky has been temporarily barred from practicing law and permanently banned from selling securities in Missouri following an investigation into her role in one of the costliest real estate scheme ever to hit the region.
In the mid-2000s Krempasky served as the lawyer for developer Doug Hartmann and his DHP Properties that used funds from private investors to scoop up hundreds of properties for rehab in neighborhoods throughout St. Louis. Hartmann promised investors that they would make 20 percent returns on the investments. But many of those investors soon discovered that the properties they purchased through Hartmann were worth far less than advertised and owned by several other fellow investors whose names were deliberately kept off the title.
In 2009 Hartmann pleaded guilty to mail fraud from the scam and was sentenced to two years in prison and ordered to pay $34 million in restitution to some 114 victims. Although closely tied to Hartmann, Krempasky managed to evade any penalties until now.
Last month the office of the Missouri Secretary of State found that Krempasky misled investors by not disclosing that Hartmann was paying her a percentage for new money she brought into the real estate scheme. Further, Krempasky was not licensed to sell securities and the securities she sold investors were unregistered.
In a consent order signed May 23, Krempasky agreed to never register as a securities agent or broker-dealer in Missouri and to not practice law in the state for a period of three years. She also agreed to pay back two investors a total of $5,000.
Krempasky could not be reached for comment, though it appears she's found a new calling. She now advertises herself on LinkedIn as a motivational speaker.
Continue on for a full copy of the consent order.