House Flipper Tied To 'Ugly Houses' Pleads Guilty To Fed Fraud Charges

A woman who once owned a franchise in Colorado Springs of the "We Buy Ugly Houses" national chain has pleaded guilty to federal wire fraud charges. Karen McClaflin faces 30 years in prison when she is sentenced in January. Her association with the We Buy Ugly Houses franchise is not a part of the charges.

The U.S. Attorney's Office for Colorado says that McClaflin partnered with someone to start the franchise, Trademark Properties and Trademark Reality, and use investor money to buy distressed homes and flip them.

Prosecutors say the firm ran into trouble and dissolved, with McClaflin's partner dissolving bankruptcy. She, though, transitioned to another company with the same "flip and fix business model."

According to the charges, she also ran into the financial problems with the new company and started using new investments to pay off old investors. (For more information on this and other local stories, subscribe to your local Patch for breaking news alerts.)

Prosecutors say that she was having multiple investors "invest" in the same property, sometimes forging the signature of an investor on a Deed of Trust.

She remains free on bond pending her sentencing.

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