KDKA Investigators

Tycoon Flees To Brazil, Leaves Renters In Lurch

PITTSBURGH (KDKA) ― A real estate tycoon who promised to revitalize a number of local neighborhoods has taken off to Brazil while many of his tenants are about to be kicked out into the streets because his properties are in foreclosure.

Bernardo Katz, a former Brazilian opera singer, built a multi-million dollar real estate empire in our area, but now he's returned to his home country leaving the banks and his tenants holding the bag.

Dozens of Katz's properties are in foreclosure in Beechview, downtown and Mt. Lebanon.

Katz owes banks and the city's Urban Redevelopment Authority millions of dollars, his former tenants are facing eviction and he's nowhere to be found.

"Let's hope the weather's nice and warm in Brazil because he's going to get a cold shoulder if he comes back here," Pat Kelly, a former tenant, said.

He had been faithfully paying rent to Katz on a house in Mt. Lebanon and returned home recently to find that it was up for sheriff sale.

"When you get home from work the last thing you want to find out is there's a note on your door telling you you may not have any place to live here very soon," Kelly said.

This week, 17 of Katz's properties went up for sheriff sale, including a home in Bethel Park where Eileen and Paul Karras thought they were building equity. Instead, Karras says their rent-to-own agreement with Katz turned out to be a fraud.

"We we're blind-sided. We didn't know he wasn't paying the mortgage," Karras said.

Now they're trying to get the bank to honor that agreement but the present is stressful and the future's uncertain.

"This is our dream house. this is the house we planned to, you know, go out in. So it was devastating," Eileen said.

Although Katz left the country late last fall, that doesn't mean he's not on the mind of investigators in Pittsburgh. Multiple sources tell me he is under investigation by the Federal Mortgage Fraud Task Force which includes the FBI, IRS and the U.S. Attorney's office.

Other former tenants don't mince words on what should happen next.

"Bernardo Katz should be extradicted back here and held responsible," Sue Faulkner said. 

Also sold at sheriff sale were 12 apartments in Mt. Lebanon where Faulkner and several other federally-subsidized Section 8 tenants now face eviction. Their rental agreements have been voided and the new landlord doesn't recognize Section 8.

"We have to find a place and move ASAP or get evicted and have that on our records for the rest of our lives," she said. "And we did nothing wrong it was the landlord. The landlord defaulted on a loan."

There's no word on whether Katz will be forced to come back - only that the investigation into his business dealings continues.

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