Meet the landlord who helped set off a Statehouse fight over Indianapolis rental reforms

Indianapolis Star

An Indianapolis real estate investor facing federal fraud charges and eviction from his waterfront home on Geist Reservoir helped set off a power struggle between the governor and state lawmakers over local efforts to hold bad landlords accountable.

His name: Herbert "Bert" Whalen.

He owned or managed hundreds of troubled rental properties across Indianapolis and was the subject of an IndyStar investigation in 2019 that found tenants living in horrible conditions. A federal fraud indictment and an Indiana Attorney General complaint soon followed.

The revelations helped prompt Indianapolis officials to crack down on bad landlords with new regulations, setting off a political fight at the Indiana Statehouse where the Indiana Apartment Association and several lawmakers with ties to the industry successfully pushed a measure preventing the city from instituting the reforms.

Gov. Eric Holcomb vetoed the bill, but his fellow Republicans in the Indiana General Assembly overrode the veto Wednesday.

Here's what you need to know about Whalen.

He joined ex-Fox & Friends host to sell hundreds of homes

Clayton Morris left 'Fox & Friends' in 2017.

Whalen, a former real estate broker, dealt mostly in low-end rental properties. He and his companies snatched up hundreds of homes from county tax and surplus property sales. His business was supercharged after partnering with Clayton Morris, a former Fox & Friends host who left the network in 2017 to focus on a career in online real estate investing and advice.

Morris and Whalen teamed up to sell hundreds of homes, often site unseen, to out-of-state investors. Whalen and his companies then provided management services for those homes. But their promise of turnkey investment opportunities leading to financial independence didn't pan out for some buyers. SeveraMany have filed lawsuits or complaints with the Indiana Attorney General. Others took to online real estate forums to warn would-be investors to steer clear of the pair. Some called it a Ponzi scheme.

California investor Danny Gomes said he discovered the property he bought on Asbury Street in Indianapolis actually had burned four days before the sale closed. Gomes had bought the property by dipping into his retirement funds.

One investor from California told IndyStar he learned months after purchasing a home for $52,500 that it had been destroyed by a fire days before he bought it. Others were shocked to receive notices from the city citing them for hazards such as mold, rats and other hazards. Some said they were given fake leases to fool them into believing the homes were being rented. Other investors said they paid for homes that were to be newly constructed, but ended up only with empty, trash-strewn lots.

Morris and Whalen have denied any allegations of fraud and have been fighting investor lawsuits in court.

Herbert Whalen:He put up a swanky Geist home as bond in fraud case. New lawsuit says he didn't own it.

His tenants suffered in deplorable conditions

Investors weren't the only ones who said they suffered.

Many of the complaints about Whalen focus on the poor conditions tenants endured in rental homes that were owned or managed by his companies.

An IndyStar analysis in 2019 found that Whalen's companies appeared at that time to account for more code violations than any other Indianapolis landlord. Properties he owned or managed racked up an average of 2.5 violations per day in 2018. In all, his properties had amassed nearly 1,800 code violations and $700,000 in fines since 2015. More than $440,000 remained unpaid in 2019. His companies had also run up tens of thousands of dollars in delinquent taxes.

Arthur Davenport claimed the house he rented had no water due to burst pipes, and the furnace did not work.

One man told IndyStar a broken furnace and burst pipes in the home he rented forced him to live without heat or running water. He used a bucket as a toilet. A single mother said her children were exposed to more than 100 times the level of lead deemed safe. She says there were rats and mold, too. Another renter described backed-up drains, opossums falling through the kitchen ceiling and janky wiring that ran up her electricity bills to $700 a month.

When they complained, tenants said they were evicted or the county health department forced them to move out because of unsafe conditions.

IndyStar found that Marion County's system for selling tax-delinquent properties and weak tenant protections at the city and state levels allowed the problems to persist.

April Blythe walks through grass and weeds in her overgrown back yard, Monday, June 3, 2019. She was a tenant of the home which was owned by Bert Whalen. Freeport Invest was the property manager. The company had told her it would mow the back yard, but on this day, growth was at least 3-4 feet tall.

Whalen's partnership with Morris crumbled

Whalen's partnership with Morris allowed him to enjoy a luxurious lifestyle. He lived in a waterfront home on Geist Reservoir that was once owned by former Gov. Mitch Daniels. He also had a yacht in Florida.

But in 2018, Whalen was stripped of his real estate license. He and Morris parted company later that year amidst the storm of investor complaints. They have since blamed each other for the problems encountered by investors and tenants.

Whalen was charged last year in federal court in New Jersey with one count of conspiracy to commit wire fraud and three counts of wire fraud. He faces a maximum sentence of 20 years in prison and a fine of $250,000.

In May, the Indiana Attorney General filed a lawsuit accusing Whalen and Morris of violating Indiana's deceptive sales and home loan acts in real estate deals involving more than 150 properties in Marion County. Morris and Whalen deceived real estate investors about the services offered and then tried to hide their actions through numerous other deceptive acts, according to the civil complaint filed May 1 in Marion Superior Court.

Now, Whalen is facing a lawsuit in Hamilton County Superior Court alleging he failed to make payments and meet other terms of a land sale contract he signed in 2019 for the purchase of the luxury home where he was living on Portside Court at Geist. The claim seeks forfeiture of the home and Whalen's eviction.

Complaints about Whalen resulted in a crackdown, then a Statehouse fight

The story of Bert Whalen helped spur Indianapolis Mayor Joe Hogsett to take action. The city passed an ordinance in 2019 to provide more recourse for renters living in homes without essentials such as working toilets or sound roofs.

But landlords and lobbyists struck back during last year's legislative session, passing a measure that would prohibit cities such as Indianapolis from passing or enforcing any regulations concerning retaliatory landlords.

Holcomb vetoed the bill, but the Senate voted to override the veto earlier this month and the House followed suit on Wednesday. The override effectively prohibits cities, including Indianapolis, from regulating relationships between tenants and landlords.

Reporters Tony Cook, Amelia Pak-Harvey and Kaitlin Lange contributed to this story. Contact Tim Evans at 317-444-6204 or tim.evans@indystar.com. Follow him on Twitter: @starwatchtim.