As far as I know, they no longer do arbitrage after losing a significant amount of money attempting to make it work. 

 I am in the same boat of attempting to get my deposit back.

I'm afraid they will squat if I attempt to get them out. 

No attempts to "pull one over" on anyone here--in fact this deal and partnership idea were brought to me by the other would-be investors (including the deal finder), because they're interested in making it possible for my wife and I to move closer to them (currently living in different states).

You started with one listing and ended up with a listing and a handful of new buyer clients.Trying to market to buyers without listings is like trying to chase down bees one at a time in an attempt to get honey.

I like that you came on here and at a minimum attempted to defend your position. 

He also doesn't control regulations in the states/cities, but his attempts to cut regulations may trickle down and impact personal property rights and people's ability to use their properties as they see fit.

-All permits were approved on first attempt. 

It's hard to tell if Josh knows this and is just trying to blackmail me in an attempt to get me to try to work on his behalf in twisting the sellers arm to do what Josh wants.

Seems like a very strict penalty if this is not followed through.The CTA provides that willfully reporting or attempting to report false or fraudulent beneficial ownership, or willfully failing to report or make updates to the reported data shall be punished with a civil penalty of up to $500/day while the violation continues (up to $10,000) and a criminal penalty of up to two years in prison.