.- As everyone said, get a lawyer ASAP for a civil and possibly criminal trial.

They recruit, interview, check references, skills test, criminal background check and drug test. 

Can I still run a background check on them at Some only require a name birthday and a prior address to run a criminal background check 

Jay, I will give you that there are a lot of yahoos who do stupid and criminal things.

With a $60/mo HOA(external maintenance not included with the exception of fencing) and 6.5% interest rate, my monthly mortgage (with taxes, insurance, HOA, etc)  will be around 2600/mo.

Pull credit, judgment, and criminal reports.

I've received 2 K1's so if this is fraud then i'd imagine they've committed a federal offence by issuing false documents to the federal authorities.

Same reason people ask criminal record. 

For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets.

In my area, they have recently made it a violation to turn down an applicant for having a criminal record.