Tuesday, February 21, 2017

Foreclosure Rescue Operator Dodges Hard Prison Time, Gets One Year In County Jail After Guilty Plea To Ripping Off Financially Strapped Homeowners Of Over $100K With False Promises Of Mortgage Help; All But One Client Lost Homes To Bank

In Ventura, California, the Ventura County Star reports:
  • A Canyon Lake man has been sentenced to jail for his part in a fraudulent real estate foreclosure rescue business, the Ventura County District Attorney's Office said Friday [February 17].

    Patrick Iturra, 46, was sentenced [] to 365 days in jail by Ventura County Superior Court Judge Matthew Guasco.

    In December, Iturra pleaded guilty to two felony counts of foreclosure consultant fraud and three counts of felony grand theft.

    He operated a business under the name of Mercury Business Group, promising homeowners he could save their properties from foreclosure, prosecutors said. In return, Iturra received thousands of dollars from homeowners, although he failed to help them, prosecutors said.

    Homeowners suffered more than $100,000 in losses and all but one of the victims lost their homes to foreclosure, prosecutors said.

    The charges came after an investigation by the District Attorney's Real Estate Fraud Unit.

    Iturra was also placed on 60 months of probation, ordered to pay $100,000 in restitution to the victims and prohibited from working in real estate or any business related to foreclosure rescue.

    He operated the business with Roberto Sanchez, 68, and Rosalva Sanchez, 63, both of Oxnard. They were earlier each sentenced to 180 days in jail and ordered to pay victim restitution after pleading guilty to felony grand theft and foreclosure consultant fraud, prosecutors said..

Foreclosure Rescue Operator Gets 18 To 48 Months In Prison For Role In Racket That Duped Financially Strapped Homeowners Into Paying Upfront Fees In Exchange For Fraudulent Bailout Promises

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Adam Paul Laxalt announced that Alicia Ruiz, 45, of Las Vegas, was sentenced for two felony counts of theft, a category “C” felony, for her role in a foreclosure rescue scheme. The fraud was committed between December 2011 and May 2013.

    Ruiz and two co-defendants operated a business known as “National Prevention Center” that defrauded homeowners using a foreclosure rescue scheme. Together, they solicited homeowners and promised their clients that they would purchase their foreclosed homes and then subsequently sell their homes at current value. After placing their trust in this business and paying thousands of dollars in upfront fees, clients’ homes were never purchased as promised, and the victims were not reimbursed. [Go here for criminal complaint]
    Eighth Judicial District Court Judge David Barker sentenced Ruiz to 18-48 months in prison. Ruiz previously entered a guilty plea agreement that requires her to pay back five victims nearly $50,000 in restitution. Ruiz’s co-defendants have already pleaded guilty and were previously sentenced for their crimes.
Source: Attorney General Laxalt Announces Sentencing of Las Vegas Woman for Foreclosure Rescue Scheme (Defendant Defrauded Homeowners Out of Thousands of Dollars).

Court Orders Ex-Attorney To Cough Up $18 Million For Role In Recruiting Homeowners Into Phony "Mass Joinder" Lawsuits Purporting To Challenge Mortgage Lenders' Foreclosure Rights

Law360 reports:
  • A California federal judge on Wednesday [February 15] ordered a former California attorney to pay more than $18 million and barred him from the debt relief market to settle claims by the Federal Trade Commission that he wrongly recruited homeowners into “mass-joinder” lawsuits against mortgage lenders.

    A unanimous FTC in May sued former California lawyer Vito Torchia Jr. and four attorneys for using law firms Brookstone Law and Advantis Law to steal millions from homeowners by falsely promising debt relief and financial rewards through lawsuits alleging mortgage fraud...

Monday, February 20, 2017

Bankster Cited For "Unclean Hands": Appeals Court Nixes $893K Award In Favor Of "Reckless" Lender To Reimburse It For Losses Suffered In Mortgage Fraud Scheme That It Facilitated; Urges Trial Judge To Consider Ordering Scammers Pay "Fines" Rather Than "Restitution", So That Loot Goes To Federal Treasury Instead, "A Far Worthier Recipient Of It Than BOA!"

The Indiana Lawyer reports:
  • Three defendants convicted of wire fraud in the purchase of 16 properties in Gary were clearly guilty of the crimes, but the 7th Circuit Court of Appeals Friday [February 10] threw out a restitution order in favor of Bank of America and urged the district court in Hammond to consider fining the defendants instead.

    The bank was reckless,” Judge Richard Posner wrote in United States of America v. Minas Litos and Adrian and Daniela Tartareanu, 16-1384, -1385, 2248, 2249, 2330. The defendants were convicted of wire fraud, and the 7th Circuit affirmed those convictions, but reversed an order that they pay the bank restitution of $893,015, the amount it claimed was lost in the scheme.

    The defendants were convicted on wire fraud charges filed in 2012 for a scheme in which home buyers were provided down payment kickbacks from the defendants after mortgages were secured on loan applications that provided false information. The defendants then walked away with the purchase price of the properties. But the 7th Circuit wrote Bank of America didn’t have clean hands, and there was little evidence that the bank would not have made the loans had it know the true source of the down payments — the defendants, not the buyers.

    Posner detailed the bank’s dubious mortgage-lending history during the real-estate bubble leading up to the Great Recession, noting for instance one woman to whom the bank issued six mortgages in a 10-day period. Posner noted that District Judge Philip Simon said during sentencing in this case, “Bank of America knew [what] was going on. They’re playing this dance and papering it. Everybody knows it is a sham because no one is assuming any risk. So what’s wrong with saying they’re [of] equal culpability?”

    “Indeed,” Posner continued, “and we are puzzled that after saying this the judge awarded Bank of America restitution — and in the exact amount that the government had sought.”

    Restitution for a reckless bank? A dubious remedy indeed — which is not to say that the defendants should be allowed to retain the $893,015.” That is stolen money,” he wrote. “We don’t understand why the district judge, given his skepticism concerning the entitlement of Bank of America to an award for its facilitating a massive fraud, did not levy on the defendants a fine of not more than the greater of twice the gross gain or the gross loss caused by an offense from which any of $893,015. 18 U.S.C. § 3571(d) authorizes a fine of not more than the greater of twice the gross gain or the gross loss caused by an offense from which any person either derives pecuniary gain or suffers pecuniary loss.”(1)

    The 7th Circuit vacated the restitution order as to the Tartareanus and remanded for full resentencing with the alternative remedy of a heavy fine on the defendants.(2) The panel remanded Litos’ sentencing for the limited purpose of reconsideration of the restitution order with direction to consider whether a fine is possible.
Source: 7th Circuit halts fraud restitution for ‘reckless’ Bank of America.

For the court ruling, see USA v. Litos, et al., Nos. 16-1384, -1385, 2248, 2249, 2330 (7th Cir. February 10, 2017).
(1) The court went on to say:
  • Had the amount of the fraud been made the basis of a fine rather than restitution, the $893,015 would have gone to the federal Treasury, a far worthier recipient of it than Bank of America in this case. At least that is an issue that deserves the further scrutiny of the district court, ...
(2) Ibid.

Court: City Violated Tenants' Due Process Rights By Giving Them Quick Boot Over Alleged Code Enforcement Violations Without Giving Notice Spelling Out Details About Why They Were Being Forced To Leave

In Little Rock, Arkansas, the Arkansas Democrat-Gazette reports:
  • Pulaski County Circuit Judge Alice Gray said Tuesday [February 14] that she's preparing to strike down a section of the fire code as unconstitutional in response to a legal challenge by tenants of a Little Rock apartment complex whom city officials tried to evict after discovering dangerous conditions at the property.
    The city has said it will appeal the decision.

    Gray said the notice city officials gave tenants to vacate has no details about why they were being forced to leave.

    "It basically just tells them to get out," she said.

    City officials say they had to move quickly once inspectors uncovered dangerous conditions at the apartments.

    But the judge questioned how city officials could call it an emergency situation when the city did not immediately warn tenants about what inspectors had found.

    The city took four days to notify tenants they were being evicted, then gave them a week to get out, then extended that time even further, Gray noted.

    "You let people stay in those apartments ... sleep in those apartments ... knowing there was an emergency," she said.

    The city closed the 141-unit, 17-building complex on Colonel Glenn Road and evicted its tenants in December 2015 after inspectors reported finding numerous fire-code and building violations that city officials said had put apartment residents' lives in danger.

    Fire marshals found exposed wiring, raw sewage, broken smoke alarms, possible mold, a dead cat and plumbing and mechanical issues, Fire Chief Gregory Summers reported at the time.

    The residents, who numbered more than 100, were given a week to find someplace else to live, a deadline that provoked worry and concern among many tenants, given that they were being forced to suddenly relocate just a few days before Christmas.

    But the judge halted the evictions two days later in response to a lawsuit filed by the apartment owners, ruling that the city could not act against the complex and tenants until the lawsuit is resolved.

    The tenants joined the lawsuit shortly after it was filed, and Tuesday, Gray sided with the women, represented by law students Kyla Farmer and Reese Owens with attorney Dustin Duke,(1) that Section 108 of the fire code violates due-process guarantees in both state and federal constitutions.

    The tenants' right to due process means they were owed a clear explanation of what the city was doing and why it was doing it to them, Farmer said. The tenants are also disputing that the situation was an emergency as the city has claimed.

    But the fire code does not have any requirements that the city provide any such explanation nor do those rules provide for an opportunity for tenants to challenge or question the city's actions, even retroactively, she said.

    "Due process rights don't disappear in an emergency," Farmer told the judge.

    Deputy City Attorney Cliff Sward argued that the city needed to act swiftly once inspectors found the complex could not be safely inhabited.

    City officials had to move immediately to protect the health and safety, not just of the apartment residents, but also to protect their neighbors and local businesses from the dangerous conditions, he said.

    Sward said the department put firefighters on guard at the complex once inspectors determined much of it was uninhabitable.

    The city gave tenants time to move out in consideration of their potential difficulty in finding new lodging and to avoid leaving any of them homeless at Christmas, he said.

    Sward further argued that the tenants don't have grounds to challenge the legality of the city procedures because, as renters, they do not have the same stake in the apartment complex as the owners do.

    The tenants are being represented by lawyers from Arkansas Community Organizations, Legal Aid of Arkansas and students from the consumer protection clinic at the W.H. Bowen School of Law(2) at the University of Arkansas at Little Rock under the supervision of attorney Amy Pritchard, the clinic director.
For the story, see Judge: LR's using code to evict violates rights.
(1) Duke is an attorney with the Center for Arkansas Legal Services, a 501(c)(3) non-profit, public interest law firm that provides free legal aid to low-income Arkansans in civil (non-criminal) cases. Their headquarters is in Little Rock, Arkansas, and they service 44 out of 75 Arkansas counties (the rest being served by Legal Aid of Arkansas, Inc., which is headquartered in Jonesboro, Arkansas).

(2) In the Consumer Protection Clinic, qualified University of Arkansas at Little Rock law students receive a special license to practice law in Arkansas under the guidance of a supervising attorney. Most Consumer Protection clinical cases deal with housing or consumer law. Students may represent clients who are facing foreclosure, eviction, housing instability, fraud, unfair or deceptive trade practices, and problems with credit reports and credit access.

"Wolf of Wall Street" Movie Mogul Contests Feds' Forfeiture Claims, Fighting Off Seizure Of $17.5 Million Mansion, Other Homes By Denying Allegations That He Bought Them With Dirty Money Scored In Suspected Malaysian Gov't Kleptocracy

In Los Angeles, California, The Real Deal (Los Angeles) reports:
  • Riza Aziz, co-founder of the production firm behind “The Wolf of Wall Street,” is contesting the feds’ attempt to seize several homes that he allegedly bought with funds embezzled from a Malaysian state fund.

    The Justice Department seized multiple properties linked to Aziz last year, and is seeking forfeiture of the rights to the Martin Scorsese-directed film, according to the court documents cited by the Hollywood Reporter.

    But Aziz, the stepson of Malaysian Prime Minister Najib Razak, is merely an “innocent owner” of the assets, according to his lawyer, Matthew Schwartz, who has filed a motion to dismiss several complaints against his client.

    “Riza Aziz is neither alleged to have participated in any transactions involving 1MDB nor even to have knowledge of any transactions involving 1MDB — let alone knowledge of any supposed misappropriation,” the motion reads.

    An 11,000-square-foot walled Beverly Hills mansion at 912 Hillcrest Road is among the properties at stake. Aziz purchased it for $17.5 million from Jho Low, a Malaysian businessman that has also been implicated in the scandal.

Sunday, February 19, 2017

Amateur Landlords Using Faulty Wording In Online Ads Make For Ripe Targets For Extortion-Like Fair Housing Lawsuits Filed By One Central Florida Attorney; Dozens Of Near-Identical Suits Filed On Behalf Of Four Plaintiffs All Used Same Lawyer

In Fort Pierce, Florida, WPTV-TV Channel 5 reports:
  • An extra way to make cash, could end up costing you. As home rental sites become more popular, a Contact 5 investigation found you could end up slapped with a federal lawsuit, paying thousands of dollars, for what you advertise.

    Having the surf, the sand, so close to her Fort Pierce condo is a dream for Debra Vazzana. Vazzana decided to share her dream, renting her place when she’s away.

    “In the 11 years I've had the condo, I've never had one complaint. Not one,” said Vazzana.

    That is, until a lawsuit showed up on her doorstep.

    “Said I was being sued under the Fair Housing Act for causing her distress, depression, feeling of unworthiness because I was discriminating against her children,” said Vazzana.

    In the lawsuit, a woman named Lucia Rist claims Vazzana discriminated against her, because she “prohibits families with children under three from renting her home.”

    It was all because of wording that was put on my ad where it said, because of pool regulations, children under the age of 3 are not allowed, please inquire,” said Vazzana.

    Vazzana said she'd had families with children stay with her before. The ad was meant to explain that the main pool didn't allow children. Vazzana never got to explain there was a kiddie pool instead.

    “I never heard from anybody. Not an email, not a phone call, nothing. Just a subpoena.”

    She paid $5,000 to settle the case. Rist originally asked for $25,000.

    Contact 5 found almost 60 identical discrimination lawsuits filed in Florida. Homeowners in Boca, Jupiter, Delray and Lake Worth among those sued.

    The lawsuits go after ads featuring words like, “Condo rules, no children under 15-years-old,” sleeps maximum of four adults, no children,” and Adults Only Please!

    Contact 5 discovered four different people filed the 60 lawsuits.

    A man from Maryland filed 39 of them.

    All 4 plaintiffs use the same lawyer, Shawn Heller.

    “It just seems to be a pattern of excessive abuse,” said Richard Vecchio, owner of Realty Associates in South Florida, and one of the people sued.

    One of Vecchio’s employees posted an ad on behalf of a client, claiming “no children under 12 are allowed per HOA rules.”

    “It's not that people don't make mistakes, but we should really have an opportunity to correct our mistakes,” said Vecchio. Vecchio paid $9,000 to settle his lawsuit.

    For months Contact 5 tried to talk with Heller or his partner Joshua Glickman. Heller canceled or backed out of several interviews, claiming he did not have time to talk, even by phone.

    But Contact 5 asked a Scripps investigation team in Tampa to track him down. When asked why he was filing these lawsuits, and if he was taking advantage of people, Heller would only say the same thing, “We stand by our statement.”

    That statement says, in part, “Given the limited resources of governmental agencies and fair housing organizations, lawsuits brought by individuals and testers play a significant role in combating housing discrimination.”

    Scott Holtz is a lawyer specializing in landlord-tenant issues. Holtz says you need to think carefully about what you write before advertising.

    He says it may be okay to write the house is not suitable for children, or not child proof to avoid liability, but ultimately, the decision on whether the home is safe, should be left up to the interested renters.

    Holtz admits the Federal Fair Housing law hasn’t necessarily caught up to home rental sites, like VRBO and Air BnB, so many renters aren’t entirely sure what they can write.

    But Holtz said, “Unfortunately ignorance is not a defense in these types of cases.”

    Vazzana said she regrets what she wrote but meant no harm. “It's just horrible,” said Vazzana.

    Vazzana sold the condo after settling the lawsuit, leaving others to live out her beach-front dream.

    “No, it's not fair at all. It's not fair at all,” said Vazzana.

    Bottom line, discriminating against families with children is breaking the law. An attorney with the Fair Housing Legal Society of Palm Beach told Contact 5 it’s best not write any lines in an ad that concern children.

Real Estate Brokerages Make For Ripe Targets For ADA-Related, Lawyer-Authored 'Shakedown' Letters & Lawsuits In Connection With Website Accessibility For Those With Visual, Hearing Impairments

Syndicated real estate columnist Kenneth Harney writes:
  • It hasn’t gotten much public attention, but here’s something that has the real estate brokerage industry upset: a sudden wave of potentially costly and embarrassing legal challenges to companies’ websites, alleging violations of the Americans With Disabilities Act, or ADA.

    Lawyers representing visually impaired, hearing-impaired and other clients say the vast majority of realty sites don’t offer features needed to allow handicapped individuals to shop for homes and absorb content as other people can. These features include alternative texts accompanying images, transcripts for audiovisual content, descriptive links and resizable text.

    Lawyers at one firm alone — Carlson Lynch Sweet Kilpela & Carpenter in Pittsburgh — have sent out “demand letters,” as they are called, to as many as 25 realty and home-building companies in recent months. The letters threaten lawsuits if the firms do not agree to modifications of their sites. The warnings also raise the prospect of hefty financial penalties.

    Benjamin J. Sweet, a Carlson Lynch partner, says website inaccessibility “is an epidemic in this country” in almost every segment of the economy.(1) He added that his firm has “more than 100 clients in 40 states” who either have been plaintiffs in various suits or are being represented through demand letters. Sweet declined to identify specific realty brokerages that have been contacted, citing the potential for litigation.

    Other law firms reportedly are gearing up legal attacks — a prospect that has the National Association of Realtors worried enough that it recently pleaded with the Department of Justice to accelerate its timetable for releasing long-awaited guidance on the standards that commercial websites must meet to be compliant with the disabilities law.

    In a letter to the head of Justice’s civil rights division [], Tom Salomone, president of the Realtors group, said the “lack of federal regulation governing website accessibility” has “left our members confused about how to mitigate legal risks in this area or what is even required of their websites” under the law. In the meantime, “plaintiffs are using the ADA to demand restitution from businesses.”
For more, see Advocates for the disabled find fault in many realty websites (The real estate brokerage industry faces a sudden wave of potentially costly and embarrassing legal challenges to companies’ websites, alleging violations of the Americans With Disabilities Act, or ADA).

See also, Increasing Legal Scrutiny of Website Accessibility in the Real Estate Industry.
(1) See, generally,

Single-Family Home's Landlord Who Allegedly Refused To Waive $250 Pet Deposit Fee For Tenant With Emotional Support Dog Now Finds Itself In Battle With HUD's Fair Housing Cops

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it is charging the landlords of a Moore, Oklahoma rental home with violating the Fair Housing Act by denying the reasonable accommodation requests of their tenant, a veteran with disabilities. Read the charge.

    The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities, or from refusing to make reasonable accommodations in policies or practices for people with disabilities. This includes waiving pet fees for persons with disabilities who use assistance animals.

    The case came to HUD’s attention when a combat veteran living with a mental disability(1) who uses an emotional support animal filed a complaint alleging that the owners of the house he was renting. The tenant complained that AMH 2015-1 Borrower, LLC, and its management company, AH4R Management – OK, LLC, refused to waive their pet deposit fee.(2)

    HUD’s charge alleges that although the man provided the owners and management company with medical documentation attesting to his need for the animal, they denied his request to waive a $250 pet fee. Under the law, assistance animals are not considered pets.

    Disability is the most common basis of fair housing complaint filed with HUD and its partner agencies. Last year alone, HUD and its partners considered over 4,900 disability-related complaints, or more than 58 percent of all fair housing complaints.
    People who believe they have experienced discrimination may file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY). Housing discrimination complaints may also be filed by going to www.hud.gov/fairhousing, or by downloading HUD’s free housing discrimination mobile application, which can be accessed through Apple and Android devices.
For more, see HUD Charges Oklahoma Landlords With Discriminating Against Veteran With Disabilities.
(1) According to HUD's complaint, the combat veteran is diagnosed with service-connected Post-Traumatic Stress Disorder (PTSD) and Major Depressive Disorder (MDD), which substantially limit his personal, work, and social life. The disability's symptoms include anxiety, isolation, avoidance, and a difficulty and a difficulty going out in public, as well as difficulty with interpersonal relationships and insomnia, the complaint states.

(2) According to HUD's complaint, the subject property being rented is a single family home, and the animal involved is a dog.

HUD Squeezes Fair Housing Lawsuit Settlements From Two Insurance Companies Over Allegations That They Denied Landlords' Requests For "Umbrella Coverage" For Rentals Considered To Be "Subsidized" & "Low-Income" Housing; Practice Had Discriminatory Effect Based On Race, Nat'l Origin, Say Feds

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced agreements with two insurance companies in Ohio and Florida settling allegations the companies violated the Fair Housing Act by denying insurance coverage to properties that contain “subsidized housing” and “low-income housing.”
  • The Fair Housing Act makes it unlawful for providers of housing-related services or products, including insurance providers, to discriminate because of race, color, religion, sex, national origin, disability, and familial status.

    The agreements stemmed from a Secretary-Initiated complaint HUD filed after receiving reports the insurance companies’ policies and practices had a discriminatory effect because of race and national origin. Specifically, HUD’s complaint alleged that the companies refused to provide umbrella coverage, which provides additional liability coverage when an insured’s other primary policy limits have been reached, to properties containing subsidized or low-income housing.

    Under the agreements, McGowan and Company will remove “subsidized” and “low-income” from its list of prohibited properties, spend $100,000 to affirmatively market its services and products to the affordable and low-income housing markets and provide fair housing training for management and staff that review and/or approve applications for insurance. Mack & Waltz will spend $10,000 to affirmatively promote its services in affordable and low-income housing markets, and provide fair housing training for its management and staff.

HOA Faces Fair Housing Hot Water For, Among Other Things, Allegedly Requesting 'Additional Documentation' From Rental Applicant Of Ethiopian Ancestry Not Required From Other Prospective Tenants, Despite Prior Pre-Approval Already Given By Apartment Complex's Management Company

In Washington, D.C., Washington City Paper reports:
  • A D.C. resident born in Ethiopia is suing the cooperative association of an apartment complex near the U Street corridor for allegedly denying her housing on the basis of her national origin. She was pregnant with her second child and looking for larger accommodations at the time.

    In a suit filed Friday [February 3] in U.S. District Court for D.C., attorneys for Melikt Mengiste argue that the cooperative association of 1901-07 15th St. NW and its president unlawfully discriminated against Mengiste in refusing to rent her an apartment there in 2015.

    According to the lawsuit, the cooperative association required Mengiste to "submit additional documentation" not required of other applicants—including verification forms from her employer and landlord—as part of her housing application, even after the complex's management had "pre-approved" her that June. Though Mengiste complied, she was never contacted for a tenant interview, and was denied a unit in October without any explanation.

    Mengiste's lawyers say that while Mengiste's application was pending, the president of the cooperative association, Delia Thompson, made "disparaging remarks about Ms. Mengiste's family, history, and personal appearance, and about individuals of Ethiopian national origin" to the management company. Thompson allegedly claimed that Mengiste "had poor credit, that she had damaged her prior apartment, and that her husband had a criminal background"—all false, per the lawsuit. The suit furthermore claims that Thompson's brother told Mengiste "we don't want your kind here" when she was visiting the property, and that Thompson allegedly referred to Mengiste as "dirty" and "nasty."

    Thompson could not immediately be reached for comment, but an attorney who serves as the "registered agent" for the co-op said Friday in an email that she had not yet discussed the lawsuit with her client.

    Mengiste's lawyers say she "suffered from depression and insomnia [for] at least eight months" as a result of these incidents, plus "attendant harms" like remaining in an "overcrowded" apartment for longer than necessary and having to find other housing. They're seeking an injunction and compensation under both D.C. and federal laws.

    "Ms. Mengiste's experience of being denied housing on the basis of her national origin is but one example of the types of discriminatory and harassing treatment faced by members of the District's immigrant community," says Adam Chud, a partner at Goodwin Procter LLP, which is representing Mengiste along with the Washington Lawyers' Committee for Civil Rights and Urban Affairs.(1) Mengiste, who has since relocated, lived in a studio with her husband, sister, and two children during the time she was applying for housing, according to her lawyers.

    The suit is being brought under the Fair Housing Act and the District's Human Rights Act, which both bar discrimination based on national origin.
Source: D.C. Ethiopian Woman Alleges Housing Discrimination at Building Near U Street Corridor (She was called "dirty" and "nasty," according to a new lawsuit).

For the lawsuit, see Mengiste v. 1901-07 15th Street, N.W., Cooperative Association, et al.
(1) The Washington Lawyers' Committee for Civil Rights and Urban Affairs, a non-profit 501(c)(3) organization, was established in 1968 to provide pro bono legal services to address discrimination and entrenched poverty in the Washington, DC community..

Saturday, February 18, 2017

Tough To Get, Nearly Impossible To Use: Skyrocketing Rents, Plummeting Vacancy Rates Make Section 8 Housing Vouchers Worthless For Many In Parts Of SoCal

From a recent story by KPCC-Public Radio 89.3 FM in Southern California:
  • [O]ver at the Housing Authority of the City of L.A. (HACLA), which runs voucher programs for low-income renters, homeless individuals and homeless veterans, success rates [for placing apartment seekers into permanent housing] have also dropped.

    Currently, 40 percent of those who receive Section 8 rental assistance vouchers through HACLA end up giving them up because they can't find a place to rent. That's according to most recent figures, which span the first half of 2016.

    In 2014, that number was 27 percent and in 2015, 36 percent.

    "All of this is because of the vacancy rate in the city, which is at an all-time low of 2.7 percent, and that factors into the high cost of housing," said Carlos Van Natter, director of HACLA's Section 8 program.

    Van Natter said it's tough to be competitive as a renter in such a tight market, especially since Section 8 rent is capped at a maximum of $1,314 for a one-bedroom. For the HUD-VASH program, which exclusively serves veterans, the rent cap is $1,500.

    HACLA is turning more and more attention towards committing Section 8 vouchers to developments that are aimed specifically at housing the homeless, he said.

    "If there's a change in the market, we're right there still with tenant-based assistance, but we are pushing forward and doing a lot in terms of project-based vouchers," Van Natter said.

    HACLA has also received money from the City of L.A. to do landlord outreach and recruiting. The city can provide landlords security deposits for formerly homeless tenants, as well as money set aside for if a tenant causes damage to a unit.

    The County of L.A.'s housing authority is even offering cash incentives to landlords who sign up for the program.

    The two agencies, along with L.A. County Supervisor Sheila Kuehl's office, are hosting a landlord information session in Hollywood February 15.

    "We're losing the ability to house middle class and especially working class people," Kuehl said. Affordability issues, she said, are among L.A.'s greatest challenges going forward.

    "Government doesn't create these issues, but we are trying to help work through them," she said.

    Los Angeles isn't the only city struggling with affordability—it's become a regional issue.

    In Santa Ana, for instance, the housing authority is seeing 66 percent of its rental vouchers returned for lack of a place to use them.

    "We're struggling with the same issues," said Judson Brown, housing division manager for the city.

    Brown said the city is taking steps to help, including funding a housing navigator position to help people find rentals, but there's no help from the federal government when it comes to landlord outreach and other incentive programs.

    Brown said the city is trying to figure out a way to fund some of the programs L.A. has, including security deposit help. In the meantime, he said, the agency's doing what it can with limited resources.

Ex-Property Manager Gets 18 Months For Ripping Off At Least $150K In HUD Section 8 Rent Subsidies Paid On Behalf Of Indigent Tenants

From the Office of the U.S. Attorney (White Plains, New York):
  • Preet Bharara, the United States Attorney for the Southern District of New York, announced [] that CARL IMMICH, formerly the property manager of Harriet Tubman Terrace Apartments, a Section 8 Housing Complex in Poughkeepsie, New York, was sentenced to 18 months in prison. United States District Judge Cathy Seibel imposed today’s sentence.

    Manhattan U.S. Attorney Preet Bharara stated: “Repeatedly and routinely, Carl Immich stole public money meant to subsidize housing for indigent tenants, and used it to dine out, travel, renovate his house, and play golf. For his brazen fraud, Immich was sentenced [] to time in federal prison.”

    According to the allegations contained in the Complaint, the Indictment, and statements made during court proceedings in the case:

    Tubman Terrace is a large, low-income apartment complex in Poughkeepsie, New York. The rental payments for nearly all of the apartments are subsidized by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 8 of the United States Housing Act of 1937, [...]. From in or about June 2010 through in or about November 2014, HUD provided approximately $150,000 to $160,000 each month to Tubman Terrace.

    From in or about 2009, Tubman Terrace was managed by a management company, of which IMMICH is the principal and sole owner. In that capacity, IMMICH served as the management agent and property manager of Tubman Terrace since in or about 2009.

    From at least in or about December 2010 until at least in or about March 2015, IMMICH fraudulently obtained at least approximately $150,000 of HUD funds from the operating account of Tubman Terrace, which were paid to him or used for personal expenditures. IMMICH did so through as least three different schemes: (1) he used credit cards intended for Tubman Terrace business expenses for personal expenses, which were then paid through Tubman Terrace’s operating bank account; (2) he obtained check payments from the Tubman Terrace operating bank account to cover other personal expenses; and (3) he obtained payroll checks for himself and his daughter reflecting no work or other entitlement by them to such salary.

    IMMICH, 54, of Rhinebeck, New York, pled guilty to theft concerning a program receiving government funds, and theft of government property. In addition to the prison sentence, IMMICH was also sentenced to three years of supervised release and ordered to pay $150,001 in restitution.

HUD Demands $750K+ Federal Funds Reimbursement From Sloppy Housing Authority Over Crappy Recordkeeping That Fails To Support Agency's Activities In Administering Federal Housing Programs

In Steubenville, Ohio, the Herald-Star reports:
  • The Jefferson Metropolitan Housing Authority must reimburse the U.S. Department of Housing and Urban Development $751,349 for unsupported procurement and contracting activities.

    JMHA Executive Director Debbie Bailey said [] she was able to find documents that resolved $213,000 cited in a HUD Office of the Inspector General report that initially recommended the public housing agency pay the federal department $964,000.

    “I received a letter from HUD this week saying we must pay the money back by June 30. We are now working on how we will take care of this issue,” Bailey said.

    She made her comments during the monthly board of commissioners meeting that saw several JMHA residents complain about a lack of security at the public housing apartments in Steubenville.

    “We have no funds budgeted for security at this point,” Bailey told public housing residents at the meeting.

    According to the audit that was released in August, “The authority failed to maintain adequate documentation to support its procurements and ensure there were no real or apparent conflicts of interest in its contracting process. Additionally it failed to achieve the expected savings on its energy improvements. These weaknesses occurred because the authority lacked adequate procedures and controls to ensure it complied with HUD’s and its own procurement requirements and a sufficient understanding of HUD’s requirements for the administration of its energy contract.”

    The HUD Office of Inspector General said eight of 11 authority-procured contracts reviewed by the federal auditors were missing pertinent procurement documentation.

    The audit report also noted a board member “had a business and personal relationship with at least one of the authority’s contractors.”

Marine Corps Vet/Single Mom Nearly Gets Boot From 'Section 8' Subsidized Apartment Over Paperwork Snafu, Slow-Footed Housing Authority; Bureaucratic Nightmare Triggered By $13 Rent Increase

In Kansas City, Missouri, KSHB-TV Channel 41 reports:
  • A Marine Corps veteran who receives housing assistance was facing eviction after her rent slightly increased.

    The amount was $13.

    Crystal Guhr was willing to pay it, but, she wasn't allowed to. That's because she receives housing assistance through HUD-VASH, a supportive housing program for veterans.

    Guhr lives at Old Town Lofts in downtown Kansas City.

    Per guidelines of the program, those who get assistance, are supposed to sign-off on a rent increase. The paperwork then gets sent to The Housing Authority of Kansas City.

    "Since I didn't get that signed in time, Section 8 didn't receive it in time," Guhr said. "They're denying it, saying they need 60 days notice."

    However, Guhr said she never received a notice from Old Town Lofts that her rent would be increasing. She said she wasn't aware there was an issue until she came home to an eviction notice.

    Guhr said she tried resolving the issue by contacting her landlord and her case worker, but she was told the approval letter from HAKC wouldn't be returned for months. By then, it would be too late.

    Guhr has non-combat PTSD. She finds strength in taking care of her son and working at the VA Medical Center.

    Keeping a job and taking care of her son are things she's able to do because of where she lives. Guhr doesn't have transportation, however, the bus stop is just feet from her apartment. Her son's day care is also located a few blocks away.

    "I feel like we really need to stay here," Guhr said. "Me and my son take the bus everywhere."

    The 41 Action News investigators went to Old Town Lofts to see if there was anything that could be done. No one would comment on the issue. A message was also left for HAKC, but that call went unreturned.

    However, the next morning, Old Town Lofts told 41 Action News the issue was resolved. Guhr confirmed that she and her son will be staying.
Source: KC veteran who receives housing assistance almost evicted over $13 (Unsigned paperwork leads to chaos).

Widow In High-Profile Incident Involving NYPD's Deadly 2014 Takedown Of Her Husband Gets To Keep Gov't-Subsidized, Low Income Housing Apartment, Despite Scoring $2.4 Million Lawsuit Settlement From City

In New York City, the New York Post reports:
  • Eric Garner’s widow is staying in her housing-project apartment despite a $2.4 million-plus settlement for her husband’s death — because the cash is not counted as disqualifying income, The Post has learned.

    Esaw Snipes got a $500,000, up-front payment following a judge’s order in November, and will receive the rest once a dispute among lawyers involved in the case is fully resolved.

    Federal rules say she can keep her apartment in the Fulton Houses in Chelsea and won’t even have to pay increased rent, a rep for the New York City Housing Authority said.

    NYCHA relocated Snipes to Manhattan from Staten Island following Garner’s deadly 2014 takedown by NYPD cop Daniel Pantaleo, according to law enforcement sources.

    Snipes and her lawyer, Jonathan Moore, both declined to say why she was still in public housing.

Friday, February 17, 2017

State Police Bust Contractor On Theft By Deception Charge For Allegedly Pocketing Over $70K From Homeowner To Construct Home Addition, Then Performing Incomplete & Unsatisfactory Work

In Bellefonte, Pennsylvania, the Centre Daily Times reports:
  • A Bellefonte man was arrested after receiving $71,000 for house work that was left “incomplete and unsatisfactory,” according to state police at Rockview.

    David P. Reeder, 51, has been charged with theft by deception.

    Reeder was paid by a woman in March 2016 to do work at a home on Meadow Lane in Walker Township. She reported the alleged theft Feb. 3.

    Reeder’s company, which has not been named by police, was supposed to put an addition on her home. Police said the woman also paid him $700 on Aug. 3 to install a kitchen pantry, which was to be completely in about a month’s time, but was not done.

Handyman With Track Record Of Screwing Over Home Repair-Seeking Homeowners Gets Pinched Again; Faces Theft By Deception Charge For Allegedly Pocketing $600 Pre-Payment, Then Never Completing Work; Earlier Escapades Led To Guilty Plea For Theft, $236K Order To Pay 14 Fleeced Former Customers

In South Portland, Maine, the Portland Press Herald reports:
  • A Portland handyman who previously defrauded customers out of tens of thousands of dollars and was ordered by a judge in 2013 to cease doing home repair work was charged in South Portland in January with taking money for home repairs he never completed.(1)

    According to South Portland police, Daniel B. Tucci Sr. of 104 Monument St. had been running newspaper ads for home repair work, and in mid-December, he contracted with a South Portland homeowner to do $600 of repair work on a garage.

    South Portland Detective Scott Corbett said his investigation revealed that Tucci had hired a homeless man in Portland to pose as the owner of the home-repair business, and that Tucci posed as the employee.

    Together, the two men contacted the South Portland victim, estimated the cost of the work, wrote a contract and accepted $600 in pre-payment. Then Tucci stopped answering the customer’s phone calls, and he never showed up to do the work, Corbett said.

    Corbett said that Tucci had taken out the weekly newspaper ad since 2015 and used a variety of phony business names, including Helping Hands, Helping Hands Painting and Handyman Company.

    Tucci also used the alias John Bruce, Corbett said. Tucci was issued a summons Jan. 20, and is due in court to answer the charge March 1.

    The South Portland resident who reported the latest incident may not be the only alleged victim. The Attorney General’s Office is also investigating Tucci.(2)

    “We’re looking for victims,” Corbett said.

    Tucci’s legal woes began in 2008, when he pleaded guilty to a misdemeanor theft charge related to his home repair business. In 2012, the state Attorney General’s Office brought a civil case against Tucci under the Maine Unfair Trade Practices Act, for falsely advertising that he was licensed to do home repair work, threatening customers – who were dissatisfied with his workmanship, and for taking advance payment for work he never did. Many of his customers were seniors on fixed incomes.

    A judge ordered him to pay $236,500 to 14 former customers and to cease work as a handyman. But Tucci never paid, and in 2016 the state moved to prevent Tucci from selling his home at 104 Monument St. after prosecutors alleged that he fraudulently transferred the property into the name of his children and a limited liability corporation, according to an April 2016 lawsuit filed by the Attorney General’s Office.

    The Monument Street triple-decker was listed for sale in 2016 for $2.5 million, according to the filing. Portland property tax records show that it was not sold, and its listed owners as of April 2016 were still the Tucci family.
Source: Portland handyman with history of fraud issued summons in South Portland (Police say Daniel B. Tucci Sr., who was ordered by a judge in 2013 to stop doing home repair work, took $600 for a garage repair project that he never completed).
(1) According to a separate media report, Tucci faces a charge of theft by deception.

(2) Those who had work done by Tucci within the past year can contact the state attorney general’s office at 800-436-2131 or at consumer.mediation@maine.gov.

Contractor Who Allegedly Pocketed Homeowner's $2K+ Deposit For Roof Installation, Then Repeatedly Refused To Complete Job Or Refund Money Gets Pinched (Finally? After 7 Months) On Theft By Deception Charge

In Washington Township, Pennsylvania, the Tribune-Review reports:
  • State police [] charged a Salem Township contractor with accepting $2,080 as down payment for a metal roof that was never installed.

    David M. Musgrove, 47, was charged Tuesday [January 24] with theft by deception and disorderly conduct by state police in Kiski for failing to install the roof at a residence on Kunkle Lane in the township after accepting the homeowner's money on June 20.

    Trooper Shauntai Hall alleged in an affidavit of probable cause that Musgrove has repeatedly refused to return the money or complete the work.

    A preliminary hearing is scheduled March 27 before Washington Township District Judge Jason Buczak.

Scammer Dodges Jail Time, Gets Probation, Agrees To Pay Full Restitution After Copping Guilty Plea (Finally? Almost 3 Year Later) To Pocketing $4,700 From 84-Year Old Homeowner For Roof Repairs, Then Failing To Buy Materials Or Perform Any Work

In Joplin, Missouri, The Joplin Globe reports:
  • A rural Joplin man accused of exploiting an elderly woman on roof repairs pleaded guilty [] to a reduced charge and received a suspended sentence.

    Joshua L. Carpenter, 29, pleaded guilty in Jasper County Circuit Court to a misdemeanor offense of stealing in a plea deal with the prosecutor's office. He had been facing a felony count of financial exploitation of an elderly person.

    Circuit Judge Gayle Crane accepted the plea agreement and sentenced Carpenter to one year in jail, with execution of the sentence suspended and the defendant placed on supervised probation for two years. The judge also ordered that he pay $4,907.86 in restitution.

    A probable-cause affidavit alleged that Carpenter took $4,768.70 from an 84-year-old Joplin woman in April 2014 for roof repairs but never purchased any materials and never did any of the work.

Thursday, February 16, 2017

Reverse Mortgage Foreclosures Based On Banksters' False Claims That Elderly Homeowners Violated Loan Agreement By Moving Out Of Their Homes Begin To Garner Spotlight

In Miami, Florida, the South Florida Daily Business Review reports:
  • Felicia El Hassan had already lost one house. During turbulent times decades earlier in communist Cuba, she'd been forced to surrender property before fleeing to America.

    The 86-year-old woman thought those days were far behind her after living quietly for nearly 20 years in a modest house in Opa-locka, a working-class neighborhood in northern Miami-Dade.

    But that peace of mind ended when a process server appeared on her doorstep with court papers informing her of a foreclosure lawsuit by Liberty Home Equity Solutions Inc., formerly Genworth Financial Home Equity Access Inc. The complaint's sole basis was the lender's claim that El Hassan violated a key covenant of reverse mortgages by moving out, thereby defaulting on the loan.

    "The allegation is basically debunked," El Hassan's lawyer, Ricky Corona, said. "Not only was she living there, but … they served it at her house."

    This, defense attorneys say, is a new strategy by lenders and plaintiffs lawyers: sue to foreclose on government-guaranteed home loans under various defaults, then fast-track these suits by filing motions for orders to show cause. These motions shift the burden of proof to the borrower, requiring them to appear in court and explain why a judge shouldn't grant final judgment against them.

    "All of a sudden, we saw a spate of foreclosures where the mortgage companies alleged the seniors no longer lived in the home," said Gladys Gerson, supervising attorney for Coast to Coast Legal Aid of South Florida's(1) senior unit. "This has been happening around the state."

    About a dozen similar cases reached Gerson and other attorneys at Coast to Coast, who have helped a growing number of low-income seniors fight and win dismissals despite aggressive lender litigation.

    Florida is ground zero for seniors' issues, but as the strategy has often proved effective, it's likely to spread, according to defense attorneys. “If you see the volume of national advertising that’s geared to seniors, I can’t believe this is limited to Florida,” Corona’s father and partner, Ricardo, said. “The servicers are not even based in Florida, so I don’t see why they would limit themselves.”

    Corona admits he didn't expect a hard fight when he first reviewed El Hassan's case, but court records show he was wrong. Over the last 10 months, the ongoing litigation yielded two hearings, 40 docket entries and attempts by both sides to collect attorney fees.

    When he first met El Hassan, Corona expected the plaintiff would realize the error and dismiss the suit. Without charging her or entering a notice of appearance, he placed a phone call to plaintiffs lawyers at Robertson Anschutz & Schneid in Boca Raton to say El Hassan had never moved out of her home.

    Robertson Anschutz & Schneid did not respond to requests for comment, but court records show they ratcheted up the litigation with a motion for an order to show cause weeks after Corona's phone call.

    "I looked at the document. I couldn't believe it," Corona said. "I was in shock (at) what the bank was trying to do."
    [F]lawed representations permeate an industry where real estate debt routinely changes hands through systems and processes that create a myriad of challenges in foreclosure cases. When reverse mortgages trade, elderly borrowers sometimes fail to realize the change. As new lenders mail postcards and letters requiring seniors to return the documents and certify occupancy, clients struggling with cognitive difficulties are especially vulnerable to technical defaults.
For more, see Foreclosure Litigation Strategy Takes Aim at Seniors, Attorneys Say (may require subscription; if no subscription, GO HERE, then click the appropriate link for the story).
(1) Coast to Coast Legal Aid of South Florida is a non-profit public interest law firm that provides free legal assistance to qualifying low income persons in South Florida through advocacy, education, representation and empowerment.

Potential For Negative Publicity From Local Media Troubleshooter Gets Lender To Call Off Foreclosure, Giving Homeowner Opportunity To Cure Default On Reverse Mortgage Over Unpaid Property Insurance

In Manassas, Virgina, NBC4 reports:
  • A Virginia homeowner almost lost her home a few years after getting a reverse mortgage because she defaulted on the homeowner’s insurance.

    Becky Williams and her two young sons live with the Manassas homeowner, where Williams serves as the homeowner’s caregiver and power of attorney.

    A few years ago, the homeowner did a reverse mortgage. Williams, who takes care of the bills, thought everything was going OK until she received a foreclosure notice in the mail.

    “This is really going to happen? I mean, can they really do this?” Williams said. “I started calling lawyers, attorneys to find out, and yeah, it was really going to happen.”

    Defaulting on homeowners insurance prompted the foreclosure.

    They quickly sent out a check, Williams said, but it was returned. The auction was already scheduled.

    “This is our home,” Williams said. “You know, she's worked all her life for this house and paid it off, and I'm supposed to be the caregiver and I was really disappointed in myself.”

    NBC4 Responds contacted the companies involved, including Reverse Mortgage Solutions, who said although borrowers are not required to make principal or interest payments, they do have an obligation to pay real estate taxes and property insurance.

    The company can't discuss specific cases out of respect for customers’ confidentiality, however, in a statement to News4, they said, "In the event that these obligations are not met, Reverse Mortgage Solutions works closely with our customers to establish repayment plans or other remedies."

    Williams said they called off the auction and worked with her, and the homeowner kept her house.

Sleazy Loan Servicer Seeks To Drive Elderly Couple Into Phony Technical Default On Reverse Mortgage By Twice Filing Foreclosure Actions Claiming They Vacated Their Home; Victim: "We Can't Afford To Fight Without Help From Legal Aid!"

From a recent story in the South Florida Daily Business Review:

'They Started Saying We Didn't Live here'
  • Deerfield Beach retiree Mary Carter and her husband, William, said they never received any [occupancy certification] forms before two unexpected brushes with foreclosure [on their reverse mortgage].

    The Carters had grown accustomed to the visits by lender and loan servicer representatives who would drop by unannounced to verify they still occupied the property as required under the terms of the loan. They were sitting in their carport the last time a reverse mortgage inspector checked up on them.

    Carter, a former elementary school teacher, said her 75-year-old husband would sign any paperwork handed to him at the end of these meetings.

    But the last visit, which set the elderly couple on the path to two separate foreclosure suits for non-occupancy, was different. This time they said the inspector asked them to clear the driveway so he could take a photograph without them. They and a friend visiting from next door complied.

    "He just said we couldn't be in the picture, we had to move, so we all moved out of the way," Carter said. "That's when they started saying we didn't live here."

    What followed stunned the couple: Oklahoma-based Mortgage lender Finance of America Reverse LLC claimed they defaulted on their loan by moving out of the home. "I can't fathom why there would be any indication they weren't occupying the property," said the Carters' attorney, Sarah Barker. "They don't travel out of state. Their things are in the house."

    Finance of America attorneys at Greenspoon Marder declined comment.

    Facing foreclosure in 2013, the Carters were forced to prove residency to dismiss the case. But that victory was short-lived, as an almost identical lawsuit followed within three years.

    "It was the same default reason in the complaint," Barker said. "Through the first lawsuit it was clear the Carters were living there, so we can't understand why the second lawsuit would even be filed. We can't understand why the first one was filed."

    Finance of America filed for foreclosure with a single-count complaint in 2016, calling due more than $119,925 in principal, plus interest, escrow, attorneys' fees and other charges.

    The seniors again beat back that suit, but still fear they'll lose their home.

    "We can't afford to fight without help from Legal Aid," Carter said. "We're worried there's going to be another foreclosure."
Source: Foreclosure Litigation Strategy Takes Aim at Seniors, Attorneys Say (may require subscription; if no subscription, GO HERE, then click the appropriate link for the story).

Wednesday, February 15, 2017

Trash-Out Contractor's Maintenance Employee Sues City For False Arrest After Getting Pinched For Mowing Lawn, Changing Locks On Home In Foreclosure; Criminal Charges Dropped One Month After Arrest

In Miami, Florida, Miami New Times reports:
  • Most burglars wouldn't bother cutting the lawn. But on an April day in 2014, that's exactly what raised the suspicions of a woman in one Miami neighborhood. When she saw a strange man cutting the grass outside a home on Southwest Fourth Street, she called the homeowner to let him know.

    A crime scene technician from the Miami Police Department soon showed up to dust the home for fingerprints, which an examiner later used to identify a suspect. Almost one year after the break-in, 25-year-old Alden Chase was arrested on charges of burglary and grand theft.

    But it turns out Chase had a good reason to be at the house that day: He was working for a maintenance company hired by the bank, which had filed to foreclose the home. What's more astonishing, his lawyer says, is that Chase had posted a notice directly on the front window, indicating he'd been there that day to cut the grass, change the locks, and secure the residence.

    Apprised of the mistake, the State Attorney's Office dropped the case. Earlier this month, Chase filed suit against the City of Miami for false arrest.

    "It's unique because of the obviousness of the situation," says his attorney, Michael Garcia Petit. "They were aware there was litigation between the homeowner and the bank. ... If you or I as laypeople, not trained law enforcement, came up and observed this, we'd realize we'd probably want to call the maintenance company and the bank to ascertain whether they'd been on the property."

    The City of Miami attorney's office did not respond to an email seeking comment on the case; in most instances, the office declines to comment on pending litigation.

    Although the charges were dropped about five weeks after Chase's arrest, court records indicate he spent four days in jail before he was able to bond out. His mugshot remains on the internet. As a result of the arrest, Garcia Petit says Chase lost his job and has been hard-pressed to find work.

    "The problem he now encounters with each and every job is it shows that he has been arrested for burglary and grand theft, which is not a real good thing to have on your record," the attorney says.

    While he's still waiting on more documentation, Garcia Petit says he still isn't sure how Miami police could have arrested Chase nearly a year after the burglary without so much as interviewing him or calling the maintenance company's phone number from the notice posted outside the home.

    "Throw common sense out, because common sense doesn't work here," he says. "What happens is they're on autopilot and they don't investigate. ... They arrested him, and I've still got no idea why."

Utah Couple's Brand New Million Dollar Dream Home Turns Into Nightmare As Retaining Wall Failure Triggers Slow Slide Down Hillside; Insurer Says Homeowners Aren't Covered, Homebuilder, City Deny Responsibility, Mortgage Lender Begins Foreclosure On Now-Vacated Premises

In Ogden, Utah, KSL-TV Channel 5 reports:
  • Bennett and Kassie Thurgood's nearly $1 million home came with million-dollar views. "We just love the area," Bennett Thurgood said [], gazing out from the back porch of his now empty "dream home" on Hampton Ridge Drive in Ogden.

    The house was supposed to be the last stop for the Thurgood family.

    "We could retire here and let our kids go to junior high and high school here," Bennett Thurgood said. "(Prior to building) we had the land surveyed, the soil tested, and we relied on the city to inspect it."

    They enjoyed five months in the house before they first noticed the cracks.

    "I basically had a panic attack," Bennett Thurgood said.

    Then, the retention wall below their home failed. In October, fearing for their safety, they moved out.

    For the last three months, the Thurgoods have watched their home slip slowly down the hillside. While they've tried to get help from their insurance company, homebuilder, and city, they say all they got was a feeling of abandonment.

    "It's an empty dream house," Bennett Thurgood said. "It's facing foreclosure. It's financial devastation. I mean, we lost everything."

    His wife, Kassie, visited the site several times a week as the building progressed, but now she doesn't like to come near it. "I can't come up here," Kassie Thurgood said, fighting back the emotion in her voice. "It brings a lot of anxiety."

    The couple turned to their insurance company, which "denied the claim because it's considered settlement," according to Bennett Thurgood.

    "The city, the retention wall builder, the soil tester are all pointing fingers at each other," he said.

    KSL News spoke by phone [] to representatives from the company that built the home. They said they did not build or guarantee the integrity of the retaining wall, and the city of Ogden approved their building permit.

    "We feel like we did our due diligence and now we're here," Kassie Thurgood said. "We would just like our lives back," Bennett Thurgood said. "To be made whole, and be able to move on."

    Moving on may not happen anytime soon. There is an ongoing legal battle between the homeowners, home builder and retaining wall company.

    KSL News also reached out to the city to see of they're going to condemn the property and didn't hear back []. For now, the home sits empty and continues to move.

Couple Forced Into Year Delay In Wedding Plans After Financially Strapped Reception Venue Operator Pocketed $6,400 Check, Then Refused To Refund Cash After Losing Facility In Foreclosure Settlement

In Rio Rancho, New Mexico, the Albuquerque Journal reports:
  • After months of searching, Gladys Olives and Orlando Gonzales thought they’d found the perfect venue for their April wedding reception.

    Club Rio Rancho offered mountain views where they’d pose for wedding photos, ample space for their more than 300 guests and the price was within their budget. So in July, they wrote a check – $6,423 for the facility, staff, food and beverages.

    But in late December, the club closed, leaving Olives and Gonzales out thousands of dollars and scrambling to find a new reception venue. The two filed a lawsuit in 2nd Judicial District Court last week hoping to recover their money from the now defunct club and its owner, Jhett Browne. Browne could not be reached for comment and it is not clear who is representing him.

    “It’s not a good feeling, I’ll tell you that,” Gonzales said. “Especially when it’s a day as important as our wedding.”

    He and his fiancée have postponed their wedding by a year and are relieved that they held off on sending invitations and booking a DJ and photographer. “Now we have to start all over again,” he said.

    He hopes to save over the next few months as business at his landscaping company picks up with warmer weather.

    “I’m trying to sympathize with the owner, I’m a business owner myself,” Gonzales said. “But when I think about it, I think he had to probably have known. He knew he was possibly taking my money without honoring our deal.”

    So far, according to the lawsuit, Browne has “refused to refund” Gonzales, 32, and Olives, 33, who both live in Rio Rancho.

    According to a deed in lieu of foreclosure, Browne turned over the club and golf course to Southwest Capital Bank in late December, the Rio Rancho Observer reported.

Tuesday, February 14, 2017

Real Estate Closing Attorney Loses Law License Over Her Failure To Properly Oversee Her Trust Account, Allowing Over $700K In Cash Mostly Intended To Pay Off Existing Mortgages To Be Pilfered Out From Under Her

In Virginia Beach, Virginia, The Virginian-Pilot reports:
  • The law license of a longtime Virginia Beach attorney was revoked this week after she admitted to mishandling more than $700,000 from real estate transactions in which she was the settlement agent.(1)

    Beverly Anne English, who was admitted to the Virginia State Bar in 1984 and had never been disciplined by the organization before, acknowledged the allegations were true and consented to the revocation, according to an order released by the State Bar [last month].

    In an affidavit included with the order, English conceded that she failed to adequately oversee real estate transactions in which she acted as a settlement agent. She also admitted that she did not properly keep tabs on her trust account, which allowed third parties she contracted with to access those funds and “engage in a scheme of embezzlement and fraud.” But she denied any involvement or awareness of the scheme.

    “I did not participate in, assist with, or have knowledge of, any of the embezzlements, and I have reported the suspected responsible parties to law enforcement,” she said in the affidavit.

    The majority of the cases involved mortgages that were not paid off following a real estate transaction, said Senior Assistant Bar Council M. Brent Saunders. The payoffs were supposed to have been made by several title and settlement agencies run by a married couple that English had worked with and had trusted for about 17 years, according to a letter from English’s attorney, Carl Eason.

    The State Bar found no evidence of criminal activity by English, Saunders said.

    “The ethical misconduct on her part arose from her over-reliance on third parties who provided settlement services and acted as disbursement agents in transactions in which she was settlement agent, combined with her failure to provide adequate oversight of real estate closings in which she acted as settlement agent and to reconcile her own trust account for a number of years,” he wrote in an email.

    Neither English nor her attorney could be reached for comment.
Source: Longtime Virginia Beach lawyer loses law license for mishandling settlement money.
(1) The Virginia State Bar established the Clients’ Protection Fund to reimburse persons who suffer a financial loss because of dishonest conduct by a Virginia lawyer, and arising from a lawyer-client relationship or a fiduciary relationship between the lawyer and the claimant. Each petitioner may receive no more than $75,000.00 for losses that occurred on or after July 1, 2015 or $50,000.00 for losses that occurred before July 1, 2015. The claim must be filed within seven years from when the victim knew or should have known about the loss.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Another Real Estate Operator Rolls Dice & Loses, Going To Trial & Being Convicted By Jury For Role In Bid-Rigging Racket At Northern California Public Foreclosure Auctions; Count Now Up To 64 Individuals Either Copping Pleas Or Being Convicted At Trial

From the U.S. Department of Justice (Washington, D.C.):
  • A federal jury convicted Thomas Joyce for his role in a conspiracy to rig bids at public real estate foreclosure auctions held in Contra Costa County, California, the Department of Justice announced today.

    After a week-long trial before honorable Chief Judge Phyllis J. Hamilton in Oakland, California, the jury convicted Joyce of one count of conspiring to rig bids at foreclosure auctions between about June 2008 and January 2011. Joyce was charged in an indictment returned by a federal grand jury in the Northern District of California on Dec. 3, 2014.

    The evidence at trial showed that Joyce conspired with others to rig bids to obtain properties sold at foreclosure auctions in Contra Costa County. The conspirators negotiated payoffs for agreeing not to compete and then held second, private auctions known as “rounds” to determine the amounts of the payoffs for the individuals who had participated in the bid suppression.

    Including Joyce’s conviction, 64 individuals have either pleaded guilty or been convicted after trial of criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging at public foreclosure auctions in Northern California. Indictments are pending against several other real estate investors who participated in the conspiracy.

    This conviction is the latest development in the division’s ongoing investigation into bid rigging at public real estate foreclosure auctions in California’s San Francisco, San Mateo, Contra Costa and Alameda counties. The investigation is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.

    For more information about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.

Monday, February 13, 2017

Brooklyn Feds Invoke Criminal Forfeiture Laws In Effort To Snatch Convicted Mobster's Home Allegedly Purchased, Renovated With Dirty Cash

In Howard Beach, Queens, New York Post reports:
  • He lost his freedom, and now a convicted mobster might lose his Queens house.

    The US Attorney’s office wants to seize the Howard Beach home of Bonanno soldier Ronald Giallanzo, fresh out of the clink after a year behind bars, according to court papers.

    Giallanzo, who has 17 years in the crime family, made millions managing illegal online sports betting rings, the US Attorney’s Office said in the Brooklyn Federal Court legal filing.

    The 3,500-square-foot house is “nominally” owned by Giallanzo’s wife, Elizabeth, but because Giallanzo used dirty money to “purchase, construct and renovate” the 86th Street property, the government is entitled to take it under criminal forfeiture laws, according to court documents.

    In 2015 Ronald Giallanzo landed in legal hot water after violating the terms of his supervised release by repeatedly meeting with mobsters, including at a Staten Island Christmas party.

    A lawyer for Giallanzo declined comment.
Source: Feds want to foreclose on Bonanno mobster’s house (The government says the home was bought with dirty money).

Investment Adviser Gets 42 Months For Running Fraudulent Commodity Investment Racket; Among 13 Screwed-Over Victims Were Two Homeowners Who Were Talked Into Borrowing Against Their Home Equity & Investing Proceeds With Him

From the Office of the U.S. Attorney (Central Islip, New York):
  • Daniel Winston LaMarco, a Huntington, New York investment adviser, was sentenced to 42 months in prison and three years of supervised release following his August 2016 guilty plea to wire fraud and commodities fraud. As part of the sentence, LaMarco was also ordered to pay $872,600 in restitution to the investors in a commodity pool he ran which invested in the Foreign Exchange Market.
    Beginning in approximately January 2011, LaMarco began to solicit investors to fund a commodity pool he ran which invested in the Foreign Exchange Market. LaMarco made false claims regarding his investment performance, and touted the safety of his investment strategy.

    Among his victims, LaMarco encouraged two individuals to invest proceeds from a home equity loan with him.

    As part of his fraud scheme, LaMarco sent false monthly statements to investors representing that their investments were growing, inducing new investments from the investors, and discouraging them from withdrawing their investments with him. The monthly statements claimed the investments had more than doubled in value and were worth as much as $1,796,126.22. In truth, LaMarco had lost almost all of the investors’ money, which totaled more than $872,000, in the Foreign Exchange Market.
Source: Long Island Investment Adviser Sentenced To 42 Months In Prison (Defendant Misled Investors About Investment Returns In Foreign Exchange Market Scheme).

Affinity Racket Operator Who Primarily Targeted Financially Distressed Homeowners Of Vietnamese Ancestry For Loan Modification, Mortgage Debt Elimination Ripoffs Gets 57 Months In Federal Prison

From the Office of the U.S. Attorney (Santa Ana, California):
  • Orange County man who deceived distressed homeowners with false promises that he could help them avoid foreclosure by obtaining modifications to their mortgages – or even completely eliminating their loans – was sentenced today [February 9] to 57 months in federal prison.

    Antonio Marquette, who went by "Alan Le" and "Anthony Le," 56, of Midway City, was sentenced and ordered to repay $875,000 to victims by United States District Judge Andrew J. Guilford.

    Marquette was found guilty in September of nine counts of mail fraud, one count of wire fraud, and one count of money laundering. After the federal jury returned its verdicts, Judge Guilford remanded Marquette into custody.

    According to the evidence presented at trial, Marquette operated Bolsa Marketing Group in Garden Grove in 2010 and 2011 and charged homeowners up to $100,000 in cash for services that the homeowners did not receive. Through Bolsa Marketing, Marquette ran a scheme that targeted distressed homeowners – most of whom were members of Vietnamese communities in Southern California, the Bay Area and Houston – and induced them to pay large up-front fees to obtain mortgage relief services.

    "This defendant preyed upon vulnerable homeowners desperately trying to avoid foreclosure of their homes," said United States Attorney Eileen M. Decker. "He used false promises to extract significant fees from his victims, but he provided nothing in return."

    The evidence showed that Marquette operated the scheme by "falsely promising homeowners mortgage loan modifications that would substantially reduce their mortgage payments, avoid foreclosure, or eliminate their mortgage loans entirely." The government contended at sentencing that Marquette took in more than $1.5 million from victim-homeowners.

    As part of the scheme, Marquette made various promises to homeowners, including making guarantees that he could reduce their outstanding debt to 25 percent of the loan balance in only four months. Marquette also sent fraudulent checks to "pay off" mortgages and filed bogus documents with county recorders’ offices, according to court documents.

    "Vulnerable homeowners are targeted by affinity schemes such as the one operated by Mr. Marquette, who made false promises via radio advertisements, a tactic which tends to add a veneer of legitimacy to any scheme," said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office.

Sunday, February 12, 2017

Soaring Housing Prices, Salivating Real Estate Developers Drive Extinction Of Palm Beach County Mobile Home Parks, Leaving Lot-Leasing Homeowners Feeling Squeezed-Out

In Jupiter, Florida, the Palm Beach Post reports:
  • Mobile home parks are the Florida panthers of Palm Beach County.

    Once thriving and common, the parks were a dream come true for regular Joes. The average working person or retiree could afford to buy or rent one and live comfortably in one of the quirky named parks like Yogi By the Sea in Juno Beach or Maralago Cay in Lantana.

    Last [month's] tornado brought into focus how that lifestyle may be headed toward extinction. As developers buy up mobile home parks and north county’s housing prices soar, affordable mobile home parks may not be around much longer.

    That’s what several Juno Beach Condo mobile home park residents off U.S. 1 told me as they sifted through their torn off roofs and busted windows. Still, despite the damage, they aren’t budging.

    “I like it here. My friends are here,” 83-year-old Marthe Savard-Stranix lilted in her French-Canadian accent as she put her groceries away in her tidy kitchen after the storm. A blue tarp was on her roof and her carport was smashed by the 80-mile-per-hour winds.

    Like the panthers running out of open land, these folks are seeing the mobile home parks vanish to higher-density development.


    The parks are on big pieces of land. They are on main roads. They have existing entry/exits. The infrastructure — drainage, electric, water — is in place. Some have boat docks. The zoning usually is commercial or multi-family, which is what the developers need.

    When Ocean Breeze townhouses replaced the Floridian mobile home park in Juno Beach a few years ago, urban planners call it infill development.

    To the family whose home is snatched away, it’s called “Hey, what happened to my affordable housing?”
    So who is to blame for this vanishing dream?

    Bashing developers is too easy. They go where the money is.

    The government tries to help. Florida offers mobile home moving expenses up $6,000. But that’s not much in Palm Beach County.

    The mobile home owners have painted themselves into a corner. Many live in units built long before Hurricanes Jeanne and Frances, even Andrew, brought stronger building codes. The homes, like the ones in Juno Beach, get their roofs torn off and windows smashed when storms hit.

    And many only own their mobile homes. They rent the lot. When the park sells, [...], they get evicted. Many end up just walking away, because those old mobile homes are too old to move.

    Like the panther, these residents are running out of places to live.

Sold Out From Under Them: County's Once-Secret Plan To Boot Low-Income, Lot-Leasing Homeowners From Recently-Purchased Mobile Home Park Hits Unexpected Snag As Legal Aid Group, State AG Step In, Initiate Separate Probes Into Possible Fair Housing Violations

In Ellensburg, Washington, The Seattle Times reports:
  • Every fall since 1923, hordes of people enter the Kittitas County Fairgrounds in the town of Ellensburg to watch bulls toss riders off their backs and cowboys wrestle steers to the ground.

    Just a block away is a 3.5-acre plot of land that could someday add value to the annual rodeo and county fair, the biggest attractions in this agricultural and college town east of the Cascade Mountains. The Kittitas County Board of Commissioners purchased the plot in September for $1.45 million with a plan to convert it into an RV park for visitors.

    But to execute that vision, county commissioners will ultimately need to evict about 100 people — including 50 children — who live in the skinny, rundown mobile homes that constitute the Shady Brook Mobile Home Park.

    The land sale launched a protracted standoff between Shady Brook’s residents, who are low-income and mostly Latino, and county officials who appear to have misjudged the residents’ ability to fight back.

    Shady Brook’s residents responded to the prospect of losing their biggest investment — mobile homes, many of which are too old to survive a tow to a different park — by forming a homeowners association and hiring attorneys to represent them as a group. Now they are prepared to file a lawsuit to keep their community intact.

    Meanwhile, county officials are facing questions over how they intend to help Shady Brook residents relocate in an area that suffers from a shortage of affordable housing.

    The affair has drawn the attention of the state Attorney General’s Office, which notified county officials in May that its investigators were examining the possibility that the officials had violated state and federal laws concerning fair housing.
    David Morales, a Northwest Justice Project(1) attorney who represents the homeowners association at Shady Brook, said he still plans to file a lawsuit against the county. He said the county has violated the Fair Housing Act because closing the park will “have a disproportional impact on low-income people of color.”

    “Residents are still concerned because they have no place to live in five years,” he said. “Most are well-rooted in Ellensburg.”

    The residents of Shady Brook rely on each other to baby-sit their kids, loan money, translate documents and drive neighbors to appointments. At least eight men in the park work at Anderson Hay & Grain, a big local employer that exports world-renowned timothy hay to countries like Japan. Several others prepare and package frozen vegetables at Twin City Foods, another local employer, or seasonally pick apples, cherries and pears.

    While most of those who own mobile homes at Shady Brook pay $325 a month for the space or lot, apartments of similar size rent for triple that in Ellensburg, according to a federal fair market rent report.

    Margarita Gomez, who sometimes watches the neighborhood kids while their parents work, said the eviction, regardless of when it comes, is not fair.

    “Families have four or five kids and it’s not easy for a family to find a new home because it’s more expensive,” Gomez said.

    Although county officials say they had no intention of quickly evicting Shady Brook’s residents, records show that wasn’t the original plan when they started negotiations to buy the property.

    The Seattle Times obtained documents and emails through public records requests that show county officials initially demanded in 2015 that the park’s then-owners, Jerry and Diane Barton, evict Shady Brook’s tenants and dispose of the mobile homes before closing the sale.
For more, see Mobile-home park’s residents left in dark as homes are sold out from under them (Neighbors in a low-income, mostly Latino mobile-home park are fighting Kittitas County’s surprise plan to evict them. Now the state is investigating).
(1) Northwest Housing Project is a publicly funded legal aid program that provides civil legal assistance and representation to low-income people throughout Washington State in cases affecting family safety and security, housing preservation, protection of income, access to health care, education and other basic needs.

Lot-Leasing Homeowners In 12-Unit Mobile Home Park Freeze Annual Rent Increases By Buying Out Motivated, Retirement-Minded Landlord; Assistance From Non-Profit Groups Used To Orgainize Residents, Conduct Pre-Purchase Feasibility Study, Score Needed Financing

In Brandon, Vermont, VTDigger reports:
  • It’s easy to miss Triangle Court mobile home park on Route 7 south of Brandon village. The 12-unit development has few distinguishing features. There’s no sign to greet you. Even Triangle Court Road, a cul-de-sac that abuts dozens of acres of woodland to the east, is unmarked.

    In many respects, Triangle Court is like most other mobile home parks in Vermont — with one crucial difference. In April residents of the park decided to buy the property and turn it into a cooperative.

    It wasn’t the first time Triangle Court had been put on the market. Residents had expressed an interest in purchasing the park over the years, but had never been able to come up with the resources to do so. And the would-be seller, Beverly Lent, who bought the land with her husband more than 30 years ago, was unable to find an outside buyer.

    So she stayed on, and each year raised the lot rent 4 percent. Under state law a mobile home park owner can increase the rent by that amount without providing justification.

    Jerry Calsetta, a plumber who purchased a home in Triangle Court 18 years ago, said that when he moved in lot rents were $200. The year before it became community-owned, rents were nearly twice that.

    “By owning, we determine what we want to charge for rent,” Calsetta said.

    In the first year of community ownership lot rents went down about $13. But the co-op model is about more than saving money, Calsetta said. It gives residents the power to manage their own affairs and make improvements to the development. Perhaps most important, it guarantees that the property won’t be sold and liquidated without full membership approval.

    Though a new owner would be required by state law to give 18 months’ notice before closing the park, residents would have no way of fighting or reversing that decision.

    “They don’t see that risk generally until it’s too late,” said Paul Bradley, founding president of Resident Owned Communities, USA.(1) “Those are the worst phone calls of all.”


    Vermont has some protections in place for residents of mobile home parks. Private owners wanting to sell a park have to notify the state, which gives residents 45 days to decide if they want to pursue cooperative ownership. Residents then have an opportunity to assess whether there’s enough interest among members and financial support to buy the property.

    “If they’re not invested as a group, it’s not going to work,” said Annik Paul, of the Cooperative Development Institute, a group that assists residents interested in cooperative ownership.

    Jonathan Bond, director of the mobile home program at the Champlain Valley Office of Economic Opportunity, said resident ownership is not always met with enthusiasm. “It’s a big leap of faith residents take,” Bond said. “In some instances there may not be anyone living in the park who is comfortable stepping up in that way.”

    However, if a majority of the members of a community agree to move forward, they are given 120 days to evaluate the condition of the property and make a final decision.

    In this case the Cooperative Development Institute(2) secured $10,000 in grant money to conduct an engineering assessment of the water, sewer and electrical systems. Meanwhile, residents of the park had a series of meetings to make sure everyone was on board.

    Calsetta said there were a lot of questions and people were initially skeptical, but in the end all the tenant homeowners agreed to participate. (A mental health agency that occupied a lot declined to participate and has vacated the property. Lent, the seller, has since died.)

    The membership fee is $100 and refundable if a homeowner decides to sell. Any new residents are required to become members.

    According to the CDI’s Paul, there was another buyer in the wings so they had to move quickly. The engineering study showed no major investments in the property were needed, and the CDI was able to secure the loan to buy the property.

    Calsetta, who as board president acknowledged there is a lot of work involved in managing the co-op, said residents have already begun to see the benefits. They plan to improve the gravel road, which hasn’t been upgraded in years. Lot rents may continue to decline. And residents now own the land they live on.

    “We want everybody to feel like this is their home,” Calsetta said. “That they can take pride in ownership.”


    Vermont has 11 resident-owned mobile home parks, and nationwide the movement has seen rapid growth. According to ROC USA’s Bradley, there are about 1,000 mobile home park co-ops around the country. ROC USA itself has worked with 195 communities in 14 states. ...
For more, see Mobile home park residents take ownership of their fate.
(1) ROC USA, LLC is a non-profit organization with a mission of making quality resident ownership possible nationwide by helping lot-leasing mobile home owners form co-operatives to buy their manufactured home communities or “mobile home parks” from their landlords.

(2) Cooperative Development Institute provides direct technical assistance (ie. communication, training, and facilitation) for co-ops of all kinds and at all stages of development throughout New England and New York. Among other programs, one CDI program is designed to assist residents of manufactured homes in New England gain ownership over their communities.