Friday, December 02, 2016

Duping 83-Year Old Dementia-Stricken Widower Into Signing Away 6-Acre Property For $4K (Town-Assessed For $77K) Among Bad Acts Listed In Indictment Charging Caregiving Pair With Theft Charges; Victim's Relative Estimates Total Alleged Ripoff Could Exceed $200K

In Ellsworth, Maine, the Mount Desert Islander reports:
  • The two women accused of bilking an elderly Trenton man out of thousands of dollars entered not guilty pleas at their Nov. 8 arraignment in Hancock County Unified Criminal Court.

    Lisa Harriman, 54, of Mariaville and Kathleen Prunier, 58, of Trenton were indicted by a grand jury Oct. 6 following an investigation by the Maine Attorney General’s Office. Harriman was indicted on charges of theft by unauthorized taking and misuse of entrusted property. Prunier was indicted on a theft by deception charge.

    According to the indictments, Harriman committed theft by obtaining or exercising unauthorized control over cash with an aggregate value in excess of $10,000 between November 2012 and July 2015. The misuse of entrusted property charge alleges that Harriman violated her duty as a fiduciary in managing money belonging to the victim.

    Prunier, her indictment states, committed theft by deceiving the victim by creating the impression that real estate she purchased from him was valued at considerably less than the town’s assessment of the property. Prunier allegedly befriended the victim and convinced him to sell her a 6-acre property with a right-of-way to the shore for $4,000, though it is valued by the town at $77,000.

    A member of the victim’s family, Bob Byron of North Yarmouth, has said the 83-year-old Trenton resident suffers from dementia. The total loss, he estimated, could exceed $200,000.(1) Both women posted $1,000 cash bail the day of their arraignment.
Source: Not guilty pleas in elder theft case.

See also, Two charged in elder theft:
  • A relative of the victim did provide details regarding the allegations against the two women.

    Bob Byron of North Yarmouth, a former Maine State Police trooper, said his wife, Jamilyn, is the niece of the 83-year-old victim. The family has been following the case since they first reported their concerns to state police after Harriman attempted to cash in a $150,000 life insurance policy in the victim’s name to pay expenses after “she ran out of cash,” Byron said.

    Cashing in that policy prematurely resulted in the victim paying $37,000 in penalties, Byron said. That raised red flags with the family.

    What they discovered, Byron said, is that Harriman, who also is a niece of the victim, moved into the victim’s home shortly after his wife died in October 2012.

Live-In Caregiver Hired To Attend To Ailing, Recently-Widowed Senior Promptly Marries Him, Drains Equity Out Of His Home & Cash Out Of His Bank Account; Victim Left Broke & Living Alone In Nursing Home While Perpetrator Cops Guilty Plea After Sitting In Jail For A Few Months, Gets Probation In Lieu Of Active Prison Time

In Wilmington, North Carolina, WECT-TV Channel 6 reports:
  • A Wilmington woman pleaded guilty recently to elder abuse, in a crime that came as a shock even to prosecutors who routinely try these kinds of cases.

    “It was something stunning, how much money that she spent in three months time,” New Hanover County Prosecutor Janet Coleman said.

    The Alleged Crime

    Coleman says 40-year-old Christy Paffenroth Ferguson met 80-year-old Tony Ferguson while she was working at a local adult day care facility. After Ferguson’s wife of 40 years died of cancer, their daughter hired Paffenroth to serve as his caregiver.

    Paffenroth was paid $1,100 a month for her services, plus room and board in Ferguson’s home for her and her teenage son. Coleman says Paffenroth moved in as hired help in May of 2012, married Ferguson in December, and by January she’d taken over as his power of attorney.

    In May of 2013, prosecutors say Paffenroth took $120,000 out of Ferguson’s credit union and transferred it to a joint checking account. She then took out an $80,000 equity line on his house that was bought and paid for.

    Then, prosecutors say the spending started in earnest.

    “She had plastic surgery…. She got breast augmentation. She got braces. Her son got braces. She paid for private school tuition for a local private school, Christian school, for her son and his friend. Multiple thousands of dollars,” Coleman said of some of the bigger ticket items that drained Ferguson’s life savings.

    After his bank account was empty, prosecutors say Ferguson began cashing in his savings bonds.

    “At that point….he was virtually broke,” Coleman continued. “In March of 2014, she sold the house for $90,000.” The house had previously been valued at nearly twice that amount.

    Prior to his marriage to Paffenroth, Ferguson, a retired federal employee, had no debt whatsoever. With no home left, he now lives alone in a nursing home.

    “All he wanted to do was go home. He doesn’t understand he doesn’t have a home,” Coleman said. “It literally broke my heart. And everyone else who was involved in this case.”
    Authorities Called In

    Paffenroth says Ferguson’s daughter wasn’t happy about the marriage and called the Department of Social Services and the bank to complain. That’s when authorities got involved, eventually charging Paffenroth with Felony Exploitation of an Elder Person.

    Her Public Defender, Emily Zvejnieks, thought Paffenroth was innocent, but says Paffenroth decided to plead guilty to avoid the risk of 2.5 years in prison if convicted.
    Paffenroth was given credit for a few months she’d already spent in jail, and she was placed on probation rather than given active prison time. The fact that she did not have a significant criminal history and the fact that Ferguson did not want her to go to jail were also taken into consideration at sentencing.
    Legally Incompetent

    At the time the two were first married, Ferguson was considered legally competent. The prosecutor said his physician had previously noticed early signs of dementia, but no legal action had been taken to address that.

    “People are competent until they are declared incompetent,” Coleman explained.

    That involves court proceedings, and it wasn’t until after Ferguson’s money was gone and his house sold that the courts declared him legally incompetent.

Administrators At Senior Citizens' Home Call In Cops After Elderly Resident's Rent Goes Into Default, Leads To Arrest Of Family Member For Abusing POA & Raiding Bank Accounts For Over $200K; 86-Year Old Victim Forced To Leave Facility That Provided Meals, Programming For Socializing, Now Lives Alone In Apartment Paid Thru Public Assistance

In Libertyville, Illinois, the Libertyville Review reports:
  • A woman charged with stealing over $200,000 from an elderly family member [wa]s scheduled to appear in court Nov. 29.

    An 86-year-old woman was living in a facility for senior citizens in Libertyville when in January 2015 administrators said her rent was not being paid, according to Sgt. Chad Roszkowiak of the Libertyville police department.

    Jacqueline M. Henry, 53, [...], had power of attorney over the elderly woman and joint access to bank accounts, Roszkowiak said.

    "This relative oversaw the finances, and part of that was to make sure the lease payments were being made," Roszkowiak said. "When that stopped happening, the victim went to the bank to find out what was happening and discovered that her money was pretty much gone."

    Over nearly two years, Roszkowiak said he and others have subpoenaed financial documents and found unjust financial activity dating as far back as 2010 that totaled over $200,000.

    After showing evidence to a judge, police say they were granted a warrant and Henry was taken into custody at her home on Oct. 21. Documents show Henry was charged with financial exploitation of an elderly person, money laundering, and theft.

    Attempts to reach Henry for comment were unsuccessful.

    Roszkowiak said officers were not able to recover any money. He said a judge could order restitution if Henry is found guilty.

    The 86-year-old woman was in a facility with provided meals and programming for socializing, but Roszkowiak said she's now alone in an apartment that she is paying for through public assistance.

Thursday, December 01, 2016

Convicted Loan Modification Scam Artist Already Serving Time For Ripping Off 75 South Jersey Homeowners In One County Gets Hit Again On Theft By Deception Charges In Neighboring County For Similar Racket

In Camden County, New Jersey, the Burlington County Times reports:
  • A Mount Laurel man already in prison for a fake financial services scheme has been charged with a similar crime in Camden County. Authorities are now wondering if even more victims were scammed.

    Scott Feltman, 42, of Star Board Way, was charged with third-degree theft by deception in connection with the latest alleged scheme.

    Feltman signed a contract with a Collingswood resident to act as the victim's mortgage broker concerning a loan modification, according to the Camden County Prosecutor's Office.

    Operating under a firm named Baymar Capital Funding LLC, he took money from the resident for two years without applying any of it to the mortgage, authorities said. The victim was eventually evicted from the home for which the payments were supposed to be applied.

    Authorities did not say when the fraud allegedly occurred.

    Feltman is already serving a sentence at the Central Reception and Assignment Facility in Ewing, Mercer County, for stealing money from 75 people for whom he was supposed to provide financial services, also under Baymar Capital.

    He pleaded guilty earlier this year to second-degree theft by deception in that case. On Sept. 27, Feltman was sentenced to three years in prison with the possibility of entering an intensive supervision program that could have seen him released after serving several months behind bars.

    It was not clear [] whether a conviction on the latest charge would disqualify him from the supervision program.

    Investigators said there may more victims who have not come forward. Anyone who has dealt with Feltman or Baymar Capital in Camden County, or who has information about potential fraud, is asked to call Camden County Prosecutor's Office Sgt. Michael Molle at 856-225-8674.

    Information can also be emailed to

    Anyone who may have been defrauded outside of Camden County should contact the police in the towns in which those incidents occurred.

Foreclosure Rescue Operator Belted With $1.36 Million In Bail On Arrest For Allegedly Filing Fraudulent Land Documents In Connection With Racket To Improperly Stall Foreclosures

In Huntington Beach, California, The Orange County Register reports:
  • A Huntington Beach woman was arrested [] in connection with a scheme where money was taken to fraudulently halt home foreclosures.

    Police said that 55-year-old Brandy Taylor was arrested at her Huntington Beach home after a months-long investigation, according to a statement[].

    In January, Santa Barbara County District Attorney’s officials contacted Huntington Beach police investigators regarding a “Foreclosure Rescue” scam that had victims in Santa Barbara County, Alameda County and Orange County.

    “For a monthly fee, the company was suspected of offering to stop the foreclosure process through the use of fraudulent deeds of trust,” according to the statement. The company suspected in the deceptive activity was known as Carrington Investments/The Wellington Group operating out of Huntington Beach.

    The counties issued arrest warrants in Huntington Beach for Taylor on suspicion of filing forged or false documents, said Huntington Beach police Officer Jennifer Marlatt. [... T]he Huntington Beach Police Department Crime Task Force Unit conducted surveillance at Taylor’s home. Once detectives confirmed she was in the home, they arrested her.

    She was booked into jail and was being held in lieu of $1.36 million bail.

Wednesday, November 30, 2016

HOA Residents Threaten Lawsuit Against Developer For Allegedly Hoarding Control Of Association, Doubling Maintenance Fees & Using Proceeds For Matters Unrelated To Community Upkeep

In Schertz, Texas, the San Antonio Express-News reports:
  • Residents of a neighborhood in Schertz are threatening to sue local developer Chris Price, who they say has hoarded control of their homeowners association, hiked their annual fees and used the proceeds to build another master-planned community.

    In the past two years, annual homeowners fees have almost doubled, to $540 from $275, at Sedona, a modest neighborhood of 169 homes that’s mostly quiet except for the occasional roar of a jet from nearby Joint Base San Antonio-Randolph. Residents don’t see where the money has gone — their drainage ditches are inadequate, causing streets and backyards to flood during storms, they say. A small park is poorly maintained, with rocks tumbling off a water fountain that hasn’t worked for years.

    The residents, many of whom are elderly or ex-military, say the higher fees have hurt their property values and caused them to cut back on groceries and visits to their grandchildren.
    Texas RioGrande Legal Aid, a nonprofit that offers legal services to homeowners, has accused Price and his partners of breaking state HOA laws. The nonprofit sent a letter to Price’s attorney this week offering to open negotiations for a settlement, according to Legal Aid attorney Molly Rogers.

    The residents want control of the HOA, a reduction in their fees, a limit on future increases and the return of some of their previous payments. If the negotiations fail, Legal Aid plans to help the residents take Price to court.

Winning Bidder At Tax Foreclosure Sale Walks Away With Egg On His Face; Bids $19K For Home, Instead Winds Up With Vacant 30' Wide Lot Next Door

In West Seneca, New York, WIVB-TV Channel 4 reports:
  • Jaclyn Cooper got a knock on the door earlier this month, a stranger with papers showing he had just bought the family’s home in a tax foreclosure auction. The Coopers were stunned and bewildered because they had just paid their back taxes, and had the receipt to prove it.

    “He said, ‘well I just bought this house in auction, and I am going to take over ownership on Wednesday,’” Jaclyn recalled.

    Jaclyn and her husband James would learn, when Erie County held its annual tax foreclosure sale October 13, their address was on the auction block, and sold for $19,000 to cover the back property taxes. What’s worse, it was no mistake.

    The future was looking dim for the couple and their two small children, facing the prospect of vacating their home, and moving all of their belongings.

    “I cried, and because it was Veterans Day and we could not get ahold of anybody, I did not sleep the whole weekend,” the West Seneca mom said. “I was having panic attacks. It was terrible.”

    When Jackie and James did make it to the tax office in the Rath Building, county officials confirmed they still owned their house. They would eventually learn the buyer who thought he got their home for $19,000–a steal–actually bought a 30’ wide vacant lot with the same address, not such a good deal.

    The lot? A driveway separating the Cooper’s house from the property next door. Somehow, a 30’ section of property abutting the Cooper’s home was carved out into a separate parcel, but with the same address on Clinton Street.

    Joseph Maciejewski, Erie County’s Director of Real Property Tax Services, confirmed the address aberration, “I am aware that both the 30’ vacant lot, which is separately described, and the home, share the same address.”

    Maciejewski said the address was assigned by the Town of West Seneca, not Erie County, and now the buyer who thought he got a house for $19,000 has a tough decision. He paid a non-refundable deposit of $3,800 dollars for the driveway, and can own it by paying off the balance, or walk away.

    “You are dealing with foreclosure, and it is buyer beware–you assume whatever you bid on, you know what you are bidding on,” said a sympathetic Maciejewski.

    The driveway is hardly worth $19,000 but Maciejewski insists, the $3,800 deposit the buyer put down now belongs to Erie County—an expensive lesson that every deal at a tax foreclosure sale is not a bargain.

Two More Real Estate Investors Agree To Plead Guilty In Ongoing Antitrust Probe Into Northern California Foreclosure Sale Bid-Rigging Rackets; Count Now Up To 59 Guilty Pleas, With Indictments Pending On Another 16

From the U.S. Department of Justice (Washington, D.C.):
  • Two Northern California real estate investors have agreed to plead guilty [] for their role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

    California real estate investors John Michael Galloway and Nicholas Diaz each pleaded guilty to one count of bid rigging in U.S. District Court for the Northern District of California in Oakland [].
    According to court documents, between June 2008 and January 2011, John Michael Galloway and Nicholas Diaz conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County. The selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.

    The department said that the primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Contra Costa County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

    The guilty pleas entered [] were the result of the department in its ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, California. To date, 59 individuals have agreed to plead or have pleaded guilty. In addition, indictments are pending against 16 real estate investors. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office, in connection with the president’s Financial Fraud Enforcement Task Force.
    For more information about the task force, please visit 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.

Tuesday, November 29, 2016

'Involuntary' Probate Scheme That Exploits Obscure Michigan Law To Target Homes Owned By Recently-Deceased Homeowners Uncovered In Southeastern Michigan; Broker Known For Peddling Books On Real Estate Investment Linked To Operation, Says He'll Take His System Across The Country

In Macomb County, Michigan, WXYZ-TV Channel 7 reports:
  • When you lose a loved one, often the last thing on your mind is what to do with the home they once lived in. But several local families say before they could do anything with their relatives’ estates, some realtors and attorneys are swooping in to cash in.

    “It’s really shady,” said Kristin Bobier Rekowski. Rekowski tells the 7 Investigators that her late father would be furious if he knew what had happened with his home.

    When Richard Bobier died last year, Kristin says she had been told his Warren house was worth far less than what he owed on it. “I was just working on getting his belongings out of the house and just trying to salvage what could be salvaged,” said Rekowski.

    After the foreclosure process started, Rekowski and her siblings talked about trying to redeem the house and put it up for sale. But before they could do that, somebody else stepped in.

    “We were summoned to the court. Someone opened a probate case in his name,” said Rekowski.

    That someone is attorney Cecil St. Pierre. St. Pierre is also the Warren City Council President, and he’s a state-appointed Public Administrator who’s authorized to open estates, like Richard Bobier’s, in Probate Court.

    An estate is everything you own, such as your house, and your bank account, which are known as your assets. An estate is also everything you owe, including things like your mortgage, or credit card debts.

    And when someone dies, even if you have a will, in Michigan the probate courts are in charge of making sure your heirs get what they’re due from your estate.

    But if the heirs don’t take certain steps when a loved one dies – after 42 days a Public Administrator attorney can put themselves in charge of the estate.

    And that’s what several lawyers and heirs say Cecil St. Pierre has been doing in Macomb County at a rate they’ve never seen before. And he’s not doing it alone. A company called Probate Asset Recovery, or PAR, is often paying the $150 filing fee so St. Pierre can open the estates – a practice other Public Administrators and lawyers call unusual.

    When Rekowski received notice from the court announcing that St. Pierre was becoming the Personal Representative of her dad’s estate, she says she had no idea what to do – so she did not fight St. Pierre taking over the estate. She says that meant St. Pierre could dictate which realtor would sell the home. Rekowski says she told him Ralph Roberts Realty would be handling the sale.

    Roberts is a Macomb County realtor who literally wrote the book on flipping houses in foreclosure, “Flipping Houses for Dummies.” Roberts sold the Bobier house for a $31,729.52 profit.

    Now court records show, one of Roberts’ companies is set to get $3,390 from the estate. But here’s what Kristin wasn’t told about until recently: another company, Probate Asset Recovery, is getting the biggest cut of $10,576.53.

    So who owns PAR? That’s exactly what the judge wanted to know at Kristin’s last hearing.

    “Is there an owner,” asked Macomb County Circuit Court Judge Kathryn George. “Yes. Ralph Roberts is the owner,” answered PAR Manger Steve Mogdis during that hearing.

    That means, between Robert’s other company and PAR, nearly $14,000 will ultimately end up in Ralph Robert’s pocket. Kristin Rekowski and her brothers (after she’s reimbursed for funeral expenses she already paid) will only net $3158.71 each.

    “It’s really not fair,” said Rekowski.

    Moments after Rekowski’s court hearing last week, I asked Cecil St. Pierre why he’s using a private company’s money to open so many estates.

    “I deal with Probate Asset Recovery because they work with Ralph Roberts Realty in order to sell the house on the multi-list and get the top dollar for the asset. We don’t deal with any investors, or do anything other than what’s on the multi-list,” said St. Pierre.

    “Well of course they work with Ralph Roberts Realty – they’re owned by the same person,” said 7 Investigator Heather Catallo. “I don’t know – I don’t know who owns PAR,” said St. Pierre.

    But the PAR manager had just admitted that Roberts is the owner in court, with St. Pierre present. In fact, St. Pierre and Ralph Roberts go way back – all the way to middle school – and they even once owned property together.

    “I’m very fortunate to have Cecil as one of my best friends,” said Ralph Roberts. “Is he your attorney,” asked Catallo. “He’s represented us in the past,” said Roberts.

    Roberts says he’s helping people in southeast Michigan, by finding assets they didn’t know about. He says he’s brought $4.5 million dollars into probate estates since 2013.

    “You get 1/3 correct,” asked Catallo. “25[%] to a third, depending on what the case is,” said Roberts. “I used to buy these houses and I would get 100% of the profit. And I don’t need to make money anymore, I want to do good for the community.”

    It needs to be stopped,” said attorney Gary Allen. Allen says Robert’s company paid for Cecil St. Pierre to petition to open an estate without contacting his clients (the heirs) first, even though his clients don’t want to sell their late mother’s condo.

    Allen says one of the heirs had already been named personal representative in the will.

    I called the public admin almost every day from July 27th through August the 3rd, sometimes twice a day. And he never returned my calls,” said Allen “Not once. Never spoke with him. And so then I was forced to go to court, and my client who lives in Brooklyn, she came in from Brooklyn so that she could appear at the hearing. When we got to the hearing, the Public Admin did not show up for an hour.”

    Allen says all that extra time and expense was unnecessary for his client. He said St. Pierre did let his client take over the estate, but then he sent them a bill for $892 to come from the estate, including $187 in filing fees – even though Ralph Roberts company had already paid those costs.

    “I think it’s a huge problem,” said Allen.

    St. Pierre is also asking the court to grant him $4196.25 in fiduciary and attorney fees on the Bobier estate.

    “We follow the law to the T. Dot the I’s and cross the T’s. There’s nothing being done wrong,” said Roberts.

    “I haven’t said it was illegal – I asked you if it was the right thing to do,” asked Catallo. “It’s absolutely the right thing. I’m doing great things for thousands of people. I’m getting them money. I’m going to take this across the country. And I’m going to make probate great again,” said Roberts.

    Since the 7 Action News started investigating this back in August, the State Attorney General has stepped in to issue new guidelines for Public Administrators. “The allegations and associated case will be reviewed in a thorough and exacting fashion,” said spokeswoman Andrea Bitely.

    Both Roberts and St. Pierre insist they’re helping these estates, by turning around the properties to make money for the estate. Roberts also says by selling empty homes, he’s getting the properties back on the tax rolls and fighting blight.

    St. Pierre says if an heir wants to take over the estate they can. But estate lawyers tell 7 Action News if the estate is opened formally like this without an heir realizing it, heirs could end up with a bunch of legal fees.

    The Attorney General regulates Public Administrators in Michigan (for complaints).

Egyptian Woman Sues To Reestablish Her Ownership In $930K NYC Triplex After Putting Dad's Name On Deed (In Keeping With Egyptian Custom), Then Finding Herself Locked Out Of Her Home After His Alleged Physical Abuse

In Bay Ridge, Brooklyn, the New York Daily News reports:
  • An Egyptian woman used part of a $2.3 million settlement with the city to buy a house and put her dad on the deed — a move in keeping with the country’s customs — only to find herself locked out after repeated abuse, a new lawsuit alleges.

    Walla Mohamed in 2011 bought a $930,000 triplex in Bay Ridge, Brooklyn, shortly after receiving the payout. She was unmarried and without kids at the time.

    “Egyptian custom dictates that (Walla Mohamed) as an Egyptian woman is strongly encouraged to designate a male to represent or stand in for her in legal contracts in proceedings,” according to filings in Manhattan Supreme Court.

    When Walla Mohamed bought the house, her dad Abdallah Mohamed decided it was “in her best interest for her to include his name on the deed,” the suit says.

    Her dad — who’s lived there rent free since December 2011 — has not contributed a “single dollar” to the house’s purchase or upkeep, she claims.

    Walla Mohamed, 30, who is currently married with three kids, alleges her dad physically abused her “on more than one occasion.”

    In September, Abdallah Mohamed “maliciously beat (his daughter), striking her,” the suit also says.

    A man reached on a phone line listed to Abdallah Mohamed hung up on a Daily News reporter [].

Two NYC Real Estate Brokers Who Have Held Seminars Warning Homeowners About Rampant Title Hijacking Rackets Now Count Themselves As Victims; Say No One Is Safe Until City Does More To Protect Property Owners

In Bedford-Stuyvesant, Brooklyn, DNAInfo (New York) reports:
  • Local real estate brokers who've hosted a series of panel discussions warning residents of property fraud happening in their neighborhood have themselves become victims to the crime, they say.

    Brokers Richard Flateau, founder of Flateau Realty Corp., and Gloria Sandiford say they received a notification from the city last week alerting them that the empty mixed-use building at 1424 Fulton St. they own had a new power of attorney, but the signature on the document authorizing the change wasn't theirs, they said.

    The document filed on Nov. 8 lists Elganto Management Inc., an entity with a similar name to their Elganto LLC that owns the building but is unknown to both owners, as the power of attorney over the property, alongside a forged signature of Flateau's, they said. The authorization would allow the entity to act as owners of the property.

    Then when they went to the building on Nov. 12, they discovered the locks had been changed.

    "It was forged and it all happened very rapidly," Flateau said. "I've done a bunch of seminars and public meetings about property fraud, so it's kind of's surreal. It's hard to fathom, but it's very real. I'm a victim of it."

    Last year, both Flateau and Sandiford participated in an educational panel raising awareness about the issue as residents complained of rampant occurrences in the area. But now that they've become victims themselves, they said that no one was safe until the city did more to protect owners.

    "The system is so broken that people without the wherewithal to follow up and do the necessary follow through are being taken advantage of," said Sandiford, who also serves as president for the Bedford-Stuyvesant Real Estate Board.

    "This is an atrocity that is happening. I've heard people telling me that their building was stolen and they just had to walk away because it bankrupted them."

    Flateau and Sandiford own the Fulton Street building under Elganto LLC, according to city documents. The brokers had planned to renovate the building to turn it into offices on the ground floor and apartments on the upper levels, when they recently started seeing strange things happening, they said.

    "It's been a build up of things because two weeks ago, we noticed the company's label was ripped off the mailbox," Sandiford said, adding that the mailbox lock had also been changed.

    According to Department of State records, the fraudsters under the Elganto Management Inc. name had registered the business corporation on Nov. 7, just a day before filing the change in attorney of power at the Fulton Street property.

    Then over the weekend, they noticed the padlocks to the building had been changed, a skylight inside had been broken into, and their belongings were rifled through, Sandiford said.

    Flateau immediately reached out to the city's Sheriff's office, which deals with property actions, as well as local elected officials and a lawyer for the next steps in getting the power of attorney revoked. They're still waiting to hear back from the Sheriff's office, they said.

    "We need to appeal to our city to create a better system, this is the bottom line," Sandiford said. "What happens to someone who isn't connected, that falls through the cracks?"

    Sandiford and Flateau recommended that all property owners register with the Automated City Register Information System, or ACRIS, which will alert them to any new documents filed on their properties.

Monday, November 28, 2016

More On Title Hijacking Epidemic Affecting One NYC Neighborhood; Forged Signatures, Fraudulent Deeds Used To Outright Steal Homes Out From Under Long-Time Homeowners; Residents Urged To Register Their Property Addresses With City Automated Alert System

In Bedford-Stuyvesant, Brooklyn, DNAInfo (New York) reports:
  • A "scourge" of property fraud which is conning Bed-Stuy owners out of their homes has community leaders working to stamp out the crime.

    “We know that we have some of the most valuable real estate in the city and the state of New York,” central Brooklyn Councilman Robert Cornegy said. He called the problem a "growing scourge" that often targets the elderly.

    “It started by little, subtle ways that people would offer you money, and now they’ve gotten so aggressive that they’re literally defrauding deeds and forging people’s signatures and literally outright stealing people’s properties. And we can’t stand for that.”

    Elected officials, real estate brokers and representatives of the Brooklyn District Attorney’s office, the Brooklyn NAACP and other community stakeholders came together in front of 1424 Fulton St., near Brooklyn Avenue, Thursday [Nov. 17] to tell locals about resources available to victims.
    [Brokers Richard Flateau and Gloria Sandiford] encouraged owners to register with the Automated City Register Information System, or ACRIS, which will alert them to any new documents filed on their properties.

    Residents can contact real estate organizations in the neighborhood for advice, Sandiford said.

    “I know of people that I literally cry with, that they’ve walked away from their home of 70 years because they do not know who to turn to,” she said.

    “We are here for you working every day, professional real estate brokers see this kind of behavior every day and I can tell you that it’s very serious and you are not alone.”
    The Department of Finance implemented steps to curb property fraud, such as training staff to review suspicious documents and installing cameras in offices where deeds are recorded.

    In 2015, the agency oversaw 511 investigations of deed and property fraud citywide, 117 of which turned into criminal cases with the city’s district attorney’s offices, a DOF spokeswoman said. A total of 14 arrests were made, according to the agency.

    Still, more needs to be done to combat the crime, community leaders said, with Cornegy adding that he is working on legislation to protect the privacy of deed holders.

Massachusetts Appeals Court Affirms Ruling Restoring Nursing Home-Bound 83-Year Old Widow's Ownership Of Over $2.5 Million In Real Estate, Other Assets Pilfered By Sleazy Son, Daughter-In-Law; Fiduciary Relationship Among Parties Shifted Burden Onto Defendants To Prove Transactions Were Free From Fraud, Undue Influence

From a recent story in
  • The near epidemic of financial exploitation of the elderly and infirm came into sharp focus in the Massachusetts Appeals Court’s decision on Nov. 2, 2016 involving the guardianship of Alice Migell, a nursing home-bound 83-year-old widow. (Guardian v. Migell, 2016 Mass. App. Unpub. LEXIS 1056 (Nov. 2, 2016)) On behalf of Alice, a complaint in equity was filed against her son and daughter-in-law to recover over $2.5 million in assets after an investigation by the local protective services agency revealed that Alice was the victim of a scheme to strip her of everything.

    Alice’s son, Andrew, and his wife, Kai, failed to win reversal of judgments holding them guilty of criminal contempt of court and recovering real estate and money that they’d taken from her. A key aspect of the case was the fiduciary relationship that Andrew and Kai had created toward Alice. Andrew was a trustee and acted under a power of attorney for Alice. Both Andrew and Kai boasted about how they did everything for Alice because she couldn’t take care of herself. They tried to use that relationship as a justification for, if not entitlement to, keeping proceeds from selling property held in trust and receiving outright conveyances of other valuable real estate. As discussed below, this proved to be their undoing under the Massachusetts rule for burden shifting in transactions that benefit a fiduciary.

    Disturbing Basic Facts

    Alice’s husband Bruce died in 2006, while she was hospitalized. They’d been married for over 40 years and had amassed a sizeable estate. Alice is the primary beneficiary of Bruce’s estate. The Appeals Court agreed with the trial judge that Andrew “had a plan to obtain transfers of property Alice owned or reasonably expected to inherit.” Several valuable real estate properties were owned in a nominee realty trust with Bruce as sole beneficiary. Andrew was a trustee but obtained a transfer of beneficial interest from Bruce shortly before his death. Investment properties in New Hampshire and Florida had also been held in the nominee trust, but Andrew sold them and kept the money. Alice held title to a vacation home in her name. Two other properties that Alice owned when Bruce died were deeded over to Andrew shortly after Bruce’s death, which the guardian was able to recover outside of the lawsuit.

    Appeals Court Ruling

    The Appeals Court upheld the trial court’s decision to restore title to the real estate and order Andrew to turn over the sale proceeds. The court also agreed that the trial judge properly found Andrew’s wife, Kai, to be liable since she received some of the property or use of the sale proceeds. Indeed, Andrew had reconveyed one property to himself and Kai. As a result, transfers of title that rendered Alice essentially destitute were reversed, so that she’ll benefit from Bruce’s estate as he’d intended.

    Alice’s Standing

    Andrew and Kai’ argued on appeal that Alice had no standing because she didn’t own the properties at issue in the trial. The Appeals Court held otherwise, concluding that under Bruce’s estate plan, his widow was intended to be its primary beneficiary. The facts clearly established that Andrew worked continuously on his plan to deprive Alice of her expected inheritance, giving her standing to recover it. Accordingly, the equitable relief to restore these assets was proper. It should also be noted that courts of equity have extraordinary latitude to grant relief for protected persons, such as those under guardianship and conservatorship like Alice.

    Fiduciary Relationship Shifted Burden of Proof

    On appeal, just like they did at trial, Andrew and Kai argued that there was insufficient evidence against them for Alice to gain back the property and money. The Appeals Court, however, agreed with the trial judge’s determination that both Andrew and Kai stood in a relationship of trust and confidence toward Alice. Although they were defendants in this action, and so wouldn’t ordinarily bear the burden of proof, the finding of a fiduciary relationship shifted the burden of proof so that Andrew and Kai were required to prove that challenged transactions weren’t the burden of fraud or undue influence.

    Andrew and Kai didn’t appear at trial or offer any testimony concerning the challenged transactions so the record was barren of any evidence that could show these challenged transactions were proper. It was incumbent on the defendants, as a result of burden shifting, to demonstrate the circumstances of the transactions and their intended benefit to Bruce. As a matter of common sense, although the Appeals Court decision is silent on this point, one is left to wonder where such evidence could have been obtained.

    Criminal Contempt

    The judgment to recover the assets followed an earlier decision, also affirmed by the Appeals Court, sanctioning Andrew and Kai for more than $550,000 in expenses that Alice incurred to defend against the “plan” to divert to Andrew and Kai all that Alice had, and so render her destitute. That judgment included an injunction freezing Andrew and Kai’s assets until Alice has been made whole.

    Andrew filed for bankruptcy shortly after the Appeals Court upheld that judgment in 2014. During the bankruptcy case, which was ultimately dismissed, it became apparent that Andrew transferred ownership in a real estate investment property to Kai and their daughter and that both defendants put a homestead declaration on a second property. The obvious intent was to shield these valuable assets from being reached to satisfy the judgment.

    Both Andrew and Kai were found guilty of criminal contempt, with Andrew receiving a 45-day jail sentence and Kai receiving 250 hours of community service. They appealed, essentially arguing that what they did wasn’t so bad, didn’t harm Alice and wasn’t willful. If anything, the argument went, a finding of civil contempt was the most that should have entered against them.

    The Appeals Court rejected all of these arguments. Clearly, each transaction violated an injunction that forbade any transfer of assets, and the violations were willful because the defendants volitionally committed the acts on which the convictions were grounded. Indeed, both Andrew and Kai showed contempt for the court’s authority, such as by Andrew’s “flippant statements” about the transfer of the investment property to Kai and their daughter and the timing of the homestead declaration that occurred just days after their appeal failed.
For the story, see Estate Plan Protects Widow From Son's Breach of Fiduciary Duty (In Migell, a Massachusetts Appeals Court ordered that real estate and other assets be returned to elderly, infirm woman).

For the court ruling, see O'Regan v. Migell, No. 16-P-348 (Mass. App. Novenber 2, 2016).

Lawsuit: Property Owner Seeks Over $400K In Damages After Allegedly Being Duped Into Signing Over Deed To Mineral & Gas Rights When She Lacked The Mental Capacity To Do So

In Marshall County, West Virginia, the West Virginia Record reports:
  • A Belmont County, Ohio, woman alleges she was persuaded to sign a deed for mineral and gas rights in Marshall County when she did not have the mental capacity to do so.

    Patricia Lee Ward, by her power of attorney Deborah Salem, filed a complaint on Oct. 21 in Marshall Circuit Court against Mountaineer Center LLC, James F. Tekely Jr., Vickie L. Markey, Gerald S. Mendleson and Louis Gay Lucci alleging fraud and breach of contract.

    According to the complaint, the plaintiff alleges that she suffered loss of income in upfront money and oil and gas royalties in an amount exceeding $400,000. The plaintiff holds Mountaineer Center LLC, Tekely Jr., Markey, Mendleson and Lucci responsible because the defendants allegedly made plaintiff to sign documents which she didn't understand and without her power of attorney and failed to pay proper considerations.

    The plaintiff requests a trial by jury and seeks judgment against defendants for compensatory damages, pre- and post-judgment interest, attorney's fees and cost and such other relief as the court deems just and proper.

Sunday, November 27, 2016

Illinois Appeals Court Sticks Discriminating HOA With $68K Tab For Victim's Legal Fees, Despite That It Was Only Liable For $3,300 In Damages & Fines For Illegal Treatment Of Lesbian Couple In Violation Of Chicago Fair Housing Ordinance

In Chicago, Illinois, the Chicago Tribune reports:
  • A lesbian couple who claimed 15 years ago they were discriminated against by a South Side condominium association are entitled to have their legal costs paid, an appeals court has ruled.

    In 2001, Pat Gilbert and Vernita Gray filed a complaint against 7355 South Shore Drive Condominium Association with Chicago's Commission on Human Relations. Gilbert alleged she was prevented from buying a unit in the building because she was white and a lesbian. Gray, who was Gilbert's then-girlfriend and lived in another unit in the building, said she was harassed because she was a lesbian.

    Gray, a gay rights activist, alleged that she was, among other things, subjected to derogatory comments, and evicted when she got behind on her assessments while heterosexual unit owners who were delinquent in their payments were allowed to stay, according to commission records.

    The commission issued a final ruling in 2011 in favor of Gilbert and Gray, finding the condo association violated Chicago's Fair Housing Ordinance. The association, including its president, was ordered to pay a total of $3,300 for emotional distress, compensatory damages and fines to the couple and to the city of Chicago, as well as to cover attorney fees, which amounted to $68,109.05. The commission said, however, there wasn't enough evidence to support claims of racial discrimination.

    In 2012, the condo association filed a petition in Cook County Circuit Court, arguing that its right to due process was violated because "the final recommended decision was issued by a hearing officer who didn't preside over the administrative hearing." It also said that, given the small award for damages, Gilbert and Gray shouldn't have been entitled to attorney fees.

    The circuit court affirmed the commission's decision in 2014, and the condo association appealed.

    On Friday [October 28], the Appellate Court of Illinois upheld the lower court's decision.

    Gilbert and Gray "were entitled to attorney fees, and the commission didn't abuse its discretion in awarding the fees," the 13-page order of the 1st Judicial District said.

    The women "prevailed on a significant legal issue, and the litigation served an important public purpose," the appellate court order said. "The record shows that considerable work was performed in pursuing this case over a course of at least five years."

    The women's law firm was Foley & Lardner, which said it represented Gilbert and Gray pro bono. Its co-counsel was the Chicago Lawyers' Committee for Civil Rights Under Law. Gray died in 2014 at age 65.

    The condo association's lawyer couldn't be reached for comment.

Complaint By Rejected Rental Applicant To Denver Fair Housing Group Leads To Reeling In Another Landlord In Housing Discrimination Suit; Defendant Agrees To Cough Up $70K To Resolve Allegations It Discriminated Against Families w/ Young Kids, Those Needing Assistance Animals; Charges Based On Evidence Gathered By Testers Posing As Tenants

In Littleton, Colorado, The Denver Post reports:
  • A fair housing agency investigating complaints found that an employee of a Littleton apartment complex illegally refused to accept renters who had children or those who depended on service animals.

    The Denver Metro Fair Housing Center(1) investigated the Langford Apartments after DeWayne Curtis responded to a Craigslist listing and a management company employee told him the apartment didn’t accept families with children.

    “They were willing to show us the apartment but as soon as I told they had kids, they told me a child had hurt himself on the property and now they don’t allow them,” Curtis said on Thursday.

    During the investigation an employee of Katchen & Co., the management company, was recorded telling investigators “we don’t accept children,” according to a fair housing center news release. He also told a deaf investigator that the Langford didn’t allow service animals, and said, “if you’re deaf, I don’t think this is the place for you.”

    No one from Katchen & Company was immediately available to respond.

    Under the Fair Housing Act, owners managers and other housing providers must make reasonable accommodations in rules, policies and practices to ensure the disabled can get housing, even if they have service animals. The act also prohibits discrimination against those with children under 18.

    Under terms of the settlement, Katchen & Company employees will receive fair housing training, the company will adopt a company-wide anti-discrimination policy and future advertisements will encourage families with children and people with disabilities to apply, according to the release.

    The settlement also provided for $70,000 in relief to the complainants.

    “I’m happy with the outcome,” Curtis said. “When I put in the complaint, I didn’t even think it would get this far. It keeps others from having the same experience.”
Source: Littleton apartment management company settles fair housing complaints involving children, service animals.
(1) Denver Metro Fair Housing Center is a private, non-profit organization dedicated to eliminating housing discrimination through comprehensive education, advocacy, and enforcement [ie. filing pro bono lawsuits] of the Fair Housing Act.

Indiana Non-Profit Fair Housing Group Uses Testers Posing As Prospective Tenants To Tag Midwest Landlord With Housing Discrimination Suit Alleging Refusal To Rent 2-Bedroom Apartment To Single Mom w/ 3 Kids Age 3 Or Younger

In Jeffersonville, Indiana, The Indiana Lawyer reports:
  • A federal lawsuit filed [] claims a Jeffersonville landlord discriminated against families with young children and denied them the opportunity to rent apartments in violation of the Fair Housing Act.

    The Fair Housing Center of Central Indiana Inc.,(1) announced the suit it filed on behalf of Meredith Fortner against Pinnacle Properties Development Group LLC, which owns and operates more than 400 rental dwellings in 13 properties around the Ohio River community.

    The suit claims Foster, 24, who is a mother of three children age 3 or younger, tried to rent a two-bedroom apartment at Pinnacle’s Alyson Circle Apartment complex but was asked how the children would be arranged. When she told the rental agent the two older children would sleep in one bedroom and she would share her bedroom with her youngest, who was 9 months old, the agent said her supervisor wouldn’t allow it. No larger apartments were available.

    After hearing of Foster’s experience, the Fair Housing Center used three testers who sought to rent units and also represented they had three young children, including an infant who the testers wished to sleep with the parent in the parent’s bedroom. All were denied, with one agent telling a tester, “Adults can’t share bedrooms with children because of fair housing law.”

    The suit seeks compensatory and punitive damages for Fortner and for the center to compensate for its investigation, plus legal fees and costs. “There now exists an actual controversy between the parties regarding Pinnacle’s duties under the Fair Housing Act. Accordingly, Fortner and the Fair Housing Center seek declaratory relief” as well as injunctive relief.
Source: Suit claims Jeffersonville landlord discriminated against kids.
(1) The Fair Housing Center of Central Indiana is a private, non-profit fair housing organization that works to seek out and eliminate housing discrimination through advocacy, enforcement [ie. pro bono lawsuits], education and outreach.

Another Landlord Gets Clipped By Fair Housing Cops; Admits No Wrongdoing, But Coughs Up $7K To Settle Allegations That Disabled Tenant With Medically Documented Need for Companion Animal Was Illegally Charged $200 Pet Deposit Fee & $25 Monthly Surcharge To Have The Animal

In Jackson Township, Ohio, The Canton Repository reports;
  • The Stark County Fair Housing Department announced a $7,000 settlement agreement with an apartment owner over a tenant's disability discrimination complaint.

    According to a news release, the agency had filed a complaint with the Ohio Civil Rights Commission in November 2015, alleging discrimination by operators of Foxhaven Apartments.

    The Fair Housing Department said a disabled tenant -- who provided medical documentation of a need for a companion animal -- was illegally charged a $200 pet deposit fee and a monthly $25 surcharge to have the animal. In addition, it was alleged to have taken four months for a disability parking sign to be relocated after he'd moved into a larger unit in the complex.

    In June, the Civil Rights Commission found Foxhaven had likely violated fair housing laws that deal with discrimination, according to the release. Last month, the parties entered into a conciliation agreement, which includes a $7,000 payment; for Foxhaven staff attend fair housing training; and to prominently display the phrase "equal housing provider" in its ads.

    Foxhaven admitted no wrongdoing.
Source: Jackson apartment complex settles discrimination complaint (A disabled tenant, who required a companion animal, was unfairly charged an extra deposit and monthly fee by his landlord).

Local Housing Authority Faces Fair Housing Feds' Allegations That It Denied 4-Member Section 8 Family's Request (Voucher Ultimately Revoked) To Allow Move From 2-Bedroom Unit Into 4-Bedroom Apartment More Appropriate For Their Disability Needs (Dad's End-Stage Kidney Disease; Grade School Daughter w/ Learning Disabilities & Enuresis)

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 Trumbull Metropolitan Housing Authority in Warren, Ohio with violating the Fair Housing Act by denying the reasonable accommodation requests of a family that includes a father and daughter with severe disabilities. Read HUD’s 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.
    The case came to HUD’s attention when the four-member family participating in the Housing Choice Voucher Program filed a complaint against the Trumbull Metropolitan Housing Authority after it denied their request to move from their two-bedroom apartment into a unit that was appropriate for their disability needs. The family submitted a request to occupy a home that had two additional rooms to separately accommodate the father’s dialysis treatments and a daughter’s disability.

    According to the charge, though the housing authority initially approved the family’s request it ultimately terminated their voucher assistance, and denied their request for new voucher program paperwork. The family then lived in separate locations while the father underwent treatments alone.

Saturday, November 26, 2016

Former & Current Lot-Leasing Homeowners Tag Mobile Home Park Operators With Lawsuit Accusing Them Of Harassment That Led To Illegally Booting Over 100 Residents To Make Way For New Construction

In Boulder City, Nevada, the Boulder City Review reports:
  • Current and former residents of the Boulder City Mobile Home Park on Nevada Highway filed a class action lawsuit Oct. 18 claiming that the owner and manager of the park intentionally committed harmful and negligent acts that caused the evictions of over 100 residents.

    The lawsuit is individually suing RPS Properties, the Boulder City Trailer Park and the owner of the two companies along with his business partners and family. Randy Schams, his wife Christine Schams and his daughter Jackie Schams, who manages the trailer park, are each being sued.

    The lawsuit filed by Matthew Callister, attorney for the six one-time trailer park residents, states that Randy Schams and other employees of RPS Properties and the mobile home park cut off necessary utilities without notice, put illegal liens on residents’ homes, evicted residents without proper notice and illegally auctioned off homes.

    “The tenants of the mobile home park were never properly notified of Randy Schams’ intention of dismantling the park,” Callister said. “Nothing that has been done has been in compliance with Nevada law.”
    Callister said that the Schams’ actions were fraudulent because they continued to collect rent while never properly informing park residents that Randy Schams was planning to remove them to create townhomes on the property.

    Jackie Schams said that she and her father never lied to tenants and always properly informed them of their plans for the land.

    “When my father bought the land he did intend to keep it as a mobile home park,” Jackie Schams said. “But the costs and some of the people we had to deal with made our original intent impossible. We are still having issues with squatters and drug use in the park, and when the bad outweighed the good we notified everyone that we were no longer going to keep the area as a mobile home park.”

Chicago Housing Authority Proposes Test Program That Would Cut Off Housing Vouchers To Limited Number Of Poor Tenants After Eight Years, Awaits HUD Approval

In Chicago, Illinois, Crain's Chicago Business reports:
  • The Chicago Housing Authority is preparing to roll out a pilot program that would cut off housing vouchers for some people after eight years, an attempt to nudge more recipients into the workforce and shrink the long waiting list for rental assistance.

    The CHA has asked the U.S. Department of Housing and Urban Development to approve its plan, which would impose the time limit on 100 families, a fraction of the 46,000 Chicago voucher holders today. The program also would include training and other services to prepare them for the job market.

    Though it's small, the initiative rekindles the long-running debate over the purpose of welfare programs, with conservatives saying they should provide a temporary safety net and steps to self-sufficiency and liberals saying that things like time limits don't take into account the difficult circumstances many recipients face. The proposal also comes at a time when federal housing policy is expected to take a more conservative turn as Donald Trump becomes president and changes HUD leaders.

    The CHA's goal is to determine if time limits can help voucher holders "more easily and quickly move up the economic ladder so they are no longer in need of" the subsidy, according to a statement. That could free up more vouchers for nearly 43,000 people on CHA's voucher waiting list.

    It's not an original idea. A 1996 federal welfare reform law cut off cash assistance payments to recipients after five years. Housing agencies in several other cities have established time limits and work requirements for voucher holders, with mixed results. In 2008, the CHA proposed a time limit for residents in its buildings but dropped the idea amid opposition from housing advocates.

    Under the voucher program, formerly known as Section 8, poor people can use vouchers to pay for privately owned apartments. They must pay 30 percent of their income, if they have any, for rent and utilities, with the voucher covering the rest. The program is funded by the federal government but run by the CHA.

    Critics say vouchers without time limits, job training or work requirements create a culture of dependency. Without incentives to find a job and become economically self-sufficient, many recipients live off vouchers for years while others in need languish on the waiting list, they say.
    Though many public housing authorities require able-bodied voucher recipients to work, the CHA does not. But people age 18 to 54 who live in CHA-owned or -supported public housing must work up to 30 hours a week.

    Several public housing authorities around the country have established voucher time limits. But it's hard to draw firm conclusions about how they're working because there's not much data to analyze, says Jill Khadduri, a former HUD official and now senior fellow and principal associate at Abt Associates, a research firm.
    The CHA hopes HUD will OK its time limit proposal in early 2017. It lets people who fail to get off vouchers after eight years apply for a two-year extension.

Housing Authority To Gently Boot 90 Poor Tenants Out Of Aging, Outdated Section 8 Complex; Will Not Renew Rent Subsidy Contract With HUD, Tells Residents They'll Each Get Individual Rent Vouchers & To Start Looking For Private Landlords That Will Accept Them

In Oxford, Mississippi, The Oxford Eagle reports:
  • The future of Riverside Place and its tenants has been a topic of discussion for nearly two years.

    The public housing complex, operated by the Oxford Housing Authority through the U.S. Department of Housing and Urban Development, sent out letters on Feb. 3, 2015, to roughly 90 tenants informing them the contract with the city of Oxford would not be extended. It runs out Feb. 27, 2017.

    OHA Director Jeff McClure said the buildings in the development, built in the 1980s, were in bad shape and lacked basic amenities including up-to-date plumbing and central heating and air conditioning.

    “HUD is going in a different direction,” he said recently. “They’re moving away from public housing developments and toward a voucher system. They’re going to more public-private partnerships. It’s HUD’s most dominating form of housing right now across the country.”

    Riverside residents are being asked to find a place they’d like to live, whether in Oxford, Lafayette County or another state. OHA will issue a voucher to landlords to pay the residents’ rent, as long as they continue to meet the financial requirements of OHA.
    If a resident hasn’t found a place to live by Feb. 28, their vouchers would be issued back to OHA to go toward their rent at Riverside until they find a new place.

    “We’re not kicking anyone out,” McClure said.

    Sanders said on Dec. 1, OHA will start compiling lists of landlords willing to work with the voucher system and distribute them to Riverside residents, and be prepared to start issuing vouchers Jan. 1 for those residents who move before the contract runs out.

    “No one will be out on the street,” said Alderman Robyn Tannehill. “Those rumors are completely untrue.”

Agreement Reached On Relocation Assistance To Lot-Leasing Homeowners, Others Living In Austin Mobile Home Park; Residents Get Nine Months & Some 'Walking-Away Cash' To Vacate Premises & Make Way For Upscale Apartment Complex

In Austin, Texas, the Austin American-Statesman reports:
  • Residents of the Cactus Rose mobile-home park in East Austin have reached an agreement for relocation assistance with Oden Hughes, a developer that wants to build an upscale apartment complex on the site that would displace the remaining tenants.

    Oden Hughes’ purchase of the land is contingent on a proposed zoning change. A vote on that change was scheduled at the City Council’s meeting on Thursday.

    The agreement concludes more than 18 months of talks between City Council member Sabino “Pio” Renteria, the Cactus Rose Neighborhood Association, Montopolis neighborhood representatives and Austin-based developer Oden Hughes.

    The mobile home park off of U.S. 183 near Vargas Road in rapidly gentrifying East Austin formerly housed more than 50 families, although some have moved since the developer announced plans for the project.

    Remaining Cactus Rose mobile home owners who are current on their rent will have nine months to move once they receive a notice to vacate the property. Owners living in a single-wide mobile homes will each receive $10,000 in relocation assistance. There is one double-wide mobile home currently in the park, according to the agreement, and the owners of that home will receive $20,000.

    Owners of recreational vehicles, and renters of permanent structures such as a duplex, will each receive $2,000. Residents will also receive their security deposits, as well as bilingual relocation assistance by a licensed real estate professional.
    Renteria said that as a city, Austin is “far from granting renters and mobile home residents the rights they deserve, but this is a step in the right direction.”

End Is In Sight For Mobile Home Community As Initial Phase Of Hospital Expansion Plans Requires Ten Lot-Leasing Families To Get Ready To Vacate; Residents Of Another 60 Sites To Remain In Limbo Pending Further Notice; Relocating Aging Trailer Homes An Issue For Many

In Clarkston, Washington, The Lewiston Tribune reports:
  • Malissa Beavert, her husband, and 2-year-old daughter are excited about exchanging their single-wide mobile home at Noble Park for something better.

    They're going to use $8,000 from a Tri-State Memorial Hospital subsidiary to put a down payment on a home, rent something nicer, or move to Minnesota, where a friend has a lead on work at a place that makes windows and doors, Beavert said.

    They're eligible for the money because the hospital needs them and nine other families to vacate in a year, possibly to construct a parking lot for a recently renovated medical office in the 1200 block of Highland Avenue in Clarkston. Residents of another 60 sites have more time, but the hospital isn't specifying how much.

    Anyone with a single-wide gets $5,000 if they leave their dwelling and another $3,000 in moving expenses. The offer is $2,500 more if they move their home. The money isn't a requirement, and hospital officials say it's a way of recognizing the potential hardships for those at Noble Park.

    "It was a shock at first," said Beavert, who's expecting a baby in January and is married to a supervisor of a fast-food restaurant. "We've had time (now) to adjust to the idea."

    Regardless of how fast it happens, the notices Noble Park residents received last week from a hospital subsidiary are forcing them to confront the fact they're living in a vanishing community.

    It's a place where aging but affordable mobile homes sit on lots with small yards, and neighbors help each other with everything from trimming rose bushes to offering advice.

    [One resident] may be one of those hit the hardest. She's lived at the park since she was 17 years old. [... She] is disabled after a career as an aide for children with disabilities and substitute teacher.

    She owns her 1978 mobile home outright, but doesn't know if she can find a park that will accept it. She also worries it could get damaged in the move.

    She wonders about finding a place where she can have her dog. Her niece had to pay $400 for a pet deposit recently. "I don't want to move," [she] said. "I have my yard. I have my home. I have my neighbors."
For the story, see Clarkston trailer park residents are mulling their options (Residents targeted in Tri-State Hospital expansion have different perspectives on buyout offers).

See also, The future for Noble's Mobile Home Park residents is uncertain:
  • [M]obile home owners at Noble's Trailer Park have received a notice that said the lot where their homes are parked will be sold, and many of the homes cannot be moved.

Friday, November 25, 2016

Ex-Housing Authority Employee Scores $129K In Whistleblower Lawsuit Alleging Employer Scored Free Money From Housing Feds, Then Failed To Use Funds For Its Intended Purpose; Defendants Admit No Wrongdoing, But Cough Up $710K To Make Allegations Go Away

In Fairfield, California, the Daily Republic reports:
  • The federal government said [] that Fairfield and its housing authority paid $680,000 to settle False Claims Act allegations that Fairfield received money to pay for two coordinator positions in a U.S. Housing and Urban Development department program and did not use the grant for that purpose.

    “Housing authorities that receive HUD grants have a duty to help families in need,” acting U.S. Attorney Talbert said in the release. “When families try to become self-sufficient by applying to programs like Fairfield’s family self-sufficiency program they deserve to be assisted at every step by dedicated and responsive professionals.”
    The release [] said the Fairfield Housing Authority administers the Section 8 housing choice voucher program, the homeownership program and the family self-sufficiency program, which provides case management for Section 8 families who desire to improve their earning potential and move toward financial independence and home ownership.

    According to court documents, the Fairfield Housing Authority – with the city’s approval – applied for and received federal grants from the U.S. Department of Housing and Urban Development to fund two full-time self-sufficiency program coordinators from January 2012 through November 2014. Neither the city or its housing authority employed any full-time program coordinators during that time, the U.S. Department of Justice said.

    Court documents further allege that the city housing authority violated the False Claims Act by submitting data into HUD’s voucher management system affirming that it was spending the grant funds on two full‑time program coordinators when no such coordinators were employed, the Justice Department said.

    The allegations resolved by the settlement were first raised in a lawsuit filed against Fairfield and its housing authority under whistleblower provisions of the False Claims Act, the release states. The False Claims Act allows private citizens with knowledge of fraud [committed against the federal government] to bring civil actions on behalf of the government and to share in any recovery, the release said.

    Former Fairfield Housing Authority employee David Samloff, the whistleblower who brought the case, received $129,200 in the settlement. His attorney was paid $30,000 and the total amount Fairfield incurred is $710,000.

    The claims settled by the agreement are allegations only and liability in the case was not determined, the Justice Department said.

Long Island Feds: Ex-Housing Authority Chief Pocketed $100K In Kickbacks In Connection With Fraudulently-Inflated Construction Contracts Bid-Rigging Scheme; Five Co-Conspirators Already Pleaded Guilty, Await Sentencing; Fleeced Loot Intended To Be Used For Repairs At Local Low-Income Housing Project

In Hempstead, New York, News 12 Long Island reports:
  • The former head of the Hempstead Housing Authority is facing federal charges. Former Housing Authority chairman Cornell Bozier is accused of taking $100,000 in an alleged kickback scheme. The North Baldwin man pleaded not guilty to conspiracy, theft and wire fraud in federal court [...].

    Prosecutors say the money that was allegedly taken was supposed to be used to make repairs at a low-income housing complex in the village.

    Federal prosecutors say Bozier secured a $250,000 contract for his alleged co-conspirator to replace a roof at a Housing Authority building. When the job was then subcontracted for $23,000, the FBI says Bozier’s former Housing Authority director Stacy Stackhouse and other co-conspirators pocketed the rest of the money. Stackhouse plead guilty to the charges last year.

    According to the FBI, more than $500,000 was stolen in total from the Housing Authority through the alleged bid- rigging scheme.

    Current Hempstead Housing Director Rosemery Olsen says she was brought in to clean up the corruption after Bozier resigned.

    “We've been making a lot of changes over the last three and a half years and I think that we're a good quality housing authority,” says Olsen.

    Bozier was released on $150,000 bond, and as a condition of his bond, he is not allowed to leave New York. He will also be monitored by the courts.
Source: Ex-Hempstead Housing chief faces federal charges.

For the U.S. Attorney press release, see Former Chairman Of The Village Of Hempstead Housing Authority Indicted In Connection With Bid Rigging And Kickback Scheme (As Board Chair, Cornell Bozier Allegedly Orchestrated a Scheme That Stole Over $500,000 in Federal Funds Set Aside for Low-Income Housing):
  • [A]s alleged in the superseding indictment, Bozier used his position as the Board Chair of the VHHA [Village of Hempstead Housing Authority] Board to recruit and direct co-conspirators to submit fraudulently inflated construction bids for repair projects on VHHA properties, bypass the required procurement process, and ensure that the construction contracts were awarded to companies owned or controlled by co-conspirators.

    Bozier directed the hiring of additional co-conspirators for positions within the VHHA to help facilitate the Board’s acceptance of fraudulent bids and exerted improper influence and pressure on those Board members to vote in favor of the grossly inflated bids submitted by Bozier’s co-conspirators. In exchange for these official actions, Bozier solicited and accepted numerous kickbacks during the course of the conspiracy totaling approximately $100,000.
    To date, the investigation has identified more than $500,000 that was allegedly stolen from the VHHA as a result of the charged conspiracy.

    The five co-conspirators charged in the underlying indictment have previously pleaded guilty and are awaiting sentence.

Central Florida Woman Faces Accusations Of Fraudulently Buying, Using Social Security Card To Gain Access To Public Housing, Scoring $12K+ In Federal Rent Subsidies

In Pasco County, Florida, the Tampa Bay Times reports:
  • A Dade City woman was arrested [] on a charge of public assistance fraud, accused of using a fake Social Security card to gain access to public housing, according to the Pasco County Sheriff's Office.

    Cecilia Alvarez, 33, told detectives she purchased the Social Security card for $100 from someone's home in the Dade City area, according to an arrest report. Armed with the card, Alvarez was able to move into Cypress Farms, a housing complex in Lacoochee managed by the Pasco County Housing Authority.

    The U.S. Department of Agriculture subsidizes rent for residents in Cypress Farms. Detectives said the department provided Alvarez with $12,713 in rental assistance.

    In order to be eligible for assistance, residents must be either American citizens or in the country legally. Alvarez was born in Mexico, but her legal status was not available [].

    Alvarez was released [] from the Land O'Lakes Detention Center after posting $5,000 bail.

Five Family Members Plead Guilty To Defrauding Gov't Out Of $100K In Section 8 Housing Benefits; Trial Pending For 6th Co-Conspirator; Defendants Failed To Report Income To Housing Authority, Illegally Rented Home From Landlord/Relative In Violation Of Regulations

In Santa Ana, California, The Orange County Register reports:
  • Five family members have pleaded guilty to theft- and fraud-related charges after admitting to improperly receiving more than $100,000 in government subsidies for housing assistance.

    Prosecutors said that beginning in 2003 the family members received rental assistance from the Santa Ana Housing Authority and the Orange County Housing Authority, agencies that provide rental assistance to low-income adults.

    The agreement called for the family to pay $99 a month for rent, while the remaining $1,850 was subsidized.

    However, authorities say, the family failed to report $83,000 it received in wire transfers from China, as well as money one of them got from selling suspected counterfeit merchandise.

    Authorities also allege that the family was renting a home owned by relatives, breaking another rule for receiving the housing assistance.

    On Tuesday, pleading guilty to multiple felonies were: John Giang Ly, 27, Linda Gia Ly, 23, and Thu Ha Le, 54, of Westminster; and Anh Tuyet Ly, 65, and Dong Hong Phan, 75, of Fountain Valley.

    Their sentences ranged from 14 days in jail to three years in prison. They were also ordered to pay $176,613 in restitution.

    Still awaiting trial was Thang Chinh Ly, 66, of Westminster, who was facing felony counts of perjury, aid by misrepresentation and grand theft. If convicted, Ly faces up to 13 years, four months in prison.

NYC Man Gets Pinched For Allegedly Making False Statements Used To Defraud Housing Authority Out Of $12K+ In Section 8 Rent Subsidy Benefits

In Staten Island, New York, the Staten Island Advance reports:
  • A Clifton man falsely reported he lived at a Section 8 location that led to the New York City Housing Authority (NYCHA) paying him and his landlord more than $12,000 in benefits, police allege.

    From April 2012 to March 2013, Michael Bermel, 49, used an address on Arthur Avenue in South Beach to fill out a NYCHA lease when he actually lived at an apartment on the 1900 block of Clove Road, according to allegations in court documents.

    NYCHA relied upon that false document to provide the defendant and his landlord, Douglas Candella, rent subsidies in the amount of $12,063.64 for the apartment, the criminal complaint said.

    Bermel, of Norwood Avenue, was arrested [] and charged with grand larceny in the third degree, a felony, and falsifying business records in the first degree, the complaint said.

Thursday, November 24, 2016

Lawyer Who Was Bagged For Embezzling Over $160K From Disabled Client's Trust Fund Buys Her Way Out Of Criminal Prosecution; Authorities Drop Felony Charges After Defendant Repays Filched Funds

In Pineville, Missouri, The Joplin Globe reports:
  • The McDonald County prosecutor dismissed a felony theft charge against former Oklahoma attorney Betty Pitts-Cartwright [] in light of her recent restitution of the funds she embezzled from a disabled adult client and parked in a Southwest City bank.

    Prosecutor Bill Dobbs said Pitts-Cartwright, 63, of Grand Lake, paid about $164,000 in restitution to the client whose funds she embezzled and deposited in personal bank accounts in Southwest City and Jay, Oklahoma.

    Pitts-Cartwright and two other women were charged in 2014 in Delaware County, Oklahoma, with fraudulently obtaining a $1 million-plus house on Grand Lake from her former boyfriend, a Norwegian professional boat racer. Pitts-Cartwright also faced counts of perjury in the case that forced her resignation from the bar and eventually resulted in a suspended sentence.

    Her parking of the client's funds in a personal bank account at Cornerstone Bank in Southwest City got her charged with theft in Missouri.

    Pitts-Cartwright was in charge of the client's trust fund and reportedly used a rubber stamp bearing the name of the victim's mother to sign trust account checks. Her friend and co-defendant in the theft of the funds, Donna Cupp, told investigators that Cartwright opened the account at the Missouri bank "so people in Jay would not know her business."

    A probable-cause affidavit filed in the case stated that a majority of the withdrawals from the bank account were made from automated teller machines at casinos.

Vermont Feds: Attorney Pilfered As Much As $550K From Clients, Then Began Paying It Back After He Realized State Bar Investigator Was On To Him; Victim: Sticky-Fingered Defendant Kept Crappy Records, Making It Difficult To Determine Exact Amount Of Ripoff

In Burlington, Vermont, the Burlington Free Press reports:
  • A former Winooski lawyer admitted [] he began paying back money to clients from whom he had improperly diverted funds after he learned about an investigation into his conduct.

    William M. O'Brien, 60, admitted the facts of the case as described by a federal prosecutor during a court hearing. O'Brien, a longtime lawyer who represented Winooski and the Roman Catholic Diocese of Burlington, appeared in U.S. District Court in Burlington to plead guilty to a felony charge of mail fraud. The government said O'Brien took as much as $550,000 from accounts he was overseeing for two clients.

    O'Brien's lawyer Scott McGee told federal Judge Christina Reiss that much of the missing money has been paid back, and there is money set aside to finish the process. McGee and O'Brien declined to speak to reporters outside of the courtroom but provided a written statement.

    "Mr. O'Brien also expressed his regret for misusing his trust account and for putting his client funds at risk but advised the court that all client funds are accounted for and that no client has lost any money," the statement read.

    Court papers show that O'Brien took $250,000 to $550,000 from the Thelma F. Provost Trust and from funds of deceased clients Paul and Blanche Bonnette. Court papers say O'Brien used the money "to benefit himself."

    The charging documents show O'Brien used money he earned from an unrelated case to repay the two accounts in December. Prosecutors say O'Brien was aware that an investigation into his practices already was underway.

    A relative of the namesakes of one of the trusts said [] that so many of O'Brien's records from 2001-07 were poorly kept, making it difficult to determine whether everything is accounted for. Probate Court records from the Thelma F. Provost Trust shows that extended family members attempted to remove O'Brien from the trust several times from 2001-16.

    Reiss allowed O'Brien to remain free on conditions, including that he have no contact with victims or potential witnesses. A sentencing hearing is set for May in Brattleboro.

    The Vermont Professional Responsibility Board suspended O'Brien's law license Jan. 12. McGee has said O'Brien is ending his career.
    Defense lawyer McGee said in a subsequent phone interview that O'Brien "acknowledges he did not keep the records he should have kept." "He was not keeping close track of funds in and funds out, and that was, in part, what led to the problem that developed," McGee said.
    [Victim's niece JoAnn Provost] Dusharm said she and her family feel O'Brien dishonored the memories of Thelma and Joseph Provost. She said the Provosts had no children, and extended family members had few rights when it came to the trust O'Brien managed.

    "He is getting everything he deserves," she said. "Karma has come back to bite him."
For the story, see Former lawyer O'Brien admits defrauding clients.

For the U.S. Attorney press release, see Suspended Attorney William O’Brien Pleads Guilty To Wire Fraud:
  • In early 2016, O’Brien did repay about $472,000 to these two clients, but those payments were made only after O’Brien became aware he was under investigation by counsel for the Vermont bar. The Vermont Supreme Court suspended O’Brien’s law license in January.
(1) The Vermont Bar Association established a Client's Secutity Fund to reimburse screwed-over clients, at least in part, for the loss of money or property occasioned by the dishonest conduct [ie. a misappropriation, embezzlement, defalcation, or conversion of money, property, or other thing of value] of a lawyer occurring within the State of Vermont. Go here for Statement of Claim Form.

For similar "attorney ripoff reimbursement funds" that attempt to clean up 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.

Months After Disbarment For Playing Fast & Loose With Client's Cash, S. Florida Lawyer Faces Three Grand Theft Charges For Allegedly Screwing Clients Out Of Proceeds Of Their Lawsuit Settlements; No Pre-Trial Release Allowed Until Authorities Confirm That Any Posted Bail Money Is Clean Of Filched Funds

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • A former Fort Lauderdale attorney was arrested on grand theft charges [] after detectives say he set aside his clients' settlement money for his own use.

    William Hutchinson, 70, of Parkland, was booked into the Broward County Jail on $125,000 bond. But he can't post it until authorities confirm he's using his own money.

    According to his arrest report, a review of bank records showed that he "has used a substantial portion of the settlement funds well in excess of $100,000 to pay personal and business expenses."

    Investigators allege that Hutchinson settled a wrongful death case for $675,000 over several years. But the father of the victim hired a lawyer to complain to authorities in June 2015 that he hadn't received any money.

    Investigators allege Hutchinson withdrew money to make payments to the parents of the victim, but took the money from a second settlement case to do it. In that case, Hutchinson had settled a personal injury case for a man with an insurance company.

    To date, that man has not received any money, according to the report.

    Hutchinson told investigators about the misplaced money, writing a letter to the attorney of the Florida Bar saying he was self-reporting a shortage of almost $272,000 in his trust account. "I apologize and please know that I intend to pay this shortage in full and have placed my home and office building for sale," he wrote.

    In a third charge, investigators allege in February he settled another personal injury case for $100,000. He turned $10,000 over to the victim and kept a third of the settlement in his attorney fees before his client signed off on the case. That meant the money he kept was "misappropriated or [stolen]," according to authorities.

    Hutchinson was disbarred this summer stemming from the first incident of not dispersing settlement money to the parents in the wrongful death case. Records show his law office was in Fort Lauderdale.

    Hutchinson's defense attorney, David Bogenschutz, was unavailable for comment, according to his partner, Jeremy Kroll.
Source: Former Fort Lauderdale attorney accused of illegally keeping clients' settlement money (Parkland lawyer charged with three counts of grand theft).
(1) The Clients' Security Fund was created by The Florida Bar to help compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Florida-licensed attorney.

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.

One Year After Resigning From Bar (After 40 Years Of Law Practice) Amid Embezzlement Allegations, Criminal Charges Finally Catch Up To Aging Ex-Lawyer Accused Of Fleecing Five Clients For Over $200K

In Tulsa, Oklahoma, the Tulsa World reports:
  • A former real estate attorney who practiced law in Tulsa for 40 years has been charged with embezzlement amid allegations that he misused his clients’ settlement money, Oklahoma Attorney General Scott Pruitt announced [].

    Robert John Nichols, 67, was charged with five counts of embezzlement and one count of delivery of a forged instrument [], according to court documents.
    Prosecutors allege that Nichols embezzled in excess of $200,000 from five clients(1) that he represented in cases related to the condemnation of property, Pruitt said in a news release.

    In each case, Pruitt said, Nichols is “believed to have used funds intended to go to trust accounts for each victim for unintended purposes.”

    Additionally, Nichols is accused of forging a signature and depositing a check made out to one of his clients.
    In October 2015, Nichols resigned and relinquished his right to practice law after allegations that he misused his clients’ settlement money arose.

    “It’s disheartening to hear of allegations against an attorney who clients entrust,” Pruitt said. “My office has a responsibility to uphold the law, and when it is being broken, we will prosecute and make sure bad actors are not getting away with fraudulent activity.”

    If convicted of all six counts, Nichols could face up to 57 years in prison and fines of $50,000 plus restitution to the victims, Pruitt said.
For more, see Ex-Tulsa attorney arrested, charged with embezzlement (Ex-real estate lawyer charged with embezzlement, fraud).
(1) The Clients' Security Fund is a fund established by the Oklahoma Supreme Court to reimburse clients who suffer loss of money or other property from the dishonest conduct of their Oklahoma-licensed attorney. The Fund is a remedy of last resort for clients who cannot be repaid or recover money from other sources, such as insurance, a bonding company or from the attorney involved. Claimants are expected to make reasonable efforts to collect from these other sources first before submitting a claim to the Fund.

For similar "attorney ripoff reimbursement funds" that attempt to clean up 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.