Sunday, November 23, 2014

Harlem Brownstone Targeted In Stolen Identity/Deed Theft Scam; True Owners Get Roped Into Lawsuit By Would-Be Buyer Who Made $90K Downpayment In Deal To Buy Property From Two House-Heisting Scammers

In New York City, the New York Post reports:
  • Con artists have tried to sell a $2.2 million Harlem brownstone they don’t own four times since September, the building’s fed-up owners told The Post.

    And now the owners are fighting a lawsuit from a would-be buyer who made a $90,000 down payment to a lawyer representing the scammers — who used forged drivers’ licenses to impersonate the couple.

    “This was a nightmare. The audacity was just amazing,” said Pamela Page, 58, who owns the landmarked Astor Row brownstone at 57 West 130th St. with her husband, Igor Jozsa.

    The ordeal began in September when Jozsa, 69, visited the property — which the couple plans to renovate and live in — and found surveyors inside, who said they were doing work for “the new owners,” who planned to close in a few days.

    Page said they contacted a lawyer for the “buyers” and learned that they had agreed to purchase the property from two impostors. The crooks tried three more times to sell the property, even changing the locks at one point.

    A law-enforcement source said that such “deed theft” crimes are largely the work of a Russian organized-crime outfit based in Seagate, Brooklyn.

Saturday, November 22, 2014

Daughter Thwarted In Attempt To Boot Elderly Father Out Of His Home; Judge: Fight "Over What Amounts To Expectation Inheritence Rights"; Dad: "“I Am 71 & In Poor Health. I Am Not Going To Make It Much Longer. Couldn’t She Just Wait Until I Die?”

In Miami, Florida, The Miami Herald reports:
  • Former Miami Beach mayor-turned-convicted felon Alex Daoud does not have to move out of his home, a Miami-Dade judge ruled Monday.

    In 2012, Daoud’s daughter Kelly Hyman filed a complaint against him that said she owned the corporation that bought the $1 million, two-bedroom, three-bathroom house in the 1700 block of Michigan Avenue. At the time, she said she owned the home because her name is on the incorporation documents of the company that bought the house in 2006.

    She wanted her father out of the house and said her dad was trying to take away her corporation.

    But Daoud said he had made all the payments on the home and put the corporation in his daughter’s name only to avoid publicity. He said the home was his and that he should be able to live there for the rest of his life.

    On Monday, Circuit Judge John W. Thornton said in his 14-page ruling that it was a “business dispute that should have been in family court.”

    He ruled that Hyman is entitled to 50 percent of the company Bouganvilla Investments, which means half of the home. Daoud’s trust owns the other half. “The court finds that Ms. Hyman has tendered insufficient evidence to support her contention that she is the 100 percent owner of Bouganvilla,” he wrote. So in order for the home to be sold, the two would have to agree, the judge said.

    “A sophisticated father and daughter, both of whom have law degrees, both of whom have sophisticated counsel, are fighting over what amounts to expectation inheritence rights,” the judge wrote.

    He went on to say that Daoud is “entitled to quiet enjoyment thereof for the duration of his life.”

    Hyman's attorney Bernardo Burstein said Monday night that Hyman strongly disagrees with the order. "She will be pursuing her appellate options," he said.

    Daoud’s attorney, Alex Brito, said “it was unfortunate a daughter would be compelled to sue her father.” “We are very happy with the outcome,” he said.

    Daoud said he felt “vindicated.” "I still love her very much,” he said.
Source: Daoud wins legal battle against daughter over home.

See also, Father vs. daughter: Former Miami Beach mayor Alex Daoud sued for his house (Alex Daoud, the ex-Miami Beach mayor who served 18 months in federal prison for charges including bribery, is now facing off against his daughter in a suit over his Michigan Avenue home):
  • I am 71 and in poor health,” he said. “I am not going to make it much longer. Couldn’t she just wait until I die?”

Friday, November 21, 2014

Another Sloppy Lender Takes Hit With Voided Lien In Homeowner's Bankruptcy Case As Mortgage Containing Incorrect Legal Description Falls Outside Property's Chain Of Title, Thus Failing To Provide Constructive Notice To BFPs; Bank Left Holding The Bag Without Loan Collateral, But At Least Wins Fight To File Belated Unsecured Proof Of Claim

From Bankruptcy-RealEstate-Insights:
  • A Chapter 13 trustee and the debtor sought to use the strong arm powers of a hypothetical bona fide purchaser of real estate to avoid a mortgage based on the fact that an incorrect legal description was attached to the mortgage and it was indexed in the land records using the incorrect description.

    A debtor and his wife acquired property through a deed that correctly described the property by street address, parcel number, and legal description. A year later the debtor executed a note for ~$100,000 payable to a lender, and the debtor and his wife executed a mortgage on the property to secure the note.

    The first page of the mortgage granted a security interest in the “following described property” which referenced an attached legal description, and set forth the property tax parcel number and street address. Unfortunately for the mortgagee, although the street address and parcel number on the first page were correct, the attached legal description was for an entirely different property.

    Under Section 544 of the Bankruptcy Code, a trustee may avoid a mortgage that is voidable by a hypothetical bona fide purchaser under state law. Typically state law provides that a purchaser can take free of interests unless it has actual or constructive notice of the interest, and typically properly recorded documents provide constructive notice. Under Section 544, the trustee is able to exercise its strongarm powers without regard to any actual knowledge. So the key question was whether a purchaser would have had constructive knowledge of the mortgage despite the incorrect legal description.

    The debtor presented testimony about how a title search would be conducted and whether the search would have disclosed the mortgage: The witness said that if he has a deed, he would use the legal description of the property from the deed to begin the search. Alternatively, if he only had the name of the owner or the property address, he would use auditor and treasurer records to obtain a legal description.

    He further testified that a search is conducted based on the legal description and not a street address since it is more definitive than a street address and the recorder’s office indexes property based on its legal description. Similarly, the parcel ID number can be helpful in finding a legal description, but once the legal description is located, the description is what is used to review the records.

    Once a legal description is identified, the next step is to review the recorder’s index of names. The index identifies instruments and indicates the property subject to the instrument based on its legal description. In this case, the index showed that the debtor had interests relating to three different legal descriptions – identified as Bayberry Trail, Springview Acres, and Rose Estates.

    Springview Acres was owned by the debtor and was the property that should have been described in the mortgage. Rose Estates related to property that was not owned by the debtor, and Bayberry Trail described a different piece of property owned by the debtor that was in foreclosure. Thus, the witness testified that he would review only instruments related to the Springview Acres property to identify potential encumbrances in the chain of title. Although three mortgages showed up under the debtor’s name for Springview Acres, all three had been released by recorded documents.

    Since the mortgage in question was improperly indexed using the Rose Estates legal description, the witness testified that the mortgage would not fall in the chain of title for the Springview Acres property and would not have been reviewed as part of the title search. There were also no red flags that would have caused him to review instruments outside the chain of title. (For example, a circumstance where an instrument references only a street address and does not contain a legal description.)

    Under applicable state law, a purchaser has constructive notice of everything recorded in the chain of title. If a document is within the chain of title, a purchaser is deemed to have constructive notice even if the document is not properly recorded. However, a purchaser is required to examine only those items that “could reasonably be expected to exist in the record chain of title” and it is “not required to exercise a higher degree of diligence and undertake an exhaustive search of the records to discover the most remote adverse claims or encumbrances.”

    Although a document that is improperly recorded outside the chain of title might provide constructive notice, the court was clear that if a document improperly identifies the property so that it is recorded outside the chain of title through no fault of the recorder, a bona fide purchaser does not have constructive notice. The court distinguished a 6th Circuit case holding that a mortgage provided constructive notice when it included a correct street address. In that case the legal description was missing and there was no incorrect property information.

    Given that the lender’s mortgage did not provide constructive notice, it was subject to avoidance under Section 544. Although the plaintiffs sought to bar the lender from filing an unsecured proof of claim after the decision (arguing that it was too late to file a claim), the court relied on FRBP 3002(c)(3) – which generally provides that an “unsecured claim which arises in favor of an entity or becomes allowable as a result of a judgment may be filed within 30 days after the judgment becomes final” – to find that the lender was allowed to file an unsecured proof of claim.

    There are a surprisingly large number of cases in which there are errors in execution or property identification in mortgages. The consequence of errors frequently turns on state specific practices. For example, it may make a difference in the analysis if the official record is a grantor-grantee or a tract index. In any event it is a good idea both to pay attention to detail and to stay in touch with your friendly local real estate lawyer.
Source: Strong Arm Powers: Mortgage Boo-Boo Strikes Again.

For the court ruling, see Kellner v First Ohio Banc & Lending, Inc. (In re Geraci), 507 B.R. 224 (Bankr. S.D. Ohio 2014).

Thursday, November 20, 2014

Salvation Army To Fork Over $72K To Settle Alleged Fair Housing Violations That It Illegally Booted Four Homeless Women From Its Transitional Housing Center After They Became Pregnant

In Washington, D.C., the Department of Housing & Urban Development recently announced:
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that the Salvation Army will pay $48,000 to four women as part of a Conciliation Agreement resolving allegations that the international charitable organization wrongfully evicted them from its Turning Point transitional housing center in Washington, DC, because they became pregnant. Salvation Army also agreed to set aside $24,000 for a housing case manager.

    The Fair Housing Act makes it unlawful to discriminate in housing based on a person’s race, color, national origin, religion, sex, disability, and familial status. This includes discriminating against families with children under 18 years old, women who are pregnant, and persons who are attempting to secure legal custody of a child under 18.

    “Transitional housing centers are essential to helping individuals move from homelessness into stable housing situations,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, “but it is both wrong and illegal to evict women because they become pregnant.”

    The Conciliation Agreement is the result of a Secretary-initiated complaint that HUD filed against the Salvation Army after an investigation determined that the Turning Point Center’s residency rules unlawfully discriminated against residents on the basis of sex and familial status. The center accepted pregnant women and women with children, but evicted women who became pregnant during the term of their residency. The Salvation Army’s Turning Point Center maintained a policy that said “there are to be no additions to a resident’s family while she is enrolled in the Turning Point Program. Pregnancy, regardless of outcome, will be grounds for dismissal from the program.”

    Under the terms of the Conciliation Agreement,the Turning Point Center will revise its residency policies to allow women who become pregnant after entering the program to complete their stay. The Salvation Army will also pay $12,000 to each of four women who were pregnant at the time they were evicted from the Turning Point Center. In addition, the Salvation Army will allocate $24,000 to the operating budget of the Turning Point Center to hire a part-time case manager to assist women with moving to housing after completing the center’s two-year program.
Source: HUD, Salvation Army Settle Pregnancy Discrimination Claims (Settlement follows eviction of four pregnant women from D.C. homeless housing program).

Wednesday, November 19, 2014

N. Illinois Landlord Agrees To Cough Up $255K In Settlement w/ Fair Housing Feds For Allegedly Refusing Reasonable Accommodation For Mobility-Impaired Tenant Living On 3rd Floor Of Non-Elevator Bldg., Then Threatening Eviction When Adult Daughter/Caregiver Moved In

The Department of Housing and Urban Development ("HUD") recently announced (via the Fair Housing Defense blog):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it has entered into a Voluntary Compliance Agreement (VCA) with University Village, the owner and operator of a 500-unit HUD-subsidized apartment complex in DeKalb, Illinois. As part of the agreement, University Village has agreed to pay $255,000 to settle allegations that it violated fair housing laws when it failed to meet the needs of persons with disabilities and retaliated against a resident with disabilities for requesting a reasonable accommodation.

    The VCA is the result of complaints that were filed by HOPE Fair Housing Center,(1) the RAMP Center for Independent Living(2) and two residents with disabilities, which alleged that University Village made housing unavailable when it assigned a mobility impaired resident to a third-floor unit in a building with no elevator, and threatened her with eviction for having her adult daughter, who was serving as her caregiver, in the unit, even though she had documentation verifying her disability and need for the accommodation. University Village receives federal financial assistance from HUD in the form of project-based vouchers.

    The Fair Housing Act prohibits discrimination in the sale or rental of a dwelling because of disability, including refusing to make reasonable accommodations in policies or practices when a person with a disability requires such an accommodation. In addition, Section 504 of the Rehabilitation Act of 1973 requires that programs or activities receiving federal financial assistance be readily accessible to persons with disabilities and that they be granted the reasonable accommodations they need, including being allowed to have a live-in caregiver in a unit when it is necessary.

    "No one with a disability should be denied the accommodations they need to fully enjoy their home," said Gustavo Velasquez, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "This agreement reflects HUD's commitment to working with housing providers, including owners of HUD funded housing, to meet their obligation to comply with the nation's fair housing laws."

    Under the terms of the agreement, University Village will pay $255,000, which includes attorney fees,(3) to the two individuals who filed complaints and work with HOPE Fair Housing Center to develop a new reasonable accommodation policy. The complex will also conduct a needs assessment of current tenants and applicants who require assessable units to determine if their needs are being met and ensure that five percent of its units are fully accessible, either by constructing new units or converting existing units.
Source: HUD Settles Claims Alleging Owner of Dekalb Apartment Complex Discriminated Against Persons with Disabilities.


(1) HOPE Fair Housing Center is a non-profit, fair housing advocate dedicated to eliminating housing discrimination and segregation because of race, color, religion, national origin, sex, disability, familial status, or any other characteristics protected under state or local laws..

(2) A Center for Independent Living is a non-profit, non-residential organization assisting people with all types of disabilities, regardless of age, to control and direct their own lives.

(3) According to the Voluntary Compliance Agreement, one resident will receive $72,000 (from which payments will be made to reimburse Medicare for expenses related to the failure to provide reasonable accommodation, with her to keep any balance remaining from the $72K). The second resident will receive $20,000. With regard to the balance of the loot, the two non-profit groups involved will each pocket $20K, with the lawyers pocketing $123,000 to cover their legal fees and costs.

Tuesday, November 11, 2014

NYC Homebuyer Who Failed To Ascertain Status, Rights Of All Persons In Possession Of Premises Discovers 'Phantom' Tenant Holding Unrecorded 60-Year, $10/Month Lease On 2-Bedroom, West Village Duplex; Resorts To Lawsuit To Boot Renter, Claiming He Either Forged Elderly Ex-Owner's Signature Or Took Advantage Of His Dementia, Alcoholism When Obtaining Lease

In New York City, the New York Post reports:
  • It’s the best lease in the city. In 2009, Jud Parker got a West Village landlord to give him a ­duplex apartment on tony Minetta Street for $10 a month — for 50 years!

    Now new landlord Pari Dulac is challenging the sweetheart deal and claiming the old owner, who died in 2010, had dementia when it was allegedly signed. “When I saw the lease, I couldn’t believe it,” said Dulac, a longtime Village resident. “I thought it was a joke.” Wilfred Schuman, a German-born ballet dancer, had owned a pair of three-story town houses at 12 and 14 Minetta St. since 1993. He lived in the basement of 12 Minetta St.

    According to the August 2009 lease, Parker and gal pal Stefanie Tyler pay just $10 a month for the 1,400-square-foot duplex at 14 Minetta St., which has two bedrooms and a back yard. The 50-year lease has a 10-year renewal option.

    In a lawsuit filed in Manhattan Supreme Court Friday, Dulac claims Parker bamboozled Schuman, who was in his 70s — then subletted the apartment for $2,500 a month after his death. The suit claims Parker manipulated Schuman into signing the lease or forged his signature.

    Dulac bought the buildings from Schuman’s estate last week for $2.75 million. She believes she could rent Parker’s pad for $6,000 a month — which, ironically, is equal to what Parker would pay over the course of his entire half-century lease. But Parker, 47, who was making repairs to the apartment Friday, said the lease was a “gift.” “I was a surrogate son. I took care of him my whole life,” Parker said. “[Dulac] wants me out because she’s greedy.”

    Parker, who declined to comment further, grew up across the street from Schuman. He bought a condo in Davie, Fla., in 2006, rec­ords show. His lease also lists the Florida address.

    Schuman was admitted to hospitals from 2007 to 2009 for alcoholism, dementia and bleeding of the brain after a fall, the lawsuit alleges. Dulac also has an affidavit from Schuman’s brother, Volkmar, who lives in Berlin and corroborates his brother’s dementia.

    In affidavits, residents described Schuman as paranoid, reclusive and “often drunk by late afternoon.” He ate little, “besides cans of tuna fish, which he shared with his cats,” one tenant said. David Burnett, who lived above Schuman, opened a bank account in the ailing landlord’s name so tenants could deposit monthly rent checks that Schuman was ­incapable of accepting.

    Schuman refused to offer tenants formal leases beginning in 2007, and residents lived month to month. In an affidavit, Burnett said he encountered Parker in his building in 2009, but had seen him only twice before over a period of 20 years. Burnett grew suspicious after Parker and Tyler started hanging around Schuman’s pad for three weeks in 2009. He didn’t see Parker again until June 2010 — when he asked where the rent should be paid.

    Laurie Dowdeswell, who lived at 14 Minetta St., said Parker asked for Schuman in August 2010, unaware that he had died, according to the lawsuit. A day later, Parker presented her with the lease and claimed it was his apartment, according to the suit.

    Parker allegedly demanded she sublet for $1,500 a month or vacate the apartment. Her rent increased to $2,500 two years later — which was $350 cheaper than what she paid Schuman. Parker didn’t have keys to the apartment until October 2014 ­after Dowdeswell and her husband left, the lawsuit alleges.

    “This lease is outrageous and unconscionable,” said Dulac’s ­attorney Steven Sladkus.

Wednesday, November 05, 2014

Apartment-Seeking Single Mom, Fair Housing Advocates Tag A Dozen NYC Landlords With Lawsuit For Alleged Discrimination Due To Her Proposed Use Of Section 8 Housing Voucher To Pay Portion Of Rent

In New York City, the Fair Housing Justice Center (1) recently issued the following announcement of a lawsuit it filed alleging fair housing violations against a dozen area landlords over alleged violations of the New York City Human Rights Law:
  • On October 31, 2014, Ms. B., a single working mother with a Section 8 housing voucher, filed a state court lawsuit in Manhattan alleging that a dozen landlords, property managers, and real estate companies discriminated against her because she has a rental subsidy in violation in violation of the New York City Human Rights Law. The lawsuit names Peace of Mind Realty, Premier Metro Realty Corp., 1675 Lincoln LLC, Zuz Realty Corp., Golden Life Realty Corp., IMS Realty Group LLC, Cortelyou Realty & Estates, Inc., 5 Linden LLC, Spire Group Inc., Open Housing Management, LLC, NY Standard Realty LLC, Bridge and Tunnel Real Estate Brokerage, and individual agents for these companies as defendants. Since 2008, the New York City Human Rights Law has prohibited discrimination in housing based on source of income, including rental subsidies.(2)

    Earlier this year, Ms. B. complained to the Fair Housing Justice Center (FHJC) that multiple rental housing providers were discriminating against her based on the fact that she planned to use a Section 8 housing voucher to pay a portion of her rent. The FHJC conducted an undercover testing investigation into these allegations. The FHJC provided additional assistance to Ms. B. by having trained testers contact other housing providers on her behalf in response to rental advertisements featuring two bedroom apartments that were in her price range and met her needs. FHJC testers were repeatedly informed that the advertised housing was not available to persons with rental subsidies.

    According to the complaint, overt statements were made by many of the defendants indicating that tenants with rental assistance would not be considered such as “We don’t have any two bedrooms that are accepting Section 8,” “Section 8’s gonna be a problem,” or they will not “take programs.” As a result of this rampant discrimination and an inability to find a home for her and her son, Ms. B. has remained homeless since May, 2014.

    The lawsuit seeks injunctive relief to stop the discrimination, as well as damages and attorney’s fees. The plaintiff is represented by Mariann Meier Wang and Daniel Mullkoff with the law firm of Cuti Hecker Wang LLP.

    Attorney Mariann Wang stated, “Six years after New York City prohibited source of income discrimination in housing, many real estate brokers, property managers, and landlords still blatantly refuse to follow the law. That refusal prevents hardworking people like my client from finding a home. Having a housing subsidy should not be an impediment to finding a decent place to live.”

    FHJC Executive Director Fred Freiberg stated, “This case illustrates the human, social, and economic costs associated with pervasive housing discrimination. Discrimination in housing prevents people from finding suitable housing in many neighborhoods. Not only is it a personal indignity and an affront to all New Yorkers, but it disrupts families and contributes to homelessness.” Freiberg added, “This lawlessness must stop. The City needs to more vigorously enforce its Human Rights Law, including the ban on source of income discrimination. In addition, the New York Department of State must be more pro-active and ensure that real estate licensees who continue to engage in housing discrimination lose their licenses to do business in the State of New York.”
Source: No Peace of Mind for Voucher Holders in NYC (Landlords, Property Managers, and Real Estate Companies Face Lawsuit Alleging Source of Income Discrimination.

(1) The Fair Housing Justice Center, Inc. (FHJC) is a regional fair housing organization based in New York City. The FHJC provides a full-service fair housing program to New York City and the seven surrounding New York counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester.

(2) For more on 'source of income' discrimination in New York City, see No License to Discriminate (Real Estate Advertising, Source of Income Discrimination, and Homelessness in New York City).

Tuesday, November 04, 2014

Sale Leaseback Peddler Gets Ten Years In Equity Stripping, Foreclosure Rescue Ripoff While Co-Defendant/Brother Lands 35 Years Prison Stay As Mastermind Of Scam That Netted $15M+ From Unwitting Homeowners

From the Office of the U.S. Attorney (Sacramento, California):
  • Jeremy Michael “Mike” Head, 34, of Huntington Beach, was sentenced [] to 10 years in prison for a nationwide foreclosure rescue scam, United States Attorney Benjamin Wagner announced.

    A federal jury found him guilty in May 2013, after a nearly four-week trial before United States District Judge Kimberly J. Mueller. Mike Head’s brother and co-defendant Charles Head, 40, was sentenced in September 2014 by Judge Mueller to 35 years in prison.(1)

    According to evidence presented at trial, Mike Head played an important leadership role in a fraud scheme that promised to help homeowners avoid foreclosure and repair their credit. He recruited and managed other members of the scheme. Through misrepresentations, fraud and forgery, the Head brothers and their associates substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge.

    These straw buyers were often friends and family members of the defendants. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them.

    Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings. Between January 2004 and March 2006, the scam netted more than $15 million in fraudulently obtained funds from scores of homeowners, many of whom were in California.

    U.S. Attorney Wagner said: “Mike Head made a small fortune taking advantage of victims who looked to him for help. Instead of helping, he stole the last remaining equity in their homes, and many victims were evicted and left destitute. He will now go to prison and pay for his crimes. This office continues to vigorously prosecute multiple variations of mortgage fraud throughout our district.”

    “The scheme Head and his co-conspirators devised preyed upon individuals when they were most vulnerable and lived in fear of imminent foreclosure. Despite promises to help their victims avoid foreclosure, many were financially devastated by the scheme,” said Special Agent in Charge Monica M. Miller of the Sacramento FBI. “The FBI is committed to thoroughly investigating complex mortgage fraud schemes, identifying all participants, and ensuring that those who have violated the trust of the American public face justice in federal court.”(2)

    "[This] sentencing sends a clear message to those who commit mortgage fraud, the consequences can be severe,” said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. “The defendants in this case have hurt so many people and so many of our communities. This sentencing highlights IRS-CI's commitment to hold accountable those involved in these types of crimes."

    This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris are prosecuting the case.

    This case began on February 28, 2008, when a federal grand jury indicted Mike Head, his brother Charles Head, and 14 other defendants with violations of mail fraud, conspiracy to commit mail fraud, and other charges. Eleven of Heads co-defendants have entered guilty pleas, and charges were dismissed against one.

    Charges against the two remaining defendants, Domonic McCarns, 37, of Brea, and Anh Nguyen, 40, of Los Angeles are pending. The charges are allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Source: Huntington Beach Man Sentenced To 10 Years In Prison For Nationwide Foreclosure Rescue Scam.

Go here for earlier posts on this story.


(1) See 35 Year Prison Sentence For Nationwide Foreclosure Rescue Scam.

(2) For more on this type of foreclosure rescue ripoff, see:

Monday, November 03, 2014

Expired Statute Of Limitations Allows Indicted Bigshot Brooklyn Politician/Attorney To Dodge Bullet On Charges Of Illegally Snatching $440K In Surplus Sale Proceeds Held In Trust Account While Acting As Court-Appointed Foreclosure Sale Referee; Loot Left Unclaimed By Unwitting Foreclosed Homeowners; Prosecuting Fed: 'Appeal Likely'

In Brooklyn, New York, The New York Times reports:
  • The government’s case against State Senator John L. Sampson lost some of its heft on Friday when a federal judge dismissed two central embezzlement charges.

    Mr. Sampson will now probably face only eight counts, including making false statements, concealing records, obstructing justice and witness tampering, when he goes to trial early next year. The politician, a Democrat who represents East New York and Canarsie in Brooklyn, easily won his primary and is expected to be re-elected next week.

    The two dropped charges had to do with Mr. Sampson’s role as a court-appointed overseer for two foreclosed properties in Brooklyn. He was supposed to give the surplus money from the sale of the properties back to the State Supreme Court after those properties sold, which was in 1998 and 2002. Instead, the government said, he held on to the money, then withdrew it for his own use in 2008.

    If the court considered the date of the embezzlement to be 2008, which would have fallen within the five-year period of the statute of limitations for this kind of embezzlement, the charges would have stood. But the judge, Dora L. Irizarry of Federal District Court in Brooklyn, said on Friday that she sided with the defense, which had argued that the clock started ticking in 1998 and 2002.

    “The effective date of the embezzlement is the time in which the defendant did not return to the Kings County clerk” the foreclosure checks, she said.

    At a hearing last week, Nathaniel H. Akerman, a defense lawyer, argued that “the crimes were complete when the indictment says: 1998 and 2002.” It is “extraneous” and “irrelevant” how and when the embezzled money was used, he said.

    Prosecutors argued at that hearing that the funds Mr. Sampson was holding on to were not necessarily for his own use — thus he was not necessarily embezzling — until he withdrew the funds and spent them.

    A prosecutor, Paul A. Tuchmann, said on Friday that the government would most likely appeal the decision.

    Judge Irizarry said she would “welcome” clarification on the issue from the Second Circuit, because there is not much case law on how the statute of limitations for embezzlement should be applied.

    Prosecutors also asked the judge to postpone Mr. Sampson’s trial until they got an answer on their appeal. Judge Irizarry declined, saying that appeals can take a few years.

    The bizarre position of a politician running for office while under indictment was on view on Friday, as Mr. Sampson’s lawyers asked the judge to modify his travel restrictions so that he could attend a legislative conference in Puerto Rico. “It’s quite likely he’ll win his election,” Joshua N. Colangelo-Bryan, one of the lawyers, said.

    Judge Irizarry granted the request.
Source: 2 of 10 Counts Against Sampson, a Brooklyn State Senator, Are Dismissed.

See also, New York Post: Judge dismisses claims Sampson stole $440K (Allegedly Used Part Of It To Help Fund A Failed 2005 Bid To Become Brooklyn District Attorney).

Go here for earlier posts on this story.