Thursday, June 22, 2017

L.A. Feds Bag Alleged Head Of Foreclosure Rescue Racket That Abused Bankruptcy Process To Stall Forced Sales, Evictions; Defendant Pocketed Over $7 Million By Using Fractional Interest Deed Transfers To, & Court Filings On Behalf Of, Phony 3rd Parties To Trigger Automatic Stay Provisions In Effort To Keep Homeowners From Losing Their Homes, Getting The Boot: Prosecutors

From the Office of the U.S. Attorney (Los Angeles, California):
  • The alleged mastermind of a foreclosure-avoidance scam that targeted distressed homeowners has been arrested on federal charges that he orchestrated a bankruptcy fraud scheme that brought in more than $7 million from victims.

    Michael “Mickey” Henschel, 68, of Van Nuys, was arrested Wednesday morning [June 14] by federal agents with the FBI and the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG). Henschel was arrested pursuant to an 11-count indictment returned by a federal grand jury on June 8.

    During a court hearing this afternoon [June 16], Henschel was ordered detained pending trial.

    According to the indictment unsealed after his arrest, Henschel owned a Van Nuys-based company he operated under several names, including Valueline. Henschel and several co-conspirators marketed illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages and renters who were facing eviction.

    As part of the scheme, Henschel and the others allegedly convinced homeowners to sign fake grant deeds that purported to show the homeowners had conveyed an interest in their properties to fictional third parties.

    Henschel and his co-conspirators allegedly filed bankruptcies in the names of fictional persons and entities to trigger the automatic stay provision of the Bankruptcy Code, which meant that foreclosure sales were stalled.

    Henschel allegedly delayed evictions in a similar way, filing fraudulent documents in state eviction actions and sending similar documents to sheriff’s offices.

    Henschel allegedly charged some homeowners large fees before agreeing to clear title to their properties, in addition to the monthly fees paid for the illegal services. During the course of the scheme, from October 2010 through July 2013, Henschel and his co-conspirators collected more than $7 million, according to the indictment.

    The indictment charges Henschel with one count of conspiracy, eight counts of bankruptcy fraud and two counts of wire fraud.
Source: Van Nuys Man Named in Federal Fraud Indictment Alleging $7 Million Foreclosure-Delay Scam Targeting Struggling Homeowners.

See, generally, Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

L.A. Man Cops Guilty Plea To Peddling Phony Rental Lists To Apartment-Seeking Tenants, Clipping $200 From Over 1,000 Victims

In Los Angeles, California, KNBC-TV Channel 4 reports:
  • The man who state authorities called the "mastermind" of rental scams pleaded guilty Wednesday [June 14] to a felony charge of defrauding Southern California customers who were looking for affordable rental homes and apartments.

    As part of a plea agreement, Richard Rodriguez of Alhambra received a three-year suspended jail sentence and five years supervised probation in exchange for pleading guilty to conspiracy to defraud customers of his rental listing business, Superior Consulting in Rowland Heights. Superior is just one of numerous rental listing agencies run by Rodriguez over the last 20 years.

    "As a term and condition of probation, he has to provide restitution to the over one thousand victims and he's no longer allowed to be in any location where rental services are offered," Los Angeles Deputy District Attorney Jessie McGrath said.

    The NBC4 first exposed Rodriguez and his "rental listing" businesses in 2012. The I-Team reported that Rodriguez or his employees asked customers to pay them $200 cash, and in return they promised to provide listings of affordable apartments and homes to rent.
For more, see Rental Scam 'Mastermind' Pleads Guilty to Defrauding Customers (The guilty plea comes after years of investigations by the NBC4 I-Team).

Wednesday, June 21, 2017

After Investing Time, Money Into Repairing Recently-Purchased Fixer-Upper, 1st Time Homebuyer Stunned To Discover That Title Transfer Didn't Include Backyard, Shed, Part Of Back Deck

In Salmon River, Nova Scotia, CBC News reports:
  • Imagine buying a home with a deck, a shed and a big fenced backyard, only to discover you own neither the backyard nor the shed and only part of the back deck.

    That's what happened to Ryan Manning of Salmon River, N.S., who has since spent months looking for answers from everyone from the real estate agent and lawyer to the previous owner and the company that sold him title insurance.

    "It was a huge shock," Manning told CBC News, recalling the moment last fall when a man knocked on his door and offered to sell him the back half of what he thought was already his property.

    "I didn't know what to do at that point. I wouldn't have bought my house knowing that situation."
    ***
    He started working on the fixer-upper, hoping to live in half and rent out the other side to help cover his mortgage.

    Everything was going as planned until that fateful knock on his door in October 2016.

    Manning was stunned to learn the land his home sat on was one legal parcel of land while his backyard was on another. Each has a separate parcel identifier, commonly known as a PID.

    "I seen pictures [of the backyard] right there in my listing," said Manning, adding he believed the real estate agent.

    "They're the ones that are supposed to be there for me to tell me the truth about my property, to know what I'm buying."
    ***
    Not covered by title insurance

    Manning's lawyer, who has also since retired, did initially advise him to have a full survey completed or a location certificate obtained before purchasing the property.

    In a letter from Patterson Law, Manning was told an alternative was title insurance, which "would step in to compensate you if the property you purchased had issues with respect to location and boundaries, water potability, etc."

    It went on to say "a mortgage company will generally accept a title insurance policy in lieu of a location certificate or survey."

    Stewart Title Guaranty, the company from which he purchased title insurance, said the insurance covered the lender, not him.
    ***
    Agreement reached, says law firm

    Since CBC News contacted Patterson Law, which originally handled the purchase for Manning, it has been working with him to resolve the matter.

    In an email late Wednesday afternoon [June 14], managing partner George White said "we are pleased to advise that an agreement has been entered into between the parties which should result in a successful conclusion." It thanked CBC for bringing the matter to its attention.

    Manning isn't suggesting anyone intentionally deceived him. A lawyer for Genworth, the company selling the foreclosed property, said in a letter: "I don't think anyone knew of the second PID prior to the sale, including the purchaser and/or the Realtors."

    But the first-time homebuyer said the whole situation has created a huge amount of stress since he can't sell the property as it currently exists and he doesn't have the money to buy what he thought was his backyard.

    "It's something that could financially cripple you," he said.

    "I put so much money into my home to fix it up, to try to make it an income property."
Source: 1st-time homebuyer stunned to discover new backyard isn't his (Nova Scotia man told he doesn't own the backyard he thought he'd purchased with his home).

Aspiring Homebuyer/Couple Under Rent-To-Own Deal Lose Their Home After Two Years Despite Not Missing Any Payments & After Making Significant Repairs; Rent-Skimming Seller Pocketed Deposits, Monthly Payments, Then Stiffed Bank On Undisclosed Mortgage, Allowing House To Go Into Foreclosure

In Clay, Alabama, WBRC-TV Channel 6 reports:
  • Nakecia Stone scrolls through photos of her old home. With a flick of her finger, an image of her daughters cuddling in their bedroom flashes across the screen, followed by another of them in the front yard.

    “I loved the area, I loved my neighbors,” Stone said of the Clay-Chalkville home.

    She says they moved to the single-family home in 2013 under a rent-to-own agreement. It required a $5,000 down payment and $1,000 per month, she said, and promised they could own the house one day in the future.

    “The reason the down payment was so low was that we agreed to do all repairs,” Stone said.

    She recalls they spent about a month and a half cleaning the house of debris, installing new flooring and bathrooms, and refurbishing the outdoor swimming pool.

    “My husband is a workaholic, so him working on the house thinking it was going to be our house…that was over the top for him,” she remembered.

    They enjoyed the home for about two years, until one summer day in 2015. The dream of home ownership was interrupted.

    “My neighbor was coming over to see me one day and she said ‘you’ve got a note on your door.’ A note? I got the note and it says 'You’ve got 30 days to vacate. The house has been placed into foreclosure,'” Stone explained.

    A baffling moment for Stone because she says they always paid the bills on time. But as she would learn, it was not their delinquency that cut her dream short.

    The sellers had a mortgage on the home and had stopped paying the bank, prompting the foreclosure, costing the Stone family their home and investment.

    “When I saw them sell it, I knew it was over,” Stone said with tears in her eyes.

    Some say rent-to-own property agreements, which are like lease-purchase contracts, give people who cannot qualify for a home loan an opportunity to achieve the American dream that would otherwise elude them.

    But, housing lawyers say the agreements are too risky. In Alabama, there is virtually no regulatory oversight. And the agreements promising a chance at home ownership attract people who often cannot afford a lawyer to review the agreements.

    “This is an area where we need some regulatory help,” said Nancy Yarbrough, Executive Director of Birmingham Volunteer Lawyers.(1) She says acquiring the deed to a home through a rent-to-own deed is “like winning the lottery.”
    ***
    Internet posts suggest the prevalence of the rent-to-own offerings across the state. Searching listings for about 6 hours over the course of several days revealed nearly 400 properties offered for rent-to-own.

    But, the lack of public records makes it impossible to know with certainty how many properties have been sold through a rent-to-own transaction, or how many have failed.

    No governmental entity tracks rent-to-own properties. The contracts are not recorded with public offices.

    Lawyers in Texas surveyed about 1,300 people who had rent-to-own agreements. Their findings, reflected in the report “The Contract for Deed Prevalence Project,” show that the deals failed nearly 45 percent of the time.

    “The problem with a lot of these transactions is that the family never ends up with title, they never end up actually owning the home,” explained Professor Heather Way, The University of Texas at Austin. “And families end up spending thousands and thousands of dollars. They think it’s going towards ownership, but it’s not.”

    The Alabama Office of the Attorney General received 99 complaints about landlord-tenant issues in 2016. These would include rent-to-own issues, though those cases are not separately counted.

    Yarbrough, of Volunteer Lawyers, said her team of 500 lawyers volunteering time to help low-income people of Birmingham, assisted with more than 540 housing cases. Many, she says, were rent-to-own agreements.

    And, [lead housing lawyer for Legal Services of Alabama(2) Chris] McCary estimates he gets around 40 cases of rent-to-own issues every year.

    “I know it’s just a drop in the bucket of what’s out there,” said McCary. “I may have just one case on the docket for that day, but I’ll see several cases go in front of me.”

    And he believes there is room for success too.

    “I only see the ones where the dream has been interrupted, but it could be that some that are successful,” he said. “It would be hard to predict the other way how many are successful. There’s no regulation of it, there’s nothing to keep up with it,” explained McCary.

    But Yarbrough isn’t as optimistic.

    “It’s like winning the lottery,” she said of getting deed through a rent-to-own deal.

    Losing the house can happen in under a month.

    When there’s a breach of a rent-to-own agreement, through non-payment or otherwise, and a lawsuit is filed, usually it’s in district court. It’s called an “unlawful detainer.”

    “It is a fast mechanism, probably the fastest we have in Alabama to get someone off the property,” said attorney McCary. Someone can be forced out of the home in under a month.

    Landlords file unlawful detainer actions on the fast track against tenants when agreements do not make the promise of ownership and don’t require larger down payments.

    But lawsuits against property owners, where there is an ownership interest, a deed or mortgage, must be filed in a different court, called the circuit court. There, the process can take months.

    McCary says when sellers in rent-to-own agreements sue, they typically file on the faster track in district court.

    “I would assume that’s why some try to file in the district court,” said Judge Robert P. Bynon, Jr. He presides over the district court for Jefferson County in Birmingham.

    “Sometimes, you have a seller trying to take advantage of a buyer, or a buyer trying to take advantage of a seller, and you’ve got to work in good faith with one another. That’s the only way this is going to work,” Bynon explained.

    When he sees disputes over rent-to-own agreements filed in the district court, he throws them out.

    That’s got to go to circuit court for an ejectment action. It’s a completely different process and it takes a little longer than an unlawful detainer,” said Bynon.

    But many times it’s hard to know when to toss the case because often buyers represent themselves and may not know the significance of the down payment they made, and how that could potentially get them more time in circuit court.

    Sometimes, nobody, the seller nor the buyer, will not tell the court that they paid $20,000 down to have the option to buy and rent this house. You find out way after the case is over with,” said Bynon.

    And that’s how, McCary says, buyers in the rent-to-own deals are often forced out of the home on the fast court track.

    “Over the 90 percent of the time, they treat them like a tenant,” explained McCary. "Someone can be out in under a month.”

    [...]
For the story, see On Your Side Investigation: Do unregulated rent-to-own contracts deliver what they promise?
---------------------
(1) The Birmingham Bar Volunteer Lawyers Program (BBVLP) is a non-profit program that matches income-qualifying residents of Jefferson County, Alabama, with volunteer attorneys to help with legal matters. Applicants must meet certain financial criteria before they can be assisted through the Program.

(2) Legal Services Alabama is a non-profit, public interest law firm that serves low-income people throughout the state by providing civil legal aid and by promoting collaboration to find solutions to problems of poverty. It has seven offices, located in Birmingham, Dothan, Huntsville, Mobile, Montgomery, Selma and Tuscaloosa. land contract for deed

Rent-To-Own Rackets Not Limited To Dilapidated Homes; Many Trucking Outfits Use Business Model To Rope Their Drivers Into One-Sided, 'Take-It-Or Leave-It' Lease Contracts For Company Trucks In Arrangements That Leave Many Working For Peanuts & Under Threat Of Losing Everything They've Paid If They Miss One Payment

In Los Angeles, California, USA Today reports:
  • Samuel Talavera Jr. did everything his bosses asked.

    Most days, the trucker would drive more than 16 hours straight hauling LG dishwashers and Kumho tires to warehouses around Los Angeles, on their way to retail stores nationwide.

    He rarely went home to his family. At night, he crawled into the back of his cab and slept in the company parking lot.

    For all of that, he took home as little as 67 cents a week.

    Then, in October 2013, the truck he leased from his employer, QTS, broke down.

    When Talavera could not afford repairs, the company fired him and seized the truck -- along with $78,000 he had paid towards owning it.

    Talavera was a modern-day indentured servant. And there are hundreds, likely thousands more, still on the road, hauling containers for trucking companies that move goods for America’s most beloved retailers, from Costco to Target to Home Depot.

    These port truckers -- many of them poor immigrants who speak little English -- are responsible for moving almost half of the nation’s container imports out of Los Angeles’ ports. They don't deliver goods to stores. Instead they drive them short distances to warehouses and rail yards, one small step on their journey to a store near you.

    A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.

    If a driver quit, the company seized his truck and kept everything he had paid towards owning it.

    If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Then they turned around and leased the trucks to someone else.

    Drivers who manage to hang on to their jobs sometimes end up owing money to their employers – essentially working for free. Reporters identified seven different companies that have told their employees they owe money at week’s end.

    The USA TODAY Network pieced together accounts from more than 300 drivers, listened to hundreds of hours of sworn labor dispute testimony and reviewed contracts that have never been seen by the public.

    Using the contracts, submitted as evidence in labor complaints, and shipping manifests, reporters matched the trucking companies with the most labor violations to dozens of retail brands, including Target, Hewlett-Packard, Home Depot, Hasbro, J.Crew, UPS, Goodyear, Costco, Ralph Lauren and more.
    ***
    There are 800 companies regularly operating at the LA ports. Almost all of them turned to some form of a lease-to-own model, some without thinking through the consequences, said industry consultant and lobbyist Alex Cherin.

    “Flying by the seat of their pants and making it up as they went along,” he said of the scramble to find trucks for drivers. “Ultimately what they were trying to do was survive in a business with very thin margins.”

    Truckers at dozens of companies describe the same basic scene. They were handed a lease-to-own contract by their employer and given a choice: Sign immediately or be fired. Many drivers who spoke little English said managers gave them no time to seek legal advice or even an interpreter to read the contract.

    It was "take it or leave it," according to Fidel Vasquez, a driver for Total Transportation who said he couldn’t read the contract because it was in English.

    Jose Juan Rodriguez owned his own truck and drove primarily for Morgan Southern, where two dozen drivers have filed claims for back pay at the California labor commission and civil court. Like many drivers, Rodriguez said he didn’t understand what he was signing, but felt he had no choice.

    His wife has stage three breast cancer and his adult son has severe brain damage requiring frequent doctor visits.

    “Where do I sign?” Rodriguez recalled asking right away. “The only thing I had to worry about is work, because I have a family.”

    One-sided contracts

    The contracts work like sub-leases. Knowing drivers could not qualify for their own loans or leases, trucking companies arranged to finance their fleets. Then they had drivers sign up for individual trucks.

    Drivers gave their old trucks – many of which they owned outright – to their company as a down payment. And just like that they were up to $100,000 in debt to their own employer. The same guys would have had a tough time qualifying for a Hyundai days earlier.

    As far back as August 2008, a trucking finance firm warned Port of Long Beach board members that 40% of drivers were likely to default on truck leases. But no one stopped the deals, which place almost all of the financial risk onto the workers.

    Drivers' names were not on the truck titles. And many contracts effectively barred drivers from using their truck to work for other companies.

    The companies also retained the power to decide how much work to give their drivers. They decide who gets the easiest and most lucrative routes -- and who gets to work at all.

    That leaves drivers in constant fear of upsetting managers, who can fire them for any reason, or simply stop sending them business, a process some call “starving” them out of the truck.

    On a five-year lease, drivers could pay in for four years and 11 months. If they got sick, fell behind on the lease or were fired in the last month, they could lose everything – as if they had never paid a dime.

    [...]

Tuesday, June 20, 2017

Another Ex-Boyfriend Gets Pinched For Allegedly Forging Deed To Remove Former Girlfriend's Name From Title To Jointly-Owned Home

In West Palm Beach, Florida, the Palm Beach Post reports:
  • Two Palm Beach County Sheriff’s Office corrections deputies were arrested Wednesday [June 14] after they allegedly had the name of a fellow corrections employee removed from a property deed without her knowing, according to a sheriff’s office report. This isn’t the first time the two deputies have been arrested, either, records show.

    Willie Cone III, 35, and Saida Douglas, 36, each face one count of fraud. Both Douglas and Cone were released on $3,000 bond each Wednesday afternoon from the Palm Beach County Jail.

    A 40-year-old woman filed a police report that her ex-boyfriend, Cone, had removed her name without her consent from the deed to a Loxahatchee home they bought together worth about $140,000.

    She said the pair dated between 2011 and 2013 and while she had mentioned to him about removing her name from the deed after they split up, she never gave permission for him to take her off the document. She told investigators she had just happened to check to property appraiser’s website and saw the allegedly fake document.

    The woman who notarized the document told investigators that she met Cone, Douglas and the other corrections employee at the main jail near West Palm Beach because they all worked there. Cone not only works at the western facility in Belle Glade, but the other corrections employee also was out on family leave the day she allegedly signed the document.

    Additionally, investigators noted the “witness” on the quit-claim deed was Douglas’ mother. According to the U.S. Department of Homeland Security, the mother was out of the county when the document was signed. She resides in Haiti, according to the report.

    Though the notary is listed in the report and investigators note there is probable cause to charge her with fraud, jail and court records do not indicate she had been arrested as of Thursday.

    Cone was arrested twice before for domestic violence in Palm Beach County in 2011 and 2013. In both cases, it was the same woman who bought the home with him and each time charges were not filed. According to media reports in 2011, Douglas was arrested after she alleged fired a gun into a bedroom wall as she fought with her then-husband in Lauderhill. The outcome of the case is unknown, because the records do not appear in the online records of the Broward County clerk’s office.

Pittsburgh-Area Man Dumps Girlfriend, Allegedly Forges Deed To Remove Her From Title To Jointly-Owned Home, Pledges It As Collateral To Pocket $76K HELOC Proceeds, Then Bolts For Parts Unknown

In Mount Oliver, Pennsylvania, WPXI-TV Channel 11 reports:
  • An arrest warrant has been issued for a man accused of forging a deed to his house and taking his ex-girlfriend’s name off of it after their relationship ended.

    Lynne Harr claims Dennis Mueller was leading a double life, using a dating service in New Jersey. Harr has been living in a Mount Oliver home since moving in with her now ex-boyfriend in 2011.

    According to police documents, Dennis Mueller legally added Harr’s name to the deed in 2016.

    But when he moved out, Harr started going through her own documents.

    “And I came across the copy of the deed and it didn't look right,” Harr said. She discovered Mueller had taken her name off the deed to the home, without her knowing.

    He legally put me on the house, then very illegally took me off of that house,” Harr said.

    According to the criminal complaint, Harr found boxes where it appeared Mueller had been practicing signatures for local notaries, and even admitted to detectives the deed transfer wasn’t done legally.

    Harr also found he took out a line of credit, using the house as collateral, getting a $76,000 cash advance. “All for him, and now he wants me to pay it back,” Harr said.

    And the secrets, Harr said, didn’t stop there. She found receipts for a dating service she says he signed up for called “South Jersey Matchmaker” while he was traveling for his job.

    Her attorney says they’ve seen cases where people have forged deeds before and is hoping they can get it fixed, so Harr can stay in the home she thought was partly hers.

    “We're hoping he's willing to right his wrong, and there's a lot of work to do and help to become whole again,” attorney Kushal Dave said.

    “He was very good at it,” Harr said. “He was very good at acquiring the information he needed to achieve his goal.”

    Channel 11 reached out to Mueller’s attorney who said he’s handling any civil cases, and has advised Mueller to get a criminal attorney.

    He had no further comment.

Monday, June 19, 2017

Scams Targeting Real Estate Agents, Attorneys & Title Closers: Scammers Hack Into Their Emails, Then Create & Use Spoof Email Accounts To Hijack Closing Funds With Phony Wiring Instructions; Repercussions Astronomical

From a recent post in the New England Real Estate Journal:
  • As if real estate conveyancers and title insurance companies did not have enough to worry about with tracking down missing assignments/discharges, or determining whether or not a lender has followed the guidelines to perfect its rights of foreclosure, they now face a growing threat that has dire financial consequences. Unfortunately, a disturbing number of conveyancers are becoming victims. According to estimates published by the Wall Street Journal, computer hackers perpetrating wire fraud have accounted for approximately $1 billion in losses from October 2013 to June 2015.

    Hackers are acquiring information by infiltrating and monitoring emails of the real estate community. They learn who the parties are to the transaction, the amount of the purchase, the date of the closing, and most importantly, if any of the funds are being wired. Once the information is learned, the hacker generates an identity very similar to one of the parties involved in the transaction. For example, the seller’s attorney’s correct email address of AttyJones@joneslaw.com is altered slightly to AttyJones@jonelaw.com. The fake email is set up to appear exactly the same as the correct email address, and could even contain the official logo of the seller’s attorney.

    On the day of the transaction, an email is sent from the fake address to the buyer’s attorney indicating that there is a change in the wire instructions, and instructing the attorney to wire the seller’s proceeds or a payoff to a new address. An unsuspecting conveyancing attorney may look quickly at the email address and not realize that the email transmission was coming from a criminal third party. The wire is sent to the fraudulent address and the funds are forever lost.

    This scheme could even affect real estate conveyancers who believe they are protected against cyber-crime because all of their emails are encrypted. Hackers are targeting not only the real estate conveyancers, but also the real estate agents who are involved in the transaction. The unprotected emails of the realtors are compromised by the hacker. From there, the hackers can monitor the information being exchanged and learn the information they will later need to set up the fake email account. The fact that a real estate conveyancer uses encrypted email to send out information does not protect him or her from an incoming email from a fraudulent third party.

    Conveyancers who fall victim to wire fraud and attempt to cover the loss with a claim to their malpractice insurance may be informed by their carrier that they lack coverage. Some malpractice companies are taking the position that the sending out of wire fund is not considered the practice of law; rather it is considered a ministerial task and not a covered risk under the policy. Attorneys are being forced to seek court determination if wire fraud is a covered risk.

    In Stark & Knoll Co., L.P.A. v. ProAssurance Cas. Co., 2013 WL 1411229 (N.D. Ohio 2013), a malpractice insurer made such an argument; however, the court found in favor of the attorney referring to Nardella Chong v. Medmarc Casualty Ins. Co., 642 F.3d 941, 942 (11th Cir. 2011), which ruled that the insurance policy covered actions which included those of a “trustee” or “similar fiduciary capacity.” While in this instance the attorney was successful in obtaining coverage, the firm still had to incur out of pocket expenses to enforce the provisions of the malpractice policy to cover the wire fraud claim.

    From a title insurance perspective, this issue becomes extremely problematic with the wiring of payoffs for mortgages or outstanding municipal taxes. Using the same email scheme, hackers can supply false mortgage payoffs requesting funds be paid to fraudulent accounts. In such a scenario, claims could be made under both the Closing Protection Letter and the title policies for the current transaction because the lien on the property would not be paid or discharged. Considering the size of many mortgage payoffs, the repercussions of these hacker attacks are astronomical.

    According to the American Land Title Association, title companies have reported an increase of wire fraud scams in the amount of 480% in 2016. In an effort to combat these hacker attacks, there are a number of measures designed to increase security. Such measures include: avoid web-based email accounts such as yahoo or gmail to transmit business communications; secure your wireless network; change computer passwords regularly; keep virus and firewall software up to date; and most importantly, in the event there is a change in wire instructions during a transaction, call the receiver of the wire directly and verify the requested change.

    Considering the increased reliance on electronic communications and the wiring of funds during transactions, it does not appear that the end of these cyber-attacks is coming anytime soon. In addition to the measures discussed previously, conveyancers and title companies need to be vigilant in keeping up to date with the latest schemes in order to make sure they know what to look for if faced with a similar circumstance. If you unfortunately become a victim of a scheme, contact your local Federal Bureau of Investigation (FBI) office and file a complaint with www.ic3.gov.
Source: Wire fraud: A new nightmare for real estate conveyancers and title companies.

See, generally:

U.S. Secret Service Probes Closing Funds Hijacking Scams Targeting Real Estate Agents, Attorneys & Title Closers; Six Known Cases Result In Losses Approaching $500K In SC Lowcountry

In Charleston, South Carolina, WCSC-TV Channel 5 reports:
  • The United States Secret Service is investigating a half-dozen real estate scam incidents in the Lowcountry.

    "We have six known cases in the low country in the last four weeks with total losses approaching half a million dollars," Agent John Kenney said.

    The scam targets emails being exchanged between closing attorneys and realtors as a real estate deal is about to close, Kenney said.

    Hackers have accessed the closing attorneys' email accounts and created a spoof account which closely mirrors the attorneys' actual email addresses, he said. Investigators say the hackers then send an email with "new" or "updated" wiring instructions for the closing funds from the spoof account, which may only vary by one or two letters from the actual account.

    When the attorney executes the wire transfer of funds from escrow, the money goes to the hackers, not the actual seller, Kenney said.

    "We are working with victims, banks and other law enforcement partners to identify and arrest offenders," he said. "While the scheme operates in a similar manner, we do not believe that the cases are related at this time."

    Kenney said there are several things those involved in real estate deals can protect themselves:
  • Be especially wary of new or updated wiring instructions.
  • Read email addresses letter for letter and confirm by phone with known business associates.
  • Confirm all details, including banking information, by phone prior to authorizing the wire.
  • Do not be rushed or hurried. Do not attempt execution of wires just prior to close of business.
  • Have all escrow account insurance policies up to date.
  • If you've fallen victim to such a scam, Kenney says you should contact your local law enforcement and your bank.

Long Island Homeowner/Couple That Recently Beat Foreclosure With Statute Of Limitations Defense Can Now Begin Popping Champagne Bottles As Bankster's Appeal Deadline To State's Highest Court Expires

In Sound Beach, New York, Newsday reports:
  • A Sound Beach couple fighting foreclosure for nearly 10 years “can finally close that chapter of their lives” now that their lender has missed court deadlines to continue the legal battle, the couple’s lawyer said Tuesday [June 13].

    Fred and Theresa Tovar’s mortgage lender — originally Beneficial Homeowner Service Corp., and later U.S. Bank Trust N.A. — had until Friday [June 9] to file a motion seeking permission to take the case to the state’s highest court, the Court of Appeals.

    The lender could still seek an extension of time, or it could try to re-argue the case before the Appellate Division of the state Supreme Court, which last month upheld a lower-court ruling in favor of the homeowners.(1)

    However, the Tovars’ attorney, Ivan Young of Bohemia, said he believed such an effort would be “futile.”

    U.S. Bancorp, the lender’s parent company, referred questions to the mortgage servicer, Caliber Home Loans. A spokesman for Caliber declined to comment.

    The court fight turned on whether the lender missed the six-year statute of limitations to file a foreclosure lawsuit. The lender sued to foreclose in 2007, and the case was dismissed in 2012. The new lawsuit was not filed until 2014.

    By then, the six-year deadline had passed, a state Supreme Court justice in Suffolk County ruled in 2014. That decision was upheld unanimously by a four-judge panel of the Appellate Division last month.
Source: LI couple evades foreclosure as deadline passes.
--------------------
(1) Beneficial Homeowner Serv. Corp. v. Tovar, 2017 NY Slip Op 3471 (N.Y. App. Div. 2nd Dept. May 3, 2017).

Sunday, June 18, 2017

Illinois Bar Officials Say Grievance Filings Against Attorneys Are Down While Payouts To Indemnify Victims Of Sleazy Lawyers Are Substantially Up; $3+ Million Payout For 2016 Caps Off Recent 4-Year Total Of About $8-9 Million

In Chicago, Illinois, the Cook County Record reports:
  • The Illinois Attorney Registration and Disciplinary Commission (ARDC) recently released its 2016 annual report, which shows the fewest number of grievances since 1988.

    According to the ARDC report, people filed 5,401 grievances, which also reflects the fourth year in a row that the number of grievances has gone down.
    ***
    The drop in grievances and the fact that every Illinois lawyer had to contribute to the Client Protection Program jumped out at Grogan as highlights in the report.

    "All Illinois lawyers paid $25 to a fund called the Client Protection Program," he said. "Every lawyer pays to this indemnity fund, and there's a cap of a million dollars per lawyer and $100,000 per claim."

    The ARDC reported that 48 lawyers paid out nearly $3.1 million to cover 146 claims.

    "The numbers are so substantial," Grogan said. "I think that's the biggest thing, the big numbers we're dealing with."

    Grogan said payouts in the early part of the 2000s were below $1 million, and in 2006, Illinois lawyers paid out $843,000 in awards.

    "In the early 2000s, we'd see payouts annually of $800,000, $700,000, $600,000," Grogan said. "And now, for the last couple years, we're seeing a million-dollar plus. The last four years ... (brought) about $8 or $9 million in payout, so a substantial amount."
For the story, see ARDC report shows lowest grievance total since 1988.
--------------------
(1) In Illinois, the Client Protection Program was created to help (at least partially) compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by an Illinois-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.  ripoff reimbursement

Now-Disbarred Central Florida Lawyer Who Fleeced Widow, Brain-Damaged Child, Others Out Of Over $2.7 Million In Entrusted Funds Gets 10 Years In Federal Prison

From the Office of the U.S. Attorney (Orlando, Florida):
  • U.S. District Judge Roy B. Dalton, Jr. has sentenced Julie W. Kronhaus (52, Winter Park) to 10 years in federal prison for wire and bank fraud. In addition, she was ordered to pay over $2.7 million in restitution.(1)

    Kronhaus pleaded guilty on January 24, 2017.

    According to court documents, from June 2009 to February 17, 2015, Kronhaus, who was a licensed attorney and Certified Public Accountant in Florida, defrauded her clients and banks of approximately $2.7 million. As part of her practice, Kronhaus acted as a trustee for her clients and also held their money in various bank accounts. Rather than using the funds for the purpose intended by her clients, Kronhaus diverted the money into her law firm’s bank accounts and paid for her personal expenses.

    In addition, Kronhaus engaged in a check kiting scheme where she wrote checks from accounts that had insufficient funds. She deposited the worthless checks into her trust account at another bank to give the appearance that there were sufficient funds in the account. She then issued checks from her trust account to her clients, taking advantage of the bank’s float time.
Source: Disbarred Winter Park Attorney Sentenced To 10 Years For Defrauding Clients And Banks Of $2.7 Million.

See also, Now-Disbarred Central Florida Attorney Admits Fleecing Clients Of Over $2.7 Million (Among Victims: Single Mom Of Child Born w/ Severe Brain Damage, Widow Whose Husband Died In Car Crash, Local Mom & Pop Businesses).
---------------------------
(1) In Florida, the Clients' Security Fund was created by The Florida Bar to help (at least partially) 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.  ripoff reimbursement

Attorney Who Voluntarily Turned In Law License In Lieu Of Getting The Boot Now Pleads Guilty To Pilfering Over $2.5 Million Of Entrusted Money From Unwitting Clients

In San Antonio, Texas, the San Antonio Express-News reports:
  • Disgraced former San Antonio lawyer Todd Prins, who has been accused of fabricating court documents, forging judges’ signatures and stealing money out of his law firm’s trust account for his own use, has agreed to plead guilty.

    Prins, 51, this week [June 9] signed a plea deal in which he agreed to plead guilty to one count of wire fraud. He voluntarily gave up his law license earlier this year in lieu of being disciplined by the State Bar of Texas. Prins was charged by prosecutors in a court filing that was made public Friday [June 9].
    ***
    Prins’ legal troubles surfaced in his bankruptcy case in November when he was accused of fabricating court documents and forging judges’ signatures in an elaborate scheme to conceal from two clients the status of a lawsuit they filed in 2009.

    Court filings contained copies of allegedly manufactured court rulings bearing the signatures of various judges, from U.S. District Judge Fred Biery to Texas Supreme Court Justice Nathan Hecht to state District Judge Solomon J. Casseb III.

    “My clients were completely bamboozled,” Jason Davis, an attorney for William and Karen Ozer, said during a Nov. 7 bankruptcy court hearing in San Antonio. The Ozers have sued Prins, alleging he committed fraud and breached his fiduciary duty to them.

    Prins issued the Ozers a $1.6 million promissory note, which he claimed was settlement proceeds from a judgment they received in the lawsuit. In actuality, the plea agreement said, there was no such settlement.

    Under the terms of his plea deal, Prins has agreed to repay $225,264 to the Ozers.

    Prins’ troubles worsened last fall when he faced arrest in a Houston bankruptcy court for allegedly pocketing $2.4 million from a Oct. 4 foreclosure sale he conducted for a client. But the sale was done without a judge’s approval and then Prins failed to turn over the proceeds from the sale, according to a December court order.

    According to the plea deal, Prins transferred the $2.4 million from his law firm’s trust account to his law firm’s bank account at Wells Fargo Bank and kept $800,000 for himself.

    U.S. Bankruptcy Judge Jeff Bohm in Houston previously found Prins used the Wells Fargo account to purchase four plane tickets for almost $1,900 and vacation lodging for more than $5,000 at hotels.com.

    “Prins continued to charge tens of thousands of dollars” to the Wells Fargo account to fund a “lavish European vacation” over the next few weeks with stops in London, Edinburgh, Scotland, and Copenhagen, Denmark for him and his family, Bohm said.

    In March, Bohm imposed $800,000 in sanctions plus more than $56,000 in attorneys' fees against Prins after he failed to turn over the proceeds from the foreclosure sale, as previously ordered. The $800,000 in sanctions imposed by Bohm represented the difference between the property’s $2.4 million sales price and $1.6 million that was seized by the government.

    Bohm referred the matter to the U.S. attorney's office for potential criminal prosecution.

    As part of the plea deal, Prins has agreed to repay the $2.4 million to Elbar Investments Inc. It paid Prins the money to acquire a foreclosed residential property, but it never took title to the house and was out of its money.

    In another legal case Prins handled for two clients, he is accused of stealing $150,000 that was supposed to be held in his law firm’s trust account, the plea agreement said. The document added that in another case Prins negotiated a $75,000 legal settlement but kept the money for himself.

    Prins, in yet another case he handled, received $125,000 as a partial settlement of a lawsuit. But rather than delivering the funds to the rightful owner, the plea agreement said Prins kept the money for his own use.

    Prins has agreed to complete a financial statement as part of the plea agreement.(1)
For more, see Disgraced ex-lawyer Prins agrees to plead guilty.
--------------------------
(1) In Texas, the Client Security Fund was created to help (at least partially) compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Texas-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.  ripoff reimbursement

Another Aging Lawyer Wraps Up Career By Copping Guilty Pleas To Fleecing Clients Out Of Entrusted Funds; Defendant Admits Looting Trust Account Of At Least $3.4 Million Of His Victims' Cash

From the Office of the U.S. Attorney (Hartford, Connecticut):
  • Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PETER RESSLER, 70, of Woodbridge, waived his right to be indicted and pleaded guilty today [June 7] before Senior U.S. District Judge Alfred V. Covello in Hartford to embezzling millions of dollars from his bankruptcy clients, and to related fraud offenses.

    According to court documents and statements made in court, RESSLER, an attorney with a bankruptcy practice based in New Haven, defrauded numerous clients in various ways. First, RESSLER took retainers from at least 30 clients for various legal matters on their behalf, including protection under Chapters 7, 11, and 13 of the bankruptcy code. Although RESSLER represented that he would hold the funds in trust until he provided legal services, he used the monies for other expenses.

    In addition, RESSLER required certain clients who were seeking a Chapter 11 or Chapter 13 reorganization to deposit funds and represented that such monies would be held in trust for purposes of the anticipated reorganization. RESSLER obtained the funds after he had filed formal bankruptcy actions, which created relevant bankruptcy estates for which he had a continuing duty to maintain client assets under his control and to give appropriate accountings to the U.S. bankruptcy court. RESSLER was entrusted with hundreds of thousands of dollars from at least 10 businesses involved with Chapter 11 reorganizations. Instead of holding the funds in trust, he used the monies for other purposes.
    ***
    The investigation revealed that RESSLER took $64,000 from a client purportedly to purchase property; $180,000 from a client to hold money in escrow; $45,000 from another client purportedly to buy back a home in foreclosure; $100,000 from a client to hold money in escrow; $97,000 from a client to hold money in escrow; $102,000 and $50,000 from two other clients purportedly to settle tax obligations with the IRS; at least $199,000 from a client to negotiate a settlement with the IRS; $141,000 from a client to settle debts with IRS and a lender; and $165,000 from a client purportedly to negotiate a loan modification with a lender. In each instance, RESSLER used the monies for other purposes.

    In the spring of 2016, the U.S. bankruptcy court identified criminal conduct by RESSLER in cases involving debtors that were his clients. In one case, the debtor entrusted RESSLER with $450,000, which were proceeds of a legal settlement, to be held by RESSLER’s firm for the benefit of the debtor and its creditors. In a second case, the debtor entrusted RESSLER’s firm with approximately $321,409. In both cases, most of the deposited funds were used by RESSLER for other purposes than on behalf of the relevant clients.

    In total, RESSLER misappropriated at least $3.4 million in client funds and used the money for personal and family living expenses, to cover the expenses of his practice, and to fund payments relating to other clients and other bankruptcy estates from which he had previously improperly taken monies.(1)

    RESSLER pleaded guilty to one count of wire fraud, two counts of embezzlement from a bankruptcy estate, and one count of bankruptcy fraud. Judge Covello scheduled sentencing for September 6, 2017, at which time RESSLER faces a maximum term of imprisonment of 35 years and a fine of up to approximately $6.8 million.

    RESSLER has been released on a $100,000 bond since his arrest on April 25, 2016. He resigned from the Connecticut bar in March 2016.
Source: Former Bankruptcy Attorney Admits to Stealing Millions from Clients.
----------------------
(1) In Connecticut, the Client Security Fund was created to help (at least partially) compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Connecticut-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.  ripoff reimbursement.

Two Years After Pleading Guilty & Getting Four Years Prison Time For Fleecing Dead Client's Estate (& Its Beneficiaries) Out Of About $2.3 Million, Another Aging Attorney Finally Gets Formally Disbarred By Pennsylvania Authorities (After He Voluntarily Surrendered His Law License)

In Bucks County, Pennsylvania, the Philadelphia Business Journal reports:
  • A Bucks County lawyer sentenced to prison almost two years ago for defrauding a client’s estate of more than $2.3 million was disbarred by consent.(1)

    Randolph Scott, 74, of Doylestown, Pa., had been practicing law since 1969 and was placed on retired status by the Pennsylvania Supreme Court in 2012. The court made its latest decision Friday [June 9], retroactive to Nov. 25, 2015 after Scott voluntarily surrendered his law license.

    Scott pleaded guilty on March 26, 2015 to one count each of mail fraud, tax evasion, attempting to interfere with administration of internal revenue laws and three counts of failure to file income tax returns. He was sentenced to four years in prison in U.S. District Court in Philadelphia on Sept. 12, 2015.

    Scott, who maintained his own law firm in Warrington, Pa., was indicted four years ago.

    According to the indictment, between December 2005 and October 2011, while representing the estate of John C. Bready, Scott diverted about $2.3 million of estate funds to his law office accounts. Because the estate was valued at more than $6 million at the time of Bready’s death in 2005, federal law required that a federal estate tax return be filed that would have resulted in $520,351 being paid to the Internal Revenue Service.

    The indictment alleges that Scott purposely failed to file the required form in order to keep enough money in the estate to pay its beneficiaries and to avoid detection of the theft.

    Prosecutors also said after the estate’s executor died in 2009, Scott failed to disclose the death so that the investment account manager would continue to send the executor’s checks to Scott’s law firm.

    Scott then allegedly forged the executor’s signature and deposited the checks into his law firm’s account. Prosecutors said Scott also had the successor executor sign a document renouncing the position so that he could continue to forge the signature of the deceased executor and divert money belonging to the estate.
Source: Bucks lawyer disbarred after sentenced to prison for $2.3M fraud scheme.
--------------------------
(1) The Pennsylvania Lawyers Fund for Client Security was created to help (at least partially) compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Pennsylvania-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.  ripoff reimbursement

Saturday, June 17, 2017

Criminal Interference With Right To Fair Housing: Cincinnati Feds, Local Cops Bag Ex-Tenant For Hate Crime After He Allegedly Destroyed Rented Apartment, Spray-Painting Racist Messages On Walls Of Interracial Couple/Landlord's 2-Unit Home After Getting The Boot

From the Office of the U.S. Attorney (Cincinnati, Ohio):
  • A federal grand jury has charged Samuel Whitt, 41, of Cincinnati, with criminal interference with the right to fair housing and attempted arson.

    Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office and Cincinnati Police Chief Eliot K. Isaac announced the indictment that was returned yesterday [May 23] and unsealed today [May 24].

    The indictment alleges that Whitt destroyed a rental home in Price Hill after being evicted from the property. Whitt and another individual had rented the lower unit of the house from an interracial couple.

    According to the indictment, over the Thanksgiving holiday, Whitt broke into the rental home and spray-painted the walls with messages including “die nigger,” “nigger,” and “white power,” as well as images of swastikas. Whitt also splattered paint on walls, stairs and appliances; made holes in the walls; broke banisters; tore carpet; poured quick-drying concrete into the bathroom drains and toilet; and stabbed a knife into the floor. Whitt also allegedly removed plumbing traps from the sinks and left the water running, causing extensive water damage to the ceilings and floors. Whitt turned on the gas stove in the upstairs kitchen, poured paint into the burners, and attempted to remove the smoke detector above the stove.

    Whitt is charged with one count of violating the Fair Housing Act through force by willfully intimidating the homeowners based on their race, color and familial status. This is a crime punishable by a potential maximum sentence of up to 10 years in prison. Whitt is also charged with attempted arson, which carries a mandatory minimum sentence of five years’ up to a possible 20 years’ imprisonment.

    Cincinnati Police officers arrested Whitt on December 9, 2016 on local breaking and entering and vandalism charges. Whitt was arrested this morning by FBI agents and Cincinnati Police officers on the federal charges.

    U.S. Attorney Glassman commended the investigation by the FBI and Cincinnati Police, as well as Assistant United States Attorneys Megan Gaffney and Kyle Healey who are prosecuting the case.

    An indictment merely contain allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Source: Grand Jury Indicts Cincinnati Man with Hate Crimes Charges (Defendant Allegedly Destroyed Price Hill Home after Being Evicted).

Lawsuit: Landlord Refuses To Allow Nonverbal, Developmentally Disabled Tenant In Need Of Full-Time Caretaker To Add Sister To Her Lease ($356/Month, 2-Bedroom Apt.); Serves Them Both With Eviction Papers Instead

In New York City, the New York Daily News reports:
  • A nonverbal, developmentally disabled woman faces eviction because the building's owner won't add her sister to her lease, a new lawsuit alleges.

    Blanca Martinez has lived in her East Harlem apartment, located on E. 107th St. and Lexington Ave., for 28 years. Martinez, 58, has cerebral palsy, and doctors have also diagnosed her with "moderate mental deficiency."

    "She is mostly nonverbal, and generally points or nods in response to questions," according to her Manhattan Federal Court lawsuit, filed on May 26th.

    Because of Martinez's condition, she needs a full-time caretaker to help her bathe, dress and use the restroom. Her parents took care of her for many years and held the lease on the apartment where she lives.

    But in July 2010, her father, Marcos, died and her mother, Maria, developed Alzheimer’s in 2014 — requiring her sister, Thelma, to care for both of them, court papers state.

    "Wherever I go, my sister comes with me," Thelma Martinez told the Daily News in an exclusive interview. "I never let her out of my sight."

    Following the Alzheimer’s diagnosis, Martinez, 57, asked the building's management, Manhattan North Management Co., to add her to the lease.

    Manhattan North said no because of a previous housing court judgment, the civil suit states.

    When their mother died in March 2016, the Martinez sisters stayed in the home and Thelma took care of Blanca.

    The building's management hit the siblings with an eviction notice in October, claiming Blanca let her younger sister live in the apartment without its consent.

    Thelma said she doesn't know where else they could go on their combined income — and find another two-bedroom for $356 per month. "It's hard for me because I don't work, (but) I wouldn't be able to go back to work — because I can't leave my sister alone," Thelma Martinez said.

    "I don't know much about shelters," she said. "It frightens me."

    Martinez, who is trying to get power of attorney over her sister and hopes the suit, filed by Aisha Elston-Wesley, a staff attorney with Manhattan Legal Services's Tenant Rights Coalition,(1) will allow them to stay.

    "This is the place where my sister feels calm, at peace, happy," Martinez said. "This is her home."

    Neither Manhattan North, which manages the property, nor L.A. Equities Corp., which owns the 108-unit building, responded to requests for comment.
Source: Harlem landlord threatens to evict disabled woman because she wants caretaker sister added on lease: lawsuit.
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(1) Manhattan Legal Services is a part of Legal Services NYC, a non-profit organization providing legal services to low-income residents throughout New York City. fair housing

Refusal To Make American Sign Language Interpreter Services Available To Deaf Persons Raises Fair Housing Issues For Dozens Of Nursing Homes & Assisted Living Facilities In Metro NYC-Area

From a recent announcement by the New York City-based Fair Housing Justice Center:
  • [T]he Fair Housing Justice Center (FHJC) announced that several defendants have settled a lawsuit that was filed in the Eastern District of New York (EDNY) in November 2015. The lawsuit, which stemmed from an eight-month systemic testing investigation by the FHJC, alleges that the operators of dozens of nursing home and assisted living facilities refused to make American Sign Language (ASL) interpreter services available to Deaf persons.

    Though denying the allegations, the following defendants have entered into separate agreements to resolve the housing discrimination lawsuit, Crown Nursing Home Associates, Inc., Cliffside Nursing Home, Inc., Forest View Nursing Home, Inc., Ultimate Care Assisted Living Management, LLC, EBC White Plains, LLC, Hungry Harbor Care, LLC, Sayville Senior Care, LLC, and Armonk Senior Care, LLC.

    The settlements were so-ordered by the Hon. Judge Raymond J. Dearie in December 2016 and April 2017. The settlement agreements contain similar injunctive relief that apply to thirteen assisted living facilities and four nursing homes. Some of the provisions include:
  • Agreement not to refuse to provide a reasonable accommodation to obtain auxiliary services including ASL interpreters when appropriate for effective communication;
  • Adoption of policies and procedures that will ensure Deaf people have access to ASL interpreters or other auxiliary services as needed to provide effective communication when appropriate;
  • Training for key facility staff on the legal rights of Deaf persons under fair housing and other civil rights laws as well as sensitivity issues and best practices for working with Deaf and Hard-of-Hearing persons; and
  • Agreement to maintain and make available specific records over several years for review by the FHJC to document efforts made to comply with the terms of the settlements.
  • In addition, the settlements also provide for a monetary recovery totaling $242,500, including damages and attorney’s fees. Claims against other defendants are still pending.

    FHJC Executive Director Fred Freiberg stated, “These settlements help to ensure that Deaf and Hard of Hearing populations have greater access to assisted living and nursing care in the New York City region.” The FHJC has partnered with the National Association of the Deaf (NAD) to provide training to key personnel in the facilities named in these settlements as well as in settlements that were reached last year in a similar lawsuit filed in the Southern District of New York.

    The FHJC is represented by Eric Baum and Andrew Rozynski of Eisenberg & Baum, LLP.

    The mission of the FHJC, a nonprofit civil rights organization, is to eliminate housing discrimination; promote policies and programs that foster open, accessible, and inclusive communities; and strengthen fair housing enforcement in the New York City region.
Source: Nursing Home and Assisted Living Facility Operators Settle Fair Housing Claims Brought by the FHJC (Agreements Ensure Deaf & Hard Of Hearing Populations Can Access Auxiliary Aids & Services).

City's Application Of Zoning Regulations To Prevent Use Of 12-Unit Building As "Supportive Housing" For Disabled Homeless Veterans To Cost It Nearly $2 Million To Settle Fair Housing Lawsuits

In Jacksonville, Florida, WOKV-Radio 104.5 FM reports:
  • A multi-year dispute over a Springfield housing project has now come to a close- and it’s costing the City of Jacksonville close to $2 million and some changes to zoning code.

    This started when the nonprofit Ability Housing announced plans for a 12-unit apartment building in Springfield, which they would rework to serve as “supportive housing” for disabled homeless veterans. Through a lengthy proves, the project was denied the needed approval from the City, which claimed that the housing project violated the Springfield Zoning Overlay which restricted “special uses” including residential treatment facilities and similar groupings. Ability Housing maintained they would fit within the zoning code, because no on-site services would be provided, so the project would, in essence, be a multiple-family dwelling- which was allowed.

    In 2015, Ability Housing filed a lawsuit against the City of Jacksonville for a violation of the Fair Housing Act and the Americans with Disabilities Act. Disability Rights Florida also sued, and was later consolidated in to Ability Housing’s claim. The US Department of Justice further brought forward a claim against the City in 2016.

    WOKV was the first to tell you earlier this year that federal court records showed agreements had been reached to settle this pending litigation. Three bills were filed with the City Council- two of which contain the settlements of the two lawsuits, and the third dealing with changing the Springfield Zoning Overlay- which is a condition of the settlements. The bills were snagged at the Committee level for some time over the zoning provisions, but all three bills have now passed the full City Council.

    Under the settlement, Jacksonville commits to awarding a $1.5 million grant through a competitive grant process, with the money going to permanent supportive housing for persons with disabilities. Additionally, Jacksonville is paying Ability Housing $400,000 and Disability Rights Florida $25,000 in fees and expenses, as well as a $25,000 fine to the Justice Department.

    On the administrative side, there are some zoning changes, to include a statement of intent that the code be interpreted under civil rights law and that persons with disabilities can request and receive reasonable accommodations. City representatives involved in zoning, permitting, housing, and similar areas will also be retrained under the Fair Housing Act and Americans With Disabilities Act, and the City will designate a Fair Housing Compliance Officer.

City To Cough Up $185K, Agrees To Revise Zoning Code In Settlement Of Fair Housing Lawsuit Accusing It Of Using Unlawful Restrictions To Keep Group Homes For Those In Recovery From Alcohol/Substance Abuse Out Of Residential Neighborhoods

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department today [May 31] announced a settlement with the City of Jackson, Mississippi to resolve allegations that the city violated the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA) by preventing people in recovery from alcohol and substance abuse from living in group homes in most residential areas.

    The settlement, which must still be approved by the U.S. District Court for the Southern District of Mississippi, resolves a lawsuit the department filed in September 2016.

    The United States alleged that the City of Jackson engaged in a pattern or practice of discrimination on the basis of disability by imposing unlawful zoning restrictions on group homes for persons in recovery. The city enforced those restrictions against a group home operated by Urban Rehab, Inc., resulting in an order requiring the home to close and the residents to relocate. Several other homes for persons in recovery were at risk of being closed by the city’s enforcement of its ordinance.

    As part of the settlement, the city agreed to revise its zoning code to permit persons in recovery to reside in all residential zones and to ease other restrictions on group homes for people with disabilities. The city has agreed to adopt a reasonable accommodation policy, train city employees on the requirements of the FHA and ADA, appoint a Fair Housing Compliance Officer, and report periodically to the Justice Department. The city will pay $100,000 to the owner of Urban Rehab, Inc., $35,000 to the department as a civil penalty, and $50,000 to a settlement fund that will compensate other victims.

Friday, June 16, 2017

North Dakota Woman Dodges Prison Time, Having Already Served 43 Days After Arrest & Offering Immediate Restitution For Allegedly Abusing POA To Fleece 90+ Year-Old, Dementia-Stricken Uncle Out Of Real Estate Deeds, Mineral Rights, Bank Account; Defendant To Repay $30K, Remainder Of Pilfered Assets Returned To Victim

In Watford City, North Dakota, the Williston Herald reports:
  • A woman who McKenzie County prosecutors say took all of her mentally impaired uncle’s assets in 2014 has been sentenced to serve two years of probation.

    Sandra Potter appeared in court in Watford City on Tuesday, where she entered an Alford plea to two counts of exploitation of a vulnerable adult. One of the charges was a Class A felony, and the other a misdemeanor.

    An Alford plea is a legal maneuver that allows a person to avoid admitting guilt while conceding that enough evidence exists for a conviction.

    Two additional charges of exploitation of a vulnerable adult, both Class B felonies, were dismissed as part of a plea agreement.

    Northwest District Judge Daniel El-Dweek sentenced Potter to one year in prison, with all but 43 days suspended. Potter was credited for the 43 days she spent in jail after her arrest, which means she will serve no prison time.

    Prosecutors say Potter convinced her uncle, Robert Gross, who is in his 90s, to sign over his bank account, mineral rights and deeds to property between 2013 and 2014.

    The sentence angered Gross’s niece, who accused Potter of planning to take advantage of the elderly man for years by isolating him from other family members and telling him that others were out to get his money.

    “I am happy that you are exposed for what you really are — a predator,” Lynette Wicorek said as she read a statement during the hearing. “Of all the crimes you have committed you are getting off extremely easy.”

    Potter, 70, also spoke, telling the judge that she had Gross’s best interests at heart and did not set out to take advantage of him.

    “I’ve known him since I was a child, and I’ve loved him since I was a child,” she said. “I did not take from him, if he was incompetent I did not know it.”

    Potter was ordered to pay $30,300 in restitution, an amount that McKenzie County Assistant State’s Attorney Todd Schwarz said was “unhappily” accepted by one of Gross’s co-guardians, and not accepted by another.

    Still, he said, he felt that the sum was the most he could legally demand, and pointed out that land, a will, mineral rights and other assets had been returned to Gross’s name.

    “This is a circumstance in which frankly everyone will walk out of here unhappy,” Schwarz said. “This is a family thing that has many many facets beyond the criminal issue… There are a lot of hard feelings, there’s a lot of hurt, there’s a lot of pain, there’s a lot of anger.”

    Deep-rooted emotions propelled the case into the criminal realm, defense attorney Tyrone Turner said, referring to it as a civil dispute.

    “It really has gone too far mainly because of this animosity,” he said.

    Potter was arrested in 2015 after an investigation into claims that she bilked Gross out of his entire estate was re-opened by the Bureau of Criminal Investigation.

    Authorities said Gross handed over assets worth nearly $200,000 including mineral rights, the deeds to his farm in Fairview and three other properties in Arizona. He also gave Potter power of attorney and left her everything in his will, court records say.

    Gross, who now suffers from dementia, has been diagnosed with the mental capability of a 12-year-old.

    In January, El-Dweek rejected a plea deal that included many of the same elements of the agreement presented this week.

    He expressed continuing dissatisfaction with the resolution before accepting the new terms, but said the fact that Potter was prepared with immediate restitution payment factored heavily into his decision to accept them.

    “The law and the criminal justice system is insufficient to heal the harm that’s been done in this case,” El-Dweek said.
Source: Woman gets probation for exploiting uncle (Judge accepts plea deal, but expresses dissatisfaction). jail prison buyout

Cops: Elderly Disabled Mom Got The Boot From Home After Daughter Stole All Her Money

In Lawrenceville, Georgia, the Gwinnett Daily Post reports:
  • A Lawrenceville woman [...] is accused of stealing all her mother’s money in April, leading to the elderly woman’s eviction.

    Melissa Gibson, 30, was supposed to buy her mother money orders when she took her bank card on April 25 at around 2:30 p.m. Her mother said she was going to use the money orders to pay rent and her cell phone bill.

    But Gibson didn’t return to her mother’s Duluth home for a while and the elderly woman got “a feeling that she needed to call” her bank, according to a police report.

    “Once she spoke with (the bank), they informed her (that) her account was (at) negative $11,” responding Officer D.J. Fields wrote in the report.

    Gibson’s mother told police she got a check that day for $1,025, just like she did every third Wednesday of the month. She knew her account would have had at least that much in it when Gibson took her card.

    It might have had a little more.

    This likely wasn’t an isolated incident, according to the police report. The property manager where the elderly woman lived said she only saw Gibson on the third Wednesday of every month — when her mother got paid.

    The elderly woman’s mother told police a similar story.

    “She told how Melissa takes (her mother’s) money, leaves for a while and comes back to do it again when (her mother) gets paid,” according to the police report.

    Officials took out warrants for Gibson’s arrest on May 31, charging her with exploitation of a disabled adult, financial transaction card fraud and financial transaction card theft. But they didn’t catch back up with her until the early hours of Thursday morning.

Woman Admits Abusing POA To Drain Her Since-Deceased, Dementia-Suffering Mom's Life Savings, Leading To Victim's Forced Move Out Of Private Assisted Living Home

In Dover, New Hampshire, WCSH-TV Channel 6 reports:
  • A woman from West Newfield, who pleaded guilty in a case of elder financial exploitation, was back in court [May 24] for a hearing to determine how much money she stole from her mother.

    Donna Dell made nearly 600 transactions with her mother's money for her own personal use. Her mother, Geraldine Orser, had Alzheimer's disease and was unaware her life savings were being drained.

    Dell twice tried to delay the court proceedings in her case by asking for a new attorney, then a continuance. After the judge denied both motions, Dell admitted the money she had stolen from her mother totaled more than $91,000.

    "The fact that Ms. Orser had Alzheimer's makes this particularly egregious in my mind," said Asst. County Prosecutor Emily Conant. "She was a perfect victim, she had no idea this was going on."

    While Dell was spending her mother's money going shopping and at Mohegan sun and Foxwood casinos, her mother was being cared for at Watson Fields, a private assisted living facility. When Dell stopped the payments her mother was forced to move out to a public facility, where she died at the age of 81.

    "She provided herself with enough money to live the way that she wanted to live for the remainder of her life," Conant said, "and that was taken from her by her daughter and she was forced to live in a place she no longer called home."

    For people who help seniors try to prevent financial abuse, details of the case come as no surprise.

    "Financial exploitation is something that is insidious and can happen over a long period of time with no one knowing," said Katlyn Blackstone of the Southern Maine Area Agency on Aging.

    In this case, Donna Dell was given power of attorney over her mother's finances. Blackstone says it's a good idea to have a second person involved when you hand over that authority, even to a loved one.

Thursday, June 15, 2017

Real Estate Agent Cops Guilty Plea To Using False Representations To Purloin Over $750K From Prospective Buyers Of Vacant Foreclosures That He Had No Authority To Peddle

From the Office of the U.S. Attorney (Scranton, Pennsylvania):
  • The United States Attorney’s Office for the Middle District of Pennsylvania announced that Ignacio Beato, age 46, of Hazleton, Pennsylvania, pled guilty today [May 26] before United States District Judge James M. Munley to conspiracy to engage in monetary transactions through a financial institution, with funds that were the proceeds of wire fraud. Beato is scheduled to be sentenced on August 31, 2017.

    According to United States Attorney Bruce D. Brandler, Beato, who was a licensed realtor, falsely represented to potential purchasers that he was authorized to sell vacant conventional and Federal Housing Administration insured mortgaged properties in Hazleton, when in fact, he did not have such authority. Between December 2013 and March 2015, Beato accepted $751,082 from individuals who believed they were purchasing properties. Beato then fraudulently converted that money to his own personal use.

Loan Modification Scammer Pleads Guilty To Using False Promises To Hijack Over $2.2 Million In Mortgage Payments From 500+ Unwitting Homeowners Seeking House Payment Help

From the Office of the U.S. Attorney (Santa Ana, California):
  • An Orange County man pleaded guilty this morning [May 26] to federal charges relating to his operation of a fraud scheme that took $2.2 million from distressed homeowners through false promises that he could help them avoid foreclosure by obtaining modifications to their mortgages.

    Kevin Frank Rasher, 45, who has been in custody since his arrest at his Coto de Caza residence one year ago, pleaded guilty to 12 counts of mail fraud.
    ***
    In a plea agreement filed in federal court, Rasher admitted that, between 2011 and March 2016, he falsely told distressed homeowners that he was an employee of HUD and/or an attorney, and that the homeowners had been approved for a reduced mortgage payment or interest rate. Rasher then instructed the homeowners to mail their mortgage payments to one of his businesses, claiming that he would forward the money to the homeowners’ mortgage lenders. Instead of forwarding the money to the mortgage lenders, Rasher deposited the money into his bank accounts and used it for his own personal expenses.

    Rasher admitted that he fraudulently obtained approximately $2.24 million from more than 500 victims.

Defendant In Northern California Foreclosure Sale Bid-Rigging Conspiracy Gets 12 Months Prison Time After Jury Conviction

From the U.S. Department of Justice (Washington, D.C.):
  • After being convicted at trial, a Lafayette, California, man was sentenced to 12 months and one day in prison for his role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

    Thomas Joyce was charged on Dec. 3, 2014, in an indictment returned by a federal grand jury in the Northern District of California. Joyce was convicted on Feb. 6, 2017, of conspiring to rig bids at real-estate foreclosure auctions in Contra Costa County. In addition to his term of imprisonment, Joyce was sentenced to serve three years of supervised release and ordered to complete 100 hours of community service.

    Between June 2008 and January 2011, Joyce and other bidders at the auctions conspired not to bid against one another for selected properties, instead designating a winning bidder to win the property at the auction. The members of the conspiracy then held second, private auctions, known as “rounds,” to award the properties to members of the conspiracy and determine payoffs for other conspirators who had agreed not to bid against each other at the public auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. When real estate properties are sold at public auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with the remaining proceeds, if any, paid to the homeowner.

    The sentence is a result of the division’s ongoing investigation into bid rigging at public real estate foreclosure auctions in California’s San Francisco, San Mateo, Alameda and Contra Costa counties. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.

    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.

Wednesday, June 14, 2017

Detroit-Area Man Points Finger Of Blame At Probate Racket For Attempt To Cause His Dead Mother's Former Home To Be Sold Out From Under Him, Then Snatch Nearly $70K In Surplus Sale Proceeds; Victim: “They Messed With The Wrong Family This Time!”

In southeast Michigan, WXYZ-TV Channel 7 reports:
  • The 7 Investigators have been exposing a disturbing pattern of some public officials and real estate brokers taking over estates after someone dies, leaving the rightful heirs with very little.

    Here’s what’s been happening: Real Estate Broker Ralph Roberts has teamed up with some Attorney General-appointed lawyers called Public Administrators. The Public Administrators and Roberts’ company, Probate Asset Recovery, bill the estates for thousands of dollars, plus Roberts gets real estate commissions when they sell the homes that are at stake in the estates after someone dies. The Public Administrators then take legal fees from the estate.

    “I find properties. I believe there’s a benefit, so I then tell a public administrator, here’s the benefit there,” Roberts told 7 Investigator Heather Catallo in November 2016.

    Cecil St. Pierre was one of those Attorney General-appointed Public Administrators. He’s also the Warren City Council President.

    They messed with the wrong family this time,” said Petar Georgievski. When Georgievski’s mother passed away last August, she used a Quit Claim Deed to give her Warren house to her son. Georgievski says he later found out that money was owed for a small loan on the home, and his lawyer tried to address it with the bank. But without warning, Georgievski says the house was sold at Sheriff’s Sale.

    “No notice to myself, no notice to this home, no notice to my current residence, no noticed to my brother, no notice to my attorney that this foreclosure was happening on April 7,” said Georgievski.

    Luckily, Georgievski says he had a friend in attendance at that Sheriff’s auction who witnessed Ralph Roberts attempting to purchase that house, but he lost the bidding war.

    “So my understanding is that he was furious that he didn't win the bid,” said Georgievski.

    That bidding war resulted in a surplus of $70,000 from the sheriff’s sale. That surplus should go to Petar Georgievski, as the original owner of the home. But Georgievski says St. Pierre and Roberts tried to take that cash.

    “That same exact day, Cecil opens a probate case. [He] doesn't even wait 24 hours-- that day, within that hour that that auction closed,” said Georgievski.

    In St. Pierre’s petition to take over the probate estate for Georgievski’s mother , he only asset he lists: that $70,000 surplus. And Ralph Robert’s company called Probate Asset Recovery, LLC paid the fees to open the estate.

    “That's ridiculous. none of that is their money,” Georgievski told Catallo. “It's sickening to think that there's people out there like that and he's got to be stopped. He's got to be stopped!”

    After our investigations aired, the Michigan Attorney General suspended Cecil St. Pierre as a Public Administrator, and Attorney General Bill Schuette later suspended the entire practice of opening estates where houses are in foreclosure.

    Ultimately, Georgievski got the surplus, paid off the debts, and sold the home; although he still had to go to court to get Cecil St. Pierre removed from his mother’s probate case. But St. Pierre did not show up.

    “He has failed to appear at this court this morning. I am going to set this matter for a show cause so that Mr. St. Pierre can explain why he failed to appear in court this morning,” said Macomb County Probate Judge Sandra Harrison-Suratt.

    That means on Monday June 12, Mr. St. Pierre will have to show the judge why he should not be held in contempt of court. The same day that the judge issued that Show Cause order, St. Pierre resigned as a Public Administrator because of a “barrage of false allegations.” He told the Attorney General that he was grateful he could help so many people over the years, but there are just too many distractions for him to continue to serve as Public Administrator.

HOA's Bookkeeping Screw-Up, $25 Late Fee, Attorney Fee 'Pile-Up' Leaves Homeowner Facing Foreclosure On $340K Townhome; Some Unit Owners & Ex-Property Managers Describe Condo President As Dictatorial, Vindictive, Prone To Bullying Leading To "Dysfunctional" Operations, "Combative Culture" On Perceived "Sinking Ship"

In West Palm Beach, Florida, the Palm Beach Post reports:
  • David Silva’s $340,000 condo faces foreclosure because of a $25 late fee.

    Silva, a resident at Ventura Greens at Emerald Dunes since 2007, was having his bank make automatic payments of the monthly maintenance fee for his three-bedroom, 2½-bath townhouse on the outskirts of West Palm Beach just west of Florida’s Turnpike. But the 70-unit development changed property managers in 2014 without advance notice and his payment was never rerouted to the condo association, he said.

    By the time he learned of the problem and sent a payment to the new property manager, the association had charged him a $25 late fee. While he disputed the fee, which he insisted was the association’s fault, the association tacked on late fees, attorney fees and interest charges — and in 2015, the association filed a foreclosure suit that threatens to take away his home.

    Neither association President Vic Bally, nor Cory Kravit, the association’s Boca Raton collections lawyer who filed the foreclosure suit, would comment for this story. The association vice president, Geoffrey Bourne, called Silva “unbelievably difficult” and said association rules must be enforced.

    Bourne defended Bally’s hard line on community rules. “If you drive into Ventura Greens, it’s beautiful,” Bourne said. “If you’re president of it, you keep the rules or the place falls apart.”

    “The whole thing has built up into just monstrous folly, absolute folly,” Bourne said. “I just wish David Silva had been a little more mature,” he said, adding that Silva should have paid his fine and ended the matter years ago.

    Silva, 52, a retired New York state trooper, countered that Bourne doesn’t know the facts, only what Bally tells him.

    “It’s not a matter of $25,” Silva said. “I spent more money fighting this than the $25. They should have said, ‘You know what? This is ridiculous. This is our fault.’ But they want to pursue it because they want to maliciously and intentionally take my home. There’s no other way of looking at it.”

    Silva and five other current and former Ventura Greens homeowners, and some former property management companies — there have been at least eight in the development’s 11 years of existence — say enforcement there is dictatorial. They lay the blame on Bally, describing him as a vindictive man who “rules with an iron fist,” tows resident cars from visitor parking spaces while board members park unpunished in the same spaces, files liens and slaps big fines on residents for alleged infractions they seldom have the will to fight.

    One of the development’s former property managers, Bristol Management, notified the Ventura Greens board in September 2013 that it was quitting, writing that “Protecting our employees from constant harassment by Vic Bally … is our priority.”

    “Vic (Bally), who hired Bristol and then quickly resigned when he did not get his way from the rest of the elected board, has caused an inordinate amount of contention, …” wrote Bristol’s Steve Inglis. “Mr. Bally is attempting to reassert his dictatorial control over Ventura Greens. This makes for a combative culture under which it is impossible to achieve the board’s goals. There is constant bullying from one person who demands to be the captain of what we perceive to be a sinking ship.”

    Just seven months later, when Bally had returned to the board as vice president, another management company, Banyan Property Management, quit, calling the board “dysfunctional.”

    Yet another former manager, who asked not to be identified, echoed those sentiments. “The guy is out of control,” the manager said. “There were constant allegations of biased treatment, unfair application of rules. That’s why we didn’t get along with him very well. I run things in a fair manner. … He runs the place with an iron fist.”

    Asked why the association has run through so many property managers, Bourne said it’s because the board has been trying to hire better companies.

    Silva hasn’t been the only target of the association’s rule enforcers.

    Nasaire Fontia said he got a $400 fine for allegedly “driving my car over a piece of grass,” an allegation he questioned and for which the association had no proof, he said.

    Others, he said, had to pay hundreds of dollars for towing from visitor spots, even though board and committee members frequently park in the same places. One resident got a $2,000 fine for failing to trim a bougainvillea prior to the association painting the buildings, Fontia said.

    Resident Jeff Lanaghan said he was facing a $1,000 fine in 2014 for failing to remove a satellite dish he had permission to install in 2008. The association had changed its rules. Lanaghan took the case to the state Division of Condominiums and won.

    ...