Thursday, March 26, 2015

Corrupt Real Estate Operator Cops To Conspiring w/ Two Others In Scheme To Hijack Title To At Least Ten Vacant, Fannie & Freddie-Owned Foreclosures, Then Flipping Them To Unwitting Buyers For $2.3M+; Feds Pinch One Escaping Co-Confederate At LAX As He Prepared To Flee To Norway

From the Office of the U.S. Attorney (San Diego, California):
  • Daniel Deaibes pleaded guilty [] to participating in a scheme to steal title to Southern California homes, and then to “sell” the properties to unsuspecting buyers – who later learned they had actually purchased nothing.

    According to his plea agreement, between September 2012 and November 2014, when Deaibes and two alleged co-conspirators were indicted and arrested, the trio fraudulently sold or attempted to sell at least 10 homes for more than $2.3 million.

    As Deaibes admitted during his guilty plea, he participated in the scheme at the direction of a co-conspirator, the owner of several real estate investment outfits. According to Deaibes’ admissions, the co-conspirator and others would record fraudulent grant deeds at county recorder’s offices, so that it would appear that the true owners of homes had deeded their properties to shell companies controlled by the co-conspirator.

    Once the fraudulent documents were recorded in the chain of title, the co-schemers would pose as the new owners and immediately try to sell the properties. Deaibes said his coconspirator used aliases and a host of sham businesses to pose as the owner of properties they listed for sale, and along with Deaibes, set up bank accounts for the sham companies so that fraud proceeds could be funneled out of the scheme. In this way, the conspirators would take all the proceeds of the sale, and the true owners of the properties would get nothing.

    As Deaibes admitted during his guilty plea, the schemers even took steps to thwart efforts by the true owners to regain title to the properties. In one instance, true owner Fannie Mae discovered that a fraudulent grant deed had been recorded on a property it owned in Rowland Heights, California. Shortly after discovering the fraudulent deed, Fannie Mae filed a lawsuit to recover control over the property and notify prospective buyers of the fraudulent deed.

    According to Deabes’ plea agreement, he and his co-schemers created a fake “Withdrawal of Lis Pendens” in an effort to proceed with the fraudulent sale. When Fannie Mae won a judgment in its favor and obtained a court finding that the deed was fraudulent, the co-schemers created a fake “Satisfaction of Judgment” and recorded that fraudulent document as well.

    Deaibes also admitted that he used the alias “John Moran” to pose as the seller’s representative in several of the fraudulent sales. He introduced himself as “Moran” and presented a fake driver’s license to two different notaries in 2014. Deaibes admitted that he signed fraudulent documents using this alias in an effort to sell or encumber properties that belonged to unsuspecting owners.

    Deaibes admitted that he and the co-schemers generated more than $1.5 million in profits from the scheme. In each case, the unwitting third-party buyer paid for a house believing that Alzoubi and his co-schemers had valid title. In fact, most of these properties were actually owned by Fannie Mae and Freddie Mac -- government sponsored enterprises with a mission to provide liquidity, stability, and affordability to the United States housing and mortgage markets. As part of their mission, Fannie Mae and Freddie Mac purchase residential mortgages in the secondary market, enabling lenders to replenish their funds to finance additional single family loans. Fannie Mae and Freddie Mac can become the property owners if they own the mortgage loan at the time a home is foreclosed.

    ***

    Deaibes and two other defendants, Mazen Alzoubi real estate investor Mohamed Daoud, were indicted in November 2014. Deaibes and Alzoubi, who were both arrested by FBI agents on November 19, 2014, were charged with mail fraud. Daoud was arrested at Los Angeles International Airport as he prepared to depart for his home country of Norway. He was charged in a related case with conspiracy to commit mail fraud and wire fraud.
Source: Defendant Pleads Guilty in Complex Real Estate Scam (Scheme used fake names and fraudulent deeds to steal title).

Sunday, March 22, 2015

Another Non-Pet "Therapy" Pooch Sinks Sharp Teeth Into Landlord, Savoring $90K Bite In Disability Discrimination Case For Alleged Violation Of NYC Human Rights Law

In Brooklyn, New York, the New York Post reports:
  • A little Shih Tzu has caused a $90,000 shih-storm.

    A Brooklyn family that faced eviction after violating their building’s no-dog policy can keep the pup — and their pad — after convincing an administrative judge it was a therapy dog to treat depression, city documents show.

    The judge recommended that the city’s Human Rights Commission wallop the building’s management firm, Prestige Management, with a $90,000 fine for trying to evict the family without seeking to confirm the legitimacy of their therapeutic claim. Doing so was a violation of the Human Rights law protecting the disabled, Judge Faye Lewis said.

    The victory for Carol T., her daughter Cinnamon and their Shih Tzu named Swag came even though the pup was initially sneaked into their apartment hidden inside a baby carriage.

    “Providers of housing accommodations are required to give good-faith consideration to a tenant’s request to keep a pet as a companion or emotional support animal, even if the tenant gets the pet first and asks permission later,” Lewis ruled last week.

    Reps for Prestige Management pointed out the lack of any documentation of Cinnamon’s prior treatment history and a five-year gap in her mom’s therapy sessions.

Saturday, March 21, 2015

R/E Brokerage Agrees To Fork Over Up To $17,500 To Settle Housing Discrimination Complaint; Fair Housing Testers Say Agent Allegedly Used Language In Online Ads Intended To Steer Away Families w/ Kids From Available Rentals Due To Landlord's Refusal To Comply w/ Massachusetts Law Requiring Abatement Of Lead-Based Paint Hazards

From the Office of the Massachusetts Attorney General:
  • Coldwell Banker Residential Brokerage has agreed to implement fair housing training and adopt new antidiscrimination policies to resolve allegations that it discriminated against families with children in housing rentals, Attorney General Maura Healey announced []. Coldwell Banker will also pay up to $17,500, including $5,000 to the Childhood Lead Poisoning Prevention Program.

    “Families with children are protected under Massachusetts law and have the right to live in housing where lead hazards have been abated,” AG Healey said. “Massachusetts realtors must understand that they cannot steer families with children away from available housing because of a landlord’s refusal to comply with the lead laws.”

    According to the assurance of discontinuance, filed today in Suffolk Superior Court, Matthew Gore, an agent of Coldwell Banker in Jamaica Plain, posted several rental advertisements on Craigslist.org that discouraged applications from families with children. Subsequent fair housing tests conducted by the Suffolk University Housing Discrimination Testing Program(1) found that Gore had engaged in a pattern of discrimination by indicating to prospective tenants with children that landlords had expressed unwillingness to delead their properties.

    Under the terms of the settlement, Gore and certain agents of Coldwell Banker will attend training on fair housing and lead laws. Coldwell Banker will also adopt a comprehensive antidiscrimination policy that will be posted and distributed to agents in all of its Massachusetts offices. To ensure compliance with the settlement, Coldwell Banker will submit to future fair housing tests conducted by the Suffolk University Housing Discrimination Testing Program.

    Massachusetts law prohibits discrimination against prospective tenants on the basis of familial status. It is illegal for a realtor to place a rental advertisement indicating a preference for tenants without children. Landlords are required to comply with Massachusetts and federal lead laws, and a realtor may not steer families away from available housing because renting to them may trigger a landlord’s obligation to delead.
Source: Coldwell Banker Resolves Claims of Housing Discrimination Against Families with Children (Real Estate Company to Pay Up to $17,500, Implement Fair Housing Training, and Adopt Comprehensive Antidiscrimination Policy).

(1) Suffolk University Law School's Housing Discrimination Testing Program is funded by a grant from the U.S. Department of Housing and Urban Development to work in partnership with the Boston Fair Housing Commission to eliminate housing discrimination in the Boston metro area through testing, enforcement and education.

Friday, March 20, 2015

Lawyer Faces Charges For Allegedly Pocketing $500K+ In Client Cash From Attorney Trust Account & Blowing The Loot Gambling; Victims Include Divorced Couple Screwed Out Of $147K Proceeds From Sale Of Former Marital Home, Dead Client's Estate, Heirs

In Cumberland County, Pennsylvania, The Patriot News reports:
  • Carlisle attorney Karl Rominger misappropriated more than $535,000 of his client's money for personal use and for gambling at casinos, Cumberland County investigators claim in criminal charges filed Friday.(1)

    Even as he filed the counts, Les Freehling, the county's chief detective, said the investigation into Rominger hasn't ended and that more charges likely will be lodged.

    "I apologize to everybody that I wronged," Rominger said when contacted concerning his arrest. "I look forward to accepting the consequences and putting this behind me, while making restitution."

    He said he hasn't gambled since last March. His lawyer, William C. Costopoulos, declined further comment on the case.

    The 25 theft and fund misappropriation charges already lodged in the case come more than a year after Rominger, whose clients have included Jerry Sandusky, came under investigation by the Cumberland County District Attorney's Office.

    The state Supreme Court accepted Rominger's voluntary surrender of his law license last spring. He is scheduled for a preliminary hearing on the criminal case in April before Carlisle District Judge Jessica Brewbaker.

    Meanwhile, the 41-year-old Rominger remains free on $250,000 unsecured bail.

    In arrest papers, Freehling said the alleged thefts came to light in late January 2014 as a result of financial irregularities in a divorce case where Rominger represented one of the splitting spouses. Rominger had failed to turn over $147,883 from the sale of the marital home, the detective said.

    Costopoulos then provided information, which Rominger later confirmed, that about $800,000 of client money was missing from a bank account Rominger was legally required to maintain to hold such funds, Freehling wrote.

    He said the misappropriations cited in the newly-filed criminal case involve money due to an auto accident victim from a settlement, the money owed to the divorced couple, and funds due to the survivors of a woman whose estate Rominger represented. That tally comes to $535,135, the detective wrote.

    "It should further be noted that this investigation will be considered ongoing, with additional charges to be forthcoming," Freehling wrote in boldfaced italic at the end of the affidavit of probable cause. The "disarray" of Rominger's financial records have made the accounting of other potential losses difficult, he said.

    District Attorney David Freed said investigators are still working with a forensic accountant as they pore over Rominger's financial records. "In these large white collar thefts it requires not only proving money is missing, but also tracing where it went," Freed said.

    He said investigators still don't have complete access to all of Rominger's files because for some of them claims of attorney-client privilege have been raised. "There is at least one other substantial situation we are looking at, and perhaps more," Freed said.

    In addition to the Sandusky child-sex case, where he was second chair at the defense table, Rominger has been involved in an array of high-profile local and statewide cases, including murders. He also provided legal advice on a local radio station.
Source: Sandusky lawyer Karl Rominger stole $535K, used clients' money to gamble at casinos, detective says.

(1) The Pennsylvania Lawyers Fund for Client Security was established to to reimburse victims of attorney dishonesty in the practice of law; to preserve the integrity and protect the good name of the legal profession; and to promote public confidence in the legal system and the administration of justice in Pennsylvania.

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.

Thursday, March 19, 2015

Another Title Insurance Agent Faces Charges For Allegedly Looting Client Funds Intended For Real Estate Transactions From Escrow Account; Title Underwriter Left Holding The Bag For Over $700K

In Fort Myers, Florida, the Florida Department of Financial Services announced:
  • The Florida Department of Financial Services [] announced the recent arrest of former title agent Lana Dargai of Estero for stealing more than $705,000 in client funds intended for real estate transactions. As a result of her fraudulent actions, the underwriter for the funds was forced to cover the losses.

    An investigation by the Florida Department of Financial Services’ Division of Agent and Agency Services and Division of Insurance Fraud found that Dargai, doing business as Global Title Company, stole the funds from clients in May 2010 and August 2010. She faces up to 15 years in prison for first degree grand theft and fraud charges. Her title agent license has also been revoked.

Wednesday, March 18, 2015

South Florida Man Pinched On Grand Theft, Organized Fraud Charges For Allegedly Using Forgeries, Fraudulent Documents To Hijack Title To Ten Homes Worth $2.5 Million; Suspect Bagged While Already In State Prison Serving 5-Year Stint For Earlier Conviction On Three Separate But Similar Heist Attempts

In Dade County, Florida, the Orlando Sentinel reports:
  • A two-time convicted car thief from South Florida got into the real estate business and began filing phony records with county officials then began stealing houses, according to the Florida Department of Law Enforcement.

    Louis Marvin Lewis, 47, formerly of Hollywood, used that scam to fraudulently obtain titles to 10 houses worth $2.5 million, the agency reported.

    One was a two-story, four-bedroom house near Bithlo that was in foreclosure and worth $207,000, FDLE said.

    Lewis managed to find buyers and sell four of the houses, including the one in Orange County, FDLE reported, and was working to sell the other six.

    Lewis was arrested Thursday at a state prison — Dade Correctional Institution in Florida City — where he is serving a five-year sentence for a conviction in Broward County last summer for three separate but similar crimes: filing false documents in an attempt to get title to houses.

    In this new case, he'll be prosecuted in St. Lucie County on charges of grand theft and organized fraud by the Office of Statewide Prosecution.

    Five of the houses he's accused of stealing were in that county; three were in Broward and one each in Orange and Martin counties.

    His attorney, Sean P. Sheppard, did not return a phone call.

    Lewis used forgeries and false documents to transfer title to companies he created, FDLE said.

    He forged sellers' signatures, as well as that of at least one North Carolina notary public.

    One of his companies, Think Tank Innovations Inc., acquired title to the house near Bithlo in 2012 and sold it to Meridian Trust LLC the following year for $70,000, a Meridian partner told FDLE. It has since been sold twice, now to a couple, according to property records. The house was in foreclosure when Lewis stole it, according to the FDLE. It had been owned by a brother and sister who stopped making payments to Wells Fargo Bank.

    Lewis forged the signatures of both on separate warranty deeds, FDLE reported.

    Neither brother nor sister realized what had happened and got no proceeds from the sale, FDLE reported.

    The 10-house case began when employees at the St. Lucie County Property Appraiser's Office spotted suspicious details on deeds that Lewis filed there, FDLE reported.

    Previously, he's served prison time for a series of crimes in Miami-Dade: stealing two vehicles, robbery, aggravated battery and possession of a firearm by a convicted felon.

Sunday, March 15, 2015

Florida's Now-Disbarred Ex-Foreclosure King Faces Suit For Allegedly Stiffing Process Serving Outfit Out Of Approx. $2M; Attorney Faced Earlier Bar Boot Over His Firm's Sleazy Conduct In Homeowner Foreclosure Cases While Process Server Faced Earlier State Probe In Connection w/ "Sewer Service" Allegations

In Miami, Florida, The Real Deal (South Florida) reports:
  • Florida’s “foreclosure king” David J. Stern has been hit with another lawsuit, this time over $2 million in payments the disbarred attorney allegedly owes to a Miami-based process serving company.

    The suit was filed by Gissen & Zawyer Process Service,(1) which partnered with Stern and his firm Law Offices of David J. Stern PA to serve foreclosure actions on residences, a publication reported. The company is seeking $1.9 million plus interest for services that allegedly went unpaid from 2009 to 2011. DJSP Enterprises, Stern’s publicly traded company that handled his practice’s back-office functions, was also named in the suit, according to a report from Law360.

    Stern was disbarred by the Florida Supreme Court in 2014 due to his firm’s misconduct while handling nearly 118,000 cases per day. The Plantation-based law office grew to 154 attorneys and 1,200 employees total during its peak operation
Source: Foreclosure king David J. Stern hit with $2M lawsuit (Process serving company suing disbarred attorney for overdue payment).

(1) Gissen & Zawyer Process Service was one of two process server outfits involved in a 2010 probe by the Florida Attorney General in connection with "sewer service" allegations. See AG investigates two companies delivering foreclosure court papers.

Go here for earlier posts on foreclosure stories involving Gissen & Zawyer.

Saturday, March 14, 2015

Bronx Landlord Agrees To Cough Up $200K, Change Leasing Practices To Settle Race Discrimination Suit; Complaint Alleged That Rental Agents Misrepresented Apartment Availability To Black Testers While Showing Apartments To White Testers On Same Day

In New York City, the Fair Housing Justice Center recently announced:
  • On March 11, 2015, U.S. Magistrate Debra Freeman signed an agreement resolving a housing discrimination lawsuit involving rental housing in the Woodlawn neighborhood of the Bronx.

    The complaint, filed in May 2014, by the Fair Housing Justice Center (FHJC) and three African American testers alleged that J.J.A. Holding Corporation engaged in racially discriminatory rental practices. The complaint resulted from an FHJC testing investigation conducted in 2013-14. The complaint alleged, among other things, that an agent for J.J.A. Holding was misrepresenting to African American testers that no apartments were available, while showing available apartments to white testers on the same day.

    As part of the injunctive relief in this case, the defendants agreed to adopt, post, and distribute a fair housing policy, require employees and agents to participate in fair housing training, ensure that available rental units are publicly advertised, and require uniform standards and procedures for showing available apartments and dispensing information about them.

    Under one provision of the settlement, the defendants agreed to notify tenants living in defendant buildings located in other parts of the Bronx that they may, if they choose, add their names to a waiting list in order to receive priority consideration for any apartments that come available at the rent-stabilized Woodlawn rental buildings located at 360 East 234th Street, 4300 Martha Avenue, and 4313 Kepler Avenue. The FHJC hopes that this provision will afford tenants currently residing in defendant-owned buildings that are located in predominantly minority areas with the opportunity to move to any of the defendant’s buildings located in the predominantly white Woodlawn neighborhood.

    The order provides that the defendants will maintain rental records and the FHJC will be able to monitor compliance with the agreement for a period of four years. Finally, the defendants agreed to pay the plaintiffs $200,000 for damages and attorney’s fees. The plaintiffs were represented by Diane L. Houk with the law firm of Emery Celli Brinckerhoff & Abady LLP.
For the news release, see Bronx Race Discrimination Case Settled (Landlord Agrees to Change Rental Practices and Pay $200,000).

Thursday, March 12, 2015

Divided Federal Appeals Court Affirms Trial Judge In "Green-Lighting" Class Action For Over 100,000 Plaintiffs In Notorious, Long Standing NYC "Sewer Service" Litigation Involving Zombie Debt Buyer & Its Law Firm & Process Server Confederates

In New York City, Reuters reports:
  • A divided federal appeals court in New York allowed more than 100,000 potential plaintiffs to pursue class action litigation accusing Leucadia National Corp and a law firm of fraudulently cutting corners to win default judgments in debt collection cases.

    Tuesday's 2-1 decision by the 2nd U.S. Circuit Court of Appeals came after the U.S. Consumer Financial Protection Bureau and Federal Trade Commission warned that a contrary ruling could undermine the Fair Debt Collection Practices Act, a 1977 law designed by Congress to police unscrupulous debt collectors.

    The lawsuit focused on "sewer service,"(1) a long-running practice where debt collectors fail to serve complaints on debtors, and later falsely certify to courts that service was made and that the cases have merit.

    Sewer service often ends in default judgments because debtors do not know to appear in court. It can lead to bank account seizures, wage garnishments and ruined credit scores.

    Four New York City residents, led by Monique Sykes of the Bronx, challenged lawsuits filed from 2006 to 2009 in New York City civil courts on behalf of Leucadia, which like rivals buys consumer debt at pennies on the dollar and tries to collect in full.

    Leucadia was represented in more than 99 percent of the collection lawsuits by the Mel S. Harris law firm, a debt collection specialist that the plaintiffs called a "default judgment mill." A process server, Samserv Inc, was also sued.

    In September 2012, Circuit Judge Denny Chin certified class actions arising from the Harris firm's lawsuits.

    Writing for the 2nd Circuit majority, Circuit Judge Rosemary Pooler agreed that the plaintiffs' claims had enough in common to allow a class action.

    Pointing to allegations that one Harris employee supposedly certified the merits of 20 lawsuits per hour, Pooler said it was "undisputed" that he did not review the underlying documents.

    Circuit Judge Dennis Jacobs dissented. He said there were too many individual issues to justify a "unwieldy" class action where "hungry lawyers" might earn a big payday.

    "This is class litigation for the sake of nothing but class litigation," Jacobs wrote.

    Leucadia also owns the Jefferies Group investment banking and securities firm. The company, its lawyer Miguel Estrada, the Harris firm's lawyer Paul Clement, and a Samserv lawyer did not immediately respond to requests for comment.

    The plaintiffs' lawyer Matthew Brinckerhoff welcomed the decision.

    "The problem of unscrupulous debt collectors is nationwide," he said in an interview. "This class action provides a framework to obtain relief for a large number of victims."

    In a brief supporting the debtors, the Consumer Financial Protection Bureau and FTC said the 1977 debt protection law was meant to curb abuses that could cause bankruptcies, marital instability, job losses and privacy invasions.

    They said "the act's purposes would be disserved" by accepting defense arguments that debtors could not recover because any false statements were directed at the civil court, not the debtors themselves.

    The AARP and the National Consumer Law Center also supported the plaintiffs.
Source: US court allows 'sewer service' debt collection class action.

For the appeals court ruling, see Sykesv. Mel S. Harris and Associates LLC, No. 13-2742 (2d Cir. Feb.10, 2015) (go here for plaintiff's appeal brief), affirming the trial judge's ruling in Sykes v. Mel Harris & Assocs., LLC, 285 F.R.D. 279 (S.D.N.Y. 2012).

Go here for the class action complaint (or at least one amended version thereof - filed December 28, 2009).

Go here for earlier posts on this case. and here for earlier posts on sewer service, generally.

For more on the "sewer service" problem in New York City, generally, see:
  • Tuerkheimer, Frank M., Service of Process in New York City: A Proposed End to Unregulated Criminality, 72 Columbia Law Review 847 (1972),

  • MFY Legal Services: Justice Disserved (A Preliminary Analysis of the Exceptionally Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York) (2008) (documents problem of improper service of process in debt collection lawsuits that have led to default judgments entered against unknowing victims).
(1) "Sewer service" is an epithet for the intentional failure to provide service of process on a named party in a lawsuit, in order to prevent the party from having a chance to respond. The phrase refers to the figure of speech of throwing the documents into a sewer. (Courtesy: Wikipedia).

Sunday, March 01, 2015

KKK Member Gets Ten Months For Perjury In Connection w/ Probe Into Racially Motivated Cross Burning In Alabama That Resulted In Conviction Of Two Others For Criminal Interference w/ Housing Rights Of Another

From the U.S. Department of Justice (Washington, D.C.):
  • [Last month], U.S. District Court Judge L. Scott Coogler sentenced Pamela Morris, former secretary of a chapter of the Ku Klux Klan (KKK) in Ozark, Alabama, to 10 months in prison and three years of supervised release for committing perjury during a grand jury’s investigation into a racially motivated cross-burning.

    Morris, 47, previously admitted during her plea hearing on June 12, 2014, that she lied to a federal grand jury investigating a cross-burning committed by Steven Joshua Dinkle, Morris’s son and the Exalted Cyclops (president) of the local KKK, and Thomas Smith, another KKK member. On May 8, 2009, Dinkle and Smith burned a six-foot tall cross at the entrance to an African American neighborhood in Ozark to threaten and intimidate residents.

    Several witnesses observed and were frightened by the cross, including a young man returning from choir practice as the defendants set the cross ablaze. In sworn testimony before the grand jury, Morris made several false statements, including denying that she had been the secretary of the Klan or involved with the KKK at all.

    In pleading guilty, Morris admitted that she had been an officer of the KKK and that her testimony denying any connection to the organization was false. She further acknowledged that she knew Dinkle had committed the cross-burning. In addition, Morris admitted that she testified falsely to prevent the grand jury from learning about other KKK members who had information relevant to the investigation.

    Dinkle is currently serving a 24-month sentence imposed on May 15, 2014, for his conviction on hate-crime and obstruction-of-justice charges related to the cross-burning.(1)  Smith, Dinkle’s co-conspirator, was sentenced to five years of probation on Aug. 19, 2014.
For more, see Former Ku Klux Klan Officer Sentenced to 10 Months for Committing Perjury During Cross-Burning Investigation.

Go here for links to other cross burning incidents from the U.S. Justice Department.

(1) Former Alabama KKK Leader Sentenced to Prison for Cross Burning and Obstruction of Justice:
  • Dinkle pleaded guilty to hate crime and obstruction of justice charges related to the cross burning. Specifically, he pleaded guilty to one count of conspiracy to violate housing rights, one count of criminal interference with the right to fair housing and two counts of obstruction of justice.

    ***

    Dinkle admitted that in burning the cross, he intended to scare and intimidate residents of the African-American community by threatening the use of force against them. He further admitted that he burned the cross because of the victims’ race and color and because they were occupying homes in that area.

Saturday, February 28, 2015

Ex-Klansman Gets Nine Months On Charges Involving Interference w/ Housing Rights Of Another; Admitted To Role In Cross Burning Incident In Front Of Interracial Family's Home

From the U.S.Department of Justice (Washington, D.C.):
  • [Earlier this month,] Timothy Flanagan, 33, was sentenced to nine months and ordered to pay a $5000 fine in federal court in Nashville, Tennessee, for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tennessee, the Department of Justice announced. Flanagan previously pleaded guilty to one count of conspiring with others to threaten, intimidate and interfere with an African-American man’s enjoyment of his housing rights, and one count of interfering with those housing rights.

    Flanagan—a former member of the Church of the National Knights, a Ku Klux Klan affiliate—admitted during the plea hearing that on the night of April 30, 2012, he and two other individuals devised a plan to burn a cross in the yard of an African American man in Minor Hill, Tennessee. Flanagan’s co-conspirator, Timothy Stafford, constructed a wooden cross in a workshop behind his house.

    Using Flanagan’s credit card, Stafford and co-conspirator Ivan “Rusty” London then purchased diesel-fuel with which to soak the cross. Flanagan and the other co-conspirators then drove the cross to the victim’s residence and, upon arriving at the residence, Flanagan and London exited the truck. The cross was placed in the driveway leading up to the house and was ignited. The co-conspirators burned the cross with the purpose of intimidating the African-American male who resided at that residence.

    Timothy Stafford, 41, of Minor Hill, Tennessee, and Ivan “Rusty” London IV, 21, of Lexington, Kentucky, previously pleaded guilty for their roles in the conspiracy, and will be sentenced on March 3, and March 26, respectively.
For more, see Former Klansman Sentenced for Cross Burning.

Go here for links to other cross burning incidents from the U.S. Justice Department.

Friday, February 27, 2015

Unit Owners In Failed Florida Condo Complexes Get Squeezed Out Of Their Homes As Developers Acquiring 80% Interest In Defunct Projects File For "Condominium Termination", Then Give Unit Owners The Boot

In Winter Springs, Florida, the Orlando Sentinel reports:
  • Shirley Lofgren, 85, is being forced to sell the sun-filled, waterfront condo she and her husband bought nine years ago for less than a third of the $217,000 they paid for it.

    The sale is allowed under a "condominium termination" law passed by the Legislature in 2007.

    "Nobody can believe this is legal — that they can just take your home and they'll give you what they want to give you," said the former Chicago resident, whose husband now lives in a nearby Alzheimer's treatment center.

    Rep. Chris Sprowls, R-Clearwater, said Lofgren and condo owners across Florida are being "divested" of their own homes.

    Under the law, developers must get an appraisal to determine the value of a home. But Sprowls said owners are left with little negotiating leverage.

    "In this situation, these people are not being permitted to stay in their homes, and that's just wrong," said Sprowls, who has proposed a reform bill that would pay relocation fees and above-market value for condo owners who live in their units.

    The law, passed in order to reinvigorate stalled condo projects, lets developers take title to condos when only 20 percent of the units are in the hands of individual owners.

    Throughout the state since the law was passed, developers and investors have used the condo-termination law to take ownership of more than 11,000 condominiums in 160 condo complexes, according to records from the state Department of Business and Professional Regulation. In Central Florida, Enders Place at Baldwin Park, Conway Forest, Esplanade Condos, Harbor Beach, Summerlin at Winter Park and Harbor Bay Retirement Village are among the condominium projects that have gone through a wholesale change of ownership.

    Many condo complexes had been apartments before converting to condominiums during the real-estate boom of a decade ago. Now they are reverting back to apartments as rental demand grows.

    Outside the sliding-glass doors of Lofgren's home, the green lawn is trimmed. The developer, Prestwick Partners LLC, has painted apartment buildings cheery shades of yellows and blues to entice renters as it urges Lofgren and other remaining condo owners to sell.

    Representing Prestwick Partners LLC, Miami lawyer Michael Cosculluela contacted Lofgren's family last week urging it to accept the offer to sell her unit to Prestwick. In an email, Cosculluela told them that the company is "under considerable pressure from the lender to simply file suit for ejectment [eviction]," and that if Lofgren seeks a higher price through the courts and then fails, "it will result in far less money for her unit after attorney's fees and costs."

    April Woods, whose company owns a unit in the same complex, said Prestwick is attempting to acquire ownership of the units by amending the condo documents. She said she has contested it in Seminole County courts.

    In Metro Orlando, the value of condos suffered during the economic downturn, dropping by more than half after the housing-market collapse. For the price Prestwick is offering, which is covered by a confidentiality agreement, Lofgren said she can find no similar condos anywhere, let alone near the Publix, SunTrust and restaurants she can now walk to. She said she has started looking at a mobile-home park off University Boulevard.

    The developer Prestwick Partners LLC has offered Lofgren the chance to rent her home from it at a reduced rate.

    At her condo, Lofgren walks onto her patio and fills a water bowl for a stray cat that has wandered up. She said she loves her place, which was bought mostly with cash, and would prefer to stay. She still has to pay off a $20,000 mortgage that paid for travertine tile, custom molding, granite counters and fireplace upgrades.

    The octogenarian said she isn't certain that she would she have enough money left from the sale of her condo to rent it back for the remainder of her days.

    Up until 2007, all the owners in a condominium project had to agree to terminate their ownership. In 2007, legislators changed the laws so that only 80 percent of owners had to agree to end their ownership.

    The law became the "Distressed Condominium Relief Act" in 2010, and it helped restore Florida's bottomed-out condominium market by encouraging lenders and developers to take over the condo projects with "fractured" ownership, said Fort Lauderdale attorney Mark Grant, who helped author that legislation.

    "That worked very well. Bulk buyers came in droves," Grant said.

    Condo complexes had been so empty that the few remaining holdout owners were saddled with association fees, maintenance costs and taxes, he added.

    Grant said some of the provisions in Sprowls' proposed bill are "poison pills" that could limit investors' appetite to reclaim challenged condo complexes. They would be more likely to encounter financial obstacles from trying to buy out remaining owners.

    Grant said he is working with Sen. George Moraitis, R-Fort Lauderdale, on a compromise measure. Among other things, developers would have more opportunities to terminate ownership if condo owners initially rejected the idea.

    Sprowls said that without laws in place to protect owner occupants of condos, buyers such as Lofgren are likely to shy from buying condos, and Florida's condominium market could soften.

Thursday, February 26, 2015

Antitrust Feds Squeeze Guilty Pleas From Pair Accused Of Sherman Act Violations Involving Bid Rigging At Northern Georgia Foreclosure Sale Auctions

From the U.S. Department of Justice (Washington, D.C.):
  • Two Georgia real estate investors pleaded guilty [] for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

    Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta. According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia. Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

    Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012. Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

    “These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division. “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”

    The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

    The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office. “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”

    A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.(1)

    The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.
For more, see Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions.

Go here for earlier posts on foreclosure sale bid rigging rackets.

(1) As has been pointed out here in earlier posts, suspects who have been pinched on bid-rigging charges and are considering copping guilty pleas should first consider whether their alleged unlawful bid rigging racket was really nothing more than an innocent, lawful joint bidding endeavor. See Illegal Bid Rigging Racket? Or Mere Innocent 'Joint Bidding' Arrangement?

Wednesday, February 25, 2015

Purported "Sovereign Citizen" Gets Three Years In Connection With Income Tax Prosecutions & Subsequent Filing Of Bogus Retaliatory Liens Against Two Federal Judges, Nebraska U.S. Attorney, Other Feds

From the U.S. Department of Justice (Washington, D.C.):
  • A La Vista, Nebraska, woman was sentenced [] in U.S. District Court for the District of Nebraska in Omaha to serve 36 months in prison and three years of supervised release for tax obstruction, filing a false claim and filing false retaliatory property liens, Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.

    Donna Marie Kozak, a former college instructor, was convicted by a jury on Aug. 1, 2014, on all nine counts charged in the superseding indictment. At trial, the evidence showed that in 1997, Kozak stopped filing income tax returns, and from 1997 through 2012, she obstructed the Internal Revenue Service (IRS) by hiding assets, applying for tax-exempt status for a sham entity, filing a false claim for a tax refund, sending harassing correspondence to IRS agents, and filing false liens against an IRS-Criminal Investigation special agent and others.

    In about 2009, Kozak joined the “Republic for the united States of America,” a sovereign citizen group, and was the group’s designated “governor of Nebraska.” In 2012 and 2013, Kozak and Georgia resident Randall Due conspired to file false liens in retaliation for the federal criminal tax prosecution and trial convictions of associates David and Bernita Kleensang. In furtherance of the conspiracy, Kozak and Due filed a false lien for $19 million on property located in Boyd County, Nebraska, that was owned by the federal U.S. District Court judge who presided over the Kleensang trial.

    After Kozak was indicted by a federal grand jury for the criminal tax charges and while on pre-trial release, she filed five more false liens on properties owned by another federal U.S. District Court judge, the U.S. Attorney for the District of Nebraska, two Assistant U.S. Attorneys and an IRS-Criminal Investigation special agent. Due was tried and convicted in the District of Nebraska on related charges on Sept. 4, 2014.
Source: Nebraska “Sovereign Citizen” Sentenced for Obstructing Internal Revenue Service and Filing False Property Liens Against Federal Officials.

Click links for earlier posts on attempts by so-called sovereign citizens to file phony deeds and bogus retaliatory liens to either hijack title to or otherwise cloud the title to real estate.

Tuesday, February 24, 2015

Homeowner: I Lost Part Of My NY/Connecticut Border-Straddling Home When Next-Door Neighbor Snatched Up .2 Acre Portion Out From Under Me At R/E Tax Foreclosure Sale For $275, Then Demanded $150K For Its Return; Mortgage Servicing Bankster Seeks Negotiated Buy-Out From Tax Deed Holder

In New Fairfield, Connecticut (or neighboring Brewster, New York, depending on what side of the house you're in), The Stamford Advocate reports:
  • Plans to build a shed on her half-acre property led Rosanne Di Giulio to a shocking discovery.

    She learned her neighbor owned 0.2 of an acre of her property, including most of her house and front yard.

    "I thought I was going to be sick to my stomach," Di Giulio said Thursday. "I cried hysterically. Then I got a hold of myself."

    Di Giulio's property straddles Putnam and Fairfield counties, with 0.2 of an acre lying in Brewster, N.Y. Putnam County conducted a delinquent tax auction in 2010 that led her neighbor, Althea Jacob, to purchase the 0.2-acre parcel for $275.

    On the heels of her 2013 discovery, Di Giulio, 52, petitioned the court to get her property back. After 17 months of legal wrangling, a solution may be near.

    The banks that held her mortgage -- the same financial institutions she thought had been paying the taxes -- are negotiating a deal to pay the neighbor for the Brewster parcel. In return, as a third-party recipient, Di Giulio would get her property back, according to her attorney, Michael Caruso, of Carmel, N.Y.

    Caruso said they will be in court next Friday. Di Giulio is asking to have the "clock turned back" on her Putnam County property taxes, he said.

    "This is all subject to a ruling on reasonableness," Caruso said. "Did the county act properly and did the county communicate properly with another county in another state about what was happening?"

    Michael B. Karlsson II, of Wm. G. Sayegh, P.C., is representing Jacob and said his client saw a sign posted on a tree on the Brewster parcel. The sign was a notification about the tax auction and Jacob acted to "protect her home," he said.

    "You don't know who is going to buy a parcel," Karlsson said. "She did what anyone would do and bought it. Who would have known that half of Ms. Di Giulio's house was included with the parcel?"

    Di Giulio claims Putnam County never notified her about the delinquent Brewster taxes.

    She refinanced her mortgage in 2004 and again in 2006, entering an agreement with the banks, American Homes Servicing and Chase Mortgage Services, to pay into an escrow account that was supposed to finance the Putnam County taxes, Di Giulio said.

    Di Giulio filed a petition in September 2013 to overturn the foreclosure, citing lack of notice and breach of contract by the lenders.

    New York Superior Court Judge Victor Grossman last March denied Di Giulio's petition to invalidate Jacob's deed and he ordered the Putnam County finance commissioner to provide proof that a foreclosure notice was sent to Di Giulio. The judge dismissed the liability claims against the lenders.

    Calls to Putnam County Deputy Attorney Andrew Negro were not returned.

    Tax records indicate vacant land for the 0.2-acre parcel at 46 Hudson Drive in Brewster, N.Y. The records for the 0.3-acre portion of the property at 62 Hudson Drive in New Fairfield indicate improved property and tax the house.

    Karlsson said this is not unusual when a property straddles two states. It is an agreement often reached between the states.

    "My client had no animosity toward Ms. Di Giulio," Karlsson said. "She's done nothing wrong."

    However, Di Giulio believes Jacob had hard feelings toward her prior to buying the Brewster parcel.

    Di Giulio pointed to an earlier disagreement when Jacob encroached on her property. Di Giulio said she reacted by installing a chain-link fence down the middle of Jacob's driveway to properly mark the property line.

    "She'd widened the gravel driveway over the years, encroaching on my property when the previous owners had it," Di Giulio said.

    New Fairfield property records show a $5,107.02 tax lien on Di Giulio's property filed last September by the state of Connecticut.

    Di Giulio said Thursday she had difficulty paying bills after she was laid off from a previous job. The state tax lien on the New Fairfield parcel will be paid with her 2014 income tax refund expected this spring, she said.

    Di Giulio is a former employee of The News-Times, a sister paper of The Advocate.
Source: Tax auction spurs turf war between neighbors (Tax auction pits neighbor against neighbor).

See also, New York Post: Woman loses half of her border-straddling home in tax snafu:
  • Rosanne Di Guilio’s kitchen, living room and porch now belong to her neighbor Alethea Jacob, 52, who snatched up .2 acres of the half-acre plot for $275 at a county auction after it went into foreclosure in 2010.

    “It’s sickening. She’s an opportunist. How do you sleep when you do something like this?” said Di Guilio, a 52-year-old electrical contractor who lives in Brewster, NY, or New Fairfield, Conn., depending on which side of the house she’s on.

    Rosanne Di Guilio’s survey blueprints show the the dividing line between Patternson, New York and New Fairfield, Connecticut.

    Di Guilio, who is fighting the foreclosure in court, said Jacob demanded $150,000 when she tried to buy back the house after she learned of the tax snafu in 2013.

    She insists Jacob schemed for access to her property to avoid fixing her own leaky septic tank. “I believe she bought it to be able to use [my] septic. It would be thousands of dollars to fix her own,” fumed Di Guilio, who has owned the home since 1997.

    ***

    Chase will take responsibility for the cost Di Guilio will have to pay to buy back the property, she said. Jacob and the bank are still negotiating a price.