Monday, August 31, 2015

Trump Buys Out $3.65M Defaulted Mortgage Owed By Failed Company Co-Founded By Son, Two Others, Then Begins Foreclosure In Apparent Squeeze Play To Eliminate Unwanted Partner, Wipe Out Slew Of Subordinate Lienholders

In North Charleston, South Carolina, The Post and Courier reports:
  • Donald Trump, who explained his four corporate bankruptcies at the Fox News GOP debate by saying he’d “taken advantage of the laws of this country,” could turn a profit from the financial wreckage of a North Charleston manufacturing company his eldest son co-founded.

    The unusual business deal is apparently the “very interesting” investment in the Charleston area that Trump, the Republican presidential front-runner, mentioned during an April campaign stop. Trump created a company in late 2014 to acquire a multimillion-dollar bank loan secured by the North Charleston company’s assets, and now he’s trying to collect the debt through foreclosure.

    Titan Atlas Manufacturing, a specialty construction products firm, operated for barely two years and shut down in 2012, leaving a trail of litigation, unpaid bills and unpaid taxes.

    Donald Trump Jr. and two partners in Titan had personally guaranteed payment of a $3.65 million loan from Deutsche Bank. With roughly the full amount coming due in November, the senior Trump stepped in and bought the note, through a new company called D B Pace Acquisition.

    The scenario allows Donald Trump to potentially turn a profit on the debt, which is worth more now than when he acquired it, while relieving his son of personal liability to Deutsche Bank. If the presidential candidate’s attempt to foreclose on the North Charleston business is successful, the company’s unpaid taxes and other debts could go uncollected.

    “It makes perfect sense,” said William Harrison Jr., a real estate professional who lectures at University of South Carolina’s Darla Moore School of Business. “Father steps in to essentially protect his son’s investment and strip away the unsecured investors.”

    Real estate law experts described the deal as smart and sophisticated, while some of the creditors who may never see the money Titan Atlas Manufacturing owes them said it was unfair, or dishonorable.


    “This is a legitimate business tactic that few people know is available,” Harrison said. “It’s fairly sophisticated.”

    Trump acquired the loan from a private wealth lending arm of Deutsche Bank, a lender involved in several high-profile Trump deals. The amount Trump paid for the loan was not disclosed, but banks typically sell debts at a discount, and that’s one way buyers can gain control of distressed property for ownership or investment.

    “What a bank does is factor in their costs and the possibility of recovery, sell the note at a discount,” said College of Charleston real estate law professor John F. Martin. “Anybody can buy a note, as long as the bank is willing to sell it.”

    “It’s not an ‘average Joe’ kind of deal,” Martin said. “This is a very smart play, and not everybody would have the resources to do this.”

    As owner of the debt, Trump could ignore loan guarantees made by his son and Titan co-founder Lee Eickmeyer, or pursue them after attempting to collect the full value of the debt through foreclosure on Titan’s assets. Trump’s foreclosure suit reserves the right “to further seek a judgment against each of the guarantors jointly and severally.”

    Eickmeyer, a Washington state farmer, originally owned a one-third share of Titan, as did Trump Jr., and Mount Pleasant resident Jeremy Blackburn. Eickmeyer also loaned Titan $950,000.

    Each of the three company founders personally guaranteed the $3.65 million loan from Deutsche Bank, allowing the bank to pursue them together or individually if it were not repaid. However, Blackburn declared personal bankruptcy in 2013, wiping away his debts and liabilities.

    Eickmeyer’s Charleston lawyer, Jason Smith, said in a legal filing that D B Pace Acquisition — the company controlled by Donald Trump — is engaging in unfair trade practices and purposefully caused Titan to default on the loan. Smith’s filing accuses Trump’s company of being “owned or controlled by individuals who owed and breached fiduciary duties and made misrepresentations” to Eickmeyer.

    Smith declined to elaborate on those claims or otherwise comment on the case.

    Mount Pleasant resident Franz Meier owns a company, XJM Co., that sold land and a building in North Charleston to Titan in 2010, for $1.5 million according to Charleston County records. In legal filings, Meier said he was never fully paid, and a $351,908 judgment won by XJM in 2012 is still outstanding against Titan, according to Trump’s foreclosure filing.

    “It’s very interesting, but it’s not very honorable,” Meier said of Trump’s move to purchase and foreclose on the loan. “That’s what he said in the debate, that he takes advantage of the laws like bankruptcy.”


    Philadelphia law firm Mendelsohn Drucker & Dunleavy is another company with a significant claim against Titan. The firm won a judgment of more than $400,000 in 2013, after not being fully paid for work on a patent lawsuit.


    Titan also left taxpayers on the hook, failing to pay nearly $115,000 in South Carolina sales tax, workers compensation tax and federal taxes. The state and federal governments have placed 24 liens on Titan’s property in the hope of someday collecting those taxes, but if Titan’s assets are sold through foreclosure and fetch less than Trump’s loan is worth, other creditors would get nothing.

    Meanwhile, the value of the loan owned by Donald Trump’s company is growing by $1,716 per day, because it’s in default and high-interest penalties are being assessed. So, the value of Trump’s investment grows ever larger as a result of the company co-founded by his son defaulting on the loan.

    “What the father is apparently banking on is wiping out the other creditors and recovering his investment,” Martin said.

    Creditors could have faced a similar scenario if Deutsche Bank had retained ownership of the loan, and in that scenario the younger Trump and Eickmeyer could also have faced personal liability.

Notorious Foreclosure Trash-Out Contractor 'Respectfully Disagrees' With Maryland AG's Illegal Lock-Out Allegations, But Agrees To Fork Over $167K For Homeowner Restitution To Make Him Go Away

In Baltimore, Maryland, The Baltimore Sun reports:
  • Ohio-based Safeguard Properties, which has faced claims across the country that it locked people out of their homes or took their belongings before the foreclosure process was complete, settled a complaint from the Maryland attorney general's office [].

    Under the settlement, Safeguard, the nation's largest mortgage field services company, agreed to a host of reforms to its practices and to pay $167,000 in restitution to Marylanders allegedly harmed.

    Safeguard has faced lawsuits in other states from homeowners and in June settled a lawsuit brought by the Illinois attorney general for $1 million.

    Safeguard is responsible for inspecting, maintaining and repairing homes in default or foreclosure. Maryland Attorney General Brian E. Frosh alleged that the company failed to supervise and train its vendors who work in Maryland.

    Safeguard "respectfully disagreed" with the allegations, spokeswoman Megan Greenwalt said in a statement, adding that the agreement did not include findings of liability or wrongdoing by Safeguard or its contractors.

    "The assurance agreement memorializes those procedures that were materially already in place at Safeguard prior to the inquiry and will allow us to continue to deploy industry best practices within the State of Maryland," Greenwalt said.

    The company agreed to changes including new background checks for employees, not removing nonhazardous personal property prior to foreclosure, and clearly posting notice when its agents have entered a property.

    The Consumer Protection Division of the attorney general's office will contact consumers who are eligible for restitution, and payments will be distributed through a claims process. For more information, residents can contact the division at 410-576-6569.
Source: Maryland attorney general settles with Safeguard Properties.

For the Maryland AG news release, see AG Frosh Secures Settlement with Company That Allegedly Locked Residents From Homes And Damaged Property (Nation's Largest Mortgage Services Company Agrees to Improve Practices).

Go here for earlier posts on Safeguard Properties.

Sunday, August 30, 2015

Crackpot Serving Five Years For Obtaining Property By False Pretenses When He Attempted To Hijack Title To Vacant $800K NC Home To Ask State Supremes To Nix Conviction

In Raleigh, North Carolina, The Associated Press reports:
  • North Carolina's crippled housing market was limping along when Shawn Pendergraft decided he'd take over a foreclosed Raleigh home in 2011. He backed up a moving van, unpacked his belongings and changed the locks.

    But he never paid for the $800,000 house, instead filing a bogus document with the Wake County register of deeds staking an ownership claim he had no legal right to make.

    Pendergraft, 43, was convicted of a felony for obtaining property by false pretenses and sentenced to more than five years in prison. On Wednesday, his lawyer will ask the state Supreme Court to throw out his conviction.

    Pendergraft's squatting scheme was part of a wave of hundreds of frivolous property claims at a time registrars were already dealing with a flood of foreclosures amid the Great Recession's housing market collapse. Flimflam artists were occupying foreclosed homes in Virginia, Georgia, New Jersey, California and elsewhere across the country.

    In North Carolina's most populous county, more than 200 of the bad filings were filed in 2011, said J. David Granberry, Mecklenburg County's register of deeds. Many were written in confusing pseudo-legal jargon, some making outlandish claims about being exempt from U.S. law.

    “Lump ‘em together in the wacky document category and we still get a lot of them,” Granberry said. “They don't really mean anything. They have a lot of jibber-jabber and some quotes from statutes.”

    But since this spring there's been a sharp drop in fake deeds transferring ownership, such as Pendergraft used, through the misguided application of the actual legal concept of adverse possession, Granberry said.

Title Hijacking Victim Sues NYC For Accepting, Recording Crappy Deed From Alleged Scammer

In New York City, the New York Post reports:
  • A woman whose Queens home was allegedly stolen by a scheming squatter says her nightmare never would have happened if bone-headed city bureaucrats hadn’t given him a fraudulent deed — and now she wants the city to pay up, court papers show.

    Jennifer Merin, 71, is seeking nearly $600,000 for the debacle, including the $400,000 in property that ex-con Darrell Beatty stole from her family home while living there, her Manhattan Supreme Court suit says.

    “[The city] was negligent in the way in which they allowed the deed to be registered,” a bitter Merin told The Post on Friday. “There was no indication that any of those signatures were related to my family or the property.”

    Beatty, a 50-year-old convicted armed robber, had simply presented the city Finance Department with a forged deed that claimed to transfer the Laurelton home to him, Merin says.

    A Law Department spokesperson said the “agency will review ­[Merin’s suit] upon receipt.”

Another NYC Landlord Probed For Alleged Attempts To Strong-Arm Tenants Out Of Below-Market Rate, Rent-Regulated Apartments; Renters Nix Buyout Offers Of Up To $50K To Relinquish Rights, Prefer To Stay Put

In New York City, the New York Daily News reports (via The Real Deal (NYC)):
  • State officials have launched an investigation into an East Village landlord accused of strong-arming tenants into giving up their rent-regulated apartments, the Daily News has learned.

    The state’s tenant protection unit served subpoenas on companies controlled by landlord Raphael Toledano as part of a probe into claims of abusive behavior by his agents, including threats of eviction and the shutting off of gas and other essential services, officials said.

    State officials were made aware of the accusations against Toledano by the Urban Justice Center, which is representing a group of tenants — mostly Mexican immigrants — at 444 E. 13th St. in a lawsuit against the Toledano-controlled Goldmark Property Management.

    “There has been repeated pressure, repeated intimidation to push them out,’ said Keriann Pauls, a staff attorney at the Urban Justice Center.

    Pauls said tenants secretly recorded Toledano’s agents making trumped-up claims of looming police and immigration raids, rent hikes and structural problems in an effort to force them to sign agreements surrendering their rights to their apartments.

    Jeffrey Goldman, an attorney for Toledano, denied his client was harassing tenants.

    “I have not seen him engage in any behavior or conduct that would give rise to an investigation let alone a finding of harassment,” said Goldman.

    The Cuomo administration said it has “zero tolerance” for anyone trying to harass tenants out of their apartments. “We created the tenant protection unit to crack down on these shameful practices and, with this most recent action, we’re sending a clear message that abhorrent behavior has no place in New York,” the governor’s office told The News.

    Toledano purchased the building in January. Rent-stabilized tenants in the building pay between $800 and $1,400 a month for small one- and two-bedroom units that could be worth up to $4,000 a month in the gentrifying neighborhood.

    Tenants claim Goldmark immediately offered $15,000 buyouts to get them to leave and later upped the offer to $50,000. Many tenants, however, refused to budge.

Saturday, August 29, 2015

Another Fair Housing/ADA Suit Against Municipal Government Gets Green Light; Involves Ohio City That Passed Ordinance Banning Horses From Homes, Then Criminally Prosecuted & Convicted Disabled Kid's Mom Who Claimed Miniature Nag Was A Service Animal

The following summary comes from a recent ruling from the 6th Circuit Court of Appeals involving litigation over allegations of violations of the Fair Housing Amendments Act and the Americans With Disabilities Act against the City of Blue Ash, Ohio for an ordinance it passed banning horses from residential property:
  1. This appeal is the latest chapter in an ongoing dispute between Ingrid Anderson and the City of Blue Ash, Ohio,(1) over whether Anderson can keep a miniature horse at her house as a service animal for her disabled minor daughter, C.A.
  2. C.A. suffers from a number of disabilities that affect her ability to walk and balance independently,(2) and the horse enables her to play and get exercise in her backyard without assistance from an adult.
  3. Since Anderson first acquired a horse in 2010, she has struggled with the City for permission to keep it at her house.
  4. In 2013, the City passed a municipal ordinance banning horses from residential property and then criminally prosecuted Anderson for violating it. Anderson's defense was that the Americans with Disabilities Act ("ADA"), 42 U.S.C. 12101, et seq., and the Fair Housing Amendments Act ("FHAA"), 42 U.S.C. § 3601, et seq., both entitle her to keep the horse at her house as a service animal for C.A.
  5. Rejecting those arguments, the Hamilton County Municipal Court found Anderson guilty.
  6. Anderson brought this action against the City in federal district court, again arguing that the ADA and FHAA entitle her to keep her horse as a service animal for C.A. She also claims that the City intentionally discriminated against her because of C.A.'s disabilities, in violation of both the ADA and the FHAA, and that the City's ordinance has had a disparate impact on C.A. and other disabled individuals, in violation of the FHAA.
  7. The district court granted summary judgment to the City, finding that Anderson's claims were barred by claim and issue preclusion stemming from her Municipal Court conviction.
  8. Because the fact-finding procedures available in a criminal proceeding in municipal court differ substantially from those available in a civil proceeding, Anderson's conviction has no preclusive effect on this lawsuit.
  9. Furthermore, while there is no evidence that the City's actions were motivated by discriminatory intent against C.A. or had a disparate impact on disabled individuals, there are significant factual disputes regarding whether the ADA or FHAA require the City to permit Anderson to keep her miniature horse at her house.
  10. We therefore reverse the district court's grant of summary judgment to the City on those claims.
For the entire court ruling, see Anderson v. City of Blue Ash, No. 14-3754 (6th Cir. August 14, 2015).

(1) Named as a co-plaintiff in the civil lawsuit against Blue Ash is Housing Opportunities Made Equal, Inc. ("HOME"), a non-profit, fair-housing-assistance organization in the Cincinnati area that began providing services to Anderson around the time that she began getting clipped with citations from the local cops for keeping a horse on her premises. HOME advises clients of their rights to fair housing and helps them file fair housing claims. HOME advised Anderson of her rights under the FHAA and the ADA and assisted her with filing a Fair Housing Act violation against the City of Blue Ash.

(2) According to the allegations:
  • C.A. [Anderson's disabled child] has a variety of disabilities, including autism, seizures, chronic lung disease, gastroesophageal reflux, feeding and vision problems, severe allergies, attention deficit hyperactivity disorder, developmental delay, autonomic dysfunction, and tachycardia, among others. Her disabilities make it difficult for C.A. to maintain her balance independently, particularly when she must change directions or navigate uneven surfaces. Consequently, C.A. cannot effectively use her backyard for recreation and exercise without assistance.

    While the traditional service animal is a dog, miniature horses are often used to provide assistance to individuals with disabilities. See generally 28 C.F.R. § 35 app. A (2011) (specifically discussing miniature horses as service animals). Miniature horses can be trained to provide many of the services commonly associated with service dogs, such as guiding individuals with impaired vision. Like dogs, miniature horses can also be housebroken, and individuals with disabilities have taken them on trains and commercial flights.

    Miniature horses may be preferable to service dogs for "large stature individuals" and "individuals with allergies, or for those whose religious beliefs preclude the use of dogs." Id.

    Additionally, because they are stronger than most dogs, miniature horses may be preferable for "providing stability and balance for individuals with disabilities that impair the ability to walk, and supplying leverage that enables a person with a mobility disability to get up after a fall." Id.

    Miniature horses also have significantly longer lifespans than dogs, and are able to provide service for more than twenty-five years while dogs can only provide service for approximately seven. This allows a disabled minor to have a single miniature horse throughout his or her childhood, without having to periodically replace aging service dogs. Therapy with miniature horses is sometimes referred to as "equine" or "hippotherapy." municipal code violations

Fair Housing Group Shakes $1.3M Out Of Developer, Its Architects & Engineers To Resolve Lawsuit Alleging Inadequate Wheelchair Access Throughout Two Multi-Family NYC-Area Residential Developments

In New York City, the Fair Housing Justice Center(1) reports:
  • On August 27, 2015, U.S. District Court Judge Kimba Wood signed an order resolving a disability discrimination lawsuit involving the improper design and construction of two multi-family residential developments, Powell Cove Estates in Queens County and Overlook Pointe in Dutchess County.

    In August, 2013, the Fair Housing Justice Center (FHJC) and Suzanne Vilchez, a paralyzed woman who uses a wheelchair, filed a fair housing lawsuit. The complaint alleged that a national housing developer, along with its architects and engineers, engaged in disability discrimination by failing to design and construct multifamily housing in New York in compliance with the accessibility requirements in fair housing laws.


    The lawsuit stemmed from a complaint FHJC received from Ms. Vilchez and the results of a FHJC testing investigation that identified multiple barriers to accessibility at Powell Cove Estates and Overlook Pointe. The investigation found inadequate wheelchair access throughout the residential developments including, but not limited to, thresholds for front and patio doors were too high, interior doors were too narrow, thermostats were mounted too high, electrical outlets were mounted too low, and ground floor unit driveways were too steep for someone using a wheelchair. Furthermore, because of the architectural barriers, Ms. Vilchez was unable to leave her home or traverse the residential development without the assistance of another person.

    The defendants will pay $900,000 to the plaintiffs for damages, attorney’s fees and the costs associated with retrofitting the apartment owned by Ms. Vilchez, as well as some common areas at Powell Cove. The settlement agreement also requires defendants to make retrofits to common areas at Overlook Pointe at their expense, and to adopt fair housing policies and attend fair housing training. In addition, defendants have agreed that the accessibility compliance at their future multifamily residential construction will be monitored by FHJC for four years.

    The FHJC will also receive $400,000 from defendants to establish an Accessibility Fund, which will be used to provide financial assistance to 1) income eligible homeowners and renters with physical disabilities seeking to make accessibility modifications to their existing housing and 2) unit owners with physical disabilities at Powell Cove who need accessibility modifications made to their units.

    The plaintiffs were represented by Diane L. Houk and Alison Frick of Emery Celli Brinckerhoff & Abady LLP and James E. Bahamonde of the Law Offices of James E. Bahamonde, P.C.
Source: Disability Case Settles for $1.3 Million (Agreement Creates Accessibility Fund).

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

According to its website, FHJC services are free of charge and available regardless of income to any individual or organization who believes has been discriminated against, or who has information that illegal discrimination is occurring. Due to limited resources, the FHJC is unable to assist everyone within its service area. If unable to provide the type of assistance that is needed, it will refer you to public fair housing enforcement agencies.

Friday, August 28, 2015

Closing Agent Misses $86K+ Water Lien, Leaving Recent Homebuyer Without H2O; Title Company Owner Agrees To Put Up Family Of Five In Local Motel Until Mess Is Cleared Up

In Forney, Texas, WFAA-TV Channel 8 reports:
  • A family of five is living without water inside their new home after the title company missed a huge lien against the property before they bought it. "One day without water, OK. But we're going on day four now," said Chris Smith, homeowner.

    Kaufman County Municipal Utility District No. 6 initially started new service for the Smiths, but realized a lien existed on the property, shut off their water this week and even took the meter out of the ground.

    "I said 'how much is the lien?' I'm thinking maybe a few hundred dollars, I'll pay it and try to figure it out," Smith said, recalling his visit to the water department.

    The amount is astounding. "$86,000? That can't be right," said Rossana Smith, Chris's wife. "It seems so impossible." The lien is for $86,438.62 – much of it is late fees and penalties over the last three years from the previous owners.

    The home was a foreclosure. The Smiths bought it at auction this summer. But the biggest question remains for the title company.

    Heartland Title in Southlake did the title work for the transaction. The lien was filed in June. The Smith's closed in August. How did Heartland Title miss that?

    Matthew Farris, the CEO of Heartland Title, would not interview with News 8 for this story. But he said he is still looking into what went wrong. Farris also called that $86,000 lien by the utility company excessive and said he asked the utility to resume service during his internal investigation.

    Farris also agreed to put the Smith family up in a local motel until everything gets worked out.

    Chris uses a five-gallon bucket and a neighbor's hose to get water across the street to his house. "We really try to use paper plates, cups and stuff so we don't have to do this," said Rossana as she scooped out water to wash dishes.

    They use the buckets to fill up toilets and empty Ozarka bottles are everywhere.

    The Smiths paid $1,324 for a title insurance policy to protect them against just such a scenario. But they're still awaiting it to pay off so they can settle in.

Pennsylvania AG: Real Estate Operator Used Bandit Signs, Craigslist To Place Deceptive Ads Claiming Outfit Would Buy Homes "As-Is", "For Cash", Other BS; One Foreclosure-Facing Homeowner Signed Over Title To Home That Was Subsequently Used In Peddling Rent-To-Own Deal While Leaving Defaulted Mortgage Unpaid

From the Office of the Pennsylvania Attorney General:
  • Attorney General Kathleen G. Kane [] announced her office has filed a legal action against the former principal of an Erie County business accused of misleading consumers through advertisements.

    The legal action against Christine J. Neubauer also names her former company, Sell House in 1 Hour, LLC, as a defendant. It was filed in the Erie County Court of Common Pleas by the Office of Attorney General's Bureau of Consumer Protection.

    The legal action alleges Neubauer’s advertising did not represent the actual services that were offered to consumers once they contacted her business. The ads, which appeared on her website,, and Craigslist, among other places, claimed the company would buy property “as is,” for “cash” and some signs said “stop foreclosure."(1) Other ads offered “quick sales” and “no realtor fees."

    An investigation showed Neubauer and her company did not deliver the services advertised but rather switched consumers to other services once they contacted her. Additionally, the business advertised specific services that required a license under the Mortgage Licensing Act. Neither Neubauer nor her business possessed such a license, the legal action states.

    In one case, the owner of a property who was threatened with foreclosure signed documents transferring the title to her property to Neubauer's company. Rather than provide advertised services, such as a “fast sale” and payment in “cash," Neubauer directed her efforts to finding a tenant for the property who would enter into a rent-to-own transaction.

    These alleged business practices, rather than stopping foreclosure on the original owner’s existing mortgages, exposed the owner to continuing liability on the past due mortgages.

    The legal action accuses Neubauer of violating the Mortgage Licensing Act and the Consumer Protection Law. It seeks to permanently prohibit Neubauer from doing future business with Pennsylvanians, including owning or operating any business that claims to provide real estate or mortgage brokering services.

    The legal action also seeks full restitution for all consumers who have suffered losses as a result of the alleged business practices of Neubauer and her company. Additionally, the legal action seeks a $1,000 civil penalty for each violation of the Consumer Protection Law and $3,000 for each violation involving a person 60 years old or older.
Source: Attorney General's office files legal action against Erie County woman and former business.

(1) Go here for other posts on the use of "bandit signs" to peddle real estate scams, and go here for examples of bandit signs peddling real estate, related services, and other crap.

Thursday, August 27, 2015

Title Hijacking Suspect Accused Of Using Forged Deed To Steal 94-Year Old Woman's Temporarily Unoccupied Home While Victim Was Laid Up In Nursing Home Rejects Plea Deal, Fires Attorney, Demands Trial

In Orange County, Florida, WFTV-TV Channel 9 reports:
  • An elderly woman is still waiting to get her Orange County home back months after 9 Investigates uncovered how it was stolen from her.

    Vivian Smith, 94, said someone moved into her home on Yucatan Drive and changed the deed.

    Suspect Vannesa Russell was supposed to take a plea deal on Thursday, but Channel 9's Shannon Butler was there when Russell suddenly changed her mind and fired her attorney.

    Russell was supposed to take a plea deal that would have given her a year in jail and then probation. She declined, saying she would rather go to trial.

    "And you're not interested in that?" asked the judge. "Not at all, your honor," said Russell.

    "OK, do you believe you own the property?" asked the judge. "I really don't want to go into the matter right now," said Russell.

    Russell was accused of taking Smith's house while she sat in a nursing home. Russell lived there for months until a Channel 9 investigation resulted in authorities removing her from the home and arresting her.

    Documents obtained by Channel 9 show a forged deed to the home, a stolen notary stamp and only cash transactions made on the property for the taxes.

    Smith told Channel 9 she never gave anyone her house, and wanted it back.

    After almost a year, Smith still doesn't own her own home legally. Russell has not signed over the paperwork and the case could be headed to civil court.

    Russell faces 30 years in prison if convicted. The trial is expected to start Aug. 31. The public defender is now on stand-by. The civil case is still months away from being resolved.(1)
Source: Woman accused of stealing elderly woman's home backs out of plea deal.

(1) Presumably, the parallel civil case was initiated to void the allegedly forged deed, and to quiet title (to formally reflect the restoration of ownership in the public records) to the home in the victim's name.

SC Man Wanted On Suspicion Of Breaking Into Vacant Foreclosed Homes, Then Pocketing Cash By Renting Out Premises To Unwitting Tenants Turns Himself In; Faces Burglary, False Pretenses Charges

In Goose Creek, South Carolina, WCSC-TV Channel 5 reports:
  • A man accused of renting homes in foreclosure in Goose Creek turned himself in [...] while insisting he did not commit a crime.

    Goose Creek Police say 39-year-old Earl Johnson Jr. allegedly has been renting out foreclosed homes in the city and has been collecting rent from tenants. He faces charges of third degree burglary and obtaining a signature or property under false pretenses, according to Goose Creek Police Capt. John Grainger.

    Johnson was escorted to the Berkeley County Detention Center by Elder James Johnson, who is not related to the suspect, and Charles Tyler of the National Action Network.

    "They obviously put me on the news like I was a murderer, that's why," Johnson said. "I didn't commit any crime, I reserve my right and that's what I do."

    Goose Creek police say they received multiple calls from potential victims of Johnson's alleged scheme of fraudulently renting homes over which he has no legal rights to unsuspecting tenants. Some victims have been referred to surrounding jurisdictions, Grainger said in a statement.

    Goose Creek Police say Johnson also goes by the name of Elder Noble.

    Investigators are asking anyone who has rented from Johnson to contact them.
Source: Fraud suspect turns himself in, claims innocence.

In a related story, see Real estate agents offer tips to avoid rental fraud:
  • A man accused of illegally renting Lowcountry homes he didn't own is facing new charges. Now real estate agents warn that it's a situation that happens far too often.

    For $800 a month, Nancy Bowman and her sister, Tina Capreole, believed they were renting to eventually own a beautiful home in Goose Creek. It’s a home police say Earl Johnson broke into and illegally rented out for cash.


    Bankruptcy Attorney Kevin Campbell is the rightful owner of the property. He’s trying to sell the home before it goes into foreclosure. "Not only did they rent the property to this lady who's gonna lose the property but they gave her an option to purchase," Campbell said.

Wednesday, August 26, 2015

Real Estate Operator Gets Five Years For Role In Short Sale Flipping Scam That Targeted Financially Distressed, Underwater Homeowners, Screwing Unwitting Banksters In The Process

From the Office of the U.S. Attorney (Alexandria, Virginia):
  • Charise Stone, 46, of Ashburn, Virginia, was sentenced [] to 60 months in prison, followed by three years of supervised release for her role in a real estate short sale scheme that included tax and mortgage fraud, and passing fraudulent financial documents. Stone was also ordered to forfeit $721,552, and ordered to pay restitution of $2,441,174 to the victim financial institutions and the IRS.

    Stone was found guilty by a federal jury on May 27, 2015. According to court documents, from 2007 to 2010 Stone targeted distressed homeowners who owed more on their mortgage loan than the market value of the home with false promises of financial recovery.
    Stone acquired distressed homeowners’ properties in her own name or under entities she controlled, made false representations to mortgage lenders in order to induce approval of the short sales, and then re-sold the properties – often the same day or the next – to new buyers at a price above the short sale amount, in violation of agreements made with mortgage lenders

    Jose Marinay owned a settlement company that closed every short sale transaction for Stone. Marinay pleaded guilty to wire-fraud conspiracy on May 27, 2014. At his and Stone’s direction, fraudulent HUD-1 settlement statements were prepared to facilitate the transactions, and Stone destroyed some of the incriminating documents after closings. Financial institutions suffered losses of at least $2.2 million from the scheme, while Stone profited more than $720,000 from these transactions but failed to file individual income tax returns. She also sent fictitious bonds to the IRS in an attempt to pay off her tax liability, and she sent fake international promissory notes to creditors purporting to satisfy her credit card debt as well as her mortgage loan.

Mortgage Broker Gets 36 Months For Role In Duping Secured Lenders Into Releasing Their Liens On Real Estate Through Fraudulently Arranged Short Sales

From the Office of the U.S. Attorney (Newark, New Jersey):
  • A Middlesex County, New Jersey, man was sentenced [] to 36 months in prison for his role in a large-scale mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.

    Delio Coutinho, 73, of Woodbridge, New Jersey previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with conspiracy to commit wire fraud. Judge Wigenton imposed the sentence [] in Newark federal court.

    According to documents filed in this case and statements made in court:

    From March 2008 through June 2012, Coutinho, a loan officer at a northern New Jersey mortgage brokerage company, and others conspired to release liens on encumbered properties via fraudulently arranged short sale transactions. This allowed Coutinho and other conspirators to profit from new fraudulent mortgage loans obtained on the properties from other mortgage lenders.

    To complete the short sale transactions, Coutinho and others submitted materially false closing and other documents to mortgage lenders. They submitted fraudulent mortgage loan applications to lenders to obtain new loans on multiple properties in Elizabeth, New Jersey. In all, Coutinho and others obtained approximately $2 million in illegal mortgage proceeds.

    In addition to the prison terms, Judge Wigenton ordered Coutinho to serve three years of supervised release and pay more than $1.3 million in restitution.

Tuesday, August 25, 2015

Alexandria Feds Score Two Pleas Against Pair Who Ran Bogus Loan Modification Racket, Screwing 400+ Homeowners, Many Of Whom Lost Homes To Foreclosure

From the Office of the U.S. Attorney (Alexandria, Virginia):
  • Kristen Michelle Ayala, aka “Amber Lynch,” aka “Olivia Benet,” aka “Grace Williams,” 30, and Joshua Manuel Sanchez, aka “Nelson Cruz,” aka “Chris Ward,” “Daniel Mora,” 34, both formerly of Las Vegas, have pleaded guilty to conspiracy to commit wire fraud for their role in a $3.8 million dollar mortgage modification scam.

    In a statement of facts filed with the plea agreement, from in and around October 2012 through September 2014, Ayala, Sanchez, and others, executed a scheme to defraud vulnerable victim homeowners who were at risk of foreclosure. Ayala and Sanchez developed fraudulent documents, telephone scripts, and aliases in an effort to defraud the victim homeowners. Their scheme lulled victim homeowners into believing that the defendants were part of the legitimate U.S. Government “Home Affordable Modification Program” (“HAMP”).

    During the execution of the ruse, the Ayala and Sanchez used documents containing fraudulent government seals, made statements regarding modification of the victims’ mortgages through the HAMP program, and the victims’ mortgage payments to their own accounts rather than to the victims’ lenders.

    To date, the scheme defrauded more than 400 victims, caused losses of over $3.8 million dollars, and resulted in many victims losing their homes, despite the victims’ efforts to modify their mortgages and continue to make payments on their loans.

Connecticut Man Pleads Guilty To Falsely Advertising Loan Modification Services; Used Shell Company As A Front Operation That Referred Homeowner Leads To Scammers

From the Office of the U.S. Attorney (New Haven, Connecticut):
  • [M]ATTHEW GOLDREICH, 46, of East Lyme, pleaded guilty [] in New Haven federal court to a false advertising offense stemming from his production and dissemination of false advertisements for mortgage modification services.

    According to court documents and statements made in court, GOLDREICH used his New London-based media agency, National Media Connection, LLC, to produce and air television, radio, and Internet advertisements for the National Mortgage Help Center, LLC (“NMHC”), a shell company incorporated by GOLDREICH.

    The advertisements falsely claimed that NMHC could help struggling homeowners obtain home mortgage loan modifications. For example, one advertisement that aired in 2010 stated: “Attention homeowners. We know it’s tough out there. And while America’s homeowners are facing more challenges than ever before, the National Mortgage Help Center is ready to help.” The same advertisement also stated: “We may be able to lower your rate to as low as 1% and cut your mortgage payment in half. Our trained specialists know all the new regulations to get you quick relief. We help thousands of homeowners every day.”

    The advertisements included toll-free telephone numbers for mortgage borrowers to call for help modifying their mortgages. In truth, NMHC did not provide mortgage modification services for any homeowners, and operated only as a front.

    Homeowners who called the toll-free telephone numbers advertised by NMHC were routed to National Media Connection’s clients. The clients, in turn, paid National Media Connection for these “leads.” Under the pretense of helping homeowners modify their mortgages, certain National Media Connection clients then charged the homeowners fees and provided no services whatsoever in return.

    GOLDREICH pleaded guilty to one count of false advertising, an offense that carries a maximum term of imprisonment of one year and a fine of up to $100,000. .

Two Suspected Philly-Based Loan Mod Rackets Get Off Easy, Agree To Cough Up $35K To Buy Their Way Out Of Civil Lawsuit With Pennsylvania AG; Outfits Accused Of Falsely Holding Themselves Out As Attorneys Peddling Forensic Loan Audits, Other Services To Homeowners That Failed To Produce Favorable Results

From the Office of the Pennsylvania Attorney General:
  • Attorney General Kathleen G. Kane [] announced a legal action, in the form of an assurance of voluntary compliance (AVC), against two Philadelphia-based mortgage loan modification companies that will provide $30,000 in restitution for consumers.

    The AVC was reached with Liberty Financial Consultants, Inc. and Doc Prep Solutions, LLC as the result of an investigation by the Office of Attorney General's Bureau of Consumer Protection.

    The AVC alleges the companies made a number of misleading representations throughout their websites. For example, Liberty Financial Consultants advertised for a "forensic loan audit," among other services.

    The company allegedly stated the audit could expose mistakes and unscrupulous lending practices that may assist the borrower in negotiating efforts to obtain mortgage payment relief or loan modifications. Liberty Financial Consultants claimed to use the audit results to apply for mortgage relief with consumers' lenders, the AVC states.

    According to the AVC, the Bureau of Consumer Protection received several complaints in which consumers reported they paid up front fees for these types of services but received little, if any, assistance from the companies. The Bureau's investigation was the result of complaints filed by consumers against the companies, some of which claimed the companies failed to stop foreclosures as promised and others claimed that the companies did not provide refunds as promised.

    Additionally, the AVC alleges the companies acted or held themselves out to the public as being entitled to practice law when in fact their representatives were not licensed attorneys. Doc Prep Solutions also posted a video to its website that the Bureau of Consumer Protection believes falsely depicted a Commonwealth representative conducting an interview with Doc Prep's principals.

    According to the AVC, the companies have agreed to comply with the Consumer Protection Law, the Telemarketer Registration Act and the Unauthorized Practice of Law statute. In addition to the $30,000 in consumer restitution, the companies must pay $3,000 in civil penalties and $2,000 in other costs.

Monday, August 24, 2015

NYC Authorities Get Aggressive w/ Rogue Landlords, Pinch Operator Of So-Called "Three-Quarter Homes" Accused Of Illegally Booting Tenants

In Brooklyn, New York, The New York Times reports (via The Real Deal (NYC)):
  • Prosecutors have filed criminal charges against a notorious landlord of cramped flophouses in Brooklyn, taking what housing advocates described as unusually forceful action against an operator of so-called three-quarter homes.

    The landlord, Yury Baumblit, was the subject of an investigation in The New York Times on three-quarter housing — seen as somewhere between regulated halfway houses and actual homes — in May.(1)

    The two counts filed against Mr. Baumblit last week that allege he illegally evicted tenants are misdemeanors, punishable by as much as a year in jail. But housing advocates could not recall the last time, if ever, prosecutors have moved ahead with charges against an operator of three-quarter houses accused of unlawfully evicting tenants.

    We’re hopeful this is the beginning of a sea change in prosecuting illegal evictions against three-quarter-house landlords,” said Tanya Kessler, a lawyer with MFY Legal Services(2) who represents three-quarter-house tenants in Housing Court.

    After learning of the charges on Thursday morning, Mr. Baumblit collapsed outside the courtroom, grabbing his chest.

    Three-quarter houses, also known as “sober” or “transitional” homes, have multiplied in the past decade, catering to poor people in treatment for substance and alcohol abuse, homeless people desperate to avoid shelters, and mentally ill people with nowhere else to go. For a bunk bed, operators usually charge residents either the monthly $215 housing allowance for people on public assistance, or about $300 a month for people on disability.

    Tenants are crammed into bedrooms, as many as eight to a room. The ramshackle homes are often infested with bedbugs and rodents. Bunk beds block exits. Because they are not regulated, they are often centers of the very kind of drug activity they purport to avoid.

    After The Times published its investigation on May 30, the city formed an emergency task force, inspected 64 of the homes and moved out more than 200 tenants in overcrowded homes, mainly to hotels. The task force is now working on helping those tenants find permanent housing.
For more, see Landlord of ‘Three-Quarter’ Homes Faces Criminal Charges.

(1) Some describe three-quarter houses as unregulated homes that rent shared rooms to homeless people and others, such as those leaving hospital mental health and substance abuse units, and others reentering the community after serving time in jails or prisons, and recruit them by falsely promising support services and assistance with finding permanent housing.

(2)  MFY Legal Services is a non-profit law firm providing free legal assistance to low-income residents of New York City on a wide range of civil legal issues, prioritizing services to vulnerable and under-served populations.

Two Cabbies Use Obscure NYC Housing Law To Take Unwitting Landlord To The Cleaners & Score Lifetime Leases Currently Paying $226/Month In $3,200/Month Neighborhood

In New York City, the New York Post reports (via The Real Deal (NYC)):
  • Two cabbies used an obscure law to score sweet apartments near the High Line for as little as $226 a month — even though similar-sized digs in the neighborhood go for around $3,200.

    Hamidou Guira spent just one night in his new home in the Chelsea Highline ­Hotel before he was able to game the system with the help of fellow hack Joe ­Stevens and score himself a lifelong lease, according to sources.

    Guira did it by submitting a written request to become a permanent tenant under a little-known section of the Rent Stabilization and New York City ­Administrative codes.

    Because the hotel at 184 11th Ave. is a former SRO, “an occupant who requests a lease of six months or more . . . shall be a permanent tenant,” the law says.

    The owner must accept the lease at the regulated rate — $226 — and it can be renewed indefinitely.

    In Guira’s case, the hotel manager tried “forcefully preventing” him from entering his room on July 31 after learning of his plan.

    But the cabby went to Manhattan Housing Court and, acting as his own lawyer, won the case when Justice Sabrina Kraus ruled he was “unlawfully evicted” from his dirt-cheap digs.

    “It’s one of those things that is just so strange,” said Joe Restuccia, executive director of the nonprofit Clinton Housing Development Corp. Restuccia’s group is partnering with the owners of the hotel to turn the building into 15 units of ­affordable housing with apartments starting at $800 a month.

    “That part of the law means that at any hotel in the city, [you] can claim a need for relief like at The Waldorf and the Marriott Marquis. It applies to everybody, but it’s fallen out of use,” Restuccia said.

    Restuccia said Guira ­received guidance from Stevens, another longtime resident, who learned to navigate the back roads of the housing law when he successfully fought the building’s former owner over harassment.

    Restuccia said Stevens likely drafted court papers for Guira, who needed a French interpreter to try his case in Housing Court.

    When reached by The Post, however, Stevens denied he gave any legal advice to Guira, who declined to comment. Stevens did say he steers people to ­low-cost housing.

Sunday, August 23, 2015

6th Circuit To Cleveland-Area Housing Authority: Landlord's Additional Monthly Fees Charged To Section 8 Tenants Who Holdover After Lease Expiration Constitute Add'l Rent Under Voucher Program, So Cough Up The Additional Subsidy!

From an Opinion Summary from Justia US Law:
  • The Section 8 low-income housing assistance voucher program, 42 U.S.C. 1437f(o), is administered by public housing agencies such as Cuyahoga Metropolitan Housing Authority (CMHA).

    Program regulations define “rent to [the] owner” as “[t]he total monthly rent payable to the owner under the lease for the unit. Rent to owner covers payment for any housing services, maintenance and utilities that the owner is required to provide and pay for.”

    Velez and Hatcher, voucher recipients, entered into one-year leases with K&D. The leases provide: “If Resident(s) shall holdover after the end of the term of this Rental Agreement, said holdover shall be deemed a tenancy of month to month and applicable month to month fees shall apply.”

    Velez entered into a month-to-month tenancy after her one-year term expired; Hatcher entered into month-to-month tenancies, and, later, a nine-month agreement. K&D charged fees of $35.00 to $100.00 per month. CMHA did not treat these short-term rental fees as rent under the voucher program. Velez and Hatcher were required to pay the fees and filed suit under 42 U.S.C. 1983.(1)

    The [lower] court granted CMHA summary judgment, holding that the fees were not rent.

    The Sixth Circuit reversed. Recasting the charge as a short-term fee, rather than rent, does not change that it is consideration paid by the tenant for use of the rental unit.
Source: Opinion Summary - Velez v. Cuyahoga Metro. Hous. Auth.

For the court ruling, see Velez v. Cuyahoga Metropolitan Housing Authority, No. 14-3978 (6th Cir. July 30, 2015)

(1) Representing the Section 8 tenants was the Legal Aid Society of Cleveland, a non-profit law firm providing free legal services to low-income people in Ohio in the counties of Cuyahoga, Lake, Lorain, Ashtabula, and Geauga.

Indy Housing Authority Abruptly Halts Rent Subsidies For Section 8 Tenants In Apartment Complex Put Into Receivership & Facing Foreclosure; Approx. 30 Residents Face The Boot

In Indianapolis, Indiana, WXIN-TV Channel 59 reports:
  • Thursday afternoon some residents at the Wyckford Commons apartments along 10th Street on the city’s west side said they were frustrated and wanted answers.

    Upset residents pay their rent with Section 8 vouchers and recently got notice that they’d have to move soon because the complex is now in the foreclosure process.

    The Indianapolis Housing Agency said the issue affects roughly 30 occupants at the complex.

    “We’ve been there for about two or three weeks maybe,” said Brian Faulkner. Faulkner says he, his wife, and four kids found everything but the welcome mat in the few weeks they’ve called Wyckford Commons home. “They’re telling us it’s nothing they can do, it’s out of their hands,” he said.

    His wife got a notice from the Indianapolis Housing Agency in the mail yesterday, saying the family’s got to move. The complex is in the process of foreclosure, and IHA said Section 8 vouchers can’t be used in that case to pay the rent.

    “It’s not common and it happens occasionally,” said Bud Myers, executive director of the Indianapolis Housing Agency. “It’s common sense if a place is in foreclosure, you don’t have an owner.”(1)

    Myers said it’s possible some voucher recipients could stay, but it’s too soon to tell. He said anyone managing the property must be in compliance with Section 8 program requirements.

    Jennifer Kinsey, an executive with Louisville-based PMR companies, said they were appointed receiver a few weeks back ahead of the foreclosure process. Kinsey said via e-mail:

    PMR would gladly allow these residents to stay at Wyckford Commons, however we have been told by the section 8 office they cannot continue at Wyckford Commons due to the receivership order. PMR manages other properties that do participate in the section 8 program, and we’ve told section 8 we are happy to work with each of these tenants to provide transfers to our other managed properties, at no cost to the tenant.

    “We went through hell and high water just to get where we are now,” said Faulkner, “I need some answers. Faulkner says his kids just got back in school, and he doesn’t want to move. But it looks like he may not have a choice.

    Myers said for the people affected, IHA first advises that they do not panic. They can bring foreclosure notices to the IHA and receive a new voucher for a place that does participate in the program.
Source: Frustrated residents say they’re being forced out of apartments.

(1) This is a patently ridiculous statement; maybe he was misquoted, but if he actually said this, he should be shamed and excoriated. If a place is in foreclosure, it still has the same owner, who continues owning the property until the foreclosure process is complete and the premises is sold at a foreclosure sale.

HUD IG: 300,000+ Needy Apartment-Seeking Families Wallow On Public Housing Waiting Lists While 25,000+ Current Tenants Making More Than Max Income Get To Stay On Government Dole

The Washington Post reports:
  • A family of four in New York City makes $497,911 a year but pays $1,574 a month to live in public housing in a three-bedroom apartment subsidized by taxpayers.

    In Los Angeles, a family of five that’s lived in public housing since 1974 made $204,784 last year but paid $1,091 for a four-bedroom apartment. And a tenant with assets worth $1.6 million — including stocks, real estate and retirement accounts — last year paid $300 for a one-bedroom apartment in public housing in Oxford, Neb.

    In a new report,(1) the watchdog for the Department of Housing and Urban Development describes these and more than 25,000 other “over income” families earning more than the maximum income for government-subsidized housing as an “egregious” abuse of the system. While the family in New York with an annual income of almost $500,000 raked in $790,500 in rental income on its real estate holdings in recent years, more than 300,000 families that really qualify for public housing lingered on waiting lists, auditors found.

    But HUD has no plans to kick these families out, because its policy doesn’t require over-income tenants to leave, the agency’s inspector general found. In fact, it encourages them to stay in public housing.

    “Since regulations and policies did not require housing authorities to evict over income families or require them to find housing in the unassisted market, [they] continued to reside in public housing units,” investigators for Inspector General David Montoya wrote.

    The review, conducted in 2014 and 2015 at the request of Rep. Phil Roe (R-Tenn.), found that 45 percent of the 25,226 public housing tenants with incomes higher than the threshold to get into the system were making $10,000 to $70,000 a year more. About 1,200 of them had exceeded the income limits for nine years or more, and almost 18,000 for more than a year.


    [U]nder HUD regulations, public housing tenants can stay as long as they want, no matter how much money they make, as long as they are good tenants. The agency is only required to consider a tenant’s income when an individual or family applies for housing, not once they’re in the system.

    This is different from the housing choice voucher program that used to be called Section 8, which gives families subsidies for rentals in private apartment buildings. That program has an annual income limit; tenants who go above it get less money.

Saturday, August 22, 2015

Rough Time Continues For Banksters In Attempts To Prove Standing In Florida Appeal Courts

From a client alert from the Florida law firm Burr & Forman:
  • The UCC was supposed to make enforcing negotiable instruments a simpler, more streamlined process. It has proven anything but in Florida. Continuing a trend that now stretches back years, mortgage lenders have had an increasingly tough time proving standing to the satisfaction of Florida’s District Courts of Appeal in the last few months.

Florida Homeowner's Homestead Exemption Claim Covering Multiple Homes To Score Real Estate Tax Breaks OK, As Long As Properties Are Contiguous, Not Rented Out

In Hollywood, Florida, the South Florida Sun Sentinel reports:
  • Retiree Karen Caputo owns four homes in Hollywood and claims one tax exemption on all four of them.

    A few folks, apparently, have a problem with that. Caputo, a Hollywood activist, has been reported to the Broward County Property Appraiser's Office twice as a possible tax cheat.

    But what Caputo is doing is perfectly legal, says Property Appraiser Lori Parrish. "We recommend lots of people do this," Parrish said. "They just combine them for tax purposes."

    Caputo combined her neighboring properties under one title in 2008 after reading a story in the Sun Sentinel saying the practice was legal.

    It was legal then and it's legal now, says the Florida Department of Revenue, which oversees property appraisers throughout the state.

    "You can combine contiguous parcels into a single homestead," said Renee Watters, a spokeswoman for the Department of Revenue. "It does not matter if the contiguous parcels have structures on them. We do not know how common the practice is, but it does occur."

    The Palm Beach County Property Appraiser's Office says the practice is valid as long as the properties are contiguous and not being rented out.

    "In Palm Beach County, we would also give them a homestead exemption on the combined property," said Chief Deputy Property Appraiser Dorothy Jacks. "If she started to rent them out, the home would be considered a commercial property and she would lose the exemption."

    Caputo says she is not renting out the homes and lives in three of them. The fourth she uses as a guest house for relatives when they come to visit. "I've never rented them and I never intend to rent them," she said of her homes on Garfield and Arthur streets in eastern Hollywood.

    Caputo pays nearly $50,000 in property taxes each year, she said.

    "I pay more property taxes than most of the city commissioners," she said."I bought the houses to garden, for the land. My four houses are small [two-bedroom, one-bath] worth the price of one nice house. I would much rather have four quaint small houses on three-quarters of an acre than one expensive one on one-quarter acre. It wasn't my intention when I started, but it turned out to be a good thing."

    Parrish established a fraud division 10 years ago to go after homeowners who were claiming homestead exemptions on properties that were not their primary residences.

Friday, August 21, 2015

Philly Homeowner Faces Theft By Deception, Fraud Charges For Allegedly Pocketing Ten$ Of Thousand$ From At Least 15 Would-Be Tenants, Then Never Turning Over The Keys; Used Zillow, Craigslist To Offer His House For Rent; Some Victims Say They've Been Left Broke, Homeless

In Philadelphia, Pennsylvania, WPVI-TV Channel 6 reports:
  • Philadelphia police say they have a man in custody in connection with a scam that deceived thousands of dollars out of would-be renters.

    44-year-old Harry Moore surrendered at Northwest Detectives Wednesday morning. He's accused of running a scam and stealing tens of thousands of dollars from would-be renters - posting his property online.

    With their savings gone, many of his victims and their families have been left with nowhere to go.

    Liz Lozano is just one of the 15 victims who've now come forward accusing Moore of stealing thousands of dollars from her in a rental scam involving a house he owns in the 8000 block of North Fayette Street in West Oak Lane.

    Police say Moore posted the property on Craigslist and Zillow, took the potential renters' deposit money, but came up with all kinds of excuses and never turned over the keys.

    Lozano gave him $3,150 - money the disabled Air Force veteran and mother of three small children doesn't ever expect to see again.

    She and her family are homeless, relying on friends and family for a place to stay. She says, "He's taking the roof off my children's head before we even got there."

    Police had been trying to track Moore down for days, as more and more victims came forward.

    This morning he surrendered to detectives, allegedly giving a full confession and blaming his deceit on gambling debts.

    Philadelphia Police Captain Malachi Jones tells us, "He took a lot of money. In fact, of the 15 complainants that we have so far, because we don't know if there are others out there that haven't come forward. In 10 of the 15 incidents that we have recorded he took $3,100."

    Lozano says, "He's lucky that nobody else caught him first. There's a lot of us and we are angry. There's children involved. It's money lost. These people are homeless. We have nowhere to go."

    Moore faces charges including fraud, theft and theft by deception. He is being held for now at Northwest Detectives.

    There are already plans in the works to try to put a lien on his property in an effort to recoup some money for all those victims.

Construction Company Boss Gets 15+ Years For Role In $58 Million Racket Using Straw Buyers & Palm Grease To Fraudulently Wrestle Control Over HOAs To Steer Lucrative Contracts His Way

From the U.S. Department of Justice (Washington, D.C.):
  • A former construction boss from Las Vegas was sentenced [on August 6, 2015] to 188 months in prison for his role in a $58,141,275 million scheme to fraudulently gain control of condominium homeowners’ associations (HOAs) in the Las Vegas area to secure construction and other contracts for himself and others. Forty-two individuals have been convicted of crimes in connection with the scheme.


    Leon Benzer, 48, pleaded guilty on Jan. 23, 2015, to one count of conspiracy to commit mail and wire fraud, 14 counts of wire fraud, two counts of mail fraud and two counts of tax evasion. In addition to imposing the prison term, U.S. District Judge James C. Mahan of the District of Nevada ordered Benzer to pay restitution in the amount of $13,294,100.

    Leon Benzer recruited and paid off puppets to serve on homeowners’ boards so that they would steer lucrative contracts to his company and cronies,” said Assistant Attorney General Caldwell. “Far from enjoying their corrupt proceeds, however, Benzer and his co-conspirators will serve years behind prison bars.”


    In connection with his guilty plea, Benzer admitted that, from approximately August 2003 through February 2009, he and an attorney developed a scheme to control the boards of directors of HOAs in the Las Vegas area. According to plea documents, Benzer and his co-conspirators recruited straw buyers to purchase condominiums and secure positions on HOAs’ boards of directors. Benzer admitted that he paid the board members to take actions favorable to his interests, including hiring his co-conspirator’s law firm to handle construction-related litigation and awarding remedial construction contracts to Benzer’s company, Silver Lining Construction.