Thursday, August 17, 2017

Texas Title Agent Cops Plea To Siphoning Over $1.6 Million From Escrow Account For Closings In Real Estate Deals; Authorities Bagged Her In Illinois After She Abandoned Business & Skipped Town With Loot

In Southlake, Texas, KXAS-TV Channel 5 reports:
  • A former wealthy Southlake title agent pleaded guilty Monday [August 14] to stealing more than $1.6 million before she abandoned her business and skipped town last year.

    Nancy Jackson Spinks, also known as Nancy Carroll, was arrested in February 2016 driving a Mercedes Benz near Chicago, where she was renting a 6,000-square-foot estate.

    Carroll’s business, Millennium Title Company, was seized by the Texas Department of Insurance.

    Regulators said $3 million was missing from the company’s escrow accounts and $2 million from separate investor accounts.

    A sentencing date has not been set but her crime carries a range of punishment from five to 99 years in prison. Carroll also is eligible for parole, prosecutors said.

    Carroll pleaded guilty to misappropriation of fiduciary property and theft of $1.6 million.

    Carroll's attorney, Lance Evans, declined to say if she will seek probation.

    "Ms. Carroll admits her responsibility for the conduct alleged in the indictment and is prepared to receive her punishment at the appropriate time," he said.
Source: Former Southlake Title Agent Pleads Guilty to Stealing $1.6 Million (Nancy Jackson Spinks could get 99 years in prison -- or parole). closing agent theft

Another Attorney Gets Pinched For Allegedly Sticking Her Sticky Fingers Into Real Estate Escrow Account & Pilfering $40K Held As Downpayment In Home Sale Transaction

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced that a suspended attorney from Islip has been arrested for allegedly stealing $40,000 from a mortgage escrow account. The money had been earmarked as a down payment for a home.

    Nancy Enoksen, 49, was arraigned today [August 14] [...] and charged with Grand Larceny in the Third Degree (a D felony). [...] If convicted, the defendant faces a maximum of 2-1/3 to seven years in prison.

    “Attorneys who betray their clients’ trust and victimize those whose interests they have an obligation to protect, disgrace their profession and when they steal, we will hold them criminally accountable,” DA Singas said.

    DA Singas said in January of 2015, the complainants had retained Enoksen to represent them in the sale of their home in Broad Channel, Queens. The complainants’ buyers gave a cashier’s check for $40,000 payable to “Nancy Enoksen as Attorney” as a down payment on the house. However, in April of 2015, Enoksen’s law license was suspended due to unrelated professional misconduct. Subsequently, the complainants retained a new attorney but when it was time to close on the home in June of 2016, Enoksen is alleged to have refused to release the $40,000 down payment to the new attorney. Attempts to recover the funds by the complainants have been unsuccessful.

    A review of bank records showed that over the course of several months, Enoksen moved the money from her escrow account, located at a TD Bank in Hicksville, and into her operating account. She is accused of using the money to make payments to several credit card companies and make purchases at Stop and Shop, CVS, restaurants and other retailers.

Wednesday, August 16, 2017

NYS, NYC Pension Funds Find Their Way Into Investments In Private Equity Outfit Accused Of Predatory Lending, Unnecessary Foreclosures; City Advocate: Municipal Workers' Retirement Cash Is Being Used Against Them To Foreclose On Their Homes

In New York City, WNBC-TV Channel 4 reports:
  • Despite a pressing need for more affordable housing in New York, the state's public retirement funds have invested more than $1 billion in Lone Star, a private equity company accused of predatory lending and unnecessary foreclosures, an I-Team investigation has found.

    According to a lawsuit filed by several homeowners in southeast Brooklyn and Queens, Lone Star has purchased large portfolios of distressed mortgages insured by the Federal Housing Administration. But instead of considering typical FHA modifications -- like interest-rate reductions or loan balance reductions -- Lone Star is accused of offering mostly loans with interest-only periods and balloon payments.

    Karen Morrison, a retired NYPD officer, says Lone Star offered her father one of the interest-only modifications when he fell behind on his mortgage payments two years ago. Now she says she's afraid he won't be able to afford the balloon payment when the interest-only period is up.

    "It's like four generations that live in the household and if we cannot afford to pay when the interest-only payment is up, we're all going to be out on the street," said Morrison.

    On top of the stress of potentially losing her family home, Karen Morrison said it was “like a shocker” to hear her own retirement fund, the New York City Police Pension Fund, has invested more than $100 million in Lone Star, the very company that may one day foreclose on her father's house.

    It’s almost like I co-signed it,” she said.

    After the I-Team contacted NYC Comptroller Scott Stringer to ask about the Lone Star investments, Stringer wrote a letter to Lone Star Chairman John Grayken, expressing concern about the interest-only loan modifications.

    “This kind of predatory lending is unacceptable,” Stringer told the I-Team. "When a company acts more like a predator, rather than an investor, we have serious questions of that company and we are now in the process of hunting down those answers."

    Public Advocate Letitia James is another city official who has expressed concern about city retirees investing in Lone Star. Last year, as a Trustee on the Board of the New York City Employees Retirement System, James successfully opposed an opportunity to make further investments in Lone Star. She said it is ironic that a cop or sanitation worker could face foreclosure at the hands of the very company financed by their own retirement savings.

    “Basically, municipal workers in the city of New York – we’re taking their money and using it against them and foreclosing on their property,” James said.

    [...]
For more, see I-Team: NY and NYC Pension Funds Invest in 'Predatory' Lender (“Basically, municipal workers in the city of New York – we’re taking their money and using it against them and foreclosing on their property,” the city's public advocate said).

Cops: Woman Used Fraudulent Documents To Obtain Job As Home Health Care Worker, Then Began Draining Assets From 83-Year Old Dementia Patient; Attempt To Score Reverse Mortgage On Victim's Home Among Alleged Bad Acts

In Rockland Township, Pennsylvania, WFMZ-TV Channel 69 reports:
  • A home healthcare worker is in trouble with the law, accused of stealing from an elderly client with dementia.

    Grace Deguia-Reed, 46, of Perry Township, has been charged with identity theft, theft by unlawful taking, theft by deception, and related offenses. She is now free on $10,000 unsecured bail.

    The charges stem from an investigation that was launched in May by the Pennsylvania State Police, who said that Deguia-Reed began to drain the assets and savings of an 83-year-old woman she was paid to care for at the woman's home in Rockland Township.

    Investigators said Deguia-Reed took advantage of the woman's disability and either convinced her to cash in three life insurance policies for nearly $181,000, or she did so herself.

    Then, between April 2015 and April 2016, Deguia-Reed deposited $70,849.35 worth of checks from the woman into her own accounts, according to court documents released Thursday [August 10]. She also attempted to cash a $75,000 check, with plans to buy a property with the money, police said.

    Investigators also cited evidence that Deguia-Reed attempted to get the woman to obtain a reverse mortgage and have her property logged for more assets.

    Deguia-Reed was also in possession of a 2015 Jeep Cherokee that was leased and registered to the woman without her knowledge, police said.

    In addition, evidence points to Deguia-Reed using fraudulent forms to obtain her job as a home healthcare worker, according to court documents.
Source: Police: Home healthcare worker stole from elderly client (Grace Deguia-Reed free on $10,000 bail).

Tuesday, August 15, 2017

Career Conman Again In Hot Water, Accused Of Using Forged Deed To Score $441K In Refinancing Proceeds Secured By One Victim's Home, Falling Short In Similar Effort Involving $250K Loan Against Another Homeowner's Property

In Miami, Florida, the Miami Herald reports:
  • In his most infamous scam, longtime con man George French Jones targeted wealthy celebrities and sports figures, promising them Miami Heat courtside season tickets during the height of the LeBron James era.

    Now, Jones is back in Florida facing charges in an audacious new enterprise: declaring himself the owner of other people’s luxury real estate.

    Posing as a high roller, police say, Jones used phony documents to try to gain ownership of a high-end South Beach condo while at the same time trying to take out a $250,000 loan against the property. He’s also facing a second criminal case, accused of impersonating a condo owner to secure a $441,000 loan against the woman’s posh Brickell home.

    In two other cases, civil lawyers allege Jones pulled similar scams — using phony driver licenses and court documents — to gain control of a beachfront Fort Lauderdale condo, as well as a mansion in the Cocoplum neighborhood of Coral Gables.
    ***
    It was in February that he began text messaging his neighbor, a high-end real estate agent named Linette Guerra, inquiring about buying her unit next door to where he lived.

    In a series of messages released by prosecutors, he casually offered $2.5 million for the unit while playing up a playboy lifestyle. In one text, he bragged that his girlfriend was “having too much fun at Ultra,” the popular Miami electronic music festival. In another, he apologized for taking too long to return a text. “Just woke up rock star evening,” he wrote.

    What Guerra did not know was that Jones was using her company’s name on documents to try to get the $250,000 loan against her own property, detectives said. When confronted by police, Jones acknowledged his “extensive white-collar criminal past” and numerous companies but refused to talk about the loan, according to an arrest report.

    Jones didn’t actually get the loan money wired to him.

    But in the case of Ana Marzal de Bolivar, the owner of a condo at Brickell Icon, lawyers say he succeeded in getting hundreds of thousands of dollars sent to him as a loan against her property in late 2015. According to court documents, Jones filed a phony deed giving himself control of the property, then got the $441,000 loan by signing his own name and Bolivar’s.

    Her attorneys, Henry Bell and Manny Reboso, won a suit against Jones and one of his companies, which never replied to the legal action. The lawyers also complained to police, who are now looking to arrest Jones.

    “Ms. Bolivar, like many other individuals, has been defrauded by George French Jones,” said Reboso, of Lagos & Priovolos. “We are confident that he will ultimately be held accountable for his criminal acts.”

Tampa Feds Squeeze $475K Civil Settlement From Real Estate Operator Accused Of Peddling Condo Apartments To Elderly Buyers By Recruiting Them, Paying Them To Artificially Inflate Sales Prices, Then Failing To Disclose Material Information When Obtaining Reverse Mortgages To Cash Out On Transactions

From the Office of the U.S. Attorney (Tampa, Florida):
  • Acting United States Attorney W. Stephen Muldrow announces a civil settlement with Alexander Olympus Zarris that resolves alleged violations of the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) through reverse mortgage transactions engineered by Zarris at a Tarpon Springs condominium complex. Zarris will pay $475,000 to address the damage his conduct caused to a lending program overseen by the Department of Housing and Urban Development (HUD). This is the third civil settlement reached in this vital area of civil affirmative enforcement.
    ***
    From 2008 to 2011, the United States Attorney’s Office and HUD’s Office of Inspector General (“OIG”) investigated Zarris’s practices and concluded that he had improperly obtained the proceeds of federally insured reverse mortgages that, but for his conduct, would not have been underwritten by the lenders.

    Investigators learned that Zarris had engaged in sales transactions where he concealed the amounts that he had paid to the buyers to artificially inflate the appraised values of condominium complex units.

    He recruited elderly buyers (over the age of 62) to purchase units at inflated values and, as part of those sales transactions, required them to immediately apply for reverse mortgages in the maximum amount possible. Zarris, or others working with him, would then assist the elderly buyers in applying for reverse mortgages, including filling out their loan applications. The applications submitted on behalf of these buyers failed to disclose certain information that was material to the bank’s decision to underwrite the reverse mortgages. Through these practices, Zarris was able to create the appearance of equity so that the elderly buyers could obtain the reverse mortgages. The proceeds of the mortgages were then wired to a company owned by Zarris at the reverse mortgage closing.

Monday, August 14, 2017

NJ Feds Squeeze Guilty Plea Out Of Operator Of Loan Modification Racket That Screwed Over Two Dozen Homeowners Out Of $400K+

From the Office of the U.S. Attorney (Trenton, New Jersey):
  • The sole proprietor of a purported loan modification consulting company today [August 8] admitted that he fraudulently billed clients more than $400,000 for services that were never performed, Acting U.S. Attorney William E. Fitzpatrick announced.

    Jeffrey Halpern, 62, of Hewlett, New York, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of wire fraud.

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

    Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

    In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of over $400,000.

Real Estate Managing Agent Pinched For Allegedly Bilking 15 Landlords For Over $330K In Rent Collections, Tenants' Security Deposits Held In Company Escrow Account

In Warwick, Pennsylvania, The Intelligencer reports:
  • A Doylestown Township woman who owns a real estate management company is charged with fraudulently using more than $330,000 to pay her business expenses, Warwick police allege in a criminal complaint.

    Helene Senior, 67, of Gatehouse Lane, is charged with four felony counts, including theft and receiving stolen property. According to court documents, a client contacted Warwick police after Senior failed to respond to numerous attempts to contact her, and a police investigation allegedly revealed that Senior had taken $338,494 from 15 customers out of an escrow account and used it for her personal business purposes.

    Police say that Senior owns Mark V. Realty and operates out of an office on Stout Drive in Warwick. The property management firm is primarily tasked with collecting rent for other property owners in Bucks and Montgomery counties and sending her clients the money.

    One of her clients, Scott Cornell, hired Senior to collect rent on three properties owned in Warminster and maintain security deposits paid by the properties' tenants, totaling more than $33,000, in an interest-bearing escrow savings account, police said. Under the agreement, Senior would collect the rent, pay herself a 6 percent commission and send the remainder to Cornell.

    According to the probable cause affidavit, Cornell began collecting the rent himself in April 2016 after Senior failed to perform her duties or call him back after numerous messages. Cornell made a formal request that Senior end the contract and return the security deposits in escrow, but she did not respond to his phone calls or mailed letters, police said.

    Warwick police allege they reached out to Senior's other clients and found 14 additional customers who could not get a hold of Senior nor recover security deposits she agreed to hold in an escrow account. After looking at her bank accounts, police found that the security deposits had been transferred out of escrow and used for business-related expenses, according to court documents.

    Senior met with the police in July and allegedly admitted that she transferred the escrow money into her general accounts and used the funds for salaries and other expenses without her clients' authorization.

    She told police that she intended to pay the money back but, "once it got out of hand she did not have the money to put back into her customers' escrow accounts," the affidavit says.

Sunday, August 13, 2017

Federal Jury Slams Two West Palm Beach Lawyers For $16.4 Million Civil Court Judgment For Their Roles In "Holding Captive" A Wealthy 97-Year Old Texas Man In South Florida While Fleecing Him For "Unnecessary & Excessive Fees" Of $1 Million In Guardianship Racket

In West Palm Beach, Florida, the Palm Beach Post reports:
  • Advocates for guardianship reform clamored in vain for years that Florida’s system failed to properly protect incapacitated seniors, that its primary purpose had been perverted to line the pockets of greedy attorneys and professional guardians with the hard-earned life savings of the elderly.

    Now they can point to a new federal verdict awarding a whopping $16.4 million in a lawsuit claiming that two West Palm Beach attorneys breached their fiduciary duties while running up “unnecessary and excessive fees” of $1 million.

    “It’s really kind of a landmark case,” said Julian Bivins, who brought the suit as the personal representative of the estate of his father, Oliver, a Texas oil man. “It sends a message to these unscrupulous lawyers and guardians that they are not going to be able to get away with it anymore.”

    The Bivins guardianship case emanates out of the court of Circuit Judge Martin Colin, the subject of an investigation by The Palm Beach Post into the judge’s conflicts of interest because his wife is a professional guardian.

    Colin in open court had heaped praise on the attorneys who lost the case and refused to hold a hearing to decide whether the attorneys had “secretly” kept money from the sale of one of Oliver Bivins’ properties in an escrow account for more than a year, according to court documents.

    The Post’s award-winning series featuring Colin, Guardianships: A Broken Trust, resulted in an overhaul of guardianship rules in Palm Beach County. Colin retired last December after he was transferred from the Probate & Guardianship Division because of The Post’s reporting.

    Weeks after The Post published, Julian Bivins filed a motion to disqualify Colin, saying his concerns about the “close-knit atmosphere of the Guardians, their attorneys” and Colin had been “glaringly brought to light” in the stories.

    Held captive?

    The younger Bivins said he felt his father was “held captive” in South Florida by the guardianship so the attorneys could liquidate real estate assets — including a New York City Upper East Side mansion — and charge more fees. Colin granted an emergency order prohibiting the senior from returning to Texas.

    The jury found on July 28 that attorneys Brian M. O’Connell and Ashley N. Crispin of the Ciklin, Lubitz & O’Connell firm not only breached their fiduciary duty but committed professional negligence.

    The lawsuit claimed they failed to get appraisals on two high-end New York City properties being divided among family. They were not of equal value and as a result, Julian Bivins ended up with one that was worth millions less than other.

    The jury’s decision to award $16.4 million makes up the difference.

    But the fight over the property is far less important to reform advocates than the fact that attorneys who carry out the wishes of professional guardians and are paid with the ward’s money were held accountable.

    This case in one of the longtime hotbeds of guardianship abuse is a tipping point,” said Sam Sugar, director of Americans Against Abusive Probate Guardianship.

    “This first salvo sends a serious message not only to the predatory guardians and lawyers who have been exploiting families all over Florida for decades but especially to the probate judges without whose complicity these cases could never happen.”

    Oliver Bivins died at age 97 in March 2015. He ended up in the court-ordered guardianship when he visited his condominium in Palm Beach in 2011 and a social worker became concerned with his well-being, according to court documents.

    Oliver Bivins appeared to be coming to Florida for a weekend vacation, leaving his refrigerator in Texas fully stocked, plaintiff attorneys told the jury. His son said he often didn’t visit his Palm Beach condominium for years at a time.

    The verdict takes a further step toward re-establishing that attorneys are supposed to represent the incapacitated ward, not the court-appointed professional guardian — a position many lawyers have argued in court to thwart families trying to rein in a fee frenzy.

    If it wasn’t for me, they would have completely depleted my dad’s estate,” said Julian Bivins, who now lives in Palm Beach. “I’ve been fighting them from the beginning to just get him back to Texas. Finally, I got him back there 35 days before he passed away.”

    As with many family members who challenge the status quo in guardianship in Palm Beach County, Julian said he found himself relentlessly attacked in court. He was even sued by one of the guardians in the case, Curtis Rogers.

    The biggest toll, he said, though, was his relationship with his father as Rogers told the elder Bivins that his son only wanted his money. “He turned my dad against me,” Julian Bivins said. “I could never explain to my father how he was being held for ransom, how they wouldn’t let him go.”

    [...]
For more, see Jury hits lawyers with $16.4M for doing senior wrong in guardianship.

See generally, The Wall Street Journal: Abuse Plagues System of Legal Guardians for Adults (Allegations of financial exploitation and abuse are rife, despite waves of overhaul efforts).

Go here for earlier posts on the ripoffs of the dead and incapacitated under cover of court-sanctioned guardianship/conservatorship/public administrator systems. granny-snatching ripoff reimbursement

Lawyer Invokes 5th Amendment In Attorney Disciplinary Hearing, Then Promptly Surrenders Law License After Refusing To Answer Questions Surrounding Alleged Losses Of Over $183K Suffered By Two Clients (Estate Of Deceased 89-Year Old & Senior Care Facility-Bound 96-Year Old)

In Topeka, Kansas, The Topeka Capital-Journal reports:
  • Topeka lawyer Margo E. Burson faced a formal complaint based on the losses of more than $183,000 by two Topeka women.

    The family of one woman said she violated their trust. A nursing home had asked her repeatedly to fill out required paperwork for the other woman.

    But when Burson appeared at a disciplinary hearing before the Kansas Supreme Court and was asked what authority she had to remove money from a client’s account without a judge’s approval, she paused.

    “At this time, I decline to answer,” Burson said.

    “I’m sorry. What?” Justice Dan Biles asked.

    I decline to answer,” Burson said.

    Are you taking the Fifth Amendment?” Biles asked.

    Yes,” Burson said.

    With that, questioning about the status of the money ended. That hearing was June 15.

    The Fifth Amendment protects a defendant from testifying to something that might be self-incriminating. A witness may sometimes “plead the Fifth” in district court cases.

    But disciplinary administrator Stan Hazlett said he couldn’t recall the protection being used in an attorney disciplinary hearing.

    In a letter dated July 18, Burson voluntarily surrendered her Kansas law license, and the Kansas Supreme Court disbarred her a day later.

    Burson was facing two complaints filed by the Office of the Disciplinary Administrator, which polices the conduct of Kansas lawyers, based on the losses of more than $183,000 by two Topeka women.

    The estate of Dorothy May Harvey, an 89-year-old woman who died in September 2011, and a 96-year-old woman living in a senior care facility reported the losses. The name of the older woman hasn’t been disclosed in public documents.

    ‘Betrayed’

    Family members were grateful for Burson’s help during Harvey’s final illness, and Burson got initial accounting to family within days of Harvey’s death.

    “We trusted her implicitly,” said Don Peters, a brother-in-law of Harvey who is married to her sister, June Peters.

    Peters, who lives outside of Kansas, said Harvey’s obituary even reflected respect for the attorney.

    “The family expresses their deep appreciation to Margo Burson, who lovingly managed her health care affairs,” the obituary said.

    But the closing of the estate is still ongoing, Peters said. The Peterses became a little suspicious about a year after Harvey’s death, and by September 2016, they registered a complaint with the disciplinary administrator’s office.

    “In essence, she violated our trust, very seriously,” Peters said. “We feel betrayed, not so much for the money lost but for the time (lost).”

    Ten internet transfers totaling $66,000 were made from the Harvey estate account, then were deposited into Burson’s operating account, according to disciplinary administrator’s records.

    The transfers started on Aug. 19, 2016, and ended on Jan. 30, 2017, and ranged from $1,000 to $19,000 for each transfer, the records show.

    “We did trust her for years, unfortunately, until we learned she didn’t merit our trust,” Peters said. “She is now our ex-lawyer.”

    In the other complaint against Burson, more than $117,249 wasn’t paid to the account of a 96-year-old woman living at Brewster Place, officials said.

    The disciplinary administrator received a complaint from an individual reviewing accounts on behalf of Brewster Place, where Burson had power of attorney for a resident beginning in 2005.

    Records show Brewster Place sent letters and emails to Burson “on numerous occasions” asking her to fill out and file a Medicaid application, a request that began in March 2014.

    By February 2017, the resident’s balance due to Brewster Place was more than $99,000, and on May 24, the balance was $117,249.

    When the complaint was filed in June, Burson hadn’t completed the Medicaid application process, and the resident remained at the facility.

    “Brewster Place does not wish to evict” the woman, the complaint said.

    ‘Worn out’

    In an interview last week, Burson said she couldn’t talk at length about the disciplinary case.

    “I am not in a position to discuss it at this time,” Burson said.

    The disciplinary action coincides with Burson’s planned retirement, she said. Burson said she had planned to retire at the end of the fiscal year, which was June 30.

    The timing “on the other matter” happened to coincide with her retirement, she said.

    “It was a surrender of the license,” Burson said, “rather than a knock down, drag out (disciplinary hearing). Some of us are worn out and ready to do something else.”

    A full evidentiary hearing was scheduled for Aug. 17 before a three-member panel of lawyers, but that was canceled after Burson surrendered her license.

    During her June 15 appearance before the Kansas Supreme Court, Burson asked for time to complete documents for several other clients. She cited her health as a reason for retiring, saying she developed arthritis in the mid-1980s.

    Lawyers facing serious allegations in disciplinary cases appear before the supreme court justices, and hearings are recorded on video. Serious cases include alleged acts of dishonesty, misappropriation of money and extreme misconduct.

    The day Burson appeared before justices, they temporarily suspended her law license.

Possible Disbarment Looms After Lawyer Gets Hit With Emergency Suspension For Allegedly Swiping $32K Of Client's Funds Held In Trust Account, Then Lying About It In Subsequent Legal Proceedings

In Edwardsville, Illinois, The Telegraph reports:
  • A state commission has suspended the license of an Edwardsville lawyer after he allegedly used $32,000 of a client’s money for his own purposes.

    William James Meacham, of 521 St. Louis St., Edwardsville, may also be disbarred after further proceedings in the case.

    The Illinois Attorney Registration and Disciplinary Commission has suspended Meacham’s license, and a hearing board of the commission has recommended he be disbarred.

    The commission claims Meacham not only misused the $32,000, he lied about it during legal proceedings and set up a scheme to deceive the commission concerning his involvement. He was also cited for allegedly neglecting two personal injury cases.

    The money was deposited in a trust fund at Bank of Edwardsville after the client, Mark A. Breeden, received a settlement for an automobile accident. Meacham had borrowed money against the possible settlement, and the $32,000 was due to the lender, LawCash.

    LawCash is a firm that lends money in advance of legal settlements to provide the clients ready cash and to finance the litigation. The settlement was for $160,000, and Meacham allegedly borrowed $32,000 against the settlement. By agreement, Meacham was to receive the customary one-third of the settlement amount.

    The money was supposed to be held in a trust account for the client to repay LawCash. The money was not available when the loan came due because Meacham had already spent most the $32,000 on himself. He failed to notify his client or the lender, the IARDC claims.

    LawCash prevailed upon Meacham for repayment of the loan and filed suit to recover what was due. In a deposition, Meacham was unable to give clear answers as to what happened to the $32,000. “I don’t know what in the world has happened here. It don’t look good,” he testified.

    The IARDC alleged that Meacham’s testimony was false.

    A document on file in the IARDC case claims Meacham left a message with Breeden, admitting he removed the $32,000 that was to be held in trust against the loan in order to hide the money from the lender. He said he planned to deliver the funds to Breeden after the LawCash suit expired. That statement was also false, the IARDC claims.

    Meacham then allegedly created fake receipts to indicate the funds had been paid to Breeden, the client. The commission claims that Meacham also lied to Breeden that he was holding the funds for Breeden at a later date.

    The commission also claims that Meacham lied during an IARDC hearing by testifying that he had disbursed the money to Breeden, but did not, and created false receipts to cover his tracks.

Accused Of Misusing Client Cash, Lawyer Gets Bar Boot For Failing To Prove Where Money Went; Crappy Trust Account Records Rendered Bar Auditor Unable To Determine Whereabouts Of Missing Loot

In Tallahassee, Florida, the Florida Record reports:
  • Miami attorney Dennis Roland Bedard has been disbarred following a May 25 Florida Supreme Court order following a complaint by former clients that he'd misused client funds.

    Bedard also was ordered by the state court to pay the Florida State Bar's costs of $10,313.89.

    The state Supreme Court issued its order of disciplinary revocation, tantamount to disbarment, with leave to seek readmission after five years. The Florida State Bar announced the discipline and the supreme court's order June 29.

    Bedard was admitted to the bar in Florida on July 27, 1988, according to his profile at the state bar website.

    He was suspended following a state supreme court order in November for failing to comply with subpoenas for his trust accounting and other records which were served on him in March and June 2016, according to the state bar's petition of contempt filed Feb. 27 with the court. Because he was already suspended, Bedard's disbarment was effective immediately.

    The documents requested included monthly bank statements, cancelled checks, check stubs, deposit slips and receipt and disbursement journals, as well as all client ledger cards with activity or a balance between Jan. 1, 2009 and Dec. 31, 2015, according to the petition. Upon receiving the subpoenas, Bedard produced some but not all of the request documents and did not respond to a notice of hearing or offer any explanation for his failure to comply more fully with the subpoenas, according to the petition.

    On Sept. 29, 2016, a state bar auditor stated in a sworn affidavit included with the petition that without the records subpoenaed she could not complete her investigation into whether Bedard properly accounted for and disburse funds received from his former clients.

    The state bar's inquiry stemmed from a dispute between two former business partners who'd been represented by Bedard and disagreed over the disbursement of trust monies, according to the petition.

    Bedard made no factual admissions about any issues in the proceedings but did "acknowledge that the allegations, if proven, would form the predicate for significant disciplinary action by this court," the petition said.

Saturday, August 12, 2017

Former Housing Authority Executive Director Gets 37 Months, Hubby Gets 24 Months For Roles In Bilking Over $730K In HUD Cash Intended To Further Mission To Provide Low Income Tenants With Affordable Rental Housing

From the Office of the U.S. Attorney (Little Rock, Arkansas):
  • [C]hief United States District Judge Brian S. Miller sentenced Rhonda Williams, 50, and her husband, Gary Williams, 59, both of Des Arc, Arkansas, to prison for their role in a scheme to steal money intended for use by the Cotton Plant Housing Authority.

    On September 2, 2016, Rhonda Williams and Gary Williams appeared before Judge Miller and pleaded guilty to conspiring to commit bank fraud and money laundering. Today, Judge [Brian S.] Miller sentenced Rhonda Williams to 37 months’ imprisonment, to be followed by three years of supervised release. In the same hearing, Judge Miller sentenced Gary Williams to 24 months of federal prison, to be followed by three years of supervised release. The Williams were jointly ordered to pay restitution of $732,177.80 and to forfeit $145,000 in cash seized from their home, the money in four bank accounts, a boat, and an SUV.

    “These defendants took public money that was meant to provide affordable housing to a low income population, and instead used it for their own personal gain,” Harris said. “This case is an example of how our office will continue working tirelessly to protect the public and eliminate this unacceptable fraud, waste, and abuse.”

    The Cotton Plant Housing Authority received its annual operating funds from HUD in the form of an annual distribution. Rhonda Williams served as the Executive Director of the Housing Authority and Gary Williams was the Housing Authority’s Maintenance Supervisor.

    From January 31, 2001 to December 31, 2014, the Williams conspired and executed a scheme where they used false and fraudulent pretenses to receive funds that were intended for use by the Housing Authority. As part of the conspiracy, the Williams lied about the reasons for the payment of Housing Authority money, and solicited and accepted bribes and kickback payments from Housing Authority contractors.

    In addition, the Williams caused the Housing Authority to pay for their personal expenses on their Housing Authority credit cards, and took Housing Authority equipment and materials and used them in the construction of their personal residence.

Feds Bag Former Housing Authority Executive Director For Allegedly Embezzling Over $336K Meant To Maintain Public Housing Facility For Low Income Residents; Charges Brought One Year After Defendant Abruptly Retired & Left State

In Detroit, Michigan, The Detroit News reports:
  • The former head of the St. Clair Housing Commission embezzled more than $336,000 in low-income housing funds and spent the cash on booze, beauty products, bedroom furniture and homes for her family, federal prosecutors said Monday [August 7].

    Former Executive Director Lorena Loren, 55, was charged in federal court with conspiracy to commit federal program fraud during an eight-year scheme that benefited and involved relatives, including her husband and son, according to federal court records.

    Since 2008, Loren fraudulently used the housing commission’s credit cards to make $166,000 worth of purchases at Amazon, Wal-Mart and Sam’s Club, falsified lease agreements for low-income housing and used the money to pay for her own relatives’ homes, the government alleged.

    “Holy crap,” St. Clair Mayor Bill Cedar Jr. told The Detroit News. “I guess you never know what’s going on with people.”

    Loren was charged in a criminal information, which means a guilty plea is expected. She could not be reached immediately for comment Monday.

    If convicted, Loren could face at least five years in federal prison.

    Loren was charged one year after she retired abruptly, the mayor said. She moved to southeast Georgia and bought a $325,000 custom-built house in October, according to public records.

    The home is far from low-income housing. The five-bedroom, 2,858-square-foot home features a salt-water pool, 24-foot ceilings, walk-in closets, a game room and detached man cave.

    Loren was appointed executive director in 2003 and started stealing from the poor five years later, prosecutors alleged.

    She fraudulently obtained housing-assistance payments for properties in which she had a proprietary interest with family members or for the benefit of family members, according to court records.

    She falsified lease agreements and money intended to help low-income residents afford apartments was used to rent a home for her son, Ryan Loren, prosecutors alleged.

    Lorena Loren also told relatives to establish bank accounts so federal subsidy payments could be deposited and spent for their personal use, including to rent a home in Florida, according to court records.

    She lied while claiming her son-in-law was the landlord of a rental property for low-income residents, prosecutors alleged. The property turned out to be Lorena Loren’s home in Port Austin, Michigan, according to court records.

    Her son-in-law, Jaime Johnson, deposited the money into a bank account he controlled with Lorena Loren’s husband, Brian, the government alleged.

    The $166,000 worth of credit card purchases included adult and infant clothing, furniture, appliances, mattresses, food, beauty supplies, medications and other household items, according to court records.

    The money was supposed to maintain Palmer Park Manor, the commission’s low-income public housing facility, prosecutors alleged.

Ex-Housing Authority Director Cops Plea To Embezzling Over $86K In HUD Funds Meant To Further Affordable Housing Mission For Low Income Families

From the Office of the U.S. Attorney (Fort Myers, Florida):
  • Acting United States Attorney W. Stephen Muldrow announces that Twaski Jackson (38, Lee County) today [August 1] pleaded guilty to a two count information charging him with stealing and embezzling thousands of dollars from the City of Fort Myers Housing Authority and the Lee County Housing Authority. Both agencies receive federal funds to further their mission of providing affordable housing to low income families. Jackson faces a maximum penalty of 10 years in federal prison for each count. A sentencing date has not yet been set.

    According to the plea agreement, Jackson served as the Director of Client Services for both housing authorities from 2012 until 2016. As part of his position, he had the authority to approve credit card disbursements and checks written on behalf of the agencies. Jackson used that authority to approve expenditures that benefited himself and his friends. Various personal charges were made, including payments of his own college tuition and personal trips. He also improperly paid a “vendor” (actually Jackson’s friend) who performed no services for the agencies, without authorization. The two then split the money.

    Over a three-year period, Jackson bilked the agencies for over $86,000. Jackson’s plea agreement requires him to forfeit the proceeds of his crime and to repay his victims.

Friday, August 11, 2017

Lawsuit: Computer Hacker Dupes Homebuying Couple Out Of $1.57 Million In Closing Cash By Allegedly Commandeering Title Agency's Servers, Then Sending Them Phony Email Request For Funds; Victims Include $5 Million RICO Claim In Legal Action Against Closing Agent, Others

In Washington, D.C., WAMU-Radio 88.5 FM reports:
  • When hopeful D.C. homebuyers Sean Smith and Erin Wrona were asked earlier this year to wire their title company $1.57 million, they took it as a routine request ahead of closing on the purchase of a five-bedroom, 2,300-square-foot Cleveland Park home.

    But when they went to the offices of Federal Title & Escrow a month later to sign the final paperwork, an attorney for the company informed them that the funds the couple thought they had wired had not ended up in escrow as expected. In fact, no one at Federal Title even knew the money had been sent.

    A new lawsuit now sheds some light on the mystery of the missing money: Smith and Wrona apparently fell victim to a hacker who had commandeered Federal Title’s servers and sent the couple an email asking that they wire the $1.57 million for the home purchase to a bank account that, unbeknownst to them, was controlled by the hacker.

    It’s a practice known as phishing, and while it’s not a new scam — it’s how hackers gained access to John Podesta’s email account last year, for one — it is fairly new in the realm of real estate transactions.

    Last year, the Federal Trade Commission and National Association of Realtors teamed up to warn homebuyers of phishing attempts:
  • Hackers have been breaking into some consumers’ and real estate professionals’ email accounts to get information about upcoming real estate transactions. After figuring out the closing dates, the hacker sends an email to the buyer, posing as the real estate professional or title company. The bogus email says there has been a last minute change to the wiring instructions, and tells the buyer to wire closing costs to a different account. But it’s the scammer’s account.
  • Unlike the victims in those scams, many of which involved closing costs involved in home purchases, Smith and Wrona lost almost the entirety of what they were going to pay for the house, spare the $200,000 they put down separately as a deposit. (The sales price was just north of $1.7 million.)

    In a statement, Federal Title spokeswoman Nikki Lyon says the incident stemmed from “what appears to be a cybercrime attack on our information systems.”

    “Federal Title discovered the attack and immediately reported it to the FBI. Federal Title continues to work with the FBI as they complete their investigation. Federal Title’s internal review has revealed that no other customers were affected by this attack,” she said.

    Those assurances are not enough for Smith, who works for a U.S. senator, and Wrona, a statistician with the U.S. Census Bureau.

    Last week, the couple filed a lawsuit against the company, alleging that Federal Title either conspired to defraud them of the $1.57 million or was so negligent in its online security protocols that it all but allowed the money to be stolen by someone else.

    “Federal Title either caused our money to be stolen or stole it, and we need to get our money back,” said Michael Nadel, the couple’s attorney. “We don’t have any evidence that it happened because of hackers other than Federal Title’s say-so.”

    Nadel also says Federal Title, which has offices in Friendship Heights and Logan Circle, failed to effectively communicate with Smith and Wrona ahead of the closing — a situation he attributes to the company being involved in the scheme.

    “Federal Title never called Sean Smith and said, ‘Bring your money to closing,’ and didn’t even bring it up until the middle of closing. So if they weren’t responsible for helping steal the money, it certainly seems like they knew well in advance of that closing that the money was gone. Their conduct shows that,” he said.

    The pair is asking not just for their $1.57 million, but also close to $5 million for an alleged violation of RICO — the Racketeer Influenced and Corrupt Organizations Act, the law best known for its use against the mob — plus punitive damages and attorneys’ fees.

    Federal Title’s Nikki Lyon denies that the company had anything to do with the money going missing.

    “While the investigation is ongoing, Federal Title wishes to unequivocally and categorically deny the plaintiffs’ allegations that FTE and its employees were somehow complicit with the person or persons who perpetrated this scheme,” she said in the emailed statement. “The allegations in the complaint are false and misleading and FTE will fully defend this matter.”

    Last month, Federal Title used its official blog to warn consumers of phishing scams like the one they say Smith and Wrona fell victim to.

    “Federal Title & Escrow Company will only send wire instructions to clients via email, in a secured format and only upon request,” said the company in the blog post.

    Lyon says there’s a lesson to be learned from this experience.

    “This incident should serve as a reminder to the public about the importance of cybercrime awareness and education,” she said.

    Smith and Wrona did ultimately buy the house. According to the lawsuit, the couple and their family “wired an additional $1.57 million to close the transaction.”

Raleigh Feds: Local Man Who Acquired Title To Mortgage-Encumbered Homes At HOA Lien Foreclosure Sales Subsequently Recorded Phony Satisfactions Of Mortgage On Each Premises, Then Flipped Properties Purporting To Be Free & Clear To Unwitting Buyers, Pocketing Over $1 Million While Leaving Unpaid Lenders Holding The Bag

In Raleigh, North Carolina, WRAL-TV Channel 5 reports:
  • A Wake Forest man made more than $1 million by swooping down on homes in foreclosure and using an intricate shell game involving fraud, forgery and offshore companies, according to federal authorities.

    Xavier Milton Earquhart faces 14 counts of bank fraud, five counts of engaging in monetary transactions involving criminally derived property and one count of aggravated identity theft. He is being held without bond in the Harnett County jail.

    Earquhart was arrested in Wake Forest in June 2014 when residents on Coral Bell Drive saw him drilling out the locks of a nearby house and called police. Police eventually dropped all charges against him when he showed that he had purchased the title of the $300,000-plus home, which the Heritage Wake Forest Homeowners Association had foreclosed on for nonpayment of dues, for $3,800.

    "Everything that occurred with this house was lawful," Earquhart told WRAL News at the time. "To say the least, it was very traumatizing."

    The arrest kick-started a federal investigation into Earquhart's real estate transactions that culminated in a recent indictment.

    Authorities allege Earquhart illegally obtained seven properties in Wake Forest, Cary, Holly Springs and Charlotte through HOA foreclosures, using aliases to bid on properties and funneling money through holding companies. He would produce fraudulent documents showing the mortgages had been paid off and that he had clean titles to the properties and would liquidate the holding companies as soon as the properties had been resold, according to the indictment.

    "He received money that he was not entitled to, so I would definitely call that stealing," said James Oliver, a real estate attorney with Hatch Little & Bunn in Raleigh, which isn't involved in the case.

    "He goes to sell the property or put a mortgage on the property. Someone does a title search. They see he owns it. They see that the mortgage has been satisfied. Of course, they don't realize it's fraudulent, and so the bank loans money," Oliver said. "When he'd get title, he'd transfer title to several different entities, which I think makes it more convoluted and difficult to track what's going on."

    The indictment lists Xavier Smart, Xzayvier Ernhart and David Imrich among the aliases used in the alleged scheme, which authorities allege cost banks a total of $920,000.

    "I can't imagine there are too many people out there filing fraudulent satisfactions and thinking they're going to get away with it," Oliver said.

    E.J. Stern, one of the Coral Bell Drive neighbors who first alerted police to Earquhart three years ago, said he's not surprised by the federal indictment.

    "The police had their suspicions. My neighbors and myself had our suspicions," Stern said. "I'm glad the justice system found a way to catch this guy."

    Earquhart also is accused of acquiring a homes on Knowles Street in Raleigh through fraudulent documents and using it as collateral to obtain $185,000 in bank loans, according to the indictment.

    "It's good to see people who aren't doing the right thing – making bad choices – be accountable for those choices," Stern said.

    As part of the indictment, federal authorities are seeking a court-ordered forfeiture by Earquhart of more than $1.1 million in cash, nearly $300,000 in gold bullion coins, a Rolex watch and any other property he gained through his real estate transactions.

Thursday, August 10, 2017

Homebuyer Coughs Up $10K Downpayment To Purchase Fixer-Upper, Shells Out Thousand$ In Cash, Sweat Equity Over Eight Months To Improve Premises, Then Finds Out Seller Doesn't Have Title To Home; Felony Theft By Deception Charge Pending

In Athens, Alabama, The News Courier reports:
  • Limestone County resident Tommy McLemore and his daughter, Marla, wanted to buy a decent home in a nice neighborhood that they could remodel.

    Marla found a candidate.

    A woman who said she was a certified Realtor sold them the house, which she said she owned, and even financed the sale.

    The McLemores paid the woman a total of $12,600 in the form of a down payment and additional payments. They hired workers to remodel the home. They also put in eight months of sweat equity themselves, only to learn the woman who sold them the house didn't really own it — at the time.

    The woman — Laurie Jones McGuire, 42, of 21075 Broadwater Drive — has been charged with felony theft by deception in connection with the sale, records show.

    “She was as slick as a button,” said 73-year-old Tommy to The News Courier Friday.

    According to Count 1 of the indictment, McGuire knowingly obtained, or exerted by deception, unauthorized control over more than $2,500 belonging to Tommy and Marla McLemore with intent to deprive them of the money.

    McGuire could not be reached for comment Friday at her real estate number. Her voicemail was not accepting messages.

    The journey's beginning

    Linda McLemore, Tommy's wife, said the adventure began when Marla came by their house one day to tell her father about a house at 433 Rogers St., near Athens State University, and they decided to buy it together and redo it.

    McGuire came by their home on New Cut Road off Alabama 99 and told them she owned the home, Linda said.

    They had agreed on a price of $31,000, Tommy said. He applied for a bank loan to pay for it but the process was taking a while, he said.

    McGuire said she needed to close the house as soon as possible, so she offered to sell and finance the purchase. Tommy said he paid McGuire $10,000 down in cash to lock in a 4 percent interest rate on the mortgage. Plus, he made $2,600 in other payments.

    Bad news knocks

    One night when Tommy and Marla were at the house, there was a knock on the door.

    “This lady and gentleman asked if we owned the house,” Tommy said, explaining they had bought it from Laurie McGuire.

    “They said Laurie didn't own the house, that it belonged to Ted Barnett of Barnett Real Estate in Ardmore,” Tommy said. “I liked to fell out. We had just had the carpet put down that day.”

    Tommy and Marla confirmed with Barnett that he still owned the home. He said he was selling it to McGuire but he still held the deed and she had never paid him. In addition, her contract for the home did not allow her to sell it.

    “She sold it to us under false pretenses,” Linda said.

    By then, though, the McLemores had gutted the home, renovated it and landscaped the yard, Linda said. Tommy had even installed a driveway himself, he said.

    They were nearly finished with the house, Linda said.

    Tommy and Marla reported the matter to Athens Police Department.

    Investigator Kelly Fussell looked into the matter, questioning the McLemores, Barnett and McGuire, and she believed McGuire had committed theft by deception. Police decided not to obtain a warrant initially charging her with a crime as police often do. Fussell sent his findings to the Limestone County District Attorney's Office so an attorney could present the matter to a grand jury and let them decide if a crime was committed. This sometimes occurs in cases of a “he said, she said” nature or cases, such as this one, that border on being civil court matters.

    The District Attorney's Office presented the case to a grand jury, which voted June 2 to indict — or formally charge — McGuire with first-degree theft by deception. She was arrested on the indictment warrant July 28. She was freed from the Limestone County Jail immediately after her arrest after posting bail of $5,000.

    [...]

Migrant Worker Loses Thousand$ After Buying Home Site On Land Contract; Completes Making All His Periodic Payments Only To Encounter Trouble Getting Deed Put In His Name

In Progreso, Texas, KRGV-TV Channel 5 reports:
  • A man said the deed to a Rio Grande Valley lot he purchased was never transferred to his name.

    Everardo Garcia is blind and an amputee. He worked as a migrant across the U.S. but had to retire due to complications related to diabetes.

    Garcia said he’s spent all of the money he had on a plot of land since 2008. It was to build the home he and his wife always wanted.

    “I would give him payments. Every time I came from up north, I would hand him my income tax, too,” he said. “The way I would get the money, I would give it to the man. We don't know how to read. It wasn’t until my daughter said, ‘No, my dad gives this man too much money.’"

    Property attorney Armando Puente told CHANNEL 5 NEWS that’s due to the type of contract he signed. He said it’s known as a contract for deed.

    “It binds the buyer and the seller, on the certain properties, and sets out all the terms usually on a single or two pages. But basically it says, ‘When you finish paying me, I will give you a deed. At your expense, of course,’” Puente said.

    Puente explained these types of contract, written for a term of more than six months, is illegal. He said page 22 of the Texas Property Code 2016 Edition states the style of contract was banned in 1995.

    “At that point, there is nothing there to show that you had an interest in it, other than the piece of paper that you have in your hand,” he said. “Fraud can happen so easily, it’s frightening.”

    The attorney explained people who find themselves entangled in this style of contact may sue if they never receive their deed. He admitted it can be an uphill battle due to the lack of paperwork.

    Garcia said he wants to sue the person who sold the property. He said the only problem is he can’t afford an attorney.

    Puente said if you plan on purchasing a property be sure to sign a deed of trust contract. He said the deed will be transferred into your name during the life of your contract.

Wednesday, August 09, 2017

NYC Feds Charge Duo In Short Sale Scam That Hid Non-Arm's Length Nature Of Transaction To Dupe Bank Into Taking $250K+ Haircut On Underwater Mortgage

From the Office of the U.S. Attorney (New York City):
  • Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent in Charge of the United States Department of Homeland Security’s Homeland Security Investigations, announced today [August 3] the unsealing of a criminal Complaint charging MICHAEL RIZZI and EDWARD MONAHAN with bank fraud and conspiracy to commit bank fraud, in connection with a scheme to submit false documentation to a bank to make RIZZI’s sale of property to his friend and business partner look like an “arm’s length” transaction.
    ***
    According to the allegations in the Complaint[1] unsealed [] in Manhattan federal court:

    RIZZI purchased a property (the “Rizzi Property”) in 2007 with the assistance of a mortgage (the “Mortgage”) The Mortgage was acquired by a bank (“Bank-1”) that same year. Over time, RIZZI stopped paying the Mortgage and, in 2009, the Mortgage fell delinquent. In 2015, RIZZI contacted Bank-1 and requested a short sale due to financial hardship (the “Short Sale”).

    Bank-1 advised RIZZI that the Short Sale was required to be an “arm’s length” transaction, meaning that the buyer could not have any personal, familial, or business connections with RIZZI.

    Later that year, MONAHAN agreed to buy the Rizzi Property from RIZZI. In connection with the sale and closing of the Rizzi Property, RIZZI and MONAHAN both executed various documents in which they affirmed that the buyer and the seller were engaged in an “arm’s length” transaction, and the seller and buyer of the Rizzi Property did not have a personal or business relationship. RIZZI and MONAHAN were, in fact, friends and business partners. Among other things, RIZZI and MONAHAN were partners in the ownership of Nitecap Megastore, a Staten Island adult sex and smoke shop. MONAHAN also has posted photos and videos on social media, which depict RIZZI and MONAHAN socializing with each other.

    As a result of this scheme, Bank-1 suffered more than $250,000 in losses.
Source: Acting Manhattan U.S. Attorney Announces Fraud Charges Against Former New York City Police Officer And Staten Island Man (Michael Rizzi and Edward Monahan Are Alleged to Have Made False Claims in Connection With the Sale of a Staten Island Property).

Vegas Feds Indict Pair In Alleged Short Sale, Buyback Scam Designed To Dupe Lender Into Taking Haircut On Mortgage While Allowing Underwater Homeowner-Seller To Continue Residing On Premises, Regain Title In Future; Defendants Accused Of Failing To Disclose Non-Arm's Length Nature Of Transaction From Bank

From the Office of the U.S. Attorney (Las Vegas, Nevada):
  • Dustin M. Lewis, 42, of Henderson, Nev., and Brian Sorensen, 49, of Las Vegas, were each charged with one count of conspiracy to commit bank fraud and one count of bank fraud. If convicted, Lewis and Sorenson each face a statutory maximum penalty of 30 years in prison and up to a $1,000,000 fine.

    According to allegations made in the indictment, from about August 15, 2011 to about January 17, 2014, Lewis and Sorensen conspired with each other to defraud OneWest Bank. The defendants allegedly devised and executed a scheme to avoid foreclosure so that Lewis could retain ownership of a 5,331 square foot, five-bedroom Henderson, Nev. home.

    As part of the scheme, Lewis submitted a fraudulent short sale application to the bank, which induced the bank to allow Lewis to sell the property to Sorensen’s family member for much less than Lewis owed under the existing mortgage loan. It is further alleged that Lewis did not disclose that he and Sorensen agreed that Lewis would continue to reside at the property and Sorensen would later cause the property to be sold back to Lewis free of the bank’s mortgage loan. It is further alleged that on or about July 21, 2017, Lewis then listed the property for sale at a price of $1,195,000.
Source: Two Men Indicted For Mortgage Fraud. leaseback arm's length transaction

Tuesday, August 08, 2017

Seattle Feds Tag Indictment On Former Owner Of Now-Defunct Closing Agency For Allegedly Siphoning Away Approx. $2 Million In Escrow Funds From Real Estate Transactions, Defrauding Homebuyers, Sellers, Financial Institutions

From the Office of the U.S. Attorney (Seattle, Washington):
  • The owner of a now defunct real estate escrow firm was indicted last month by a federal grand jury on ten counts of bank fraud, and one count each of mail and wire fraud, announced U.S. Attorney Annette L. Hayes. LORI LYNN ANDREW, 48, of Cashmere, Washington, the owner of Hartman Escrow, Inc., was arrested and arraigned on the indictment August 3, 2017. The Washington State Department of Financial Services arranged for a receiver to take over the Tukwila, Washington escrow company in 2012 after finding evidence of fraud. ANDREW had her license to act as an escrow agent suspended in 2013 and her license has since been revoked.

    According to the indictment, beginning in about January 2011, and continuing until July 2012, ANDREW used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions.

    ANDREW made, or had others make, false settlement statements on the transactions listing false or inflated fees and charges to hide the fact that she was embezzling money. ANDREW forged signatures on various statements and created false invoices, statements and bills; she altered and deposited checks to her company account that should have gone to others; she took funds from her trust account and transferred them to her personal account for her own use.

    ANDREW used the money for casino payments, credit card bills and other personal expenses. ANDREW defrauded individual customers as well as Bank of America, Wells Fargo, Citi Bank, Chase and GMAC.

    In all the indictment alleges ANDREW defrauded the financial institutions and other customers of approximately $2 million.
    ***
    The case is being prosecuted by Special Assistant United States Attorney Hugo Torres and Assistant United States Attorney Norman Barbosa. Mr. Torres is a Senior King County Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.
Source: Owner of Real Estate Escrow Company Indicted for Bank, Wire and Mail Fraud (Defendant Falsified Documents, Altered Checks and Embezzled Money from Trust Account).

Media Investigative Report On Southeast Michigan 'Involuntary' Probate Scheme That Feasts On The Equity In Dead People's Homes Triggers Federal Criminal Probe; FBI Raids Real Estate Broker's Office While One Public Official Gets The Boot, Another Quits

In Lansing, Michigan, WXYZ-TV Channel 7 reports:
  • The 7 Investigators continue to get results for grieving families in Michigan. The Attorney General is terminating one of the public officials accused of cashing in on a controversial probate practice, and another public official has resigned.

    And even though new legislation has been introduced because of our investigation, the Attorney General is now telling the 7 Investigators that he wants the changes to the law to go even farther.

    “They’re messing with my home -- where I live! How dare they,” said Joanne Zaremba.

    Several local families say they nearly lost their late relatives’ homes after some Attorney General-appointed lawyers called Public Administrators teamed up with real estate agent Ralph Roberts to cash in on probate estates.

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

    The Public Administrators bill the estates for thousands of dollars in fees. Court records show that Roberts’ company, Probate Asset Recovery, often tried to take 1/3 of the value of the assets, plus Roberts earned real estate commissions (often 4% instead of the typical 3%).

    Oakland County Sheriff’s investigators and federal agents recently raided Ralph Roberts offices as part of an ongoing criminal probe.

    And now Attorney General Bill Schuette has terminated Kemp Klein lawyer Barbara Andruccioli from her Oakland County Public Administrator duties. A spokeswoman for the Attorney General says their office has received 5 complaints about Andruccioli since the 7 Investigators first reported on her in May.

    The 7 Investigators showed you in May how heirs like Zaremba said she had no idea that Andruccioli had opened an estate in Joanne’s late mother’s name.

    “She has a duty to the estate which means to the heirs of the estate. She’s completely failed on that,” said attorney Carol Kramer, who now represents Zaremba.

    After our initial investigation, the Attorney General also disciplined, and then later accepted the resignation of Macomb County Public Administrator Cecil St. Pierre.

    Now Wayne County Public Administrator Joseph Xuereb has resigned as well. He, too, had teamed up with Ralph Roberts during the last 3 years to open probate estates. Xuereb resigned after the 7 Investigators filed paperwork to record one of his upcoming hearings; it was a case that was filed in court after the Attorney General’s recent order to suspend foreclosure and tax forfeiture probate cases.

    In his letter to the Attorney General, Xuereb said his filing of the cases was “inadvertent” because he had misunderstood the order from the state.

    Two new bills have been introduced in Lansing to change the Public Administrator law to better protect heirs – but Attorney General Schuette's spokeswoman now says they don’t go far enough, and he wants criminal penalties added to the law.

    Attorney Xuereb also told the 7 Investigators that while he was working as a Public Administrator, he always tried to do what was best for the heirs, and made sure that they got notified about the probate proceedings.

    Barbara Andruccioli, the former Oakland County Public Administrator, is not commenting about her termination.