Thursday, October 20, 2016

DC Appeals Court: Developer Seeking To Demolish Aging 302-Unit Low Income Housing Complex & Build Market-Rate Condos, Rental Apartments Violated Local Law Requiring Existing Tenants To Be Offered Bona Fide Opportunity To Buy Premises

In Washington, D.C., WAMU Radio 88.5 FM reports:
  • The residents of the Museum Square residential building near D.C.'s Chinatown neighborhood can breathe a little easier now.

    That's because of a ruling from the D.C. Court of Appeals, which last [month] tossed out the $250 million sales price set by Bush Construction Companies, the Virginia-based group that owns and wants to demolish the 302-unit building to replace it with 800 market-rate condos and apartments.

    In the ruling, which upheld a prior court decision, the three judges said that the sales price "was not based on an objectively good faith assessment of the value of the property," and thus violated the D.C. law that offers tenants the first shot at buying the building they live in if it is put on the market.

    The fight over the building — where residents are largely low-income and Chinese — dates back to 2013, when Bush Companies announced it would not be renewing the Section 8 contract with the U.S. Department of Housing and Urban Development that kept rents subsidized. Instead, the group said it wanted to raze and redevelop the property, which stands in Mt. Vernon Square, a neighborhood that has developed quickly over the last decade.

    As per the D.C. Tenant Opportunity to Purchase Act, Bush Companies offered the building up to the tenants first — but for $250 million, or more than $800,000 per unit. (Read more about how TOPA works here.) The residents recoiled at the proposed price tag, but Bush Companies defended it by saying that it faithfully reflected the potential value of the building once it gets redeveloped.

    The tenants sued, saying Bush Companies had not put forth a "bona fide" offer as required by TOPA. Instead, they argued, the building was worth just a fraction of that — a later appraisal set it at just under $70 million — and any proposed sales price should be closer to that. In April 2015, a trial judge sided with the tenants, and last [month] the Court of Appeals backed that decision.

    "TOPA is supposed to work by allowing tenants to purchase a unit at a fair and reasonable price and giving them the right of first refusal if they choose to," says Jonathan Levy of the Legal Aid Society of D.C.,(1) which represented the tenants. "The reason this decision is important is because it clearly says that a land owner cannot evade the intent of the statute by choosing an arbitrarily high figure to sell the building to the tenant, which is functionally the same as not offering to sell it at all."
For more, see D.C. Court Backs Low-Income Renters In Fight With Developer Over Building.
(1) The Legal Aid Society of the District of Columbia is a non-profit law firm that provides legal services to persons living in poverty in the District of Columbia in the areas of domestic violence/family, housing, public benefits, and consumer law. In addition to providing direct representation, it also helps clients avoid unnecessary legal entanglements through outreach and education, and helps them resolve their own disputes with advice and other brief assistance.

Four Years After Being Disbarred, Criminal Charges Finally Brought Against Lawyer Who Allegedly Defrauded Dozens Out Of Over $1.4 Million In Loan Modification Ripoff; Defendant Accused Of Instructing Homeowners To Redirect Their Monthly House Payments To Him, Purportedly To Use In Negotiaitons With Lender

From the Office of the U.S. Attorney (Santa Ana, California):
  • A disbarred California attorney was arrested [] on federal charges of running a mortgage modification scheme that defrauded more than 75 distressed homeowners in Orange County by inducing them to pay more than $1.4 million for services he never provided.(1)

    Moses S. Hall, 60, a resident of Blackwood, New Jersey, who formerly had a law practice in Fullerton, was arrested without incident [] at his residence after being indicted this week on fraud and tax offenses.

    According to the 16-count indictment returned [] by a federal grand jury, Hall operated his mortgage modification scheme from 2008 until 2012 through his law offices, as well as businesses called “Salva Casas” and “Loan Modifications of America.” The indictment alleges that Hall told distressed homeowners to stop making their mortgage payments, and instead direct their monthly mortgage payments to him, purportedly so he could use that money to negotiate with the banks. Instead, as detailed in the indictment, Hall used the victims’ money for himself.

    The indictment alleges that Hall concealed from victims that he was using their money to pay for personal expenses and that he was a previously convicted felon who had served years in state prison in New Jersey prior to being admitted as an attorney in California.

    Over the course of the fraudulent scheme, more than 75 victims were cheated out of more than $1 million, and some subsequently lost their homes. One married couple entrusted Hall with $400,000 to help them modify their mortgages. According to the indictment, Hall spent that $400,000 on personal expenses in only six months. That couple subsequently lost their home to foreclosure.

    As further alleged in the indictment, Hall withdrew more than $1 million in cash from the bank accounts into which the victims’ payments had been deposited. Hall allegedly wrote checks to himself and his daughter, and used $25,000 cash to purchase a Mercedes Benz.

    “This defendant allegedly used his position as a licensed attorney to persuade victims that he could help them with their financial problems,” said United States Attorney Eileen M. Decker. “Instead of working for his clients, the defendant simply pocketed their money to fund an extravagant lifestyle. He has lost his license to practice law, and now he faces a significant prison term for the alleged crimes.”
    According to the California State Bar, Hall was disbarred in 2012 for “misconduct in three loan modification matters.”
For more, see Disbarred Attorney Indicted in Mortgage Modification Scheme (Victims Paid the Attorney Well Over $1 Million, Which He Allegedly Used for Personal Expenses and Never Reported as Income to IRS).
(1) The California State Bar's Client Security Fund is a public service of the California legal profession. The State Bar sponsored the creation of this fund to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

California Man Gets 12 Months Imprisonment For Misrepresenting Status With HUD, Misusing Government Seal In Connection With Peddling Loan Modification Services To Financially Strapped Homeowners

From the Office of the U.S. Attorney (New Haven, Connecticut):
  • Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHN VESCERA, 60, of Dana Point, Calif., was sentenced [...] to 12 months and one day of imprisonment, followed by three years of supervised release, for false advertising and misusing a government seal in connection with the provision of mortgage modification services.
    First One [] misrepresented its status with the U.S. Department of Housing and Urban Development (“HUD”). First One employees were instructed to inform homeowners that “[w]e’re a HUD approved lender and we represent the government loan modification programs.” In addition, certain of First One’s forms claimed that the company provided “HUD . . . Housing Counseling assistance” and bore HUD’s seal. In truth, First One had no affiliation with the government mortgage loan assistance programs and was not licensed or approved by HUD for housing counseling or home mortgage loan modification services.

    Through this scheme, 302 victims lost a total of $374,622. Many of these victims were previously compensated after VESCERA and First One paid approximately $1.5 million to the Neighborhood Assistance Corporation of America in March 2013 to resolve a federal lawsuit in the Central District of California. As part of this criminal case, VESCERA paid restitution of $30,320 to 24 of the victims who were not identified at the time the federal lawsuit was settled.

Wednesday, October 19, 2016

Ex-NJ Politician Gets 10 Months House Arrest After Getting Nailed For Rent Skimming On 2-Family House; Admits Pocketing Nearly $150K In Rental Income While Stiffing Lender Out Of House Payments On $400K+ HUD-Related Mortgage

In West New York, New Jersey, The Jersey Journal reports:
  • A former West New York commissioner will spend about a year on house arrest for collecting nearly $150,000 in rental income while being in default of a federal mortgage loan.

    Ruben Vargas pleaded guilty to equity skimming in May after obtaining a $417,449 loan through the Department of Housing and Urban Development to buy a two-family home at 5512 Grant Place. Vargas collected about $3,000 each month in rental income from the property without making any payment on the mortgage that he obtained in 2007, U.S. Attorney Paul J. Fishman announced.

    Vargas was sentenced [] to three years of probation with 10 months of location monitoring in Trenton. He was ordered to pay the federal government back the $149,900 he collected in rental income, but does not have to pay the interest on the loan.

    By law, anyone in default of a HUD loan can only use rental income for necessary expenses to the property and for making payments on the mortgage.
    Vargas faced up to five years in prison and $500,000 in fines on the charge. Fines in the case were waived and he was only ordered to pay an additional $100 for assessment, according to the minutes of his sentencing.

Dallas Slumlord Refuses To Comply With New City Ordinance Tightening Rules, Enforcement On Rental Properties; Threatens To Bulldoze Problem Properties, Telling 300+ Tenants: Either Buy The House Or Pack Your Bags & Take A Hike!

In Dallas, Texas, WFAA-TV Channel 8 reports:
  • The man identified by News 8 last February as the largest junk property landlord in the city is threatening to evict most of his tenants. Hundreds of residents could be affected.

    It comes after the Dallas City Council voted last [month] to tighten the regulations and enforcement on rental properties. But rather than conforming to the new rules, the owner of HMK Ltd. is threatening to bulldoze many, if not all, of his rental properties by the end of the month.

    The letter was sent to city officials and tenants just a few days ago. It reads, “HMK, Ltd, as the landlord, is terminating each and every tenancy at each listed property […] as soon as legally possible;” and after the tenants move out the landlord will either immediately demolish the rental unit or no longer use the unit for residential purposes.

    Included in the notice to the city was a list of 305 residential properties that would be affected.

    News 8 talked to several tenants [] who confirmed they were given the option of either buying their property outright or moving out by the end of the month.

    HMK is run by a man named Khraish H. Khraish. Last February, News 8 published a map of Khraish's empire, an estimated 400 rental homes and apartments mostly located in west and south Dallas. In one case in west Dallas he owns an entire block of homes.

    Some tenants we talked to earlier this year say they were living in poor conditions and getting the landlord to make repairs has been next to impossible.

    The city responded by tightening rental property codes, rules, and enforcement. Now, Khraish is responding by forcing tenants to either buy their homes or move.

    Some of those residents told us the asking price for their homes is $40,000, which is well above the average $12,000 value assessed by the Dallas County Appraisal District.

    [T]he City of Dallas issued the following response:

    "At a time when the City is facing a crisis with homelessness, HMK’s mass evictions will likely cause many of its tenants to suffer serious hardships because they may not be able to find suitable alternative housing on such short notice. Regardless, HMK would not need to close so many dwellings had it properly maintained them."
Source: Junk landlord investigated by News 8 evicting hundreds of tenants.

For a story follow-up, see Dallas Judge Temporarily Halts Mass Eviction:
  • State District Judge Ken Molberg [last week] ordered a Dallas landlord to temporarily halt the abrupt mass closure of hundreds of rental houses in some of the city's poorest neighborhoods.
See also, The Texas Tribune: As Dallas Struggles With Poverty, Landlord Plans Abrupt Closures.

Tuesday, October 18, 2016

Real Estate Operator Accused Of Illegally Snatching Surplus Proceeds From Foreclosure Sales For Unpaid Real Estate Taxes Admits No Wrongdoing, But Agrees To Cough Up $415K+ To Settle Indiana Lawsuit; State AG Announces Restitution Distribution To 24 Aggrieved Homeowners While Setting Sights On Other Outfits Engaged In Similar Schemes

From the Office of the Indiana Attorney General:
  • Indiana Attorney General Greg Zoeller announced [] the return of more than $415,000 to Indiana homeowners victimized by a complicated tax sale scheme orchestrated by California-based 4Bridge, LLC and Colorado-based Asset Recovery, Inc.

    According to complaints filed by the Attorney General’s Office in Marion County Circuit Court this year, 4Bridge and Asset Recovery perpetrated a complicated scheme that took advantage of vulnerable Hoosiers across the State who had fallen behind in their real-estate taxes and who did not understand the tax sale process. Homeowners in Elkhart, Howard, Lake, Madison, Marion, Vanderburgh, and Vigo counties will receive a refund.

    The settlement calls for restitution totaling $418,525.97 to 24 Indiana homeowners and a permanent injunction preventing further behavior described in the complaints:
  • Violations of the Home Loan Practices Act: Concealing material information in connection with real estate transactions and engaging in real estate transactions without proper licensure.
  • Violations of the Deceptive Consumer Sales Act: Unfair, abusive, or deceptive acts, omissions, or practices in connection with consumer transactions.
  • “Rarely have we seen a scam that so brazenly exploited desperate property owners and took advantage of their lack of understanding of a complicated legal process. Victims not only lost their property but thousands of dollars rightfully owed to them,” Zoeller said.

    Consumers whose funds had already been distributed will receive monthly payments from Asset Recovery and 4Bridge made payable to, and distributed by the Attorney General’s Office. The remaining homeowners are able to claim the surplus available to them. The Marion County Circuit Court has already entered Orders directing funds to be paid to several of the affected homeowners.

    Zoeller added his office is pursuing an action against other companies he alleges conducted similar schemes across the state. Earlier this year, the Attorney General filed a lawsuit – for up to $12 million in restitution and penalties – against FLRC, LLC. / Oak Tree, LLC; and Coastal Title, Inc. Several individuals operating on behalf of the companies were named in the lawsuit as well.

    These schemes impacted at least 48 vulnerable Hoosiers in Allen, Johnson, Lake and Marion counties, attempting to swindle them out of surplus funds upwards of tens of thousands of dollars.

    “These cases have not only highlighted how homeowners were being exploited, but also assisted local officials in providing more education to citizens,” Zoeller said. “Working with county officials has been key in identifying and preventing potential fraud.”

    4Bridge and Asset Recovery’s Scheme

    When a homeowner falls behind on their property taxes, the county lists the property at tax sale. The minimum bid set for these homes is the amount owed in taxes. If the winning bid exceeds the amount of the unpaid property tax owed, the county claims the tax amount, special assessments, penalties and the costs of the auction. The original homeowner is entitled to any surplus amount beyond what may be owed to a mortgage lender. This surplus may be considered a rough equivalent to their home’s equity.

    The original homeowner then has one year to redeem the property if he or she can pay back the taxes originally owed. If the homeowner can’t pay within a year, then the bidder is awarded ownership of the property. It’s during this one-year time window that 4Bridge and Asset Recovery perpetrated the scheme.

    Using court and public records, the companies and their agents located and contacted the original homeowners whose properties had been sold at tax sales for large surplus amounts. They deceived at least 24 homeowners by making misrepresentations about their legal rights to redemption or surplus in the tax sales. The scam worked best with property owners who did not have an outstanding mortgage that would have to first be paid off with the surplus.

    By exploiting the homeowners’ unfamiliarity, 4Bridge, Asset Recovery and their agents persuaded the homeowners to sign quitclaim deeds and other legal paperwork turning over their remaining legal interest in the properties to the companies. 4Bridge and Asset Recovery, in turn, were then able to submit claims for the tax sale surplus funds that the 24 original owners would have been entitled to – in amounts ranging from $3,000 up to $53,000.

    The Attorney General’s Office through its Homeowner Protection Unit (HPU) fielded complaints about the tax sale scheme from the affected owners and from county officials, who were able to identify the potential scheme only after the deed exchanges were filed with the county offices.

    The complaint notes violations including “unfair, abusive or deceptive” conduct; “incurable deceptive acts” and that the entire scheme conducted by Asset Recovery is considered “unconscionable”. Under the settlement the companies did not admit wrongdoing but have agreed to comply with settlement terms.

Statute Of Limitations Defense Bites Another Home Mortgage Lender

In Suffolk County, New York, Newsday reports:
  • A Suffolk state Supreme Court judge has dismissed a foreclosure action on a $2.47 million mortgage on a Westhampton home, citing New York’s six-year statute of limitations.

    Bohemia-based Young Law Group PLLC, attorneys for Samuel Rudick, defendant in the case, argued that lender U.S. Bank failed to begin its foreclosure action in time.

    In 2003, Samuel Rudick and Patricia Rudick, who is now deceased, took out a $1.75 million loan for their Westhampton home. The Rudicks had the loan modified a year later, before taking out a second mortgage on the home in 2006. Later that year the two loans were consolidated with a third note, totaling $2.47 million.

    The original lender, JP Morgan Chase Bank, placed a lien on the home before sending a note of default to the Rudicks, “stating that they had defaulted on their mortgage loan by failing to tender their monthly payments,” Judge Joseph Santorelli wrote in his ruling Tuesday. In 2008 JP Morgan commenced a foreclosure action.

    “At some point that action was discontinued, and then the bank commenced a second foreclosure action,” said Ivan Young of the Young Law Group. According to documents, that second, 2014 action was dismissed for missing the six-year deadline started by the first foreclosure action. “Then they [U.S. Bank] commenced a third foreclosure action, in 2015.”

    Young, who said he has worked on “a dozen” foreclosure cases invoking the statute of limitations in the last two years, said what made the Rudicks’ case more complex was the change in lenders. The first two actions were initiated by JP Morgan Chase, before the loan balance was transferred to U.S. Bank in 2014.

    The lender still has a mortgage lien on the property, but Rudick can now file court papers seeking to have the lien removed, Young said.

    U.S. Bank has until Nov. 3 to file a notice of appeal if it will try to get the dismissal of the foreclosure overturned. A spokesman for the lender declined to comment.

    Young said he has worked on four cases in which judges dismissed foreclosure actions because lenders missed the six-year deadline. In one, a Brooklyn family was able to get the $75,000 mortgage lien on their property removed, so they now own it free and clear, Young said. In another case, a lender has appealed the dismissal of a foreclosure action on a Sound Beach home; the Appellate Division is expected to hear oral arguments soon, Young said.

    Under state law, the clock starts running when a lender first files a foreclosure case declaring the entire loan due, Young said. If that original case gets dismissed, the lender must file a new case within six years of calling in the loan.

Monday, October 17, 2016

NYPD Cop Accused Of Swiping Title To Home With Forged Deed To Sue Local DA For False Arrest After Judge Throws Out Most Charges Against Her

In Brooklyn, New York, Gothamist reports:
  • An NYPD cop who prosecutors have accused of stealing a townhouse in Bedford-Stuyvesant through a fraudulent deed transfer is striking back, announcing her plans to sue the city for false arrest after a judge threw out some but not all of the charges against her.

    Police arrested veteran NYPD beat cop Blanche O'Neal, 46, last year on charges of possessing and filing forged documents, grand larceny, and perjury, alleging that she carried out the bogus purchase of the abandoned property from one of the heirs to the deceased owner, claiming he was the "sole heir," and later lied to a grand jury by saying she was the owner of the house. In March, a judge threw out three of the four charges against her, leaving only the perjury charge, which stems from a grand jury proceeding where she testified as a prosecution witness against a burglar.
    Sanders and O'Neal allege that the prosecution is actually an extension of the efforts of the people behind an LLC with a central Long Island address to take over the property by fraud. They claim that the company, 23A Vernon LLC, and its principal, Yotam Michaeli, have concocted fake heirs to the property, doctored a death certificate for its late owner, and improperly acquired a Sheriff's Office investigator's interview notes with O'Neal to bolster their civil case to take the property. The owners have also, O'Neal's lawyers claim, repeatedly sent men to harass O'Neal, at the three-story Vernon house, as well as at the 83rd Precinct where she works, and threatened her livelihood.
    The floundering of the prosecution of O'Neal could be seen as demonstrating the difficulty of untangling ownership in such cases.

    O'Neal's trial is set for October 19th. She faces as many as seven years in prison, not to mention the loss of her job, and of the house, which is easily worth more than a million dollars. The DA's Office is appealing the judge's decision to throw out her other charges.

Looking To Dodge Tear-Down Costs On Condemned Home, Nationwide Real Estate Operator Comes Up Empty In Effort To Rope In An Unwitting Buyer Willing To Bite On Lease-To-Own Bait On Eve Of Demolition

In Green Bay, Wisconsin, WFRV-TV Channel 5 reports:
  • Last month, we told you about a house off Ashland Avenue that was condemned by the City of Green Bay but offered as a lease-to-own home by a company called Vision Property Management.

    In our 5 Investigates reports, we told you that offering a condemned home for lease is a violation of city code, and the city was ready to tear the house down on Thursday [Sept. 29].

    But now, the owner tore it down before the city could - something Green Bay's neighborhood development specialist Ken Rovinski says is not very common.

    "Typically that doesn't happen," he said. "Typically once it gets to my desk, it will be our contractor that will take it down. You don't usually see the owner step in if it's already been contracted out."

    Vision Property Management has been advertising the condemned house as lease-to-own, which is a violation of city code. In fact back in August, the company offered to lease our producer the house for $750 a month.

    Just last week when crews arrived to remove asbestos, Vision had posted a 'best offer' for sale sign in the front yard. This was concerning to the city.

    "If they would've sold this property and then our demo contractor would've come in, that bill then could've been put on the new owner," said Ravinski. "That's something they weren't advertising, that the demo was scheduled to happen at all. That would've been the extra on top of their $20,000 that they were charging for the property, there would've also been the added bill for this demolition."

    If the property did not sell, that demolition bill would have been on Vision Property Management, which could be one reason the company chose to demolish the home with its own contractor.

    On Monday, 5 Investigates spoke with Mike Murray with Strategic Vantage, a PR firm which represents Vision Property Management.

    "Vision Property Management decided to retain its own company because basically it costs more for the city to do it, so they decided to retain their own company," said Murray.

    City officials admit the company demolishing the house was a bit of a surprise, especially since they've been trying to talk with Vision about the property since it was condemned in April.

    Vision currently owes the city about $9,000 for repairs and damages at other properties in Green Bay.
Source: 5 Investigates: Rent-to-own follow up (Ashland property demolished before scheduled date). rent to own land contract for deed

81-Year Old Ex-Lawyer Buys His Way Out Of Prison Time; Pays $11K Upfront, $400/Month Over 14 Years As Restitution For Ripping Off 80+ Year Old Widow Out Of $75K

In Genesee County, New York, The Batavian reports:
  • Prominent 81-year-old attorney Randolph Zickl was sentenced to five years probation in Genesee County Court [] and ordered to pay $400 a month in restitution to his victim, the widow of a former client.

    Zickl admitted stealing $75,398 dollars from the woman, who is "well into her 80s," and on June 24th he pled guilty to second-degree grand larceny, a Class-C felony punishable by up to 15 years in prison.(1)

    Prosecuting attorney Candice Vogel, an assistant DA in Erie County, said after today's proceedings: “The sentencing order was for five years probation. During that five years of probation the defendant was ordered to make restitution payments at the rate of $400 a month through the Probation Department here in Genesee County. He had already made a payment of $11,300 before we arrived here today.”

    That leaves a remainder of $64,098 in restitution to be repaid to the victim. At the rate set today, she will not see the full restitution payment for approximately 14 years.

    Zickl was once one the most respected attorneys in the county, heading up the County’s Office of Legal Assistance. He also has two sons currently working in the Genesee County District Attorney’s Office.

    One of Randolph Zickl’s defense attorneys said before sentencing that he “feels horrible” about his crime; Zickl declined to speak before sentencing.

    His defense also requested that he be given 60 days before continuing restitution payments as he has already paid a large sum of the amount and is currently living off of Social Security.

    Presiding Judge James Bargnesi gave Zickl 30 days before the resumption of monthly restitution.

    Vogel said that the perpetrator's age, the victim's age, the sizable amount of restitution paid to date and Zickl's assets and capability of paying the remaining amount all factored into the judge's decision to grant probation and set the amount of monthly restitution. Vogel said the victim's family is aware of the terms and indicate they are comfortable with them.

    Asked about the likelihood that the victim will live to reap the benefits of full restitution, Vogel said: "This is one of the biggest issues of financial exploitation of the elderly. It's kind of a race..." to try and prosecute such crimes and recoup what was stolen before the victim dies.

    Vogel said, technically, if Randolph Zickl dies before he completes restitution, the balance will be the liability of his estate and its heirs.
Source: Randolph Zickl given five years probation, ordered to pay $400 a month in restitution.
(1) The Lawyers’ Fund For Client Protection Of the State of New York manages and distributes money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the New York bar acting as an attorney or a fiduciary.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Sunday, October 16, 2016

One Canadian Crooked Lawyers' Victim Reimbursement Fund Boosts Max Payout To $500K Per Screwed Over Client Fleeced By Dishonest Attorneys; Bar To Cover Higher Cap By Clipping Province Attorneys Add'l $18/Year

In Toronto, Ontario, the Times Colonist reports:
  • Anyone cheated by a lawyer in Ontario will now be eligible for up to $500,000 in compensation, more than triple the previous limit, the body that regulates the profession has decided.

    In recommending the higher cap, a committee of the Law Society of Upper Canada tasked with the issue noted the last increase was in 2008, at which the time the limit was set at $150,000.(1)

    "In light of the over eight years that have elapsed since the last increase and acknowledging the mandate of the law society to govern in the public interest, the committee determined that an increase in the per claimant limit is appropriate at this time, notwithstanding the infrequency with which claims exceeding the limit are likely to arise," the committee concluded.

    Between Feb. 1, 2014, and Aug. 31, 2016, the fund doled out almost $7.5 million to 260 claimants, law society figures show.

    The highest payout during that period — almost $1.4 million — went to 35 clients of Javad Heydary, a Toronto lawyer who took money from trust accounts before he fled to Iran in late 2013 and likely died there.

    Another 10 clients of Richard Chojnacki, a lawyer from Mississisauga, Ont., received $1.08 million. His licence was revoked in October 2010 and he was jailed in 2012 after pleading guilty to fraud for embezzling money from clients.

    The society established the fund in 1953 to compensate clients who lose money due to their lawyer's dishonesty. Errors and omissions insurance, which covers negligent conduct, does not cover dishonest conduct, such as theft.

    "The legal profession is considered unique in protecting clients from dishonesty in this fashion," its report states.

    Claims in other provinces vary widely. For example, Nova Scotia has no limit while Quebec's is set at $100,000. A survey of "client protection funds" in the United States also showed wide variance in programs, ranging from limits of $50,000 to $400,000.

    To cover the higher cap approved this week, the society's 35,000 practising lawyers will have to pay another $18 a year, bringing their levy to $290.

    People ripped off by paralegals can get as much as $10,000 — an unchanged amount. The fund paid 37 clients of paralegals $85,640 from February 2014 to the end of last month.
Source: Cap on crooked lawyers fund in Ontario raised to $500K per claimant.
(1) The Compensation Fund of the Law Society of Upper Canada helps clients who have lost money because of the dishonesty of a lawyer or paralegal practicing in the province of Ontario, Canada. It is paid for exclusively by the lawyers and paralegals of Ontario, out of their own pockets. Over the years it has paid out millions of dollars to help clients.

If you've lost money due to a lawyer or paralegal's dishonesty, the fund can reimburse you for all or part of your loss. Typically, the fund will pay for losses involving money from estates, from trust funds held for real estate closings and from settlements in legal actions. The fund doesn't reimburse in cases dealing with negligence.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other Canadian provinces or in the states throughout the United States, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Recently-Announced List Of Disciplined Attorneys Include 15 Lawyers For Playing Fast & Loose With Entrusted Money &/Or Recordkeeping Violations Related To Client Money

The Illinois State Bar Association recently announced that the state Supreme Court disbarred 13 attorneys, suspended 16 others in a latest disciplinary filing.

The following seven lawyers were disbarred for, among other things in some cases, playing fast and loose with their clients' money:
  • Bradley F. Aubel, Libertyville
    Mr. Aubel, who was licensed in 1997, was disbarred. He was convicted in federal court of obstruction of justice after he converted client credit cards to his own use. In addition, he was convicted of filing a false income tax return when he materially understated his law business’s gross receipts. He was suspended on an interim basis on January 3, 2013.

    Dwight Lenore Beck, Ford Heights
    Mr. Beck, who was licensed in 1985, was disbarred. He converted $1,800 in client settlement funds, failed to maintain complete records of his trust account, and was convicted on two separate occasions of driving an automobile on a suspended license. He failed to appear at his disciplinary hearing.

    Robert Christopher Beck, Wheaton
    Mr. Beck, who was licensed in 1995, was disbarred. He intentionally misappropriated funds in excess of $700,000 from two elderly clients, one of whom suffered from dementia, and an additional $189,500 from the estate of a third client following that client’s death.

    Reid D. Henderson, Washington D.C.
    Mr. Henderson was licensed in Illinois in 2005 and in the District of Columbia in 2007. The District of Columbia Court of Appeals disbarred him after he neglected six client matters, failed to keep those clients reasonably informed about the status of their cases and engaged in dishonesty when he made false statements to clients and misappropriated fees paid in advance. The Illinois Supreme Court imposed reciprocal discipline and disbarred him.

    Ronald L. McPheron, Chicago
    Mr. McPheron, who was licensed in 1993, was disbarred. He settled a client’s personal injury case without her authority and then intentionally misappropriated $11,737 in settlement funds he had received on her behalf. He also fabricated settlement documents to conceal actions and did not cooperate with the ARDC investigation into the matter.

    Frank Anthony Santilli, Chicago
    Mr. Santilli, who was licensed in 1989, was disbarred on consent. He knowingly misappropriated over $500,000 in client settlement funds and signed a medical lienholder’s signature to three settlement checks without authority. He was suspended on an interim basis on June 1, 2016.

    David Joel Silberman, Mequon, Wis.
    Mr. Silberman, who was licensed in 1973, was disbarred. While operating a title insurance company in Wisconsin, he transferred more than $460,000 from the company’s escrow accounts to its operating accounts, and used more than $180,000 of that money, which had been supplied by mortgage lenders and real estate purchasers planning to buy properties, to fund the title company’s operations.
In addition, the following eight attorneys had their licenses suspended for varying periods of time for either playing fast and loose with money belonging to their clients and/or others, or, in one case, failing to promptly provide a client with an accounting for the assets in an estate upon request:
  • Edward Christopher Abderholden, Chicago
    Mr. Abderholden, who was licensed in 1977, was suspended for six months and until further order of the Court, with the suspension fully stayed by a two-year period of conditional probation. He converted $2,666.50 in client funds and also failed to timely pay medical providers on behalf of that same client when he allowed checks payable to certain medical providers to become stale.

    Robert Allan Holstein, Chicago
    Mr. Holstein, who was licensed in 1962, was suspended for eighteen months. He knowingly used at least $20,000 in fees that were the subject of a citation to discover assets in order to pay personal expenses. The suspension is effective on October 13, 2016.

    Larry S. Mayster, Chicago
    Mr. Mayster, who was licensed in 1955, was suspended for six months, with the suspension stayed after thirty days by a six-month period of conditional probation. He mismanaged approximately $800 in settlement proceeds belonging to third-party lien holders while handling a personal injury matter and failed to maintain complete records for his client trust account. The suspension is effective on October 13, 2016.

    Vincent J. O'Brien, Chicago
    Mr. O’Brien, who was licensed in 1987, was suspended for nine months, with the suspension stayed after four months by a twelve-month period of conditional probation. He did not diligently pursue two personal injury matters and a pending estate matter and he did not inform his clients of, or respond to their requests for information about, the status of their cases. Also, in one of the personal injury matters, he misrepresented the actual status of the case to the client and, in the estate matter, he did not provide his client with an accounting for more than four months after the client’s request. The suspension is effective on October 13, 2016.

    Douglas Alan Shenk, Northbrook
    Mr. Shenk, who was licensed in 1976, was suspended for thirty days and required to complete the ARDC professionalism seminar. He converted $3,210.35 of client and third party funds by using them for his own business or personal purposes. The suspension is effective on October 13, 2016.

    James E. Taylor, Chicago
    Mr. Taylor, who was licensed in 1992, was suspended for one year, with the suspension stayed after sixty days by a two-year period of conditional probation. He did not diligently represent four different clients in a variety of legal matters, failed respond to client requests for information, and did not timely refund unearned legal fees. He also did not deposit the advance payments of legal fees provided by those clients into a client trust account. The suspension is effective on October 13, 2016.

    Francis Joseph Coyle, Jr., Rock Island
    Mr. Coyle, who was licensed in 1974, was suspended on an interim basis and until further order of the Court. An ARDC hearing panel earlier found that he had misappropriated $100,000 in escrow funds and made intentional misrepresentations to another attorney about the status of those funds. The panel recommended that he be disbarred.

    Richard Carl Moenning, Chicago
    Mr. Moenning, who was licensed in 1962, was suspended on an interim basis and until further order of the Court. An ARDC hearing panel earlier found that he had engaged in multiple acts of misconduct in connection with his role as attorney for, and trustee of, two trusts, as well as in his role as attorney in two separate probate matters. The panel found that he had intentionally taken an excessive amount of fees and recommended that he be disbarred.
Source: Illinois Supreme Court disbars 13, suspends 16 in latest disciplinary filing.

Editor's Note: The Client Protection Program of the Attorney Registration and Disciplinary Commission (ARDC) was established by the Supreme Court of Illinois to provide reimbursement to clients who have lost money or property because of dishonest conduct by lawyers admitted to practice law in the State of Illinois. The Program reimburses clients who cannot get reimbursement from the lawyers who caused their losses, or from other sources such as insurance. (But see Stolen Inheritances: I-Team lawyer warning, in which one Illinois victim said of the program, "Their rules are vague, ambiguous and they are applied at their own discretion, and you can't get a straight answer[.]")

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Bail Set At $100K For Attorney Pinched For Practicing Law With Suspended License & Receiving, Misapplying Over $500K In Entrusted Client Funds

From the Office of the Bergen County Prosecutor:
  • Acting Bergen County Prosecutor Gurbir S. GREWAL announced the arrest of JAY I. LAZEROWITZ, a 58-year-old Franklin Lakes, New Jersey man, on Unauthorized Practice of Law and Misapplication of Entrusted Property charges.
    The investigation, which was based on civilian complaints and information received from the New Jersey Office of Attorney Ethics revealed the following:

    Jay I. LAZEROWITZ, whose license to practice law was suspended on January 27, 2016, failed to comply with Attorney Ethics regulations and continued to practice law. Even though his Attorney Trust Account was frozen as a result of his suspension, Mr. LAZEROWITZ continued to receive monies in trust. Mr. LAZEROWITZ received those entrusted funds and placed them into regular, business type checking accounts.

    During the course of the investigation, it was determined that Mr. LAZEROWITZ also misapplied entrusted funds by moving and/or utilizing funds outside the terms of the established escrow agreements. The funds lost to date are in excess of $500,000.

    On September 19, 2016, Jay I. LAZEROWITZ was charged on a Warrant issued by the Bergen County Central Municipal Court. On September 23, 2016, Mr. LAZEROWITZ was arrested by members of the Bergen County Prosecutor’s Office White Collar Crimes Unit. [...] Mr. LAZEROWITZ was remanded to the Bergen County Jail in lieu of bail set at $100,000 with a ten percent cash alternative [...].

State Supremes Disbar Illinois Attorney Facing Criminal Charges For Allegedly Glomming Over $2 Million Of His Clients' Money; Dementia-Suffering Senior, Dead Client's Estate Among Unwitting Victims; Suspicious Bank Investigator Blows Whistle, Triggers Probe

In DuPage County, Illinois, the Daily Herald reports:
  • A Wheaton attorney facing criminal charges for stealing more than $2 million from his clients has been disbarred.

    The Illinois Supreme Court and the Attorney Registration and Disciplinary Commission orders released Thursday [September 23] state that Robert Beck, licensed in 1995, was disbarred because he "intentionally misappropriated funds in excess of $700,000 from two elderly clients, one of whom suffered from dementia, and an additional $189,500 from the estate of a third client following that client's death."(1)

    In his criminal case, Beck, 49, [...], is accused of bilking the estates of four former and three current clients of $1 million from July 2011 through January 2015. He is free on $250,000 bail.

    Prosecutors have alleged Beck would steal money from a client's trust for the estate and use that money for personal and business expenses. He would then steal money from another client's trust for the estate and use that money to pay back the estate of his previous victims.

    Beck also is accused of shifting roughly $1.3 million among the trusts using one to pay the heirs of another to cover up the thefts.

    Beck's alleged scheme came to light when a bank investigator became suspicious of the transactions.
Source: Wheaton attorney facing theft charges is disbarred.
(1) The Client Protection Program of the Attorney Registration and Disciplinary Commission (ARDC) was established by the Supreme Court of Illinois to provide reimbursement to clients who have lost money or property because of dishonest conduct by lawyers admitted to practice law in the State of Illinois. The Program reimburses clients who cannot get reimbursement from the lawyers who caused their losses, or from other sources such as insurance. (But see Stolen Inheritances: I-Team lawyer warning, in which one Illinois victim said of the program, "Their rules are vague, ambiguous and they are applied at their own discretion, and you can't get a straight answer[.]")

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Attorney Gets Hammered With 60-Day License Suspension Over Technical Bar Violation That Harmed No One (Except Himself); Lawyer Failed To Promptly Remove His Earned Fees From Client Trust Account, Paying Business & Personal Expenses Out Of His Own Money Using Trust Checks

Anyone wondering how strictly attorney regulatory bodies will enforce client trust account rules against their members may find the following story of some interest, courtesy of the Northern California Record:
  • The California State Bar Court placed [a] San Jose attorney [] on a 60-day suspension from practicing law and gave him a two-year probation with specific requirements that include completion of the multistate professional responsibility examination.

    [His] failure to meet the requirements of his probation can lead to a two-year suspension.

    The sanction is based on [his] commingling of funds during a 10-month period in 2009. He deposited advance fees into a client trust account and failed to remove them in a timely fashion and as soon as his interest in the funds became fixed. He used the funds to pay businesses and personal expenses that included a membership to Gold’s Gym and utilities.

    In weighing [his] violations, the court found that although his use of funds from the client trust account indicated misuse and mismanagement, there was no evidence that he “actually endangered client funds, left insufficient funds in his account or otherwise used client funds to pay personal expenses.”

    Furthermore, the court found no evidence that any client was harmed, as a result of respondent’s misconduct, because the money he used was earned via fees.

    In its report, the court supported its decision to deviate from the standard suspension time of 90 days.

    “Taken together, the mitigating circumstances suggest a low risk of recidivism. [He] demonstrated remorse at the first opportunity and took significant steps to reduce potential misconduct from reoccurring. Under the circumstances, including the fact that the misconduct occurred over five years ago, and that it was isolated to one year in an otherwise discipline-free practice of over 25 years, a deviation from the 90 days minimum is appropriate.”

    As part of his discipline, [he] must pay $2,797 related to the cost of disciplinary proceedings.
    The court also gave [him] points for cooperating with the investigation and admitting to his violations rather than pushing the issue to trial, thus sparing State Bar resources.

Saturday, October 15, 2016

Non-Profit Health & Housing Group Reaches Settlement Of Fair Housing, Other Claims In Lawsuit Centered Around City's Abrupt Changes In Zoning, Land Use Ordinances To Prevent Use Of Premises To Provide Aid To Homeless

In Yakima, Washington, the Yakima Herald-Republic reports:
  • Under a settlement agreement reached [last month], Yakima Neighborhood Health Services(1) will drop its federal lawsuit against the city of Yakima and instead submit a new application for using Roy’s Market as an apartment building to house local homeless people.

    The revised application, which Neighborhood Health must submit within 90 days, will be for an apartment facility in which up to 40 homeless people could stay for 30 days to two years — not for a temporary shelter.

    “We’ve agreed the facility will not be designed as a place of temporary sojourn, a mission or a warming shelter,” said Rich Hill, Neighborhood Health’s attorney in the lawsuit, which was filed in Superior Court in February and moved to federal district court in March.

    The settlement is a “positive step,” Hill said. “Neighborhood Health is excited to work with the city on obtaining approval for the proposal,” he said.

    The pressing issue of where to house Yakima’s homeless population has been in contention since the fall of 2014, when Neighborhood Health expressed interest in installing an emergency homeless shelter in the Roy’s Market site — to which the city responded by passing an emergency moratorium on new homeless shelters in “Small Convenience Center” (SCC) zones in Yakima.

    Though a city hearing examiner agreed with Neighborhood Health’s proposal, which included other social services besides the emergency shelter, the city appealed and ultimately denied the application. Neighborhood Health then sued the city in Superior Court to overturn the land-use decision; that suit remains on hold pending the outcome of the new application process.

    The separate federal-court suit dealt with Neighborhood Health’s allegations of Fair Housing Act violations and discrimination by the city in making certain zones off-limits for homeless shelters.

    Resolving that lawsuit rather than continuing to push it through the court system was in both parties’ interest, said Ken Harper, the city’s attorney on the case.

    “The litigation process is full of cost; it’s full of risk,” Harper said []. “Over the summer, as we had discussions in and outside the litigation setting, it became obvious that there was an opportunity to resolve this outside of litigation.”
    Rather than a shelter, the facility would be an apartment complex, likely with a variety of one- or two-bedroom units to accommodate families in need of housing.

    Neighborhood Health would be the landlord, and the individuals would be treated as normal tenants — likely with continued support and case-management services through Neighborhood Health programs.

    “The tenant has to behave themselves or they can’t stay in the unit,” [Neighborhood Health's board chairman Don] Hinman said. “We’re not going to turn anybody away, but we’re not going to allow any disruptive behavior, either.”
For more, see Lawsuit settlement could mean housing for Yakima’s homeless (Yakima Neighborhood Health Services plans to open a facility that would house up to 40 homeless people after it dropped a federal lawsuit against the city). zoning land use ordinance regulations
(1) Yakima Neighborhood Health Services is a private, non-profit housing & health care organization that provides comprehensive medical, dental , and behavioral health care at seven locations in Washington State's Yakima Valley; and also provides emergency shelter services, and permanent supportive housing locally for homeless individuals and families (including medical respite care).

HUD, Mississippi Municipality Reach Settlement In Fair Housing Lawsuit Accusing City Of Using "Agressive Code Enforcement Regime", Passing Lower Density Restrictions In Zoning, Land Use Ordinances In Attempt To 'Bleach' Minority-Populated Area Of Blacks, Latinos

In Ridgeland, Mississippi, the Jackson Free Press reports:
  • Just a few months after the U.S. Department of Housing and Urban Development filed a complaint against the City of Ridgeland for alleged violations of the Fair Housing Act, it announced a conciliatory agreement with that city []. In its Dec. 20, 2015, complaint, HUD alleged that Ridgeland's 2014 Comprehensive Zoning Ordinance engaged in "unlawful discrimination based on race in its ongoing 'amortization,' condemnation, and threatened removal" of five apartment complexes and the "rezoning of approximately nine."

    Suburban Ridgeland annexed its southeastern corner from the City of Jackson in 1981 and, from 1990 to 2010, saw its population of color drastically increase. HUD alleges in the complaint that Ridgeland has prioritized the redevelopment of that majority black area since 2006, with the mayor and board of aldermen selecting an all-white Community Awareness Committee for the purpose. Then, HUD says, the City implemented an "aggressive code enforcement regime" for those apartments in 2010. When that failed, Ridgeland adopted its 2014 Ordinance and largely blocked apartments' efforts to come up to code in another attempt to bleach the area.(1)
    The Mississippi Center for Justice, a legal advocacy group, in conjunction with legal group Venable LLP, also filed a complaint against the City of Ridgeland on behalf of the denizens of some of the apartment complexes in southeast Ridgeland this February, also for Fair Housing Act violations.

    "We're thrilled with the conciliation," John Jopling, managing attorney for the Mississippi Center for Justice, told the Jackson Free Press. "It really does vindicate the basics of our lawsuit, which is the Fair Housing Act and the disproportionate impact the zoning ordinance had on African American and Latino residents." Jopling says the Mississippi Center for Justice has to confer with its partners and clients over the future of the lawsuit.

    Among its responsibilities in the HUD settlement, Ridgeland must amend the 2014 Zoning Ordinance and appoint a fair housing compliance officer.
For more, see Ridgeland, HUD Reach Settlement in 'Shifting Demographics' Dispute.
(1) See HUD Announces Agreement With Ridgeland, Mississippi To Settle Discriminatory Zoning Complaint:
  • [I]n December of 2015, HUD filed a fair housing complaint against the city after receiving reports that a number of apartment complexes faced possible demolition after the city instituted a new zoning requirement that lowered the allowable density.

    Specifically, HUD complained the city’s new zoning ordinance called for several of the apartment complexes with the highest minority populations to be amortized, putting more than 1,400 units at risk of being replaced with mixed-use developments. HUD also alleged that other majority minority complexes were subjected to lower density restrictions, which could have resulted in a loss of hundreds of additional apartment units.

Another Landlord Gets Roped Into Housing Discrimination Lawsuit Over Alleged Denial To Allow Tenant's Request For Emotional Support Pooch; Complaint To Local Non-Profit Group Triggered Probe Utilizing Fair Housing Testers

In Pittsburgh, Pennsylvania, the Pittsburgh Post-Gazette reports:
  • A Bethel Park woman sued her landlord [], alleging that she was denied her right to an emotional support dog at a Shadyside complex, and was not fully accommodated when she moved to the suburbs.

    Victoria Immel, 22, suffers from general anxiety disorder and "requires the use of an emotional support dog to mitigate these symptoms, as prescribed by her licensed therapist," according to the lawsuit in U.S. District Court.

    From 2012 through early 2016, she lived in a Fifth Avenue building owned and managed by Amore Limited Partnership, Amore Management Co., and related firms, according to the complaint.

    In late 2015, Ms. Immel got an emotional support dog, but Amore refused to allow it in the apartment building, so it stayed with her mother in Ohio, she alleges. In June, she moved to the Lindenbrooke complex in Bethel Park, which allows pets, but the dog is still "prohibited from being with her in the common areas" there, according to the complaint.

    The Fair Housing Partnership of Greater Pittsburgh(1) sent test renters to Amore, which showed "that Amore’s corporate office ultimately does not grant reasonable accommodation requests for emotional support animals," according to the complaint. The partnership is a plaintiff in the case with Ms. Immel.

    Ms. Immel suffers "humiliation, embarrassment, emotional distress, anxiety, stress, and a deprivation of her right to equal housing opportunities," due to Amore's violations of the Fair Housing Act, the lawsuit alleges, demanding change to the company's policies, plus compensatory and punitive damages.

    Amore executives were not immediately available for comment Saturday.
Source: Bethel Park woman sues over landlord's dog policies.
(1) The Fair Housing Partnership Of Greater Pittsburgh is a nonprofit organization dedicated to the enforcement of fair housing laws in southwestern Pennsylvania through advocacy and comprehensive housing counseling services.

City Of Dubuque To Area Landlords: Beware Of Fair Housing Ambush Patrol On The Hunt For Prohibited Discrimination When Renting Apartments; Hunting Season To Begin Soon

In Dubuque, Iowa, the Telegarph Herald reports:
  • City of Dubuque officials hope data gathered during a series of upcoming landlord tests will expose any fair housing issues in the community.

    Rental property owners, however, consider the exercise an unnecessary inconvenience, according to Jerry Maro, president of Dubuque Area Landlords Association. “I think with our landlord association, everybody is pretty fair about renting their properties,” he said.

    City Council members [] signed off on a proposal from Fair Housing Center of Nebraska and Iowa to conduct the testing this fall. The organization will be paid up to $24,000 to evaluate how prospective tenants’ race or use of housing vouchers affects their renting experiences.

    The testing based on protected classes is “in furtherance” of objectives spelled out in a voluntary compliance agreement with the U.S. Department of Housing and Urban Development, according to a memo from Assistant City Attorney Crenna Brumwell.

    That agreement followed a 2013 report from the federal agency condemning the city’s administration of the Housing Choice Voucher program. HUD officials determined that black, out-of-state applicants were inordinately excluded from the program, also known as Section 8.
    Maro said landlords have been made aware of the impending study, but members of his association think the testing is a nuisance. “I guess, for most of us, basically it’s an inconvenience,” Maro said. “Because we’re answering a phone and we don’t know if it’s somebody looking for an apartment or if it’s somebody testing us.”
    The nonprofit center also will be paid $8,360 to evaluate rental housing on the basis of disability and the presence of companion or therapeutic animals, Brumwell said. “The reason for recommending that is people with physical or mental disabilities, the number is increasing,” she said.

HUD Issues Guidelines In Addressing Housing Discrimination Claims Based On Limited English Proficiency

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) [] issued "Limited English Proficiency" (LEP) guidance that addresses how the Fair Housing Act would apply to claims of housing discrimination brought by people because they do not speak, read, or write English proficiently. More than 25 million people in the United States do not communicate proficiently in English. Read the new limited English proficiency guidance here.

    The Fair Housing Act prohibits both intentional housing discrimination and housing practices that have an unjustified discriminatory effect. People with limited English proficiency are not a protected class under the Fair Housing Act. However, the Fair Housing Act prohibits discrimination on seven protected bases, including national origin, which is closely linked to the ability to communicate proficiently in English.

    Housing providers are therefore prohibited from using limited English proficiency selectively or as an excuse for intentional housing discrimination. The law also prohibits landlords from using limited English proficiency in a way that causes an unjustified discriminatory effect.

    "Having a limited ability to speak English should never be a reason to be denied a home," said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "Every family that calls this nation home has the same rights when it comes to renting or buying a home, regardless of where they come from or language they speak."

    Nearly 9 percent of the U.S. population is limited in English proficiency. Approximately 16,350,000 (or 65 percent) of these individuals speak Spanish, while 1,660,000 (7 percent) speak Chinese, 850,000 (3 percent) speak Vietnamese, 620,000 (2 percent) speak Korean and 530,000 (2 percent) speak Tagalog. Housing decisions that are based on limited English proficiency may have a greater impact on these and other groups because of their nationality.

    The guidance addresses how various legal approaches, such as discriminatory effects and disparate treatment, apply in Fair Housing Act cases in which a housing-related decision – such as a landlord’s refusal to rent or renew a lease – involves a person’s limited ability to speak, read, write, or understand English.

    Discriminatory practices, for example, could include
  • applying a language-related requirement to people of certain races or nationalities;
  • posting advertisements that contain blanket statements, such as "all tenants must speak English;" or
  • immediately turning away applicants who are not fluent in English.
  • Targeting racial or national origin groups for scams related to housing also constitutes intentional discrimination.

Friday, October 14, 2016

Contractor Faces Felony Charges Of Theft By Deception, Receiving Advance Payments For Services & Failing To Perform For Pocketing $4K Deposit For Remodeling Work, Then Never Showing Up To Job Site

In Ferguson Township, Pennsylvania, the Centre Daily Times reports:
  • A Beaver Springs contractor is facing felony charges after allegedly taking a customer’s money but never performing any work.

    According to the criminal complaint filed by Ferguson Township police, a township resident wanted some remodeling work and was contacted by Charles Meredith, 32, of Serenity Contracting LLC, on July 28. The next day, Meredith and a helper came to the home to take measurements, allegedly telling the resident work could start the next week.

    Meredith allegedly gave a written work estimate to the resident on July 30, police said, estimating the cost of the work at about $7,100, and requested a $4,000 down payment. The resident allegedly gave Meredith a check for $4,000, which cleared on Aug. 2.

    Afterward, police said, the resident allegedly tried several times to make contact with Meredith to find out when work would begin. When Meredith would return calls, police said, he allegedly would make new promises and not show up.

    By late August, the resident allegedly began asking for his money back, police said. Meredith allegedly stated on Aug. 28 that he would return the money but didn’t show up.

    The resident sent a final email to Meredith on Aug. 30, police said, allegedly saying he was going to file a report with the police.

    Meredith was arraigned before District Judge Thomas Jordan on Sept. 23, court documents said, and was charged with felony counts of receiving advanced payment for services and failing to perform, theft by deception and receiving stolen property.

Dubious Contractor Finally Gets Pinched For Allegedly Stiffing Roofing Supplier Out Of Approx. $150K, Leaving 70 Central Florida Homeowners With Liens On Their Properties

In Pasco County, Florida, WTSP-TV Channel 10 reports:
  • "I’m glad he’s behind bars," said John Pfaff, who is out thousands of dollars detectives say because of John Iacovino.

    Iacovino is now facing felony extortion charges for at least 15 other victims and detectives say that’s not all. "Seventy properties had liens against them because of Ike’s Roofing," said Detective Darren Hill of the Pasco Sheriff's Office.(1)

    Pfaff said, "I feel bad for the other people because they’re probably never going to get the lien removed." Pfaff paid Ike’s Roofing $8,800 in cash after his roof was installed thinking the deal was over, but investigators say the Ike’s owner Iacovino never paid his bills.

    "Ike’s Roofing got the supplies on credit from Suncoast Roofing Supply then did the roofing jobs, but never paid Suncoast Roofing Supply for the materials," said Hill.

    And that’s how Pfaff ended up with a $3,700 lien against his home. "When I get older it’s going to hurt because this is my nest egg," Pfaff said.

    The sheriff’s office says make sure everything is resolved before making a final payment.

    "They received a final waiver of lien from all the subcontractors and suppliers because that’s what’s going to keep you from getting a lien put on your property," Hill said.

    Pfaff, who doesn’t work due to medical issues, had this to say about Iacovino. "Karma is going to get him," said Pfaff.

    Hill said, "He wasn’t paying attention to the bills and was kind of treating the money as his personal bank account." Hill says Iacovino has a history of drug and DUI arrests, and showed no remorse for his victims. "He seemed more upset with everyone else blaming everyone but himself," said Hill.

    Pfaff said, "I’m not going to give anybody my money anymore." Pfaff says done trusting contractors.

    The sheriff's office says Suncoast Roofers Supply is out around $150,000. 10News WTSP contacted the company, but it had no comment.

    If you've paid Ike's Roofing for a job and think you may be a victim contact the Pasco Sheriff' Office at (727) 847-5878.
Source: Sheriff: Roofing contractor skipped bills, left 70 victims.
(1) The Florida Homeowners' Construction Recovery Fund is a fund of last resort that might be available to qualified individuals [no business entities] who have suffered monetary damages by the financial mismanagement or misconduct of a contractor, and who has exhausted all other resources of payment. The Construction Industry Licensing Board makes the determination of eligibility for an award. For more:
But see, Action 9 investigates state recovery fund meant to help homeowners for a story on how some homeowners claimed they got the run-around from this fund. mechanics lien

Contractor Who Allegedly Fleeced Seven NJ Homeowners Out Of $75K Gets Bagged In Florida; Charged With Theft By Failure To Make Required Disposition Of Property Received

In Ocean County, New Jersey, the Asbury Park Press reports:
  • A Clearwater, Florida, contractor is under arrest for allegedly bilking $75,000 in personal savings, insurance payments and federally funded home-repair grants, according to Ocean County officials.

    The prosecutor's office's Economic Crimes Unit charged 63-year-old Richard Woodard, part owner of the now-defunct Willwood Builders, with theft by failure to make required disposition,(1) Ocean County Prosecutor Joseph D. Coronato said. Woodard allegedly defrauded seven homeowners.

    In addition to taking his would-be clients' savings and insurance money, he also accepted payment in the form of state-administered Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) grants.

    The federally funded grants are meant to bridge the gap between insurance payments and the true cost of rebuilding storm-resistant homes.

    Willwood Builders never finished the work its clients had paid for, according to the announcement.

    Officers from the Pinellas County Sheriff's Office arrested Woodard on Friar Tuck Lane in Dunedin, Florida, on Sept. 21, according to the announcement. Florida authorities held him on a $150,000 bail as Ocean County arranges for his extradition.
For the story, see Florida contractor charged with Ocean Co. ripoffs.
(1) 2C:20-9, New Jersey Revised Statutes. Theft by failure to make required disposition of property received.

A person who purposely obtains or retains property upon agreement or subject to a known legal obligation to make specified payment or other disposition, whether from such property or its proceeds or from his own property to be reserved in equivalent amount, is guilty of theft if he deals with the property obtained as his own and fails to make the required payment or disposition. The foregoing applies notwithstanding that it may be impossible to identify particular property as belonging to the victim at the time of the actor's failure to make the required payment or disposition. [...]

Thursday, October 13, 2016

Charged With 65 Felonies, Real Estate Agent Accused Of Pilfering $250K In Loan Modification Scam Abandons "Bad Businessman" Defense, Cops Plea To Two Charges; Will Get Easy Jail Sentence (No More Than 1 Year) In Exchange For Probable Prison Time-Buy Out Deal; Victims Express Outrage

In Sonoma County, California, The Press Democrat reports:
  • A Petaluma real estate agent accused of defrauding dozens of clients across the Bay Area in an alleged home mortgage scam settled his case with state prosecutors [] with an agreement to serve up to a year in jail.

    Miguel Angel Lopez-Soleta, 44, pleaded no contest to felony grand theft and embezzlement from an elderly person through his Rohnert Park business, Mortgage Modifiers, in 2012.

    In addition to possible jail time, Lopez-Soleta will receive five years of probation and be ordered to pay restitution at his Dec. 1 sentencing hearing. Prosecutors agreed to dismiss the 63 remaining charges.

    Former clients who claimed they were ripped off by Lopez-Soleta expressed outrage at what they said was a light punishment. Robert Gillis, who said his mother lost her Novato home to foreclosure because of Lopez-Soleta, said he should have received 20 years in prison.

    “It’s totally unacceptable,” said Gillis, who is part of an email group with 100 people who lost money on the alleged scam. “None of the victims agree with it. They are so upset.”

    Caroline S. Chen, the deputy attorney general handling the case, did not return a call [] seeking comment. She told Judge Robert LaForge she would seek additional restitution in the amount of $147,000 for two people and other victims not named in the complaint. Lopez-Soleta has already agreed to pay about $100,000.

    A spokeswoman for Attorney General Kamala D. Harris said it is common to drop charges when a defendant accepts responsibility and pays restitution.

    His lawyer, Kristin Long, said her client had valid defenses to many of the claims but accepted the plea bargain to avoid the risk of a long prison term.

    He could be allowed to serve jail time any jail sentence on electronic home confinement or work release, she said. He appeared in court [] and remains free on bail.

    Last year, Lopez-Soleta was charged with 65 felonies accusing him of bilking clients out of about $250,000.(1)
For more, see Plea deal for Petaluma real estate agent accused in Bay Area home mortgage scam.
(1) In a June, 2015 story, his then-attorney characterized this case as nothing more than a civil matter, not a crime:
  • Lopez-Soleta declined to comment but his lawyer, Stephen Turer, called the case against him a “witch hunt.” Turer said Sonoma and Marin county prosecutors have already declined to bring charges in what he characterized as a civil contract dispute. It is unclear why the state Attorney General’s Office is now taking up the case, he said.

    He’s a bad businessman,” Turer said. “There’s a big difference between being a bad businessman and being a criminal.”

Federal Jury Convicts Loan Modification Scammer Of Fleecing Foreclosure-Facing Homeowners Out Of $1.5+ Million; Affinity Racket Specifically Targeted Members Of Vietnamese Community

From the Office of the U.S. Attorney (Santa Ana, California):
  • An Orange County man who deceived distressed homeowners with false promises that he could help them avoid foreclosure by obtaining modifications to their mortgages – or even completely eliminating their loans – was convicted [] on federal fraud charges.

    Antonio Marquette, who went by “Alan Le” and “Anthony Le,” 56, of Midway City, was convicted [] in United States District Court in Santa Ana of nine counts of mail fraud, one count of wire fraud, and one count of money laundering. Marquette was taken into custody after the verdicts were taken, and United States District Judge Andrew J. Guilford set the sentencing hearing for January 30, 2017, at which time Marquette will face a statutory maximum sentence of 220 years.

    According to evidence at trial, Marquette operated Bolsa Marketing Group in Garden Grove in 2010 and 2011 and charged homeowners up to $100,000 in cash for services that the homeowners did not receive. Through Bolsa Marketing, Marquette ran a scheme that targeted distressed homeowners, most of whom were members of Vietnamese communities in Southern California, the Bay Area and Houston, and induced them to pay large up-front fees to obtain mortgage relief services.
    The evidence showed that Marquette operated the scheme by “falsely promising homeowners mortgage loan modifications that would substantially reduce their mortgage payments, avoid foreclosure, or eliminate their mortgage loans entirely.” The trial evidence further showed that Marquette took in more than $1.5 million from victim-homeowners.

    As part of the scheme, Marquette made various promises to homeowners, including making guarantees that he could reduce their outstanding debt to 25 percent of the loan balance in only four months. Marquette also sent fraudulent checks to “pay off” mortgages and filed bogus documents with county recorders’ offices, according to court documents.

    “The defendant operated this affinity scheme by targeting Vietnamese homeowners with false promises via Vietnamese-language radio advertisements, which added a veneer of legitimacy to his scheme,” said Deirdre Fike the Assistant Director in Charge of the FBI’s Los Angeles Field Office.

NJ Man Cops Guilty Plea To Theft By Deception, Gets 3 Years For Running Loan Modification Scam That Pilfered $131K From Multiple Financially Strapped Homeowners

In Mount Holly, New Jersey, the Burlington County Times reports:
  • Victims duped by a Mount Laurel man who promised them financial services and instead kept $131,000 of their money for his own use told a judge [] they do not think three years in prison is enough punishment.

    Scott D. Feltman, 42, of Starboard Way, was sentenced by Superior Court Judge Christopher Garrenger at the Burlington County Courthouse in Mount Holly after pleading guilty earlier this year to second-degree theft by deception.

    Feltman admitted using his Mount Laurel company to take about $131,000 from about 75 victims to perform loan modifications and other financial services but keeping the money for himself.
    About 10 victims addressed Garrenger, telling him that Feltman "talked a good talk," made promises he never kept, represented himself to be something he wasn't and, in many cases, stole from them when they were vulnerable and in need.

    The victims spoke of losing up to about $12,000 to Feltman, their homes in some cases, and their faith and trust in people. Some said they have suffered from stress and emotional issues. One called Feltman "despicable" for taking advantage of people who were trying to save their homes or having other financial issues.
    Many of the victims were not happy that Feltman received three years and that he will possibly be accepted into the state's intensive supervision program, which provides an opportunity for certain offenders to work their way back into the community under intensive supervision instead of being incarcerated.

    If accepted into the program, Feltman could possibly be released from prison in months. [...] Feltman was sentenced according to the terms of a plea deal reached between the state and defense.

    Feltman's attorney, Samuel Asbell, argued that the quicker Feltman gets out, the sooner he can get a job to pay back the $131,000 in restitution. Many of the victims said they fear they will never get all their money back.

    The victims were from New Jersey and Pennsylvania and are owed amounts that range from a few hundred dollars to as much as about $15,000, authorities said.

    Feltman was operating under the company Baymar Capital Funding LLC, according to court documents. He has a previous conviction for drugs in 1998 and criminal usury in 2011, according to court records. His attorney could not be reached for comment.

    Feltman has a pending charge of theft by deception charge in Camden County, according Burlington County Assistant Prosecutor Andrew McDonnell.

Operators Of Another Loan Modification Racket Avoid Criminal Prosecution; Court Judgment In Feds' Civil Lawsuit Bans Scammers From Peddling Future Debt Relief Services, Ordered To Give Back $1.7 Million Fleeced From Duped Homeowners

The Federal Trade Commission recently announced:
  • The operators of an alleged mortgage relief scam that preyed upon distressed homeowners are banned from the mortgage loan modification and debt relief business under a court order obtained by the Federal Trade Commission.

    The order stems from a case the FTC brought in July 2014 against five defendants as part of a federal-state law enforcement effort called Operation Mis-Modification. According to the FTC, the defendants, operating under the fictitious names “2Apply” and “UW Solutions,” falsely claimed they could lower consumers’ mortgage payments and interest rates or prevent foreclosure, pretended to be affiliated with a government agency or consumers’ lenders or servicers, and illegally charged advance fees – an initial $495, plus monthly fees that averaged about $399.

    In granting the FTC’s request for summary judgment against Tuan Dinh Duong, the court found that Duong knew about the false claims and directed the illegal scheme, which violated the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule. The court also entered default judgment against four co-defendants.

    Under the final orders, the defendants are banned from selling secured or unsecured debt relief products or services, and prohibited from making material misrepresentations about any financial or other products or services. The orders impose a judgment of more than $1.7 million, which represents the amount of money consumers lost.

Wednesday, October 12, 2016

Study: Battle Creek Real Estate Agents Prefer White Prospective Homebuyers Over Better-Qualified Black Counterparts; Fair Housing Testers Strike Again

In Battle Creek, Michigan, the Battle Creek Enquirer reports:
  • White prospective homeowners received better treatment and service from Battle Creek real estate agents than their black counterparts who were "better-qualified consumers," according to a fair housing investigation conducted last fiscal year.

    The findings, released Thursday [Sept. 29] at a news conference held at Battle Creek City Hall, reported that among 38 tests, white subjects were offered more listings, received better communication and had fewer discussions on pre-approval requirements. That's despite black test subjects being assigned characteristics that would give them an advantage, such as better financial situations.
    While the city has conducted previous fair housing studies, often required by the U.S. Department of Housing and Urban Development because of federal funding, it contracted with the Kalamazoo-based Fair Housing Center of Southwest Michigan for $25,000 to take "a larger-scale approach" after hearing concerns during public engagement efforts over the past couple years.

    The investigations focused on real estate agents and race discrimination, individual landlord investors and race discrimination and companion animal acceptance.

    The tests "are structured in such a way to grant black testers the advantage in an effort to target discriminatory behavior," according to the investigation.

    Agents were more likely to follow up with white testers, and black testers "had to try five times harder to receive correspondence or correct information."
    The investigation also discovered a lack of understanding about laws related to persons with disabilities who have a companion animal. Ten of 28 agents denied housing after disclosure of a disability status, half of which were due to a no-pet policy.

    It found "no clear patterns" related to landlord investors and race discrimination — testers in general received poor treatment and were shown rental units in poor condition. Fourteen advertised but uncertified rental units were discovered during the investigation. They have been reported to the city's code compliance department.

Different Company Name, Same BS; Loan Servicer To Cough Up $1.4 Million To Settle State AG's Lawsuit Alleging It Called Overdue Borrowers More Than Twice/Week, Failing To Verify Debts Before Commencing Foreclosure, Both In Violation Of Massachusetts Law

In Boston, Massachusetts, The Boston Globe reports:
  • Following a series of debt collection lawsuits and settlements, including one announced [last month] by Attorney General Maura Healey, consumer advocates are calling for tighter state regulations over the industry.

    On Wednesday [Sept. 28], Healey’s office announced that a Florida mortgage company agreed to pay the state $1.4 million to settle allegations it violated Massachusetts debt collection laws, including calling overdue borrowers as many as 12 times a day.

    Ditech Financial LLC tried to collect on more than 5,000 delinquent Massachusetts mortgage accounts since 2012 using tactics that violated state law, including calling borrowers as many as 12 times a day, Healey said.
    “It is big-volume business right now,” said Margaret Miley, an adviser for the Midas Collaborative, an Allston-based network of community groups. “There needs to be more done to regulate this growing industry.”

    Healey’s office and officials with the Division of Banks are debating whether to further regulate the industry and held their first hearing on the issue earlier this month.

    Healey’s settlement with Ditech will probably fuel that discussion.

    Healey described Ditech’s practices as “abusive” and said the company’s calls to borrowers exceeded the two calls a week allowed by state law.

    Homeowners also went into foreclosure without receiving the appropriate and timely information about their debt, Healey alleged.(1)
    Ditech, which used to be known as Green Tree Servicing LLC, was not immediately available for comment. Green Tree had its own share of regulatory problems. In April 2015, Green Tree paid $63 million in fines and restitution after the federal Consumer Financial Protection Agency and the Federal Trade Commission said the company failed to honor prior loan modifications, demanded payments before notifying borrowers of their options, and made false threats and repeated calls to borrowers who had fallen behind.
For the story, see Advocates seek more limits on debt collectors.
(1) According to the Massachusetts Attorney General's office:
  • [T]he AG’s Office also found that Ditech failed to notify borrowers of their right to seek detailed information regarding their mortgage debt. Under state law, mortgage borrowers have the right to verify the amounts owed on a debt in collection and to confirm that the party seeking to collect on the debt has the legal right to do so.

    Particularly where mortgage loans are frequently transferred from servicer to servicer and sold from party to party, state law protects the rights of consumers to access information relating to their debt. Ditech’s alleged failure to issue required debt validation notices deprived consumers of their rights and their opportunity to seek information regarding their own mortgage loans.
See National Company Pays $1.4 Million, Strengthens Policies over Abusive Debt Collection Practices (Conduct Allegedly Affected More than 5,000 Accounts in Massachusetts; Allegations Include Making High Volume Collection Calls, Failure to Provide Debt Validation Notices).