Federal Judge Imposes $10K In Damages Against NY Attorney For Involvement With Foreclosure Rescue Operator

Last week, a Federal judge in Brooklyn, New York entered a judgment for damages in the amount of $10,720.75 against New York attorney Fred Douglas Way, III, Esq., (aka Fred Way) for his involvement in an equity stripping scheme involving New York foreclosure rescue operator Home Savers Consulting Corp. and Phil Simon.

The damages broke down as follows:

• $2,500 for money that he refused to return to the victimized homeowners of a foreclosure rescue scheme,
• $7,500 in punitive damages, and
• $720.75 for the cost of serving a subpoena on him.

According to the record:

• "[W]ay [was served] with notices of court conferences, a request to enter default, and a subpoena duces tecum directing Way to produce documents and appear for deposition. The process server for the subpoena served Way at his office on November 14, 2005, after being forced to wait for forty minutes because of Way's refusal to accept service. Due to the evasion of service, the cost of service of the subpoena was $ 720.75. Way did not appear for the January 9, 2006 deposition noticed in the subpoena served upon him, nor did he produce any documents in response to the subpoena. Plaintiffs' counsel also spoke with an attorney named Domenik Napoletano on January 9 and 31, 2006, who inquired whether plaintiffs would consent to vacate the default against Way. Plaintiffs stated that they would not agree to vacate the default, and neither Napoletano nor Way moved to vacate the default, or made efforts to engage in settlement talks with plaintiffs or respond to the subpoena served upon Way. Despite the numerous notices given to Way and his clear knowledge of the action against him, Way has still failed to appear in this action. Way also has a documented history of failing to appear in other litigation against him and defying court orders."

In addition, the record reveals allegations of other cases in which attorney Fred Way may have been involved in foreclosure rescue schemes:

• "Plaintiffs also point to other litigation involving similar claims against Way. See Attie Decl. PP 27-31; Johnson-Hines v. Freeman, No. 05-cv-5173 (E.D.N.Y. November 4, 2005) (foreclosure rescue scheme in which Way allegedly acted as attorney for investor); Robinson Electrical v. Woods, Index No. 37841/05 (N.Y. Sup. Ct., Kings County) (alleging that Way steered plaintiff into a fraudulent home improvement scheme); Hinds v. Way, Index No. 48329/99 (N.Y. Sup. Ct., Kings County) (alleging that Way took and retained nearly $ 40,000 from the sale of two properties while acting as attorney for an estate)."

The victimized homeowners were represented by South Brooklyn Legal Services, Brooklyn, NY; and White & Case LLP, New York, NY.

To read the Federal Magistrate Judge's Report and Recommendation against attorney Fred Way in this case, including a recitation of the basic facts involving the foreclosure rescue operator and its conduct against the victimized homeowners, see Johnson vs. Home Savers Consulting Corp., Phil Simon, et al., Case # 04-cv-5427 , 2007 U.S. Dist. LEXIS 24288, E.D.N.Y, March 23, 2007.

To read the April 11. 2007 court order entering judgment against Way, see Amended Order - Johnson vs. Way et al.

To read the facts of the case, as alleged by the victimized homeowners, see Complaint - Johnson vs. Home Savers Consulting Corp., Phil Simon, et al.

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