Colorado Woman Gets Probation In House Flipping, Equity Skimming Scheme That Stiffed "Rent To Own" Tenants

Judith Smith (aka Katzenberg), 23, who was implicated in a combination property flipping / equity skimming scam that reportedly shattered the lives of its victims avoided jail and received a three-year deferred sentence, is prohibited from working in the mortgage field, or at any other job where she would be privy to sensitive customer information, and must do 60 days of house arrest.

Smith was one of five people indicted by a Pueblo grand jury under the Colorado Organized Crime Act. Each originally was charged with theft, conspiracy, forgery, criminal possession of a forged instrument and offering a false document for recording.

In addition to bilking investors in a real estate scam involving buying homes in foreclosure, getting inflated appraisals, and selling them for more than their actual values:

• They also were accused of selling homes on a rent-to-own basis, then allowing the original notes to lapse into foreclosure or reselling the homes to second buyers while the rent-to-own contracts were still in effect.

Smith's former employer at Trinity Benefits Group, Maurice Goring, is still awaiting disposition of his case. Goring, 41, is set to face trial in October.

Appraiser Alvin Jack Woolford, 57, pleaded guilty to misdemeanor forgery in exchange for a deferred sentence. Charges against two other defendants were dismissed. The three and Smith have all agreed to testify against Goring at trial. For more, see Woman avoids prison term for fraud scheme.

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For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. rent to own lease purchase option scams zebra unwittingly equity skimming beta