Matthew Cox Pleads Guilty To Multi State Mortgage Fraud

Former art student and aspiring fiction writer Matthew Cox, better known for his mortgage fraud exploits, pleaded guilty today in an Atlanta Federal Court to multiple counts of mortgage fraud and identity theft in Georgia, Florida and Tennessee—crimes that could land him in the pokey for up to 54 years, along with earning him obligations for a $2 million fine and millions in restitution, according to an online report by Daily Report, at dailyreportonline.com. In addition, the Feds have seized all of his assets in civil forfeiture actions, including a number of his own highly distinctive paintings. Sentencing is scheduled on August 22.

To read more, see Book closes on elaborate mortgage fraud scheme (Man who was on Secret Service’s Ten Most Wanted list pleads guilty after running scam in four states, including Georgia)

To read the grand jury charges, see Indictment - U.S. vs. Matthew Cox (2.27 MB - 63 pages).

For related stories, see:

• Man accused in multi-state mortgage fraud scheme pleads guilty
• Cox pleads guilty to mortgage fraud in Atlanta
  

Go here for other posts on Matthew Cox (including link to NBC Dateline one hour feature).
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Multi State Alleged Mortgage Fraudster Matthew Cox Expected To Plead Guilty Today

The St. Petersburg Times reports that alleged multi-state mortgage fraudster Matthew Cox is expected to plead guilty in an Atlanta Federal Court today in connection both with a 42 count indictment as well as recently filed charges involving alleged mortgage fraud scams in Tampa, Florida and Nashville, Tennessee. To read more, see Fraud leader had a lot of help (Matthew B. Cox had 22 co-conspirators in his mortgage schemes, new charges say).
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Indiana To Give Permanent Status To Homeowners Protection Unit

Indiana Attorney General Steve Carter is applauding Indiana lawmakers for passing a measure that would give permanent status to the Homeowner Protection Unit (HPU) created nearly two years ago as a test program administered by the attorney general’s office. The Unit investigates complaints and files disciplinary actions against licensed appraisers and licensed real estate agents & salespersons for alleged misconduct relating to real estate and mortgage fraud. Carter states:

• “By raising awareness of the Unit, we hope that more people will recognize that there is a place to turn to for help if they believe they have been the victim of, or suspect, questionable business practices by individuals or companies in these professions.”

To read more, see Attorney General’s Homeowner Protection Unit Nears Permanent Status with Latest Action by the Legislature (Attorney General Steve Carter says Consumers Benefit from the Unit’s Focus on Mortgage Fraud)

For a related article, see Attorney general team hits real estate fraud hard, reported at nwi.com.

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Indiana Authorities Scrutinize Land Contract, Rent-To-Own Schemes

Two recent articles by The Times of Northwest Indiana, reported at nwitimes.com, report on land contract and rent-to-own deals that are currently part of a larger probe into mortgage fraud statewide by the homeowner protection unit of Indiana Attorney General Steve Carter's office. Reported is the story of one home that was reportedly sold by its owners on a land contract to a company called TotalBiz 247, and then sold on a "rent-to-own" basis to a prospective buyer. Non-payment of existing mortgages by TotalBiz, which is owned and operated by real estate broker Kurtis Kintzel, is reportedly one reason why his business operation, which has been described as basically flipping schemes with a delayed closing is getting increased scrutiny by authorities. For more, see:

• Experts question TotalBiz deals, and
• Home sale scheme features hidden sellers

Go here for other posts on "rent to own" scams. rent to own lease purchase option scams zebra

Using Consumer Protection Laws To Pursue Illegal Real Estate Scams

On his Indiana Consumer Lawyer Blog, attorney Robert Duff comments on the real estate scams currently being investigated by the Indiana Attorney General's office and points out that Indiana consumers have a way to pursue compensation for unlawful business practices by licensed real estate appraisers and real estate agents through legal actions under the Indiana Deceptive Consumer Sales Act. He notes that actions under this statute must be brought within two years, and points out that one notable advantage of bringing legal action under this statute is that it provides for the payment of the consumers' attorney fees by the losing defendant.

This advantage, typical of state and Federal consumer protection laws throughout the U.S., is meant to encourage enforcement of these laws by individual consumers through their own private lawsuits, encourage attorneys to take on consumer protection cases on behalf of aggrieved consumers, and to make the culpable business engaging in the illegal conduct foot the consumer's legal bill.

For more, see Indiana Real Estate Appraisers and Agents Apparently Need More Oversight.
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NYS Banking Dept.To Launch Campaign Targeting Abusive Practices

The New York State Banking Department is launching a "Campaign to Halt Abusive Lending Transactions and Mortgage Fraud" this week in Manhattan whereby the state Banking Department will bring together the banking industry with state and nonprofit groups in an effort to solve the problem, according to the Albany Times-Union. One item expected on the agenda is the enforcement of the New York Home Equity Theft Prevention Act, which the state passed last year and went into effect this past February 1 with the view to eliminate illegal foreclosure rescue scams that take unfair and illegal advantage of New York homeowners facing foreclosure without targeting ethical investors. According to Steve Kirchgraber, deputy superintendent of the consumer services division with the state Banking Department:

• "The legitimate investors who aren't looking to scam people will play by the rules ... This is designed to make the market unappealing to those who would run a scam, because now there are penalties, including jail time."

Similar conferences are expected later this year in Albany, Buffalo and, possibly, Watertown. For more, see State targets abusive lending (Schumer pushes subprime rules, says 6,000 in Capital Region could lose homes).

Go here for other posts on NY Home Equity Theft Prevention Act.
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Home Lenders Would Rather Modify Than Foreclose

A recent Associated Press article (reported on the MSNBC website) reports on efforts by EMC Mortgage Corporation's "Mod Squad" to reach out to their loan customers in default in order to help them calculate a workable payment plan on their mortgages, rather than immediately forclosing on their homes. They are shooting for up to 2,000 loan modifications a month; six months ago EMC only modified about 400 loans a month. Litton Loan Servicing in Houston also claims that it is modifying about 1,000 loans a month; up from 300 to 400 about six months ago.

The nonprofit Home Ownership Preservation Foundation, a national organization that offers free foreclosure counseling, prevention and intervention services, is reporting that calls to it have picked up markedly over the last 12 months. Its 24-hour hotline, (888) 995-4673 (888-995-HOPE), is getting 300 calls a day, up from 75 daily in the first quarter of 2006. To read more, see Lenders willing to help struggling homeowners (To stop rise in foreclosures, mortgage modifications are more common).
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Lack Of Mandatory Escrows Contribute To Subprime Lending Troubles

Federal regulators believe that a key contributing factor with so many subprime mortgage loans going bad is that many of these loans came without mandatory escrow accounts, which are accounts that the borrower pay into every month and out of which the home's real estate taxes and property insurance premiums are paid from. These loans are contrasted with conventional mortgage loans made to those with excellent credit, which typically require these escrow accounts.

One consumer advocate says "It's an upside-down world ... The people you'd think need an escrow the most are not required to have them, and the people who need them the least are forced to use them."

To read more, see syndicated columnist Kenneth Harney's article, Feds, Consumer Advocates Focus on Lack of Escrows in Subprime Mortgages, reported online at Realty Times.
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Feds Get Indictment Of Alleged Upfront Fee Scammer

The Originator Times reports the indictment of Maryland resident Robin Neil Snyder and Mortgage Bankers, Ltd. for, according to Federal prosecutors, wire fraud and money laundering arising from a scheme to defraud loan applicants.

Snyder allegedly collected nonrefundable upfront fees from prospective loan applicants as well as business plans, appraisals, tax returns and insurance information in support of borrowers’ loan applications for loans that he never processed or submitted for independent underwriting. He reportedly collected approximately $339,500 in fees. For more, see Broker Indicted After Collecting Advance Fees.
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Mortgage Lender Alleges Fraud In 149 Deals

A recent article in the Journal Gazette (Fort Wayne, Indiana) features a Federal lawsuit filed in December 2004 by mortgage lender ABN Amro filed against 15 partitcipants in a mortgage fraud scheme involving 149 houses and fraudulently obtained mortgages in Fort Wayne, Indiana. The lawsuit paints a story of three people who, wanting to get into real estate investing, were allegedly duped by the alleged scammers into buying, what was represented as, "turnkey" investments and obtained mortgages for $2.5 million more than what the properties were worth. All 149 mortgages ultimately went into default.

The participants in the alleged scams include Rex Wells, described as one of the biggest landlords in the Fort Wayne rental market, Justin Stuckey, the owner and broker at Maximum Mortgage in Fort Wayne, appraiser Greg Chevalier, who appraised each of the 149 houses, and James Pappas, a title closing agent and owner of Accelerated Title, where most of the sales were closed.

Amro’s suit claims breach of contract, fraud, negligence, breach of fiduciary duty, unjust enrichment, civil conspiracy, defrauding a financial institution, deception and criminal mischief. Further, any corporate insulation from personal liability that Stuckey and Pappas believe they have is also being attacked as Amro is requesting a court judgment that both be held personally liable.

To read more, see Mortgage fraud alleged in 149 transactions (Lawsuit blames price scheme; novice investors go bust)

To read ABN Amro's actual lawsuit, setting off their version of the facts, see First Amended Complaint - ABN Amro vs. Maximum Mortgage Inc., Stuckey, Wells, et al.
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Westchester County Clerk Joins Chorus With Warning Against Foreclosure Rescue Scams

Mid Hudson News reports that Westchester County, New York Clerk Timothy Idoni announced earlier this week that the number of newly filed foreclosure actions during the first quarter of 2007 is up 39 percent increase over the first quarter of 2006, and up 116 percent increase over the first quarter of 2005. He warns to be cautious of foreclosure rescue schemes if a foreclosure action is filed against you. “Unfortunately an increase in foreclosures also brings with it a new set of con artists just waiting to take advantage of residents who are under the stress of foreclosure action,” he warns. For more, see Westchester County clerk urges at-risk residents to seek reputable counseling.
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Cash Back, Double HUD Scam Lands Two In Jail

The Chattanoogan.com reports that former mortgage broker Jay Snyder (36 months, $261,000 restitution) and her boyfriend, Mark Wilkins (27 months, $278,000) were sentenced in a Tennessee Federal Court recently for their involvement in a cash back, "double HUD" mortgage fraud scam that also involved illegally inflating the value of the real estate involved in the fraudulent transactions.

Reportedly, the title company handling the preparation of the closing paperwork issued two HUD settlement statements - one with the actual price that went to the seller and one with the inflated price that went to Wilkins and to the finance company providing the money.

The two women that Ms. Snyder reportedly learned the double HUD technique from, Angela Byrd and Donovan Jean Barnes-Bass of Executive Title Company, each received 18 month sentences. To read more, see Snyder Gets 36 Months, Wilkins 27 Months For Mortgage Fraud.

Go here for the Indictment - U.S. vs. Snyder, Wilkins.
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Nevada Considering Foreclosure Rescue Legislation

The Las Vegas Sun reports that a foreclosure rescue victim testified this past Wednesday at a hearing of the Nevada Assembly Commerce and Labor Committee about her experience of allegedly getting ripped off by a foreclosure rescue operator. The committee is currently considering the passage of legislation that, in addition to creating the crime of mortgage fraud, will regulate the conduct of so-called foreclosure consultants as well as those who purchase real estate from homeowners facing foreclosure. Attorney Daniel Ebihara, with the non profit law firm Clark County Legal Services, also testified, advising lawmakers that foreclosure rescue operators operate without restrictions and the people who run them aren't required to be licensed. The article quotes him as telling lawmakers that:

• "This business is fraught with lies, fraud and misrepresentation. The people who engage in this business of foreclosure purchasing have learned their trade from get-rich-quick seminars in hotel ballrooms."

For more, see Nevada bills aimed at regulating mortgage industry.

Go here for for Nevada's Pending Legislation AB440 (specifically see Sections 7 through 20 of the bill) to see the anti home equity theft provisions of the statute that Nevada lawmakers are considering passing into law.

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Another Homeowner Battling Misguided Condo Board

The South Florida Sun-Sentinel reports that another Fort Lauderdale condominium association board of directors has again picked on the wrong person. A condo association at The Port Condominium, who originally prohibited one of its residents from attaching a small Jewish religious symbol known as a Mezuzah on her front door is now backpeddling and has allowed her to do so. Further, Florida Attorney General Bill McCollum's office, through its civil rights division, has jumped into the battle and has given the association until 5:00 pm Thursday to change its rules so all its Jewish residents can hang mezuzahs. If that isn't enough, R. Alexander Acosta, the U.S. Attorney in Florida's Southern District has announced that his office has assigned an attorney in the Fort Lauderdale office to take a careful look at the facts in this matter and determine if a federal lawsuit would be appropriate.

The association's rule prohibits anyone from attaching, hanging, affixing or displaying anything on the exterior walls, doors, balconies and windows, which are considered common property controlled by the association. Reportedly, however, it was not uncommon for some residents to hang Christmas wreaths on their front doors without anybody bellyaching about it.

This is another example of a condo association board of directors' common sense taking a "leave of absence", doing something ridiculous, and in the process, exposing all of the unit owners to monetary liability for damages from a possible Fair Housing lawsuit for doing something stupid, thinking that they could bully someone and get away with it.

It hasn't been a good week for South Florida condo associations. I reported Wednesday on a wheelchair-bound, 85 year old widow with a failing memory who is also getting bullied by a condo association because her caretakers haven't been screened and approved by the condo association's board of directors. In my view, all the unit owners in this case are being exposed to potential monetary liability for a possible Americans' With Disabilities Act lawsuit simply because of a condo association board of directors' inability to apply common sense to a relatively simple fact pattern. The wheelchair-bound widow has elected to fight back. See 85 Year Old Widow Battling Condo Association.

For more on today's story, see Florida attorney general orders Lauderdale condo to allow Jewish mezuzahs on doors (no longer available online).

For a prior story on this case, see Condo board's stance against mezuzah is totally meshuganeh (no longer available online).

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New York State Banking Department To Kick Off Statewide Campaign To Address Abusive Lending & Mortgage Fraud

The New York State Banking Department is kicking off a statewide campaign to address abusive lending and mortgage fraud next week, as reported by Queens Courier Online, at queesncourier.com. Reckless mortgage underwtiting practices and the onslaught of so-called foreclosure rescue services are primary concerns of local consumer advocates. “These predatory and subprime loans are often targeted specifically at people of color, low income and vulnerable people,” said Oda Friedheim, a staff attorney at the Queens Neighborhood Office of the Legal Aid Society.

To read more, see Record number of subprime mortgage foreclosures here.
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Litigating Foreclosure Rescue Scams

Public interest attorney Phillip Robinson, Executive Director for Civil Justice, Inc., has an article directed to attorneys appearing on the website of the Maryland State Bar Association. In it he poses a scenario involving a client in dire straits who approaches an attorney. The client "has little money, owns a home, recently lost his job, has mounting unsecured debts and just received an eviction notice from the District Court of your county." The client wants to know why he is being with eviction when he owns his home.

Robinson encourages that "a little further investigation of the facts may yield new remedies for your client worthy of their consideration – as well as a statutory attorney fee award."

He goes on to describe the nightmare of an 83-year-old Maryland woman in poor physical health whose monthly income was about $1,300 and who had about $200,000 in home equity when she signed away her home to a foreclosure rescue operator. After taking the operator to court and winning, the Court awarded her over $10,000 in actual damages and $500,000 in punitive damages.

He points out that the Maryland anti home equity theft statute (Protection of Homeowners in Foreclosure Act of 2005) criminalizes some activities commonly found in these scams and also provides a treble damages award to victims when the foreclosure rescue operator willfully or knowingly violates the statute plus reasonable attorney's fees.

The article concludes by suggesting that while the Maryland anti home equity theft statute exempts from liability many settlement service providers connected with the transaction, those such as real estate agents, title insurers, settlement firms and others facilitating the transaction could nevertheless face certain liabilities based on their other legal obligations.

For more, see Litigating Foreclosure Rescue Scams (An Emerging Area of Consumer Law)

Editor's Note

In those states that do not have an anti home equity theft statute, the attorney representing the foreclosure rescue scam victim may have to find remedies for their client in their state's unfair and deceptive trade practices statutes, which typically provide for statutory attorneys' fee awards, or if applicable, in the Federal statutes (ie. Truth In Lending Act (TILA) and/or the Homeowners Equity and Protection Act (HOEPA), which also provide for statutory attorney fee awards). And, as I have mentioned in the past, prevailing on claims of state law violations could also entitle the plaintiff and counsel to a fee enhancement by the application of a contingency fee risk multiplier, depending on the law of your home state (see South Florida Homeowner Victimized By Foreclosure Rescue Operator - then search for the term "multiplier").
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Media Coverage Not New For D.C.-Area Foreclosure Rescue Operator

The foreclosure rescue operators referred to in the recent press release (see Hogan & Hartson Wins $3.3 Million Verdict in Pre-Foreclosure Scam Case) by the Washington, D.C.-area law firm Hogan & Hartson are not new to media and other coverage regarding their rescue operations.

1) The Daily Record (Baltimore, MD) published this story:

• Prince George's County Circuit Court awards $500K to victim (available online courtesy of findarticles.com)

2) CBS News did a 2004 Consumer Alert on Vincent Abell, Modern Management, and Calvin Baltimore. See:

• Loan Scam Targets Seniors' Homes (Washington Con Artists Preyed On Elderly People In Financial Trouble), or
• Watch the CBS Evening News Report on this D.C. foreclosure scam.

3) The Concord Monitor Online published this Washington Post article:

• From Foreclosure To The Cleaners

4) HomeOwners For Better Building has published this article:

• Cheated Out of House and Home

5) The Maryland law firm Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC has made available online this Federal Court decision involving Vincent Abell:

• Abell v. Devan, Case No. 06-1621 (D. Md. 2006) (link no longer available).

6) For other reports, see Google Search on Vincent Abell.

Go here , go here , and go here for other posts on elder financial abuse. zeta elder financial abuse

More On NBC's Dateline: To Catch An I.D. Thief

Part 2 of NBC's undercover investigation on identity theft, Dateline: To Catch An I.D. Thief aired this past Tuesday night. To watch Tuesday's program, see Putting a face on ID theft. Chris Hansen reports. Go here for the To Catch an I.D. Thief homepage. Click here for other posts on Dateline: To Catch An I.D. Thief.
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85 Year Old Widow Battling Condo Association

Today's South Florida Sun-Sentinel features a story of a wheelchair-bound, 85 year old widow with failing memory who requires 24-hour care who is being sued by her condo association because it considers her caretakers as "unauthorized and/or transient occupants" who need to be screened and approved by the association in order to stay in the apartment. Said approval hasn't been sought.

To read more, see Ailing Margate widow, 85, fights condo board to preserve her independence.

Postscript

Fort Lauderdale attorney F. Blane Carneal, recipient of the Broward County Legal Aid's Lawyer's Care Award as Pro Bono Lawyer of the Year in 1999 and The Florida Bar President's Pro Bono Service Award in 2002, is representing the widow. Go here for more on F. Blane Carneal.

Representing the condo association is Rachel E. Frydman of the Fort Lauderdale firm Katzman & Korr. Go here for more on Katzman & Korr, including reports of a class action lawsuit brought against it by homeowners of a condo association for allegedly violating Federal law in the collection of unpaid maintenance fees. In that matter, Mr. Carneal was one of the attorneys representing the homeowners who brought the lawsuit against Katzman & Korr. Go here for report of class action settlement by Katzman & Korr.

(It seems to me that if the law doesn't treat a medically-necessary service animal as a "pet" for purposes of enforcing a "no pets" restriction, it shouldn't treat a medically-necessary caretaker for a wheelchair-bound 85 year old person as an "occupant" for purposes of enforcing "screening requirements" contained in condo association bylaws. In any event, this case has the makings for quite a battle, especially give the history between the attorneys involved. Personally, I'm bettin' on the lady in the wheelchair, and if she wins this battle, it wouldn't surprise me if an Americans With Disabilities Act lawsuit against the condo association in Federal Court follows.)
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Judge Blocks Eviction Of Foreclosure Rescue Victim; Police Investigating

CBS4 in Miami, Florida reports on a foreclosure rescue victim who was scammed out of an estimated $60,000 in home equity in exchange for a few hundred bucks. The deal was apparently a standard foreclosure rescue deal; sign over the property to an investor and is told that in 6 or 12 months, the homeowner can buy it back.

Reportedly, a judge has blocked her eviction and the case is being investigated by the North Miami police department. To read more, see Foreclosure Fraud: Predators Want Your Home.

Go here to watch the CBS4 Video of this story. (Consumer reporter Al Sunshine reporting).
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Southern California Foreclosure Rescue Victims

(revised 8-16-07)
The Orange County Register recently featured a story of some of the victims of a five person foreclosure rescue operation in Southern California. The scam, according to a federal indictment, defrauded about 100 homeowners throughout Southern California out of about $12 million. Those indicted were Edward Seung Ok, Martha Rodriguez, Cynthia Valenzuela, Vladimir Stefanovic, and Maria G. Juarez. Rodriguez and Valenzuela have each entered a plea of guilty; the remaining three face a federal court trial in July. Some of the victims currently have civil lawsuits pending against the rescue operators.

For more, see Let the borrower beware (At least 10 O.C. property owners have lost equity and even their homes in what federal prosecutors call a $12 million scam. As more homeowners get overextended, foreclosure rip-offs will rise).

For a prior post on this case, see Two Plead Guilty In Combined Foreclosure Rescue / "Straw Buyer" Mortgage Fraud Scam.

For the Federal prosecutor's version of the facts in this foreclosure rescue scam, see U.S. vs. Valenzuela - Plea Bargain Agreement; Stipulated Statement of Facts, pages 15 through 21, describing the foreclosure rescue deals, the subsequent mortgaging of the victims' homes using straw buyers, and the ultimate default on the newly obtained mortgages.

For past U.S. Department of Justice Press Releases on this case, see:

• Two Arrested On Federal Fraud Charges In Foreclosure Scam (11-30-05)
• Three Defendants Added To Federal Indictment In Foreclosure Scam (7-20-06)

Go here for other posts on this foreclosure rescue scam.

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