Thursday, December 20, 2007

Boca Builder Facing Foreclosure; May Leave Dozens Of Stiffed Subs, 30+ Homebuyers Holding The Bag

In Palm Beach County, Florida, the Daily Business Review reports:
  • Bank of America is eager to recover $20.5 million it lent to Boca Raton-based developer Sterling Communities to build a luxury community of single-family homes in Lake Worth. [...] Sterling, headed by president Paul W. Asfahl, owes money to numerous subcontractors who worked at Talavera, a community northeast of State Road 7 and Lake Worth Road with 77 single-family homes with starting prices ranging from $700,000 to $1.5 million. The contractors are among 86 defendants named in the lawsuit.

***

  • At Talavera, Sterling has closed on about 49 homes, according to Palm Beach County public records. [...] Dozens of contractors are named in Bank of America’s suit, including Certified Security Systems, which is owed about $60,000, Florida Builder Appliances, $35,000; Production Plumbing, $41,828; and Dobson Construction Services and Roofing, about $31,000. [...] A subcontractor, who spoke on condition of anonymity, said Sterling paid him for his services but the checks bounced. Several homebuyers who had deposits to purchase Talavera houses are also named in the lawsuit.

For more, see Bank of America files foreclosure suit against builder Sterling Communities.

To view the lawsuit, see Bank of America v. Sterling Communities at Talavera, LLC, et al.

Go here for other posts on builders & contractors accused of stiffing customers & subcontractors. contractors stiff subs customers alpha

"Billy The Kid" Cops Guilty Plea In North Jersey Flipping Scam

In Northern New Jersey, The Star Ledger reports:
  • An unlicensed real estate appraiser known as "Billy the Kid" pleaded guilty yesterday for his role in a mortgage scam used to flip dozens of rundown properties rented by low-income families on federal assistance. William Ottaviano, 41, of Branchville admitted inflating the value of dozens of multifamily houses in a series of sales orchestrated by Michael Eliasof, a Paterson real estate manager who pleaded guilty last month in the scheme that officials said netted as much as $2.5 million. The operation has been tied to Garfield's long-time municipal court judge, William Colacino Jr., who has not been charged, but has been named as an unindicted co- conspirator in the ongoing criminal investigation.

***

  • The case revolves around the sale of dilapidated residential properties throughout the city of Paterson that were quickly sold at inflated prices to obtain higher mortgages from banks. The houses were rented by tenants receiving federal Section 8 assistance, but most of the houses, sold to buyers with no money down, ended up in foreclosure.

For more, see Home appraiser pleads guilty in flipping scam (Paterson plot reportedly netted $2.5 million).

Go here for other posts on this flipping scam.

Cook County Prosecutors Charge 15 In Alleged Cash Back Fraud Racket Involving At Least 9 Homes Worth $4M+

In Chicago, Illinois, The Southtown Star reports:
  • In what authorities say is a symptom of the excesses in the subprime mortgage market, 15 people have been charged with fraud involving at least nine homes valued at more than $4 million. The scam - led by a mortgage broker and a real estate agent - involved "straw buyers" taking out mortgages on homes for more than the asking price, Cook County prosecutors said. They said the extra money allegedly was divvied up among the participants. [...] The "common thread" was Durrel Castile, 26, and Andrew Lewis Jr., 34, Assistant State's Attorney Karyn Stratton said.

For more, see 15 people charged in mortgage scheme.

Illinois Feds Charge 3 For Fraudulently Obtaining FHA-Backed Mortgages

In Rockford, Illinois, the Rockford Register Star reports:
  • A Rockford loan officer and two others were charged today with generating thousands of dollars in commissions by creating fake documents to get unqualified families loans backed by the Federal Housing Authority. Mitchel A. Fuchs, 40, also known as Mike Fox, was charged with mortgage fraud in a 14-count indictment. Also charged were 25-year-old Jessica L. Gibson of Loves Park, who was Fuchs’ mortgage-loan processor, and Frank G. Anast, 58, of Rockford, who was self-employed in computer work.
According to the allegations:
  1. Fuchs created fictitious cashier’s checks and bank checks to give the appearance that his customers had invested their own funds in the properties they were buying,
  2. Fuchs paid Anast to create fictitious pay stubs and W-2s for Fuchs’ loan customers,
  3. Fuchs and Gibson altered pay stubs and W-2s for other customers, changed credit reports and created fake investment statements.

The case is being prosecuted by office of the U.S. Attorney for the Northern District of Illinois.

For more, see 3 charged in another mortgage fraud ring.

Illinois Loan Officer Gets 20 Months In FHA Mortgage Scam

In Rockford, Illinois, the Rockford Register Star reports:
  • A former Rockford loan officer was sentenced to 20 months in federal prison and fined nearly $500,000 for her part in a five-person mortgage fraud ring that ran from 2001 to 2003. Rhonda Torossian, 46, of Rockford was sentenced today in federal court. She was the third of the five to be sentenced and the first to receive prison time in the scheme where the group falsified Social Security numbers, created fraudulent employment verifications, bank checks and credit letters so families could receive mortgage loans insured by the Federal Housing Authority.

For more, see Ex-Rockford loan officer's sentence includes no chance of parole.

Alaska Feds Nail 9 In Alleged Mortgage Fraud Operation

In Anchorage, Alaska, KTUU-TV Channel 2 reports:
  • Federal prosecutors say they have uncovered the largest case of mortgage fraud in state history. [...] Prosecutors say in Anchorage shady deals and swindling had a group of real estate wrong doers cashing in. They charged nine people on 64 counts including conspiracy, wire fraud, bank fraud and false statements. [...] The group's ring leader is said to be 34-year-old broker Lance Lockard. Authorities caught up to Lockard Friday in Florida.
Reportedly, in one of the alleged schemes, seven homes on one street and six more on another street only a block away, were all financed to the same person at the same time. Two of the alleged scam members are accused of arranging 12 different lenders so each would be in the dark that the same buyer was involved on each one.

The alleged scam members pocketed $1.7 million and lenders have lost $1 million to date with more foreclosures pending, according to the charges. The prosecutors from the U.S. Attorney's office in Anchorage say that the overall racket involved every level of professional in a real estate transaction.

For more, see Feds bust mortgage swindlers (read story) (watch video).

See also,

California Loan Coordinator Admits Lying To Grand Jury In Federal Fraud Probe

In Northern California, the San Francisco Chronicle reports:
  • An Alameda County man pleaded guilty Monday to lying to a federal grand jury that is investigating subprime mortgage fraud in San Joaquin County, prosecutors said. John Ngo, 27, of Dublin, a former senior loan coordinator for Long Beach Mortgage Co., admitted receiving payments from the company's sales representatives to get loan applications approved despite knowing that many of the applications were fraudulent, said the office of U.S. Attorney McGregor Scott in Sacramento.
Acording to prosecutors, Ngo admitted that he lied about having pocketed money from a mortgage broker who referred loan applications to the company. He had actually received about $100,000, mostly to "put in the fix" in the approval process, insuring that bogus applications were given the green light. Prosecutors say Ngo has agreed to cooperate with the investigation, in which prosecutors are seeking to nail several others currently under indictment.

Ngo was nailed amid a federal probe into Stockton's Iftikhar Ahmad, who is currently under indictment for allegedly illegally flipped houses in the Stockton area. For more, see:

Florida Closing Agent Gets 3 Years In Scam Involving $17M+ In Fraudulently Obtained Mortgages

In Jacksonville, Florida, The Florida Times-Union reports:
  • The manager of a title agency in Jacksonville was sentenced to three years in federal prison Monday for being part of a mortgage scam that collected millions of dollars from dishonest loans on upscale homes. Robert W. Hulbert, 46, was the closing agent on some mortgages and arranged loans on two properties he bought personally, according to a news release from the U.S. Attorney's Office. Hulbert managed the Jacksonville branch of Nations Title Agency of Florida.
Prosecutors say the fraudulently obtained mortgages totaled $17.7 million, of which scam members pocketed about $4 million. The case was prosecuted by the U.S. Attorney's Office in Jacksonville. For more, see:

Wednesday, December 19, 2007

NYC Foreclosure Rescue Operator Back In The News

In New York City, WABC-TV Channel 7 ran a follow-up story on Monday on the now well-known area foreclosure rescue operator, Brooklyn based Home Savers Consulting Corp. Two separate criminal investigations are reportedly (still) underway into the rescue firm. Channel 7 investigative reporter Sarah Wallace speaks with two more homeowners who fell victim to the alleged equity stripping scam orchestrated by Home Savers' principal, Phil Simon, by unwittingly signing over their homes to a straw buyer.

Channel 7 was able to catch up with Phil Simon (I mean, they literally caught up with him - when Simon saw the Channel 7 camera, he started running away. Wallace, with microphone in hand and camera person in tow, chased Simon down a Brooklyn street before he relented and consented to speak to her). Simon had little to say, however, other than to refer questions to his attorney. Home Savers' co-principal, Garth Celestine, was conspicuous by his absence in this report.

For the transcript of the story, and a link to the Channel 7 video, see Homes stolen by 'Home Savers'? (Heartbroken people lose homes, equity to "Home Savers").

For the earlier Channel 7 report on Home Savers which aired in late November, see A Home Mortgage Mess.

Go here for other posts on Home Savers Consulting Corp, including links to a couple of the civil lawsuits it has been recently facing.

For a related post, see Foreclosure Rescue - For Criminal Prosecutors Only.

Editor's Note:

According to the law of the State of New York at one time (see Marden v. Dorthy, 160 N. Y. 39 (NY 1899)):

  • fraudulently procuring the signature of another to an instrument which he has no intention of signing constituted forgery on the part of the procurer. It was not necessary that the act of forgery be done by the hand of the person being charged. It was sufficient that the forgerer caused or procured it to be done; and

  • if the scammed homeowner, during all the time covered by the fraudulent transactions, was in possession of the real property in question, the legal effect of the homeowner's possession constituted notice of the homeowner's rights to the property to all the world, including subsequent purchasers and encumbrancers.

If this is still the law in New York, state and local law enforcement authorities may have grounds to charge these foreclosure rescue operators with forgery. Further, inasmuch as it is generally considered that a forged deed is void, it conveys no title. Accordingly, the scammed homeowners would still own their homes. The burden of the foreclosure rescue scam would be borne by the foreclosure rescue operator, the straw buyer, and the financial institution who financed the equity stripping transaction (and, possibly, the title underwriter who issued the title insurance policies). If anyone knows for sure that Marden v. Dorthy no longer is reflective of New York law, please drop me a line at HomeEquityTheft@yahoo.com and tell me specifically why not (while I understand that the case is over 100 years old, that in itself doesn't make the case obsolete. Unlike a loaf of bread, court decisions of the highest court of the state don't grow stale by the mere passage of time).

One final note. Even if the deed is not considered a forgery, the foreclosure rescue transaction would still have to withstand scrutiny as an equitable mortgage (and, depending on how much profit the operator pocketed, the claim may be that of a usurious equitable mortgage). Possession by the homeowner throughout the transaction would appear to, as noted above, constitute "notice to the world" of the scammed homeowner's rights in the home, thereby denying "bona fide purchaser / encumbrancer" status to the straw buyer, the lending institution financing the deal, or anyone else who subsequently acquired an interest in the home.

Feds Investigate Possible Flipping Scam In One Northern Virginia Subdivision

In Northern Virginia, The Washington Post reports on a Federal home flipping investigation taking shape in one Northern Virginia subdivision. The subdivision is part of a sprawling 186-acre community being developed by D.R. Horton of Fort Worth, one of the nation's largest home builders. According to the story:

  • Sources with knowledge of the probe at the Villages at Rippon Landing said investigators are examining why a number of townhouses in a five-block area were bought and resold quickly, for a large profit, even as the real estate market was cooling and unsold homes dotted the neighborhood. The new buyers sometimes failed to pay the mortgages, sending homes into foreclosure and hurting lenders. Renters found themselves unexpectedly forced to move. The FBI this month launched a mortgage fraud task force, gathering federal prosecutors and law enforcement officials from Prince William, Loudoun and Fairfax counties to map out a strategy to tackle the issue region-wide.
Reportedly, some of those townhouses were never occupied and went into foreclosure. Other townhouses were used in rent skimming scams. In those cases, properties were rented to tenants and rent collected from them while at the same time, mortgage payments went unpaid, thereby allowing the properties to go into foreclosure.

For more, see FBI Probes Virginia Mortgage Scam (Townhouses Bought and Sold for Big Profits as Market Was Cooling).

Predatory Reverse Mortgage Scams Beginning To Surface?

The Miami Herald reports:

  • With the housing market in decline, unscrupulous sales agents are popping up in the booming reverse mortgage industry, where reports of deceptive and high-pressure sales tactics are worrying lawmakers and consumer advocates alike. [...] Peter Bell, president of the National Reverse Mortgage Loan Association, said he doesn't believe the problem is widespread. But he conceded that sales agents left jobless by the housing crisis are migrating to the reverse mortgage industry and may "have a different type of mentality about moving transactions through quickly.''

***

  • In [U.S. Congressional] committee testimony, [...], Prescott Cole, a lawyer from San Francisco, said some sales agents seeking larger commissions are wrongly advising seniors to buy tax-deferred annuities with their loan proceeds. [...] In one case, a 92-year-old man put $650,000 in a deferred annuity and died two years later, Cole said. But because the annuity didn't mature until 2063, the dead man's family had to pay a $150,000 fee to break the contract and access the money, said Cole, who works on behalf of the national Coalition to End Elder Financial Abuse.

  • ''Long-term annuities are almost always inappropriate for seniors, as they can tie up retirement savings far beyond one's life expectancy,'' said Sen. Herb Kohl, D-Wis.

  • The nation's largest provider of reverse mortgages, Financial Freedom Senior Funding Corp. of Irvine, Calif., is at the center of the controversy because of several lawsuits that allege borrowers were steered into inappropriate loans and annuities by sales agents and insurance brokers working in concert.

For more, see Seniors at risk from predatory lenders (As the popularity of reverse mortgages for seniors grows, the industry is proving fertile ground for predatory lenders, loan agents and brokers who see older, cash-strapped borrowers as easy pickings) (if link expired, try here or try here).

Go here for stories related to Reverse Mortgage Problems.

See also, Be wary of tapping into reverse mortgages (North Country Times):

  • "We are seeing an increase in sales agents who have perfected the technique of selling annuities by playing on the seniors' fears of going into nursing homes or outliving their assets," said Prescott Coles, a spokesman for the coalition, as he testified before the committee.

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

More On Reverse Mortgage Traps

Use of vague default provisions buried in the text of a reverse mortgage agreement is named as a source of concern by a consumer watchdog, according to an article in The Sydney Morning Herald. To read more, see Traps for older players.

Go here for stories related to Reverse Mortgage Problems. zebra

Tuesday, December 18, 2007

Complaint Claims Consumer Clipped For $50K+ By Mortgage Servicer

According to a lawsuit recently filed in a West Virginia state court, Select Portfolio Servicing, Inc. (the firm formerly known as Fairbanks Capital Corp.) is being accused of collecting over $50,000 more than what was due from a West Virginia homeowner, whose mortgage balance had been previously reduced pursuant to a legal settlement in a previously litigated class action lawsuit. The current lawsuit, filed on November 14, 2007, alleges, among other things:
  • "The Defendant [Select] failed to follow the ordered new payoff schedule consistent with the reduced loan. Despite the Court Order, the Defendant continued to treat the entirety of the loan as due, and have month-by-month demanded the full payment. Since January 2001, the Defendant has sent over eighty-two demands for payment that misrepresent the total amount due."
In a procedural maneuver, counsel for Select has filed a request last week to move the case from the state court to a West Virginia Federal Court.

Representing the consumer is attorney Daniel F. Hedges, Charleston, West Virginia.

To view the lawsuit, see Helen B. Moss v. Select Portfolio Servicing, Inc. f/k/a Fairbanks Capital Corp.

To view the request to move the case, see Notice of Removal. questionable mortgage servicing practices tactics yak

Race Discrimination, Civil Rights Violations Alleged In Predatory Mortgage Servicing Lawsuit - Class Action Status Sought

A lawsuit filed in a New Haven, Connecticut Federal Court last week alleges that Wall Street investment banking firm Bear Stearns and its EMC Mortgage servicing unit engaged in:
  • "[r]acially discriminatory practices ... in servicing near-prime and sub-prime residential home loans" and claims that "EMC and Bear Stearns intentionally sought out non-prime loans, predominanly made to Hispanics and African Americans, in order to reap profits from their predatory servicing practices."
The predatory servicing practices complained of in the suit include:
  • "[t]he imposition of unwarranted fees and costs, the pyramiding of late fees, the unjustifiable force-placing of insurance, the failure to properly credit payments, the unwarranted reporting of derogatory information regarding borrowers to credit reporting agencies, and the failure to properly administer escrow accounts."

Representing the homeowners are the firms Butler Norris & Gold, Hartford, Connecticut, and James, Hoyer, Newcomer & Smiljanich PA., Tampa, Florida.

To view the lawsuit:
See also, Bear Stearns Mortgage Unit Accused of Predatory Loan Servicing (Bloomberg News).
.
Go here and go here for other posts on alleged race bias in real estate transactions.

Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics yak race bias predatory lending

One View Of The Mortgage Loan Servicing Industry

For an interesting look at one point of view of the mortgage servicing industry, check out this YouTube video on mortgage servicing (suited only for those with a sense of humor). questionable mortgage servicing practices tactics yak

Monday, December 17, 2007

Miami Feds Charge 31 In Alleged Cash Back, Straw Buyer Mortgage Scam

From the office of the U.S. Attorney - Southern District of Florida:

  • R. Alexander Acosta, United States Attorney for the Southern District of Florida, [and officials from other government agencies involved in the investigation] announced today charges against 31 defendants in the most recent multi-million dollar mortgage fraud scheme in South Florida.

The indictment charges lead defendants Juan Torrens, Rachael Torrens, Daniel Ramos, Alfonso A. Muxo, and Katherine Harris with conspiracy to commit wire fraud and/or wire fraud for their participation in a massive mortgage fraud scheme. This scheme allegedly involved fraudulent mortgage loans obtained for the purchase of 28 properties located in Miami-Dade and Broward Counties, and in the City of Marco Island. According to the indictment, the five were part of a conspiracy that operated to:

  1. identify sellers of residential properties who were willing to overstate the true selling price of their properties,
  2. recruit and pay straw buyers to pose as buyers and ostensibly participate in the purchase of the selected properties,
  3. prepare and cause to be prepared on behalf of straw buyers fraudulent mortgage loan applications (which included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2); said applications were then signed by the straw buyers,
  4. prepare, for a fee, fraudulent appraisals to support the overstated sales prices on the properties,
  5. create and submit phony closing statements to the lending institutions financing the transactions,
  6. pocket the cash for the difference between the inflated price and the actual selling price of the property, and
  7. attempted to make the payments on the fraudulently-acquired mortgage loans while they tried to turn around and unload the newly-acquired properties. Some of the lenders ultimately got stiffed on their payments and their mortgages went into foreclosure, leaving them holding the bag.

In addition to the above five defendants, 25 straw buyers were also indicted for wire fraud on account of their participation in the transactions. One bank employee from Regions Bank was also named as a defendant in the indictment.

For more, see the U.S. Attorney Press Release - Federal-State Mortgage Fraud Initiative Charges 31 Defendants In Multi-Million Dollar Mortgage Fraud Scheme.

See also, 31 Accused in Florida of Falsifying Home Loans (The New York Times).

Go here to watch the U.S. Attorney announcement (Associated Press video at MiamiHerald.com).

For a copy of the indictment, see United States of America vs. Torrens, et al.

Miami Straw Buyer Cops Plea In Alleged Cash Back Scam

U.S. Attorney R. Alexander Acosta, Southern District of Florida, announced that defendant Felipe Nunez pleaded guilty on December 14, 2007 to one count of money laundering, in an alleged cash back, straw buyer mortgage fraud scam that resulted in the indictment of fourteen other defendants. Nunez admitted in court that he was paid $20,000 to purchase two properties selected by defendants Henry Quintero-Lopez and Lazaro Villalba, the apparent leaders of the alleged racket. For more, see the U.S. Attorney Press Release.

Go here for the 9/27/07 U.S. Attorney Press Release on this case and go here for the Indictment - U.S. vs. Quintero-Lopez, et al.

ABC News' Nightline On Alleged Mortgage Servicing Company Ripoffs

Last Friday night, ABC's Nightline ran a piece on the mortgage servicing industry and the problems some servicing companies have been accused of causing to homeowners in connection with servicing their home mortgages. Featured in the story were:
  • New Hampshire homeowner Mike Dillon and the ongoing problem he's had with a mortgage company formerly known as Faorbanks Capital Corporation (now known as Select Portfolio Servicing) that serviced his home loan;

  • North Carolina consumer bankruptcy attorney Max Gardner who asserts that it is not uncommon that his clients' cases involve charges tacked on by servicing companies that shouldn't have been charged (in addition to practicing law, he runs Max Gardner's Bankruptcy Boot Camp where, according to his website, trains other attorneys to use every available consumer protection statute in his system including the FDCPA, TILA, UDAP, FCRA, ECOA, the automatic stay and the discharge injunction when representing individual consumers);

  • Professor Katherine M. Porter of the University of Iowa College of Law, who discusses some of her findings which have been recently published in a research paper, Misbehavior and Mistake in Bankruptcy Mortgage Claims, in which she examined mortgage servicing companies' frequent non-compliance with law in consumer bankruptcy cases.

To read the online transcript of the ABC Nightline program, see 'Playing the Odds' (Lawyer Max Gardner Says Some Mortgage Servicers May Be Taking Homeowners for a Ride).

The link to the video of the program will be posted when it becomes available.

For more on:

Go here , go here , and go here for posts on questionable mortgage servicing practices.

Go here for more posts on homeowners and their attorneys who are using Federal & state consumer protection statutes, including the Federal TILA to try and undo the bad loans. undo mortgage loans TILA alpha questionable mortgage servicing practices tactics yak

CNN On Homeowner Fighting Foreclosure Rescue Operator To Keep Home

Some time ago, the CNN business program Open House with Gerri Willis featured a Florida couple facing foreclosure and their experience when they unwittingly signed over their home to a title-holding land trust in a deal arranged by foreclosure rescue operator Jack Moussa and his Florida Housing Council ("FHC"). Interviewed for the piece was Florida attorney David Silverstone, who represents the homeowners in a lawsuit against Moussa and FHC in which Silverstone seeks to void the deed transfer, alleging that the foreclosure rescue transaction was a disguised loan that violates the Federal Truth In Lending Act, the Florida Deceptive and Unfair Trade Practices Act, and the Florida usury statute. Based on the transaction the homeowners entered into with Moussa, Silverstone claims that the return on investment on the disguised loan was 300%, more than the maximum amount allowed by Florida law.

To watch the video, see Rescue or Ripoff? (Open House with Gerri Willis; CNN).

Go here for other posts on Florida foreclosure rescue operator Jack Moussa and the Florida Housing Council.

--------------------

Editor's Note:

There is plenty of case law in Florida (and other places as well) that can be used to support a court's decision to recharacterize sale-leaseback foreclosure rescue deals as (possibly usurious?) secured loans / equitable mortgages. Go here for more on the Florida case law on equitable mortgage (some of which also addresses usury) to consider how the case law may be applied to foreclosure rescue transactions structured as a sale leaseback, or variations thereof, with a right to buy back the property in the future.

It may only be a matter of time before the Florida Attorney General's Office "steps up to the plate" and begins to prosecute foreclosure rescue operators who offer sale leaseback programs for violating Florida's usury statutes:

  • Civil usury - Section 687.03, which currently sets a maximum 18% per annum interest, and applies to advances up to $500,000;
  • Criminal misdemeanor usury - Section 687.071(2), generally applies on interest willfully and knowingly charged in excess of 25% per annum but not exceeding 45% per annum;
  • Criminal felony usury - Section 687.071(3), generally applies to interest willfully and knowingly charged in excess of 45% per annum,
  • Debt unenforceable - Section 687.071(7) states that a loan made in violation of the Florida criminal usury statute is unenforceable.
For more on foreclosure rescue and equity stripping arrangements, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Victims' Attorneys Seeking To Void 800+ Mortgages In Pensylvania Ponzi Scheme; Request Class Action Transfer

Lancaster Online reports:

  • Attorneys who filed a class-action lawsuit on behalf of customers defrauded by Wesley A. Snyder's defunct mortgage businesses [were due] in court again [last] Thursday. This time, the lawyers [...] seek to move their case from federal court in Philadelphia to U.S. Bankruptcy Court in Reading. An attorney representing Snyder's customers said Tuesday that a motion will be considered to join the customers' suit with the bankruptcy cases filed by Snyder's companies, including OPFM Inc. Personal Financial Management Inc. and Image Masters Inc.

***

  • Attorneys representing Snyder's customers are seeking to void about 811 mortgages Snyder brokered in his customers' names with about two dozen banks. [...] Snyder's businesses soaked homeowners, including 300 from Lancaster County, for more than $26 million and ripped off 31 investors for $3 million.
For more, see Attorneys want class-action suit in mortgage case moved.

According to WFMZ-TV Channel 69, the request to transfer the case was denied. Watch the Channel 69 video for more.

Go here and go here for other posts and links to earlier media reports on the Pennsylvania Ponzi scheme involving OPFM, Image Masters, and other companies operated by Wesley Snyder.

Sunday, December 16, 2007

Ohio Feds Indict Foreclosure Rescue Operator

From the U.S. Attorney's Office in Cleveland, Ohio:
  • Gregory A. White, United States Attorney for the Northern District of Ohio, [on Wednesday] announced that a federal grand jury in Cleveland, Ohio, charged James A. Warsing of Ashtabula, Ohio, with eight counts of Mail Fraud. The indictment charges that between 2001 and 2005, James A. Warsing, using his company, WJW Enterprises, devised a scheme to defraud various homeowners threatened with foreclosures, by falsely promising he could save the homes from foreclosure. It was further alleged that Warsing fraudulently obtained large sums of monies from homeowners promising to use such monies to settle their accounts with lenders but used the money for other personal and business purposes.
For more, see U.S. Attorney News Release.

To view grand jury charges, see Indictment - U.S. v. Warsing.

Go here for more on WJW Enterprises.

Texas AG Files Suit Against Another Upfront Fee Foreclosure Rescue Operator

(originally posted 10-14-07)
According to a press release from the Texas AG's office:

  • Texas Attorney General Greg Abbott took legal action Thursday against an unlawful Arizona-based foreclosure rescue operation that targeted struggling Texas homeowners. According to court documents, Abell Mediation, Inc., and its president and vice-president, Elizabeth Cory and Michael Cory, respectively, fraudulently advertised that the company could save homeowners from imminent foreclosure. The enforcement action seeks a temporary and permanent injunction stopping the defendants from falsely soliciting distressed Texas homeowners.

***

  • Homeowners who contacted Abell Mediation, Inc. were pressured to pay fees between $800 and $1,200 immediately. Abell Mediation, Inc. strictly prohibited homeowners from contacting their mortgage lenders. After homeowners paid the fees, many never heard back from the defendants’ representatives and often lost their homes anyway.

For more, see the Texas AG's press release - Attorney General Abbott Takes Legal Action Against Foreclosure Rescue Firm's Unlawful Texas Operations (Clients of Abell Mediation, Inc. urged to call their lenders immediately).

For additional information:

For story update (12-10-08), see Final judgment against Abell Mediation, Inc..

Idaho AG, Foreclosure Rescue Operator Reach Legal Settlement

(originally posted 10-14-07)
From the Idaho Attorney General's Office:
  • Highland Financial, a Post Falls business that offers mortgage foreclosure rescue services, will change its business and advertising practices, Attorney General Lawrence Wasden said. Under the terms of a legal settlement, Highland Financial agrees to comply with the Idaho Consumer Protection Act in its future advertising and promotions. [...] Highland Financial advertised that it could help financially distressed consumers end the “stress,” “worries,” and “hassles” of foreclosure, bad credit, and eviction. The Attorney General alleged the company failed to make certain disclosures and may have misrepresented to homeowners that they could help homeowners retain ownership of their homes and improve their credit when that was not the case.

For more, see Idaho AG press release - Wasden Reaches Settlement with Highland Financial.

See also, Post Falls foreclosure rescue firm settles with Idaho A.G. (Idaho Business Review).

California Legislature Urged To Strengthen Statutes Regulating Foreclosure Rescue

In Northern California, the sixth in a series of editorials on elder financial abuse in the Contra Costa Times urges the State of California to pass AB 1356, a law that would strengthen the current laws regulating foreclosure rescue operators in California. An excerpt from the article:

  • The Legislature can and must take a major step now to curb foreclosure rescue abuses. AB 1356 would have done just that, but the law fell victim to petty politics. For starters, it would have required foreclosure rescuers to clearly let people know in bold letters that they would no longer be the homeowner.

  • It would have also required that equity sales contracts be recorded with the county. That would have prevented foreclosure rescuers from selling the property to a third party who knew nothing about the individual's option to repurchase the property.

  • Finally, the law would have mandated that anyone signing an equity sales contract must first undergo pre-loan counseling. Homeowners going through foreclosure are in a panic. They don't know where to turn. They're not thinking clearly. They often don't realize that there may still be time to salvage some of the equity. They have a tendency to hunker down and hide, ignoring notices from their lender. Yet what they should do is contact the mortgage company to try to work something out. Foreclosure rescuers pressure homeowners not to talk to anyone but them. Their game is to run out the clock until it's too late for homeowners to get real help. It's time to derail the foreclosure rescue gravy train. The Legislature must revive and pass AB 1356.

For more, including a story of an elderly couple facing foreclosure who had the equity in their home stripped, and ultimately lost their home after doing business with a foreclosure rescue operator called Bridgeport Capital Management in Irvine, see Theft of Elder Nation: An editorial series - Place legal curbs on 'rescue' practice.

Go here for all posts and links to this Contra Costa Times editorial series on elder financial abuse.

Go here for the proposed statute, AB 1356; and here for Bill Analysis on AB 1356.

For California's current state law regulating foreclosure rescue operators, see:

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

Nevada AG, Secretary Of State Issue Joint Foreclosure Rescue Advisory

From the Nevada Attorney General's office:
For more, including what to look out for, see Masto And Miller Warn Nevadans To Beware Of Foreclosure Rescue Scams.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Foreclosure Rescue: News On Video

Online Videos On Foreclosure Rescue

For those who hate reading and love watching TV, I've compiled the following list of links to television coverage of stories involving foreclosure rescue from around the country - most of which have appeared elsewhere on this blog, and with a few new ones thrown in.

Recently added videos (since 6-12-08):

  1. Gonzales Woman Arrested For Mortgage Fraud (Police: Woman Charged Homeowners Thousands) KSBW-TV Channel 8 - Monterey County, California (added 8-19-08);
  2. Former Stripper Ran Foreclosure Rescue Scam (story of one victim of alleged Metropolitan Money Store foreclosure rescue scam; WMAR-TV Channel 2 (Baltimore, Md) - posted on website, Daily Motion),
  3. Secret deal leaves family facing foreclosure - again; WOOD-TV Channel 8 (Grand Rapids, Michigan) (added 7-30-08).

Recently added videos (since 12-16-07):

  1. Are People Preying On Your Financial Misfortune? (KCBS-TV Channel 2 - Los Angeles),
  2. Homeowners Unknowingly Sign Away Property (NewsChannel 5, Nashville, Tennessee),
  3. Foreclosure Fears (The potential for scams is on the rise as homeowners become more desperate) (ABC-TV Good Morning America),
  4. CBS 11 Investigates Foreclosure Rescue Company (CBS 11 TV, Dallas / Fort Worth, Texas).

Videos as of 12-16-07:

  1. Freddie Mac Dramatizes An Equity Stripping Scam (Federal Home Loan Mortgage Corporation - "Freddie Mac"),
  2. Predators Prey On Homeowners Facing Foreclosures (KCBS-TV Channel 2 - Los Angeles),
  3. Homeowners Targeted By Foreclosure Agents (KCBS-TV Channel 2 - Los Angeles),
  4. A Home Mortgage Mess (WABC-TV Channel 7, New York City),
  5. Homes stolen by 'Home Savers'? (Heartbroken people lose homes, equity to "Home Savers"), (WABC-TV Channel 7, New York City),
  6. Valley teacher, former business partners tied to federal mortgage probe (ABC 15, Phoenix),
  7. 87-Year Old Scammed In Foreclosure Rescue Refinance Scam (CBS2 - Chicago),
  8. Rescue or Ripoff? (Part 1; Open House with Gerri Willis; CNN),
  9. Rescue or Ripoff? (Part 2; Open House with Gerri Willis; CNN),
  10. Mortgage Rescue? Rip-Off! (MoneyTalksNews),
  11. Beware of Foreclosure Rescue Scams (KOMO-TV Channel 4 - Seattle),
  12. Beware of foreclosure rescue scams (a different video from #5, above) (KOMO-TV Channel 4, Seattle),
  13. Hazards Of Foreclosure Rescues (KIRO-TV Channel 7, Seattle),
  14. Foreclosure scams prey on homeowners (Reuters News Service),
  15. Texas Attorney General Deals with Foreclosure Rescue Scams (Channel 2, Texas),
  16. Vulnerable homeowners target of scams (NBC News),
  17. Homeowners sue mortgage company (NBC News),
  18. Home Lost In Foreclosure Scheme (Central Florida News 13 - Orlando),
  19. Man jailed for 'foreclosure rescue' theft (WOOD-TV Channel 8, Grand Rapids, MI),
  20. Company accused of exploiting the desperate - Part 1 (Fox Channel 13, Tampa, FL),
  21. Second company accused of mortgage scam - Part 2 (Fox Channel 13, Tampa, FL),
  22. ConsumerWatch: Foreclosure Scams (CBS Early Show),
  23. Mortgage Foreclosure Scams (NBC Today Show),
  24. Foreclosure Scams - Don't Get Taken (CBN Network),
  25. Foreclosure Scams Skyrocketing Across S. Fla. (CBS 4, Miami, FL),
  26. Mortgage Scams More Rampant Than Ever In Fla. (CBS 4, Miami, FL),
  27. Foreclosure Fraud: Predators Want Your Home (CBS 4, Miami),
  28. Church Members: We Were Scammed Out Of Our Homes (CBS 4, Miami),
  29. Homeowners facing foreclosure are targeted again (WKYC-TV Channel 3, Cleveland, OH),
  30. Foreclosure Rip-Offs (KHOU-TV Channel 11, Houston, TX),
  31. Feds Seize Alleged Shoddy Businessman's Belongings (WBAL-TV Channel 11 - Baltimore),
  32. Woman May Lose House After Answering TV Ad (WBAL-TV Channel 11, Baltimore, MD),
  33. Woman Claims To Be Swindled In Foreclosure Feud (WBAL-TV Channel 11, Baltimore, MD),
  34. Woman Gets Home Back After Fraud Investigation (WBAL-TV Channel 11, Baltimore),
  35. Victims Of A Foreclosure "Rescue" (CBS News Shows How A Growing Scam Is Exploiting Homeowners In Foreclosure) (CBS News),
  36. Woman Falls Victim To 'Mortgage' Program (Resident On Verge Of Losing Home) (WCVB-TV Channel 5, Boston),
  37. Woman Falls Victim To 'Mortgage' Program (Resident On Verge Of Losing Home) (WCVB-TV Channel 5 - Boston, MA),
  38. Foreclosure Rescue Scheme Turns Homeowners Into Tenants (Land Trust Agreement That Offers Help Often Costs People Their Homes) (WCVB-TV Channel 5, Boston),
  39. I-Team Investigation: From Homeowner to Homeless (KLAS-TV Channel 8, Las Vegas),
  40. Woman Scammed Out Of Home (FBI: Mortgage Fraud Cases Increase) (WRC-TV Channel 4, Washington, D.C.),
  41. Mortgage Rescue Services (Some mortgage rescue services are really con artists) (WRC-TV, NBC 4, Washington, D.C.).
  42. News19 On Your Side: Foreclosure Fraud Alert (WLTX-TV Channel 19, South Carolina),
  43. Consumer warning: Home foreclosure nightmares (WCNC-TV, North Carolina).

Real Estate "For Sale" Signs An "Invitation" For Copper Thieves?

In York, Pennsylvania, WHP-TV Channel 21 reports:
  • Realtors don't even want to hang up signs that say ”For Rent” or “For Sale” anymore. They say it's not just an invitation for tenants - but an invitation for thieves. Realtors Bob Williams and Charlotte Bergdoll are competitors when it comes to selling and renting homes in York: but they're working as allies now - fighting the metal burglars ruining their business.

  • First time they took copper pipe the second time they cut the electric out of it and the third time they cut the air conditioner pipe.” Williams has been a victim of metal thieves so many times - he doesn't want to buy any more homes in the city. “But you know for $200 worth of valuable copper it cost me $16,000 in property damage, it's not worth it.”

***

  • Bergdoll - who manages hundreds of city properties - believes more needs to be done to stop it. “These people are going in there and cutting gas lines there's gonna be an explosion and that may be what it takes before the city gets serious about this.”

For more, see Copper thefts bad for business in York.

For other stories on stolen copper, see Copper Thefts I and Copper Thefts II. copper metal theft yak

Unoccupied Homes A Target for Copper Thieves

Selected news reports (some recent, some not-so-recent) from around the country on the targeting of vacant homes by those in the "copper theft industry":

Syracuse, New York: Copper piping pilfered from Syracuse homes ("Burglars stripped copper piping from eight homes [on one] weekend... . [...] Most of the homes hit were vacant or under renovation.")

Gaffney, South Carolina: Copper stolen (7th blurb from the top - A currently vacant home was broken into through a basement door; copper electrical wires and pipes were stolen),

Chillicothe, Ohio: Pair arrested for thefts of copper pipe (Police report rash of metal being stolen around town) (Suspects had about a dozen pieces of copper piping, screwdriver and crowbar inside their car; the piping looked like it matched up with a recent theft at a vacant home),

Richmond, Virginia: Suspects in Copper Theft Caught on Tape (Alleged copper thief caught on tape removing the copper gutters and drain spouts from a vacant house). copper metal theft yak

Landlord Employs Unique Tactic To Catch Copper Thieves

In Cincinnati, Ohio, WKRC-TV Channel 12 reports:
  • A local business owner fights back against copper thieves after several expensive break-ins. The latest happened Thursday [...] . Thieves ripped out new drywall in four apartments and a laundry room and cut copper pipes, while the water was still running. Dan Schimberg owns the property and Uptown Properties, which encompasses hundreds of buildings all over the Tri-State. He says he now hires sub-contractors to stay in vacant buildings overnight and keep an eye out for copper thieves. Police were able to catch one of the crooks in Thursday's robbery because a sub-contractor was waiting for them.

For more, see Business Owner Fights Back Against Copper Thieves. copper metal theft yak

Copper Thieves Strike Synagogue; Leave $30K Damage

In Springfield, Massachusetts, CBS 3 reports:
  • The scrap thieves are at it again. They have moved on from abandoned houses to a synagogue of all things.Thursday morning Hy Rabinovitz, the President of Kesser Israel Synagogue in Springfield, found his place of worship torn apart. Thieves ripped up baseboard heaters and piping, in search of all the copper they could get.Vandals have been targeting vacant houses for copper piping and wiring for years, but lately they seem to be more brazen. [...] At Kesser Israel, the vandals ripped up everything from the floor to ceiling, causing about $30,000 in damage. Their boiler room was filled with five feet of water when the the vandals broke the main water pipe. Everything was submerged, even an electrical switch.

For more, see Scrap Thieves Strikes Synagogue; go here to watch the CBS 3 video.

For more on copper thefts, go here , and go here. copper metal theft yak

Copper Thieves Add Aluminum Guard Rails On Freeways To Their List Of Targets

In Irvine, California, The Orange County Register reports:
  • With copper prices hovering around all-time highs, local law enforcement has been battling an on-going war against thieves targeting copper and other high-priced metal. Everything from copper valves to piping to aluminum guard rails on freeways are disappearing as thieves turn the stolen metal into scrap yards.

For more, see Police arrest suspect in copper theft. copper metal theft yak

Saturday, December 15, 2007

Unaffordable House Payments, Homeowners Seeking Insurance Cash Arouse Arson Fears, Say Some Industry Players

Realty Times reports:
  • Insurance fraud investigators say they are bracing for an outbreak of home arsons set by cash-strapped homeowners looking for insurance money to escape from foreclosure. [...] The Coalition Against Insurance Fraud says the illegal tactic is not new, but the coalition fears current market conditions could trigger a home-based arson outbreak beyond normal levels. [...] "I don't believe that it's had time to ripple through the market yet to the point that many people have reached the point of desperation, but I absolutely think it's coming" says Alex Ahart, a fire investigator with EFI Global, an insurance claims investigator.

For more, see Burning Down The House.

For other stories on fires & foreclosures, go here and go here. foreclosure arson yak

Minneapolis-Area Cops Busy Busting Grow House Ops

In Minnesota, the Minneapolis Star Tribune reports:
  • Hennepin County narcotics officers are busting more home-grown marijuana operations -- sometimes in upscale suburbs. One reason for increased home production is the decreased flow of high-grade pot from Canada since border controls tightened up after the Sept. 11, 2001 terrorist attacks, said Sheriff Rich Stanek. Another factor is more indoor cultivation of higher-grade marijuana that's is up to six times more potent than that sold years ago, he said. Higher potency raises dealer profits and also may increase addictiveness, a drug expert said.

For more, see Marijuana growers tend potent kind of pot.

See also, Big Money, Violence Behind Minneapolis Marijuana (Hennepin County Sheriff's statistics on marijuana busts, trends) ("Local marijuana grow operations and related violent crimes are on the rise in the Minneapolis metro, according to Hennepin County Sheriff Rich Stanek." - My Fox TV Channel 9; 12-11-07).

--------------

For the kinds of health and safety concerns arising from using homes to cultivate marijuana, not to mention the kind of damage such operations can inflict on a home, see Beware Of Homes Used As Indoor Pot Farms & Meth Labs.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops alpha

The Invisible Legacy Left In Homes Used As Meth Labs

A People magazine article published in 2005 described the hazards awaiting subsequent owners/occupants of homes once used as labs to manufacture methamphetamine. The article tells the story of three families and their experiences with contaminated homes that they unwittingly purchased and moved into. The cost to the families' health and finances, and in one case, the stress that may have led to a failed marriage, are described in some detail.

For more, see Homes Toxic Home (Buyers Beware: Owners of homes once used as methamphetamine labs are having health problems -- and sometimes going broke trying to clean up their toxic houses) (no longer available online).

For links to more on meth labs from the FLDFS, see:
  • Are you living next to a ticking time bomb? (links to articles & press releases on meth labs), (no longer available online),
  • Methamphetamine Videos (links to videos made available by the FLDFS).

For a related post, see Beware Of Homes Used As Indoor Pot Farms & Meth Labs.

Go here for some methamphetamine information resources.

Go here and go here for other posts on home based meth labs. meth lab zeta

NAR Field Guide To Meth Labs

The National Association Of Realtors ("NAR"), through its Information Central, has compiled a list of useful links to media reports and other sources from around the country that deal with the hazards of meth labs and the real estate used to house them. Links to articles describing the growing epidemic and warning signs, as well as articles describing issues related to property management, disclosure, and decontamination are included. Although the links to some of the media reports have expired, the remaining links provide ample information for those interested in the subject. For more, see Field Guide to Meth Labs (NAR's Information Central).

Go here for some methamphetamine information resources.

Go here and go here for other posts on home based meth labs. meth lab zeta

Alleged "Dope Hotel" Evacuated Upon Meth Lab Discovery On Premises

In Orlando, Florida, WFTV Channel 9 reported in October:
  • Orlando police broke up a potentially explosive meth lab at a local hotel. [...] Investigators said a maid and a security team at the Vacation Lodge led officers to the operation ... . "This hotel is the biggest dope hotel in the city of Orlando. It caters only to druggies, drug addicts and prostitutes," said Greg May, an Orlando resident.

For the story, see Maid Leads Police To Meth Lab At Orlando Hotel; or go here to watch the WFTV video report.

See also, Meth Lab Found In Orlando Hotel ("A meth lab was located at an Orlando hotel, [...] forcing officials to evacuate the facility") (WKMG-TV Channel 6, Orlando).

Go here for some methamphetamine information resources.

Go here and go here for other posts on home based meth labs. meth lab zeta

Friday, December 14, 2007

Minneapolis-Area Non-Profits To Receive Funding For "Tenant Rights" Counseling For Renters Facing "Foreclosure Eviction"

In Hennepin County, Minnesota, the Minneapolis Star Tribune reports:
  • Concerned that home foreclosures are displacing renters who don't know their rights, the Hennepin County Board moved Tuesday to boost resources to help renters stay in foreclosed homes as long as possible and prevent empty houses from becoming targets for vandals.

  • The board gave preliminary approval for $70,000 in new county funding to go to three nonprofits that counsel renters on their rights. That money will be matched by state money from the Family Housing Fund, a nonprofit group that works to ensure affordable housing in the seven-county metropolitan area. It follows a county investment of $300,000 earlier this year to counsel homeowners who face possible foreclosure.

  • "There is no silver bullet ... but this is an attempt to balance the help we've already given to homeowners," said county Commissioner Gail Dorfman.

For more, see Some help for renters caught up in foreclosures (Looking to keep people in homes, the Hennepin County Board supports money for groups advising on their leasing rights). equity skimming unwittingly gamma

Foreclosure Frustration Hitting Renters Throughout South Florida

In Miami, Florida, CBS4 reports:

  • When Tamara Rutter moved into her new downtown apartment, she couldn't wait. "We we're so excited," said Rutter. "It was our first place together." But things quickly changed with a knock on her door. "She handed me over a huge stack of papers and said you are being foreclosed on," said Rutter. Tamara may have seen it coming if she owned a condo, but she rents. It was shocking for her.

  • What happened to her is happening across South Florida. Despite rents paid on time, landlords can't afford the mortgage, often double what they are renting for. Tamara had 60 days to move out while they foreclosed. She held back rent, in essence getting her deposit back.

For more, see Renters Beware, Foreclosures May Affect You Too. To watch the CBS4 video coverage, see Foreclosures: Not Even Tenants Are Safe.

For other posts involving rent skimming landlords who pocket rent and allow homes to go into foreclosure, see Tenants Unwittingly Renting Homes In Foreclosure I , II , III , and IV.

Go here for other posts related to the Miami condo market problem. equity skimming unwittingly gamma

Utah Feds Indict Six In Cash Back Flipping Scam; Straw Buyers Include Local TV Sports Anchor

According to several Utah media reports:
  • Six Utah residents have been indicted by a federal grand jury on charges they conspired in what prosecutors are calling a mortgage fraud scheme that totaled at least $18 million in fraudulent loans. [This week] a federal grand jury returned a 15-count indictment against six residents, charging them with counts of wire fraud, mail fraud and conspiracy to commit a crime.

***

  • The alleged fraud involved entering false sales prices in the Multiple Listing Service, then using the exaggerated figures to support inflated appraisals of other properties in the affluent River Bottoms area. The defendants used straw buyers to flip five residences in the neighborhood, according to the indictment, and kept the difference between the home loan and the actual value of the properties.

Charged in the indictment are: David R. Bolick, 51, owner of Home Owners Group (H.O.G.) and Paragon Investment Group L.L.P., Bradley Grant Kitchen, 40, who allegedly participated in real estate transactions with H.O.G. and Paragon, Steve Wells Cloward, 40, a licensed real estate appraiser with Express Appraisal, Ron K. Clarke, 40, a licensed real estate agent, and Jeffery David Garrett, 43, and Rebecca Ann Hadlock, 31, both of whom are escrow officers with Precision Title Co.

Reportedly, three lower-level participants have copped plea deals in state court and have agreed to cooperate with prosecutors. Among those cooperating is KUTV Channel 2 sports anchor/reporter Dave Fox, who pleaded guilty in September for his participation in the operation as a straw buyer. For more, see:

Curbing Elder Financial Abuse Through Required Reporting To Authorities

The fifth in a series of editorials by the Contra Costa Times (Northern California) on elder financial abuse focuses on a California state law, which became effective in January, 2007, which requires reporting of suspected elder financial abuse in certain cases:
  • [The Financial Elder Abuse Reporting Act] requires all employees of financial institutions - banks, credit unions and savings and loans - to contact the police department or Adult Protective Services if they suspect that an elderly person is a victim of financial abuse. Those who fail to do so face fines of up to $5,000. Financial institution employees now join other so-called mandated reporters who often come into contact with elderly people and are in a position to detect hidden abuse. They include health care workers, state and county employees, nursing home staff, clergy, and law enforcement.

***

  • When it comes to elder financial abuse, financial institutions are often the scene of the crime. Brazen elder predators have been known to march seniors up to the teller window in their pajamas. Our financial institutions are an important early warning system for detecting elder abuse. Their employees can spot unusual activity on an elderly customer's account, such as a $150,000 wire transfer going to a foreign lottery, or a $135,000 check written to an accountant for a bogus tax bill.
***
  • California law makes it easy for financial institution employees to do the right thing. They don't even have to worry about getting in trouble if they make an honest mistake. They can't be prosecuted unless they knowingly make a false claim. No one's asking tellers to play detective, only to report in a timely manner by telephone or in writing possible crimes occurring before their very eyes.
The editorial includes the story of one 82 year-old widower who (prior to the new law becoming effective) was in the process of having his bank accounts at four financial institutions cleaned out by a scam artist when, because of the actions of alert employees at one of the institutions, an ex-felon's elaborate scheme to steal everything that the elderly man owned was foiled. It turns out that the predator had also set himself up to inherit the widower's $400,000 home and annuities worth $200,000. He's now in prison, serving a 10-year sentence for elder theft.

For more, see Theft of Elder Nation: An editorial series (Requiring reporting) (may require free registration).

Go here for all posts and links to this Contra Costa Times editorial series on elder financial abuse.

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