Illinois Attorney Disbarred For Actions In Alleged Equity Stripping Foreclosure Rescue Scam

In Aurora, Illinois, The Beacon News reports:

• [A]urora attorney Edward Varga was disbarred for neglecting 18 bankruptcy cases and failing to refund the clients' fees in those cases. He failed to appear for his disciplinary hearing, according to the Illinois Attorney Registration & Disciplinary Commission. According to IARDC documents, Varga took between $300 and $2,760 from several clients, then failed to return calls or make court appearances for them.

• In 2006, federal prosecutors charged Varga with defrauding clients, trustees and creditors of $500,000. According to the U.S. Department of Justice, Varga and a woman, under the guise of assisting individuals facing foreclosure, convinced these homeowners to sell their homes to "investors" while in bankruptcy or just before entering bankruptcy.

• Varga, through the use of false statements and documents, ensured that the closings took place, the Justice Department said. Then the sale proceeds were signed over to the woman and not the sellers, prosecutors said. The sale and existence of the proceeds were concealed from the Bankruptcy Court, the trustees and creditors, prosecutors said.

For the story, see Attorney is disbarred after cheating bankruptcy clients.

For earlier reports on the criminal indictment, see:

• Chicago lawyers charged in bankruptcy fraud probe, and
• U.S Attorney press release.