Chicago Federal Jury Slams Ex-Attorney With Guilty Verdict In Sale Leaseback, Equity Stripping Foreclosure Rescue Ripoff

In Chicago, Illinois, the Chicago Tribune reports:

• Norton Helton, a former Chicago attorney who once offered personal-finance advice on the radio, was found guilty Friday of bilking distressed homeowners through a fraudulent foreclosure rescue program.(1) [...] Helton was the subject of a 2006 Tribune investigation into mortgage fraud. In its investigation the Tribune found that in 2005 Helton helped persuade a 91-year-old woman to sign over her sole asset, a brick home on Chicago's West Side co-owned with her nephew.

• Nine months after the story was published, federal prosecutors charged Helton with bankruptcy fraud for allegedly concealing home sales from U.S. Bankruptcy Court.(2) The nephew, Kelvin Martin, was one of at least nine alleged victims.

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• Evidence showed that Helton worked with [Charles] White, who owned a real estate company that offered troubled homeowners a "mortgage bailout" program. Under the scheme, homeowners were persuaded to sell their property to "investors" with the expectation they would be allowed to remain in their homes while they paid down debt and repaired their credit through bankruptcy.

• After a year, clients would have the right to repurchase their homes, if financially able to do so.At the time of sale, White stripped the homeowners of their equity. He also obtained more than $1.6 million in mortgage financing for the investors by preparing fraudulent loan applications with fake employment and income information. He did so with the help of [Felicia] Ford, a closing agent who worked for a title company that shared offices with White's company.

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• "The people who went through bankruptcy did so as part of a bailout program," said Assistant U.S. Attorney Joel Hammerman. "The individuals were told they could improve their credit by going through Chapter 7.'' Prosecutors charged that Helton hid the home transfers from the bankruptcy petition so he could keep $400,000 in his clients' assets under wraps.(3)

For the story, see Lawyer convicted of mortgage-rescue fraud (Attorney, subject of a 2006 Tribune investigation, once offered financial advice on radio).

(1) According to the story, the jury convicted Helton after a monthlong trial of all the charges against him — nine counts of bankruptcy fraud and three counts of wire fraud related to mortgage loans. Each count of wire fraud carries a maximum penalty of 20 years in prison, and he faces a maximum five years in prison for each bankruptcy charge. Helton is free on bond pending his sentencing, scheduled for the end of September. Two other defendants, Charles White and Felicia Ford, were later added to Helton's case, and were found guilty of wire fraud, the story states.

(2) For the U.S. Attorney's 2006 press release announcing the indictment, see Five Chicago Area Bankruptcy Attorneys Among A Dozen Defendants Charged In Separate Federal Bankruptcy Fraud Cases. See also, Crain's Chicago Business: Chicago lawyers charged in bankruptcy fraud probe.

(3) To the extent Helton's victims cannot recover their financial losses from him, they should consider filing an application with The Client Protection Program of the Attorney Registration and Disciplinary Commission (ARDC), which, according to their website, was established by the Supreme Court of Illinois to provide reimbursement to clients who have lost money or property because of dishonest conduct by lawyers admitted to practice law in the State of Illinois. The Program reimburses clients who cannot get reimbursement from the lawyers who caused their losses, or from other sources such as insurance.

For information on "attorney ripoff reimbursement funds" in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.