Monday, April 30, 2012

LA Sale Leaseback Peddler 'Strikes Out'; Gets 25 To Life For Equity Stripping Ripoffs That Targeted Poor, Elderly With Promises Of Foreclosure Rescue

In Los Angeles, California, the Los Angeles Times reports:

  • An Orange County man who swindled elderly people out of their homes after promising to help them avoid foreclosure was sentenced to 25 years to life in prison under California's tough three-strikes law. Defense lawyers and prosecutors across the state could not recall any other case in which a white-collar offender received such a lengthy sentence under a statute typically applied in violent crime cases.

  • The sentencing of Timothy Barnett was unusual because his entire criminal record involved fraud. The 49-year-old was convicted last month of 17 felonies for tricking five people into unknowingly granting him title to their homes. He had been convicted of similar charges in the 1990s.

  • "The worst thing you can do is take somebody's home," Los Angeles County Superior Court Judge Stephen A. Marcus said Friday in explaining the lengthy sentence. "Instead of helping people, he stripped the equity from their homes and left five people homeless," the judge said. "Even Bernie Madoff didn't take people's homes from them."
***
  • Barnett's latest crimes occurred between 2005 and 2007. The victims were older residents of poor South Los Angeles communities who had used the explosion of real estate values to borrow against their equity, only to fall behind on the payments.

  • That's when Barnett appeared. Victims testified that he went to their homes and prayed with them, saying he could help keep their homes, bring loans current and reduce monthly payments. What Barnett didn't make clear enough was that he would end up owning the homes, Marcus said. Along with their homes, the victims cumulatively lost nearly $900,000 of equity to Barnett.(1)
***
  • Many people across the country have been accused of victimizing desperate homeowners since the real estate market collapsed in 2008, without facing a potential life sentence. What set Barnett's case apart was two prior "strikes" he received after pleading guilty to two burglary charges in the 1990s. That made him eligible for a life sentence if convicted of a new felony, as he was in March.

  • Under California law, a person can be convicted of burglary if he or she enters someone's home with the intent to commit a crime, as Barnett did. Burglary is one of the dozens of serious or violent crimes considered strikes under state law. "He's a career criminal who specializes in real estate fraud," Marcus said. "He preys on the weakest people in our society."

  • Among the most recent victims was an 85-year-old blind widow named Dorothy King. Her niece, Angenetta Allen, said Barnett deserved the harsh punishment. "Mr. Barnett did prison time for the very same thing, and as soon as he got out he did the same thing," Allen said. When the judge announced Barnett's sentence, some victims and their families cried out in approval(2).
For more, see Housing scam brings up to life sentence under three-strikes law (An Orange County man who swindled elderly people out of their homes is sentenced to 25 years to life in prison under California's three-strikes law, which is typically applied in violent crime cases).

(1) For more on this type of foreclosure rescue ripoff, see:

(2) At one time, many in state and local law enforcement once passed on prosecuting these sale leaseback equity stripping ripoffs that under the flimsy pretense that these cases were merely 'civil matters.'

Over the last couple of years, it's been primarily the Feds (U.S. Attorneys, FBI, Secret Service, etc.) that have been bringing prosecutions in these equity stripping ripoffs. However, as this story reflects, more and more state court prosecutors now appear to be stepping up to the plate and showing some guts by bringing criminal charges against these scammers. See, for example:

posted by Home Equity Theft Reporter at 4:10 AM