Saturday, November 21, 2015

Attorney Specializing In Elder Law Accused Of Ripping Off $65K+ From Elderly Client's Trust Fund Cops 'No Contest' Plea To Lesser Charge; Agrees To Cough Up Bar Ticket

In San Luis Obispo, California, The Tribune News reports:
  • A Morro Bay estate attorney and former planning commissioner faces up to a year in jail and must surrender his law license after being convicted [] of stealing from elderly clients.

    John Patrick Fennacy, 50, pleaded no contest [] to a felony charge of grand theft over $950, in exchange for prosecutors dismissing a criminal enhancement alleging he took property exceeding $65,000.

    Fennacy faces a maximum of one year in San Luis Obispo County Jail, five years of formal probation, 100 hours of community service and a yet-to-be-determined amount of restitution. He must immediately forfeit his license to practice law and agree not to practice law until terms of his probation are complete.

    In a complaint filed in February, the San Luis Obispo County District Attorney’s Office alleged that Fennacy — whose now-defunct website had listed him as specializing in elder law and estate planning — stole at least $65,000 from a client’s trust fund.(1)

    Fennacy served on the Morro Bay Planning Commission from January 2012 to May 2014 and was involved in an unsuccessful recall effort against Mayor Jamie Irons in 2013.

    He was a former co-owner of Brickhouse BBQ. He handed over full ownership of the restaurant to his son last year.

    Fennacy is scheduled to be sentenced Dec. 8 in San Luis Obispo Superior Court.
Source: Morro Bay attorney pleads no contest to stealing from elderly clients.
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(1) The State Bar of California's Client Security Fund was established to reimburse eligible clients who have suffered a loss due to misappropriation or embezzle­ment by a California-licensed attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Disbarred Long Island Lawyer Already Facing Charges Of Stealing $1.2 Million In Eminent Domain Proceeds From Elderly Disabled Client Whose Land Was Taken From Her By Local Gov't Now Charged With Pocketing $85K From Another Elderly Woman Needing Help Getting Reverse Mortgage

In Mineola, New York, Newsday reports:
  • A disbarred lawyer who's already facing charges for allegedly stealing $1.2 million from a disabled client is now accused of stealing from an elderly former client and spending the money to buy limos and a vintage Corvette, Nassau prosecutors said Monday.

    Janice Jessup, 68, surrendered Monday to face new felony charges of grand larceny, criminal possession of a forged instrument and falsifying business records.

    The Nassau district attorney's office said she stole more than $85,000 from a woman who, at 85, hired Jessup in 2008 to help get a reverse mortgage on her Roosevelt home.

    Jessup, who lives in Baldwin and Charlotte, North Carolina, declined to comment on the new allegations while leaving Hempstead district court after her arraignment. A judge released her on her own recognizance, ordering her to keep wearing a GPS monitoring device she was given in her earlier case.

    Jessup is free on $50,000 bond after her arrest in April, when she pleaded not guilty to an indictment charging grand larceny and scheme to defraud.

    Prosecutors alleged then that Jessup, who also goes by a married surname of Jones, stole money from a physically and mentally disabled client who had owned land that was taken by the government, through eminent domain, and used to build New Cassel's Yes We Can Community Center. Authorities claimed Jessup never gave that client the money the government paid out. In 2010, an appellate court disbarred Jessup after she had faced more than a dozen professional misconduct allegations.

    Her arraignment attorney, Joseph Norton, referred a request for comment Monday to the defendant's attorney, Ira Weissman. Weissman later declined to comment.

    Acting District Attorney Madeline Singas said in a statement that "stealing from the elderly is especially despicable," and her office would aggressively prosecute Jessup.

    In the new case, prosecutors are alleging Jessup in 2011 got a power of attorney "purportedly bearing the signature" of the reverse mortgage client. Jessup then filed an application in the unidentified victim's name with Wells Fargo bank asking for a line of credit, according to authorities.

    The defendant also gave a document to the bank falsely saying that the woman still lived in her Roosevelt home, but she had been in a nursing home since 2008, prosecutors said.

    Jessup then stole more than $47,000 from a bank credit line and other money from the victim, the district attorney's office said.

    Prosecutors claim Jessup spent the money on herself, her husband at the time, and his business, Legacy Limousines. They also alleged she forged a $3,500 check payable to the business.(1)
Source: Disbarred lawyer accused of stealing client's money is facing more charges, Nassau prosecutors say.

For the Nassau County, New York District Attorney news release, see Disbarred Attorney Arrested for Stealing More than $85,000 from Elderly Disabled Former Client (Janice Jessup was indicted in April for separate case in which she allegedly stole $1.2 million from another disabled client).
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(1) Clients found to have been victimized by a theft by a New York attorney may be able to seek some reimbursement for being screwed over by turning to the The Lawyers’ Fund For Client Protection Of the State of New York, which manages and distribute money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Suspension Was No Impediment For Now-Disbarred NJ Attorney Desiring To Continue Practicing Law - He Simply Allegedly Misappropriated Use Of Another Attorney's Name To Go On To Pilfer $75K In Real Estate Closing Funds Meant For Property Seller

In Morris County, New Jersey, the Daily Record reports:
  • A now-disbarred lawyer who used to practice in Flanders was charged [] with using the name of a legitimate attorney in a real estate closing and stealing more than $75,000 in funds meant for the seller of the property.

    Morris County Prosecutor Fredric M. Knapp [] announced that Neil Lawrence Gross, 47, of Livingston, was charged by office Detective Joseph Soulias with theft, identity theft and forgery. He was released into his own custody, and his initial state Superior Court appearance will be scheduled for a future date.

    Gross, a former partner in the Flanders-based firm Ward & Gross, was suspended from practicing law in October of 2012 and ultimately was disbarred on Oct. 21, 2014. According to state Office of Attorney Ethics records, Gross first was suspended for failing to promptly turn over funds to a client. His disbarment that followed was related to violations of attorney ethics that included lack of diligence, failure to communicate, practicing law while suspended and failure to cooperate with ethics investigations.

    In the current case, the Prosecutor's Office received a referral of an alleged theft from the New Jersey Lawyers' Fund for Client Protection(1) in July. Through an investigation by the Prosecutor's Office's Financial Crimes Unit, Gross allegedly was found to have used the name of another attorney in a real estate closing that occurred in 2013, while he was suspended.

    As part of the closing, Gross allegedly held more than $75,000 in a trust account but failed to disburse the funds to the seller of the property. He instead diverted the funds to a personal account and in doing so, forged the name of the other attorney, according to the charges and the Prosecutor's Office release.

    Gross also has a charge pending in Morris County of passing bad checks in Florham Park in 2014, according to court records. His attorney, Michael Fletcher, was not available Friday for comment.
Source: Ex-Flanders lawyer charged in theft of $75,000.
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(1) The New Jersey Lawyers' Fund for Client Protection was established to reimburse clients who have suffered a loss due to dishonest conduct of a member of the New Jersey Bar.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Disbarred Lawyer Convicted Of Extortion For Attempted $50K Squeeze On A Client Seeking To Claim Her Share Of Dead Father's Estate Now Faces New Charges For Allegedly Commingling Clients' Trust Account Cash w/ Operating Funds

In Montgomery County, Tennessee, The Tennessean reports:
  • A former Clarksville attorney has been indicted with three counts of theft following a TBI investigation. Former Attorney Carrie Gasaway has been named in the indictment.

    TBI Special Agents began investigating Carrie Gasaway, who operated a law firm in Clarksville until July, on Aug. 6. Agents developed information that Gasaway had commingled funds between her attorney trust account and operating account from Jan. 2014 through Feb. 2015, according to a news release sent out [].

    ***

    The Montgomery County Grand Jury returned indictments charging Gasaway, 43, on Tuesday with three counts of Theft of Property. Gasaway was arrested [] and booked into the Montgomery County Jail on a $55,000 bond.

    Gasaway has been previously convicted of extortion in Montgomery County.

    She was disbarred by the Tennessee Supreme Court in October, admitted guilt in eight disciplinary cases and was ordered to pay restitution to six former clients.

    According to the court's Board of Professional Responsibility, Gasaway engaged in extortion; stole client money from trust; charged unreasonable fees; provided incompetent representation; filed meritless claims; failed to perform professional services; failed to provide diligent representation; failed to refund unearned fees; made false statements of fact and failed to disclose material facts to a tribunal; threatened criminal prosecution to obtain an advantage in a civil proceedings; failed to properly supervise her co-counsel and knowingly ratified his conduct; and failed to report the professional misconduct of co-counsel and partner and engaged in conduct involving dishonesty, deceit and misrepresentations.

    Gasaway and attorney Fletcher Long, who were law partners in October 2010, were convicted of extortion May 12. The state claimed the pair pressured a client to pay them $50,000 to obtain her share of her father’s estate. Gasaway and Long had the client arrested weeks later because she changed lawyers and refused to pay them the entire $50,000 for the short time they worked on her case, according to a news release.

    In June, they both agreed to give up their law licenses permanently to avoid jail time. They were each sentenced to two years in prison, which was suspended to four years probation, and ordered to repay the victim, Michelle Langlois, $2,000 each in restitution.

    The Tennessee Supreme Court officially disbarred Gasaway on Oct. 5. Long was disbarred Sept. 15.

    A news release from the Board of Professional Responsibility says Gasaway violated numerous rules of professional conduct. She was ordered to pay restitution to six former clients, totaling $112,939. If any of them are repaid by the Tennessee Lawyer's Fund for Client Protection, Gasaway will have to refund the fund.(1)

    She is married to Circuit Court Judge John Gasaway, who announced in August that he would retire Dec. 1. He was first elected in 1990 and was elected to a fourth, eight-year term in August 2014.
For the story, see Former Clarksville attorney Gasaway indicted.
-----------------------------

(1) Clients victimized by a theft of funds by a Tennessee-licensed lawyer may be able to seek some reimbursement for being screwed over by turning to the Tennessee Lawyer's Fund for Client Protection, which manages and distribute money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Friday, November 20, 2015

Policing for Profit: The Abuse of Civil Asset Forfeiture By Law Enforcement, Giving Them Strong Financial Incentives To Swipe Property Regardless Of Owner's Innocence Or Guilt

From a recent press release issued by the non-profit civil liberties law firm Institute for Justice:
  • Draconian state and federal civil forfeiture laws are fueling an unprecedented rise in property seizures nationwide, according to a new national study—and federal laws are among the nation’s worst. The study provides the most comprehensive examination of civil forfeiture laws and forfeiture statistics yet compiled.

    The federal government’s civil forfeiture scheme scores a D- in the new report, Policing for Profit: The Abuse of Civil Asset Forfeiture, released [] by the Institute for Justice. In addition to meager protections for property and due process rights, federal law gives law enforcement a strong financial incentive to take property regardless of the owner’s guilt or innocence—100 percent of the proceeds.

    Most state laws likewise fail to make the grade: 35 states receive a D+ or worse, demonstrating the poor state of civil forfeiture laws across the country. Only two states receive worse grades than the federal government.

    “Research has shown that the financial incentives baked into civil forfeiture laws influence law enforcement behavior,” said Dick M. Carpenter II, Ph.D., an IJ director of strategic research and one of Policing for Profit’s co-authors. “When laws make taking property relatively easy and lucrative for law enforcement, it should be no surprise to see agencies take advantage.”

    Under civil forfeiture laws, police and prosecutors can seize cash, cars, homes and other property on the mere suspicion that it is connected to criminal activity. No charges or convictions are required. And once property is seized, owners must navigate a confusing, complex and often expensive legal process to try to win it back before it is forfeited. Worst of all, most civil forfeiture laws give law enforcement agencies a powerful incentive to take property: a cut, or even all, of forfeiture proceeds. Such financial incentives, combined with weak protections for property owners, increasingly put people’s property at risk.

    Nationwide, forfeiture revenue has exploded. Since 2001, annual federal forfeiture revenue has increased from less than $500 million to more than $5 billion in 2014—a tenfold increase in just 14 years. And available data show forfeiture revenue across 14 states more than doubling from 2002 to 2013.

    The study also finds that when police and prosecutors take property, they overwhelmingly prefer civil forfeiture to its criminal counterpart. Civil forfeiture is easier for law enforcement because it does not require a conviction, while criminal forfeiture does. Data obtained by IJ reveal that the Department of Justice took advantage of easier civil procedures in 87 percent of forfeiture cases from 1997 to 2013.

    State and local law enforcement can also take advantage of a controversial federal forfeiture program called equitable sharing, which enables them to circumvent their own states’ laws, which are often less lucrative, and forfeit under federal law instead—getting up to 80 percent of the proceeds back. Policing for Profit finds that DOJ equitable sharing payments to state and local law enforcement nationwide more than tripled between 2000 and 2013, jumping from $198 million to $643 million.
For the entire press release, see TAKEN: New Report Finds Civil Forfeiture Laws Are Fueling Explosive Growth in Property Seizures (Federal Laws Among the Nation’s Worst; Annual Federal Forfeiture Take Grew Tenfold in Just 14 Years).

Brooklyn Judge Temporarily Slams Brakes On Convicted Scammer/Real Estate Developer Using Dubious Deed To Claim Ownership Over Disputed Lot; Orders Probe To Find Rightful Inheritors Of Property Currently Used As Community Garden

In Brooklyn, New York, DNAInfo New York reports:
  • The hunt is on for the heirs to a local community garden lot after a Brooklyn judge questioned the ownership of the Maple Street property in a decision — and appointed a guardian to find its rightful inheritor.

    In a decision filed in Brooklyn Supreme Court on Nov. 6, Judge Mark Partnow dismissed the ownership claim of "Housing Urban Development LLC"(1) at 237 Maple St. — an empty Prospect-Lefferts Gardens lot planted and maintained by the Maple Street Community Garden. Partnow wrote in his decision that the deed claiming the company bought the space in 2003 from the “sole survivors” of the previous owners for $5,000 “is of dubious validity."

    The deed says the LLC, which is controlled by brothers Joseph and Michael Makhani,(2) bought the property from “Alexander Kirton and Alan Kirton as sole survivors for the estate of Oscar and Germaine Kirton,” who owned a home on the lot that burned down in 1997, the gardeners and their advocates have found.

    However, the decision from Partnow points out, no address, phone number or attorney is listed for either Alexander or Alan Kirton on “the deed at issue.”

    To clarify the rightful owner of the garden space, Partnow ordered an independent legal guardian to make “diligent and exhaustive efforts” to find Alexander, Alan or any heirs to the Kirton estate. The judge did not specify a deadline for that investigation.

    He also ordered that, until that process is complete, the LLC cannot eject the garden from the property, interfere with their activities, develop on the property or file new applications for building there; the Makhanis filed permits to build a five-story building on the garden lot in December of 2014, records show.

    The decision is the latest in a long fight between the Maple Street gardeners and the Makhanis. The trouble began in earnest in the fall of 2014 when the brothers tried to rip up the garden before police ordered them to stop because they couldn’t prove they owned the lot.
    ***
    “We are really happy with the decision,” Segal said in a statement. “Judge Partnow took care to weigh the impacts of potentially illegal development on the local community and to consider the entirety of the record before him.”
For more, see Deed for Disputed Maple Street Community Garden is 'Dubious,' Judge Says.
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(1) Calling themselves "Housing Urban Development LLC," if "[r]easonably calculated to convey the false impression that such name or business has some connection with, or authorization from, the Department of Housing and Urban Development, [...] which does not in fact exist ..." may constitute a violation of federal law that might rise to the level of a crime. See 18 U.S. Code § 709 - False advertising or misuse of names to indicate Federal agency. See, generally:
(2) See The New York Times: Student Filmmakers, Not Ceasing or Desisting:
  • [B]oth Makhani brothers pleaded guilty in federal court in 1999 to taking part in a scheme involving foreclosed properties in Queens; they were fined and sentenced to three months in prison. And last December, HPD and two other companies in which Joseph Makhani is a principal pleaded guilty in State Supreme Court to filing false deeds as part of a housing scam in Queens. The companies were fined $5,000 each.

Duped By Home Hijackers Peddling Phony Rent-To-Own Deal, Victim Estimates He Lost At Least $10K In Ripoff After Unwittingly Moving Himself & Family Into Vacant Home In Foreclosure

In Kennewick, Washington, KNDO-TV Channel 23 reports:
  • [T]ravis Herndon says he'll have trouble trusting anyone ever again after what Maggie Zieske and Steve Hartmann allegedly did to his family. Police tell us they believe the couple would break into foreclosed or vacant homes, change the locks, and then rent the homes themselves.

    Herndon says this scam was professional and complex, and his family is losing thousands because of it.

    Travis Herndon thought he had found his family's home for years to come. They bought new appliances, fixed the bathtub, put hours of work and thousands of dollars into their new life. "Our lifetime home," Travis Herndon said. "Something my kids could come back to when they were adults."

    Before all that, Herndon was in talks for months with this woman identifying herself as Maggie Lawson. Herndon thought the rent to own agreement she was offering seemed very cheap. So he looked into it. "Three months of my own research and looking through things, doing research on her and her background," Herndon told us.

    But the scam was extremely complex. Maggie even had Herndon meet with a man who impersonated a realtor. "I met somebody I thought was a realtor," Herndon said. "But I don't know where that person is now. And the number I used to call them doesn't work."

    Convinced the deal was real, Herndon moved in his family of three kids and three dogs. Soon enough, letters from the bank starting coming in saying the home was foreclosed. Herndon knew something was wrong, and collected every conversation or document he had from Maggie and turned it over to Kennewick Police.

    "And so when I gave that to the police, it was less than 24 hours and they were in jail," Herndon said. "So yeah I believe that what I turned in is what put them there."

    Herndon says he's losing at least $10,000 with rent costs and repairs he made around the home. Even though they can stay in the home through Christmas, the holidays are ruined.

    "Holidays are on hold," Herndon said. "You know I can't go out and buy that $200 dinner because I can't afford it. We have to save that money."

Thursday, November 19, 2015

Charlotte Feds Score Four Guilty Pleas In Foreclosure Assistance Scheme That Falsely Characterized Debts Using Fraudulently Filed Forms 1099-OID To Claim Over $4 Million In Tax Refunds

In Charlotte, North Carolina, The Charlotte Observer reports:
  • A man and a woman from Charlotte have pleaded guilty in a foreclosure assistance scheme.

    Daniel Heggins and Joan Clark pleaded guilty to conspiracy to defraud the United States, prosecutors said. According to court documents and statements in court, the pair conspired to defraud the government by filing false tax returns.

    Heggins recruited people with debts, such as home mortgages or car loans, and created false Forms 1099-OID falsely characterizing the amount of the debts as income, prosecutors said. Heggins and Clark then prepared and filed false Forms 1040 that requested refunds from the IRS based on the false Forms 1099-OID.

    Sixteen false tax returns claiming more than $4 million in fraudulent refunds were filed with the IRS office in Charlotte as part of the scheme, court records show.

    Clark and Marlowe Williams of New London, N.C., filed three false tax returns requesting $900,000 in refunds from the IRS. They received $601,780, according to court records.

    Heggins pleaded guilty to one count of conspiracy on Tuesday and faces a maximum five years in prison and a $250,000 fine.

    On Nov. 5, Clark pleaded guilty to two counts of conspiracy to defraud the United States. She faces a maximum five years in prison and a $250,000 fine on each count.

    On Monday , Williams pleaded guilty to conspiring with Clark to defraud the United States. He faces a maximum five years in prison and a $250,000 fine.

    On Sept. 24, Cheryl Jones of Chicago, Ill., pleaded guilty to presenting a materially false document to the IRS. Jones submitted false tax returns to the IRS at the direction of Heggins and Clark, according to prosecutors. She faces a maximum year in prison and a $10,000 fine.

    Sentencing dates for the four have not been set.
Source: 2 Charlotte residents plead guilty in foreclosure assistance scheme (False forms filed with the IRS, Four defendants involved in scheme).

Deadbeats Invoking Sovereign Citizen Rights Continue Snatching Vacant Foreclosed Homes; Despite Arrest, Crackpot Returns To Premises After Posting Bail

In Charlotte, North Carolina, WCNC-TV reports:
  • A woman and as many as nine other people are refusing to leave a home in one of Charlotte's wealthiest neighborhoods.

    Ninti el Bey moved into the empty home that is in foreclosure on Kelly Woods Lane in Piper Glen late this summer.

    Bey filed a cease and desist order against the Piper Glen Estates Association and is fighting to keep the house, even though she is not the owner and does not pay any rent.

    This is a case similar to others across the nation where sovereign rights groups like the Moorish Nation take over empty houses, make threats and file nuisance lawsuits knowing full well it will take a long time for them to legally be evicted.

    "This is a masterful plan," said Attorney Jerry Miller, who represents the association that is trying to have Bey removed from the house.

    Miller read from a portion of the cease and desist order that says, "...there is a very important person/diplomat from the International Indigenous Trust residing in the community and there will be no trespassing allowed."

    The order also says, "This is private property and the right to bear arms is fully executed."

    Last Saturday, the Boston bank that legally owns the house while it is in foreclosure filed a criminal complaint against Bey and she was arrested. She was charged with breaking and entering and three other charges.

    Hours later she posted bail, and neighbors say she went right back to the house.

    A neighbor who did not want to be identified for fear Bey would file a suit against him said, "I wouldn't want this to happen in any community. You just don't get to steal houses."

    The homeowners association in now fining the bank $300 a day for everyday Bey remains in the house.

    Banks usually leave the power turned on in empty houses for security reasons, but the association is now asking that the power be turned off in this house, hoping that will force Bey out.
Source: Squatters refuse to leave pricey home in Piper Glen.

For story follow-up, see Accused squatter in pricey Piper Glen home arrested again; suspect gets pinched again for reoccupying home after release from jail.

Two Crackpots Get Sentenced (30 & 27 Months) For Peddling Sovereign Citizen-Linked Debt Elimination Hustle

From the Office of the U.S. Attorney (Columbia, South Carolina):
  • United States Attorney Bill Nettles stated [] that Jeffrey Scott Green, age 53, and Lisa Flaugher-Green, age 52, both of Easley, were sentenced [...], for a conspiracy to defraud, [...]. Senior United States District Judge Henry M. Herlong, Jr., of Greenville sentenced Jeffrey Scott Green to 30 months in prison and Lisa Flaugher-Green to 27 months in prison.

    Evidence presented at the change of plea hearing established that this was an Electronic Funds Transfer (“EFT”) debt elimination case. Various branches of the Sovereign Citizen movement, which denies the jurisdiction and authority of the federal government, teach that they can discharge debts by presenting a check written off a closed account. The debtor writes on the check “EFT only for discharge of debt.” On the back he writes “authorized representative without recourse.” Sovereign-Citizen groups falsely teach that if the creditor accepts the instrument then the debt is discharged even though no money ever changes hands. The Defendants were part of a group that endorsed the use of EFT instruments.

    It was a part of the scheme and artifice to defraud that Jeffrey Scott Green and Lisa Flaugher-Green wrote checks on closed accounts and noted on the checks “EFT only for discharge of debt.” They then would mail these bogus “EFT instruments” and accompanying documents to creditors in an effort to trick the creditors into issuing documents noting that the debt was paid in full. Once the creditor discovered the scam, Defendants would refuse further payment on the grounds of a discharge procured by “EFT instruments.” Agents estimate that the Defendants attempted to eliminate over half a million dollars in debt using the scheme.

Wednesday, November 18, 2015

San Antonio-Area Adverse Possession-Claiming Crackpot Continues Getting Bagged By Local Cops For Alleged Attempts To Snatch People's Real Estate

In San Antonio, Texas, KSAT-TV Channel 12 reports:
  • Accused of exploitation of the elderly, aggravated perjury and theft of over $150,000, Samuel Charles Perkins, 46, remains in the Bexar County Jail under bonds totaling $45,000.

    Perkins already had been arrested last month after several people claimed he had broken into houses they owned and tried to rent them out himself.

    He claimed the properties were his under the law of adverse possession, often known as squatter’s rights.

    At the time, Perkins told reporters as he was led into a San Antonio police patrol car, “Adverse possession, you ain’t owning it. You’re claiming it.”

    But Bexar County District Attorney Nico LaHood said Tuesday, “Not for one second do I believe he legally adversely possessed any one of those properties.” He said the law requires years of open and continuous “squatting on the property” before filing a claim.

    The latest charges come as a result of Perkins filing false information with the Bexar County Clerk regarding two vacant lots in the 600 block of South W.W. White Road, including one appraised at more than $176,000.

    An arrest warrant affidavit states Perkins tried to illegally obtain the property from the actual owner, who is 84 years old.

    Police allege Perkins cut the locks to the vacant land, “moved his BBQ and used cars onto the property, setting up a mini-flea market.”

    Perkins last year was accused of stealing a dementia patient’s house and life savings. Perkins said as the man’s caretaker, “He willingly gave me everything.”(1)

    The District Attorney said his office is reviewing the allegations against Perkins.

    LaHood said, “It’s the same defendant, the same citizen accused and you have multiple cases pending, so they’re going to be dealt with as a whole.”

    He said his advice to help keep squatters off your property is to "check on the records, check on the property and talk to the neighbors.”

    LaHood said owners who are out of town should consider hiring someone trustworthy to monitor their property.
Source: Accused squatter now charged with exploiting elderly, perjury, theft (Samuel Charles Perkins, 46, in Bexar County Jail).
------------------------------
(1) See Samuel Perkins charged with stealing home, $92,000 from elderly man (SAPD: Perkins, 45, allegedly posed as victim's nephew):
  • The affidavit stated that Perkins obtained power of attorney over him, withdrew more than $92,000 from his bank accounts and changed the deed on the man's East side home into his name.

    Investigators said the 84-year-old victim suffers from severe dementia. Investigators said they located some of his real relatives who told them Perkins had been keeping the victim isolated from them.

Cops Pinch Pair Allegedly Working As Tag Team, Snatching Possession Of Vacant Foreclosure Homes By Breaking In & Changing Locks, Then Renting Them Out To Unsuspecting Tenants

In Kennewick, Washington, KEPR-TV Channel 19 reports:
  • Kennewick police said they have arrested a tag team responsible for an elaborate housing heist in the Tri-Cities. And they think there may be more victims.

    Police reports said Maggie Zieske, who also goes by the last name Lawson, and Steven Hartmann, who also goes by Nick, were targeting and renting out empty homes that were pending foreclosure or were already foreclosed to unsuspecting victims.

    The pair would force their way into the homes and change the locks, and then supply fake rental agreements or rent-to-own agreements, leading the renters to believe they were legitimate.

    One victim, who already came forward, owned a home on East 22nd Street and was unaware the two had illegally rented it out.

    KEPR talked to the next-door neighbor of Zieske and Hartmann, who was not surprised. “That sort of thing is just normal in our neighborhood, that people are being arrested in our neighborhood,” said Samantha Elder. “It's just kind of a scary, sad thing as a parent.”

    Police said they know of three victims in Kennewick, two in Benton County, and at least one in Pasco. They are also checking with Spokane police because they believe the scam could have stretched into their jurisdiction.

    Twenty-year-old Hartmann and 32-year-old Zieske have both been booked in the Benton County Jail. They are being held on three counts of residential burglary.

    Police are asking if anyone recognizes the pair and have worked with them for housing to come forward. You may be a victim.

Oregon Man Given 60-Days Jail/Work Release Sentence For Breaking Into Vacant Home & Using Craigslist To Reel In Unsuspecting Rent-Paying Tenant; Defendant Currently Under Probe In Other Vacant Seattle-Area Home Hijackings Involving Other Renters

In Federal Way, Washington, the Federal Way Mirror reports:
  • An Oregon man was sentenced to 60 days in King County Jail on Oct. 30 after being found guilty of residential burglary and first degree criminal impersonation for renting out a home he did not own in Federal Way.

    Chad Eichenberger, 37, broke into an empty Federal Way home and listed it for rent on Craigslist. He gained access to the home by breaking into the realtor key box and taking the key inside.

    On April 19, police were alerted by the home's owner when he returned to the residence to find the renter moving furniture into the home. Police contacted both men. The owner stated that he was renovating the home in order to sell it. He had placed the locked key box on the front door.

    The renter stated he had agreed to pay Eichenberger $500 a month for rent. He stated that he paid Eichenberger $1,200 to cover the first and last month's rent and part of the security deposit.

    He knew Eichenberger as a landlord named "John."

    The victim gave officers the address that he had met Eichenberger at earlier. When officers arrived at the address, they found another man whom Eichenberger had rented a room out to. The man packed his belongings and left after suspecting the house did not belong to Eichenberger.

    Officers returned to the house later in the day and arrested Eichenberger. He told them that he was hired by banks to maintain houses in foreclosure until the sales were final. He was found in possession of several house keys.

    A week after his arrest, Eichenberger contacted the victim whom he tried to rent the home to in order to try to convince him to drop the charges. The victim, now homeless, called police instead.

    Eichenberger had no prior felony convictions and could have been sentenced to restitution and community service. The prosecuting attorney recommended 30 days in jail, but the judge decided on 60 days of work-release instead. He was credited with serving 18 days at the time of the sentencing. Eichenberger was also ordered to serve 240 hours of community restitution.

    He is currently under investigation for breaking into and renting out other homes in Federal Way and may face additional charges.

Tuesday, November 17, 2015

Two Loan Servicers Agree To $217 Million Settlement In Alleged Force Placed Insurance Racket That Screwed Homeowners

In Miami, Florida, the Daily Business Review reports:
  • Two of the largest mortgage servicers in the U.S. reached a combined $217 million settlement in Miami federal court over a national homeowner insurance scandal.

    Ocwen Loan Servicing LLC and Nationstar Mortgage faced class action lawsuits covering more than 1 million homeowners suing over insurance policies the servicers and lenders placed on their properties.

    Banks, other lenders and their loan servicers have long authorized third-party insurers to access their records and identify borrowers with no property insurance or insufficient coverage to satisfy mortgages.

    Homeowners claimed the insurers automatically issued policies on these properties at lender-approved rates, which were well above market rates, leaving homeowners to cover the costs.

    Lenders call it creditor-placed insurance. But foreclosure defenders prefer the term force placed, and they say the practice brought large and illegal returns for lenders. They say insurers paid commissions of up to 25 percent to lenders, while overburdened homeowners struggled through the housing collapse.

    "These practices had been going on for a long time, but they were never brought to light," Adam Moskowitz, a partner at Kozyak Tropin & Throckmorton in Coral Gables, told the Daily Business Review.

    Moskowitz teamed with lead co-counsel Aaron Podhurst of Podhurst Orseck in Miami and Lance Harke of Harke Clasby & Bushman in Miami to represent more than 1 million homeowners nationwide.

    U.S. Magistrate Judge Jonathan Goodman approved the Nationstar settlement on [Nov.9] and the Ocwen settlement Sept. 14.

    The deals provide $140 million in monetary relief from Ocwen and $77 million from Nationstar, revising practices that once allowed lenders and servicers to benefit from collateral protection insurance.

    "The settlement is generous to class members, providing relief approximating a trial win and for many class members exceeding a trial win," Goodman wrote in the 75-page Ocwen order that allows homeowners to recoup 12.5 percent of the net insurance premium.

    It was the latest blow for Ocwen, which reached a $150 million settlement with New York state regulators over accusations of improper servicing practices for allegedly levying excessive charges on distressed borrowers through affiliated companies and failing to maintain adequate systems to service billions of dollars' worth of mortgages. Former Ocwen chairman William Erbey stepped down as part of the New York settlement, and the company paid a $100 million penalty plus $50 million in restitution to current and former borrowers who faced Ocwen foreclosure actions from 2009 to 2014.

    The latest Miami settlements are among 14 in nationwide class action suits filed in the Southern District of Florida. The cases involved more than 4 million homeowners nationally and provided injunctive changes and more than $2 billion in relief.

Boston Prosecutor: Local Man Talked Two Elderly Siblings Into Appointing Him As Their Personal Representative, Then Proceeded To Sell Their Longtime Family Home Out From Under Them & Pocket The Loot

In Boston, Massachusetts, The Boston Globe reports:
  • The duplex on Sanford Street in Dorchester is dingy and battered, but it was the prized possession of Andrew and Margaret Williams, and the home the brother and sister inherited when their mother and siblings died.

    But now a 27-year-old Dorchester man is facing charges that he betrayed the siblings’ trust and sold their home to keep almost the entire profit — $117,000 — for himself.

    Kyle Pam pleaded not guilty in Boston Municipal Court Thursday to charges of embezzlement, perjury, larceny over $250 against the elderly or disabled, and money laundering. But his family, who arrived to the courtroom in droves to support him, said the case is a legal misunderstanding and could be resolved in civil court.

    Pam was held on $10,000 cash bail and is scheduled to return to court for a probable cause hearing on Dec. 3.

    Prosecutor Andrew Doherty said Pam convinced the Williams siblings, who are both 68, to name him the personal representative of their estate after promising to make them a fortune. Doherty alleged that Pam then falsified court documents to sell the Williams’ home to his girlfriend, Jasmin Deangelo, for $140,000. Deangelo then allegedly sold the home for $92,000 more than the original price to a third party.

    Doherty alleged that Deangelo transferred the funds from the second sale to Pam’s bank account, which turned him a $117,000 profit.

    Margaret Williams is now homeless and Edward Williams has moved to Maine, according to court documents. Prosecutors said that Pam offered to give the siblings less than $5,000 in compensation.

    Neither Margaret nor Edward Williams could be reached for comment

    [Pam] didn’t just steal someone’s inheritance, but he stole someone’s home,” Doherty said in court. “This man made a woman homeless and lied about it to the court.”

    Pam’s lawyer, Rudy Miller, disputed the allegations. He said Pam is a graduate of University Massachusetts-Dartmouth with a degree in economics, whose family has worked in Boston real estate for decades.

    Miller said Pam went through the proper process to become the Williams’s legal representative and that he worked with a real estate lawyer throughout the sale of the Dorchester home.

    The case, according to Miller, belonged in civil court.

    “He was the representative of the estate, who now wants more than they received at closing. This is a civil matter,” Miller said. “He disputes any allegations of fraud.”

    Miller also took issue with prosecutors’ request for a $50,000 cash bail.

    Pam turned himself into police immediately after his lawyer learned of the criminal charges, and has no previous criminal record, Miller said.

    “It’s highly inappropriate,” Miller said of Doherty’s bail request.

    Municipal C0urt Judge Peter Coyne eventually decided on a $10,000 bail, with conditions that Pam stay away from the siblings and take no action as their personal representative.

    Pam remains the legal guardian while the case is pending, lawyers said.
    The parties are also involved in a civil dispute regarding the sale of the home.

    Pam’s father, brother, two sisters, a niece, and a nephew attended the hearing. Some wept during the proceedings. “You are innocent until proven guilty and my son is innocent,” said his father, Rolando Pam. “He’s a wonderful young man, he’s the best and brightest.” The father, who has practiced real estate in Boston for 30 years, said he also believes the case belongs in civil court.

    Charise Pam, Kyle’s 23-year-old sister, said she wished people knew a different side of her brother. “He’s goofy, he’s smart, he’s intelligent,” Pam said. “It’s just tough to see him like this.”

    Doherty said Boston police have seized $80,000 in Pam’s bank accounts. In court, Doherty said Pam knew “full well” what he was doing to the Williams.

    A personal representative for an estate has “an extraordinary amount of power and an extraordinary amount of responsibility,” Doherty said.

    Pam’s father said his son knows the business and will fight the charges. “He won’t run from this,” Pam said, regarding his son’s court case. “Only criminals run.”

Connecticut Feds: Sneaky Attorney Transferred Condo Interest To Girlfriend For $1 On Eve Of Getting Belted w/ $3.9M Restitution Order In Connection w/ Conviction For Role In Mortgage Fraud/Short Sale Racket

In Stamford, Connecticut, The Connecticut Law Tribune reports:
  • Months before a judge sentenced Stamford attorney Christopher Brecciano to prison and ordered him to pay millions of dollars in restitution for his involvement in a mortgage fraud scheme, he sold his interest in a condominium for $1. Now the U.S. Attorney's Office says it wants the actual value of Brecciano's interest in the real estate to go toward paying any victims.

    On Nov. 5, Assistant U.S. Attorney Christine Sciarrino filed a complaint in U.S. District Court alleging fraudulent transfer against Brecciano and the Stamford woman to which his property was allegedly sold. Court documents describe Ermina Bojadzic as Brecciano's girlfriend.

    Brecciano "knew or should have known that he was the target of a criminal investigation and prosecution, with the potential for the imposition of restitution to his victims," Sciarrino wrote in the complaint.

    In October, U.S. District Judge Janet Hall sentenced Brecciano, 37, to 14 months in prison. He has been ordered to surrender to the federal Bureau of Prisons by Dec. 17.

    Brecciano and his male co-defendants owe a combined $9.4 million in restitution, though Brecciano is solely liable for $3.9 million, court documents show.

    Brecciano and Bojadzic bought a condominium on Seaton Road in Stamford in June 2008, holding title jointly. They paid $55,000 for the property, which had been in foreclosure. The condominium is now valued at about $96,350, according to the Stamford assessor's office.

    Brecciano pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud in February 2014. In January, he transferred his interest in the property to Bojadzic by quitclaim deed for $1, prompting this civil action.

    The U.S. Attorney's Office is asking that the transfer of Brecciano's interest in the property be adjudged fraudulent and void to the extent necessary to satisfy the judgment in his criminal case. It also seeks to have the United States be awarded a judgment against Bojadzic for the value of Brecciano's interest, plus costs, fees and interest.

    ***

    Brecciano acted as closing attorney in more than 50 mortgage loan transactions, and provided false information to lenders, according to the U.S. Attorney's Office. The fraudulent information included false verifications of down payments on real estate transactions, false deeds and false HUD-1 forms.

    The government has asserted that Brecciano knew in many of the transactions that the borrower was actually a "straw buyer," and that other individuals actually intended to control the property and collect rental income. His co-defendants had developed and used a "stable of straw buyers from the Bangladeshi community," according to federal prosecutors.

    Brecciano in many cases distributed mortgage loan funds to the straw buyer and other co-conspirators at the closing, according to the U.S. Attorney's Office. The properties involved typically ended up in foreclosure or in short sale transactions. Brecciano worked on the short sale transactions and was aware the buyer and seller were working together to retain control of the property, according to federal prosecutors.

    According to the state Judicial Branch website, Brecciano was placed on interim suspension in June. The Office of Chief Disciplinary Counsel has initiated a disciplinary action against him based on his conviction, with a hearing scheduled for Nov. 30.

Monday, November 16, 2015

Final Defendant In Syracuse-Area Rent-To-Own Racket Sentenced; Gets 6 Months For Role In Scam That Bought Dilapidated Foreclosed HUD Homes, Peddled Them To Aspiring 1st Time Homebuyers w/ Crappy Credit, Then Used Inflated Appraisals To Fraudulently Refinance Properties & Pocket The Cash Out From Under Victims As They Were Ready To Claim Deeds

From the Office of the New York Attorney General:
  • Attorney General Eric T. Schneiderman [] announced the sentencing of Tracie Clark, 44, of Wimauma, Florida, for her role in a million-dollar residential mortgage fraud ring that operated in the Syracuse area. [...] Clark was sentenced [] to 6 months in jail and five years of probation [...] in Onondaga County Court.

    “The state prison sentence announced [] brings to justice a defendant who defrauded numerous first-time homeowners,” said Attorney General Schneiderman. “The shameful actions of the defendants in this case harmed many vulnerable New Yorkers who wanted nothing more than a chance at homeownership.”

    Clark played a vital role in a mortgage fraud ring led by former attorney Theresa Sanders, which operated for years and netted more than $1 million by preying upon first-time home buyers and institutional mortgage lenders.

    Sanders purchased dozens of dilapidated homes in and around the City of Syracuse from the United States Department of Housing and Urban Development, using powers of attorney in the names of family members.

    Sanders then advertised the homes as rent-to-own opportunities, seeking out first-time home buyers with low credit, who were now offered the chance to own their own homes with no down payments and no closing costs. Sanders promised to work to improve their credit and that after one year of renting the property, they could obtain first-purchase mortgages to buy the homes they inhabited.

    In anticipation of the sale of each property to a tenant, Sanders obtained a second appraisal, typically from [appraiser Steven] Essig, which was higher than the previous appraisal she had ordered. The inflated appraised values enabled Sanders to apply for refinance amounts to financial lenders that were significantly higher than the actual values of the properties.

    After tenants had paid rent for approximately one year to AFA America, a shell company owned by Sanders, Clark prepared forged mortgage loan applications for the properties. Rather than submitting the tenants’ mortgage applications as first-time homeowners, Sanders and Clark submitted applications for refinances of the properties. Sanders and Clark fraudulently listed AFA America as holding a first mortgage on the property, although AFA America had made no such mortgage loan to the tenants. Institutional lenders, believing they were paying off underlying mortgages held by AFA America, wired closing funds to accounts controlled by Theresa Sanders, who then pocketed the money.

    To prevent discovery of their crimes, the defendants used a variety of excuses to withhold from the buyers the deeds to the properties, which caused the buyers to suffer numerous additional hardships stemming from their difficulties in demonstrating that they were the rightful owners of the properties.

    Clark is the fifth and final participant of the mortgage fraud ring to be sentenced. Previously, Sanders was sentenced to 2 1/3 to 7 years in state prison for her role in the mortgage fraud scheme. Michelle Powers, a licensed attorney who conducted the closings for the refinanced loans, was sentenced to 6 months in jail and 5 years probation. Appraiser Steven Essig and property manager Paul Sakowski were also convicted of felonies and were each sentenced to 5 years probation.
Source: A.G. Schneiderman Announces Prison Sentence for Participant in Million-Dollar Mortgage Fraud Scheme (Defendant Tracie Clark Sentenced To 6 Months In Jail And Five Years Of Probation; Schneiderman: The Shameful Actions Of The Defendants In This Case Harmed Many Vulnerable New Yorkers Who Wanted Nothing More Than A Chance At Homeownership). land contract for deed

Online Operator Uses "Rent-To-Own" Bait To Peddle Dubious Home Listings For $199; Racket's Trail Unhappy Customers Earn It "F" Rating From BBB

In Hartford, Connecticut, NBC Connecticut reports:
  • Imagine getting a letter from a stranger who is trying to rent the home you already live in. It’s happened to a number of people because a company advertises homes as available for rent to own, but many are not.

    Looking for a home on Craigslist, Wesley, Susan and Kelly found ads for attractive rent-to-own homes at a low cost. “I was excited quite honestly,” Kelly said.

    They called the number advertised and say a high pressure sales pitch had them pulling out their credit cards to pay $199 dollars for a list of what was described as “distressed properties” in “pre-foreclosure” from a company called American Standard.

    The houses are vacant or they are moving out because they are getting ready to lose the house,” explained Kelly. Wesley said a sales representative told him the company had already been in contact with the home owners. “Absolutely, I mean how else are they going to bring us on sight for a face to face with a homeowner if they didn’t have some type of business relationship with them?”

    According to Kelly, a telephone rep also sold her on the list of desperate home owners who would let her check out their houses, then rent-to-own if she wanted. “I would actually be able to see the house and be inside the house.”

    But soon after American Standard had their money, Wesley and Susan learned they wouldn’t be directly connected with the homeowners at all.

    “Then they started stipulating that “’well when you do find a house we’re going to send you a letter. You fill out the letter and then you send that to the homeowner.”’ Wesley explained. “And then flags really started raising because you contradicted yourself from what you told us initially.”

    They went ahead and sent the letter for a house they liked anyway. When they didn’t get a response, they managed to track down the owner by phone. “They never heard of American Standard,” said Susan.

    They started to question just what had they had paid $199 for? “We never saw anything that they indicated they would provide us,” said Wesley.

    The company’s website states they are “Among the largest providers of distressed properties.” But, if you look at a different link on the website, American Standard warns they take “No responsibility for the accuracy of the list”. Wesley says the sales person never said that over the phone when he handed over his money.

    Troubleshooters showed Wesley and Susan another home on their list that was quite a shock. It’s the one they’re living in now! “There it is son of a gun,” gasped Wesley in surprise.

    How is that possible? Wesley says they’re in a three year lease. I spoke with the owner of his home who tells me he has never heard of American Standard and he purchased the house less than a year ago and has never been behind in the payments. Kelly says she feels tricked by the company. “They took my money and ran.”

    ***

    Some of the homes on this list from American Standard don’t even exist. For instance, went to verify the listing of what is supposed to be 23 Todd road in Shelton, but it’s just vacant land. The city of Shelton has no record of a home being here. According to the list, there is supposed to a 3 bedroom 2 bathroom home here. We found 9 other addresses on the list where the homes don’t exist.

    We also took a closer look at their Craigslist ads. In one, there is a picture and details for a 3 bedroom home in Hartford that is also listed as a 4 bedroom home in Naugatuck. “I want my money back,” said Wesley.

    The American Standard website advertises they are “one of the most trusted names in the business.” However, we found more than 700 complaints about them and the other name the company sells the list under, “Anchor House Financial”. [go here for some examples]

    After repeated attempts to contact the company’s’ owners at their Santa Barbara California offices, the troubleshooters received an email back. They did not answer any of our questions, but asked for the names of the customers so they could contact them directly about their issues.

    Meanwhile, Kelly, who accidentally bought lists from both companies not knowing they are from the same owners and have the same information, got a refund from Anchor House Financial. But not American Standard, they emailed her and said too much time had passed.

    She hopes her story will serve as a warning for others. “They took advantage of somebody who needs housing who doesn’t have a big income and they made money on me,” said Kelly.

    The Better Business Bureau has an alert out for both companies. They urge you to file a complaint if you have dealt with them and have a problem with American Standard or Anchor House Financial.
For more, see Rent-to-Own Home Listings Questioned: Some Homes Don't Exist.

Go here for the BBB's "F" rating for this outfit (last accessed 11/16/2015).

Sunday, November 15, 2015

NY Attorney Ripoff Reimbursement Fund Recently Coughs Up $4.1 Million To Cover Lawyer Swindles Of Client Cash; Brings Grand Total Of Payouts To More Than $185 Million Since Fund’s Creation In 1982

In Buffalo, New York, The Buffalo News reports:
  • Seven clients, or heirs, of two Western New York lawyers are among more than 100 recipients statewide recently reimbursed a total of $4.1 million by the state Lawyers Fund for Client Protection.(1)

    The fund, which is financed fully by the registration fees of attorneys, covered six clients, or heirs, of the late Ronald D. Anton, a former Niagara Falls-area attorney, who misappropriated $115,684 from escrow accounts, according to Timothy J. O’Sullivan, the Albany-based executive director of the Lawyers Fund.

    Anton, of Grand Island, worked as legal adviser for the Greater Buffalo Development Foundation, taught classes at the University at Buffalo, Niagara University and Niagara County Community College and was active in civic organizations. He was considered an attorney in good standing when he died on April 1, 2014, at the age of 82. But after his death, it was discovered there was a shortage in his attorney escrow accounts, Sullivan said.

    The clients, or their heirs, recently were paid amounts ranging from $8,097 to $27,735, Sullivan added.

    A former Western New York couple currently living in Pennsylvania also received $75,000 lost to former Jamestown lawyer James A. MacCallum in a loan transaction before he was disbarred in October 2012.

    ***

    Sullivan said the bulk of the most recent reimbursements by the client fund involved dishonest conduct by 18 other attorneys statewide, including four in Manhattan and Brooklyn who were prosecuted for the thefts of more than $1.5 million from 65 clients.

    ***

    With the latest repayments, more than $185 million has been paid out to 8,211 clients defrauded by lawyers since the Lawyers Fund’s creation in 1982.
For the story, see Client of two WNY lawyers repaid for faulty legal help (Attorney fees go to protection fund).
----------------------------

(1) For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

NJ Attorney Ripoff Reimbursement Fund Recently Coughs Up Nearly $3.25 Million For 3rd Quarter 2015 To Cover Clients' Losses Resulting From Conduct By 15 Sticky-Fingered Attorneys

The New Jersey Lawyers' Fund For Client Protection recently announced:
  • During the third quarter of 2015, the New Jersey Lawyers’ Fund for Client Protection, funded by the state’s lawyers and judges, paid $3,233,028.58 to clients for losses caused by 15 lawyers, the board of trustees announced [].

    The purpose of the fund is to pay on behalf of the honest majority of lawyers for the wrongdoing of the few who are suspended or disbarred for misappropriation.(1) In its 46-year history, the fund has paid claims against a total of 759 attorneys. There are 95,687 lawyers licensed in New Jersey.

    The fund operates under the authority of the Supreme Court pursuant to Court Rule 1:28. The court appoints the seven trustees, five attorneys and two public members, who serve staggered 5-year terms without compensation. The trustees consider clients’ claims and make awards when it is determined that the loss was caused by dishonest lawyer conduct, under fund rules.(2)

    Cases involving legal malpractices and negligence are handled through civil court actions, and fee disputes are handled through the district fee arbitration committees established by the Supreme Court.

    For a claim to be paid, the attorney against whom it is filed must have been a member of the bar, acting as either attorney or fiduciary, at the time of the incident; and unless deceased, must have been disbarred or suspended from the bar, or convicted of embezzlement or other misappropriation of property.

    A claimant can receive up to $400,000 if their claim is approved, and the fund can pay up to $1.5 million in claims against any one lawyer. Special permission can be granted by the Supreme Court to exceed the aggregate limit.

    To receive a claim form, write to the New Jersey Lawyers’ Fund for Client Protection, Richard J. Hughes Justice Complex, P.O. Box 961, Trenton, NJ 08625-0961, or call 855-533-FUND (3863). The form must be completed, signed and returned with copies of any proofs of the transaction. There is no filing fee. Claimants assisted in their claims by practicing attorneys receive their representation free of charge. Fund Director Daniel R. Hendi welcomes inquiries about the fund’s purpose and operation.
Source: Lawyers’ Fund for Client Protection Releases Third Quarter Report.

Attached is an itemized list of the third quarter claim awards and status of each attorney for whom reimbursement payouts to victimized clients were made under the Supreme Court discipline system, along with the specific basis for each of the allowed claims (ie. Dishonest Retention of Unearned Retainer Fees, Misappropriation of Escrow Money, Misappropriation of Lawsuit Settlement Monies, among other things).

The two major attorney-scoundrels on the 3rd quarter 2015 list are Michael W. Kwasnik ($2,690,727.31 this quarter's payout; $8,308,920.16 cumulative payout), and Louis A. Capazzi, Jr. ($279,041.00 this quarter's payout; $967,800.55 cumulative payout).
-----------------------------

(1) For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of miscreant lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

(2) There is a one year deadline from the time of the issuance of discipline for the screwed-over clients to file their claims against New Jersey lawyers. See Lawyers’ Fund for Client Protection Announces Deadlines for Claims:
  • [T]he issuance of the Supreme Court’s determination to suspend or disbar an attorney activates the fund’s jurisdiction to receive claims against that attorney. There is a one-year deadline after the discipline is issued to the attorney for clients to file claims. The client’s claim does not need to be included in the ethics determination to be compensable. Discipline of the attorney does not guarantee compensability for any specific claim. Attorneys can be disciplined for conduct other than misappropriation.

Recently-Deceased 76-Year Old Connecticut Lawyer, Hailed As Iconic, "Larger-Than-Life," Extolled For Honesty, "Ethical Backbone" Leaves Over $1 Million Deficit In Client Trust Account; Attorney Ripoff Reimbursement Fund Now Faces Two Dozen Claims To Cover Shortfall

In New Haven, Connecticut, The Connecticut Law Tribune reports:
  • After New Haven attorney William Gallagher died on Christmas Day 2013, dozens of Connecticut lawyers stepped forward to sing his praises. Gallagher was described as an "icon" and a "larger-than-life figure," with a gruff demeanor, a big heart and incredible skills as a trial lawyer. One colleague also extolled his honesty and "ethical backbone," saying "he would never mislead the court or his opponent."

    But now an investigation that began shortly after his death has revealed that Gallagher's clients were owed almost $1.9 million, with his accounts able to cover only a fraction of it.

    Superior Court Judge Brian T. Fischer in May ordered the court-appointed trustee for Gallagher's practice, William J. Sweeney Jr. of New Britain, to distribute $300,000 that had been found in Gallagher's accounts. According to Fischer's order, it was anticipated that the trustee would be recovering additional funds. Sweeney said a total of about $500,000 has been recovered to date.

    When asked if his inquiry has revealed what happened with the remainder of the funds owed to clients, Sweeney said, "I don't know where the missing money went."

    The $300,000 was divided recently among 24 claimants, with most receiving their share in early June. The claimants additionally have all made claims to the Client Security Fund, Sweeney said, adding, "That is expected to make them whole."(1)

    The highest claim is the one involving Joseph and Cheryl Dee Soracco of Fairfield, who had an approved claim of $483,988.

    They were to receive just $77,705 under the pro-rated distribution. Of the 24 claimants, six were owed more than $100,000, court documents show.

    Attorney Jonathan Einhorn of New Haven represents two of the claimants. One man, who was paralyzed in a fall, is owed $258,701, but got $41,535 through the recent disbursement. In Einhorn's other case, a parent whose son was killed in a motorcycle accident is owed $150,121, but got $24,102, court documents show. "They both have claims in to the Client Security Fund, and I hope they will be fully compensated," Einhorn said.(2)

    Upon his death at age 76, Gallagher had been an attorney for 50 years. He was the sole proprietor of The Gallagher Law Firm in New Haven. During his career, he had served terms as president of the Connecticut Bar Association and the Connecticut Trial Lawyers Association.

    "Bill was loved and respected by the bar, and I don't think anyone saw this coming," Einhorn said. "Where the money went—it is a mystery to everybody." ...
For more, see Probe Reveals Iconic Lawyer Owed Clients Nearly $2 Million.
-------------------------------
(1) The Client Security Fund is a fund established by the rules of the Connecticut Superior Court to provide reimbursement to individuals who have lost money or property as a result of the dishonest conduct of an attorney practicing law in the State of Connecticut, in the course of the attorney-client relationship. The fund provides a remedy for clients who are unable to obtain reimbursement for their loss from any other source. (Claim form JD-GC-15 - Application for Reimbursement - Client Security Fund)

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

(2) Ibid.

Ex-Chairman Of Oregon Bar's Legal Ethics Committee Bears Brunt Of Blame For 2012-2013 Cataclysmic Meltdown Of State's Attorney Ripoff Reimbursement Fund After Treating Client Trust Account As His Personal Piggy Bank, Fleecing Dozens; Paltry Payout Per Victim Of $50K Maximum Fails To Make All Victims Whole

From a November, 2013 story in The Oregonian:
  • For 46 years, the Oregon State Bar's Client Security Fund(1) operated in happy, efficient obscurity, providing a small but steady trickle of compensation to clients who could prove they'd been ripped off by their lawyer.

    That all changed in 2012 when an unprecedented explosion of claims nearly emptied the fund.

    Payouts to clients in both 2012 and 2013 were six to seven times the norm. Several clients' losses far exceeded the Client Security Fund's $50,000 maximum pay out, meaning they suffered uncovered losses in excess of $590,000.

    The fund's meltdown is due largely to one guy: Bryan Gruetter, a veteran personal injury lawyer and former chairman of the bar's legal ethics committee.

    Gruetter's thriving practice -- he had offices in Portland and Bend -- went off the rails in 2012 in a way that shocked his peers.

    Forty-four of Gruetter's clients filed claims in 2012 and 2013 alleging he owed them $1.44 million. Typically, his customers claimed that he'd pocketed all or part of the legal settlement he had negotiated for them.

    The scope of the losses stunned bar officials. But they argue it was more of a horrific coincidence rather than any reflection on the 14,000 lawyers practicing in Oregon.

    "This was a total anomaly," said Sylvia Stevens, the bar's executive director. "We've never seen anything like it before in terms of the number of claims or the size of the claims."

    The bar [in 2012] took over Gruetter's practice and he has voluntarily resigned from the practice of law. But a more serious day of reckoning may be approaching. Federal prosecutors filed criminal charges against him [] accusing him of conspiracy to commit wire fraud.

    Prosecutors allege Gruetter "illegally diverted" more than $1.1 million of his clients' funds.

    Lana Runkel of Bend hired Gruetter to represent her after she was injured in a traffic accident. Runkel said she waited for years assuming that Gruetter was negotiating a settlement that would help her pay her medical bills. But nothing happened and her lawyer became impossible to get hold of.

    "I'm really angry, to suffer all this time and not get reimbursed," Runkel said. "He didn't do anything for us other than steal our money and cause us heartache."

    Runkel filed a claim with the Client Security Fund for $142,000. Because of the fund's payout limits, she received just $46,800.

    Steven Bennett, a Portland attorney, is one of several who investigated claims against Gruetter. He said the firm's bookkeeping was poor. Gruetter "treated his client trust account as a general, unsegregated fund where deposits and withdrawals could be made at will without attention to whose money it was," he said.

    The collapse of Gruetter's thriving practice into chaos and criminal charges has shocked other lawyers. "Bryan was a very successful lawyer," said Stevens, the bar executive director. "He was a really good guy."

    Gruetter and his public defender attorney, Bryan Lessley, declined to comment for this story.

    Gruetter wasn't the only attorney who contributed to the Client Security Fund's historically bad year.
    ***

    The tidal wave of claims has badly depleted the fund. It began 2012 with $607,132 in reserve. By Oct. 31 of [2013], that number had shrunk to $109,194.

    The fund would be in considerably worse shape if not for the bar's decision early this year to triple the assessment it charges to practicing lawyers in the state from $15 to $45 a year.

    The fund will likely try to rebuild its financial reserves to $1 million in hopes of being better prepared for another 2012-style cataclysm, Stevens said.
For more, see Oregon State Bar's relief fund overwhelmed by claims involving one lawyer, Bryan Gruetter.
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(1) The Client Security Fund of the Oregon State Bar was created to help reimburse clients who have suffered a financial loss as the result of dishonest conduct by their lawyer. According to their website, Oregon lawyers developed the program and voluntarily fund it for the benefit of the public. Claims for reimbursement are reviewed by a committee of volunteers, including one public member. All awards are made by the Oregon State Bar Board of Governors. The maximum payout is a minimal, seemingly paltry $50,000 per screwed over victim, as the victimized client named in this story, Lana Runkel, would probably attest to after she found herself short nearly $100,000 after receiving her reimbursement.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Long Island Closing Attorney Charged With Raiding His Trust Account, Glomming Onto $5.7M+ In Property Refinancing Proceeds Belonging To One Family Of Real Estate Investors

From the Office of the Nassau County, New York District Attorney:
  • Acting Nassau County District Attorney Madeline Singas announced [] that a West Hempstead attorney was arrested [] for stealing more than $5.7 million from clients between September 2012 and February 2014.

    David Frankel, 50, surrendered [] to NCDA Detective Investigators and was arraigned before District Court Judge Darlene Harris.

    He was charged with one count of Grand Larceny in the 1st Degree (a B felony) and six counts of Grand Larceny in the 2nd Degree (a C felony). Frankel faces a maximum of 8 1/3 to 25 years in prison if convicted on the top count and bail was set at $300,000 cash or bond. He is due back in court on October 21.

    “This attorney was trusted with more than $5.7 million and he allegedly betrayed that trust by using the money to fund his own investments,” Acting DA Singas said. “Lawyers are duty bound to represent their clients in an ethical manner and I encourage anyone who thinks that they have been defrauded by an attorney to contact our office.”

    Acting DA Singas said that Frankel represented seven realty companies between June 13 and September 12, 2012, with overlapping ownership in eight Brooklyn properties. The properties were refinanced and $5,769,281.17 was placed in escrow into an Interest on Lawyer Account, commonly known as an IOLA account. The companies were held by relatives and the principals were deciding how to distribute the funds.

    Several days after the money was deposited into the account, Frankel began drawing on it and using the money to fund his own unsuccessful investments and to make payments in unrelated real estate transactions. The account, in which other unrelated money was periodically deposited, was drawn down to a balance of $836.81 by February 28, 2014. Frankel was not authorized to use the funds for any purposes other than distributing them as instructed by the principals of the companies.(1)
Source: West Hempstead Real Estate Attorney Arrested for Stealing More Than $5.7 Million from Clients (David Frankel, 50, allegedly stole real estate proceeds to fund his own investments).
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(1) Clients found to have been victimized by any attorney trust fund theft may be able to seek some reimbursement for being screwed over by turning to the The Lawyers’ Fund For Client Protection Of the State of New York, which manages and distribute money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.