Saturday, January 30, 2016

Foreclosure Wipes Out Mortgage Loan Condition That Property Owner Rent 152-Unit Building Exclusively To Low-Income, Elderly Tenants For 30-Year Period; New Landlord Begins Purge, Booting Long-Time Residents w/ View To Attract More Market-Rate Renters

In Columbus, Ohio, The Columbus Dispatch reports:
  • The owner of the Bryden House apartmentson Columbus' Near East Side is ending the leases of a number of elderly, low-income tenants, leaving many wondering why and struggling to find a place to live in the dead of winter.

    The residents started receiving terse notices in December that they needed to be out by Jan. 31. There was no explanation.

    “I was shocked,” said Gregory Pritchard, 59, who has spinal problems and has lived there five years. He fears that if he can’t find somewhere else to live by the end of the month, he’ll be forced to go to a shelter.

    The short notice concerns Ben Horne, a lawyer with the Legal Aid Society of Columbus. He believes that though the move is legal, the owner didn’t allow enough time to find new housing.

    He’d like management to give residents, many of whom are elderly or disabled, more time to locate an apartment. “Finding a new place would be very difficult,” said Horne, who met this week with several tenants at the apartment building at 1555 Bryden Road.

    The terminations are disturbing, said Terri O’Connor, a supervisor at the Central Ohio Area Agency on Aging. It’s disheartening that the residents were given the bad news in a simple, two-sentence letter just a week before Christmas, O’Connor said. “Merry Christmas, indeed,” she said.

    Building management should have told residents, a majority of whom use Section 8 public-housing vouchers to pay their rent, why they were being kicked out, O’Connor said. Speculation among residents is that the building’s owner wants to attract more market-rate tenants.

    Daniel Pessar, a spokesman for the company managing the complex, said in an email: "Our purpose at Bryden House is to enrich the quality of life of our tenants. We have no plans to raise rents."

    According to Franklin County Municipal Court records, owner Bryden Management LLC filed evictions against close to 60 tenants in 2015.

    Bryden Management LLC, of Hackensack, N.J., bought Bryden House in February 2014 for $1.2 million. The previous owner, Tritex Bryden House LLC, purchased the building at a sheriff’s sale for $1 million on Nov. 27, 2012.

    In 1994, the original owner agreed to a requirement that the units be exclusively for low-income residents for 30 years. The 152-unit complex is primarily for residents 55 and older.

    But in January 2014, the Ohio Housing Finance Agency agreed to release the owner from those restrictions after Nov. 27, 2015, as long as the owner didn’t raise rents on tenants or evict tenants without good cause before that date.

    Horne said the 2012 foreclosure allowed the owner to wipe out the covenant’s restrictions eight years before they were set to expire.

South Jersey Crook Gets Four Years For Fleecing $180K+ Out Of Homeowners Seeking Loan Modifications, Reverse Mortgages, Other Financial Assistance; Suspect's Community-Respected Father Steps Up To Pay $145K In Partial Restitution For Son's Misdeeds

In Mount Holly, New Jersey, the Burlington County Times reports:
  • A Cherry Hill man was sentenced [] to four years in state prison for duping 10 people and two banks out of about $183,000 in connection with a mortgage and loan scheme.

    Mark Begley, 51, of Park Boulevard, was sentenced by Superior Court Judge Terrence R. Cook per a plea agreement reached in October, when he pleaded guilty to charges of second-degree theft by deception and third-degree failure to pay taxes.

    Begley, a purported loan specialist, was arrested in July and accused of taking $146,000 from Burlington County residents who were seeking mortgage and loan assistance and using the money for his personal use. He was charged with multiple counts of theft by deception, misapplication of entrusted property, filing a fraudulent or false income tax return, failure to file a tax return, and failure to pay/remit taxes.

    Authorities said Begley claimed to be a mortgage loan specialist whose services included assistance with reverse mortgage procurement, mortgage refinancing and assorted loan modifications. He prepared documents for clients to sign to convince them he was working with lenders and mortgage companies on their behalf, but instead kept the money, authorities said.
    ***
    “This did strike me as the worst type of offense,” Cook said, adding that Begley used his father’s standing in the community as a well-respected attorney to gain the victims' trust. “It doesn’t appear to this court that hard work is something you are used to. … He didn’t want to earn his money; he simply wanted to take it.”

    Cook called Begley “greedy” and “selfish,” adding, “He’s a thief, he’s a hustler, he’s a crook, he’s a con man.”

    [A] Beverly couple have been reimbursed for about $111,000 by Begley’s father, as have another couple from Cinnaminson for $24,400, according to [Burlington County Assistant Prosecutor Andrew] McDonnell. A bank has been reimbursed about $7,215 and another resident $2,400.

    Cook ordered that $30,000 in restitution be paid to five other residents, including three from the county. Another $7,251 must be paid to a bank, and Begley must pay about $6,700 to the state in back taxes.

    Begley also failed to file a personal income tax return in 2012, filed a false or fraudulent return in 2011, and failed to pay personal income taxes in 2011 and 2012, authorities have said.

    McDonnell said other allegations were levied against Begley, including some by family members, but no criminal charges are currently being pursued.

    Cook also sentenced Begley to four years for the charge of failure to pay taxes, to be served concurrently as the theft by deception offense.

County Government To Pay $1.5 Million To Settle Lawsuit Brought By Family Of Locksmith Who Was Murdered Alongside Deputy Sheriff In Ambush By Foreclosed Homeowner In Eviction Gone Bad

In Modesto, California, The Modesto Bee reports:
  • Stanislaus County will pay $1.5 million to settle a lawsuit brought by survivors of a locksmith killed alongside a deputy sheriff in a 2012 eviction gone bad on Modesto’s Chrysler Drive.

    Added to $1 million spent on attorney fees, the $2.5 million cost to taxpayers is the highest among dozens of lawsuits involving the Sheriff’s Department in Sheriff Adam Christianson’s 10-year tenure.

    “Neither the county, nor the sheriff or his deputies, were responsible in any way for the intentional acts of the shooter Jim Ferrario, who ambushed and murdered” locksmith Glendon Engert and Deputy Bob Paris, said County Counsel John Doering. “We understand the tragic loss suffered by the Engert family because we too suffered the loss of one of our own, and no amount of settlement will fully compensate for those losses.”

    Engert’s mother, Anne, said: “I still cry for my son, and I will for the rest of my life. His death has left a permanent wound in our family that does not lessen, irrespective of any compensation.”

    The lawsuit, filed three years ago in federal court, contended that the 35-year-old locksmith might have expected better protection from Paris, 53, and his partner, since-retired Deputy Mike Glinskas. They had been warned about the gunman’s instability and military-grade weapons but did not alert Engert.

    Occupant Jim Ferrario, 45, had lost through foreclosure a fourplex unit, where he had lived many years with his father, when the deputies arrived to evict Ferrario and secure the property for the new owner. Engert was trying to disable a heavy security door lock when Ferrario, using a high-powered assault rifle, fired from inside, killing Paris and Engert. A lengthy standoff ended when the home went up in flames, ignited by Ferrario, who committed suicide surrounded by a cache of weapons and ammunition.
For more, see Lawsuit over deadly Modesto ambush settled for $1.5 million (Stanislaus County approves out-of-court deal paying slain locksmith’s family; Although warned about armed ‘weirdo,’ deputies told locksmith – alerted by noise – to keep drilling door lock).

Chronic Con Man/Contractor Pinched For Running Serial Home Improvement Ripoffs Gets An Add'l 12 Months In Jail For Criminal Contempt After Already Serving 90 Days For Violating Court Order In Civil Case

From the Office of the New York Attorney General:
  • Attorney General Eric T. Schneiderman [] announced that Justice John F. O’Donnell sentenced George Anna, a Western New York home improvement contractor, to 360 days in jail.

    In 2012, the Attorney General obtained a court order barring Anna from the home improvement business unless he first posted a $100,000 performance bond. In the 2012 case, the Attorney General proved that, time and time again, Anna took money from consumers and failed to provide the home improvement services for which he had been paid.
    ***
    In May of 2015, Attorney General Schneiderman’s office learned that Anna was holding himself out as a home improvement contractor, despite never having posted the bond. An investigation by the Attorney General showed that, despite the court order, Anna again was taking money for home improvements, but not providing the services – the very conduct that led to the court order in the first place. The Court sentenced Anna to 90 days in jail.

    In August 2015, Attorney General Schneiderman’s office learned that Anna was again holding himself out as a home improvement contract and again was ripping off consumers. As a result, Attorney General Schneiderman’s office moved to have Anna held in criminal contempt of the Court’s order leading to [the] sentencing of Anna to 360 days in jail.
Source: A.G. Schneiderman Announces 360 Day Jail Sentence For Fraudulent Western New York Home Improvement Contractor (Schneiderman: This Sentence Shows That Contractors Who Scam Consumers Will Be Held Accountable).

Friday, January 29, 2016

Another Lawyer Gets Bar Ticket Yanked For (Among Other Antics) Allegedly Fleecing Client In Connection w/ Foreclosure Matter; Attorney Pocketed Approx. $15K Intended To Resolve Litigation Involving Client's Deceased Mom's Home

In Chicago, Illinois, the Cook County Record reports:
  • A lawyer who allegedly took $15,000 from a client for his own use, was charged with criminal trespass for attempts to enter the Kane County Jail without proper attorney credentials, and then allegedly repeatedly threatened judges and other Kane County justice officials, accusing them of engaging in a racist conspiracy against him, was among five lawyers disbarred by the Illinois Supreme Court.

    The state high court announced it had signed off on the recommendation from the Illinois Attorney Registration and Disciplinary Commission to disbar attorney David A. Bertha, of Chicago, one of five attorney disbarments ordered by the court in a Jan. 21 release.
    ***
    According to information included in documents related to disciplinary proceedings before the ARDC, Bertha, since 2010, had allegedly appropriated to himself and his father about $15,000 in various payments submitted to him by a client who had agreed to represent in certain Chicago real estate and foreclosure matters following the death of the client’s mother.

    For instance, in 2010 and 2012, the ARDC reports indicated the client paid Bertha a total of $13,000, presuming Bertha would deposit the funds in an escrow account, as demanded by Bank of America, with whom the client was embroiled at the time in foreclosure proceedings over her late mother’s home.

    Instead, the ARDC reports indicated Bertha allegedly either cashed the checks or deposited them into his father’s personal checking accounts. The client later demanded repayment of the money, a written request Bertha has allegedly not yet fulfilled.(1)

    The ARDC reports also alleged Bertha told his client he had initiated certain probate and collections actions on her behalf, when he had not.
Source: IL Supreme Court disbars 5 lawyers, including one who threatened Kane County judges; suspends 14 others.
----------------------------
(1) The Client Protection Program of the Attorney Registration and Disciplinary Commission (ARDC) 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. (But see Stolen Inheritances: I-Team lawyer warning, in which one Illinois victim said of the program, "Their rules are vague, ambiguous and they are applied at their own discretion, and you can't get a straight answer[.]")

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.

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.

"Young, Inexperienced" NJ Attorney Who Was Snookered Into 'Lending' His Name To Out-Of-State Law Firm Gets Three Month License Suspension; While Lawyer Was Away On Active Military Duty, Outfit Engaged In Real Estate, Foreclosure Defense, Loan Modification Matters; Misappropriated $10K Sale Deposit By Pilfering Paralegal Triggers Probe

In Trenton, New Jersey, the New Jersey Law Journal reports:
  • In another case that illustrates the perils of "lending" one's name, a lawyer and U.S. airman who was merely a nominal partner in a New Jersey firm will spend some time without his law license.

    After the Disciplinary Review Board (DRB) was divided on what level of punishment to dole out, the New Jersey Supreme Court issued a three-month suspension to Mark Edelstein, a U.S. Air Force veteran who was on active duty at the time the firm bearing his name was formed.

    Edelstein's "willing participation in an agreement to allow a non-New Jersey licensed attorney to practice law in New Jersey is an egregious violation of the rules and undermines the public's trust in the profession as a whole," the DRB previously said.

    According to the DRB's opinion, Todd, Ferentz and Edelstein was formed in December 2011 by Edelstein and Frederick Todd, an attorney based in California.

    Edelstein was an Air Force captain and chaplain who was deployed in Afghanistan and Qatar, and stationed at air bases in the U.S. before being honorably discharged in 2013. Todd served as Edelstein's religious sponsor to the U.S. Department of Defense through a rabbinical program, the opinion said.

    The DRB said Edelstein never practiced with or received compensation from Todd Ferentz, but was the firm's lone partner with a New Jersey license and allowed his signature to be stamped on documents prepared by per diem attorneys in connection with real estate and mortgage modification matters.

    Edelstein admitted to the Office of Attorney Ethics [OAE] that "his partnership with [the firm] was a legal fiction created in order to allow Todd to open and operate a law firm in New Jersey," according to the DRB. He acquiesced to the arrangement "apparently out of fear that Todd would withdraw his sponsorship with the Air Force, threatening respondent's ability to remain a chaplain," the board said.

    It was a Todd Ferentz client, Sebastian Pacholec, who ultimately filed an ethics grievance against Edelstein after the firm represented him in a foreclosure case in connection with a Lakewood property, the opinion said, noting that the firm's retainer agreement identified Edelstein as the lawyer on the case, though it actually was Todd who handled it.

    More problematically, the firm also represented Pacholec in a real estate sale in which a firm paralegal ended up misappropriating a $10,000 deposit, according to the opinion.

    Edelstein was charged with and admitted to violating ethics rules on record-keeping, supervision of nonlawyer staff, assisting in the unauthorized practice of law and making false or misleading communications about legal services, the DRB said.

    "Further, the name of the firm violated RPC 7.1(a)(1) and RPC 7.5(d) because it contained respondent's name, despite the fact that he had no role in any of the firm's business," the board said.

    Counted as an aggravating factor by the board was the fact that Pacholec suffered harm; counted as mitigating factors were Edelstein's clean disciplinary record since being admitted in 2007 and his military service.

    The panel also noted that "at the time these violations occurred, he was a relatively young and inexperienced attorney who was likely easily controlled[.]"
For more, see 'Lending' Name and Signature Gets Lawyer Suspended in NJ (may require subscription; if no subscription, go here, then click appropriate link for the story).

For the New Jersey Supreme Court ruling, see In re Mark Edelstein.

Illinois Disciplinary Review Board Recommends 1-Year Minimum License Suspension For Previously-Disciplined Rogue Lawyer For Buying Clients' Home Out From Under Them At Foreclosure Sale, Leaving Victims w/ $25K Deficiency Judgment; Panel: Attorney "Neither Understands Nor Accepts The Need To Comply w/ The Ethical Rules Of The Legal Profession"

In Springfield, Illinois, The State Journal-Register reports:
  • A panel that hears disciplinary allegations of Illinois attorneys has recommended that a Jacksonville lawyer’s license be suspended for one year and until further order of the state Supreme Court.

    In a complaint filed June 9, the Attorney Registration and Disciplinary Commission alleged that G. Ronald Kesinger of Jacksonville, who was licensed to practice law in 1973, had a conflict of interest when he bought his clients’ home at a foreclosure sale in 2012.

    His purchase of their home subjected his clients to a $25,000 deficiency judgment in the foreclosure case.

    A previous ARDC complaint filed in July 2014 and amended in February alleged that Kesinger improperly obtained a loan from a client and made a false application for a bank loan in 2012.

    A three-person hearing board found that the ARDC proved all of the charges of misconduct and recommended Thursday that Kesinger’s license be suspended for a year, after which he will have to apply to the state Supreme Court for reinstatement.

    Kesinger’s law license was suspended for six months in 2013 because the court found he revealed confidential information told to him by a client in a shooting case that resulted in the client being convicted of felony murder.

    He also attempted to obtain a larger fee from another client and then converted $4,000 of the client’s bond refund.

    Kesinger, 76, also was censured by the high court as a result of a 1999 complaint.

    In its report on the current cases, the hearing board said that based on the evidence, including Kesinger’s own testimony, it found that Kesinger “neither understands nor accepts the need to comply with the ethical rules of the legal profession.”

    He simply has not gotten the message, by being previously disciplined, that his misconduct will not be tolerated,” the report said.

    Kesinger may appeal the findings and recommendation to a review board. Any discipline imposed must come from the Illinois Supreme Court, which makes the final decision in such matters.

Now-Disbarred Attorney Avoids State Prison Time, Gets 30 Days In Jail After 'No Contest' Plea To Fleecing 65-Year Old Blind, Double Organ Transplant Recipient Out Of $400K+ Inheritance; Victim: "He Stole My Parents' Whole Lives Away, What They Saved Up. ... I Feel Like I Might As Well Be Dead!"

In Concord, California, the Contra Costa Times reports:
  • On Oct. 27, 2008, Janet Stites' mother died and left her an inheritance of more than $400,000.

    Stites, who is blind, hired an attorney, but on the advice of her friend Richard Stickney, she fired that attorney and hired 56-year-old Concord lawyer Timothy Darden to set up two trusts for her. Within a year, Darden had allegedly swindled $438,000 from Stites and $33,500 from Stickney, and days after they complained to the State Bar of California, he turned around and sued them for fraud.

    "I've been scammed by the damned devil himself," said Stites, a 65-year-old double organ transplant recipient.

    "My mom knew how hard it is to be blind to make it in the world, especially when you're poor," she said. "Meanwhile, Darden lives high on the hog, driving his fancy Lexus and sticking his nose in the air like he's God almighty himself."

    On Jan. 13, Darden pleaded no contest to two felony grand theft charges and must serve 30 days in jail and pay $471,500 in restitution to his two victims over a five-year probation period, prosecutor Dodie Katague said. He was disbarred a year ago.(1)
    ***
    The years of court battles have sapped the strength and retirement savings of Stites and Stickney, who hold little faith that Darden will pay back the money.

    "It's been eight years that he's been using my money," Stites said, her voice cracking. "He stole my parents' whole lives away, what they saved up. ... I feel like I might as well be dead."

    Darden has not served his jail time yet, and despite the conviction and disbarment, his law firm website remains active. "We're taking steps to take down the website, and if it doesn't come down he can be charged with a crime," Katague said.

    Darden said he hasn't practiced law in a decade and will take down or "adjust" his website. He said he hopes to have his law license reinstated once he completes his probation.
For more, see Concord attorney swindled blind client of $430,000 inheritance.
----------------------------
(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.

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.

Thursday, January 28, 2016

Dallas Feds Bag Pair For Allegedly Running Deed-Snatching Racket; Suspects Accused Of Searching For Vacant Homes Abandoned By Financially Distressed Homeowners, Then Hijacking Title By Recording Fraudulent Deeds In Their Names, Followed By Arm-Twisting Efforts Against Foreclosing Lenders By Filing Lawsuits Against Them To Seek Legal Settlements

In Dallas, Texas, The Dallas Morning News reports:
  • For two Dallas County men, homes left vacant by owners who defaulted on their mortgage payments presented an opportunity.

    But the men were not real estate agents.

    Instead, federal authorities say, Melvin Ray Layman and Daylon Esaw hatched a plot to fraudulently take ownership of the homes and sell them.

    The two filed forged quitclaim deeds in Dallas County that appeared to indicate the owners sold their homes to them, records show. They then filed lawsuits against banks that held liens on the houses in an attempt to force a legal settlement that would allow them to sell the homes, authorities say.

    Instead, both men were charged in a 15-count federal indictment with bank fraud and aggravated identity theft.

    Layman, 63, of Grand Prairie, has been released pending trial. He could not be reached for comment.

    Esaw, 26, of Duncanville, remains in federal custody after a federal magistrate ruled that he is a safety risk. Esaw has been indicted in two other federal cases. One is sealed and the other involves credit card fraud.

    Federal prosecutors said in court records that Esaw is a “major player in schemes involving illegal drugs, identity theft and credit card fraud.” They said he has no legitimate job and has been squatting in a foreclosed house.

    Layman, a notary public, leased an office on West Main Street in Grand Prairie. With his help, Esaw created the Galleria Trust to use in the scheme, which ran from July 2014 to September 2015, authorities say.

    Esaw researched vacant homes that were in foreclosure proceedings and filed quitclaim deeds with the Dallas County clerk’s office, transferring ownership to Esaw or his trust, usually days before the foreclosure sale. In at least one case, Layman notarized the deed.

    Esaw and Layman then filed the lawsuits against the mortgage banks in Dallas County District Court, claiming they were the sole owners, authorities said. The lawsuits were not successful.

    The men recruited someone to find buyers for the homes and help with the sales, according to officials.

    One of the homes, in DeSoto, is still listed in Esaw’s name, according to appraisal district records.

County Recorders' Offices Continue Campaign To Protect Property Owners From Deed Snatching Rackets

In Weymouth, Massachusetts, the Weymouth News reports:
  • Continuing his efforts to protect homeowners against dishonest individuals, Nolkford County Register of Deeds William P. O’Donnell recently spoke about the availability of a free, online consumer notification service offered by the registry to protect Norfolk County property owners against fraud.

    “The FBI has reported that property and mortgage fraud is one of the fastest growing white collar crimes in the United States,” said O’Donnell. “Multiple jurisdictions across the country have reported individuals recording fraudulent documents and making it appear like they own another person’s home or property. While we have been fortunate that this problem has not revealed itself here in Norfolk County, I want to make sure my office is proactively and vigorously protecting consumers.”

    Any owner of real property in the 28 communities comprising Norfolk County can sign-up for the consumer notification service free of charge by doing the following: Go to the registry’s website, norfolkdeeds.org, and click on the consumer notification alerts button to complete the initial registration. From there, follow the remaining sign-up instructions.

    Once you have signed up for the service, each subscriber will be able to input two names, individual or business, and the corresponding city or town in Norfolk County for monitoring. They can monitor their real estate for such activities as changes in deeds, mortgages, nonmortgage liens, homesteads or other land documents that might be recorded against the property.

Ex-Hubby Turns Himself In On Charges Alleging He Snatched Title To Property Once Serving As Marital Home By Forging Former Wife's Name On Quit Claim Deed

In Acadia Parish, Louisiana, KLFY-TV Channel 10 reports:
  • A local man turns himself in according to, Acadia Parish Sheriff Wayne Melancon Boudreaux.

    The man, Christopher S. Boudreaux allegedly forged his ex-wife’s signature on a quit claim deed in April of 2012 for a residence in which they jointly owned during their marriage in Lafayette Parish.

    Melancon stated that during the investigation, Investigators learned that the quick claim deed was allegedly signed at his place of employment in Acadia Parish.

    Boudreaux is being charged with forgery. His bond was set at $10,000 by District Judge John Trahan.

Ex-Clerk For Chicago-Area Recorder Of Deeds Cops Guilty Plea To Pocketing $200 Bribe To Prepare Fraudulent Deed On Local Home; Purported Palm-Greasing Title Snatcher Actually An Undercover FBI Agent

From the Office of the U.S. Attorney (Chicago, Illinois):
  • A former clerk for the Cook County Recorder of Deeds pleaded guilty [] to accepting a cash bribe in exchange for preparing a back-dated deed on an Oak Park home and agreeing to record it with her office.

    REGINA TAYLOR accepted the $200 bribe from an individual who purportedly wanted to add a relative’s name to the deed of a residence in Oak Park, according to a written plea agreement. Unbeknownst to Taylor, the individual was actually an undercover law enforcement agent, the plea agreement states.

    Taylor, 59, of Chicago, pleaded guilty to one count of honest services mail fraud. The conviction carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.

    U.S. District Judge Sara L. Ellis scheduled a sentencing hearing for April 13, 2016, at 10:30 a.m.

    According to the plea agreement, the fraudulent quit claim deed was created to add the purported relative as a fourth owner of the Oak Park property. Taylor directed the undercover agent not to tell anyone that the three other individuals on the deed were deceased, according to the plea agreement. Taylor then prepared the fraudulent deed and back-dated it by 18 months, confirming the purported relative as a grantee.

    After giving the fraudulent deed to the undercover agent to have it stamped at the Village of Oak Park, the undercover agent gave Taylor $200 in cash, according to the plea agreement. Taylor further directed the undercover agent to bring back the stamped copy of the fraudulent deed so that Taylor could officially file it at the Office of the Cook County Recorder of Deeds.

Wednesday, January 27, 2016

Dubious Duo Accused Of Developing Crappy Condos Reach Settlement With NY AG; Allegations Include Use Of Falsified Documents To Dupe Building Inspectors, Improper Scoring Of Property Tax Breaks, Theft Of Condo Buyers' Escrow Money Earmarked For Code Compliance

In New York City, Gothamist reports:
  • Companies owned by luxury developers and accused serial fraudsters Shaya Boymelgreen and Lev Leviev will continue to be allowed to do business in New York under the terms of a settlement announced [last week] by state Attorney General Eric Schneiderman.

    The investigation focused on three luxury condo projects in the Financial District and DUMBO where, according to Schneiderman, they built shoddily, falsified documents to get building inspectors' okay, stole condo buyers' money that was meant to bring the buildings up to code, and resisted attempts to get them to pay up and relinquish control.

    According to the terms of the settlement, Leviev's company Africa Israel must finally fix up 15 Broad Street, which overlooks the New York Stock Exchange, as well as 20 Pine Street a block away, and 85 Adams Street, at the foot of the Manhattan Bridge. (Leviev and Boymelgreen ended their business partnership in 2007.)

    Africa Israel must also hand over the buildings to the condo boards, pay a $2 million fine for improperly collecting tax breaks on the Broad Street building and neighboring 23 Wall Street, and put an undisclosed settlement in escrow for bilked condo buyers.

    Schneiderman filed no criminal charges in the cases, and though he has the power to restrain the company from doing business, he instead reserved that punishment for if it breaks the terms of the settlement.

    'Today’s settlement is a warning to property developers in New York state," he said in a statement. "Those who collect the enormous profits that flow from offering real estate securities in New York will not be allowed to shirk their obligations to purchasers and the public. My office will not allow developers to walk away from their promises."
For the New York Attorney General press release, see A.G. Schneiderman Announces Major Settlement with Africa Israel over Condominium Development Practices (Developer To Complete Construction Of A Stalled Project And Resolve Construction Defect Claims Involving Three Condominiums; Control Of Condominium Board Handed Over To The Unit Owners; Restitution Of $2 Million To The City Of New York For Misuse Of 421-G Tax Benefits).

Fair Housing Feds vs. Donald Trump: A 40+ Year Look Back At Govt's Discrimination Allegations Against Republican Presidential Frontrunner

The Washington Post reports:
  • When a black woman asked to rent an apartment in a Brooklyn complex managed by Donald Trump’s real estate company, she said she was told that nothing was available. A short time later, a white woman who made the same request was invited to choose between two available apartments.

    The two would-be renters on that July 1972 day were actually undercover “testers” for a ­government-sanctioned investigation to determine whether Trump Management Inc. discriminated against minorities seeking housing at properties across Brooklyn and Queens.

    Federal investigators also gathered evidence. Trump employees had secretly marked the applications of minorities with codes, such as “No. 9” and “C” for “colored,” according to government interview accounts filed in federal court. The employees allegedly directed blacks and Puerto Ricans away from buildings with mostly white tenants, and steered them toward properties that had many minorities, the government filings alleged.

    In October 1973, the Justice Department filed a civil rights case that accused the Trump firm, whose complexes contained 14,000 apartments, of violating the Fair Housing Act of 1968.

    The case, one of the biggest federal housing discrimination suits to be brought during that time, put a spotlight on the family empire led by its 27-year-old president, Donald Trump, and his father, Fred Trump, the chairman, who had begun building houses and apartments in the 1930s. The younger Trump demonstrated the brash, combative style that would make him famous, holding forth at a news conference in a Manhattan hotel to decry the government’s arguments as “such outrageous lies.” He would also say that the company wanted to avoid renting apartments to welfare recipients of any color but never discriminated based on race. [...]

NJ Woman Faces Multiple Felony Charges For Allegedly Swindling Elderly Widow Out Of Her Life Savings, Causing Her To Lose Her Home To Foreclosure

In Hillsborough Township, New Jersey, nj.com reports:
  • A township woman who, along with her now-deceased husband, allegedly swindled a 71-year-old widow out of her life savings, told Judge Robert B. Reed Friday morning that she has retrained an attorney.

    In November, Wilhelmina Gangi, 59, who is accused of swindling Martha Figalora out of between $200,000 to $300,000, told Reed that she was facing a financial hardship and needed time to raise money to hire an attorney. She said she didn't want to be represented by a public defender.
    ***
    The couple have been charged with second-degree theft by deception, second-degree theft by failure to make required disposition of property and second-degree misapplication of entrusted property.

    Figalora, whom the couple reportedly knew well, has had her home in Hillsborough foreclosed and is now living in a garden apartment because of the scheme.

NY Appellate Court Gives Landlords Green Light To Begin Booting Profiteering Rent Stabilized Tenants Who Peddle Their Apartments As 'Short-Stay' Sublets Thru Airbnb, Similar Outfits; No Opportunity To Cure Lease Violations Need Be Given Before Eviction

In New York City, The Real Deal (NYC) reports
  • The legal gray area that is Airbnb’s operating space in the city is a bit less foggy after a panel of judges shot down an appeal from a Related Companies tenant who was evicted for listing his rent stabilized apartment on the home-sharing website.

    The ruling is significant in New York City, where Airbnb is battling a perception as an outlaw company. To boot, New York City has more than 1 million rent-regulated apartments, some of which are listed on the popular home-sharing service.

    This is big as far as evictions for short term rentals go,” said real estate attorney Adam Leitman Bailey. “Before this decision, a tenant or owner could rent out a unit for a weekend and then when he or she received an eviction notice the tenant could stop renting for a month or two until he or she cured and start again. This decision allows for evictions if the owner or shareholder or tenant runs a short term rent[al] business.”

    In late December, the appellate court upheld a February decision by Housing Court Judge Jack Stoller to evict Henry Ikezi from his swanky two-bedroom penthouse at Related’s MiMa apartment tower at 450 West 42nd Street in Hell’s Kitchen.

    Soon after he moved into the building, Ikezi began listing his apartment on Airbnb for $649 per night, and the trial produced evidence of short-term renters showing up at the building. Izeki was paying $6,670 a month on a stabilized apartment with a market value north of $9,000 prior to the eviction, according to court filings.

    Beyond barring hosts from renting entire units for fewer than 30 days, New York state law also prohibits tenants from profiting from stabilized units. And while rent-stabilized landlords have certainly argued that’s just what many Airbnb hosts are doing, thanks to the appeals court ruling, building owners now have case law on their side.

    “The integrity of the rent stabilization scheme is obviously undermined if tenants, who themselves are the beneficiaries of regulated rentals, are free to sublease their apartments at market levels and thereby collect the profits which are denied the main landlord,” the panel said in the ruling.

    In fact, the appellate judges in their decision quoted from a 1985 case that ruled rent-stabilized tenants could be evicted for subleasing their apartments for a premium.(1)

    Airbnb did not respond to a request for comment. A spokesperson for Related said the company has a “zero tolerance policy” when it comes to making sure its residential units comply with the stabilization laws.

    The judges also found that Related was not required to give Izeki a chance to rectify the damage before being evicted, as he “charged the subtenants far in excess of the legal rent and commercialized the premises from the inception of his tenancy.”

    The majority of the 33,000-plus Airbnb listings in the city, by the company’s own admission, are in violation of the state’s multiple dwelling law.

    An analysis by The Real Deal of commercial units listed on the site – those available for rent at least half of the year – showed the effect the home-sharing site has on pushing rents up in popular neighborhoods. A Penn State University study commissioned by hotel interests found that New York metro area hosts with two or more listings accounted for 32 percent of Airbnb revenue in New York City.
Source: Court upholds decision to evict rent-stabilized Airbnb host (Related booted MiMa tenant for listing apartment on the home-sharing site).

For the court ruling, see 42nd & 10th Assoc., LLC v. Izeki, 2015 NY Slip Op 51915 (NY App. Div. 1st Dept. December 30, 2015), affirming 2015 NY Slip Op 50124(U) (Civ. Ct. New York County, 2015).
-----------------------
(1) Continental Towers Ltd. Partnership v Freuman, 128 Misc 2d 680 (NY App. Div. 1st Dept. 1985).

Tuesday, January 26, 2016

California Supremes Unanimously Tell Sneaky Banksters: Quit Going After Short-Selling, Underwater Homeowners For Unpaid Loan Balances; State Anti-Deficiency Laws Apply To Both Foreclosures & Short Sales

In Sacramento, California, the San Francisco Chronicle reports:
  • Distressed homeowners who, with their lender’s approval, arrange a short sale of their property — for less than they owe — can’t be sued for the balance of their debt, the state Supreme Court ruled Thursday.

    The unanimous decision protects borrowers who increasingly resorted to short sales as property values fell at the end of the last decade. The Legislature amended state law in 2012 to provide them explicit protection against deficiency judgments, but a lawyer for the borrower in Thursday’s case said that about 200,000 Californians had conducted short sales in the previous five years and were potentially affected by the ruling.

    “The little guy won today,” said the attorney, Andrew Stilwell.

    His client, Carol Coker, borrowed $452,000 in 2004 to buy a condominium in San Diego County. She fell behind on her payments, and in March 2010 JPMorgan Chase Bank, which then held the loan, sent her a default notice and began foreclosure proceedings.

    The bank then agreed to allow Coker to sell the condo to another buyer for $400,000, collect the proceedings and release its lien on the property. But after the sale, the bank billed her for the $116,000 balance due on her loan.

    The state law at the time, originally enacted in 1933 and amended in 1989, prohibited a bank from seeking a deficiency judgment, for the balance due on its loan, after the bank itself foreclosed on a home. But the law did not address short sales, which were rare until the late 2000s, and JPMorgan Chase argued that the antideficiency rule did not apply to those cases.

    But the court said the rationale of the law applied equally to short sales.

    For more than half a century, this court has understood the statute to limit a lender’s recovery on a standard purchase-money loan to the value of the security,” Justice Goodwin Liu said in the 7-0 decision.

    Liu said the law was intended to maintain economic stability and protect property buyers from severe losses during periods of economic decline.

    Coker’s short sale of the condo — which she bought as a residence, rather than an investment — “did not change the standard purchase-money character of her loan,” Liu said. He said the short sale, “like a foreclosure sale, allowed Chase to realize and exhaust its security” in the property.

    Stilwell said the ruling would also affect cases in federal Bankruptcy Courts in California, which rely on state laws affecting creditors and debtors.

    “The Supreme Court shut the door on banks trying to go too far to take advantage of the poor, the middle class, people who couldn’t afford what they got into in this real estate debacle,” he said.

    The bank’s lawyers referred inquiries to bank headquarters in New York, which could not be reached for comment late Thursday.
Source: Short sellers can’t be sued for balance of debt, court rules.

For the court ruling, see Coker vs. JPMorgan Chase, S213137 (January 21, 2016).

Editor's Note: The following non-profit legal & homeowner advocate groups joined to file a "friend of the court" brief in support of the underwater, short-selling homeowner:
  • Housing and Economic Rights Advocates,
  • National Housing Law Project,
  • Neighborhood Legal Services of Los Angeles County,
  • California Homeowner Bill of Rights Collaborative,
  • Legal Services of Northern California and 
  • Public Counsel.

Brooklyn Heights Co-Op Shareholders Vote To Give Thumbs-Down To Proposal To Sell Slice Of Its Property To High-Rise Developer For $130 Million, Leaving 112 Unit Owners Feeling Robbed Of Huge Payout

In New York City, the New York Post reports:
  • Residents of a Brooklyn Heights co-op griped [last week] that they were robbed of a huge payout by their fellow shareholders, who turned down a small fortune by refusing sell a nearby slice of land to a developer.

    The residents of 75 Henry St. at Cadman Plaza West could have made up to $400,000 apiece by selling property on Pineapple Walk, a pedestrian path now home to a restaurant, pet shop and grocery store.

    Instead, the shareholders voted 191-112 not to even consider the $130 million offer from Anbau Enterprises, which wants to build a 40-story tower and shopping complex on the 278,000-square-foot plot.

    The decision infuriated some residents.

    “That’s not chicken feed,” grumbled Gil Gleit, 84, at a heated meeting before the private vote Friday, when residents slipped pieces of paper reading “yes” or “no” into the building manager’s mailbox on the first floor.

    He said it was a solid deal.

    “The developer right away was offering $75 million, then they upped it to $130 million. They made the first offer, we had that advantage, and who knows how much more they would have offered?” he told The Post.

    Residents stood to gain $150,000 to $400,000 depending on the size of their unit. Town-house owners may have earned more.

    “People that voted yes had an open mind, believed the money could keep the co-op financially sound for the future. They had an opportunity to get a lot of money in a tax-efficient manner,” said a source from the building.

    Some residents of the 370-unit tower refused the deal because they feared the proposed high-rise would crowd schools and subway stops.

    Construction would have blocked sunlight and lowered property values of nearby buildings and changed the character of the historic neighborhood, said resident Bill Closs.

    “It’s hard to imagine that greed didn’t win out, but, in our case, we voted no because we didn’t want to put our neighbors through that kind of hell,” he said. “We don’t deserve the money, and we really don’t need it that much. Ethics were a factor for us.”

Lawsuit Accuses L.A. Landlord Of Engaging In Campaign To Circumvent Local Rent Control Laws By Driving Out Long Time Tenants & Renting Out Apartments On Short-Stay, Revolving-Door Basis Using Airbnb, Craigslist

In Los Angeles, California, Los Cerritos News reports:
  • A new lawsuit filed in Los Angeles superior court [last week] alleges how one Hollywood landlord resorted to alleged fraud and negligence to make an end-run around city and state housing laws. [...] A new complaint filed by four former tenants of a Hollywood apartment building alleges how Landlord “devised a scheme to circumvent the Los Angeles rent control laws by turning the apartment building into an unlicensed hotel,” driving out tenants who were protected by rent-control ordinances.
    ***
    “The building was more than a place to live – it was a bona fide community,” says the complaint. “Residents regularly had communal meals in the complex’s well-tended garden and dined together several times per week.”

    But in his alleged effort to drive tenants out, Landlord stopped performing routine maintenance on the building, the complaint states. “After the resulting sewage leaks, rats, and maggots drove the long-term tenants out,” the complaint says, landlord moved to “rent their apartments to tourists on a short-term, revolving-door basis by using websites such as AirBNB and Craigslist.”

    Landlord also allegedly violated the Ellis Act, the state law that allows landlords to evict tenants if a family member is going to move in to the unit. Landlord notified a number of other tenants that he was going to move a relative or an on-site property manager into their apartments but “this did not happen,” according to the lawsuit. “Instead, once the long-term tenants of one or more of those apartment moved out … Landlord converted their apartments into AirBNB rentals,” the lawsuit states.

Erie County Launches 'Surplus Funds' Website To Help Local Tax-Foreclosed Ex-Homeowners Claim Excess Proceeds From Previously-Conducted Public Auctions

In Erie County, New York, The Buffalo News reports:
  • The Erie County Comptroller’s Office has launched new website to help previous property owners claim more than $13 million left from government tax foreclosure auctions.

    The page, Surplus Funds, includes a searchable database of the more than 1,300 properties sold by the city and county, dating back to 2009, that netted surpluses. It also provides an overview of the surplus process, necessary steps to filing a claim and downloadable legal forms to expedite the process.

    The comptroller is the custodian of all unclaimed money in the county and currently manages a total of $19.1 million, including estate money and mechanic’s liens. But the excess proceeds from property auctions account for the bulk of the money.

    Buffalo’s surplus alone totals $11.6 million for more than 1,200 properties and $1.4 million for 76 sold by the county. The average amount is $9,600; the highest is almost $150,000 from the city’s list.

    But the law doesn’t require the city or county to give surplus notifications, so foreclosed owners often don’t know they are entitled to excess proceeds from the sale of their properties. Only 11 percent, or $2.56 million, has been claimed for the sale of 153 properties out of 1,368 with surpluses since 2009.

Monday, January 25, 2016

Fresno Feds Bust Alleged 'Mortgage Elimination' Racket, Accusing Outfit Of (Among Other Things) Purporting To Peddle Foreclosure Rescue Help By Recording Fraudulent Land Documents On Over 100 Homes, Creating Title 'Clouds' In Effort To Gum Up Foreclosure Process In Exchange For Thousand$ In Upfront, Monthly Fees

From the Office of the U.S. Attorney (Fresno, California):
  • Martin Calzada, 28, of Los Angeles, was arraigned [] in Fresno, charged in connection with a scheme to defraud homeowners facing foreclosure, United States Attorney Benjamin B. Wagner announced.

    On December 31, 2015, a federal grand jury returned an indictment against Calzada, charging with conspiracy to commit mail fraud and mail fraud. In court today, Calzada entered a plea of not guilty. His next court date is a status conference and is set for March 21, 2016.

    According to court documents, between August 2010 and October 2011, Calzada, and other employees of Star Reliable Mortgage, which had offices in Bakersfield, Visalia, and Salinas, targeted distressed homeowners with a fraudulent “loan elimination” scheme. Star Reliable charged clients an upfront fee — ranging from $2,500 to $4,500 — as well as monthly fees, based on false promises that the clients could own their homes “free and clear” as a result of Star Reliable’s services.

    In furtherance of the scheme, Calzada and other employees filed at county recorders’ offices fraudulent documents on behalf of the homeowner-clients that purported to replace the legitimate property trustees with fictitious trusts affiliated with Calzada and Star Reliable, all in an effort to “cloud title” and halt or stall the foreclosure process.

    Additionally, Calzada, and other employees working at his direction, told clients to stop paying their mortgages. They also falsely represented that each client had one million dollars in a U.S. government account that could be used to pay off a homeowner’s mortgage.

    Instead of owning their homes “free and clear,” many of Star Reliable’s clients lost their homes in foreclosure. The scheme caused more than 100 homeowner-clients to pay approximately $875,000 to Star Reliable and lending institutions to lose more than $4 million. At least $270,000 of the money paid to Star Reliable by homeowner-clients was funneled back to Calzada.

    This case is the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.

Real Estate Operator Gets Six Years For Scamming Over 25 Financially Distressed Homeowners Into Signing Away Their Homes To Use In Rent Skimming Racket, & Fleecing Investors Out Of Cash Purportedly Raised To Rehab Those Properties

From the Office of the U.S. Attorney (Camden, New Jersey):
  • A Woolwich Township, New Jersey, was sentenced [] to 72 months in prison for scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors – secured by those same properties – that netted him more than $3 million in illicit profits, U.S. Attorney Paul J. Fishman announced.

    Randy Poulson, 44, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to Count One of an indictment charging him with mail fraud. Judge Bumb imposed the sentence [] in Camden federal court.

    According to documents filed in this case and statements made in court:

    Poulson owned and operated Equity Capital Investments, LLC and Poulson Russo LLC and was the former president of the South Jersey Real Estate Investors Association. Paulson gave speeches, seminars, monthly dinners and various private tutorial sessions, purporting to teach real estate investing tips to individuals who paid fees to attend.

    Poulson engaged in a two-pronged scheme.

    First, he promised to pay the mortgages of distressed homeowners facing foreclosure if they sold their homes to him. Using this method, Poulson obtained the deeds to more than 25 distressed homeowners’ residences, causing them to vacate the homes so renters could move in. Afterwards, Poulson then stopped making the monthly mortgage payments, causing those mortgages to go into foreclosure without the distressed homeowners’ knowledge.

    In the second part of the scheme, Poulson solicited seminar attendees and other private investors to invest in Equity Capital Investments, which purportedly bought and sold real estate. Poulson told the investors that their money would be used to acquire and rehabilitate a property, which Poulson claimed he would rent out and then sell for a 10 to 20 percent return on the investment.

    The properties for which Poulson solicited the investments were those he acquired in the first part of the scheme. Although Poulson claimed that he would use funds to acquire and rehabilitate those properties, Poulson spent the money on personal expenses and to repay other investors. As a result of the scheme, Poulson was able to fraudulently obtain more than $3 million from investors.

    In addition to the prison term, Judge Bumb sentenced Poulson to three years of supervised release and ordered him to pay $2.58 million in restitution.

Utah Jury Convicts Real Estate Agent Of Flipping (Thru Simultaneous Closings) Purportedly Buildable Home Sites To Unwitting Buyers Without Disclosing Lots Weren't Eligible For Building Permits; Unable To Convert Construction Loans Into Permanent Financing, Some Victims Ended Up In Foreclosure

In Salt Lake City, Utah, The Salt Lake Tribune reports:
  • A jury on Friday found a real estate agent guilty of defrauding lot buyers by not disclosing an ownership interest and that water facilities had not been completed, meaning building permits wouldn't be available.

    Kimberly Bowen, 51, was found guilty of five counts of communication fraud and one count of engaging in a pattern of unlawful activity, all second-degree felonies punishable by up to 15 years in prison each.

    Bowen wept as the jury of five women and three men were polled by 3rd District Judge Randall Skanchy, who presided over the two-week trial.

    Sentencing was set for March 1.

    Bowen sold lots in 2007 at the Fox Hollow subdivision of developer Richard Wolper — a star witness for the Utah Attorney General's Office, which prosecuted the case. Bowen was convicted for failing to tell buyers that she had an ownership interest in the company selling the lots — a contention hotly disputed by the defense — and for not informing buyers that there was no water available at the lots and that they weren't eligible for building permits.

    Without building permits, owners weren't able to build homes and convert construction loans into long-term financing. Many ended up in foreclosure.

    But it was Wolper's role in the water debacle and his failure to complete the water system that was very much in dispute at the trial. During contentious testimony that drew the ire of Skanchy, Wolper claimed he informed Bowen and others who worked with her that there was no water at the lots and that buyers had the obligation to ensure the lots were viable for building.

    Skanchy at one point said he was close to declaring Wolper in contempt. Then later, with the jury gone from the courtroom, the judge said it was "unbelievable" the attorney general's office had not pursued Wolper as a suspect.

    Defense attorney Chris Bown also had produced documents showing Wolper had failed to complete the water system as his contract with the city required. Wolper himself had not disclosed that water was not available and that building permits would not be forthcoming, the documents showed.

    After the verdict, Bown said the defense planned to appeal.

    "While respecting the jury and the process, we are dismayed that Kim Bowen and other co-defendants have been the only ones prosecuted over these seven years by the attorney general's office," he said, referring to the length of the case. "Our pursuit of justice does not end with today's verdict."

    Assistant Attorney General Denise Dalton, the prosecutor, spent much of her time during the trial on evidence that she said showed Bowen held an ownership interest in Empire Custom Homes and other entities involved in reselling lots purchased from Wolper. Dalton gave little effort to questions of who was responsible for disclosing the lack of water.

    "This is not a trial to convict Mr. Wolper or anyone else [besides Bowen]," Dalton said in closing arguments.

    Bown also said Saratoga Springs officials bore responsibility for allowing Wolper to record his subdivision, which allowed the sale of lots even though water wasn't available.

    Another defendant in the case, Sandy Chapple, reached a plea agreement and was sentenced in October 2014 to a year in jail. Chapple's husband, Allen Chapple, also pleaded guilty to several charges and was ordered to pay restitution of about $75,000.

    A fourth defendant, Clair (Chuck) Rulon Hawkins, was convicted of two counts of communications fraud and served three months in jail.

    The Utah Court of Appeals upheld Hawkins' conviction on Friday, but his attorney, Marcus Mumford, said he would appeal to the Utah Supreme Court.

    "In the case of Mr. Hawkins, we showed how Wolper had orchestrated the entire transaction as an illegal double-closing to enrich himself and his friends," said Mumford, who has filed a suit against Wolper on behalf of a lot buyer. "In the case of Ms. Bowen, the trial judge himself observed how the state was letting the real culprit lie on the stand and walk free, as he said, to finish the job of fleecing people."
For more, see Jury: Utah real estate agent guilty of defrauding subdivision lot buyers (Bowen is found guilty of failing to disclose ownership interest and unavailability of water in a Saratoga Springs subdivision).

Legal Secretary Gets 137 Years For Fleecing Nearly $600K From Law Firm's Clients While On Probation For Earlier Unrelated Theft From Another Attorney's Clients ($152K); Lawyer-Employer's Bar Ticket Suspended; Widow Who Lost Home To Foreclosure After Being Fleeced Of $183K Life Insurance Proceeds From Her Late Husband's Death Among Latest Victims

In Decatur, Alabama, The Decatur Daily reports:
  • Former Hartselle legal secretary Tami Hinkle gasped and turned to her family when a judge announced [last week] the sentences totaling 137 years in prison he had just handed out would be served consecutively.

    “Oh, my God, he just gave me life,” Hinkle said in Morgan County Circuit Court. She had pleaded guilty to 20 counts of theft. Hinkle, 49, began crying uncontrollably, and her family and supporters gasped and sobbed when Marshall County Circuit Judge Tim Riley, who handled the case, announced the consecutive sentences.

    Prosecutors argued Hinkle stole nearly $600,000 from clients of the Long and Long law firm from when she was hired in April 2008 until her arrest in February 2014. The defense contended the thefts totaled about $350,000.

    Hinkle will be eligible for parole in 10 years, according to the Alabama Board of Pardons and Paroles website. The board said a person is eligible for parole after serving the lesser of 10 years or one-third of the sentence. Hinkle pleaded guilty to 17 counts of first-degree theft, which is a Class B felony, and three counts of second-degree theft, a Class C felony.

    Riley, who heard the case because all of the Morgan County judges recused themselves, also ordered Hinkle to pay $350,000 in restitution. He gave her credit for 23 months she has served in prison after her probation was revoked on a 2009 conviction of stealing money from a lawyer she worked for in Madison.

    Assistant Morgan County District Attorney Jerry Knight asked Riley to sentence Hinkle to life in prison. “It’s probably heavier than life,” Knight said of the sentences handed down by Riley after an all-day hearing.

    William White, Hinkle’s attorney from Birmingham, said state sentencing guidelines call for a range from one year and 10 months to five years and nine months in prison. “I’ve never seen a life sentence in a property crime,” White told Riley. “We think that too extreme to the Nth degree.”

    Several of the state’s nine witnesses described how they gave Hinkle checks at the law firm of Bob Long and Jack Long, who are not related, that were supposed to be deposited into Bob Long’s law firm’s trust account. Instead, she deposited them into the firm’s operating account, from which she had authority to write checks.

    Knight recounted the significant losses the victims suffered from Hinkle’s thefts when he asked Riley for a life sentence. He asked that Riley send a message to would-be thieves. “You steal money from people who put their trust in you, you go to the penitentiary for a long time,” Knight said.

    Hinkle did not testify during the hearing but was allowed to make a statement before hearing Riley’s sentence. “I take full responsibility for what I’ve done, for the pain and suffering I’ve caused,” she said tearfully.

    Hinkle said she’s spent two years in prison trying to do the right thing and be a better person.

    Before announcing the sentence, Riley said some of the victims have been “totally devastated” by the harm Hinkle caused. He said Hinkle could have been a successful business person had she used her talents in the right way instead of plotting how to take the victims’ money.

    Riley said Louise Harris was left “totally destitute” because of Hinkle.

    Hinkle was accused of taking $183,318 from Harris from a $250,000 life insurance payment Harris received after the death of her husband, George Harris. George Harris was the minister at Somerville Church of Christ where Hinkle, of Hartselle, and her family attended church.

    Hinkle told Louise Harris, a South African citizen, the money could be held in Long’s trust account until the estate was settled in probate court, according to Knight. Louise Harris wrote checks totaling $183,318 to Long that Hinkle deposited into Long’s operating account and then withdrew.

    Louise Harris, 66, testified she lost her house to foreclosure and had her car repossessed because of Hinkle’s theft. “I have nothing,” she said. “I trusted her completely,” Louise Harris testified Tuesday. “My husband trusted her completely.”

    Louise Harris said she has quit taking her heart medicine because she has no insurance, cannot get Medicare or Social Security because she is not a United States citizen, and lives with her daughter in Kansas City, Missouri.

    Angela Aldridge, a special agent with the Alabama Department of Revenue, testified about her investigation of bank records belonging to Long, Hinkle and the business owned by Hinkle’s husband. She testified about checks and wire transfers from Long’s operating account deposited into Hinkle’s accounts from 2010 through 2013.

    Hinkle’s husband, Louis Jack Hinkle Jr., 45, of Decatur, has been indicted on a first-degree receiving stolen property charge related to the money stolen from Long’s clients, Knight said.

    Testimony by Bob Long, whose law license has been suspended, revealed his lack of oversight of Hinkle’s control of his trust account and the checks that clients gave her. Long is the defendant in a lawsuit filed by the estates of Robbie Morris and Edith Simmons to recover $286,939 that the estates said should have been deposited into Long’s trust account, but instead went into the operating account and was withdrawn by Hinkle.

    Long testified Hinkle was giving the heirs of the two estates “the runaround” about why they were not receiving their disbursements in a timely manner.

    On another occasion, Long said, Hinkle was to meet him in Decatur on Jan. 21, 2014, to give him a check, but instead gave him an envelope containing a letter. She told him she had been raped in the law office on Jan. 6, but didn’t report it to the police.

    Hartselle police investigator Tania Burgess testified Hinkle reported the rape to her Jan. 21. Burgess said she became suspicious of Hinkle’s story because of Hinkle’s demeanor and because Long came in about an hour later to report checks stolen from the law office. She said Hinkle and Long “used some of the same verbiage.”

    Burgess said her investigation showed that Hinkle was in Chicago on Jan. 6.

    Hinkle pleaded guilty to first-degree theft in Madison County in 2009. She was charged with stealing $152,984 from clients of a Madison lawyer for whom Hinkle worked, court records show. Hinkle made $500 monthly restitution payments in that case until she was arrested in Hartselle.(1)
Source: Former Hartselle legal secretary sentenced to 137 years to run consecutively.
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(1) According to another media report (Morgan Co. woman pleads guilty to stealing hundreds of thousands from legal clients):
  • Hinkle was on probation for stealing $152,000 while working for a Madison County attorney when she committed the crimes in Morgan County. She is serving a ten-year sentence for violating that probation.

Sunday, January 24, 2016

Staten Island Landlord Busted For Allegedly Stealing Moroccan Immigrant/Tenant's Possessions Now Faces Fair Housing Suit; Victim Says Landlord Flipped Her Lid After Hearing Her Speaking Arabic

In New York City, NY1 reports:
  • A contentious landlord-tenant housing dispute pits a former political leader in the hot seat, and one woman is saying the case is racially motivated.

    The doorbell goes unanswered at MaryLou Shanahan's home. The townhouse on the quiet Eltingville Street is at the center of a nasty landlord-tenant dispute between the one-time chairwoman of the Island Conservative Party and a Moroccan immigrant who says Shanahan harassed her and stole all of her possessions.

    "Harassment every day, every day, every day," said the tenant, 33-year-old Hasna Jalal. Jalal moved into the third floor late last summer.

    According to a federal civil complaint Jalal filed this week, the relationship between the two women soured almost immediately, after the landlord heard her speaking in Arabic. Shanahan allegedly told her, "I don't need anybody speaking Arabic in my house! You're scaring the neighbors!" and "The neighbors will think you are from al-Qaida."

    Jalal also alleges that the landlord routinely cursed and insulted her, once words to the effect of, "I remember when this country was all white. Those were the days..." "The harassment, the insults, it was nonstop every day," Jalal said.

    Jalal says the situation escalated when she came home one day and found the locks changed and everything she owned gone. After neighbors told police that they saw Shanahan removing items from the apartment and trucking them away, the landlord was arrested and charged with grand larceny and stolen property possession.

    Jalal, an accountant who works in Manhattan, says the items, with a total value of $400,000, have not been returned. "This is something that should not be tolerated, certainly in a place like New York City, where the are very strict protections for tenants," said lawyer Nicholas Moccia.

    In October, the Staten Island district attorney's office asked for the appointment of a special prosecutor because the Acting D.A knew Shanahan. A judge finally approved the request this week. The reason for the delay is unclear. Shanahan's defense attorney tells NY1 his client is innocent... and then declined further comment.

Landlord Who Was Accused Of Failing To Correct Disability-Related Harassment Of Down Syndrome-Resident By Other Tenants, Then Allegedly Denying Victim's Mother A Renewal Lease Based On Disability Agrees To Cough Up $40K In Damages To Settle Fair Housing Lawsuit

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department filed a proposed settlement of a lawsuit alleging that a Waunakee, Wisconsin, landlord and apartment complex owner violated the Fair Housing Act by discriminating against two residents of Applewood Apartments based on disability.
    ***
    No family should have to endure degrading insults and comments in the place they call home,” said Gustavo Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “T[his] settlement reflects HUD and the Justice Department’s ongoing commitment to taking appropriate action against individuals who violate the housing rights of persons with disabilities.”

    The lawsuit, [] along with a proposed settlement [...], alleges that defendants Applewood of Cross Plains LLC (ACP) and William Ranguette discriminated against two residents of Applewood Apartments, a mother and daughter living together, and denied them rights by refusing to renew the residents’ lease because of their disabilities; demanding that they develop a “plan” to deal with the daughter’s purported disability-related behavior (she is a person with Down Syndrome); and pressuring them to move.

    Furthermore, the United States alleges that all defendants, which include the residential apartment manager of the building, discriminated against the two residents by failing to take prompt action to correct and end disability-related harassment by other tenants. From the moment the residents moved into the building, other tenants made such statements as calling the daughter “mentally retarded,” and stating “You don’t belong here. . . you belong in an institution.” Complaints to the landlord and building manager, including that other tenants continued with offensive comments, followed them around the building, and interfered with their use of the premises, went unaddressed.

    Under the terms of the settlement, which is subject to approval by the U.S. District Court, defendants will pay the complainants $40,000 in damages. Although denying the allegations, defendants ACP and Ranguette have also agreed to maintain non-discrimination housing policies, advertise that they are equal opportunity housing providers and attend fair housing training.

Three Women Awarded $4+ Million Court Judgment In Fair Housing Lawsuit Accusing Two Lowlife Landlords Of Targeting Female Tenants For Abuse, Intimidation

In Cleveland, Ohio, The Cleveland Plain Dealer reports:
  • After Brianna Bowers' son tested positive for lead poisoning in 2013, public health officials told her landlord, Derek Brown, that her apartment had to be inspected for the toxin.

    Brown called with a message for the 21-year-old mother.

    "He said he was going to kick my door in and 'f' me up if I didn't get out of the house," Bowers said.

    Bowers's son was a toddler. This was her first apartment. She was uneasy, already, about mold and a flickering light in the bathroom ceiling.

    She didn't know that it was unusual for a tenant to lack a written lease. Or for a landlord to demand that rent be paid only in cash.

    Nor did she know that Brown, 48, and his brother Graig, 44, were among Cleveland's most notorious landlords.

    The two were accused dozens of times over the past decade of mistreating tenants: taking their deposits, locking them out of their homes, threatening them, swearing at them, or taking everything from clothes to family keepsakes from tenants who were late on rent, or asked for repairs.

    The tenants making those accusations in civil and criminals complaints were almost all women.

    Over the years, the Brown brothers and companies associated with them were hit with civil judgments totaling more than $1.2 million, and contempt of court fines of $1.4 million. Yet, they have stayed in business, often transferring assets among multiple companies.

    Last year, a group of women filed a lawsuit accusing the brothers and their companies of violating federal fair housing laws by targeting female tenants, including Bowers, for abuse and intimidation. U.S. District Court Judge Donald C. Nugent awarded them a civil judgment of $4 million in December.

    Diane Citrino, an attorney with Giffen & Kaminski who represented the tenants with the help of Legal Aid Society of Cleveland, said the massive judgment means that the Brown brothers can no longer ignore the courts.

    "This makes it clear it's not a cost of doing business," she said.
For the court ruling, see Gray v. Brown, 1:14-cv-00225-LW (N.D. Ohio December 7, 2015).

Long Island Landowner To Scrap Rule Allowing Only Those Of German Ancestry To Buy Homes In Community & Agrees To Cough Up $175K To Settle Fair Housing Lawsuit

In Yaphank, New York, the New York Law Journal reports:
  • A couple suing a Long Island property owner over discriminatory housing policies have reached a settlement requiring the owner to scrap a policy that gave preference to people with German backgrounds.

    After unsuccessfully trying to sell their Yaphank home for years, Philip Kneer and his wife, Patricia Flynn-Kneer, sued the German-American Settlement League, which owns the underlying land and rents lots to league members, who own their homes.

    The Kneers said the league's rules, such as making membership primarily open to people "of German extraction and of good character and reputation," breached laws such as the federal Fair Housing Act.

    The New York Times quoted the league president in October as saying that previous efforts to change the "antiquated" rules had been unsuccessful.

    Under the agreement [], the league would discard its old constitution and by-laws and adopt a new one declaring membership open to all backgrounds. Long Island Housing Services, a co-plaintiff, will monitor board minutes and membership applications for four years.

    The case, Long Island Housing Services v. German-American Settlement League, 15-cv-05987, is before Eastern District Judge Joan Azrack, who must approve the pact.

    Diane Houk, of counsel at Emery Celli Brinckerhoff & Abady, and O. Andrew Wilson, a partner, represented the plaintiffs.

    The league will pay the firm and the plaintiffs $175,000 in damages and fees. The agreement does not say how much will go to the lawyers.

    Christo Hadjicharalambous, an associate at Milber Makris Plousadis & Seiden in Woodbury, represented the German-American Settlement League. He declined to comment.
Source: LI Property Owner Agrees to Housing Bias Settlement (may require subscription; if no subscription, go here - then click appropriate link for the story).