Jury Slams Lawyer On Multiple Felony Charges For Fleecing Over $31 Million In Trust Funds From Dementia-Stricken Beneficiary

From the Office of the U.S. Attorney (Anchorage, Alaska):

• U.S. Attorney Karen L. Loeffler announced [] that a former Anchorage resident and former municipal prosecutor Mark J. Avery was convicted of three counts of wire fraud, six counts of money laundering, one count of bank fraud, and one count of making false statements to a bank after a two week trial before U.S. District Judge Ralph R. Beistline.
  
  Avery, 57, of San Francisco, California, was indicted by a federal grand jury in Anchorage in 2013 alleging he defrauded May Wong Smith and the May Smith Trust, of over $52 million dollars. Avery was, at the time, a trustee of the trust and used his influence to obtain access to $52 million of trust assets, all of which he expended in a period of six months.
  
  The jury’s verdict found that, in 2005 and 2006, Avery committed over $31 million in wire fraud related to the scheme to defraud the May Smith Trust. The verdicts involve the largest money laundering convictions by amount ever prosecuted in Alaska.
  
  The jury did not reach verdicts on one count of wire fraud and three counts of money laundering. The jury acquitted Avery of one count of wire fraud.
  
  Avery was re-charged after the Ninth Circuit Court of Appeals reversed Avery’s conviction on similar charges for honest services wire fraud in 2013 based on a Supreme Court decision that found the theory of honest services fraud under which Avery was previously convicted unconstitutional.
  
  The revised indictment filed against Avery, a trustee and lawyer to the May Smith Trust, charged that Avery engaged in a scheme to defraud the trust and May Wong Smith. Avery held those positions from early 2002, and received yearly compensation in the amount of $600,000 in trustee fees for his role as trustee and fiduciary to these trusts.
  
  ***
  The May Smith Trust was established on October 10, 1982, to provide for May Wong Smith’s support and maintenance during her life and certain charitable purposes after her death.
  
  In the early 1980s, May Wong Smith began to show signs of dementia. From that time, her mental condition began to deteriorate to the point where she was not capable of living without assisted care. Due to her mental condition she had full time live-in care from at least 1991 until her death in Nassau, Bahamas, on July 15, 2006. In spite of her compromised mental capacity, she remained a trustee until her death in July 2006.
  
  The indictment alleged that Avery engaged in a scheme that involved pledged assets of the May Smith Trust as collateral for a $52 million dollar loan made to Avery. The jury’s verdicts found that Avery defrauded May Wong Smith and the May Smith Trust by using the $52 million loan funds for his personal use and to invest in various businesses without any indicia of normal business practices in that the money was obtained and spent with no written business plan, no controls over how the money was to be spent, no repayment terms, no promissory note and none of the common safeguards of commercial investments.
  
  At trial the evidence showed that Avery ran through all $52 million he obtained from the trust in six months using the funds for various purchases including two World War II era fighters, a P-51D Mustang, and an F4U-4 Corsair, other antique aircraft, real estate, a personal mortgage payoff, a 47' Carver Yacht, and a 37' heavy-duty patrol boat.

Source: Former Anchorage Prosecutor convicted in wire fraud and money laundering scheme amounting to $31 million (Largest money laundering scheme in Alaska history).

Florida Supremes Indefinitely Suspend Attorney For Allegedly Abandoning His Law Practice & Walking Off w/ At Least $190K In Trust Account Funds

In Fort Myers, Florida, the News-Press reports:

• The Florida Bar has issued a suspension for a Fort Myers attorney for misappropriation of a client's funds.
  
  Josiah Ewing Hutton Jr., 59, Fort Myers, was suspended until further order, following a Jan. 20 court order.
  
  According to a petition for emergency suspension order Hutton abandoned his practice and misappropriated client funds. An investigation revealed that Hutton misappropriated at least $190,947 from a trust account.(1)
  
  Hutton was also publicly reprimanded in 2012 after pleading guilty to a 2011 driving under the influence citation in Pinellas County. He was placed on five years probation by the Florida Bar. Previously he had also been suspended for 30 days in 2000 for practicing law while administratively suspended and publicly reprimanded in 1995 for trust account violations.

For more, see Fort Myers attorney suspended from practice.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

--------------------------------

(1) The Clients' Security Fund was created by The Florida Bar to help compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Florida-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:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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.

Massachusetts Bar Indefinitely Suspends Attorney For Allegedly Fleecing Thousand$ From Dead Client's Estate While Handling Uncomplicated Estate, Failing To Keep Cash In Trust Account, Neglecting To Render Accurate Accounting To Beneficiaries

In Fall River, Massachusetts, Wicked Local Fall River reports:

• The Massachusetts Board of Bar Overseers has suspended a Fall River attorney indefinitely for misusing client trust funds and for charging “clearly” excessive fees.
  
  The state said that attorney Jeffrey S. Entin, [...], misused more than $28,000 from a deceased client’s estate for his own benefit, depriving the client’s heirs of their money.
  
  According to documents from the board, Entin served as the executor of the late client’s estate, but Entin did not keep the funds in a trust account and failed to render and accurate accounting to the client’s beneficiaries.
  
  The Board of Bar Overseers also said Entin, despite what should have been an uncomplicated handling of the estate, charged the estate $117,214.50, an amount that included $72,750 in legal fees for 286.25 hours of legal work — an amount that Entin inflated — as well as $27,402 for work performed in his capacity as executor even though he performed no work as executor that he did not already charge and bill to the estate as a legal fee.
  
  The board also said Entin charged the estate $17,062.50 for legal services that were unrelated to his work on behalf of the estate.
  
  The board’s order says Entin will be indefinitely suspended from practicing law, beginning in mid-March.

Source: Fall River lawyer suspended indefinitely for misusing client's money (The Massachusetts Board of Bar Overseers has suspended a Fall River attorney indefinitely for misusing client trust funds and for charging “clearly” excessive fees).

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

--------------------------

(1) The Clients' Security Fund of the Massachusetts Supreme Judicial Court was created to help compensate members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the Massachusetts bar acting as an attorney or a fiduciary.

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:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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.

Suspended NJ Lawyer Agrees To Disbarment As Part Of Plea Deal w/ Prosecutors Admitting He Fleeced Dead Cousin's Estate Out Of Over $75K

From the Office of the Monmouth County, New Jersey Prosecutor's Office:

• A suspended Jersey City attorney admitted [] he misused more than $75,000 from the estate of his deceased cousin, a Sea Girt resident, announced Acting Monmouth County Prosecutor Christopher J. Gramiccioni.
  
  John Hamill, 65, of Jersey City, pleaded guilty [] to one count of second degree Misapplication of Entrusted Property. Hamill entered his guilty plea before Monmouth County Superior Court Judge Joseph W. Oxley. Sentencing is scheduled for June 17, 2016.
  
  Hamill was arrested in October 2014, after an investigation by the Monmouth County Prosecutor’s Office revealed he made numerous withdrawals from the estate of a cousin in Sea Girt. Hamill utilized the money for the payment of debts and personal lifestyle activities.
  
  As part of his plea agreement, this Office will recommend Hamill be sentenced to serve 180 days in the Monmouth County Correctional Institution, Freehold Township, as a condition of any probationary period. The plea agreement also calls for restitution in the amount of $109,422. Hamill, who is currently suspended from the practice of law, has also agreed to disbarment as a part of the plea agreement.(1)

Source: Jersey City Man Admits Withdrawing Money from Estate.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

-----------------------------

(1) The New Jersey Lawyers' Fund for Client Protection, an entity of the Supreme Court of New Jersey, was established to reimburse clients who have suffered a loss due to dishonest conduct of a member of the New Jersey Bar.

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:

• Directory Of Lawyers' Funds For Client Protection (now includes a listing for Canadian client protection funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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.

Canadian Law Society CEO: Compensation Available To Clients Victimized By Attorney Ripoffs, Negligence

In Winnipeg, Manitoba, CBC News reports:

• David Michael Bradley, described as lacking integrity and unworthy of being a lawyer, has been disbarred following a hearing at the Law Society of Manitoba.
  
  He's also been ordered to pay $22,500 in costs toward the discipline process.
  
  The hearing was told Bradley lied to clients and misappropriated clients funds. In all, he faced 22 charges related to professional misconduct. He pleaded guilty and consented to the disbarment.
  
  Rocky Kravetsky, counsel for the law society, told the hearing disbarment is the only sanction that will protect the public and protect the reputation of the profession.
  
  ***
  Compensation available
  
  All lawyers in Manitoba are required to have professional liability insurance, said the law society's chief executive officer Kristin Dangerfield in a statement to CBC News.(1)
  
  "In the event any clients sustained a loss as a result of Mr. Bradley's negligence, compensation is available under the Lawyers Professional Liability Fund which protects clients from the errors or omissions of a lawyer," said Dangerfield.
  
  "With respect to losses caused by the theft of client funds, every lawyer in the province contributes annually to the Reimbursement Fund."(2)
  
  "It is unknown as of today whether any claims will be made against either of the funds by Mr. Bradley's former clients," she said.

For the story, see Winnipeg lawyer David Bradley disbarred (Misappropriation, lack of integrity cited by Law Society of Manitoba).

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

----------------------------

(1) Unlike the lawyers in the United States, Canadian lawyers (or at least those licensed to practice in the Province of Manitoba) are apparently required to carry professional liability insurance.

(2) The Reimbursement Claims Fund is a fund maintained by The Law Society of Manitoba (equivalent to a state bar in the U.S.) to repay people whose trust monies have been misappropriated by their lawyer. All members of the legal profession in Manitoba contribute to this fund.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other Canadian provinces as well as those licensed throughout the United States, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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.

Scam Artists Use 10-Page Sovereign Citizen 'Manifesto' To Temporarily Hijack Possession Of Vacant Home For Sale; Befuddled Cops Initial Response To Complaining Homeowner: 'Take A Hike - It's A Civil Matter!" Four Ultimately Get Pinched After Authorities Wake Up & Come To Their Senses

In New Orleans, Louisiana, The Times-Picayune reports:

• When New Orleans police responded last month to reports of squatters taking over a house for sale in Bywater, officers said there was nothing they could do because the newly installed residents had legal documents laying claim to the property.
  
  Fred Hines, the true owner, was told by police that it was a civil matter and he would have to take it up with a judge if he wanted them out. That was despite Hines having shown them a deed, bank documents and tax records for the property all with his name on them.
  
  The squatters' claims have been declared false — four of them now face felony burglary charges — but they were able to stay in the house for several days after police spoke with Hines. What exactly had they shown the officers that was so convincing?
  
  It wasn't a falsified deed, a forged court order or some other official-looking filing that would seem to give the squatters a legitimate legal claim to the North Rampart shotgun house. It was a nonsensical 10-page manifesto full of claims to legal immunity.
  
  Squatters espousing allegiance to an esoteric black nationalist movement have staked a claim to a Bywater house up for sale and remain there more than a week after neighbors complained to police about the apparent trespassing.
  
  In explaining why the squatters were not immediately turfed out, the Police Department said that it wasn't reasonable to expect a beat officer to parse seemingly official documents on the fly. The department, as Superintendent Michael Harrison put it, had to do its due diligence.
  
  The document is full of legal jargon and court citations, but there are some clues that its bearers may not have had sound judicial footing.
  
  The first paragraph introduces the self-declared "lineal heir" of the property as an "authorized representative of the Washitaw Nation," who, as a "natural person" and an "indigenous American National," is "part and parcel with the land."
  
  The document was printed on the homespun letterhead of "The Mu'ur National Republic, Mu'ur Divine and National Movement of the World."
  
  The Washitaw Mu'ur Nation, sometimes spelled Washitah, is a sovereign-citizen group that sprung up in the mid 1990s in north Louisiana. It takes its name from a native tribe that lived in the area prior to European invasion. Several place names, including a parish, bear the tribe's French name, Ouachita.
  
  It's unclear how the document, even if it were valid, would have applied to the squatters, as it doesn't bear any of their legal names, at least none of those who were later arrested.
  
  Lawyers who specialize in real estate said the claims outlined in the manifesto are farcical.
  
  "In a way, the Washitahs' document is clever because it includes a legal description of the Bywater house, citations to legal cases and federal statutes, mysterious Latin words, and a whole lot of misused legal jargon," said lawyer Ryan McCabe, of the Steeg Law Firm. "But when you look at what it actually says, it's completely incoherent. It's as if the author put a legal dictionary into a blender and then randomly rearranged the pieces. It makes no sense."

For more, see Read the Washitah Nation manifesto that squatters used to flummox the NOPD.

Go here for the full, nonsensical 10-page manifesto used by these scam artists that inexplicably left the local cops befuddled, causing them to initially conclude that the possession-hijacking of the home from the true owner was not a crime, just a civil matter.

Despite Conviction After 6-Hour Long Trial, Squatter Who Asserted Sovereign Citizen-Associated Title Claims To $800K Foreclosed Home Dodges Prison Time, Gets 12 Months Probation

In Charlotte, North Carolina, WSOC-TV Channel 9 reports:

• A judge found a woman guilty [] on charges related to her 2015 occupation of a pricey home in the Piper Glen neighborhood.
  
  The ruling came after a nearly six-hour long trial [] on charges against Ninti El-Bey.
  
  Police said the woman squatted in a home off Kelly Woods Lane. Records show it is a foreclosure and is owned by J.P. Morgan Chase. However, she has claimed she had the legal right to stay there as part of an agreement with something called the "International Indigenous Trust" and the bank.
  
  District Judge Donnie Hoover sparred with her [] over her alleged proof of that agreement and was frequently confused by her arguments.
  
  "I'm not going to sit here all night unless you come up with that private agreement in 30 seconds," Hoover said at one point during El-Bey's testimony.
  
  El-Bey cited case law claiming she didn't have to divulge the details of that agreement. She frequently made arguments about liens and Uniformed Commercial Code that fell on deaf ears.
  
  During testimony Tuesday, prosecutors called to the stand Canan Kennedy, a Realtor who was tasked with keeping an eye on the property and preparing it for sale.
  
  Kennedy testified she showed up one day and the "For Sale" sign was missing from the front yard and the lock damaged.
  
  She entered the home and encountered a man, not identified in court, who she claims said the property belonged to the "International Indigenous Trust".
  
  El-Bey has mentioned her ties to the Moorish Nation or Moorish Nationals. Police experts say the group is often tied to squatting incidents as well as lengthy legal battles and lawsuits against authorities.
  
  Judge Hoover ultimately found her guilty on six of seven counts. She was found not guilty on a charge related to her driver’s license.
  
  The judge's sentence allows her to avoid prison time so long as she obeys a 12-month supervised probation period and stays away from the home.

Source: Judge finds Piper Glen squatter guilty.

For an earlier story, see NC woman claims ‘lawful contract’ allows her to stay in $800K home.

Brooklyn Civic Group Campaigns To Raise Awareness Of Deed Theft Rackets Targeting Local Homeowners

In Brooklyn, New York, DNAinfo New York reports:

• Neighborhood homeowners are coming together this March to raise awareness about deed theft and property fraud in the community.
  
  The Brownstoners of Bedford-Stuyvesant, a civic group aimed at revitalizing the neighborhood, is hosting the event “We Are Our Neighbor’s Keeper” to help educate locals on an issue many say is rampant in the area.
  
  “This is happening way too often and way too easily,” said Brownstoners’ president Lynette Lewis-Rogers.
  
  “It’s frustrating, but we’re hearing from different sources that it is very, very widespread, particularly throughout Bed-Stuy,
  
  “We know they’re in demand, our beautiful brownstones. They’re very desirable, and if you’re not willing to sell, the next thing is for people to be under-handed about it.”
  
  Many affected residents lose their homes after reaching out for assistance, Lewis-Rogers added.
  
  Those facing foreclosure or looking to refinance their property sometimes come across scammers and later find out they signed over the deed to their homes, according to experts.
  
  The March 19 panel was created out of a concern to help residents pass down their properties through generations, Lewis-Rogers said.
  
  It follows a January event from the Brownstoners of Bedford-Stuyvesant in which they discussed the same topic with elected officials and representatives from the State Attorney General, the Brooklyn District Attorney’s Office and the Bedford-Stuyvesant Real Estate Board.

For more, see Panel To Address Deed Theft and Property Fraud in Bed-Stuy.

Judge Slams Sleazy Landlord w/ $825,000 In Damages After Campaign To Harass & Shame Elderly Man Out Of His Below-Market Rate Rent-Controlled Pad Of 34 Years Culminated By Publicly Disclosing Private Details Of His Involuntary Psychiatric Confinement To Other Tenants

In Los Angeles, California, the Santa Monica Mirror reports:

• A resident of 1519 12th Santa Monica is breathing a sigh of relief today after being awarded a total $825,000 by Los Angeles Superior Court after suing his landlords for public disclosure of private facts.
  
  The tenant was taken away in October 2013 on a 51-50 hold [ie. an involuntary psychiatric confinement under California law].(1) Following the incident, his landlords posted a notification on fellow residents’ doors, informing every one of the event, and in doing so, breaking the law and shaming the tenant.
  
  Attorney Frances Campbell, from Campbell & Farahani, represented the tenant under the Legal Aid Foundation of Los Angeles(2) (Santa Monica) and told The Mirror that the now 82-year-old man had been a victim of constant harassment from his landlords who made obvious attempts to evict him from his rent control apartment and home of 34 years.
  
  “Achieving a verdict where two landlords have to pay $825,000 to their tenant because they publicly disclosed his private mental health information to other tenants sends a strong message to Santa Monica landlords that the local community will not support, and in fact will punish, tenant harassment,” Campbell said.
  
  The tenant was awarded $200,000 as a compensatory payment for past and future emotional distress. Landlords Joyce Urode and Kelli Urode were also ordered to pay $500,000 and $125,000 respectively in punitive damages.
  
  With increasing demand for housing in Santa Monica pushing up rents dramatically, more and more landlords who own rent-stabilized properties are implementing near-desperate plans to evict long-term tenants, Campbell said.
  
  Tenants are able to utilize the protections of the Santa Monica Tenant Harassment Ordinance to combat these situations should they arise.
  
  “We have seen eviction attempts against tenants who have paid themselves to improve the landlord’s properties, by putting in granite countertops or hardwood floors, on the ground that the improvements were not authorized,” Campbell explained. “We have seen landlords attempt to evict for a tenant changing a shower head to low-flow; we have seen landlords attempt to evict a tenant because the tenant calls the police to report their neighbors playing loud music.”
  
  All tenants need to be vigilant about protecting their rights, particularly where they pay far-below-market rents, Campbell advised.
  
  “Tenants should make sure all communications with their landlords are in writing,” she said. “If a landlord violates their privacy rights, or harasses them, they need to take action either by suing their landlords in small claims court, hiring private counsel to sue their landlords or by complaining to the Santa Monica City Attorney’s Office.”
  
  As for the gentleman who won his case, he is current residing in a skilled nursing facility, but plans to return to his apartment home in the near future.

Source: Small Victories: 82-Year-Old Tenant Awarded $825,000.

Go here for a copy of the letter used by the landlord to disseminate the elderly renter's private information to the other tenants in the building.

For another example of a landlord accused of sleazy conduct to drive an elderly tenant out of her long-time, below-market rate rent-controlled apartment, see 91-Year Old Ex-Opera Singer Gets To Go Home, Scores Release From 'Involuntary Detention' In Nursing Home By Defying Order & Serenading Judge In Open Court; (Daughter & Attorney Say Sneaky Landlord/Developer Made Anonymous Complaint To City Social Service Agency In Push To Have Senior Granny-Snatched Out Of Her Rent-Controlled Pad Where She's Lived Since 1960).

---------------------------

(1) A 51-50 hold refers to Section 5150 of the California Welfare and Institutions Code which authorizes a qualified officer or clinician to involuntarily confine a person suspected to have a mental disorder that makes him or her a danger to him- or herself, a danger to others, and/or gravely disabled. When used as a term, 5150 (pronounced "fifty-one-fifty") can informally refer to the person being confined or to the declaration itself, or (colloquially) as a verb, as in "I have a possible 5150 here" or "(Someone) was 5150ed". (Reference: Wikipedia).

(2) The Legal Aid Foundation of Los Angeles is a non-profit public interest law firm that provides civil legal services to poor and low-income people in Los Angeles County, California.

Real Estate Operator Gets 25+ Years For Duping Financially Strapped Homeowners Into Phony Sale Leaseback Ripoffs w/ False Mortgage Elimination Promises

From the Office of the Sacramento County, California District Attorney:

• The Honorable Donald Currier sentenced Lonnie Glenn Schmidt to 24 years, 8 months in state prison, and 1 year in county jail consecutive.
  
  On December 9, 2015, a jury convicted Schmidt of 30 felony real estate fraud charges involving foreclosure consultant fraud, recording false documents, unauthorized use of personal identifying information, second-degree burglary, perjury, grand theft, and attempted grand theft. The jury also found true out-on-bail, white-collar crime, and property loss enhancements.
  
  Between 2009 and 2013, Schmidt falsely promised homeowners facing foreclosure that he would save their homes by eliminating their mortgage. Desperate to believe Schmidt’s promises, homeowners who signed up for his program gave Schmidt control over their properties. Schmidt then tried to use those properties as collateral for personal loans or tried to sell them outright for his own profit – all the while charging the victims “rent” to continue living in what had been their own homes.
  
  Schmidt was previously convicted of four felonies in 1990 in federal court for a tax scam involving conspiracy to impair and impede the IRS, witness tampering, aiding and abetting witness tampering, and conspiracy.
  
  This case was investigated and prosecuted by the Sacramento County District Attorney’s Real Estate Fraud Unit.

Source: Defendant Sentenced for 30 Counts of Real Estate Fraud.

Lawsuit: 'Knight In Shining Armor' Dazzles Divorcee, Then Uses Forged Deed To Sell Her 18-Acre Long Island Business Property Out From Under Her, Walking Away w/ Million$

In Suffolk County, Long Island, the New York Post reports:

• Long Island catering queen Rhona Silver thought she’d met the man of her dreams when a rabbi introduced her to a real estate developer in 2003.
  
  That is, she says, until the businessman took her money and ran.
  
  Now Silver — who ran the sprawling Huntington Town House catering hall on Long Island — is suing Barry Newman for $25.9 million, alleging he forged her name on documents for the sale of the hall’s 18-acre property and ripped her off for millions.
  
  On their first date, Newman flew Silver, a divorcée in her late 50s, to Boston on a private jet for a seafood dinner. On their second date, they went to Rome for Italian food.
  
  “He took me to Valentino shopping, to the Spanish Steps [in Rome], bought my daughter a fur pocketbook,” Silver told The Post.
  
  She fell hard — and quickly entrusted Newman with her finances, even letting him oversee the sale of her legendary catering hall, which had 12 ballrooms and hosted luminaries from Hillary Clinton to rapper 50 Cent.
  
  “He was going to be my Maurice Tempelsman,” a weepy Silver said, referring to the late Jacqueline Kennedy Onassis’ companion, who managed her money after her second husband, Aristotle Onassis, died.
  
  “He said, ‘I’m going to take care of you and your family forever,’ ” the single mom recalled. “I had no reason not to believe him.”
  
  But when Newman secured a $38.5 million deal with Lowe’s for the 20-acre Jericho Turnpike property in June 2007, he forged her signature on the sale documents and hit the road, taking Silver’s millions with him, her pending Suffolk County lawsuit alleges.
  
  “No one told me when the closing was, no one told me about it,” Silver said about the Lowe’s sale, which took place in the offices of Newman’s lawyer in Binghamton, NY.
  
  Her attorney, Jeffrey Buss, showed The Post documents with what he claims are Silver’s forged signature.
  
  In an affidavit, a forensic document examiner says that two sets of closing documents, one from March 2007 and another from June 2007, have three signature lines bearing Silver’s name and the script is identical on each.
  
  “It is axiomatic that no person signs his name exactly the same way twice,” the examiner, Andrew Sulner, says in court papers. “It is irrefutable that at least one of these two signature blocks is a forgery accomplished by means of a mechanical or digital ‘cut and paste’ process.”
  
  Silver was supposed to net $6 million on the sale but she got nothing and is now dependent on friends to make ends meet, according to her suit.
  
  Newman’s attorney, Douglas Cooper, said there “is not a single shred of truth” in Silver’s claims.
  
  In court papers, Newman admits he swept into Silver’s life to help a damsel in distress. But, he says, “Silver’s claims that she has been victimized are a blatant fraud,” maintaining she used the loans to fund her “lavish lifestyle.”

Source: ‘Dream man’ seduced divorcée, then stole millions: lawsuit.

How To Use Chapter 13 Bankruptcy To Unload Title To Dilapidated, Soon-To-Be-Abandoned, Financially Underwater House Onto Reluctant-To-Foreclose Bankster; Move Cuts Off Homeowner's Continuing Liability For Property Expenses (ie. Civil/Criminal Liability For Code Enforcement Violations, etc.)

From a recent post on Bankruptcy-RealEstate-Insights:

• The debtors proposed a chapter 13 plan providing that certain real property was to be surrendered to the mortgagees and title to the property was to vest in the first mortgagee over its objection. The bankruptcy court confirmed the plan.
  
  After the house where the debtors were living suffered damage in Superstorm Sandy, they bought a second house – which is where they were living when they filed a chapter 13 bankruptcy.
  
  Their bankruptcy schedules showed the old house with a value of ~$255,000, subject to a first mortgage with a balance of the ~$387,000 and a second mortgage with a balance of ~$30,000. The first mortgagee filed a proof of claim asserting that it was owed ~$440,000. The first mortgagee also filed a motion for relief from the automatic stay to permit it to continue a foreclosure.
  
  Under the plan the debtors proposed to retain their current home and to surrender their former home to the mortgagees “in full satisfaction of the secured portion of the mortgage owed pursuant to 11 U.S.C. Section 1325 and 506.” It also provided that title to the old property would be vested in the first mortgagee: “‘[t]his vesting shall not merge or otherwise affect the extent, validity, or priority of any liens on the property’; and ‘the confirmation order shall constitute a deed of conveyance of the property when recorded with the county clerk’s land records.'” Further, under the plan all claims secured by the old property would be deemed paid by surrender of the property, provided that the mortgagees had 30 days after confirmation of the plan to file unsecured claims for any deficiencies.
  
  Although the first mortgagee did not oppose surrender, it objected to being forced to take title to the property.
  
  ***
  A debtor has a right to surrender property to a lender over its objection, and the court viewed vesting of title to the surrendered property in the lender as entirely consistent. Adding vesting to surrender allows the lender to dispose of the property without waiting to complete foreclosure. Consequently the court confirmed the plan over the first mortgagee’s objection.
  
  Surrender is one of those concepts that is often misunderstood. Debtors are surprised to find that they have continuing liability for property expenses after surrender, with no way to force a mortgagee to foreclose in order to cut off liability.(1)
  
  Combining surrender with vesting title produces a result that is more aligned with debtors’ expectations – although, on the other hand, it is almost certainly the case that lenders expect to control their own destiny, which probably does not include being forced to take title to “dilapidated property.”

Source: Chapter 13 Plan: How to Really Get Rid of Unwanted Property.

For the court ruling, see In re Zair, 535 B.R. 15 (Bankr. E.D.N.Y. 2015).

--------------------------

(1) See Lender Abandons Foreclosure Action, Leaving Unwitting Property Owner Holding The Bag On Code Enforcement Violations & Facing Criminal Charges for an example of one homeowner who surrendered two rental properties in bankruptcy, only to be eventually slapped with three arrest warrants for not maintaining them after the foreclosing bank abandoned its foreclosure action, leaving the houses in legal limbo.

Maryland High Court Green-Lights Inverse Condemnation Lawsuit By Ex-Campground Owner/Operator Who Lost Lakefront Property To Foreclosure; Plaintiff Alleged That State Knew Of Local Sewage Contamination Problems From Failure Of Nearby Septic Systems & Did Nothing About It, Driving Her Out Of Business In The Process

From a client alert from the law firm Ballard Spahr LLP:

• A property owner states a valid claim for inverse condemnation where the owner alleges that its property was taken by the government's failure to act in the face of an affirmative duty to act, the Maryland Court of Appeals has held. The holding is the first time the Court has recognized a claim for inverse condemnation based on government inaction.
  
  In Litz v. Maryland Department of the Environment, the plaintiff sued the Maryland Department of the Environment (MDE), among others, after losing her property when a lake on the property became contaminated from run-off from failed septic systems in the nearby town of Goldsboro. The plaintiff operated a popular campground on the property and the lake was its recreational centerpiece. When the contamination forced the closing of the lake the plaintiff was unable to operate the campground profitably and ultimately lost the property to foreclosure.
  
  The problems with the septic systems and their effects on the lake were well known. Most of the systems were installed in the 1940s and 1950s and began failing in the early 1970s. By 1995, MDE reported that there were “actual water quality impacts” on the plaintiff's lake and that the ''situation has deteriorated and created environmental concerns that will need to be addressed.'' Shortly thereafter, in August 1996, MDE entered into an administrative consent order with Goldsboro that required Goldsboro to identify the failing septic systems and to submit, by January 1, 1997, a plan and schedule for the construction of a public sewer system. Shortly thereafter, Goldsboro and MDE agreed that Goldsboro could not afford a public sewer system so Goldsboro never submitted a plan for one and MDE never enforced the order.
  
  Years later after losing the property, the plaintiff sued MDE in 2010 and alleged that the failure to comply with and enforce the order and to otherwise prevent the contamination of her lake constituted a taking of her property without just compensation. The defendants moved to dismiss the claim on a variety of grounds, including that the loss of her property was not caused by any affirmative act by the state or town but rather by independent third parties using failed septic systems. The trial court dismissed the inverse condemnation claims on the grounds that the plaintiff failed to comply with the Maryland Tort Claims Act and the Court of Special Appeals, hearing the case for a second time, affirmed the dismissal on those grounds as well as on the ground that a takings claim could not arise from the state’s ''failure to regulate.''
  
  In a 4-3 decision, the Court of Appeals, also hearing the case for a second time, reversed and held that the plaintiff did assert a valid inverse condemnation claim. Observing that the claim did not fit ''neatly within conventional thinking about inverse condemnation'' because it was based on inaction by the government rather than affirmative action, the Court relied on decisions from other states that it construed as recognizing that government inaction could support an inverse condemnation claim. The Court found particularly persuasive those cases where the government agency was aware of some risk of injury to property and the agency had some affirmative duty to act to prevent that injury.
  
  The Court observed that MDE was aware of the risk to the plaintiff's lake from the failed septic systems and even after entering into the order with Goldsboro, MDE failed to take action to change the sewage treatment system in Goldsboro.
  
  Consequently, the Court held that the plaintiff properly alleged an inverse condemnation claim because her property was ''alleged to have been 'condemned' by the failure of the State and the Town in the face of an affirmative duty to abate a known and longstanding health hazard.''

Source: Maryland Court of Appeals Opens Door to New Class of Inverse Condemnation Claims.

For the court ruling, see Litz v. Maryland Department of the Environment, No. 23 September Term, 2015 (Md. January 22, 2016).

Arizona AG Uses Civil Lawsuit To Go After Real Estate Operator Accused Of Using False Promises To Dupe Homeowner Into Signing Over Title To House, Stiffing Bank Out Of Mortgage Payments, Then Flipping Property To Multiple Unwitting Buyers, Pocketing Upfront & Monthly Payments While Premises Ended Up Foreclosed

In Tucson, Arizona, KVOA-TV Channel 4 reports:

• The Arizona Attorney General has filed suit against a Tucson company alleging the company charged homeowners for foreclosure assistance services but did not provide the services.
  
  According to Arizona AG Mark Brnovich, Sonia Hodgin and Hodgin & Co, LLC charged their clients thousands of dollars for their service.
  
  In one case, Brnovich said the defendants told a client they would take over the homeowner's mortgage loan obligation and would take over the monthly payments in exchange for the deed on the house.
  
  Brnovich said the defendants did not take the homeowners off the mortgage loan obligation and did not pay the monthly fee, resulting in the house being foreclosed on.
  
  The defendants are also accused of selling the same property to multiple victims and charging them a down payment and monthly payment fees. Brnovich said the defendants continued to collect monthly payments from the victims after the house had already been foreclosed on.
  
  “Arizona homeowners who lost their homes to fake foreclosure schemes should immediately file a complaint with our office,” said Attorney General Mark Brnovich. "This office will continue to fight for vulnerable homeowners who fall victim to fraudulent foreclosure schemes."
  
  Brnovich is requesting the defendants pay restitution and a $10,000 fine for each violation of the Arizona Consumer Fraud Act.
  
  If you believe you are a victim of Sonia Hodgin and/or Hodgin &Co, LLC, call the AG's Office in Tucson at (520) 628-6504.

Source: AG's Office files suit against Tucson foreclosure assistance company.

For the lawsuit, see State of Arizona v. Hodgin & Co. LLC, et al. rent skimming

Court Belts Bankster For Over $200K In Damages In Favor Of Homeowner For Engaging In Conduct During Course Of Servicing Home Loan That Judge Described As "Beyond The Bounds Of Decency" & "Utterly Intolerable"; Appeal Forthcoming

In Seattle, Washington, KING-TV Channel 5 reports:

• “Intolerable” and “beyond the bounds of decency.”
  
  Those are the words a Seattle federal judge used to describe the conduct of a nationwide mortgage lender in its campaign to drive a Bellevue single mother out of her home.
  
  “He saw it too. I wasn’t going crazy. These guys were trying to take my house,” Leticia Lucero said of the ruling by Judge Robert Lasnik.
  
  Lucero was awarded $213,000 in damages against Cenlar, the servicer of her home loan, for “emotional distress.”
  
  Lucero’s lawyers, Ha Dao and Omar Barraza, say the case is a first of its kind ruling in Washington state and could set a precedent for in litigation against lenders and loan servicers.
  
  Lucero was given a modification to her home loan in 2013, after a divorce and the housing crash sent her account into default.
  
  But after the modification, Cenlar inexplicably continued to report to creditors that Lucero’s home was in foreclosure. Her repeated requests to correct the record went unanswered.
  
  Lucero filed a lawsuit against Cenlar and, according to court records, that’s when things turned dirty.
  
  Mysterious charges started showing up on Lucero’s monthly mortgage bill.
  
  Soon, she had more than $26,000 for charges owed that Cenlar refused to explain.
  
  During a trial last year, Judge Lasnik determined Cenlar was “annoyed that plaintiff had sued it” and started tacking Cenlar’s legal fees onto Lucero’s mortgage.
  
  Cenlar gave at least eight excuses for why it did this.
  
  However, Judge Lasnik ruled that nothing in Washington law made it permissible for the lender to toss its legal fees onto the back of the Bellevue mom.
  
  “Such conduct is beyond the bounds of decency and is utterly intolerable,” Lasnik wrote in a January decision.
  
  “The message was clear: continue this litigation and we will take your home,” Lasnik wrote.
  
  Cenlar did not respond to KING 5’s emails and phone call seeking comment. Cenlar has appealed the January decision.
  
  Attorney Barraza says the case could open the door for other struggling homeowners who want to argue that their lender or loan servicer is causing emotional distress in negotiations.

Source: $213,000 'emotional distress' judgment against lender.

See also, The Associated Press: A nationwide mortgage lender is appealing a $213,000 emotional distress judgment awarded to a Bellevue mom who was fighting to keep her home.

For the court ruling, see Lucero v. Cenlar FSB, No. C13-0602RSL (W.D. Wash. January 28, 2016).

Fugitive-Hunting Feds Bag Sleazy Pennsylvania Real Estate Agent In Central Florida; Suspect Wanted For Allegedly Peddling Foreclosed Homes He Had No Authority To Sell To Over 20+ Victims & Walking Off w/ Their Cash

In Scranton, Pennsylvania, The Citizen's Voice reports:

• A Hazleton real estate agent wanted after failing to appear at a Florida extradition hearing on Jan. 19 was captured in Orlando, Florida, [...].
  
  Martin J. Pane, of the Scranton U.S. Marshals Office, announced in a news release, that Ignacio Beato, 45, was arrested at approximately 7 a.m. by U.S. Marshals at an apartment complex in Seminole County in Florida. A fugitive task force in Scranton contacted the Orlando office after members developed information of Beato’s whereabouts.
  
  This comes two years after claims started surfacing that Beato defrauded potential home buyers. He was taking cash from prospective real estate purchasers who were left only to find eviction notices once they moved in.
  
  ***
  More than 20 people claim that they were scammed from Beato. They are represented by Hazleton attorney Edward Olexa, who could not be reached for comment [].

For the story, see Hazleton real estate agent wanted on fraud charges again captured in Florida.

For an earlier media report, see Embattled real estate agent named ‘person of interest’:

• State police are investigating claims against Beato dating back to February 2014, according to their most recent report. [...] The homes that Beato sold during this time period were strictly cash transactions. The homes in question were either in foreclosure or owned by HUD and therefore subject to irregular monitoring.

NJ Appeals Court Affirms Five Convictions, Vacates & Remands Three Others Against Imprisoned Scammer Doing 20 Years For Using Forged Deeds To Hijack Title To Houses, Then Rent Them Out; Mistaken Jury Instruction Requires New Trial On Some Counts

In Trenton, New Jersey, the New Jersey Herald reports:

• An appellate court [] vacated three of the eight convictions of Robert Kosch stemming from a 2014 trial for renting out homes he did not own and remanded the case to Superior Court for a new trial.
  
  Kosch, 59, was convicted in October 2014 of two counts of second-degree theft of immovable property by taking or disposition, one count of third-degree theft of immovable property by unlawful taking or disposition, two counts of third-degree theft of movable property by unlawful taking or disposition, two counts of third degree forgery and one count of second-degree trafficking in personal identifying information pertaining to 50 or more separate persons.
  
  He was sentenced to 20 years in prison with six years of parole ineligibility.
  
  On Tuesday, the appellate court vacated the three counts of theft of immovable property.
  
  "Although there was evidence in the record to demonstrate an unlawful taking of an interest in immovable property, we nevertheless vacate those convictions because the jury was mistakenly instructed as to the nature of the interest allegedly taken," the appellate court said in its decision.
  
  The decision says the trial court asked the jury only to determine if Kosch unlawfully took full possession of the properties in question, and not if he unlawfully took an "interest" -- "the right to possession or the right to collect rents or both" -- of the properties.
  
  "Clearly in assessing the immovable property charges, the jury believed it was to determine whether defendant unlawfully took something more than the rental proceeds -- that he took the immovable property itself," the decision reads. "This was a conclusion the evidence could not permit and, therefore, those convictions cannot stand."
  
  The convictions stemmed from Kosch's arrest for falsifying deeds and signatures to pass himself off as the landlord of properties facing foreclosure. He collected rent, including some federal Section 8 subsidized rent, from unknowing tenants, the jury found.

For more, see Kosch case remanded to Superior Court.

For the court ruling, see State of New Jersey v. Kosch, A-2099-14T3 (App. Div. Mar 01, 2016).

Sticky-Fingered Real Estate Lawyer Gets Bar Boot For Pocketing Homebuyers' Purchase Deposits After Transactions Failed To Close, Refusing To Respond To Their Repeated Refund Requests

In Brooklyn, New York, the New York Law Journal reports:

• A suspended Nassau County attorney who practiced for 31 years and who was the subject of six complaints to the grievance committee in 2013 and 2014 for mishandling client funds was disbarred [].
  
  According to court papers, Lester Mackey was suspended in July after he was found guilty of professional misconduct for misappropriating client funds;(1) conduct involving dishonesty, fraud, deceit and misrepresentation; and failure to cooperate with the grievance committee's investigation.
  
  In one complaint, a woman alleged that she was attempting to buy property in Queens from one of Mackey's clients in 2011, and that she put $50,000 down on the property, which was deposited in Mackey's Interest on Lawyer Account. After the seller was unable to abate several code violations against the property, she cancelled the contract, but Mackey did not respond to her requests to return the down payment.
  
  In another complaint, also in 2011, Mackey deposited a $20,000 down payment from Patricia Gayle, a prospective buyer of property owned by one of his clients. After the buyer was unable to obtain financing, she cancelled the sale and asked for repayment, but said Mackey did not respond to her repeated inquiries.
  
  After Gayle sued the seller, Mackey admitted that he used unrelated client funds from his IOLA to pay back Gayle's down payment.
  
  The Appellate Division, Second Department, wrote in Matter of Mackey, 2015-00808, that Mackey did not respond to three petitions filed against him by the Grievance Committee for the Tenth Judicial District.

Source: Attorney Who Admitted to Fraud Is Disbarred.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

---------------------------

(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.

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:

• Directory Of Lawyers' Funds For Client Protection (now includes a listing for Canadian client protection funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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.

Judge Offers Now-Disbarred Attorney Incarceration 'Buy-Down' Offer: Pay $127K Restitution To Homeowner Who You Fleeced Out Of Home Sale Closing Proceeds & You'll Get One Year In County Jail - Otherwise, It's Three Years In State Prison ... I'll Give You A Week To Come Up w/ The Cash!

In Morristown, New Jersey, the Daily Record reports:

• A now-disbarred lawyer who used to practice in Flanders has one week to raise $127,583 he stole from a client or face a sentence of three years in state prison, a Superior Court judge said Friday.
  
  Neil Lawrence Gross, 47, of Livingston, pleaded guilty in December in state Superior Court, Morristown, to theft, issuing a bad check and practicing law without a license. Gross was supposed to be sentenced Friday on his plea but defense lawyer Michael Fletcher asked Superior Court Judge Stephen Taylor to give Gross one more week to borrow the $127,583 from an out-of-state relative to meet restitution.
  
  Restitution is critical to Gross' case in that Morris County Assistant Prosecutor Michael Rappa has recommended Gross be sentenced to 364 days in the Morris County jail if he repays the money. If Gross can't repay it, the state is recommending that he be sentenced to three years in state prison, the judge said
  
  "I'd like to see the victims be made whole," Taylor said. "If the defendant goes to state prison, the likelihood of the victims being made whole drops precipitously."
  
  Taylor noted that sentencing previously was postponed for the same reason and said sentencing would occur March 11 -- in one week -- whether or not Gross has managed to raise restitution.
  
  Gross is a former partner in the Flanders-based firm Ward & Gross. He was suspended from practicing law in October of 2012 for failing to cooperate with an investigation by the state Office of Attorney Ethics. Yet he represented six clients between October 2012 and June 2013 for fees even though his license to practice law was suspended.
  
  He ultimately was disbarred on Oct. 21, 2014 for an array of ethical violations.
  
  Last summer, the Morris County Prosecutor's Office received a referral of a theft from the New Jersey Lawyers' Fund for Client Protection.(1) Through an investigation by the Prosecutor's Office's Financial Crimes Unit, Gross 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 held the $127,583 in an attorney trust account but failed to disburse the funds to the seller of the property. He instead diverted the funds to a personal account, according to his plea.
  
  He also had admitted to passing bad checks in Florham Park in 2014 and pleaded guilty to this offense in December.

Source: Ex-Flanders lawyer who stole must raise $127K in restitution.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

----------------------------

(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.

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:

• Directory Of Lawyers' Funds For Client Protection (now includes a listing for Canadian client protection funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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.

Void vs. Voidable: Challenging Validity Of Mortgage/Deed Of Trust Assignments: Some Highlights From Recent California Supreme Court Ruling

A recent post on the Money and Dirt blog highlights some of the key points in the big win scored by foreclosed California homeowners in the state Supreme Court in Yvanova v. New Century Mortgage Corporation:

Holding

The Supreme Court held:

• We conclude a home loan borrower has standing to claim a nonjudicial foreclosure was wrongful because an assignment by which the foreclosing party purportedly took a beneficial interest in the deed of trust was not merely voidable but void, depriving the foreclosing party of any legitimate authority to order a trustee's sale.

The Court distinguished between "void" and merely "voidable" assignments, and also limited the reach of its ruling in important respects.

Void vs. voidable

The Court started by acknowledging that normally a borrower cannot object to assignment of the note and deed of trust because a note is a negotiable instrument that can be sold without notice, and the deed of trust is inseparable from the note and follows it even without a separate assignment.

But, the Court observed, if the borrower defaults on the loan, only the current beneficiary (the original beneficiary or its valid assignee or agent) may direct the trustee to undertake the nonjudicial foreclosure process under California law. A foreclosure initiated by one with no authority to do so is "wrongful."

As to "whether and when" a wrongful foreclosure plaintiff may challenge an assignment, the Court turned to the distinction between void and voidable transactions.

A void transaction has no legal effect, and "has no existence whatsoever." It cannot be ratified or validated even by the parties to the transaction.

A voidable transaction, on the other hand, is one where either party to the transaction (but usually not an outsider) may elect to avoid, or to ratify, the legal relations created. The transaction can be declared void, but is not void in itself.

The Court sided with a prior line of cases holding that a borrower can challenge an assignment of his or her note and deed of trust if the defect asserted would void the assignment, not merely render it voidable.

The Court rejected the defendants' arguments that the borrower suffered "no prejudice" from foreclosure by an unauthorized party because she was in default, and the actual beneficiary could just as well have foreclosed. The Court held that the borrower suffered sufficient prejudice through the lost ownership of her property in an allegedly illegal sale.

The Court further held that the borrower had a legitimate interest in identifying the true beneficiary:

• "The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security."

Driving home this point, the Court quoted a Texas district court opinion:(1)

• Banks are neither private attorneys general nor bounty hunters, armed with a roving commission to seek out defaulting homeowners and take away their homes in satisfaction of some other bank's deed of trust.

Limitations on the holding

The Court made clear that it was not reaching several issues.

First, the Court limited its opinion to wrongful foreclosure claims -- i.e., those challenging completed foreclosure sales. The Court declined to extend its holding to actions for injunctive relief seeking to stop an impending foreclosure sale. As to the latter, the Court acknowledged other cases holding that pre-foreclosure lawsuits challenging the foreclosing beneficiary's authority would delay valid foreclosures and re-route the nonjudicial foreclosure process into the court system. (On the other hand, it would seem odd to force borrowers with a legitimate gripe about a void note assignment to suffer the loss of their property before asserting a claim.)

Second, the Court declined to decide the factual issue of whether the assignment of the note to the securitized trust made after the trust's closing date was void or instead, merely voidable. As such, that question will have to be resolved in future proceedings.

Third, the Court declined to address whether the borrower's lawsuit was fatally flawed by a lack of "tender" of the debt owed. The Court noted that the tender requirement has been excused in circumstances where the borrower alleges the trustee's deed is facially void, "as arguably is the case when the entity that initiated the sale lacked authority to do so." But the Court expressed no opinion as to whether tender was excused in this case.

Finally, the Court declined to address the recently enacted Homeowner Bill of Rights, since that legislation post-dated the foreclosure sale at issue. (Certain provisions of the Homeowner Bill of Rights prohibit any entity from foreclosing unless it is the beneficiary under the note and deed of trust -- see Civil Code section 2924(a)(6).)

Lesson

A borrower has standing to claim a nonjudicial foreclosure sale was wrongful on the grounds that an assignment of the note or deed of trust to the purported foreclosing beneficiary was "not merely voidable, but void." Lenders must carefully plan and meticulously document such assignments.

Source: California Supreme Court: Borrowers Have Standing to Allege Wrongful Foreclosure Based on Void Assignment of Note.

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(1) Miller v. Homecomings Financial, LLC (S.D.Tex. 2012) 881 F.Supp.2d 825, 832.

Florida's Home Improvement Contractor Ripoff Reimbursement Fund Not All That It's Cracked Up To Be

In Fort Lauderdale, Florida, WTVJ-TV Channel 6 reports:

• If you've ever lost money to a contractor, you know how stressful that can be. But there's a little known pot of money that the state collects to reimburse homeowners who have lost cash to a contractor.
  
  The Florida Homeowners' Construction Recovery Fund(1) has paid millions to homeowners since it started. But the NBC6 Investigators found it isn't an easy process. Consumers say is too difficult for the average person to access on their own and many will wait years to find out if they'll qualify for the cash.
  
  Maria Gonzales, a housekeeper in Sunny Isles said she's been waiting ten years. That's when she paid a $2,000 down payment to a contractor who promised to install hurricane shutters on her condo windows. But the contractor disappeared with her money.
  
  "I thought they were going to do a good job but in the end we were tricked and scammed," Gonzales said.
  
  Gonzales recruited help from her daughter-in-law, Michelle Carpio. The two were able to get a state order revoking the contractor’s license.
  
  During that process, Carpio found out about the Florida Homeowners' Construction Recovery Fund. In 2012, she applied to get her mother-in-law's money back. The money for the fund comes from a surcharge added to building permits and reimburses up to $50,000 if a homeowner loses money and meets certain criteria.
  
  1) Contractor was licensed
  2) Court judgment in your favor
  3) Prove no other means to collect
  
  "I thought it was great," Carpio said. "I said great. I told her you might get your money back."
  
  But ten years since writing the check and four years since applying for the money, their request is still pending.
  
  When the NBC6 Investigators reached out to the state fund, a spokesperson said a letter was sent to Gonzales requesting additional paperwork from the family. They also said they never received the letter. After our phone calls, the two now have the needed documentation and plan to submit it soon.
  
  "We don't know if she's going to see her money back. We're trying to see if there's anything that we can do," Carpio said. "It will certainly take the bad taste out of our mouth."
  
  More than 1,000 people have applied since 2010 to get money from the fund. 33 percent are still pending because they need to submit additional paperwork with the state. 29 percent of those who have since 2010 have gotten money from the fund. $6,469,690 have been paid out since 2010.
  
  "I am happy with what we got," Cashel said.
  
  Fort Lauderdale's Ed Cashel received $50,000 from the fund after he said his contractor took his money and left a mess behind.
  
  "The process, and there's one word for it and it's burdensome, extremely burdensome and expensive," Cashel said.
  
  He's grateful for the money but said the process to finish the work and get his money reimbursed took him more than two years. He had to refinance his home twice, take out a home equity line of credit and pay an attorney $17,000.
  
  "The whole recovery fund needs to be looked at by legislators because it really needs revision. It really needs to have customer friendly documentation," Cashel said.
  
  Attorney David Durkee said the fund is an important safety net for consumers but has too many legal hoops to jump through.
  
  "There's no sense in creating a pot of gold for victims to go to and knock on the door and try to get there if it's guarded by barbed wire. That makes no sense," Durkee said.
  
  Durkee would like state legislators to take a look at the process. "They need to make procedures that are understandable and procedures that an ordinary consumer can do by themselves," Durkee said.
  
  A fund spokesperson said changes have been made over the years to make the process easier for homeowners to file claims and there are robust resources online to help.
  
  Click here to view the eligibility requirements for the fund.
  
  Click here to see the Department of Business and Professional Regulation's list of important facts regarding fund eligibility and contact information.

Source: Money Available for People Ripped Off By Contractors.

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(1) The Florida Homeowners' Construction Recovery Fund is a fund of last resort that is available to a natural person [ie. a human being, as opposed to a business entity - corporations are not considered to be "people" for purposes of administering this fund] who has suffered monetary damages by the financial mismanagement or misconduct of a contractor, and who has exhausted all other resources of payment. The Construction Industry Licensing Board makes the determination of eligibility for an award. (information sheet, claim form).

But see, Action 9 investigates state recovery fund meant to help homeowners for a story on how some homeowners claimed they got the run-around from this fund.

Pennsylvania State Cops Pinch Plumbing & Electrical Contractor Duo For Allegedly Fleecing Three Elderly Victims w/ "Grossly Exorbitant" Charges, Performing "Patently Unnecessary" Work On Home Improvement Jobs

In Wayne County, Pennsylvania, The News Eagle reports:

• The owners of Bordsam’s Inc. Plumbing, Electrical Services in Texas Township, are facing several felony charges related to overcharging and performing work that is unnecessary. In a case filed by State Police, the victim, an 81-year old woman from Seelyville, paid Borsdam’s Inc. over $83,000 in 2014-2015.
  
  Charged were filed in District Court, February 22nd by the PA State Police against David Borsdam and his wife Betty Jane Borsdam of Honesdale.
  
  Additionally, Honesdale Borough Police filed their own complaints, on behalf of two other elderly victims.
  
  In the case of the 81-year old woman from Seelyville (Victim 1), State Police referred to “financial exploitation” done at the home. The Service Coordinator for Protective Services for Wayne County Area Agency of Aging supplied Trooper John Strelish with 15 contracts for work done by Borsdam’s, dated Nov. 19, 2014- Aug. 6, 2015. Victim 1 paid a total of $83,771.43 for the work.
  
  On September 9, Steve Ostrander, Area on Aging Inspector, of Ostrander Design Homes, went to the residence to review work that had been completed by Borsdam’s. After reviewing invoices of worked billed and actual work done, Ostrander gave his opinion to State Police that the work was more than necessary to complete the needed repairs. Stranger was of the opinion that the prices were extremely high and that the homeowner was taken advantage of.
  
  Executing search warrants, State Police obtained files and records from Borsdam’s which State Police say reveal a scheme of conduct to obtain money from the victim but overcharging for work that was “patently unneccessary” or that charges were “grossly exorbitant.”
  
  This included contracts for snow removal, yard work, repairs to a bath room floor, replacing a water heater and lines, and an electrical upgrade, among other jobs.

For more, including the details of the alleged screwing-over of the other two elderly victims, see Home Improvement Fraud in cases of elderly victims.

Jury Rejects 'It's A Civil Matter' Defense, Takes Under An Hour To Slam Contractor w/ Guilty Verdict In Home Improvement Ripoff; Suspect Allegedly Told Cop That After Running Out Of Cash To Finish Job, He Awaited A Possible Civil Lawsuit By Homeowner & Would've Stiffed Her Again By Filing Bankruptcy

In Clearfield, Pennsylvania, the Centre Daily Times reports:

• It took a jury less than an hour to find a Philipsburg contractor guilty of theft [] in Clearfield County Court.
  
  Brian T. Barton, 46, was charged with theft by deception, theft by failure to make required disposition of funds, home improvement fraud-false or misleading statement, and home improvement fraud-receiving advanced payment for not completing a home improvement project in Osceola Mills. He was convicted on all charges after a two-day trial.
  
  Testimony on the first day came from the victim who entered into a home improvement contract with Barton Contracting and owner Brian Barton that was signed Sept. 8, 2013, with work to be completed by May 2014 for a total cost of $90,000, according to the affidavit of probable cause. The project was an addition to the current building of two bedrooms and a bathroom on the first level of the house as well as an expansion to the kitchen.
  
  The victim issued Barton a check for $30,000. In November 2013 she issued a second check for $30,000 and in March 2014 another check for $10,000. He cashed all three checks totaling $70,000. He did not complete the work or return the money.
  
  Scott Lukens, of Lukens Kitchens, testified [] that when he went through the home it had wiring that was deficient and problems with the water/sewer lines. The cost for him to install new wiring in the home and put the water/sewer lines up to code was more than $14,000. The proposed cost to finish the project which would include insulating the new structure, floor coverings, kitchen/bath cabinets, porch railing, exterior stairs and paint would be more than $60,000.
  
  Former Decatur Township police Sgt. James Ward testified that he was contacted by the victim who was complaining about her contractor, Barton. She said after she paid him $70,000 she stopped paying and he stopped working on the home. He said he didn’t have any money to give back to the victim.
  
  When Ward spoke with Barton in December 2014, Barton explained he under bid the job and ran out of money to complete it. He had no plans to go back to finish the job. He was going to wait until she filed a civil case and he’d then file for bankruptcy, Ward said.
  
  The defense had one witness, Chris Hockenberry, a general contractor who reviewed the project for Barton. He testified that the cost for this project as completed would be more than $83,000. This was based on drawings provided to him by Barton.
  
  There was no further testimony on Friday, the second day of the trial.
  
  In his closing arguments, Brian Jones, attorney for Barton, argued that this was not a criminal case(1) and stated that District Attorney William A. Shaw Jr. had not proven Barton’s intent was to defraud the customer.
  
  Jones pointed out there was no testimony regarding the amount of money Barton put into the project.
  
  “He has no idea how much the defendant spent on materials and labor, or what he put in his pocket,” Jones stated. There were no witnesses saying he intentionally kept the money.
  
  Shaw argued in his closing that Barton underbid the job to lure the victim into a contract. His intention was obvious when Barton said he would declare bankruptcy if she sued him.
  
  “And he walks away with that money in his pocket.”
  
  Shaw stated to the press in an interview after the completion of the trial that the Home Improvement Consumer Protection Act has made it easier to identify and prosecute these cases. He encouraged anyone contemplating hiring a contractor to go to the attorney general’s website to see if they have registered.

Source: Philipsburg contractor found guilty of theft (Man charged for not completing home improvement project; Attorney argues case not criminal, DA didn’t prove intent to defraud).

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(1) As a reminder to those lowlifes and others who mistakenly assume that these apparent ripoff deals are nothing more than civil cases, it is clear that all the sophisticated paperwork in the world (ie. business/purchase contracts, leases, closing statements, etc.) isn't enough to permit scammers to insulate themselves from criminal prosecution when they target their victims with legitimate-looking business propositions when screwing their victims over. Criminal prosecutors have the authority to "pierce through" such attempts to disguise a blatant criminal real estate ripoff as a common, legitimate business deal.

Clear precedent exists for such a "pierce through" approach to overcome any objections that will certainly arise when the scammers make the argument that the arrangement was just a civil transaction that, if challenged, should be done with a civil lawsuit, not a criminal prosecution. See, for example:

People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:

• The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)

People v. Jones, (1943) 61 Cal.App.2d 608, 620 [143 P.2d 726]:

• Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.
  
  [***]
  
  Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.
  
  The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)