81-Year Old Attorney Wraps Up Career By Handing In Bar Ticket, Then Pleading Guilty To Fleecing Elderly Client Out Of Over $75K; Judge May Consider Jail "Buy-Out" Deal If Defendant Makes Good On Pilfered Loot Before Sentencing

In Batavia, New York, WKBW-TV Channel 7 reports:

• A well-known lawyer in Genesee County admits he stole over $75,000 from an elderly client.
  
  Batavia Police charged Randolph Zickl, 81, with second-degree grand larceny. He double billed a woman as he worked on the estate for her late husband and withdrew money from a bank account. Investigators say the thefts took place over several years.
  
  When Zickl was arraigned [], he pleaded guilty to his crime. The judge is giving him until September 20th, his sentencing date, to make full restitution. If he does, the judge will likely consider a sentence of probation instead of jail time.(1)
  
  The case is being prosecuted by the Erie County District Attorney's office. According to WHAM 13 in Rochester, Zickl has two sons who are attorneys in the Genesee County District Attorney's office. [He] was arraigned before a judge from Erie County.
  
  Zickl has resigned from the NYS Bar Association.

Source: Lawyer admits stealing $75K from elderly client.

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

(1) The Lawyers’ Fund For Client Protection Of the State of New York manages and distributes 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 New York 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.

Disbarred Lowlife NYC Real Estate Lawyer Gets Shipped Off Upstate To Begin 4-12 Year Sentence For Fleecing Vulnerable, Unwitting Clients Out Of $4.5 Million

In New York City, the New York Daily News reports:

• A disbarred real estate lawyer was sentenced to prison [] in Manhattan for stealing $4.5 million from clients.(1)
  
  Luigi Rosabianca, 41, former head of Rosabianca & Associates, got four to 12 years behind bars in exchange for his plea to multiple counts of grand larceny.
  
  Starting in 2013, Rosabianca began stealing money from real estate transactions that was kept in an escrow account and in two other accounts he had access to.
  
  One of his victims was former Daily News editor-in-chief Martin Dunn, who was ripped off for $630,000 by Rosabianca while his wife was gravely ill with cancer in 2013.
  
  Dunn, in a statement to the court, said he felt like the former attorney, a friend of his, had exploited his vulnerable state. "This was a very painful, distressing experience," Dunn said. He and his wife were paid back $455,000 weeks before she died.
  
  Rosabianca's refund to Dunn was taken from another of his seven victims, who was mentally ill and unable to care for herself, prosecutors said.
  
  "Luigi Rosabianca targeted and preyed upon vulnerable clients, whether that person was suffering from a serious mental illness, caring for a sick spouse, or simply living in a different country," Manhattan District Attorney Cyrus Vance Jr. said in a statement.
  
  "He gained his clients' trust before raiding funds entrusted to him for safekeeping."
  
  Rosabianca got choked up as he apologized before getting shipped upstate. "I realize I hurt a lot of people and for that I am sorry," he said.
  
  His attorney Robert Schalk insisted that Rosabianca has "been contrite since day one." “He will pay back restitution owed when once again he returns to be a productive member of society," he added.
  
  Justice Maxwell Wiley referenced the sadness and grief Rosabianca had caused before handing down the sentence. "The purpose of my sentence today is punishment, pure and simple," the judge said.
  

Source: New York City real estate lawyer gets prison time for stealing $4.5M from clients.

For the Manhattan District Attorney press release, see DA Vance: Former Real Estate Attorney Sentenced To 4-To-12 Years In Prison For Stealing $4.5 Million From Clients.

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.[...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.

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

(1) The Lawyers’ Fund For Client Protection Of the State of New York manages and distributes 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 New York 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.

Resigned From State Bar With Charges Pending, Ex-California Attorney Cops Guilty Plea For Role In Loan Modification Racket; Used Boiler Room Telemarketing Scam Masquerading As Reputable Law Firm To Fleece Financially Strapped Homeowners Out Of Million$; Two Co-Defendants To Face Trial

From the U.S. Department of Justice (Washington, D.C.):

• The Department of Justice announced that a former California licensed attorney pleaded guilty in U.S. District Court in Santa Ana, California, for his role in a multi-million dollar fraudulent mortgage modification scheme.
  
  Ronald Rodis, 51, of Irvine, California, pleaded guilty before U.S. District Court Judge David O. Carter for the Central District of California to one count of conspiracy to commit mail and wire fraud.
  
  ***
  “This defendant posed as an accomplished attorney who could provide quality legal services – and hope – to struggling homeowners,” said U.S. Attorney Eileen Decker of the Central District of California. “But the promises were bogus. Rodis Law Group made few efforts to assist homeowners, who paid thousands of dollars in last-ditch attempts to keep their homes, many of which entered foreclosure.”
  
  Rodis admitted that, between October 2008 and June 2009, he participated in a scheme with Bryan D’Antonio, Charles Wayne Farris, and others to induce homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group (RLG).(1)
  
  Rodis and his co-conspirators made numerous misrepresentations regarding the RLG’s ability to negotiate loan modifications from the homeowners’ mortgage lenders. Rodis recorded radio advertisements encouraging struggling homeowners to call RLG. In the radio ads, Rodis falsely claimed that RLG consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.”
  
  In fact, RLG was a telemarketing operation that never had a team of experienced attorneys. During much of the scheme, Rodis was the only attorney at RLG.
  
  ***
  Rodis’s co-defendants, Bryan D’Antonio and Charles Wayne Farris, are each charged with 10 felony counts – nine counts of wire fraud and one count of conspiracy. Each of these counts carries a statutory maximum penalty of 20 years in prison. In addition, D’Antonio is charged with 13 counts of criminal contempt for violating a 2001 federal court order, which permanently banned D’Antonio from participating in future telemarketing operations. Criminal contempt of court has no statutory maximum penalty. D’Antonio and Farris are scheduled for trial beginning Sept. 20.

Source: Former Attorney Pleads Guilty to Participating in Fraudulent Mortgage Modification Scheme.

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

(1) Rackets of this type have played a key role in driving the State Bar of California's Client Security Fund (which purports to help alleviate clients' losses resulting from the dishonest conduct of their attorneys) into insolvency. See Golden State's Head Auditor Rips California Bar (For, Among Other Things, Screwing The Already-Screwed Victims Of Dishonest Lawyers By Stiffing Them Through Its Currently-Insolvent Client Protection Fund, Obscuring Fact That Payout Estimates Approach $19 Million While 2015 Year-End Cash Balance Sits At Only $2.2 Million; Victims Can Be Left Sucking Wind For Years Before Claims Are Paid).

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.  attorney ripoff reimbursement fund

Georgia Lawyer Is Prime Suspect After Over $100K From Real Estate Escrow Accounts Goes AWOL; Cops Allegedly Discover Loot In One Of Defendant's Personal Company Accounts

In Jasper, Georgia, WXIA-TV Channel 11 reports:

• A Pickens County attorney [has been] accused of stealing from at least two of his clients.
  
  Christopher Mark Miller, with the law firm Miller & Associates in Jasper, is being held on 48 charges ranging from theft by deception to financial transaction card fraud.
  
  Captain Kris Stancil with the Pickens Sheriff’s Office says their investigation started when more than $100,000 from various land deals went missing from their escrow accounts. Investigators say Mark Miller took part in those sales and that the money was eventually found in one of his personal company accounts.(1)
  
  ***
  "If anyone has had representation from Mr. Miller or has been a part of a transaction that Mr. Miller was involved in on either side of the table that they take a look at their records and make sure what’s supposed to be there is there," said Stancil.

For the story, see Pickens attorney is accused of stealing money from clients.

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

(1) The Clients' Security Fund of the State Bar of Georgia was established to promote public confidence in the administration of justice and the integrity of the legal profession by providing monetary relief to persons who suffer reimbursable losses as a result of the dishonest conduct of Members of the State Bar of Georgia. Go here for more on eligible claims. Reference: Georgia State Bar Rules - Part X, Clients' Security Fund.

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.

Tennessee Attorney Suspected Of Playing Fast & Loose With Cash In Client Trust Account; Gets Hit w/ Temporary Law License Suspension

In Memphis, Tennessee, The Commercial Appeal reports:

• The Tennessee Supreme Court suspended Memphis lawyer Paul James Springer Sr. [] for two years and sixty days, according to the Board of Professional Responsibility.
  
  Springer used his trust account to pay personal and business expenses over a period of five years, according to a news release. Springer also settled a personal injury lawsuit and retained $100,000, but "refused to release settlement funds to the client and never satisfied the outstanding medical bills or judgment."

Source: Tennessee Supreme Court suspends Memphis lawyer.

Queens DA Pinches Two Real Estate Agents In Ongoing Probe Into Racket That Allegedly Ripped Off Many Non-English-Speaking Prospective Tenants Out Of Upfront Payments Of $65K+ Purporting To Be For Security Deposits, Rent, Agent Fees & Not Making Promised Apartments Available

From the Office of the Queens County, New York District Attorney:

• Queens District Attorney Richard A. Brown [] announced that, as part of an ongoing investigation, two Queens real estate agents have been charged with taking a total of more than $65,000 in security deposits, agent fees and rental payments from 20 prospective tenants over a one-year period between 2014 and 2015 and then never making the apartments available and not returning their deposits. In at least three instances in which prospective tenants were allegedly provided with refund checks, the checks were returned either because the account was frozen/blocked or due to insufficient funds.
  
  District Attorney Brown said, “These arrests are the latest stemming from our ongoing investigation of a Woodside realty company accused of preying on members of the Queens Latino community. Sadly, this case represents an all too common scenario in which allegedly greedy realtors are accused of taking advantage of Queens County’s tight housing market to rob unsuspecting individuals of substantial amounts of their hard-earned savings. To date, our investigation has resulted in three arrests, alleging a total theft of more than $100,000 from 23 prospective tenants.”(1)
  
  District AttorneyBrown said that the matter was initially brought to the attention of his office by the television network Univision, and then by Make the Road New York, an immigrant advocacy organization, and several prospective tenants who met with staff from his Office of Immigrant Affairs who then developed the case by uncovering additional alleged victims.
  
  Anyone who believes that he or she may have been a victim of the defendants’ alleged scheme is asked to contact his Economics Crimes Bureau at 1-718-286-6673 or his Office of Immigrant Affairs at 1-718-286-6690.
  
  For those who do not speak English, they should call the District Attorney’s Office of Immigrant Affairs and state the language they are most comfortable communicating in and then leave a message in that language with their name and telephone number. Someone who speaks that language will return the call.
  
  Ramon Pineda, Senior Vice President/General Manager, of WXTV Univision 41, said, “At Noticias Univision 41 we are glad that the complaints brought to us by our viewers, and the subsequent story, led to an investigation and prosecution. This is a testament to our news team’s never-ending commitment to serving and empowering our community.”
  
  The District Attorney identified the defendants as Victor M. Oaxaca (a/k/a/ Manny Hurtado), 43, of Woodside, Queens, and Roger Garcia, 44, of Flushing, Queens, who were both employed by Fast Solutions Realty (formerly known as Solucions Rapida) and Supreme Realty, all formerly located at 47-20 48 Avenue in Woodside, Queens.

For more, see Two Queens Real Estate Agents Charged With Defrauding 20 Prospective Tenants Out Of Over $65,000 In Deposits And Rent (Ongoing Investigation into Woodside Realty Agency Begun Following Complaints By Prospective Tenants, Univision, and Immigrant Advocacy Organization).

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

(1) See Woodside Realtor Charged With Defrauding 19 Prospective Tenants Out Of $76,820 In Deposits And Rent (Defendant Arrested At JFK Airport Following Overseas Flight) for the press release on the earlier arrest in this ongoing probe:

• The District Attorney identified the defendant as Rosita Tsiklauri (a/k/a Rosita Tinoco, Rosie Villegas, Rosy Villegas and Rosy Tinoco), 47, of College Point, Queens, and the chief executive officer of Fast Solutions Realty and Supreme Realty, both formerly located at 47-20 48 Avenue in Woodside, Queens.

Owner Of Philadelphia-Area Home Inspection Outfit Faces 100+ Criminal Charges For Allegedly Ripping Off At Least 138 Homebuyers By Pocketing Fees For Services He Didn't Perform &/Or Was Not Certified To Perform

From the Office of the Montgomery County, Pennsylvania District Attorney:

• Montgomery County District Attorney Kevin R. Steele and Souderton Police Chief James Leary announce the arrest of Joseph T. Michalski of Souderton for felony theft by deception, receiving stolen property and related charges for defrauding at least 138 home buyers throughout seven counties through his business, Sherlock Homes Inspection Services.
  
  The Montgomery County Detective Bureau was alerted in January 2016 by a realtor and home buyer that Sherlock Homes Inspection Services billed the buyer for water testing that was never performed. The Montgomery County Detective Bureau launched an investigation that revealed that Michalski was selling home inspection services that included water, termite and radon testing.
  
  After examining records from the business, it was determined that 138 victims paid Michalski to perform testing that he did not perform and/or was not certified to perform.
  
  Michalski took more than $18,000 from the victim home buyers in seven counties: Montgomery, Bucks, Berks, Chester, Delaware, Lehigh and Philadelphia.
  
  ***
  Anyone who contracted with Sherlock Homes Inspection Services to inspect their home should contact Detective Joe Kelly, Montgomery County Detective Bureau at 610-278-3368.
  
  Michalski was charged with Theft by Deception and Receiving Stolen Property as well as 138 counts of performing testing and mitigation that required certification, which is a third-degree misdemeanor.

Source: Owner Of Sherlock Homes Inspection Services Chraged With Defrauding 138 Home Buyers.

Six Brooklyn Homeowners Score $950K After Federal Jury Finds That Lender Violated Fair Housing Act, Other Federal/State Laws By Specifically Targeting Minority Families When "Aggressively" Peddling "Highly Abusive" Loans; Bankster Promises An Appeal

In Brooklyn, New York, The New York Times reports:

• A federal jury in Brooklyn found [last week] that the Emigrant Savings Bank had discriminated against eight minority homeowners by purposefully marketing to them subprime mortgages with what were described as predatory interest rates of as much as 18 percent a year.
  
  In 2011, the homeowners — among them a home health aide, a library worker and a clinician at Rikers Island — filed a lawsuit against the bank in Federal District Court in Brooklyn, claiming that Emigrant Savings had targeted minority customers who had low credit scores with so-called no-income refinancing loans from 2005 to 2009, both before and after the subprime crash. Ending a monthlong trial, the jury’s verdict upheld the plaintiffs’ claim that the bank had “aggressively” sold the “highly abusive” loans specifically to minority families in violation of the Fair Housing Act, among other state and federal laws.
  
  Six of the plaintiffs were awarded a total of $950,000 in damages in the case. Two others waived their claims after entering into a loan modification agreement with the bank. “Today’s verdict was a victory for borrowers seeking redress for Emigrant’s discriminatory and predatory lending practices,” said Rachel Geballe, a lawyer for Brooklyn Legal Services, which represented the plaintiffs.

For more, see Emigrant Savings Bank Discriminated Against Minorities, Brooklyn Jury Says.

Thousands Of S. Illinois Property Owners Seek Class Action Status In Civil Suit Alleging Bid-Rigging Conspiracy Involving Sales Of County Tax Liens; Victims Claim Racket Resulted In Inflated Costs To Redeem Their Real Estate & Avoid Foreclosure

In St. Clair County, Illinois, the Madison-St. Clair Record reports:

• Thousands of property owners lost money due to bid rigging at St. Clair County courthouse, according to a class certification motion in a suit against county treasurer Charles Suarez and bidders he allegedly favored.
  
  Nelson Mitten of Clayton, Mo., filed the motion for Kevin Dvorak and Kathleen Dvorak in U.S. district court on June 15.
  
  They claim Suarez and buyers of delinquent property taxes conspired to award as many bids as possible at the maximum interest of 18 percent.
  
  Mitten wrote that for a property in O’Fallon, the Dvoraks paid $1,725.03 in interest on a $1,597.25 tax bill for 2007. For a property in Lebanon, they paid $2,018.22 in interest on a $1,868.72 tax bill for 2007.
  
  The class certification motion states that the histories of the properties were typical of the process and how it affected owners. All owners of parcels the county sold for unpaid taxes for tax years 2006 and 2007 are included in the proposed class.
  
  Mitten and associates previously obtained a class certification order in a Madison County circuit court action involving similar allegations.
  
  The Madison County order remains under advisement at the Fifth District appellate court in Mount Vernon, where a panel heard oral argument on June 21.
  
  Former Madison County treasurer Fred Bathon pleaded guilty of criminal antitrust violations in federal court in 2013.(1) He served time, as did tax buyers Barrett Rochman, John Vassen and Scott McLean.
  
  Rochman, Vassen and McLean stand as defendants in both civil suits, as do Kenneth Rochman, Dennis Ballinger Sr., Dennis Ballinger Jr., and Scott Sieron.
  
  The Dvoraks moved for class certification after District Judge Staci Yandle denied motions to dismiss their claims.
  
  Mitten wrote that the agreement of the defendants inflated the amounts owners paid to redeem their properties.

For more, see Property owners who lost money in St. Clair County delinquent property tax sales seek class certification.

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

(1) See U.S. Attorney press release: Former Madison County Treasurer Guilty of Structuring Property Tax Sales to Reward Campaign Contributors:

• [B]athon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18 percent. In addition to awarding properties at non-competitive interest rates, Bathon also used a seating chart to ensure that his largest campaign contributors were recognized by the auctioneer as the winning bidder.

Count Now Up To 20 Suspects Pinched (With 18 Already Having Pleaded Or Agreed To Plead Guilty) By Antitrust Feds In Ongoing Atlanta-Area Probe Into Foreclosure Sale Bid Rigging Rackets

From the U.S. Department of Justice (Washington, D.C.):

• Two Georgia real estate investors pleaded guilty [] for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia, the Department of Justice announced [].
  
  Michael Stock and Jon Stovall Jr. each admitted that they agreed with other real estate investors to refrain from bidding against one another at public real estate foreclosure auctions in exchange for payoffs. Stock admitted to participating in the conspiracy in Fulton and DeKalb counties from as early as August 2009 until at least November 2011, and Stovall admitted to participating in Fulton County from as early as October 2008 until at least January 2012. Additionally, Stock and Stovall admitted to conspiring to use the mail to carry out a scheme to defraud homeowners and mortgage holders.
  
  According to court documents filed [] in the U.S. District Court for the Northern District of Georgia, the conspirators agreed not to compete against each other at public real estate foreclosure auctions, artificially suppressed the prices of properties sold at these auctions, and made and received payoffs from each other. As a result, the conspirators seized money that otherwise would have gone to pay off the mortgage and other secured debt holders, and, in some cases, to the previous owner of the foreclosed home.
  
  ***
  Including the individuals pleading today, 20 defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Eighteen of those have either pleaded guilty or agreed to plead guilty.
  
  ***
  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.

Source: Two Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Home Foreclosure Auctions.

Florida Appeals Court Stiffs Successful Foreclosure Defendant Out Of Court-Awarded Prevailing Party Legal Fees; Failure To Plead Appropriate Statute Sinks Request

From a post on law firm Shutts & Bowen, LLP's Florida Commercial Real Estate Litigation Blog:

• Litigation is expensive. If you get sued, winning the case can still be a loss if you can’t recover your attorneys fees from the other side.
  
  Mortgages usually contain a “one-way” fee provision requiring the borrower to pay the lender’s fees if it wins the case, but not the other way around if the lender loses. But Florida has a law, F.S. 57.105(7), that permits courts to treat one-way fee provisions as reciprocal:
  
  “If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This subsection applies to any contract entered into on or after October 1, 1988.”
  
  While the cited language is permissive, not mandatory (the court” may,” not “shall” award fees to the other party), courts generally do award fees if the other party wins the case. So when a borrower wins a foreclosure case, he or she usually gets a judgment for attorneys fees against the losing lender.
  
  But what happens when a defendant (here, the wife) claims she didn’t sign the note or mortgage? If she wins, can she still get her fees from the lender under the mortgage’s fee provision?
  
  According to a recent Florida appellate ruling, the answer is “No.” In Florida Community Bank, N.A. v. Red Road Residential, LLC, 41 FLW D1358a (Fla. 3rd DCA 2016), the lender sued a business and its husband-and-wife owners, who had purportedly mortgaged their property to secure the loan. But the wife denied signing the mortgage, arguing that it was fraudulent. After the lender dropped the wife from the suit, the trial court ordered the lender to pay her attorneys fees under the mortgage’s prevailing party fee provision.
  
  On appeal, the Third District Court of Appeal reversed the wife’s fee award, explaining that because she won the case by claiming she wasn’t a party to the mortgage, she had no right to rely on that mortgage’s fee provision.
  
  The court noted there may be other possible ways to win a fee award under the right facts. But to get fees based on a one-way fee provision based on the reciprocal fee statute, F.S. 57.105(7), one must to be a party to the contract.(1)

Source: Sometimes even when the borrower wins, she still loses.

See also, Fighting Attorney Fee Demands for Dismissals in Florida for more on the traps facing successful foreclosure defendants in Florida when seeking court-awarded prevailing party legal fee awards.

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

(1) The Florida appeals court made this observation when reaching its conclusion that the prevailing foreclosure defendant was not entitled to an attorney fee award:

• Our decision should not be construed to prevent a party sued on a contract from ever recovering prevailing party fees when the party's defense is that the defendant was not a party to the subject contract.
  
  Both Florida's offer of judgment/proposal for settlement scheme, codified in section 769.68 of the Florida Statutes and rule 1.442 of the Florida Rules of Civil Procedure, and the sanction provisions found in section 57.105, provide potential, substantive fee recovery mechanisms that might be applicable to a defendant asserting a non-party defense. Additionally, in a situation where a defendant unsuccessfully asserts that she is not a party to a contract, yet otherwise prevails in the action, section 57.105(7)'s reciprocity entitlement might be applicable.
  
  IV. Conclusion
  
  Only the parties to a contract may avail themselves of section 57.105(7)'s entitlement to attorney's fees. The burden lies with the prevailing party to establish, as a threshold matter, her status as a party to the contract. When, as here, a defendant employs a defense strategy premised on the defendant's status as a non-party to the contract, it is very difficult for the prevailing party to meet this burden and avail herself of section 57.105(7)'s reciprocity entitlement.

See also, HFC Collection Center, Inc. v. Stephanie Alexander, 2016 WL 1600324 (Fla. 5th DCA April 22, 2016). In Alexander, the court held that the borrower could not use Florida Statute §57.105(7) as a basis for an attorney's fees award after her counsel successfully proved that the plaintiff was not the assignee to the credit card agreement between the lender and the borrower. Since there was no contract between them, the borrower was estopped from relying on the contract to obtain an attorney's fee award based on the terms of the contract.

This holding can be used in a similar fashion with a mortgage. As discussed above, a mortgage typically has a clause allowing for the lender to recover attorneys' fees and costs. If the court, however, finds that a plaintiff failed to prove it has standing to foreclose a mortgage, a borrower should be estopped from seeking attorneys' fees and costs against a plaintiff based on that mortgage due to the lack of standing of the plaintiff. Reference: Fighting Attorney Fee Demands for Dismissals in Florida.

Court OKs NC AG's $9+ Million Settlement w/ Online, Payday-Type Lender Accused Of Peddling Excessively-High Interest, 'Fast Cash' Loans, Using "Rent-A-Tribe" Racket To Purportedly Claim Federal Sovereign Immunity From State Usury Laws

From the Office of the North Carolina Department of Justice:

• North Carolina consumers who took out loans from online fast cash lenders CashCall and Western Sky will share more than $9 million in refunds under a settlement approved by the court, Attorney General Roy Cooper and Commissioner of Banks Ray Grace announced today.
  
  “Instead of pulling you out of the ditch, these kinds of loans sink borrowers deeper and deeper in debt,” Cooper said. “North Carolinians who fall prey to these unfair and unlawful loans deserve relief.”
  
  “We expect those who lend to North Carolina consumers to do so legally,” said Grace. “The defendants sought to circumvent the law in order to charge consumers illegal fees and interest rates resulting in a cycle of debt. This hurts not just consumers but other licensed lenders that abide by the law.”
  
  In December 2013, Cooper and the North Carolina Office of the Commissioner of Banks filed suit against CashCall, Western Sky and related companies for violating North Carolina laws that ban excessive interest rates on small consumer loans.
  
  According to the complaint, financially strapped North Carolina consumers who took out personal loans of $850 to $10,000 from the defendants faced annual interest rates of 89 to 342 percent, far in excess of rates allowed under state law. In August 2015, at the request of Cooper and the Commissioner of Banks, the court banned the companies from making or collecting on loans in North Carolina.
  
  Cooper said he was encouraged by a proposed new federal rule that gives more protections to borrowers nationwide but warned the rule is weaker than North Carolina’s law which outlaws payday lending. Currently there is no federal rule on payday loans. Though the proposed rule doesn’t preempt state law it fails to cap interest rates or give consumers the same protections afforded to members of the military.
  
  “Though our state’s laws are stronger, tougher rules for payday lenders just over state lines could help protect North Carolina borrowers who seek loans outside state borders,” Cooper said.
  
  ***
  The settlement marks North Carolina’s first successful effort to ban an online payday-type lender that tried to evade the law by claiming affiliation with an Indian tribe.(1) The case is expected to help the state enforce its lending laws against other violators operating online.

For more, see CashCall, Western Sky to pay NC $9 million plus for illegal loans (Online fast cash lender that charged excessive interest rates now banned from business).

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

(1) See State v. Western Sky Financial, LLC, 2015 NCBC 84, paragraph 18:

• Plaintiff alleges that “Defendants employ what is known as a rent-a-tribe scheme, in which unlicensed lender CashCall makes usurious consumer loans, . . . , by purporting to affiliate with an Indian tribe to claim federal tribal sovereign immunity.”

See generally, Business Court Enjoins Enforcement Of High Interest Rate Loans Made By American Indian-Related Business.

Trump Digs In His Heels In Fight To Keep His Deposition Videos In Trump University Litigation From Being Released To The Public

In San Diego, California, Courthouse News Service reports:

• Donald Trump [last week] called for the same treatment Hillary Clinton gets when it comes to privacy and litigation, comparing multiple class actions against Trump University to the litigation Clinton faces over her email scandal.
  
  In a brief filed late Monday [June 27] in support of amending the protective order covering two Southern California class actions brought by former students of now-defunct Trump University, the presumptive Republican presidential nominee claimed there is no "legitimate reasons" his deposition videos should be made available outside the courtroom.
  
  Trump also pointed out that courts "regularly protect" dissemination of video depositions, including for "public figures in cases of public interest."
  
  Case-in-point, Trump argues, is the current case against presumptive Democratic presidential nominee Hillary Clinton, where the videotaped deposition of her political aide was protected.
  
  "A district court recently considered a similar issue relating to the video deposition of a Hillary Clinton aide on a politically charged subject and refused to release the video of the deposition because a transcript was available," Trump pointed out.
  
  "There is no reason for a different result in this case."
  
  Clinton's aide feared release of her deposition video would allow others to "manipulate her testimony, and invade her personal privacy, to advance a partisan agenda," Trump argues in requesting "the same reasoning and result."
  
  Trump has not only dug in his heels to prevent the public release of his deposition videos taken in late 2015 and earlier this year, but he has also requested that U.S. District Judge Gonzalo Curiel make the protective order even more restrictive: The candidate wants to prohibit the filing of any videotaped deposition unless it remains under seal, and bar the dissemination of any videotaped deposition.
  
  Trump's request comes amidst mounting pressure from a host of media outlets who have intervened in the case in order to get Trump's deposition videos released. The videos were filed along with hundreds of other documents and exhibits by plaintiff Art Cohen in his opposition papers to Trump's motion to dismiss that case.
  
  ***
  Trump said that disclosing the videos "would not further promote public understanding of this case," and claims there are no "secrets" hiding in the tapes, as the deposition transcripts are already available.
  
  But, the media outlets argue — with the plaintiffs' support — that releasing the videos will show Trump's nuances including facial expressions and gesticulating, which adds the context needed to fully understand his deposition answers.

For more, see Trump Cites Clinton Emails in Fight to Keep Videotapes Secret.

Trump's Downtown NYC Office Tower: A 'House Of Fraud' For Thieves, Boiler Room Rackets & Penny Stock Schemers???

In New York City, The Real Deal (New York) reports:

• At a presidential primary rally in Maine earlier this year, Donald Trump said that those who have mocked his failed businesses “don’t want to talk about 40 Wall Street.” The 72-story Financial District office tower is home to “many of the top-notch businesses in the world,” the presumptive Republican nominee has said.
  
  A Bloomberg report [recently] told a different story. The news outlet reported that ever since Trump took control of the building in 1995, it has housed “frauds, thieves, boiler rooms and penny-stock schemers.”(1)
  
  “[N]o U.S. address has been home to more of the unregistered brokerages that investors complain about, according to the Securities and Exchange Commission’s current public alert list,” said the Bloomberg article. The building is said to be the most valuable in Trump’s real estate portfolio.
  
  According to Bloomberg, there are more than two dozen alleged and confirmed schemes, scams and examples of regulatory malfeasance tied to the building. Among them is New York state Attorney General Eric Schneiderman’s case against Trump University, which was headquartered on the building’s 32nd floor before it shuttered.
  
  The building also housed the offices of real estate lawyer Luigi Rosabianca, who is facing up to 12 years in prison after pleading guilty to grand larceny.
  
  The average rent at the building is $36 per square foot, roughly $20 less than the average asking price in the area, the news outlet said.
  
  In response, Trump’s son Donald Trump Jr. said asking prices at 40 Wall Street exceeded that of comparable Downtown buildings, but he did not specify what the comps were.
  
  “40 Wall’s average annual rent continues to achieve a record of immense success with 97 percent occupancy, a vacancy rate virtually unheard of in Downtown Manhattan,” he wrote.

Source: Trump’s 40 Wall Street is full of “frauds, thieves and … schemers”: report (A look at office tower's history of tenants with sketchy rap sheets).

For a video, see The crooked tenants of Trump's 40 Wall Street.

For the Bloomberg story, see Inside Trump’s Most Valuable Tower: Felons, Dictators and Girl Scouts.

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

(1) Among the rackets (as was reported in an earlier post), both alleged and confirmed, that have used The Trump Building at 40 Wall Street in downtown New York City as a mailing address was an upstate New York real estate operator who is suspected to have used forged deeds to hijack title to real estate in a racket police believe could involve as many as 80 foreclosed properties in seven Capital Region and Hudson Valley counties. See Albany Times Union: State Police probe fake deed scheme.

Trump Baja Illustrates Pattern In Presidential Candidate's Business Record Of Leaving Long Trail Of Angry Customers & Vendors

A recent story in the Los Angeles Times describes the financial disaster that befell about 250 apartment buyers who bought into the now-defunct Trump Baja hotel-condominium project in Mexico, thirty minutes south of San Diego, that never got off the ground, and ties the failure to some of the other high-profile failures that have left unwitting people extremely unhappy, to say the least, when doing business with Donald Trump. An excerpt:

• The Trump Baja fiasco(1) fits a pattern in the Republican presidential candidate’s business record. Over decades of building a business empire in real estate, casino gaming, golf resorts, reality television and the sale of clothing and other merchandise, Trump has left a long trail of angry customers and vendors who accused him in court of cheating them.
  
  Condo buyers at troubled Trump towers in Tampa and Fort Lauderdale, Fla., claimed in lawsuits that they too were misled and lost deposits. Students at the defunct Trump University say in fraud suits that they wasted money on worthless real-estate training. Trump’s string of business bankruptcies has stuck suppliers with unpaid bills and banks with uncollectible debts.
  
  Trump has denied wrongdoing in every case, and he argues in the campaign that his success as a businessman qualifies him to run the country.
  
  Most of the Trump Baja condo buyers accused Trump and two of his adult children, Ivanka and Donald Trump Jr., of duping them into believing that Trump was one of the developers, giving them confidence that it was safe to buy unbuilt property in Mexico.
  
  “We were conned out of $140,000 in cash,” said buyer Sandra Sapol, 46, of Carlsbad. “That was hard-earned money, down the drain.”

For more, see Trump's failed Baja condo resort left buyers feeling betrayed and angry.

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

(1) See Trump Baja venture leaves buyers high and dry (Deposits totaling $32.2 million are lost in the collapse of the celebrity developer's hotel-condo project).

Tennessee Lawyer Gets Bar Boot While Awaiting Sentencing On 15 Felony Counts Involving $298K+ Swindle Of Unwitting Clients' Settlement Cash

In Nashville, Tennessee, The Tennessean reports:

• A Nashville lawyer facing criminal consequences for stealing money from clients was disbarred [] by the Tennessee Supreme Court and can no longer practice law.
  
  John L. Lowery, 50, was disbarred June 24 for violating eight rules on communication, safekeeping of funds and misconduct, among others.
  
  "Mr. Lowery settled nine cases without his clients’ knowledge or consent, signed their names to settlement checks without their permission, misappropriated the settlement funds and made misrepresentations to the clients to make them think their cases were progressing normally," a news release from the Tennessee Board of Professional Responsibility says. The board oversees lawyer conduct and discipline in the state.
  
  Lowery's lack of work in another case led to it being dismissed and he did not tell his client, according to the board.
  
  Lowery can petition to have his license to practice law reinstated if he pays more than $298,000 restitution to his clients and more than $1,000 in fees to the board, according to Disciplinary Counsel Bill Moody.
  
  In the separate criminal case, according to the news release, Lowery pleaded guilty to seven counts of theft and eight counts of forgery. His sentencing is scheduled for July 29 before Nashville Criminal Court Judge Steve Dozier.

Source: Nashville lawyer disbarred amid criminal theft case.

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

(1) The Tennessee Lawyers’ Fund For Client Protection was established to reimburse claimants for losses caused by dishonest conduct committed by lawyers duly licensed to practice in Tennessee. See Tennessee Supreme Court Rule 25 for more information.

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.

Nassau County DA: Long Island Lawyer Swindled Client Out Of Over $120K In Proceeds From Divorce Settlement

From the Office of the Nassau County, New York District Attorney:

• Nassau County District Attorney Madeline Singas announced that a Mastic lawyer was arrested [] for allegedly stealing more than $120,000 from her client between April 2011 and January 2015.
  
  Barbara Maleno, 55, of Mastic, was arraigned [...] and charged with Grand Larceny in the 2nd Degree (a C felony). [...]. Maleno faces up to 5 to 15 years in prison if convicted.
  
  “Attorneys are ethically bound to act in the best interest of their client, but this defendant betrayed that trust when she allegedly stole more than $120,000 from a client who was going through a divorce,” said DA Singas. “We will aggressively prosecute this case and seek restitution for the victim.”
  
  DA Singas said that in March 2009, the victim signed a retainer with Maleno for the defendant to represent her in connection with a matrimonial action. The victim allegedly paid Maleno, who has an office in Woodbury, a retainer fee of $1,500 and $500 to cover court costs. The attorney allegedly then told the victim that there would be no additional costs or fees associated with Maleno’s representation as she was working on the case pro bono.
  
  Two separate checks, as part of the matrimonial case, were allegedly paid to the defendant on behalf of the victim in the amounts of approximately $84,543 in April 2011 and $81,068 in September 2011.
  
  About two and half years later, in March 2014, the victim contacted Maleno to request her divorce settlement funds of approximately $165,611, but Maleno allegedly did not comply.
  
  The defendant allegedly wrote numerous checks from her escrow account, without any memo notation and the checks were deposited into another account belonging to the defendant. By January 2015 the account allegedly had a balance of $2.29.

Source: Mastic Attorney Arrested for Stealing More than $120,000 from Client (Barbara Maleno faces up to 5 to 15 years in prison).

Disbarred Lawyer Gets Six Month Prison Time, Six Month House Arrest, Ordered To Participate In Drug Testing & Treatment For Pilfering $150K+ Of Entrusted Funds While Acting As Bankruptcy Trustee For Debtor

In Jacksonville, Florida, The Florida Times Union reports:

• A federal judge sentenced a 38-year-old Ponte Vedra Beach man who practiced law in Atlantic Beach to six months in prison for embezzling about $151,000 as the trustee for a debtor during a bankruptcy case in 2015, according to the U.S. Attorney’s Office.
  
  William Reid Penuel also was ordered to pay $151,239 in restitution, and after completing the prison term he must serve six months of home detention as part of a three-year supervised release, according to the U.S. Attorney’s Office.
  
  He also was ordered to participate in ongoing drug testing and treatment as part of the supervised release.
  
  Penuel assumed responsibility for about $909,000 in estate funds as the trustee for Premier Bank Holding Co. and deposited the money into his bank account, prosecutors said. The funds were authorized by the bankruptcy court to pay certain expenses, but Penuel started to divert the funds for his own use. He made withdrawals and deposited the funds into other accounts that were in his control and withdrew the funds once they were in those accounts.
  
  Penuel pleaded guilty to embezzlement in March and was disbarred from practicing law by the Florida Bar [] in April.

Source: Disbarred Atlantic Beach lawyer sentenced to six months for embezzling about $151,000.

Rhode Island Lawyer Cops Plea To Stealing $25K+ From 91-Year Old Client Living In Convalescent Facility For Whom She Held POA; Defendant Conditionally 'Buys Out' Of Prison Time, Gets 8-Year Suspended Sentence w/ Probation By Coughing Up Cash In Advance To Make Good On Pilfered Loot

In Providence, Rhode Island, the Providence Journal reports:

• Bristol attorney Humberta Goncalves-Babbit pleaded no contest [] in Superior Court to stealing more than $25,000 from a 91-year-old man for whom she had durable power of attorney. Her law license has also been suspended.
  
  Goncalves-Babbit entered her plea to one count of misappropriation of over $1,000 before Superior Court Justice Kristin Rodgers, according to a statement from the office of Atty. Gen. Peter F. Kilmartin.
  
  Under terms of the plea agreement, Goncalves-Babbit was sentenced to eight years suspended with probation and ordered to pay $26,066.34 in restitution in advance of [last week's] proceedings.(1)
  
  The state had been prepared to prove at trial that between June 19, 2012 and Jan. 11, 2014, Goncalves-Babbit "failed to properly perform her duties by not paying certain living expenses for the victim," who lived at a Warren convalescent facility, the statement from the attorney general's office said.
  
  The Alliance for Better Long Term Care filed a complaint with the Rhode Island Judiciary Disciplinary Committee. After an investigation, Chief Disciplinary Counsel David Curtin suspended Goncalves-Babbit's license to practice law in Rhode Island and turned the case over to the Rhode Island State Police Financial Crimes Unit.

Source: Bristol attorney sentenced for stealing from 91-year-old client.

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.[...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.

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

(1) The Rhode Island Bar Association Lawyer's Fund For Client Reimbursement was established to provide a public service and to promote confidence in the administration of justice and the integrity of the legal profession by providing some measure of reimbursement to victims who have lost money or property because of theft or misappropriation by a Rhode Island attorney, and occurring in Rhode Island during the course of a client-attorney relationship.

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.

NJ Supremes Give Lawyer w/ Dubious Past Bar Boot For Pilfering $15K Of Client Escrow Money That Was To Be Held In Attorney Trust Account

In Midland Park, New Jersey, The Record reports:

• A lawyer who practiced in Midland Park has been disbarred by the state Supreme Court for taking $15,000 in client funds for his own use.(1)
  
  The lawyer, William E. Gahwyler Jr., also was accused of other ethical violations, including continuing to practice law even after a 2013 suspension for allegedly falsifying real estate closing documents.(2)
  
  According to the court’s disciplinary review board, one of his clients while he was suspended was Alla Shapiro, owner of the Woodhouse Spa in Montclair. She was in a dispute with her landlord over a water leak, and had withheld $15,293 in rent. That money was placed into a trust account with another lawyer, to be held until the issue was resolved.
  
  Shapiro moved the case to Gahwyler, and in spring 2014, her earlier lawyer sent Gahwyler a check for the withheld rent. He requested that it be placed in Gahwyler’s attorney trust account. But, according to the disciplinary review board, Gahwyler placed it in his business account, which he also used for personal expenses.
  
  By early 2015, the leak was fixed, and the tenant and the landlord asked Gahwyler to pay the $15,293 in back rent to the landlord. But Gahwyler did not send the money, according to the disciplinary review board. In April 2015, according to the board, Gahwyler admitted to the state Office of Attorney Ethics “that he had used the escrow monies for his personal purposes, including, but not limited to, the payment of credit cards, auto loans, IRS payments, and other personal expenses.”

Source: Midland Park lawyer disbarred by state Supreme Court.

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.[...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.

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

(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.

(2) Gahwyler is the same lawyer who was found liable in a lawsuit filed in a New Jersey bankruptcy court for his role in a foreclosure rescue ripoff. See Foreclosure Rescue Operator, Closing Attorney Found Jointly Liable For $690K+ In Bogus Sale Leaseback, Equity Stripping Ripoff.

Stung By Undercover Phone Calls From State AG's Office, Two NYC Real Estate Brokerages Agree To Cough Up $1,500 Each In Fines, Promise To Never Again Discriminate Against Prospective Tenants Who Use Gov't Subsidies To Pay Rent

In New York City, The Real Deal (New York) reports:

• Two residential brokerages accused of discriminating against low-income tenants agreed to change their practices amid an investigation by New York’s Attorney General Eric Schneiderman.
  
  The AG’s office claims that the firms, Rapid Realty Bedford Stuyvesant and Lori & Associates LI Realty Inc., refused to help New Yorkers on housing vouchers find apartments, Politico reports.
  
  The two firms also agreed to pay $1,500 each in fines, Politico reported.
  
  Undercover AG Staffers in several instances called the brokerages. After the callers disclosed they were on the voucher program Living in Communities, which helps homeless victims of domestic violence secure apartments, they were turned away.
  
  According to documents provided to Politico, the AG’s office concluded that Long Island-based Lori & Associates “caused multiple instances of unlawful discrimination in housing rentals on the basis of lawful source of income in violation of (state law).”(1)
  
  Lori & Associates also agreed to oversight from Schneiderman’s office.
  
  According to Politico, a caller asked a Rapid Realty agent about using the LINC III voucher for an apartment in Brooklyn. The agent, Schneiderman said, referred her to another Rapid Realty agent, telling the caller “I do not know if the landlord is accepting LINC for that one. The listings that I have don’t have anything to do with programs.”
  
  In 2014, brokerages Absolute Properties, Brownstone Real Estate and Destination Real Estate paid penalties following similar allegations.
  
  Gov. Andrew Cuomo announced in February that the new Fair Housing Program would identify landlords, brokers and sellers who discriminate against potential tenants based on race, disability, economic background and sexual orientation.(2) He said brokers believed to be engaging in discrimination could have their license revoked.

Source: AG fines two brokerages for discriminatory practices (The firms had turned away applicants on housing vouchers).

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

(1) While New York City is among a number of cities/municipalities in the state that have passed local laws/ordinances prohibiting discrimination in housing on the basis of lawful source of income (which includes government vouchers as well as any legitimate occupation), I know of no statewide law in New York that prohibits this type of discrimination.

(2) See Cuomo will use undercover agents to tackle landlords, sellers involved in housing discrimination (And he's coming after brokers too). Section 8.

Los Angeles City Attorney Files Six Criminal Misdemeanor Charges Against Landlord Accused Of Invoking State's Ellis Act To Illegally Boot Rent-Controlled Tenants Out Of 4-Unit Building, Then Peddling 'Short-Stay' Rentals Thru Airbnb

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

• After years of watching the supply of affordable housing plummet, evictions and demolitions surge and landlords score quick profits with short-term rentals, Los Angeles officials are striking back.
  
  For the first time, the city attorney’s office has filed criminal charges alleging that a building’s owners offered units for rent on Airbnb after booting out tenants, officials said [recently].
  
  The misdemeanor charges, along with civil suits filed against the owners of three other buildings, are intended to send a signal to other landlords breaking city rent control laws as L.A. confronts an affordable-housing crisis.
  
  “Given that shortage of affordable housing, illegally converting rental units to hotels or short-rentals has got to stop,” City Atty. Mike Feuer said at a news conference Monday. “My office is going to intervene to preserve rent-stabilized units and restore those units when we allege they’ve been unlawfully taken off the market.”
  
  It’s unknown how many illegal short-term rentals are operating in L.A., but Feuer said his office has made it a priority to investigate such complaints.
  
  Carol J. Alsman and LSJB Investments LLC, who own a four-unit building at 500 N. Genesee Ave. in the Fairfax district, were charged last week with six misdemeanor counts of violating city zoning, building code and rent-control laws.
  
  The complaint alleges that they evicted tenants under the Ellis Act, a state law that allows landlords to get out of the rental business. The law requires landlords to pay for relocation fees and notify tenants if they intend to re-rent the units within five years.
  
  The owners later rented those units for more than $550 a night through Airbnb and failed to allow former tenants an opportunity to re-rent those units, the complaint alleges.
  
  “Obviously there is a great profit to be made if you could, on your whim, change your apartment unit into a nightly hotel rental,” Feuer said.
  
  The cases underscore the depths of the city’s housing crisis. More than 1,000 rent-controlled apartments in the city were removed from the market last year — a nearly threefold increase since 2013, an analysis of housing data found earlier this year. Evictions from such units have doubled over the same time.
  
  Across L.A., more than 20,000 rent-controlled units have been taken off the market since 2001, city records show.
  
  Tenant advocates say the removal of such units has hurt the supply of affordable housing at a time when L.A. has become one of the least affordable cities in the country.
  
  Three evicted tenants sued the owners of the Genesee building last year after they noticed their units listed on Airbnb weeks after they moved out. The civil case is still pending.
  
  ***
  Tenants in rent-controlled buildings have strong protections against eviction to ensure landlords can't kick them out to charge higher market rents.
  
  But under the Ellis Act, passed in 1985, landlords are able to evict tenants if they intend to either take the housing off the rental market or demolish the building to put up new apartments.
  
  The practice has sparked a backlash in Los Angeles and San Francisco. Efforts in recent years by state legislators to amend the law failed amid opposition from the real estate industry.
  
  The San Francisco city attorney’s office in 2014 filed civil suits against owners of two rent-controlled properties for evicting tenants and illegally converting them to short-term rentals. The landlords settled last year for nearly $400,000, according to the city attorney’s office.
  
  On Monday, Feuer also filed civil suits against the owners of three rent-controlled apartment buildings, alleging that the property owners are illegally operating and advertising them as hotels.
  
  They include two properties on Ocean Front Walk in Venice and one on North Van Ness Avenue in Hollywood. The three buildings have more than 120 units, according to the city attorney’s office.
  
  The lawsuits seek a court-appointed receiver to operate the three properties until they are brought into compliance, as well as restitution and civil penalties.
  
  Renting out apartments or houses for short stays is illegal in many residential areas, according to city planning officials. The housing department received dozens of complaints about "illegal usage" of apartment buildings last year, officials said.

For more, see L.A. apartment owners charged with allegedly evicting tenants, then renting their units via Airbnb.

Already Facing Medicaid Fraud Charges, Brooklyn Landlord Who Operated So-Called Transitional/Sober Homes Gets Pinched Again For Illegally Booting Vulnerable Residents Without Court Order

In Brooklyn, New York, the New York Daily News reports:

• The owner of a three-quarter housing company — already accused of running a Medicaid fraud scheme — was arrested [again] for illegally kicking out tenants.
  
  Back on Track, Inc. owner Yury Baumblit, 65, and his employee Edwin Elie, 42, illegally evicted at least 10 tenants who rented space in their so-called “transitional” or “sober” flophouses, prosecutors said.
  
  "These defendants are charged with taking advantage of vulnerable New Yorkers who were in need of assistance. They provided them with the opposite — allegedly evicting these tenants unlawfully," Brooklyn District Attorney Ken Thompson said.
  
  Most tenants in Baumblit’s houses, located in East New York and Crown Heights, received a shelter allowance from the New York City Human Resources Administration. Others paid the landlord in cash. The illegal evictions, which happened without a court order, took place between April 2014 and this March, prosecutors said.
  
  Elie acted under Baumblit’s supervision and enforced his orders by allegedly evicting at least six tenants.
  
  At a Glenmore Ave. location, tenants were allegedly locked out, had their property removed or had their stove destroyed to prevent them from cooking, prosecutors said.
  
  If convicted, Baumblit and Elie face up to four years in prison for the top charge of scheme to defraud.
  
  In April, the state attorney general’s office charged Baumblit and his wife, Remma, for running an alleged Medicaid kickback scheme — directing all the tenants to attend a substance abuse program, even when they did not have a substance abuse problem.
  
  If the Baumblits are convicted in the attorney general’s case, they face up to 15 years in prison.

Source: Brooklyn flophouse owner, 65, arrested for illegally evicting tenants.

For the Kings County District Attorney press release, see Owner of Three-Quarter Houses and his Employee Indicted for Fraud and Illegal Eviction for Removing Tenants from Homes (Charged with Evicting at least 10 Tenants in Systemic Scheme to Defraud; Allegedly Put Belongings on the Street, Broke Stoves and Locked Doors).

It Can Take Years To Score HUD Housing Subsidy In Steel City, But Only Four Months To Lose It As Area Landlords Give Thumbs-Down To Section 8 Renters

In Pittsburgh, Pennsylvania, the Pittsburgh Post-Gazette reports:

• It can take years to get a Section 8 voucher in Pittsburgh. But it takes just four months to lose it.
  
  Pittsburgh’s voucher waiting list has about 5,000 families on it, but once a family gets one, the clock starts ticking. The recipient must find a qualified residence within 120 days and, because of a shortage of units and willing landlords, that’s often very difficult.
  
  The Housing Choice Voucher Program, commonly referred to as Section 8, is the largest federal program for assisting low-income people to find affordable housing in the private rental market. A family that receives a voucher must find a rental unit that meets a minimum standard and can pass a quality inspection. A subsidy is then paid by the housing authority administering the program directly to the landlord; the family pays the difference between the actual rent and the subsidy.
  
  ***
  Not enough landlords
  
  “It is difficult to find a landlord willing to take a voucher in the city of Pittsburgh,” said Richard Morris, housing director for the Urban League of Greater Pittsburgh, who hears from those who have a hard time using their voucher.
  
  Dan Vitek, senior housing attorney at Neighborhood Legal Services Association,(1) represents individuals who are losing their vouchers because they were not able to find a landlord who would accept them within 120 days — the time limit a family has to secure housing before they lose the voucher.
  
  “I would say the biggest reason [people aren’t able to use them] is that there isn’t enough housing stock where they are willing to accept a voucher. In my experience over the last seven years, each year has been harder and harder for tenants to find places within the city,” Mr. Vitek said.
  
  Earl Mosley, Jr. had to leave his subsidized home in Garfield when his landlord sold the building. Since April, he has been looking for an apartment that will take his Section 8 voucher. For a time, he and his adult son were living in Mr. Mosley’s car.
  
  “I have been diligently looking, every day,” Mr. Mosley said in May.
  
  “It’s just been a nightmare,” he said.
  
  Mr. Mosley could not be reached by a reporter last week.
  
  An ‘underutilized resource’
  
  Despite the lengthy waiting list and need for vouchers, a 2015 study noted that in the city of Pittsburgh, Section 8 vouchers are an “underutilized resource.”
  
  In 2013, the Housing Authority of the City of Pittsburgh received $41.9 million in voucher funding from the federal government but spent only $29.8 million of that on voucher payments, serving about 5,000 families, the study noted. The full use of that funding could have served an additional 1,500 to 2,000 households.
  
  ***
  The limits on how much HUD will allow the housing authority to pay for what it considers a regional fair market rent, finding units that will pass inspection in an older city with aging housing stock, and a lack of willing landlords are all factors in the agency having a low voucher success rate, [Pittsburgh Housing Authority chief operations officer David] Weber said.
  
  ***
  Ebony Hobdy, who was unable to find housing within the 120-day window and is fighting the loss of her voucher, noted, “A lot of people have the same problem. There’s still people like me out there who are still looking.”

For more, see For those with Section 8 vouchers, finding suitable housing difficult (Thousands on waiting list, but not enough available units).

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

(1) Neighborhood Legal Services Association is a non-profit, public interest law firm providing civil legal assistance to poor and vulnerable Pennsylvania residents of Allegheny, Beaver, Butler and Lawrence Counties.