2015 A Banner Year For Minnesota Supremes When Hammering Lawyers In Professional Disciplinary Actions; Of Six Disbarred Attorneys, Three Got The Boot For Embezzling Client Cash

In Minneapolis, Minnesota, the Star Tribune reports:

• Minnesota lawyers set a record in 2015, but it’s nothing to boast about.
  
  Sixty-five lawyers were publicly disciplined last year, breaking the previous record of 55 set in 1990, the Minnesota Lawyers Professional Responsibility Board said in its annual report [].
  
  Among other disciplinary actions, the Minnesota Supreme Court suspended 47 lawyers in 2015, smashing the previous record of 27, set in 1990 and matched in 1995 and 1996.
  
  “I wish that we knew why there was a record year, but we don’t,” said Susan M. Humiston, who took over as director of the lawyers board office in March. “It really does appear to be the fact that more people were engaged in more serious conduct.”
  
  The office has a backlog of complaints to investigate, although it has made progress in reducing that number.
  
  Six attorneys were disbarred in 2015:
  
  • Jeremy Thomas Kramer of Owatonna lost his license for misappropriating client money, neglecting their cases, failing to communicate with them, failing to deposit all of their money into trust accounts, keeping money they gave him for filing fees, and failing to return their property.
  
  • Robert David Boedigheimer was found guilty of conspiring with his brother-in-law, a marijuana dealer based in southern Minnesota, to launder proceeds from drug sales through his St. Paul law firm.
  
  • John Tedman Heim of Rochester was found guilty of forging a client’s signature on a check and depositing the proceeds into his own business account for his own personal benefit.
  
  • David A. Overboe was found by clear and convincing evidence “to have had unwelcome sexual contact with multiple clients, including groping and exposing himself to them, and had offered to reduce his legal fees in exchange for sexual favors.” The alleged misconduct took place over 14 years. He also was found to have practiced law in North Dakota while his license was suspended.
  
  • Douglas A. Ruhland of Eden Valley lost his license as a result of his seventh disciplinary action since 1989. He represented a client with whom he had a conflict of interest without providing written disclosures and obtaining written consent; he misappropriated client funds, he failed to keep trust account records and books and he failed to cooperate with the lawyers board investigators.
  
  • Robert Andrew Huff lost his license in Minnesota after he was disbarred in Illinois, an action resulting from a 2009 conviction for conspiring to distribute a large cache of marijuana.
  
  So far, 2016 is shaping up as another busy year for lawyers in trouble. [...] As of June 14, the board reported 25 public disciplinary actions in 2016, including two disbarments, a dozen suspensions, nine reprimands that resulted in probation and two other reprimands..
  
  ***
  “Misappropriation of client funds always leads to disbarment,”(1) Humiston said. Sanctions for other kinds of serious misconduct are less predictable..

For more, see Minnesota set a new record last year for punishing lawyers (The state Supreme Court disbarred six lawyers and suspended the licenses of 47 others last year).

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

(1) The Clients' Security Fund was established by the Minnesota Supreme Court to aid those persons who suffer a loss because of dishonest conduct on the part of a lawyer during the course of an attorney-client relationship in Minnesota.

The fund may reimburse up to $150,000 for dishonest conduct committed by a Minnesota lawyer. It covers the loss of money or property resulting from lawyer dishonesty, but not because the lawyer acted incompetently, committed malpractice or failed to take certain actions.

To qualify for reimbursement, you must be able to show that the money or property actually came into the lawyer's possession and that the loss was caused by the lawyer's dishonest conduct.

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.

Florida Supremes Suspend Or Boot Seven Lawyers For Playing Fast & Loose With Their Clients' Cash

The Florida Bar, the state’s guardian for the integrity of the legal profession, has published the latest issue of its periodic gossip sheet, announcing that the Florida Supreme Court has recently disciplined 16 attorneys – disbarring five, revoking the licenses of two, suspending eight and publicly reprimanding one. Four attorneys received more than one form of discipline. One attorney was ordered to pay restitution; three attorneys were also placed on probation.

Of those 16 lawyers, the following seven have been disciplined for playing fast and loose with their clients' money, including one who pocketed upfront fees for loan modifications and foreclosure defense in Missouri, where he is not licensed to practice law:

• Angela Morton Armstrong, Palm Harbor, disbarred effective immediately, following an April 21 court order. (Admitted to practice: 2001) Armstrong was not diligent in the performance of services for which she had been retained. She accepted fees and failed to keep clients reasonably informed about the status of their cases. In numerous instances, there were no records showing that Armstrong filed bankruptcy cases on behalf of clients. (Case Nos. SC15-1407 & SC15-1418)
  
  Keirsten Klatch, Jacksonville, suspended until further order, effective immediately, following a May 17 court order. (Admitted to practice: 2011) Klatch was found in contempt for failing to respond in writing to a Bar subpoena for records and an inquiry regarding the whereabouts of a client’s funds. (Case No. SC16-567)
  
  William Todd Long, Winter Park, disbarred, effective immediately, following a May 12 court order. (Admitted to practice: 1989) Long pervasively misappropriated client trust funds, to which he was not entitled, for business expenses and for his personal benefit. He failed to respond to the Bar’s nine letters and six subpoenas requiring production of his trust account records; he misrepresented himself as a Board Certified Civil Trial Lawyer, when in fact he was not; and he improperly charged personal injury clients an administrative fee of $100 to $200. Long also failed to comply with the emergency suspension order issued by the Supreme Court of Florida that required notification of his suspension to all clients, opposing counsel, and courts to which he was counsel of record. (Case No. SC15-1739)
  
  Eric Andrew Mader, Tampa, suspended for three years, effective retroactive to June 18, 2014, following a May 19 court order. (Admitted to practice: 1997) Mader is further placed on probation for three years. Mader improperly handled a case involving the collection of a commercial debt. Additionally, Mader is not licensed in Missouri, but engaged in the unauthorized practice of law, beginning in 2012, representing Missourians in loan modification and foreclosure defense cases. He charged and received advance payment prior to fully performing all services. (Case No. SC15-2000)
  
  Robert Andrew Mogle, Davie, disbarred effective immediately, following an April 14 court order. (Admitted to practice: 2000) Mogle accepted money to represent several clients but took no significant action on the cases. He also abandoned his law practice without giving notice to clients or The Florida Bar. (Case No. SC15-1664)
  
  William Reid Penuel, Atlantic Beach, disbarred effective immediately, following an April 21 court order. (Admitted to practice: 2006) Further, Penuel shall pay restitution of $147,495. Penuel withdrew funds from an estate account without authorization. He provided no accounting of the missing funds nor has he returned the funds to the estate account. Penuel failed to appear before the bankruptcy court as ordered and was held in contempt. (Case No. SC15-1634)
  
  David Land Whigham, Tampa. The Supreme Court granted Whigham’s request for a permanent disciplinary revocation, without leave to seek readmission, effective immediately, following a May 19 court order. (Admitted to practice: 1998) Whigham had previously been placed under emergency suspension for misappropriating more than $899,000.00. Disciplinary revocation is tantamount to disbarment. Disciplinary matters pending against Whigham involved trust accounts. (Case No. SC16-428)

Source: Supreme Court Disciplines 16 Attorneys.

Note: To view discipline documents, follow these steps. Additional information on the discipline system and how to file a complaint are available at www.floridabar.org/attorneydiscipline.

Another Attorney Pleads Guilty To Using Client Trust Account As A Personal Piggy Bank, Pocketing $105K+ In Funds Meant As Security For Municipal Construction Project

From the Office of the U.S. Attorney (Scranton, Pennsylvania):

• The United States Attorney’s Office for the Middle District of Pennsylvania announced that the former Solicitor for Hazle Township, Luzerne County, pleaded guilty [] to the theft of approximately $105,586 from the township.
  
  According to United States Attorney Peter Smith, Charles Pedri, age 64, of Hazleton, entered a guilty plea [...] in Scranton to a Criminal Information which charged Pedri with theft from a program receiving federal funds. Pedri was the Solicitor for Hazle Township at the time of the theft.
  
  As set forth in the Criminal Information, Hazle Township required a company which was developing a project in the Humboldt Industrial Park in the township to complete certain specific improvements to the property, pursuant to land development ordinances. As security for the completion of the improvements, the company and Hazle Township entered into an escrow agreement.
  
  Pedri, in his capacity as Hazle Township Solicitor, signed the agreement as escrow agent. The company then paid to Hazle Township the sum of $105,586 to be held in escrow as security for the completion of the improvements. Pedri, as escrow agent, deposited the funds into his law office account.
  
  Thereafter, Pedri began withdrawing the funds held in trust and converted the funds to his own personal use. The investigation revealed that, between December 2012 and November 2013, Pedri wrote checks payable to himself, which were drawn on the Township funds. By November 2013, the funds were gone.
  
  Upon completion of the improvements in May 2014, the company requested that Hazle Township return the escrowed funds. Over a period of approximately eight months, Pedri made misrepresentations to representatives of the company regarding the status of the funds and failed to make payment. In January 2015, after the company informed Pedri it intended to file a law suit, Pedri admitted that he had converted the funds to his own use.

Source: Former Solicitor Pleads Guilty To Theft Of $105,000 Township Escrow Fund.

Another Aging Attorney Bows Out On Career-Ending Low As Feds Unseal Indictment Against Him Three Days After Bar Grievance Committee Yanks Law License; Theft/Income Tax Charges Center Around Alleged Pilfer Of An $850K Real Estate Deposit From Prospective Buyer

From the Office of the U.S. Attorney (White Plains, New York):

• Preet Bharara, the United States Attorney for the Southern District of New York, [and two other high-ranking Feds], announced [] the unsealing in White Plains federal court of a six-count Indictment of former Orange County Attorney JOSEPH G. SCALI for mail fraud, structuring cash transactions, obstructing the IRS, tax evasion, obstruction of justice, and perjury. SCALI was arrested this morning and is expected to be arraigned in federal court in White Plains this afternoon.
  
  ***
  According to the Indictment and other court filings related to this matter:
  
  From January of 2011 through August 28, 2012, SCALI, who represented the seller of two tracts of land in Pennsylvania, schemed to defraud the prospective purchaser of that real estate of the $850,000 the latter had given to him to hold in escrow by misappropriating those funds from his attorney trust/escrow account.(1)  Additionally, the Indictment charges SCALI with structuring approximately $32,000 of cash deposits to that account.
  
  ***
  SCALI, 67, of West Hartford, Connecticut, is charged with one count of mail fraud, which carries a maximum sentence of 20 years in prison; on count of structuring cash transactions, which carries a maximum sentence of five years in prison; one count of obstructing the IRS, which carries a maximum sentence of three years in prison; one count of tax evasion, which carries a maximum sentence of five years in prison; one count of obstruction of justice, which carries a maximum sentence of 10 years in prison; and one count of perjury, which carries a maximum sentence of five years in prison.

Source: Disbarred Orange County Attorney Indicted For Mail Fraud, Structuring Cash Transactions, Obstructing The IRS, Tax Evasion, Obstruction Of Justice, And Perjury.

See also, the Times Herald-Record: Town of Wallkill lawyer disbarred for professional misconduct:

• A judicial grievance committee has disbarred Town of Wallkill lawyer Joseph G. Scali, issuing a scathing decision [] that sustained 49 charges of professional misconduct against him.
  
  The Grievance Committee for the Appellate division, Second Department of state Supreme Court rejected Scali's January attempt to resign from the bar ahead of the disciplinary finding, choosing instead to disbar him. He is also ordered to refrain from practicing law in any form, appearing as a lawyer in any court. giving legal advice or holding himself out as a lawyer.
  
  The disbarment is the conclusion of a disciplinary process against Scali that's been ongoing since 2011.
  
  The Grievance Committee wrote that Scali engaged in serious misconduct, misappropriating client money from his escrow accounts, mingling client and personal funds, failing to keep or provide proper financial records, and failing to cooperate with the committee's investigation. Scali had already racked up eight admonitions and six letters of caution for similar misconduct, the committee wrote.

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

(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.
  
  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.

Alleged Financial Exploitation Of The Elderly Among Felony Charges Facing Missouri Man Accused Of Making False Promises To Do Roofing, Remodeling Work, Fleecing Seven Homeowners Out Of $20K+

From the Office of the Missouri Attorney General:

• Attorney General Chris Koster announced [] that he filed a criminal case against Donald J. Harralston in Jefferson County for multiple felony counts of financial exploitation of the elderly, stealing, and unlawful merchandising practices. Koster has joined with Jefferson County Prosecuting Attorney Forrest Wegge in prosecuting Harralston for defrauding Jefferson County consumers.
  
  Koster alleges that Harralston made false promises to do roofing and remodeling work for consumers. Harralston demanded significant upfront payment then, in most cases, performed no work and provided no materials.
  
  The total loss is more than $20,000 from seven consumers.
  
  “When our investigation reveals that a company has ripped off customers, this office will act to punish the scammer and protect Missourians,” Koster said.

Source: AG Koster files felony charges against Jefferson County man for defrauding consumers on roofing and remodeling work.

Cops Pinch Connecticut Man On Larceny Charges For Allegedly Fleecing Two Elderly Homeowners Out Of $30K+ For Home Repairs That Were Never Started

In Norwalk, Connecticut, NBC Connecticut reports:

• Norwalk police have arrested a man accused of scamming elderly residents out of thousands of dollars.
  
  Angelo Bimbo, 21, of Ponus Avenue faces larceny charges after two separate incidents. Police said the first was reported on March 15. According to police, Bimbo went to the victim’s home looking for work and agreed to do repairs. The victim paid $24,750 in checks, but the work was never done, police said. Bimbo was identified by his license, which he used to cash the checks.
  
  The second incident was reported to police on May 12. Police said another elderly Norwalk resident reported that Bimbo showed up at the victim’s home and claimed the roof had a “bubble” and that the driveway needed repairs. The victim paid Bimbo $7,000 in checks but Bimbo did not start the work, according to police. Bimbo eventually returned and the victim contacted police. Police said when they arrived Bimbo had fled the scene and abandoned a worker on the roof of the home.
  
  Police said Bimbo turned himself in [] on a warrant. He is being held on a $31,650 bond.
  

Source: Man Scammed Elderly Victims out of Thousands: Police.

NJ Woman Pleads Guilty To Theft By Deception For Pilfering $40K+ From Two Homeowners By Falsely Posing As Rep For Home Improvement Outfits & Pocketing Upfront Deposits For Repair Work

From the Office of the New Jersey Attorney General:

• Acting Attorney General Robert Lougy and the Office of the Insurance Fraud Prosecutor (OIFP) announced that a woman pleaded guilty [] to stealing more than $40,000 from two home improvement customers, including an elderly woman who hired her to repair roof damage caused by Superstorm Sandy.
  
  Dorian Leigh Dammer, 56, whose last known address was in Easton, Pennsylvania pleaded guilty to two counts of theft by deception in the third degree in a hearing before Superior Court Judge Robert B. Reed in Somerset County.
  
  Under the terms of the plea agreement, Dammer agreed to pay a total of $37,500 in restitution to the two homeowners. Additionally, the State will recommend a probationary sentence when Dammer is sentenced. Her sentence is scheduled for August 25, 2016.
  
  In pleading guilty, Dammer admitted that on two occasions she stole money from homeowners by posing as a representative authorized to bid jobs for two improvement companies that in reality she didn’t work for.
  
  ***
  Dammer admitted that in October 2013 she stole money from a Bridgewater widow who had hired her to repair roof damage caused by Superstorm Sandy. Dammer admitted she posed as an employee of Vanguard Construction and cashed three checks totaling $28,770 but never had the repairs done.
  
  Dammer also admitted that in December 2015, she posed as an employee of Majestic Exteriors to solicit a job to install windows in a Bridgewater home. Dammer admitted she cashed three checks totaling $15,000 but never had the work done.

For more, see Woman Pleads Guilty to Stealing More than $40,000 from Two Home Improvement Customers in Somerset County, Including an Elderly Woman Whose Home Was Damaged by Superstorm Sandy.

California AG Pinches Six On 135 Felony Charges For Allegedly Peddling Phony Foreclosure Rescue Racket; Defendants Accused Of Using Forged Deeds & Fraudulent Court Documents, Causing $4+ Million In Losses

From the Office of the California Attorney General:

• Attorney General Kamala D. Harris announced that six individuals were indicted and arrested on 135 felony charges for operating a mortgage fraud scheme throughout Southern California and the Inland Empire, preying on homeowners facing foreclosure. The case is being prosecuted by attorneys in the Attorney General’s Mortgage Fraud Strike Force, created by Harris in 2011 to prosecute mortgage fraud at every step of the process.
  
  Jacob Orona, Aide Orona, John Contreras, Prakashumar ("Kash") Bhakta, Marcus Robinson, and David Boyd were indicted by a grand jury on 135 felony charges, including conspiracy, grand theft, filing false or forged documents, and identity theft. All six defendants were arrested last week and one defendant, Marcus Robinson, was arraigned [], Monday, July 11, in San Diego Superior Court.
  
  ***
  The scam artists promised homeowners who were underwater on their mortgages that they could provide legal remedies to avoid foreclosure, convincing homeowners to stop making mortgage payments and instead pay them $3,500 to start with an “administrative process,” plus $1,000 every month and separate amounts to allegedly file legal documents. The defendants filed bogus petitions and court pleadings and recorded false deeds in county recorders’ offices, causing over $4 million in losses while failing to halt any foreclosures. The fraud stretched through San Diego, Riverside, San Bernardino, and Los Angeles counties.
  
  The indictment was delivered following a two-week special statewide grand jury convened in San Diego County. If convicted, Jacob and Aide Orona face over 90 years in prison; Contreras and Prakashkumar face over 70 years in prison; Robinson faces over 28 years in prison, and Boyd faces over 18 years in prison.
  
  The arrests and arraignments are the culmination of a joint investigation by the Federal Housing Finance Agency Office of the Inspector General (FHFAOIG), the Attorney General’s Financial Fraud and Special Prosecutions Section (FFSPS), the California Department of Justice Bureau of Investigation, and the Stanislaus County District Attorney’s Office, Real Estate Fraud Unit.

Source: Attorney General Kamala D. Harris Announces Arrests and Indictments by California Department of Justice Mortgage Strike Task Force (Six Defendants Indicted on 135 Felony Counts For Scam That Cost Vulnerable Homeowners $4 Million).

For the indictment, see People v. Orona, et al.

South Carolina Man Gets 63 Months After Pleading Guilty To Running Bogus Loan Modification Racket That Fleeced Over $2.2 Million From Financially Distressed Homeowners

From the Office of the U.S. Attorney (Florence, South Carolina):

• Acting United States Attorney Beth Drake stated that Shayne Harrison Smith, of Myrtle Beach, South Carolina, was sentenced to 63 months imprisonment in federal court. In July of 2015, Smith pled guilty to Wire Fraud, [...].
  
  After Smith completes the term of imprisonment, he will be on federal supervised release for 5 years. Smith was also ordered to pay $2,213,307.99 in restitution to the victims in his case. United States District Judge R. Bryan Harwell, of Florence, imposed the sentence.
  
  Information presented at an earlier hearing established that Mr. Smith was involved in a "mortgage rescue scheme." He convinced distressed home owners that he could negotiate better terms of repayment with their lenders. Mr. Smith required the victims to pay him fees which he used for his own benefit. He encouraged some of the home owners to cease communicating with their lenders and stop making payments to the lenders, because he would take care of everything. Mr. Smith never successfully renegotiated any of the mortgages.

Source: Myrtle Beach Man Sentenced on Wire Fraud Charge.

Washington State Supremes Slam Door On Banksters' Pre-Foreclosure Sale Lockouts Of Homeowners Behind On Loan Payments; Ruling Clears Way For Federal Class Action; Homeowner's Attorney: Damages Could Easily Reach Into Ten$ Of Million$

In Seattle, Washington, The Associated Press reports:

• Laura Jordan came home from work one day to find herself locked out. She had missed two mortgage payments, and the company servicing her loan had changed the locks without warning.
  
  In a ruling this month, the Washington state Supreme Court found that action illegal — a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payments.
  
  “This is criminal trespass and theft, and it should be treated as such,” said Sheila O’Sullivan, executive director of the Northwest Consumer Law Center. “There’s no basis for them to walk in and change the locks on a person’s home until they have foreclosed. It’s an important ruling.”
  
  The mortgage industry is wrestling with the significance of the 6-3 ruling, which found that provisions standard in mortgage documents around the country conflict with state law. The provisions allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned.
  
  In a friend-of-the-court-brief, the Federal Home Loan Mortgage Corporation — better known as Freddie Mac — highlighted the importance of such provisions in maintaining its collateral and avoiding blight that might harm property values in a neighborhood.
  
  But the court held that they violate state law, which prohibits lenders from taking possession of property before foreclosure. The court addressed the question at the request of a federal judge in Spokane, who is overseeing the class action.
  
  The plaintiffs’ lawyers say Washington appears to be the first state in the nation that has invalidated the provisions, and consumer advocates say other states could follow suit, or that the ruling could inspire additional class-action lawsuits.
  
  In Jordan’s case, Dallas-based Nationstar Mortgage hired a vendor to inspect her Wenatchee property in 2011 after she missed a couple of mortgage payments that year. The vendor posted a notice on the door saying the property was “unsecure or vacant,” prompting the company to have the locks changed. Jordan, a dental hygienist, argues that she was still living there, and that when she got home from work, she found herself locked out. The new key to the house was in a lockbox, and she had to call Nationstar to get the combination to retrieve it.
  
  “She could no longer access her home without going through Nationstar,” Justice Susan Owens wrote for the majority. “This action of changing the locks and allowing her a key only after contacting Nationstar for the lock-box code is a clear expression of control.”
  
  Nationstar said it was evaluating whether to ask the court to reconsider, to narrow the impact of the decision. A spokesman for Freddie Mac said the organization would not comment on the ruling.
  
  “For many years, we have followed standard industry practices regarding property preservation,” Nationstar said in an emailed statement. “Particularly if broadly construed, the decision will likely hamper loan servicers’ efforts to maintain abandoned properties and avoid blight in Washington communities.”
  
  The Northwest Consumer Law Center, which works with financially troubled borrowers to help them modify their loans or otherwise retain their properties, argued that the real reason Nationstar was quick to change locks was to prompt people to move out — making it more likely that foreclosure would proceed uncontested. Several borrowers whose locks were changed said their properties were incorrectly deemed abandoned, and that they believed they had no right to remain once the locks were changed.
  
  Clay Gatens, a Wenatchee lawyer who represents the plaintiffs, said that if properties are truly abandoned and at risk, Washington law does provide lenders a quicker alternative to foreclosure, which can take months. That’s to have a court appoint a receiver, he said.
  
  Gatens said he’s seeking damages that include the fair rental value of the class members’ properties between the time the locks were changed and the time the foreclosures were eventually completed — a period that typically spanned eight to 10 months, meaning damages could easily reach into the tens of millions of dollars, he said.
  
  “You have all this egregious behavior,” he said. “These folks are in economic distress. They don’t know what’s happened — they just know their home’s been broken into and the locks have been changed, which prompts them to move. This ruling has got broad, broad ramifications in Washington to stop this practice, but I think it will have national impact as well.”

Source: Ruling: Lender cannot suddenly change your locks if you miss mortgage payments.

For the court ruling, see Jordan v. Nationstar Mortgage, LLC, No. 92081-8 (Wash. July 7, 2016)

California Man Cons Grandparents Into Signing Over Deed To Their Home Of 56 Years, Pockets Over $400K In Refinancing Proceeds, Then Sells Premises Out From Under Them

In Thousand Oaks, California, The Acorn reports:

• Sitting on a hillside under towering pine and eucalyptus trees is the home Hank and Helen Kawecki have lived in for 56 years. But it might not be theirs for much longer.
  
  The Kaweckis, both in their late 80s, have received foreclosure notices on the 2,000-squarefoot, mid-century post-and-beam house they bought directly from the builder. In what they call the worst kind of fraud, they say their grandson took out three separate loans against the home and then tried to sell it out from under them.
  
  “I’m in a daze and we can’t sleep,” Hank said.“She’s nervous and can’t walk half the time and I’m getting like that.”
  
  The ranch-style house off Erbes Road in T.O. holds all the Kaweckis’ worldly possessions.
  
  And it holds memories of raising a family there and of the visits from their five grandchildren and five great-grandchildren. They did, however, willingly sign the deed over to their grandson, whose name they requested not be used due to ongoing criminal investigations and court proceedings. Attempts to reach him for comment on this story were unsuccessful.
  
  The trouble started two years ago, when the Kaweckis found themselves in need of money. They were thinking about getting a loan from the bank, but their grandson told them they wouldn’t be able to because they were retired. They said he suggested they sign the house over to him and he’d take out a loan against it and give them the money.
  
  “We signed the papers but we didn’t read them carefully enough,” Hank said. “We believed him and that was our mistake.”
  
  The grandson went on to convince the Kaweckis it would save them money if he kept the loan funds—about $470,000—in his account and just gave them monthly disbursements, they said. They agreed, but after a few payments, the money stopped coming.
  
  Things got worse. He put the home up for sale without telling them.
  
  Several times the grandson asked the Kaweckis to leave the house because he was having bank agents come by to assess the home to help him lower the loan payments, but in reality, he was having real estate agents and possible buyers over to view the home, they said.
  
  The Kaweckis remained unaware of the looming sale until a neighbor on their close-knit block found out by sheer chance.
  
  Art Kraft said he was talking with a Realtor about renting out his property when the agent mentioned that another house on the street was for sale—the Kaweckis’.
  
  “I had been there the day before and they didn’t mention selling their home, so I came up that day and said, ‘Hey, your house is for sale and it’s going to be foreclosed soon,’” Kraft said.
  
  The Kaweckis didn’t believe him. They asked their grandson about it and he convinced them it wasn’t on the market.
  
  It took another neighboring couple to open their eyes.
  
  Linda Emerson said she found out when two people came to her door saying, “We’re the new neighbors.”
  
  “We went over (to the Kaweckis) and said, ‘Your house has been sold,’ and they couldn’t believe it,” Emerson said.
  
  Emerson’s husband, Doug, did some online research and discovered evidence of the prior loans that finally convinced the heartbroken grandparents they’d been had by their own flesh and blood.
  
  With the help of their neighbors the Emersons, the Kaweckis were able to get a lawyer who helped stop the sale and begin a civil case against the grandson, but the couple still faced eviction.(1)
  
  “They have a lawsuit on file, and in that lawsuit they’re claiming the first deed was fraudulent . . . but lawsuits like that take a long time, they take a lot of money,” Doug Emerson said. “The problem is they could win their lawsuit, but it wouldn’t be until after they were evicted and they basically have no money, no place to go.”
  
  “The No. 1 type of reported abuse against our elders is financial,” said Marcy Snider, elder abuse program manager for Ventura County Adult Protective Services. “What we’re seeing mostly is, ‘Why don’t you quick deed the house to me?’” Snider said.
  
  In addition to home deeds, Snider’s department receives many cases of people giving full access of their bank accounts to others, perhaps to pay bills or manage the finances, without realizing the person can do whatever they want with the money in the account.
  
  “People do it because they think they’re doing the right thing,” Snider said. “Nobody expects family members to take advantage of you, but money can change people.”
  
  The county statistics—50 to 70 percent of the abuse comes from family members—match national figures, she said.
  
  In 2015, the department received more than 3,700 reports of abuse and neglect of the elderly and dependent adults. May and June this year each saw more referrals than any other month in the department’s history.
  
  The financial abuse isn’t always obvious—especially when it comes at the hands of family.
  
  For Hank and Helen, it’s catastrophic.
  
  “We’re going down,” he said. “The money we had in the bank for emergencies is almost gone.”
  
  The Ventura County Sheriff’s Office says the grandson is being investigated and that the case is ongoing.

Source: Grandson’s betrayal threatens couple’s home.

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

(1) To rescind this type of fraudulent real estate transaction, the main issue to be addressed under California law is the determination as to whether the transfer of title (ie. grant deed), and any subsequent deeds of trust / mortgages placed on the property, are absolutely void, or merely voidable, and how the equitable doctrine of bona fide purchaser (ie. one who acquires his or her interest in real property without notice of another's asserted rights in the property and therefore takes the property free of such unknown rights) interacts therewith.

Among the California court rulings that have addressed this issue is Schiavon v. Arnaudo Bros., 84 Cal. App. 4th 374; Cal.Rptr.2d 801 (Cal. App 6th Dist. 2000):

• A deed is void if the grantor's signature is forged or if the grantor is unaware of the nature of what he or she is signing. (Erickson v. Bohne, supra, "130 Cal.App.2d at pp. 555-556.)
  
  A voidable deed, on the other hand, is one where the grantor is aware of what he or she is executing, but has been induced to do so through fraudulent misrepresentations. (Fallon v. Triangle Management Services, Inc. (1985) 169 Cal.App.3d 1103, 1106 [215 Cal.Rptr. 748].) The same rules apply to the reconveyance of the property interest under a deed of trust as to the conveyance of property by grant deed. (Wutzke v. Bill Reid Painting Service, Inc. (1984) 151 Cal.App.3d 36, 43 [198 Cal.Rptr. 418] (Wutzke).).

A void deed is a nullity, invalid ab initio, or from the beginning, for any purpose. It does not, and cannot, convey title, even if recorded. The interest of a good faith purchaser under a void deed is not protected. In other words, the interests of a subsequent purchaser or encumbrancer are also void, and any action in court to declare them void can be brought at any time.

In contrast, a voidable deed conveys property and creates legal title unless, and until, it is set aside by the court. The interest of a good faith purchaser who asserts ownership under a voidable deed will be protected.

The distinction between void and voidable deeds becomes highly important in its consequences to third persons (ie. subsequent purchasers and encumbrancers), because nothing can be founded upon a deed that is absolutely void, whereas from those which are only voidable, fair titles may flow.

See:

• Unwinding An Abusive Or Fraudulent Real Estate Transaction? Determining If The Deed Is Void, Or Merely Voidable,
• More On Void & Voidable Deeds, & Unwinding Deed & Refinancing Scams,

Furthermore, in California, even in a case of a subsequent purchaser or encumbrancer who buys under a deed deemed to be voidable, said purchaser / encumbrancer will not be afforded the protection available to a bona fide purchaser if it can be shown that said purchaser knew or should have known of any unrecorded legal or equitable interests.

In the case of real property in the open possession and occupation by one other than the holder of the recorded title at the time of the title transfer, a subsequent purchaser or encumbrancer will generally be presumed to have purchased and taken a conveyance from the seller with full notice of all the unrecorded legal and equitable rights in the premises of such party in possession and in subordination to these rights. "As a general rule, possession of real property is constructive notice to any intending purchaser or encumbrancer of said property." JR Garrett Co. v. States, 3 Cal. 2d 379 (Cal. 1935). This presumption is only to be overcome or rebutted by clear and explicit proof on the part of such purchaser, or those claiming under him, of diligent, unavailing effort to discover or obtain actual notice of any legal or equitable rights in behalf of the party in possession.

Whether the subsequent purchaser / encumbrancer knew of the occupant's possession, or not, is immaterial. It is his duty to know who was in possession of the property before making the purchase, and his purchase without ascertaining the fact must be regarded as the strongest evidence of bad faith on his part. The burden of making the proper inquiry is cast upon him by the mere fact of actual possession on the part of the occupant in possession. See Scheerer v. Cuddy, 85 Cal. 270, 24 P. 713 (Cal. 1890).

If it were allowed that by failing to acquaint himself with the fact of possession on the part of another than the seller, the subsequent purchaser / encumbrancer could avoid the effect of the rule to make diligent inquiry of those in possession as to any unrecorded rights or equities they may have in the realty, he could purposely avoid any inquiry on the subject, and thereby evade the rule and its consequences entirely. Ibid.

For more, see:

• California Bona Fide Purchaser, Possession, Duty Of Inquiry,
• Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire.

Bankster Pockets Fire Insurance Proceeds To Pay Off Mortgage On Burned Down Home, Then Moves To Foreclose Anyway; Responds To Homeowner's Complaint By Purportedly Selling Loan To 3rd Party; Homeowner Left In Limbo, Sale Date Imminent

In Robertson County, Tennessee, WKRN-TV Channel 2 reports:

• A Robertson County woman is fighting to keep her former home, which burned down, from being foreclosed on after she paid her mortgage off in April.
  
  Tracye Bryant’s Cedar Hill home caught fire December 18, 2015. The home was a complete loss. Her insurance company paid the home off by sending a check directly to her lender, Bank of America in April 2016.
  
  Bryant got a copy of the cancelled check that showed it was cashed by Bank of America the next day and on the back of the check the reason printed by the bank was “Payoff.”
  
  But in May she received a statement from the bank stating her mortgage payment was late.
  
  When she called to ask why, the representative told her they needed a letter of intent to direct the money to pay off her mortgage. Bryant showed News 2 a copy of the letter she sent.
  
  She also showed a copy of an adjuster’s report Bryant said Bank of America asked for to clear the account. All of it was sent to the bank, according to Bryant.
  
  Bryant said she began getting calls from Bank of America representatives for delinquent payments. “Every time they called, I had to repeat my story that the loan was paid and I had the cancelled check,” she said. “Each time it was a different person and they would tell me that someone would look into it.”
  
  At the end of May, Bryant found out Bank of America sold her mortgage to a second party company.
  
  “I asked, ‘How can you sell a mortgage that is paid?’” she said. “They told me they could no longer talk to me about the account because the other company owns it.”
  
  Bryant contacted the other company and again had to send in all her documentation and spent weeks talking to various representatives.
  
  In June, her son said a man was on the property and told him the home was to be foreclosed on and he was hired to “clean it up.”
  
  Bryant called the second company and they showed a foreclosure date of July 19. “I can’t even think of a word,” she said. “It makes you want to sit down and cry really.”
  
  She continued, “When you lose a home to fire or whatever and the insurance pays it off, that should be it.”
  
  Meanwhile Bryant is exhausted, angry and sad because first she lost her home to a fire and now a foreclosure on her credit could cause more financial damage. “I work hard to keep my credit score high,” she said. “They are going to put that on there and the loan has been paid off.”
  
  News 2 reached out to Bank of America earlier this week.
  
  A representative told News 2 they are looking into the account. We contacted the representative again Wednesday and are still waiting to hear back.
  
  “It is hurtful,” Bryant said. “It is a lot of things and a lot of emotions. I would hate to think that they are doing this to other people.”
  
  Bryant has filed a complaint against Bank of America with the Consumer Financial Protection Bureau (CFPB). The government agency says on its website that it makes sure banks, lenders and other financial companies treat you fairly.
  
  According to the CFPB, 97 percent of consumers get a timely reply when the agency sends a complaint to the institution.
  
  In fact, Bryant got a call the day after she filed her complaint and received a letter from a Bank of America employee who said she would be the point person to handle her complaint.

Source: Woman fights foreclosure after fire destroys home.

Failure To Add/Include Hubby On Title To Home Leaves Him, Young Son Facing The Boot After Homeowner/Wife's Untimely Death & Bankster's Refusal To Offer Loan Modification

In Sacramento, California, the San Francisco Chronicle reports:

• Next month, Jose Hernandez is slated to lose his home to foreclosure. The south Sacramento home was where he and his wife planned to raise their son.
  
  But, five years after moving in, Hernandez’s wife died of complications from diabetes, leaving her husband fighting to keep the home they shared. Without her income, Hernandez fell behind on the $5,000 mortgage payment and said he was turned away from foreclosure relief programs because the home was purchased under his wife’s name.
  
  Although he inherited the property when his wife died, Hernandez is not protected by California’s Homeowner Bill of Rights, a set of regulations that require lenders to work with homeowners to help them save their homes from foreclosure. He’s not protected because his name was not on the loan or title.(1)
  
  Instead, Hernandez said he’s been lost in the lender’s maze of paperwork and people.
  
  “I must have faxed the death certificate over a dozen times,” Hernandez said. “They said they couldn’t find it. In the end, they just want to foreclose on the property.”
  
  Sen. Mark Leno, D-San Francisco, said Hernandez’s story is all too familiar. After California passed first-in-the-nation protections for homeowners in 2012, many families have been able to avoid foreclosures by modifying their home loans.
  
  Leno said those protections should be extended to spouses and children who inherit a property. His bill would require lenders to work with next of kin who lived in the home — even if they’re not listed on the deed — to help them stay in the home they shared with their deceased loved one. If they fail to do so, an heir could sue the lender, just as homeowners are permitted under the 2012 law.

For more, see Leno bill would strengthen family heirs’ homeownership rights (may require subscription).

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

(1) While there is a federal law (ie. the Garn-St. Germain Depository Institutions Act of 1982) that offers some protection to those who inherit a mortgaged home of 4 units or less (including a co-op apartment unit and a mobile home) from a deceased homeowner, there appears to be nothing in that law that specifically forces a lender to offer loan modification arrangements to the deceased owner's heirs. See Federal Law Protects Against "Due On Sale" Clauses When Inheriting Mortgaged Property From Relatives.

81-Year Old Widow On Verge Of Toppling $24 Million Orlando Timeshare Project As County Yanks Building Permit, Issues 'Stop Work' Order; Developer Misrepresented That It Owned All The Parcels Comprising Building Site Despite Fact That Widow Refuses To Sell Her Townhome

The Orlando Sentinel reports:

• Westgate Resorts was ordered today [Thursday, July 14] to immediately stop work on a $24-million timeshare project imperiled by a dispute with an 81-year-old widow who has refused to sell her condo.
  
  Orange County spokeswoman Doreen Overstreet said the order was prompted by the Development Review Committee which rescinded its approval for the new timeshare towers on Turkey Lake Road.
  
  The company had represented to county officials that it owned the properties that make up the building site,(1) but one small piece is owned by Julieta Corredor, a widow who has refused to sell the vacation home that she and her late husband bought for $154,000 about 30 years ago.
  
  Overstreet said the DRC's decision means Westgate does not have valid building permits.
  
  The company will have to win new approvals from DRC, which meets again July 27.
  
  ***
  The Development Review Committee's unanimous decision Wednesday followed a failed round of negotiations between Westgate and Julieta Corredor's sons, William and Carlos, conducted on orders of John Smogor, committee chairman, who directed both sides to "go out and talk."
  
  ***
  The company owns all the parcels on the Turkey Lake Road site except for the brothers' mother's condo, which she bought 30 years ago.
  
  Westgate lawyer David Lenox complained that the Corredor family has been unreasonable in all negotiations aimed at resolving the stalemate, saying the brothers won't state an asking price for their mother's property and have rejected other conciliatory gestures, including an apology.
  
  The company also offered to rebuild the family condo, which was severely damaged by a contractor's demolition bulldozer months ago.
  
  "There is no reason we have to be reasonable," said William Corredor, alleging the company has tried to bully them into selling. "We're not talking about somebody who just 'oops' damaged the property. We believe the property was damaged, and they as developers knew what they were doing."
  
  ***
  Corredor said a stop-work order would improve his family's bargaining position with Westgate.
  
  "Westgate pretty much knows as long as they can continue with their project they don't have to deal with us," he said.
  
  Corredor also said his family is prepared to own a condo in the long shadows of the timeshare towers.
  
  "We'll turn it into a bullying museum," he said, half joking.

For the story, see Westgate ordered to stop work on timeshare towers.

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

(1) It will be interesting to see if anyone has the guts to prosecute the developer for making misrepresentations in connections with obtaining a building permit. It wouldn't be the first time a prosecution was pursued against someone who provided false information when obtaining a building permit. See, for example, Criminal Liability For False Representation In Obtaining Building Permit.

Outfits Notorious For Using "Rent-A-Tribe" Racket (Purporting To Dodge State Usury Laws By Claiming Federal Sovereign Immunity) To Peddle Excessively High-Interest Online Payday Loans Agree To Cough Up $750K, Voids All Claims Against State Residents To Settle Another State AG Lawsuit

From the Office of the Arkansas Attorney General:

• Arkansas Attorney General Leslie Rutledge has settled a consumer-protection lawsuit against Western Sky Financial, CashCall Inc., WS Funding, Martin A. Webb and J. Paul Reddam. The entities were accused of conspiring to offer illegal payday loans online to Arkansans while claiming to be affiliated with a Native American tribe.(1)
  
  Under the terms of the settlement, the Arkansas Attorney General’s office will collect $750,000 of which $500,000 will be made available to eligible consumers. The remaining $250,000 will be deposited to the Consumer Education and Enforcement Account. The entities may not offer, fund or collect upon any loan with an interest rate in excess of the maximum rate set out in Arkansas law. Additionally, the settlement voids all current, delinquent, defaulted, charged-off or outstanding lending transaction entered into with Arkansans.
  
  “Arkansans who were in a time of need sought the online lending services of the defendants and were regrettably handed more debt,” said Attorney General Rutledge. “While traditional storefront payday lending has been eliminated in Arkansas, the risk to Arkansans from online payday lenders is quite high. My office will continue to protect consumers against these illegal activities and will notify those who are eligible to receive restitution payments under this settlement.”
  
  The lawsuit, which was filed in October 2013, alleged that the defendants offered online payday loans with interest rates as high as 342 percent, in violation of Arkansas law.
  
  Western Sky, based in South Dakota, identifies itself as a tribal entity protected by tribal sovereign immunity. However, Western Sky was not protected by tribal immunity because it was not owned or operated by a tribe. Consumers based in Arkansas, not on tribal lands, used the internet to apply for loans and sign loan documents. CashCall and its subsidiary, WS Funding, are based in California and owned by Reddam. Martin Webb, also known as Butch Webb, owns Western Sky.
  
  According to the 2013 complaint, WS Funding had an agreement with Western Sky in which Western Sky nominally originates the illegal payday loans, then assigns the loans to WS Funding for them to collect. CashCall and its subsidiaries ran virtually every aspect of Western Sky’s operations.
  
  Arkansans had been offered loans in amounts ranging from $850 to $10,000, with corresponding annual percentage rates of between 89 percent and 342 percent.

Source: Rutledge Reaches Settlement with Online Payday Lender.

For an earlier settlement with the North Carolina Attorney General, see 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).

See generally, Center for Responsible Lending: Ending the Cycle of Evasion: Effective State and Federal Payday Lending Enforcement:

• Some lenders attempt to sidestep regulations through a number of schemes, such as by claiming that affiliations with Native Nations or operating online exempt them from complying with state regulation.
  
  ***
  The scheme is structured similarly to a historic form of payday subterfuge known as "rent-a-bank,” in which non-bank lenders, such as payday lenders, partner with out-of-state banks in order to charge rates higher than what is permitted by state law.
  
  Western Sky (a non-bank company claiming tribal sovereign immunity) originated illegal payday loans over the internet, then quickly sold the loans to California-based company CashCall (or one of its subsidiaries) often before the first payment. Subsequently, the loans were serviced by CashCall (or one of its affiliated entities). Court documents revealed further that virtually all of Western Sky’s operations were controlled by CashCall. CashCall et al. claim that their association with Western Sky exempts them (and the companies servicing and collecting loans originated by Western Sky) from regulation under state law.

NYC Feds Squeeze Guilty Pleas Out Of Nine Ex-Employees Of Buffalo-Based Debt Collector Accused Of "Juicing The Balance", Using False Threats & Representations To Fleece Thousands Out Of Over $31 Million

From the Office of the U.S. Attorney (New York City):

• Preet Bharara, the United States Attorney for the Southern District of New York, announced that HEATHER GASTA, a/k/a “Heather Brez,” a former manager of a Buffalo, New York-based debt collection company (the “Company”), pled guilty [] to participating in a scheme to coerce thousands of victims across the country through false threats and representations into paying a total of more than $31 million to the Company to resolve debts these victims purportedly owed.
  
  Earlier [], COLUMBUS SIMMONS, a/k/a “Timothy Ham,” and WILLIAM CLARK, a/k/a “John Harvey,” two former debt collectors at the Company, also pled guilty for their roles in the debt collection scheme. GASTA, SIMMONS, and CLARK each pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud before U.S. District Judge Katherine Polk Failla. To date, nine former employees of the Company have pled guilty to participating in the scheme.
  
  U.S. Attorney Preet Bharara said: “As they admitted in court this week, these defendants were key members of a band of predatory debt collectors, or as they called themselves, ‘the elite team.’ Armed with telephones and a litany of threatening lies, they and others at the Company coerced thousands of desperate, debt-ridden victims to send them tens of millions of dollars. In a practice they called ‘juicing the balance,’ these defendants also falsely inflated the debt owed by the victims so they could collect even more.”
  
  According to the allegations contained in the Indictment to which GASTA, SIMMONS, and CLARK pled guilty and statements made during their plea proceedings:
  
  Between 2010 and February 2015, GASTA, SIMMONS, CLARK, and their co-defendants (collectively, the “defendants”) routinely attempted to trick and coerce thousands of victims throughout the United States into paying millions of dollars in consumer debts through a variety of false statements and false threats.
  
  The defendants, using a variety of aliases, falsely told victims, among other things, that:

• (1) the Company was affiliated with local government and law enforcement agencies, including the “county” and the district attorney’s office; 

• (2) the consumers had committed criminal acts, such as “wire fraud” or “check fraud,” and if they did not pay the debt immediately, warrants or other process would be issued, at which point they would be arrested or hauled into court; 

• (3) the victims would have their driver’s licenses suspended if they did not pay their debts immediately; 

• (4) the Company was a law firm or mediation firm and that the Company’s employees were working with lawyers, a law firm, mediators, or arbitrators; and 

• (5) a civil lawsuit would be filed, or was pending, against the victims for failing to pay their debts.

Source: Manager And Two Debt Collectors Plead Guilty In $31 Million Fraudulent Debt Collection Scheme.

Home Improvement Contractor Pleads Guilty In Scam That Bilked 11 Homeowners Out Of Hundred$ Of Thousand$ While Leaving Behind Trail Of Unfinished Renovation Projects

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

• Queens District Attorney Richard A. Brown [] announced that a 49-year-old Long Island contractor has pleaded guilty to grand larceny and other charges for home improvement scams perpetrated on Queens and Long Island residents.
  
  District Attorney Brown said, “The defendant has pleaded guilty to having defrauded homeowners out of hundreds of thousands of dollars by taking money for construction and renovation work and leaving behind a trail of unfinished renovation projects. In one instance, a Queens homeowner who had become confined to a wheelchair had her kitchen completely demolished and for nearly a year has been forced to prepare her meals in the microwave or on a hotplate because her kitchen was never rebuilt.”
  
  ***
  The District Attorney identified the defendant as Derrick Burrell (also known as James Gray), 49, of Saint Marks Avenue in Rockville Centre, Long Island. Burrell, who worked under the name of a company called “A Team Property Services,” pleaded guilty [] to two counts of second degree grand larceny and two counts of first-degree scheme to defraud before Queens Supreme Court Justice Barry Kron who indicated that he would sentence the defendant to an indeterminate term of 1½ to 4½ years in prison at sentencing on July 20, 2016.
  
  District Attorney Brown said that, according to court documents, Burrell entered into contract with nearly a dozen Queens and Long Island residents to do demolition, renovation and/or construction on their properties between February, 2009 and July, 2015 and accepted hundreds of thousands of dollars in payment. In all cases, the work was never completed, leaving the residents with either unfinished projects or projects that were never started.

Source: General Contractor Pleads Guilty To Bilking 11 Homeowners In Renovation Scams (Defendant Faces 1 ½ to 4 ½ Years In Prison At Sentencing).

Court Orders Contractor To Cough Up Over $1.1 Million For Running Home Improvement Scam That Screwed Mostly Elderly Homeowners

From the Office of the New Jersey Attorney General:

• A Superior Court Judge has permanently barred New York-based Leroy N. Brown, an unregistered home improvement contractor who did business as "B&K Masonry & Chimney," from performing home improvement work in New Jersey, and ordered him to pay $1.1 million after finding that he committed 410 violations of the State’s consumer protection laws and regulations, following an action brought by the Attorney General’s Office and the Division of Consumer Affairs.
  
  The State’s eight-count Verified Complaint, filed last December in State Superior Court in Essex County, alleged that Brown, d/b/a “B&K Masonry & Chimney,” committed multiple violations of the Consumer Fraud Act, the Contractors’ Registration Act, and related regulations by, among other things, misrepresenting himself as a registered contractor and using deceptive sales tactics, including proclamations of imminent health and safety risks, to induce mostly elderly consumers into purchasing expensive chimney repairs that were never completed.
  
  Brown failed to file a response to the Verified Complaint, resulting in Judge Donald A. Kessler granting the State’s request for entry of a Final Judgment by Default and Order. Among other things, Brown is required to pay the Division a total of $1,123,303 within ten days. That total includes $1,025,000 in civil penalties, $81,646 in reimbursement of the Division’s attorneys’ fees and investigative costs, and $16,657 in restitution to 11 consumers. Further, Brown is permanently barred from advertising, offering for sale, selling and/or performing home improvements in New Jersey, and from managing and/or owning any business in New Jersey.

For more, see New Jersey Division of Consumer Affairs Obtains Permanent Ban, $1.1 Million Judgment Against Unregistered Contractor Who Took Money from Elderly Consumers for Repairs That Were Never Completed.

One Reason So Many Veterans Are Homeless? They Can’t Afford Lawyers; VA Study Says At Least Five Of Top Ten Problems Leading To Homelessness Among Vets Can't Be Solved Without Legal Help

The Washington Post reports:

• David Garrett returned home from war to find he had no home. A disabled veteran from Maine who had served in Iraq and Afghanistan, Garrett soon fell into homelessness. After almost a year of camping out, he found an apartment he could afford by negotiating a deal in which he paid lower rent in exchange for paying four months in advance. When his landlord sold the building, the new owner said he found no evidence of Garrett’s prepaid rent and tried to evict him. Facing homelessness once more, Garrett needed a housing solution. But to get one, he urgently needed something else: a lawyer.
  
  With nearly 50,000 veterans sleeping on the streets each night, it’s clear we are failing to serve those who have served our country. But the solution isn’t as obvious as it might seem. Veterans don’t need simply more doctors and shelter beds; new research shows that veterans need lawyers to fight on their behalf as well.
  
  According to a new study from the Department of Veterans Affairs, at least five out of the top 10 problems leading to homelessness among veterans cannot be solved without legal help. The study surveyed more than 6,000 homeless veterans and service providers, asking them what services veterans need to become stably housed.
  
  The survey found that many veterans are able to secure food, medical services and substance-abuse treatment. But for problems that require legal assistance such as fighting evictions, upgrading military discharge status or restoring a driver’s license, many veterans are not receiving the help they need. Legal assistance is often critical to ensure that veterans find justice and get the benefits they have earned — and can keep a roof over their heads.

For more, see One reason so many veterans are homeless? They can’t afford lawyers (New research shows that vets are losing their homes and missing out on crucial benefits because they lack legal aid).

HUD To Begin Unloading Delinquent Mortgages In Smaller Bundles To Make It Easier For Cities, Non-Profit Groups To Help Homeowners Stay In Their Homes?

In New York City, The Associated Press reports:

• New York City is taking a novel approach to addressing enduring pockets of the home-foreclosure crisis by buying long-unpaid mortgages, with plans to help owners stay in their homes if possible or use the properties as affordable housing if not, officials say.
  
  It’s among the first cities to pursue buying such loans directly from the federal Department of Housing and Urban Development, officials say. Housing advocates and some lawmakers have pressed HUD to make it easier for cities and nonprofit groups, as opposed to investors, to buy troubled mortgages.
  
  New York announced the $13 million program []. So far, the program involves just 24 properties, containing a total of 41 homes and apartments. Officials say the cost includes millions in reserve for repairs that may not be required, and they cast the program as an experiment they hope to expand.
  
  ***
  The money is coming from the City Council, a loan from investment bank Goldman Sachs, and settlements various banks have made with state Attorney General Eric Schneiderman over lending practices. Schneiderman, a Democrat, said the program is keeping delinquent mortgages from being auctioned to entities “whose goal is to profit off other people’s losses.”
  
  Nationwide, HUD has sold about 100,000 soured mortgages at discounts in the last several years, often to private equity firms and hedge funds.
  
  Housing advocates complain the firms have been too eager to foreclose on borrowers; the firms counter that many of the homes are abandoned. HUD has said the sales can give borrowers a last chance to save their homes, but the agency also has made some changes. Among them: extending a foreclosure moratorium from six months to a year after a sale, and offering some mortgages in smaller batches, since nonprofits often can’t afford bigger chunks.

For more, see To fight foreclosure, NYC buying mortgages.

Upstate NY Housing Authority Fumbles Away $5.1 Million Of Free Federal Cash Earmarked For Rent Subsidy Vouchers For Homeless Suffering From Mental Illness, Substance Abuse, Etc.; Unspent Grants Get Forfeited Back To HUD, Which Then Added Insult To Injury By Slashing Program's Annual Budget By Nearly 75%

In Syracuse, New York, syracuse.com reports:

• The Syracuse Housing Authority failed to spend $5 million in federal grants that could have provided housing for up to 200 homeless people with mental illnesses, addictions or other disabilities.
  
  The housing authority returned $5.1 million in unspent grants from 2010 to 2015 – about $1 million per year -- to the consternation of city officials and homelessness prevention advocates.
  
  The lost money would be enough to move 200 people out of shelters and into permanent housing, according to data from the Housing and Homeless Coalition of Central New York. That would cut the local homeless population nearly in half.
  
  Syracuse Housing Authority officials say their ability to use the so-called Shelter Plus Care grants has been hampered because homeless shelters don't refer enough people to the program. Others say the housing authority is ill-equipped to work with homeless clients who need support services in addition to housing.
  
  Syracuse Mayor Stephanie Miner and leaders from the homeless coalition have urged the housing authority to make better use of the grants.
  
  Paul Driscoll, the city's commissioner of neighborhood and business development, said he does not blame the housing authority for struggling to administer the program, which requires coordination with outside service agencies. But Driscoll said the problems must get fixed.
  
  "It is inexcusable to send money back to HUD when the need exists in this town," Driscoll said.
  
  There will be less money at stake in the future. Last month, the U.S. Department of Housing and Urban Development slashed the housing authority's annual Shelter Plus Care funding from $2.6 million to $687,000.
  
  ***
  Shelter Plus Care is a small part of the operation of the housing authority, which owns 15 apartment complexes with more than 2,500 units and distributes housing vouchers to more than 3,300 other households.
  
  The housing authority does a good job managing housing-only voucher programs such as Section 8, Driscoll said. But the authority has struggled with Shelter Plus Care because of the requirement to coordinate with outside service agencies who provide the "care'' element, he said.
  
  Mental illness and substance abuse, the most common disabilities targeted by Shelter Plus Care, are common factors in chronic homelessness, experts say.
  
  ***
  The inability to coordinate support services internally has limited the housing authority's capacity to approve people for Shelter Plus Care vouchers.

For more, see Syracuse Housing Authority forfeits $5 million intended for homeless.