Saturday, November 26, 2016

Former & Current Lot-Leasing Homeowners Tag Mobile Home Park Operators With Lawsuit Accusing Them Of Harassment That Led To Illegally Booting Over 100 Residents To Make Way For New Construction

In Boulder City, Nevada, the Boulder City Review reports:
  • Current and former residents of the Boulder City Mobile Home Park on Nevada Highway filed a class action lawsuit Oct. 18 claiming that the owner and manager of the park intentionally committed harmful and negligent acts that caused the evictions of over 100 residents.

    The lawsuit is individually suing RPS Properties, the Boulder City Trailer Park and the owner of the two companies along with his business partners and family. Randy Schams, his wife Christine Schams and his daughter Jackie Schams, who manages the trailer park, are each being sued.

    The lawsuit filed by Matthew Callister, attorney for the six one-time trailer park residents, states that Randy Schams and other employees of RPS Properties and the mobile home park cut off necessary utilities without notice, put illegal liens on residents’ homes, evicted residents without proper notice and illegally auctioned off homes.

    “The tenants of the mobile home park were never properly notified of Randy Schams’ intention of dismantling the park,” Callister said. “Nothing that has been done has been in compliance with Nevada law.”
    ***
    Callister said that the Schams’ actions were fraudulent because they continued to collect rent while never properly informing park residents that Randy Schams was planning to remove them to create townhomes on the property.

    Jackie Schams said that she and her father never lied to tenants and always properly informed them of their plans for the land.

    “When my father bought the land he did intend to keep it as a mobile home park,” Jackie Schams said. “But the costs and some of the people we had to deal with made our original intent impossible. We are still having issues with squatters and drug use in the park, and when the bad outweighed the good we notified everyone that we were no longer going to keep the area as a mobile home park.”

Chicago Housing Authority Proposes Test Program That Would Cut Off Housing Vouchers To Limited Number Of Poor Tenants After Eight Years, Awaits HUD Approval

In Chicago, Illinois, Crain's Chicago Business reports:
  • The Chicago Housing Authority is preparing to roll out a pilot program that would cut off housing vouchers for some people after eight years, an attempt to nudge more recipients into the workforce and shrink the long waiting list for rental assistance.

    The CHA has asked the U.S. Department of Housing and Urban Development to approve its plan, which would impose the time limit on 100 families, a fraction of the 46,000 Chicago voucher holders today. The program also would include training and other services to prepare them for the job market.

    Though it's small, the initiative rekindles the long-running debate over the purpose of welfare programs, with conservatives saying they should provide a temporary safety net and steps to self-sufficiency and liberals saying that things like time limits don't take into account the difficult circumstances many recipients face. The proposal also comes at a time when federal housing policy is expected to take a more conservative turn as Donald Trump becomes president and changes HUD leaders.

    The CHA's goal is to determine if time limits can help voucher holders "more easily and quickly move up the economic ladder so they are no longer in need of" the subsidy, according to a statement. That could free up more vouchers for nearly 43,000 people on CHA's voucher waiting list.

    It's not an original idea. A 1996 federal welfare reform law cut off cash assistance payments to recipients after five years. Housing agencies in several other cities have established time limits and work requirements for voucher holders, with mixed results. In 2008, the CHA proposed a time limit for residents in its buildings but dropped the idea amid opposition from housing advocates.

    Under the voucher program, formerly known as Section 8, poor people can use vouchers to pay for privately owned apartments. They must pay 30 percent of their income, if they have any, for rent and utilities, with the voucher covering the rest. The program is funded by the federal government but run by the CHA.

    Critics say vouchers without time limits, job training or work requirements create a culture of dependency. Without incentives to find a job and become economically self-sufficient, many recipients live off vouchers for years while others in need languish on the waiting list, they say.
    ***
    Though many public housing authorities require able-bodied voucher recipients to work, the CHA does not. But people age 18 to 54 who live in CHA-owned or -supported public housing must work up to 30 hours a week.

    Several public housing authorities around the country have established voucher time limits. But it's hard to draw firm conclusions about how they're working because there's not much data to analyze, says Jill Khadduri, a former HUD official and now senior fellow and principal associate at Abt Associates, a research firm.
    ***
    The CHA hopes HUD will OK its time limit proposal in early 2017. It lets people who fail to get off vouchers after eight years apply for a two-year extension.

Housing Authority To Gently Boot 90 Poor Tenants Out Of Aging, Outdated Section 8 Complex; Will Not Renew Rent Subsidy Contract With HUD, Tells Residents They'll Each Get Individual Rent Vouchers & To Start Looking For Private Landlords That Will Accept Them

In Oxford, Mississippi, The Oxford Eagle reports:
  • The future of Riverside Place and its tenants has been a topic of discussion for nearly two years.

    The public housing complex, operated by the Oxford Housing Authority through the U.S. Department of Housing and Urban Development, sent out letters on Feb. 3, 2015, to roughly 90 tenants informing them the contract with the city of Oxford would not be extended. It runs out Feb. 27, 2017.

    OHA Director Jeff McClure said the buildings in the development, built in the 1980s, were in bad shape and lacked basic amenities including up-to-date plumbing and central heating and air conditioning.

    “HUD is going in a different direction,” he said recently. “They’re moving away from public housing developments and toward a voucher system. They’re going to more public-private partnerships. It’s HUD’s most dominating form of housing right now across the country.”

    Riverside residents are being asked to find a place they’d like to live, whether in Oxford, Lafayette County or another state. OHA will issue a voucher to landlords to pay the residents’ rent, as long as they continue to meet the financial requirements of OHA.
    ***
    If a resident hasn’t found a place to live by Feb. 28, their vouchers would be issued back to OHA to go toward their rent at Riverside until they find a new place.

    “We’re not kicking anyone out,” McClure said.

    Sanders said on Dec. 1, OHA will start compiling lists of landlords willing to work with the voucher system and distribute them to Riverside residents, and be prepared to start issuing vouchers Jan. 1 for those residents who move before the contract runs out.

    “No one will be out on the street,” said Alderman Robyn Tannehill. “Those rumors are completely untrue.”

Agreement Reached On Relocation Assistance To Lot-Leasing Homeowners, Others Living In Austin Mobile Home Park; Residents Get Nine Months & Some 'Walking-Away Cash' To Vacate Premises & Make Way For Upscale Apartment Complex

In Austin, Texas, the Austin American-Statesman reports:
  • Residents of the Cactus Rose mobile-home park in East Austin have reached an agreement for relocation assistance with Oden Hughes, a developer that wants to build an upscale apartment complex on the site that would displace the remaining tenants.

    Oden Hughes’ purchase of the land is contingent on a proposed zoning change. A vote on that change was scheduled at the City Council’s meeting on Thursday.

    The agreement concludes more than 18 months of talks between City Council member Sabino “Pio” Renteria, the Cactus Rose Neighborhood Association, Montopolis neighborhood representatives and Austin-based developer Oden Hughes.

    The mobile home park off of U.S. 183 near Vargas Road in rapidly gentrifying East Austin formerly housed more than 50 families, although some have moved since the developer announced plans for the project.

    Remaining Cactus Rose mobile home owners who are current on their rent will have nine months to move once they receive a notice to vacate the property. Owners living in a single-wide mobile homes will each receive $10,000 in relocation assistance. There is one double-wide mobile home currently in the park, according to the agreement, and the owners of that home will receive $20,000.

    Owners of recreational vehicles, and renters of permanent structures such as a duplex, will each receive $2,000. Residents will also receive their security deposits, as well as bilingual relocation assistance by a licensed real estate professional.
    ***
    Renteria said that as a city, Austin is “far from granting renters and mobile home residents the rights they deserve, but this is a step in the right direction.”

End Is In Sight For Mobile Home Community As Initial Phase Of Hospital Expansion Plans Requires Ten Lot-Leasing Families To Get Ready To Vacate; Residents Of Another 60 Sites To Remain In Limbo Pending Further Notice; Relocating Aging Trailer Homes An Issue For Many

In Clarkston, Washington, The Lewiston Tribune reports:
  • Malissa Beavert, her husband, and 2-year-old daughter are excited about exchanging their single-wide mobile home at Noble Park for something better.

    They're going to use $8,000 from a Tri-State Memorial Hospital subsidiary to put a down payment on a home, rent something nicer, or move to Minnesota, where a friend has a lead on work at a place that makes windows and doors, Beavert said.

    They're eligible for the money because the hospital needs them and nine other families to vacate in a year, possibly to construct a parking lot for a recently renovated medical office in the 1200 block of Highland Avenue in Clarkston. Residents of another 60 sites have more time, but the hospital isn't specifying how much.

    Anyone with a single-wide gets $5,000 if they leave their dwelling and another $3,000 in moving expenses. The offer is $2,500 more if they move their home. The money isn't a requirement, and hospital officials say it's a way of recognizing the potential hardships for those at Noble Park.

    "It was a shock at first," said Beavert, who's expecting a baby in January and is married to a supervisor of a fast-food restaurant. "We've had time (now) to adjust to the idea."

    Regardless of how fast it happens, the notices Noble Park residents received last week from a hospital subsidiary are forcing them to confront the fact they're living in a vanishing community.

    It's a place where aging but affordable mobile homes sit on lots with small yards, and neighbors help each other with everything from trimming rose bushes to offering advice.

    [One resident] may be one of those hit the hardest. She's lived at the park since she was 17 years old. [... She] is disabled after a career as an aide for children with disabilities and substitute teacher.

    She owns her 1978 mobile home outright, but doesn't know if she can find a park that will accept it. She also worries it could get damaged in the move.

    She wonders about finding a place where she can have her dog. Her niece had to pay $400 for a pet deposit recently. "I don't want to move," [she] said. "I have my yard. I have my home. I have my neighbors."
For the story, see Clarkston trailer park residents are mulling their options (Residents targeted in Tri-State Hospital expansion have different perspectives on buyout offers).

See also, The future for Noble's Mobile Home Park residents is uncertain:
  • [M]obile home owners at Noble's Trailer Park have received a notice that said the lot where their homes are parked will be sold, and many of the homes cannot be moved.

Friday, November 25, 2016

Ex-Housing Authority Employee Scores $129K In Whistleblower Lawsuit Alleging Employer Scored Free Money From Housing Feds, Then Failed To Use Funds For Its Intended Purpose; Defendants Admit No Wrongdoing, But Cough Up $710K To Make Allegations Go Away

In Fairfield, California, the Daily Republic reports:
  • The federal government said [] that Fairfield and its housing authority paid $680,000 to settle False Claims Act allegations that Fairfield received money to pay for two coordinator positions in a U.S. Housing and Urban Development department program and did not use the grant for that purpose.

    “Housing authorities that receive HUD grants have a duty to help families in need,” acting U.S. Attorney Talbert said in the release. “When families try to become self-sufficient by applying to programs like Fairfield’s family self-sufficiency program they deserve to be assisted at every step by dedicated and responsive professionals.”
    ***
    The release [] said the Fairfield Housing Authority administers the Section 8 housing choice voucher program, the homeownership program and the family self-sufficiency program, which provides case management for Section 8 families who desire to improve their earning potential and move toward financial independence and home ownership.

    According to court documents, the Fairfield Housing Authority – with the city’s approval – applied for and received federal grants from the U.S. Department of Housing and Urban Development to fund two full-time self-sufficiency program coordinators from January 2012 through November 2014. Neither the city or its housing authority employed any full-time program coordinators during that time, the U.S. Department of Justice said.

    Court documents further allege that the city housing authority violated the False Claims Act by submitting data into HUD’s voucher management system affirming that it was spending the grant funds on two full‑time program coordinators when no such coordinators were employed, the Justice Department said.

    The allegations resolved by the settlement were first raised in a lawsuit filed against Fairfield and its housing authority under whistleblower provisions of the False Claims Act, the release states. The False Claims Act allows private citizens with knowledge of fraud [committed against the federal government] to bring civil actions on behalf of the government and to share in any recovery, the release said.

    Former Fairfield Housing Authority employee David Samloff, the whistleblower who brought the case, received $129,200 in the settlement. His attorney was paid $30,000 and the total amount Fairfield incurred is $710,000.

    The claims settled by the agreement are allegations only and liability in the case was not determined, the Justice Department said.

Long Island Feds: Ex-Housing Authority Chief Pocketed $100K In Kickbacks In Connection With Fraudulently-Inflated Construction Contracts Bid-Rigging Scheme; Five Co-Conspirators Already Pleaded Guilty, Await Sentencing; Fleeced Loot Intended To Be Used For Repairs At Local Low-Income Housing Project

In Hempstead, New York, News 12 Long Island reports:
  • The former head of the Hempstead Housing Authority is facing federal charges. Former Housing Authority chairman Cornell Bozier is accused of taking $100,000 in an alleged kickback scheme. The North Baldwin man pleaded not guilty to conspiracy, theft and wire fraud in federal court [...].

    Prosecutors say the money that was allegedly taken was supposed to be used to make repairs at a low-income housing complex in the village.

    Federal prosecutors say Bozier secured a $250,000 contract for his alleged co-conspirator to replace a roof at a Housing Authority building. When the job was then subcontracted for $23,000, the FBI says Bozier’s former Housing Authority director Stacy Stackhouse and other co-conspirators pocketed the rest of the money. Stackhouse plead guilty to the charges last year.

    According to the FBI, more than $500,000 was stolen in total from the Housing Authority through the alleged bid- rigging scheme.

    Current Hempstead Housing Director Rosemery Olsen says she was brought in to clean up the corruption after Bozier resigned.

    “We've been making a lot of changes over the last three and a half years and I think that we're a good quality housing authority,” says Olsen.

    Bozier was released on $150,000 bond, and as a condition of his bond, he is not allowed to leave New York. He will also be monitored by the courts.
Source: Ex-Hempstead Housing chief faces federal charges.

For the U.S. Attorney press release, see Former Chairman Of The Village Of Hempstead Housing Authority Indicted In Connection With Bid Rigging And Kickback Scheme (As Board Chair, Cornell Bozier Allegedly Orchestrated a Scheme That Stole Over $500,000 in Federal Funds Set Aside for Low-Income Housing):
  • [A]s alleged in the superseding indictment, Bozier used his position as the Board Chair of the VHHA [Village of Hempstead Housing Authority] Board to recruit and direct co-conspirators to submit fraudulently inflated construction bids for repair projects on VHHA properties, bypass the required procurement process, and ensure that the construction contracts were awarded to companies owned or controlled by co-conspirators.

    Bozier directed the hiring of additional co-conspirators for positions within the VHHA to help facilitate the Board’s acceptance of fraudulent bids and exerted improper influence and pressure on those Board members to vote in favor of the grossly inflated bids submitted by Bozier’s co-conspirators. In exchange for these official actions, Bozier solicited and accepted numerous kickbacks during the course of the conspiracy totaling approximately $100,000.
    ***
    To date, the investigation has identified more than $500,000 that was allegedly stolen from the VHHA as a result of the charged conspiracy.

    The five co-conspirators charged in the underlying indictment have previously pleaded guilty and are awaiting sentence.

Central Florida Woman Faces Accusations Of Fraudulently Buying, Using Social Security Card To Gain Access To Public Housing, Scoring $12K+ In Federal Rent Subsidies

In Pasco County, Florida, the Tampa Bay Times reports:
  • A Dade City woman was arrested [] on a charge of public assistance fraud, accused of using a fake Social Security card to gain access to public housing, according to the Pasco County Sheriff's Office.

    Cecilia Alvarez, 33, told detectives she purchased the Social Security card for $100 from someone's home in the Dade City area, according to an arrest report. Armed with the card, Alvarez was able to move into Cypress Farms, a housing complex in Lacoochee managed by the Pasco County Housing Authority.

    The U.S. Department of Agriculture subsidizes rent for residents in Cypress Farms. Detectives said the department provided Alvarez with $12,713 in rental assistance.

    In order to be eligible for assistance, residents must be either American citizens or in the country legally. Alvarez was born in Mexico, but her legal status was not available [].

    Alvarez was released [] from the Land O'Lakes Detention Center after posting $5,000 bail.

Five Family Members Plead Guilty To Defrauding Gov't Out Of $100K In Section 8 Housing Benefits; Trial Pending For 6th Co-Conspirator; Defendants Failed To Report Income To Housing Authority, Illegally Rented Home From Landlord/Relative In Violation Of Regulations

In Santa Ana, California, The Orange County Register reports:
  • Five family members have pleaded guilty to theft- and fraud-related charges after admitting to improperly receiving more than $100,000 in government subsidies for housing assistance.

    Prosecutors said that beginning in 2003 the family members received rental assistance from the Santa Ana Housing Authority and the Orange County Housing Authority, agencies that provide rental assistance to low-income adults.

    The agreement called for the family to pay $99 a month for rent, while the remaining $1,850 was subsidized.

    However, authorities say, the family failed to report $83,000 it received in wire transfers from China, as well as money one of them got from selling suspected counterfeit merchandise.

    Authorities also allege that the family was renting a home owned by relatives, breaking another rule for receiving the housing assistance.

    On Tuesday, pleading guilty to multiple felonies were: John Giang Ly, 27, Linda Gia Ly, 23, and Thu Ha Le, 54, of Westminster; and Anh Tuyet Ly, 65, and Dong Hong Phan, 75, of Fountain Valley.

    Their sentences ranged from 14 days in jail to three years in prison. They were also ordered to pay $176,613 in restitution.

    Still awaiting trial was Thang Chinh Ly, 66, of Westminster, who was facing felony counts of perjury, aid by misrepresentation and grand theft. If convicted, Ly faces up to 13 years, four months in prison.

NYC Man Gets Pinched For Allegedly Making False Statements Used To Defraud Housing Authority Out Of $12K+ In Section 8 Rent Subsidy Benefits

In Staten Island, New York, the Staten Island Advance reports:
  • A Clifton man falsely reported he lived at a Section 8 location that led to the New York City Housing Authority (NYCHA) paying him and his landlord more than $12,000 in benefits, police allege.

    From April 2012 to March 2013, Michael Bermel, 49, used an address on Arthur Avenue in South Beach to fill out a NYCHA lease when he actually lived at an apartment on the 1900 block of Clove Road, according to allegations in court documents.

    NYCHA relied upon that false document to provide the defendant and his landlord, Douglas Candella, rent subsidies in the amount of $12,063.64 for the apartment, the criminal complaint said.

    Bermel, of Norwood Avenue, was arrested [] and charged with grand larceny in the third degree, a felony, and falsifying business records in the first degree, the complaint said.

Thursday, November 24, 2016

Lawyer Who Was Bagged For Embezzling Over $160K From Disabled Client's Trust Fund Buys Her Way Out Of Criminal Prosecution; Authorities Drop Felony Charges After Defendant Repays Filched Funds

In Pineville, Missouri, The Joplin Globe reports:
  • The McDonald County prosecutor dismissed a felony theft charge against former Oklahoma attorney Betty Pitts-Cartwright [] in light of her recent restitution of the funds she embezzled from a disabled adult client and parked in a Southwest City bank.

    Prosecutor Bill Dobbs said Pitts-Cartwright, 63, of Grand Lake, paid about $164,000 in restitution to the client whose funds she embezzled and deposited in personal bank accounts in Southwest City and Jay, Oklahoma.

    Pitts-Cartwright and two other women were charged in 2014 in Delaware County, Oklahoma, with fraudulently obtaining a $1 million-plus house on Grand Lake from her former boyfriend, a Norwegian professional boat racer. Pitts-Cartwright also faced counts of perjury in the case that forced her resignation from the bar and eventually resulted in a suspended sentence.

    Her parking of the client's funds in a personal bank account at Cornerstone Bank in Southwest City got her charged with theft in Missouri.

    Pitts-Cartwright was in charge of the client's trust fund and reportedly used a rubber stamp bearing the name of the victim's mother to sign trust account checks. Her friend and co-defendant in the theft of the funds, Donna Cupp, told investigators that Cartwright opened the account at the Missouri bank "so people in Jay would not know her business."

    A probable-cause affidavit filed in the case stated that a majority of the withdrawals from the bank account were made from automated teller machines at casinos.

Vermont Feds: Attorney Pilfered As Much As $550K From Clients, Then Began Paying It Back After He Realized State Bar Investigator Was On To Him; Victim: Sticky-Fingered Defendant Kept Crappy Records, Making It Difficult To Determine Exact Amount Of Ripoff

In Burlington, Vermont, the Burlington Free Press reports:
  • A former Winooski lawyer admitted [] he began paying back money to clients from whom he had improperly diverted funds after he learned about an investigation into his conduct.

    William M. O'Brien, 60, admitted the facts of the case as described by a federal prosecutor during a court hearing. O'Brien, a longtime lawyer who represented Winooski and the Roman Catholic Diocese of Burlington, appeared in U.S. District Court in Burlington to plead guilty to a felony charge of mail fraud. The government said O'Brien took as much as $550,000 from accounts he was overseeing for two clients.

    O'Brien's lawyer Scott McGee told federal Judge Christina Reiss that much of the missing money has been paid back, and there is money set aside to finish the process. McGee and O'Brien declined to speak to reporters outside of the courtroom but provided a written statement.

    "Mr. O'Brien also expressed his regret for misusing his trust account and for putting his client funds at risk but advised the court that all client funds are accounted for and that no client has lost any money," the statement read.

    Court papers show that O'Brien took $250,000 to $550,000 from the Thelma F. Provost Trust and from funds of deceased clients Paul and Blanche Bonnette. Court papers say O'Brien used the money "to benefit himself."

    The charging documents show O'Brien used money he earned from an unrelated case to repay the two accounts in December. Prosecutors say O'Brien was aware that an investigation into his practices already was underway.

    A relative of the namesakes of one of the trusts said [] that so many of O'Brien's records from 2001-07 were poorly kept, making it difficult to determine whether everything is accounted for. Probate Court records from the Thelma F. Provost Trust shows that extended family members attempted to remove O'Brien from the trust several times from 2001-16.

    Reiss allowed O'Brien to remain free on conditions, including that he have no contact with victims or potential witnesses. A sentencing hearing is set for May in Brattleboro.

    The Vermont Professional Responsibility Board suspended O'Brien's law license Jan. 12. McGee has said O'Brien is ending his career.
    ***
    Defense lawyer McGee said in a subsequent phone interview that O'Brien "acknowledges he did not keep the records he should have kept." "He was not keeping close track of funds in and funds out, and that was, in part, what led to the problem that developed," McGee said.
    ***
    [Victim's niece JoAnn Provost] Dusharm said she and her family feel O'Brien dishonored the memories of Thelma and Joseph Provost. She said the Provosts had no children, and extended family members had few rights when it came to the trust O'Brien managed.

    "He is getting everything he deserves," she said. "Karma has come back to bite him."
For the story, see Former lawyer O'Brien admits defrauding clients.

For the U.S. Attorney press release, see Suspended Attorney William O’Brien Pleads Guilty To Wire Fraud:
  • In early 2016, O’Brien did repay about $472,000 to these two clients, but those payments were made only after O’Brien became aware he was under investigation by counsel for the Vermont bar. The Vermont Supreme Court suspended O’Brien’s law license in January.
--------------------------
(1) The Vermont Bar Association established a Client's Secutity Fund to reimburse screwed-over clients, at least in part, for the loss of money or property occasioned by the dishonest conduct [ie. a misappropriation, embezzlement, defalcation, or conversion of money, property, or other thing of value] of a lawyer occurring within the State of Vermont. Go here for Statement of Claim Form.

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

Months After Disbarment For Playing Fast & Loose With Client's Cash, S. Florida Lawyer Faces Three Grand Theft Charges For Allegedly Screwing Clients Out Of Proceeds Of Their Lawsuit Settlements; No Pre-Trial Release Allowed Until Authorities Confirm That Any Posted Bail Money Is Clean Of Filched Funds

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • A former Fort Lauderdale attorney was arrested on grand theft charges [] after detectives say he set aside his clients' settlement money for his own use.

    William Hutchinson, 70, of Parkland, was booked into the Broward County Jail on $125,000 bond. But he can't post it until authorities confirm he's using his own money.

    According to his arrest report, a review of bank records showed that he "has used a substantial portion of the settlement funds well in excess of $100,000 to pay personal and business expenses."

    Investigators allege that Hutchinson settled a wrongful death case for $675,000 over several years. But the father of the victim hired a lawyer to complain to authorities in June 2015 that he hadn't received any money.

    Investigators allege Hutchinson withdrew money to make payments to the parents of the victim, but took the money from a second settlement case to do it. In that case, Hutchinson had settled a personal injury case for a man with an insurance company.

    To date, that man has not received any money, according to the report.

    Hutchinson told investigators about the misplaced money, writing a letter to the attorney of the Florida Bar saying he was self-reporting a shortage of almost $272,000 in his trust account. "I apologize and please know that I intend to pay this shortage in full and have placed my home and office building for sale," he wrote.

    In a third charge, investigators allege in February he settled another personal injury case for $100,000. He turned $10,000 over to the victim and kept a third of the settlement in his attorney fees before his client signed off on the case. That meant the money he kept was "misappropriated or [stolen]," according to authorities.

    Hutchinson was disbarred this summer stemming from the first incident of not dispersing settlement money to the parents in the wrongful death case. Records show his law office was in Fort Lauderdale.

    Hutchinson's defense attorney, David Bogenschutz, was unavailable for comment, according to his partner, Jeremy Kroll.
Source: Former Fort Lauderdale attorney accused of illegally keeping clients' settlement money (Parkland lawyer charged with three counts of grand theft).
--------------------------
(1) The Clients' Security Fund was created by The Florida Bar to help compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Florida-licensed attorney.

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

One Year After Resigning From Bar (After 40 Years Of Law Practice) Amid Embezzlement Allegations, Criminal Charges Finally Catch Up To Aging Ex-Lawyer Accused Of Fleecing Five Clients For Over $200K

In Tulsa, Oklahoma, the Tulsa World reports:
  • A former real estate attorney who practiced law in Tulsa for 40 years has been charged with embezzlement amid allegations that he misused his clients’ settlement money, Oklahoma Attorney General Scott Pruitt announced [].

    Robert John Nichols, 67, was charged with five counts of embezzlement and one count of delivery of a forged instrument [], according to court documents.
    ***
    Prosecutors allege that Nichols embezzled in excess of $200,000 from five clients(1) that he represented in cases related to the condemnation of property, Pruitt said in a news release.

    In each case, Pruitt said, Nichols is “believed to have used funds intended to go to trust accounts for each victim for unintended purposes.”

    Additionally, Nichols is accused of forging a signature and depositing a check made out to one of his clients.
    ***
    In October 2015, Nichols resigned and relinquished his right to practice law after allegations that he misused his clients’ settlement money arose.

    “It’s disheartening to hear of allegations against an attorney who clients entrust,” Pruitt said. “My office has a responsibility to uphold the law, and when it is being broken, we will prosecute and make sure bad actors are not getting away with fraudulent activity.”

    If convicted of all six counts, Nichols could face up to 57 years in prison and fines of $50,000 plus restitution to the victims, Pruitt said.
For more, see Ex-Tulsa attorney arrested, charged with embezzlement (Ex-real estate lawyer charged with embezzlement, fraud).
-----------------------
(1) The Clients' Security Fund is a fund established by the Oklahoma Supreme Court to reimburse clients who suffer loss of money or other property from the dishonest conduct of their Oklahoma-licensed attorney. The Fund is a remedy of last resort for clients who cannot be repaid or recover money from other sources, such as insurance, a bonding company or from the attorney involved. Claimants are expected to make reasonable efforts to collect from these other sources first before submitting a claim to the 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:
Maps available courtesy of The National Client Protection Organization, Inc.

Wednesday, November 23, 2016

High-End 20-Story, 144-Unit Tampa Bay Tower Built On Shaky Ground? HOA's Lawsuit Against Developer Alleges That Loose, Soft Soil Is Unsuitable To Support Foundation, With Resulting Movement & Significant Cracking Of Walls, Stucco, Structure Throughout Complex

In Tampa, Florida, the Tampa Bay Times reports:
  • It has been called Tampa's "most prestigious building'' and "the most refined expression of living" in all of Tampa Bay. The views are "stunning,'' the amenities "fit for a king and queen.''

    But is the Plaza Harbour Island sinking?

    The Plaza condo association is embroiled in a lawsuit alleging that the 20-story, 144-unit tower built in 2007 is plagued with problems. Among them: exterior cracking that is the result of "significant subsidence concerns and structural design deficiencies.''

    Geotechnical investigations found "very loose and very soft bay bottom soils'' under the first-floor commercial units, according to the suit filed in Hillsborough County Circuit Court. "These soils are completely unsuitable to support the foundation and, as a result, the soils have settled with resulting movement and significant cracking of the walls, stucco and structure.''

    Now, in a tower where some units once sold for more than $2 million, damages caused by the alleged defects have included "loss of use, relocation expenses, diminution in value, increased insurance premiums (and) damage to other property,'' the suit states.

    The Plaza's problems emerge as the condo association of Tampa Bay's tallest condo tower, the 36-story, 244-unit Signature Place in downtown St. Petersburg, purportedly has reached a settlement in a lawsuit alleging major construction defects there. Both the Plaza and Signature Place were built in the mid 2000s just as the housing boom was going bust.
    ***
    All houses and other buildings eventually settle into their foundations, construction experts say, and most pose little real danger to occupants. But San Francisco's 58-story Millennium Tower, built about the same time as the Plaza, has sunk 16 inches and tilted at least 2 inches, prompting a class- action lawsuit and fears it could topple in an earthquake

    This week, there were no signs from the street of any repairs that might be under way at the Plaza, unlike at Signature Place in St. Petersburg. There, scaffolding still covers part of the building two years after the condo association sued over multiple defects, including improperly installed stucco that could fly off in high winds.

    Board members could not be reached for comment, but one Signature Place owner, Scott Brandi, said he had been told the suit had been settled. He hopes that he and other owners will get back at least some of the $8 million in assessments they had to pay for repairs.

No Disney Magic In Company-Built Central Florida Theme Town As HOA Seeks Upward Of $15 Million To Fix Leaky Roofs, Deteriorating Balconies, Moldy Walls; Long-Time Resident: "We Bought Cabins On The Titanic!"

In Celebration, Florida, The Wall Street Journal reports:
  • In November, 1996, Walt Disney Co. unveiled the nation’s first Disney-built theme town, an 11-square-mile enclave near the Magic Kingdom designed to be a modern-day suburban Utopia. Homes the color of orange sherbet and buttercream frosting were graced with picket fences and Southern-style porches, intended to create an old-fashioned sense of community.

    Celebration, as it was called, was the outgrowth of a fantasy dreamed up by Walt Disney himself.

    As it celebrates its 20th anniversary, some of Celebration’s residents aren’t doing much celebrating. Condominium owners say they are battling leaky roofs, balconies that have become separated from the sides of buildings and mold spreading in their walls. Their properties have become so dilapidated, they say, they’re having trouble selling them.

    We bought cabins on the Titanic,” said Cookie Kelly, 73 years old, who has lived in Celebration since 1998.

    In a civil suit filed in April, the condo owners’ association is seeking to force Lexin Capital, which took control of part of Celebration in 2004, to pay for upward of $15 million to $20 million in repairs.
    ***
    Disney said it owned the buildings in the town center for about eight years and didn’t experience structural problems. The company said it hadn’t had responsibility for maintenance since the sale.

    Disney still retains some input into the aesthetics of the town—exterior paint colors, roof tiles, the style of front porches—but little direct control over maintenance. Still, residents said they believe Disney should step in because the neglect is destroying the town’s charming look.

    “There’s nothing more insulting with the 20th anniversary…than to parade people through, whitewash the front of the buildings, put lipstick on a pig,” said Laurel Rousseau, the condo board president. “Meanwhile we have condos we can’t sell.”
For more, see Leaks and Mold Are Ruining the Disney Magic in Celebration, Florida (may require subscription; if no subscription, GO HERE, then click the appropriate link for the story).

Report: NYS Officials Knew For 30 Years Of Severe Lead, Arsenic Contamination In Soil Adjoining Old Foundry In Upstate City & Failed To Tell Property Owners, Residents Until Last Month

In Geneva, New York the Rochester Democrat & Chronicle reports:
  • Thirty years ago, New York state officials first uncovered evidence that toxic metals from an old foundry in this historic Finger Lakes city had contaminated an adjoining neighborhood.

    A state environmental health expert concluded then that people were at risk of lead poisoning and neighbors should be warned. "Young children (those prone to placing fingers, other objects or dirt in their mouths) are of particular concern," the expert, Dr. John Hawley, wrote in an internal memorandum in June 1987.

    A decade later, consultants presented additional evidence to state and city of Geneva officials that the toxic contamination was widespread in that same near-north side neighborhood.

    The consultants recommended that the lead-laden soil in yards be removed.

    But state and city officials never warned residents and the decision to clean it up was deferred 16 more years, a Democrat and Chronicle investigation has found. Children dug for worms and played in the dirt, and adults planted gardens for more than a generation; oblivious to the small but real risk posed by that tainted soil.

    The silence ended only in early October, when state environmental officials mailed letters to nearly 100 properties near the former Geneva Foundry site, informing the owners their soil contained lead or arsenic in concentrations that are considered unsafe.

    The threat is significant enough, officials told startled neighborhood residents, that the state will spend $17 million to dig up the bad soil and cart it away.

    They did not, however, tell residents that they’d known about the contamination for 30 years.

    "The data on the toxicity of lead and arsenic are irrefutable. It's really shocking that these people were not informed," said Walter Hang, who operates an environmental data firm in Ithaca and who was deeply involved in a highly publicized lead-contamination site in that city.
    ***
    The Geneva Foundry site fits a disquieting pattern.

    While most of the thousands of old hazardous waste sites in New York were cleaned up relatively quickly, others languished with pollutants in place, caught up in a lack of funding or bureaucratic molasses; little-known or forgotten until events bring them to light in a burst of jarring publicity.

    In Geneva, that notoriety came Oct. 12, when the DEC released a fact sheet informing residents and businesses in a 55-acre section just north of the city's highly touted downtown that their soil contained excess lead and arsenic.

    Of 107 properties tested, the soil at 98 of them contained one or both metals in concentrations that are considered unacceptably high.

    Citizens were told that extensive testing done in late 2015 had found arsenic in the soil averaged 25 parts per million, with a maximum of 228 ppm. The cleanup objective — the concentration that DEC has deemed acceptable — is 16 ppm. ...
For more, see Lead tainting Geneva's soil kept hidden for 30 years. EPA environmental protection agency smelter foundry

Homeowner's Yard Becomes Toxic When Fugitive, Floating Lead-Contaminated Paint Chips, Dust Created By Next Door Neighbor's Renovation Of Pre-1978-Built Home Navigates Onto Her Property; Contractor Promises To Get EPA Certification Before Resuming Work & Remediate Tainted Soil After Homeowner Calls Health Dept.

In Pittsburgh, Pennsylvania, WPXI-TV Channel 11 reports:
  • A home renovation in Pittsburgh’s Lawrenceville neighborhood created a toxic environment in the yard of a woman who lives next door.

    Kim Autore began noticing paint chips and dust in her garden last month while contractors removed paint from the exterior of the neighboring home. “It was creating clouds of dust that contained wood chips, paint, etcetera,” she said.

    Autore, whose 2-year-old niece often plays in the yard, called the Allegheny County Health Department to have tests done. The tests came back indicating that lead levels in her yard were nearly three times above what the Environmental Protection Agency considers safe for a child’s play area.

    Channel 11’s Aaron Martin spoke with Autore on Monday. She said her niece and her friends had been over days earlier. “Her and several of her toddler friends, family friends, were here playing in the yard. It really gets me upset if I wasn’t home to witness what was going on,” Autore said.

    ACHD Environmental Health Administrator David Namey estimates that nearly 80 percent of homes in Allegheny County were built before 1978, the year lead paint was banned. He said work and renovations done on old houses can put children at risk.

    “They’re crawling on the floor. They’re hands are going on lead painted surfaces that accumulate dust, and the dust goes into their mouth,” Namey said.

    The health department recommends that children under 6 years old get tested for lead exposure to help prevent any long-term effects.

    Autore said she wants people to be aware of the dangers.

    The contractor working on Autore’s neighbor’s home has agreed to get the EPA certification required to remove lead paint, before continuing with the project, and will pay to replace contaminated sections of Autore’s yard.

Tuesday, November 22, 2016

President-Elect Admits No Wrongdoing, But Agrees To Cough Up $25 Million Anyway To Buy His Way Out Of Lawsuits Accusing Him Of Peddling Worthless Trump University Real Estate Investment Seminars, Fleecing Students For As Much As $35K Per Victim

The New York Times reports:
  • Donald J. Trump has reversed course and agreed on Friday to pay $25 million to settle a series of lawsuits stemming from his defunct for-profit education venture, Trump University, finally putting to rest fraud allegations by former students, which have dogged him for years and hampered his presidential campaign.

    The settlement was announced by the New York attorney general just 10 days before one of the cases, a federal class-action lawsuit in San Diego, was set to be heard by a jury. The deal averts a potentially embarrassing and highly unusual predicament: a president-elect on trial, and possibly even taking the stand in his own defense, while scrambling to build his incoming administration.

    It was a remarkable concession from a real estate mogul who derides legal settlements and has mocked fellow businessmen who agree to them.

    But the allegations in the case were highly unpleasant for Mr. Trump: Students paid up to $35,000 in tuition for a programs that, according to the testimony of former Trump University employees, used high-pressure sales tactics and employed unqualified instructors.

    The agreement wraps together the outstanding Trump University litigation, including two federal class-action cases in San Diego, and a separate lawsuit by Eric T. Schneiderman, the New York attorney general. The complaints alleged that students were cheated out of thousands of dollars in tuition through deceptive claims about what they would learn and high-pressure sales tactics.

Absentee Landlord Agrees To Give Up Ownership Of Three Rental Homes In Settlement Of Feds' Forfeiture Action Alleging That Tenants Used Premises As Illegal Drug Houses; Properties To Be Rehabbed & Sold By Local Non-Profit As Owner-Occupied Residences

From the Office of the U.S. Attorney (Rutland, Vermont):
  • The United States Attorney’s Office announced [] that the government and its public and private partners have completed an agreement to convert forfeited Rutland drug houses to safe, renovated housing. The government had previously filed suit to forfeit the drug houses, [...], because those properties were used to distribute crack and heroin.(1)
    ***
    The settlement was made possible by the cooperation of multiple governmental, non-profit, and for-profit parties, including: (1) the United States, which is the plaintiff in the lawsuit; (2) Ericob Vermont Realty Corp, the former owner of the property; (3) the City of Rutland, which was owed property taxes and other fees on the properties; (4) the mortgagee for the property; and (5) [Neighbor Works of Western Vermont ("NWWVT")], which will renovate and resell the properties.

    Under the terms of the settlement, the owners of the properties agreed to forfeit them to the United States. After forfeiture to the United States, the United States Marshals Service (“USMS”) agreed to transfer the properties to the City of Rutland. The City of Rutland, in turn, agreed to cancel all of its outstanding taxes, fines, and fees and transfer the properties to NWWVT. NWWVT agreed to rehabilitate the properties and sell them for owner-occupied housing.

    Under the terms of the City of Rutland’s deed to NWWVT, the three properties may only be used for owner-occupied, single family residences, duplexes, or condominium residential units. Finally, NWWVT agreed to pay $82,500 (minus the USMS’ costs) to the mortgage holder on the properties in return for the mortgage holder discharging its mortgage liens. The USMS agreed to cap its costs at $5,000 and, in fact, kept its costs to approximately $750.
    ***
    The settlement ensures that these three residential properties will be transformed from ownership by an absentee landlord into owner-occupied, single family residence, duplexes, or condominium residential units, thereby reducing the risk that the properties will again provide shelter for drug dealers.
    ***
    Many former tenants have been convicted and sentenced to significant time in federal prison. They include, among others: Eric Dixon, now serving 87 months in federal prison; Ernest Murray, now serving 60 months in federal prison; Andrew Harris, now serving 60 months in federal prison; Terrance Chenault, now serving 87 months in federal prison; and Joshua Minix, now serving 87 months in federal prison.
Source: Innovative Public-Private Agreement Will Convert Drug Properties To Renovated Housing Stock In Rutland, VT.
----------------------
(1) According to the US. Attorney's press release:
  • The United States’ forfeiture lawsuit was brought pursuant to 21 U.S.C. § 881(a)(7), which, under certain circumstances, allows for forfeiture of property used to commit or facilitate the commission of felony drug offenses.

    The federal forfeiture law also requires owners of such rental properties to take reasonable and safe steps to discourage or prevent drug dealing on the property, such as contacting law enforcement and seeking to evict the tenants involved. In its lawsuit, the government alleged the owners of the Park Avenue properties had failed to take such reasonable steps.

SF Landlords Being Left Holding The Bag For City Fines Issued In Connection With Their Tenants Who Illegally Short-Term Sublet Apartments On Websites Like AirBnb, HomeAway

In San Francisco, California, KNTV-TV Channel 11 reports:
  • A bright orange “Notice of Violation” was tacked to the front of Sondra Halperin’s Alamo Square condo building this past May.

    The tenant who rented her condo was illegally offering short-term rentals on Airbnb — and the city busted him. “It was very surprising to me,” Halperin said. “And it was scary.”

    Scary because the city was fining Halperin $484 a day until her tenant took down all rental listings from short-term rental sites and canceled all future bookings.

    Halperin said getting the tenant to cooperate was not easy. And in the end, her total fine was about $22,000. The homeowner was upset that she had to pay for her tenant breaking the law. “I was unemployed at the time,” Halperin said. “I couldn’t even focus on a job search, I was too consumed with this.”

    Kevin Guy runs the San Francisco office of short-term rentals. He says city code mandates that he fine the property owner, not the tenant. “When we conduct enforcement, we conduct enforcement and issue violations against a specfic property, not an individual person,” said Guy.

    Since last June, Guy’s office has issued $874,000 in fines to homeowners for illegally renting to people through sites like Airbnb and HomeAway. Guy says only about 10 percent of violators are tenants. But when they are, it can be tough getting them to stop breaking the law.

    Vo Duong knows all about that. His tenant illegally hosted paying HomeAway guests staying in his Forest Knolls home. When the city caught on, Vo says he told his tenant to move out, but he wouldn’t. The tenant had thousands of reasons to stay.

    “He was making more money staying here, knowing that the fine wasn’t going to affect him,” Duong said.

    Here's the math: Vo says his tenant was paying him $7,000 a month, but was making $18,000 to $20,000 a month on short-term rentals. Duong later learned this was business as usual for his tenant. “This person’s notorious for doing this,” Duong said. “He has multiple rental locations.”

    City officials confirmed that Duong is not the only victim of this tenant. The city calls him a serial tenant -- someone who rents one or more properties just to cash in on the short-term rental craze.

    All over the city, NBC Bay Area found properties that Duong's tenant had leased, then illegally rented out short-term. We tried to track down this serial tenant, using his name and apparent alias, but we didn’t find him.

    And even though the city knows what this serial tenant is up to, it still fined Duong $12,000 for the illegal activity at his house. Moving forward, officials plan to turn over serial tenants to the city attorney’s office.

    “We want to pursue enforcement against that individual person,” Guy said.

    We talked to some San Francisco supervisors to see if they think the city code needs to be revised, to protect homeowners in situations like these. No one has yet taken up that issue.

    Until that happens, if it does, Duong has a grim warning. “I want to make sure that all landlords know, that whenever they rent to people, as soon as they receive this letter, what they have to do is immediately evict the tenant,” he said.

    Guy said his office will give landlords a break on fines, if landlords can prove they’re actively trying to get the tenant to stop the illegal renting.

    Guy couldn’t comment on specific cases, but Duong's fines were not reduced - he owes the city $12,000. Halperin, however, got lucky. She asked a supervisor to help her out, and he did. The city reduced her fine from $22,000 to $1,000.
Source: San Francisco Homeowners on the Hook for Thousands in City Fines (They say their tenants are responsible, not them).

Long Island Feds: Landlord Used Forged Will To Posthumously Swindle $1.2 Million In Real Estate, Financial Accounts From Deceased Tenant After Discovering Her Lifeless Body Inside Apartment

From the Office of the U.S.Attorney (Central Islip, New York):
  • A four-count indictment was unsealed [...] charging the defendant John Derounian with mail fraud, wire fraud, and aggravated identity theft in connection with a scheme to defraud the estate of an elderly victim of more than $1.2 million. The indictment was returned under seal by a federal grand jury sitting in Central Islip, New York, on July 26, 2016.
    ***
    To devise a scheme to steal from the deceased is despicably morbid. Mr. Derounian’s alleged crimes are unconscionable. Postal Inspectors have no tolerance for anyone who preys on innocent victims, either dead or alive, and will spare no resources to ensure those who commit these crimes are brought to justice,” stated Postal Inspector-in-Charge Bartlett.

    As detailed in the initial complaint, prior court proceedings, and the indictment [], Derounian is charged for his role in a scheme to steal the entire estate of a woman, who is identified in the indictment as Jane Doe.

    On November 12, 2015, Derounian claimed to have found the body of Jane Doe, Derounian’s tenant, at her Sea Cliff home. Subsequent to Jane Doe’s death, Derounian is alleged to have placed a series of telephone calls and sent emails to Morgan Stanley in an effort to drain Jane Doe’s financial accounts of over $200,000.

    Further, in an effort to perpetuate the fraud, Derounian created a forged will naming himself as the executor and sole beneficiary, aside from a comparatively small charitable donation, of Jane Doe’s estate.

    Derounian allegedly then used the authority of the forged will to cremate the body of Jane Doe and sell her real property for over $1 million, which he transferred into bank accounts he controlled. As a result of the investigation to date, funds totaling over $1.2 million have been seized from Derounian, and the indictment seeks forfeiture of those funds.
Source: Sea Cliff Man Indicted For Scheme To Defraud More Than $1 Million From Elderly Woman’s Estate.

See also, Ex-con charged with fraud, ID theft after death of tenant:
  • [S]ources tell News 12 Derounian is being investigated in connection with the death. Back in 1984, Derounian was convicted of murdering a Sea Cliff jeweler. He served 20 years in state prison and was released in 2007.

Monday, November 21, 2016

Long-Time Southern California Rental Listings Scammer Continues in Business For At Least 20 Years With No Threat Of Criminal Prosecution, Only Getting Tagged With Toothless Administrative Orders From State's Real Estate Regulator

In Los Angeles, California, KNBC-TV Channel 4 reports:
  • Reina Gonzales was searching for an affordable apartment on Craigslist when she found what she thought was the perfect place. The three-bedroom house for $1,600 was in her price range and in the right neighborhood. But there was no street address on the ad and no photos. There was simply a phone number.

    "They say if it's too good to be true, then it is," Gonzales said.

    It was.

    Gonzales called the phone number on the Craigslist ad and was told to visit Superior Consulting Services in Rowland Heights for a list of available apartments and homes. When she got there, a Superior representative told her that for $200 in cash they would provide her with a list of rentals that were currently available.

    "That's grocery money. That's my rent money," Gonzales said. "I actually do work hard for my money."

    She paid the fee and received a list with three rental referrals. But there were no prices or phone numbers on the sheet. Gonzales says the company told her that they would set up viewing appointments for the properties on her behalf. But after calling 10 times, Gonzales said no one returned her calls. In fact, none of the homes on the list were even available according to her research.

    "They gave me fake listings," Gonzales said. "They gave us the runaround, put us on hold, 30 minutes later, let me call you back in an hour. Call again, call again. Runaround. Runaround."

    Gonzales, and others, say the person in charge of Superior Consulting Services is Richard Rodriguez. And she's not the only one who has had issues with Rodriguez and his business. The I-Team found more than a dozen one-star Yelp reviews from customers who call the company a "fraud" and a "scam." Many complained they didn't get the services they paid for, nor could they get a refund.

    "I would describe him as not only the kingpin but the mastermind," said Dolores Ramos, Statewide Enforcement Programs Manager at California Bureau of Real Estate, the agency that licenses rental listing services. "He's a threat to people who are honestly just trying to find a place to live."

    Rodriguez has been running from the California Bureau of Real Estate for 20 years. According to government documents obtained by the I-Team, the Bureau has shut down four other rental listing businesses connected with Rodriguez going back as far as 1996.

    "We issue these administrative orders and he moves to another place," said Ramos.

    But there are no criminal penalties attached to those administrative orders. The Bureau doesn't have arrest or prosecution powers. It's up to the local law enforcement agency or district attorney to criminally charge the perpetrators of rental listing fraud.

    Authorities have even had trouble keeping track of Rodriguez over the years. But the NBC4 I-Team has found him on multiple occasions.

    Four years ago, the I-Team interviewed at least 30 people who said they were scammed by Rodriguez when he ran other rental agencies, like Global Rentals, International Home Rentals and Hacienda Home Rentals.

    "They promised to find me a home. They didn't deliver," said Sylvia Vidal during an interview four years ago. "So I gave away my children's Christmas money.

    When the I-Team tracked down Rodriguez in 2012, he ran from our cameras when we tried to ask him questions about his business and the complaints of his customers. This time, he wasn't happy to see the I-Team when we caught up with him at Superior Consulting Services.

    At first, Rodriguez said he would talk to us outside. But as we began to walk toward the door, Rodriguez physically forced us out of the building by pushing us toward to door and then locking it behind us.

    "It's shameful," Ramos said. "He's there to take their money and run."

    Ramos says Rodriguez is breaking the law because he's currently barred from working in any kind of real estate business until 2017 by an administrative order issued by the Bureau of Real Estate. And this time, the Bureau is vowing to stop him for good.

    "We are committed to take this to the law enforcement authorities," Ramos said.
For more, see 'Take Their Money and Run': Rental Scams Target Thousands Looking for Apartments, Authorities Say (The NBC4 I-Team again catches alleged rental fraud "mastermind" who might have cheated thousands of would-be renters).

For story update, see Rental Rip-Offs Under Investigation (One woman says she got lured into the scheme when she called the number on a Craigslist ad for an apartment):
  • Los Angeles County Sheriff's detectives are now actively investigating the man known as "The Mastermind of Rental Scams," someone authorities say has scammed thousands of renters in southern California, through numerous apartment finder services.

    They have now served a search warrant on at least one rental business and have arrested seven employees. [...] The seven employees arrested were booked on misdemeanor charges of operating a business without a license.

Former Employees Of Nationwide Outfit That Uses Rent-To-Own Approach To Peddling Dilapidated Properties Admit That Business Model Was A Racket That Targeted Low-Income, Unsophisticated Homebuyers w/ Crappy Credit & Set Them Up For Failure; Company Now Being Probed By Wisconsin, Pennsylvania AGs

In Green Bay, Wisconsin, WFRV-TV Channel 39 reports:
  • There's now confirmation that a company that's been the subject of a Local 5 Investigation, is now being investigated by the Wisconsin attorney general's office.

    We spoke with half a dozen former employees of Vision Property Management. Two of them agreed to be interviewed for this report, but only if we hid their identities.

    They confirm what many suspected - that the company knew exactly what it was doing when it offers substandard housing as rent-to-own opportunities.

    "We knew we were putting people into situations that they couldn't handle."

    That's how one former employee describes his time at the company who specializes in lease-to-own housing - claiming to give potential tenants a chance to become homeowners, regardless of poor credit.

    "What initially started as us trying to help folks get on their feet, was more like those title loan companies. Like car places where you're just taking advantage of them - not explaining everything that's going on, jacking up the interest and then leaving them holding the bag," said another employee.

    After 5 Investigates dug deeper into some properties in the Green Bay area, some former employees offered to give us more insight into the culture of the company.

    "My big problem with the culture there was that we knowingly manipulated people's bad situations for our own gain. When people presented us with their problems like 'oh i need a little help with this, i need a little bit of help with that, i can't swing that,' they were pretty much ridiculed. They were never worked with."

    This was especially relevant when it came to contract agreements and inspections. Houses advertised in the Green Bay area consisted of broken pipes, rotting floors, crumbling roofs and much more.

    "An inspection is done with the purchase of every single property. It's kind of a brief one, but it gives us a good idea of what shape the property is in. That information isn't always translated or shared correctly."

    "When the customer ended up signing the contract and there were liens or the pipes were missing, we could say 'well we had a recorded phone call with you, I instructed you to go find that out.' But by nature, we weren't dealing with the most sophisticated real-estate consumer. So I can say 'go to the clerk of court, go look up public records' all day long, but if you don't know how to do that or if you don't even know what I'm talking about and you just want to get off the phone with me so you can get into this house, just say yeah all day long."

    "If they're already in a financial situation that puts them in a position to be working with a company like this, they probably can't afford to throw down several hundred dollars to have an inspector come in and look at all this stuff. Often times when they do, the inspectors are appalled like, 'no, no don't buy this!'"

    "We sold a considerable amount of houses to people who were making a $721 month social security check - and with $228 monthly payments, they had no business living in the house. They obviously didn't have the means to repair it themselves or pay somebody to repair it. I knew that was happening from the jump and that made me uncomfortable."

    One of the former employee was responsible for much of the official paperwork, including deeds on the properties. She says Vision would buy properties in bulk and wanted the deeds processed quickly so the investor could send the money. However when it came to sending the information to the particular county, a sales tax had to be paid. This was something Vision tried to avoid through their LLC - Kaja Holdings.

    "I would sometimes record two or three deeds at a time for one actual sale or one actual purchase, and no tax would be paid because Michigan, Pennsylvania and Maryland have higher taxes. They yelled at me and told me they refused to pay that tax and I would need to find a loophole. There were some that were legit, but the majority of them we just didn't send them in. We were told that 'we'll just pay it if we get caught, but if we don't, we're not paying the government a dime,' and so that's what I did."

    She added that many times she was told to get the deeds to the county overnight so Vision could get it processed in the tenants name before they found out - even if the house had many repairs needed or was up for demolition.

    "Once it's in their name, they can't do anything about it. They can be mad and call us, but they can't really do anything because it's in their name. It's just some really shady practices."

    The employees say Vision simply leaves their customers holding the bag.

    "Each one of them had a story, and each one of them wanted to tell it to us - and we didn't care."

    "There's a lot of customers who have complained and who have lost their homes when they thought they were going to be there forever and raise their families there, and it was taken from them because of these manipulative practices."

    Our 5 investigates team has been reaching out to Vision Property Management for their comment on this story since July. We contacted them again Thursday, and they said they are not interested in giving an interview.

    Aside from this new investigation by the attorney general's office here in Wisconsin, the Pennsylvania attorney general's office has launched an investigation into the company's practices as well.

    We've also learned some more about where Vision gets its financial backing. We'll be looking into that in the months to come.
Source: Rent to Own: Former Vision Property Management employees speak out (The company is now being investigated by the Wisconsin attorney general's office). land contract for deed

Another Contract For Deed/Land Contract Horror Story; Real Estate Operator Uses Method Of Seller Financing To Unload Home Onto Unwitting Buyer That Was Subject To Serious Undisclosed Title Issues, Then Pocketed Monthly Payments While Failing To Pay Existing Lien, Leading To Foreclosure

In Minneapolis, Minnesota, KARE-TV Channel 11 reports:
  • Imagine finally buying your dream home, moving your kids in and making your payments, only to find out it’s being taken away. One local woman says that’s what happened to her. And KARE 11 discovered it’s happening nationwide.

    Angela Woodard thought a townhome in Eagan was going to be her dream home. “Absolutely perfect. Everything we wanted,” Woodard said. But she was caught up in the perfect storm of a real estate transaction that seems set up to fail.

    “I don’t want this to happen to anyone else,” Woodard said, fighting tears. “I really don’t. I would not wish these feelings on anybody.”

    Our investigation found that what happened to Angela is happening to others because of glaring loopholes in the nation’s real estate laws. “It’s the American dream isn’t it? And it becomes our clients’ American nightmare at times,” said James Wilkinson of Mid-Minnesota Legal Aid.(1)

    ANGELA’S STORY

    For Angela’s family it all started when she saw an advertisement for a townhome in the Surrey Heights development in Eagan. “Loved the neighborhood, the schools, the community. And the neighbors are awesome,” Woodard said.

    So, last December, her family moved in. But Instead of getting a traditional mortgage, she signed a so-called contract for deed with the owner.

    “We come up with a down payment of $2400 and then pay $1200 a month thereafter until we had it paid off,” Woodard thought. “And it would become our own home at that time.”

    Contract for deeds have become a popular option for people who might have trouble qualifying for financing. But there’s something Angela didn’t know about them. A contract for deed doesn’t have some of the basic protections that come with traditional home sales.

    I’ve never seen a good deal for any of our clients on a contract for deed,” said Legal Aid attorney Wilkinson.

    “TOXIC TRANSACTIONS”

    He points to a study by the National Consumer Law Center which calls contract for deed agreements “Toxic Transactions.”

    It says one of the problems is that sellers too often fail to disclose underlying liens and mortgages. That leaves open the that the house could “sold out from under the buyer” even if the buyer is current on payments.

    “They may have made every payment to the contract for deed seller, and if the original seller is on a mortgage and doesn’t pay the mortgage, there can be loss of the home,” explained Wilkenson.

    “And that’s legal?” asked KARE 11’s Lauren Leamanczyk. “That’s legal,” said Wilkinson.

    Angela says exactly that’s what happened to her. “They told me they owned this place,” Woodard said. “They” is a company called “Homebuyer MN LLC” run by former real estate agent John Marinoff.

    Angela showed KARE 11 copies of cashier’s checks she says she sent to Homebuyer MN for six months, thinking she was buying the home. “We wasted thousands of dollars,” Woodard said.

    PROPERTY RECORDS

    Property records reviewed by KARE 11 show that John Marinoff’s company did not have clear title to the home. But Angela says she didn’t find that out until a letter from Marinoff himself arrived this summer.

    “Please be advised that the first mortgage company foreclosed the home,” the letter reads.

    Marinoff’s letter makes it sound like he’d just discovered the problem. “We were never informed as it was not our mortgage,” he wrote.

    But there’s evidence that suggests John Marinoff knew about problems with the property all along.

    KARE 11 obtained a copy of an email Marinoff sent to someone else about property in October, 2015. That was nearly two months before he offered the contract for deed to Angela. In the email. Marinoff writes there are “major title issues” with the property involving an underlying mortgage.

    In fact, records show that by mid-November the bank involved was even publishing notices setting a date for the foreclosure.

    But Angela says Homebuyer MN never said a word about it. “We wouldn’t even be here, we would not have even moved in if that was – if we knew the truth,” Angela said.

    John Marinoff declined KARE 11’s requests to sit down for an interview. When we approached him in person, he drove inside the garage and wouldn’t come to the front door.

    Through his attorney, John Marinoff said his company had warned Angela about the underlying mortgage. But he did not provide any paperwork to support that claim.

    For Angela Woodard it means uprooting her family and wondering whether she should have done more to protect them.

    “I feel like I failed family for not knowing more, for not watching out for them better,” Woodard said. “I just don’t want to tell the kids we have to go.”

    Since our interview, her family found a smaller home to rent. And she tells KARE 11 she’s contacted a lawyer to discuss her legal options. Meanwhile, there are questions consumers can ask – and steps they can take – to help protect themselves in real estate transactions.

    Mid-Minnesota Legal Aid has prepared a brochure with detailed tips, including warnings about contract for deed agreements.
Source: Homebuyer's dream turned nightmare.

For a story update, see Contract for deed lawsuit filed (A local woman is suing a Twin Cities businessman, alleging fraud in a real estate deal that cost her a home).
--------------------
(1) Mid-Minnesota Legal Aid is a non-profit law firm that specializes in providing professional legal help to Minnesotans who traditionally lack access to the American justice system and cannot afford the services of a private attorney. These groups generally include: people with low incomes, seniors and people with disabilities. land contract for deed

Naive Homebuyer Finds Himself Fleeced Out Of $15K+, Then Gets The Boot After Buying Mobile Home; Use Of Owner Financing, Informal Title Transfer Allows Seller To Unload Premises Onto Naive Buyer Without Disclosing Existing Lien

In San Juan, Texas, KRGV-TV Channel 5 reports:
  • A Rio Grande Valley man said he paid over $15,000 for a home he thought would be his. Months later, he said police came knocking on his door and told him he had to get out.

    Juan Robles saw a mobile home for sale in San Juan. He later met Marina Garcia, who he believed was the owner of the home.

    Between the two of them they worked out a payment plan. He said he made the first payment in September of last year.

    “I was paying her $600 a month. I paid for eight months as if it was going to be mine,” he said. “I have her $10,000 as a down payment.”

    Robles said an agreement was drafted and they took it to a notary. However, he said he cannot understand, read or write English.

    “I don’t know how to speak English. They were talking all English and I asked them, “Why don’t you all speak in Spanish? So that was I can understand what you all are talking about,’” he said.

    Robles said police came knocking at his door almost a year later. “They said for me to get out. If not, they were going to send people to get my stuff to the street,” he said.

    Police told Robles Garcia and all tenants needed to vacate immediately. Documents obtained from San Juan police proved Garcia didn’t own the home.

    “She was the one that supposedly sold it to me. Then it turned out she didn’t, and it wasn’t even hers. The property belonged to the financing company,” he said.

    The documents included the notarized agreement. They also gave a breakdown of the monthly rent amount. It read:

    “Buyer (being Robles) will comply with terms of seller’s contract with Vanderbilt Mortgage.”

    At the time, Robles said he had no idea what the agreement said.

    The documents also show Garcia’s history with her mortgage company. What Robles didn’t know was that Garcia wasn’t paying for the house. Robles’s payments were not reaching the mortgage company and the bill kept climbing.

    The mortgage company hired an attorney and issued Garcia a demand-for-payment letter in March.

    “She stopped giving the payments. I was giving her to the back as I had already mentioned. She owed three payments, so that’s when the financing company reacted,” he said.

    The documents show the mortgage company tried contacting Garcia countless of times for payments. She was ordered to pay more than $9,000 within 30 days.

    On May 16, a notice of sale was issued to Garcia stating her home would go up for public auction.

    Robles said he was evicted, but later filed an incident report with San Juan police for theft. He said he has tried to contact her every day since.

    The incident reports show San Juan police tried numerous times to call Garcia to come in for a statement. A warrant was also issued for Garcia about two months ago.
For the story, see San Juan Man Evicted after Purchasing Mobile Home. land contract for deed

Sunday, November 20, 2016

Landlord's 2-Family Rental Home Illegally Converted Into Five Units Targeted In Raid By NYC Code Inspectors, Leaving 25 Crammed & Suddenly-Scrambling Residents Homeless; At Least Nine End Up In Emergency Shelters; Others Forced To Shack Up With Relatives, Friends

In Dyker Heights, Brooklyn, Brooklyn Paper reports:
  • Two families — a total nine people — are homeless after city inspectors cleared 25 people out of a dangerously overcrowded Dyker Heights house on Nov. 3.

    The owner built five apartments inside the two-family home, and officials sealed the building citing illegal gas hook-ups, no fire sprinkler, and a lack of exits. Some of the displaced are staying with friends or relatives — but others are in city shelters, reps said.

    “Our records show that two households (a household of three and a household of six) were referred to the Department of Housing Preservation and Development for emergency shelter service,” according to a statement from the agency. “Displaced households are placed in family centers and single-room-occupancy hotels in Manhattan, the Bronx, Brooklyn, and Queens.”

    Buildings and Fire Department Inspectors emptied the house on 71st Street near 12th Avenue a little after 8 pm, officials said.

    Two families stayed with friends or relatives, and the Red Cross put up the other four in hotels for two days, gave them petty cash for clothes and food, and assigned them caseworkers, according Red Cross spokesman Michael De Vulpillieres. After the weekend, all four of those families asked the humanitarian organization to pass them on to the city for emergency housing, he said.

    A city spokeswoman could only confirm two families entered city shelters.

    The city cleared 31 people from a similar house on Seventh Avenue and 67th Street in August.

    Borough pols have introduced a wide-ranging bill to reign in illegal conversions with new fines and foreclosable liens on buildings with unpaid debts. Lawmakers and advocates want the fines to aid displaced residents, but that requires an agreement between Council and the Department of Buildings after the bill becomes law — and buildings department honchos testified against the bill on Oct. 31, claiming it “is either preempted by State law, duplicates existing authority, or would prove ineffective.”

    Inspectors currently get into about 45 percent of buildings they attempt to investigate for illegal conversions, and the city collected an average $1.3 million a year in related fines over the last three years — only one-sixth of the fines it issued, agency reps testified.

Settlement Of Recent Civil Rights Complaint Against Housing Authority Gives Over 1,000 East Chicago Tenants More Time To Move From Lead/Arsenic-Contaminated Public Housing Project Built On Site Of Former Lead Smelter, Will Live Rent-Free Until They Find New Digs

In East Chicago, Indiana, the Northwest Indiana Times reports:
  • Families living at the lead- and arsenic- contaminated West Calumet Housing Complex will have more time to move and no longer have to pay rent under a civil rights settlement reached [earlier this month] between the East Chicago Housing Authority and a Chicago-based fair housing organization.(1)

    The Sargent Shriver National Center on Poverty Law first filed a complaint with the U.S. Department of Housing and Urban Development on Aug. 29 on behalf of six former and current residents and a coalition of concerned citizens, Calumet Lives Matter.

    The complaint alleged the East Chicago Housing Authority — uncommitted at that time to covering security deposits, moving expenses and assisting with the housing search — was noncompliant with federal law.

    Katherine Walz, director of housing justice with the Shriver Center, said the agreement — which also offers protections to eligible former residents — represents the organization’s “collective best efforts” to protect families.

    “The hard-fought battle was by the residents themselves,” Walz said Friday. “You can’t imagine how difficult it is to sue the very program that provides you housing.”

    Residents are calling the agreement — approved [] by the U.S. Department of Housing and Urban Development — a significant victory for the more than 1,000 being forced to relocate from the complex, which was built in the early 1970s on the footprint of a former lead smelter. The complex and Carrie Gosch Elementary School are part of the first zone of an Environmental Protection Agency Superfund site.
    ***
    Under the agreement, residents have until March 31 to find housing and will receive assistance with the search. The local Housing Authority also agreed to waive rent owed between July 22 and March 31, 2017, and reimburse any rent paid for this month. They also cannot be evicted, threatened with eviction or charged with late fees.

    ECHA will offer relocation benefits to eligible residents, including those who moved out before city officials announced last summer the soil contained unsafe levels of lead and arsenic.

    Residents who moved out before the announcement will qualify for benefits if they can demonstrate they left because of lead- or arsenic- related health concerns or have children younger than 6.
For more, see Civil rights deal gives East Chicago residents more time to move.
--------------------
(1) See HUD Approves Settlement Between East Chicago Housing Authority And Fair Housing Organization (Agreement resolves discrimination claims based on race, color, national origin, familial status and disability):
  • [T]he Shriver Center’s complaints alleged the housing authority engaged in discriminatory housing practices in its management of the relocation because residents were being moved into poor, segregated communities with similar or serious levels of environmental contaminations. The agreement resolves the complaints and serves as the foundation to ensure residents of the West Calumet Housing Complex are relocated in a coordinated manner to safe housing in areas of opportunity.

Facing Uncertainty Over Failing Infrastructure/Sewage Problems, Dozens Of Lot-Leasing Homeowners In Deteriorating, Low-Income Mobile Home Park Form Co-Op To Buy Out Landlord, Then Establish Their Own Water & Sewer District, Scoring Over $2 Million In Free Gov't Money To Upgrade Premises, Save It From Ruin

In Great Falls, Montana, the Great Falls Tribune reports:
  • Six years ago, Don Feist was entangled in a feud with the owners of Trailer Terrace Park.

    Now, he owns it.

    Well, Feist and about 90 others own it as he led the charge to form a co-operative to purchase the beleaguered low-income park that had monumental infrastructure problems, including what the Department of Natural Resources and Conservation officials called in a 2013 Tribune story the worst water and sewer systems they had ever seen.(1)

    Thanks to the work of Feist and many others, work is well underway to upgrade the water and sewer systems as they continue the work to replace the open lagoon sewer system and all of the infrastructure in the park.
    ***
    “Don kept working and kept working and kept working and brought the neighbors together and formed a co-op,” said NeighborWorks Great Falls executive director Sheila Rice. “He’s a classic example of what one person can do to keep a community together.”

    She points out that the 230 or so people who live in Trailer Terrace, about 1.7 miles south of Great Falls on Lower River Road, make up a population greater than about 30 incorporated cities in Montana.

    “It really needed the attention that other communities get, and Don’s work and the work of others, including NeighborWorks, really brought that together,” Rice said.

    Before the neighbors started fighting for their park, the property was going in and out of foreclosure and the “temporary” water system that was installed years ago was falling apart. There also was high levels of arsenic detected in the water in 2012. And the open lagoon sewer system is smelly.

    “Everybody on Lower River Road is going to be glad when that’s gone (in the spring),” Feist said.
    ***
    [F]eist credits many people, including Rice and the other folks at NeighborWorks, the investor at ROC USA, which stands for resident-owned communities,(2) the county commission and fellow residents with making it possible.
    ***
    It also has been quite an education. “We had to figure out we had to,” he said. “It’s kind of like the dog that chased the car and caught it. What do you do with it?”

    That is where he said NeighborWorks has been so helpful as the co-op had to enter the granting world, which was foreign. “Sheila Rice has been a saint through all this,” Feist said.

    The residents formed a water and sewer district, which has applied for and received $2.8 million from state and federal agencies to construct new water and sewer treatment systems. All but $500,000 of the money is from grants.

    Work is continuing on those projects and in other bit of good news, the Eden Market is about to open in front of the park.

    Feist said he heard often that the co-op would fail, but he said it has no problem paying its bills and has money in the bank to continue funding improvements.
For the story, see Great Falls man honored for work on trailer park.
-------------------------
(1) See, generally, Trailer Terrace to be purchased: Residents nearing deal to buy park, fix the water (A trailer park community of 250 residents outside of Great Falls with a history of terrible water is nearing a deal in which residents would buy the park for $1.5 million and use $2.1 million in public funds to build new water and sewer systems).

(2) ROC USA, LLC
helps resident corporations buy their manufactured home communities or “mobile home parks” from private community owners. ROC USA is a non-profit organization with a mission of making quality resident ownership possible nationwide.