Thursday, June 22, 2017

L.A. Feds Bag Alleged Head Of Foreclosure Rescue Racket That Abused Bankruptcy Process To Stall Forced Sales, Evictions; Defendant Pocketed Over $7 Million By Using Fractional Interest Deed Transfers To, & Court Filings On Behalf Of, Phony 3rd Parties To Trigger Automatic Stay Provisions In Effort To Keep Homeowners From Losing Their Homes, Getting The Boot: Prosecutors

From the Office of the U.S. Attorney (Los Angeles, California):
  • The alleged mastermind of a foreclosure-avoidance scam that targeted distressed homeowners has been arrested on federal charges that he orchestrated a bankruptcy fraud scheme that brought in more than $7 million from victims.

    Michael “Mickey” Henschel, 68, of Van Nuys, was arrested Wednesday morning [June 14] by federal agents with the FBI and the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG). Henschel was arrested pursuant to an 11-count indictment returned by a federal grand jury on June 8.

    During a court hearing this afternoon [June 16], Henschel was ordered detained pending trial.

    According to the indictment unsealed after his arrest, Henschel owned a Van Nuys-based company he operated under several names, including Valueline. Henschel and several co-conspirators marketed illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages and renters who were facing eviction.

    As part of the scheme, Henschel and the others allegedly convinced homeowners to sign fake grant deeds that purported to show the homeowners had conveyed an interest in their properties to fictional third parties.

    Henschel and his co-conspirators allegedly filed bankruptcies in the names of fictional persons and entities to trigger the automatic stay provision of the Bankruptcy Code, which meant that foreclosure sales were stalled.

    Henschel allegedly delayed evictions in a similar way, filing fraudulent documents in state eviction actions and sending similar documents to sheriff’s offices.

    Henschel allegedly charged some homeowners large fees before agreeing to clear title to their properties, in addition to the monthly fees paid for the illegal services. During the course of the scheme, from October 2010 through July 2013, Henschel and his co-conspirators collected more than $7 million, according to the indictment.

    The indictment charges Henschel with one count of conspiracy, eight counts of bankruptcy fraud and two counts of wire fraud.
Source: Van Nuys Man Named in Federal Fraud Indictment Alleging $7 Million Foreclosure-Delay Scam Targeting Struggling Homeowners.

See, generally, Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.