Racist Gets 15 Years Prison Time For Criminal Housing Rights Interference; Defendant Yelled Racial Epithet As He Fired Shotgun Toward Latino Man Standing In His Front Yard w/ Wife, Son, Shouting That He Should Leave Town; Victims Moved As Soon As They Could Afford It

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

• U.S. District Judge Dale A. Drozd sentenced a Bakersfield man to 15 years in prison for federal hate crimes for firing a shotgun while yelling racist slurs at a Latino man, Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division, and U.S. Attorney Phillip A. Talbert of the Eastern District of California announced.
  
  Justin Cole Whittington, 25, was convicted in December 2016 of interfering with a person’s housing rights because of race, color, or national origin by use of force or threat of force; use of a firearm during a crime of violence; and making a false statement to a special agent of the FBI. Whittington had earlier pleaded guilty to unlawful possession of a prohibited firearm in connection to the same crime.
  
  ***
  “Hate violence has no place in our society. It harms individuals and entire communities by threatening their sense of security and freedom,” said Acting Assistant Attorney General Wheeler. “In this case, Whittington fired a shotgun at the victim, terrorizing him and his family, because of his Latino ethnicity. The Justice Department will continue to vigorously prosecute hate crimes so that all people, no matter the color of their skin, their country of origin, or how they worship, can live their lives freely and without fear.”
  
  ***
  According to evidence presented in court, on December 19, 2012, the victim, a Latino man, was standing in his front yard with his wife and son when a car drove past slowly and came to a stop in front of his neighbor’s house. The victim thought this was unusual and paid close attention to the car. Whittington, whom the victim had never seen before, got out of the front passenger seat of the car holding a sawed-off shotgun. Whittington used profanity and shouted a racial epithet as he fired one round toward the victim from about 15 yards away, and yelled that the victim should move out of Oildale.
  
  Whittington got back into the car and it drove away. Shortly thereafter, the shotgun was fired from the car at a nearby convenience store owned by a man of Middle Eastern descent. The blast left a large hole in the store’s glass door, and circles of missing paint on the metal gate in front of the store.
  
  The victim was able to describe Whittington and the car to Kern County Sheriff’s deputies, and they found Whittington nearby standing outside the car. The deputies recovered a sawed-off shotgun in the trunk of Whittington’s Crown Victoria, which was parked near the car identified by the victim. Subsequently, Whittington made false statements to an FBI agent when questioned about the sawed-off shotgun.
  
  Following these crimes, the victim and his family no longer felt safe in their home, and as soon as they had the financial means to do so, they moved from the neighborhood.

Source: Bakersfield Man Sentenced to 15 Years in Prison for Hate Crime (Defendant Fired Shotgun Round Toward Victim and Shouted, “Move … Out of Oildale”).

3rd Racist Co-Conspirator Pleads Guilty To Criminally Interfering w/ Interracial Couple's Housing Rights; Admits To Role In Halloween Night Cross Burning In Victims' Front Yard In Effort To Force Them To Move From Predominantly White Community

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

• William A. Dennis, 56, of Port Richey, Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida, Tampa Division, to one count of conspiring with others to threaten, intimidate, and interfere with an interracial couple’s enjoyment of their housing rights, announced Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division and Acting U.S. Attorney W. Stephen Muldrow for the Middle District of Florida.
  
  According to court documents, in September and October 2012, Dennis was living on Seward Drive in Port Richey in a predominantly white community. After an interracial couple moved next door, Dennis joined others in harassing the African-American neighbor with racial slurs and derogatory statements.
  
  On Halloween night, Dennis attended a party at a neighbor’s house, where several Seward Drive residents decided to burn an over six-foot tall cross in the front yard of the interracial couple in order to intimidate them and force them to move from the residence. Using wood and tools from the host of the Halloween party, Dennis and his co-conspirators constructed a wooden cross, and Dennis poured gasoline on the cross. Dennis and a co-conspirator carried the cross to the victims’ front yard, leaned it against their mailbox, and Dennis instructed the co-conspirator to set the cross on fire.
  
  “The defendant and his co-conspirators’ racially-fueled actions to threaten and intimidate a couple in their own home and neighborhood are reprehensible and will not be tolerated in our communities,” said Acting Assistant Attorney General Wheeler. “The Justice Department is committed to vigorously prosecuting those who engage in such violent acts of hate.”
  
  “This guilty plea underscores our ongoing commitment to aggressively investigate and prosecute individuals who commit hate crimes,” said Acting U.S. Attorney Muldrow.
  
  “The FBI pledges to remain vigilant in protecting our communities from hateful acts of bias,” said Special Agent in Charge Paul Wysopal of the FBI Tampa Division. “This case is an example of that commitment and determination to investigate crimes of hate and bring the offenders to justice.”
  
  Two of Dennis’ co-conspirators, Thomas H. Sigler, III, and Pascual Carlos Pietri, previously pleaded guilty to the same charge. Pietri was sentenced to 37 months imprisonment, and Sigler’s sentencing date is pending.

Source: Third Conspirator Pleads Guilty to 2012 Florida Cross Burning.

Fair Housing Ruling A Menace On Free Speech? Federal Appeals Court Green-Lights Lawsuit Against Bloggers Who Expressed Negative Views Toward Neighbors In Their Condo Building Who Kept Emotional Support Dogs, Despite HOA's 'No-Dog' Rule

From a recent post appearing on the Competitive Enterprise Institute website:

• A recent ruling by the Third Circuit Court of Appeals menaces free speech in condominiums, apartment buildings, and the Internet. It allowed individual bloggers to be sued because their blog posts allegedly created a “hostile housing environment” for condo residents who kept emotional-support dogs despite the condominium’s no-dogs rule. This “hostile environment” allegedly rendered those blog posts “harassment” in violation of the Fair Housing Act. The provision the court cited does not even mention a hostile environment, but rather makes it illegal “to coerce, intimidate, threaten, or interfere” with the exercise or enjoyment of rights under the Fair Housing Act. (See 42 USC 3617).
  
  Alarmingly, the court’s ruling in Revock v. Cowpet Bay West Condominium Association also suggested that a single sufficiently offensive blog post could potentially constitute illegal “harassment.” It stated in dictum that “a single act may be sufficient, provided that the conduct is ‘sufficiently severe or pervasive.’” This was a gratuitous statement, since each of the bloggers it allowed to be sued posted multiple blog posts critical of the allegedly disabled plaintiffs.
  
  The court justified this extremely expansive reading of the statute by citing a speech-restrictive regulation imposed by the Obama administration that purports to interpret the statute. After defining illegal interference to include the creation of a “hostile environment,” that regulation states that “[h]arassment can be written, verbal, or other conduct, and does not require physical contact.” 24 C.F.R. § 100.600(b) (2016). In addition, “[a] single incident of harassment because of race, color, religion, sex, familial status, national origin, or handicap may constitute a discriminatory housing practice, where the incident is sufficiently severe to create a hostile environment, or evidences a quid pro quo.” 24 C.F.R. § 100.600(c) (2016).
  
  Courts are not supposed to defer to [government agency regulations] at the expense of free speech. Had the bloggers raised a First Amendment defense, deferring to the Obama administration’s speech-restrictive interpretation of the statute would be an error. Even when an agency would otherwise receive great deference in interpreting a statute, it will not receive any deference from the courts where its interpretation would raise potential free-speech problems. The Supreme Court has made this point in the past. (See Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council, 485 U. S. 568, 574-575 (1988) (construing National Labor Relations Act narrowly to avoid potential free-speech problems, despite the broad Chevron deference that the NLRB's interpretation usually receives).
  
  But here, no First Amendment defense seems to have been raised, so it is not clear how free speech principles should have shaped the court’s interpretation of the statute. Presumably, as federal appeals court Judge Alex Kozinski once noted, courts should reinterpret the statute more narrowly in the future when a First Amendment defense is later raised. See United States v. X-Citement Video, Inc., 982 F.2d 1285, 1296 n.7 (9th Cir. 1992) (Kozinski, J., dissenting), rev’d, 513 U.S. 64 (1994) (arguing that if a harassment law is interpreted too broadly in the absence of a First Amendment defense, it should later be reconstrued more narrowly by the same court when a First Amendment defense is raised).

For more, see Appeals Court Revives Fair Housing Act 'Blog Post Harassment' Lawsuit.

Landlord's Own Emails Expressing Concern Over 'Small-Town Gossip' Used To Sink Her In Court On Fair Housing Violations For Refusing To Rent Apartment To Same-Sex Couple (One Of Whom Is Transgender) w/ Two Minor Children; Resolution On Award Of Damage$ Pending

In Denver, Colorado, the Daily Camera reports:

• A federal judge in Denver on Wednesday [April 5] ruled that a Gold Hill property owner violated both the Federal Housing Act and the Colorado Anti-Discrimination Act by refusing to rent her property to a same-sex couple — one of whom is transgender — and their children, due to concerns about their "unique relationship."
  
  That ruling on an unopposed motion for partial summary judgment came in the case of Aurora residents Rachel and Tanya Smith, and their two minor children, versus Deepika Avanti, of Boulder, and was issued by U.S. District Judge Raymond P. Moore.
  
  "We're incredibly pleased with this ruling. I think of this as a groundbreaking and historic ruling," said the couple's New York-based attorney, Omar Gonzalez-Pagan, a staff attorney for Lambda Legal.(1)
  
  "For the first time, a federal court has ruled that the Fair Housing Act's sex discrimination prohibitions apply to discrimination based on stereotypes about sexual orientation and gender identity."
  
  Wednesday's ruling does not establish what damages might be paid as a result of the decision.
  
  "There is the question of the damages and we'll be in conversation with the other side," Gonzalez-Pagan said. "We expect a quick resolution of the damages, a quick resolution of the entire case now that the liability has been determined.
  
  Tanya Smith, 31, said, "It's exciting and it's also humbling to be part of something that is bigger than we are. And, to be able to give something back to the LGBT community that has been like a family for us and to ensure that others will have protections now in place."
  
  Tanya Smith and Rachel Smith, the 30-year-old transgender woman to whom she has been married for five years, looked at property in 2015 in Gold Hill when they were moving out of their home in Erie.
  
  They looked at a two-bedroom apartment and a three-bedroom residence, both at 698 Dixon Road in Gold Hill, and said they were rejected because Avanti, the property owner, said she was worried about how such tenants might affect her standing in the eyes of others in that small mountain community.
  
  Critical to the plaintiffs' case was a series of emails received from Avanti, including one that said, according to the suit, "Your unique relationship would become the town focus, in small towns everyone talks and gossips, all of us would be the most popular subject in town, in this way I could not be a low profile" (sic).
  
  "We have emails documenting the rationale for the denial of housing of the Smith family," Gonzalez-Pagan said on Wednesday. "It was as pure a question of law as this court could have encountered, and the court held that the Fair Housing Act prohibits discrimination based on sex stereotypes as they apply to LGBT people, and their families."

For more, see Judge: Gold Hill landlord who refused same-sex couple violated federal, state law.

For the court ruling, see Smith v. Avanti, Civil Action No. 16-cv-00091 (D. Colo. April 5, 2017).

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

(1) Lambda Legal is a national, non-profit law firm headquartered in New York City (with four regional offices throughout the U.S.) that specializes in the civil rights issues of lesbians, gay men, bisexuals, transgender people and those with HIV. According to its website, Lambda Legal is a 501(c)(3) nonprofit organization that does not charge its clients for legal representation or advocacy, receives no government funding, and depends on contributions from supporters around the country.

City Belts Sleazy Landlord With $20K Fine, Orders Add'l $13K Payment To Low-Income, 74-Year Old Tenant In Emotional Distress Damages For Refusing To Accept Housing Subsidy Voucher, Violating Local Human Rights Ordinance

In New York City, DNAInfo (NYC) reports:

• A Brooklyn management company was fined $33,000 by the City Commission on Human Rights after leaving a 74-year-old woman homeless for two months by illegally rejecting her housing voucher, according to court documents.
  
  The commission last week fined the landlord, American Construction Associates, $20,000 for discriminating against 74-year-old Miladys Agosto, on the basis of her use of a voucher and also ordered the company to pay Agosto an additional $13,000 for emotional distress, according to a spokesman for the agency.
  
  Both fines were double the amount ordered by a judge, a measure meant to underscore the city’s dedication to stamping out housing discrimination, according to Carmelyn Malalis, chair and commissioner of the CCHR.
  
  “The commission is sending a message loud and clear to landlords and brokers that NYC will not tolerate source of income discrimination,” Malalis said in a statement.
  
  ***
  According to New York’s Human Rights Law, it is illegal for landlords to discriminate on the basis of the use of vouchers, according to the decision.
  
  Contact information for the [landlords Valentine and Nicola] Johnson[], who operate their business out of an office on Jamaica Avenue in Queens Village, was not immediately available.
  
  The trouble began in July of 2014, when Agosto looked at a unit on the second floor of an illegally converted building — which had multiple units and shared bathrooms and kitchens on each floor — at 2129 Pitkin Ave. between Wyona and Vermont streets.
  
  Agosto eventually signed a two-year lease for a one-room, $750-per-month unit, and gave Johnson $200 in cash and a $215 emergency assistance check from the Human Resources Administration. She also gave Johnson a voucher from the HRA that guaranteed the agency would pay for the unit’s security deposit should Agosto fail to pay her rent or damage the apartment, according to the decision.
  
  Johnson accepted the cash, check and voucher, which he signed, but he later changed his mind, telling Agosto that his company didn't accept such vouchers, and canceled the lease agreement, according to the court records.
  
  Agosto spent the next two months living on the streets and in old houses, which left her unable to sleep or shower regularly and which she described as humiliating and left her feeling “very bad.”
  
  By October 2014 Agosto managed to find housing, but Johnson refused to return her HRA assistance check for $215, forcing her to get help from Brooklyn Legal Services(1) in order to retrieve it, according to a tenant counselor who testified at the trial.
  
  Throughout the ordeal, Johnson admitted to both Agosto and her tenant counselor that the reason for cancelling the lease was the company’s refusal to accept a security voucher, according to the complaint.
  
  Later that month, Agosto filed a complaint with CCHR against the Johnsons, and though they initially responded by filing papers in their defense, the pair repeatedly skipped hearings with the Office of Administrative Trials and Hearings, or OATH — only reappearing to contest the eventual finding in Agosto’s favor, according to the CCHR decision.
  
  A judge with OATH eventually issued a decision in December of 2015 finding the pair guilty of discrimination and recommending a civil penalty of $10,000 and restitution to Agosto of $6,000. They also recommended the landlords undergo anti-discrimination training, a finding the landlords contested.
  
  In a decision filed last week, CCHR doubled the recommended fines, issuing a civil penalty of $20,000 and ordering the Johnsons to pay Agosto $13,000 for the emotional distress caused by her rejection from the apartment and the resulting time spent living on the streets.
  
  If they fail to pay within 30 days, the city could fine them an additional $100 per day, according to court documents.
  
  New Yorkers who have been the victims of housing discrimination can contact the New York City Commission on Human Rights at 718-722-3131 or report discrimination via 311.

Source: Landlords Fined $33K by City After Rejecting Tenant With Housing Voucher.

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

(1) Part of Legal Services - NYC, Brooklyn Legal Services is a non-profit organization of public interest lawyers providing civil legal assistance for low-income residents in Brooklyn, New York. Section 8 fair housing

Homeowners Who Succeed In Fighting Off Standing-Lacking, Foreclosing Banksters Get Stiffed Out Of Court-Awarded Legal Fees

In West Palm Beach, Florida, the Daily Business Review reports:

• Borrowers seeking attorneys' fees on appeal can't have it both ways when it comes to lenders' legal standing to foreclose.
  
  If they prevail on arguments that plaintiffs don't own their mortgage debts and therefore lack legal right to foreclose, they can't then turn around and seek attorneys' fees under these same contracts.
  
  It's either one or the other, said an April 12 opinion by Fourth District Court of Appeal Judge Jeffrey T. Kuntz, writing for a state appellate panel of Chief Judge Cory J. Ciklin and Judge Robert M. Gross.
  
  Kuntz, who rose to the bench in November, wrote the opinion weighing borrower Marie Ann Glass' reliance on a mortgage clause and the reciprocity provisions in Florida Statutes.
  
  That statute permits courts to apply contractual fee provisions to benefit both parties, even in cases of one-sided contracts. But it has two requirements: a prevailing litigant and parties to the contract.
  
  "Because the statute is in derogation of the common law, it must be strictly construed," Kuntz wrote.
  
  Glass sought appellate attorney's fees and costs from Nationstar Mortgage LLC, doing business as Champion Mortgage Co., after the lender challenged Broward Circuit Senior Judge Joel T. Lazarus' dismissal of its amended foreclosure complaint with prejudice. Her argument that Nationstar lacked standing to foreclose on her debt succeeded in the circuit court. But that victory blocked her claim for appellate fees.
  
  "Simply put, to be entitled to fees pursuant to the reciprocity provision of section 57.105(7), the movant must establish that the parties to the suit are also parties to the contract containing the fee provision," Kuntz wrote. "A party that prevails on its argument that dismissal is required because the plaintiff lacks standing pursuant to the contract sued upon cannot satisfy that requirement."
  
  But there is an exception, according to a nugget in the appellate ruling, which appears to leave the door open for collecting appellate fees in cases where lenders are party to the contract, but fail to establish legal standing.
  
  "The result is different when the plaintiff was also the originating lender," Kuntz wrote.

Source: Arguing Lack of Standing to Foreclose? Don't Expect Attorneys' Fees (may require subscription; if no subscription, TRY HERE, then click the appropriate link for the story).

Trump Golf Resort Fails In Attempt To Use Technicality To Wiggle Out Of Paying Stiffed Paint Supplier Out Of $34K+ For Unpaid Bills In Construction Lien Foreclosure; Appeals Court Also OKs Sticking Deadbeat Defendant w/ $300K Tab For Plaintiff's Legal Fees

In Miami, Florida, The Real Deal (South Florida) reports:

• A Miami-based paint company stiffed three years ago by President Donald Trump’s Doral golf resort may finally get paid.
  
  The Third District Court of Appeals on Wednesday rejected the Trump National Doral Miami’s petition to throw out a lower court’s prior ruling affirming a nearly $35,000 construction lien The Paint Spot placed on the property, and also awarded the company $300,000 in attorney fees.
  
  Bruce Rogow, the attorney representing the resort, told The Real Deal that the Third DCA’s decision is final and Trump National Doral Miami will have to settle its $34,863 debt with The Paint Spot. “The next step is to resolve the matter because the appellate court ruled the lien was valid,” Rogow said.
  
  The Paint Spot’s lawyer Daniel Vega said Trump Endeavor, the holding company that owns the golf resort, unnecessarily dragged out the court case. “At all times, Trump Endeavor refused to pay,” Vega told TRD. “Fortunately, our client had the fortitude to endure the massive pressure in order to vindicate its position.”
  
  The Paint Spot was hired to provide painting services for 10 lodges at the Doral resort by another subcontractor, M&P Reynolds, and its $200,000 contract was negotiated directly with Trump Endeavor.
  
  According to the Third DCA ruling, Trump asserted The Paint Spot’s lien claim was invalid because it identified the wrong general contractor on the project and because the paint company failed to comply with state law by submitting an erroneous construction document known as a “notice to owner.”
  
  In September 2014, M&P quit the resort’s renovation project over nonpayment, but The Paint Spot had already delivered $34,863 worth of paint and supplies, which were used for five of the 10 lodges. Trump didn’t pay, and The Paint Shop filed a notice of construction lien. A Miami-Dade Circuit Court judge subsequently ordered the foreclosure sale of the resort, which Trump avoided by placing $34,000 in escrow.
  
  During the non-jury trial, the judge found that Trump Endeavor had actual knowledge of The Paint Spot’s “notice to owner,” that the company was supplying materials for the lodge project and that The Paint Spot “substantially complied with statutory requirements,” the Third DCA ruling states. “We affirm, holding that competent substantial evidence supports the trial court’s determination.”
  
  Nicholas Siegfried, a construction litigation attorney not involved in the case, told TRD that the ruling makes it clear that developers and property owners who receive a notice when a subcontractor delivers materials must make payments, regardless of any clerical errors. “I think what [Trump Endeavor] was relying on was a technical argument to get out of the liability,” Siegfried said. “They knew they were on notice and they knew they had to pay.”

Source: Court rules Trump Doral must pay $35k to paint company (Trump golf resort must also pay $300k in attorney's fees related to litigation).

For the court ruling, see Trump Endeavor 12, LLC V. Fernich, Inc., d/b/a The Paint Spot, Nos. 3D16-1065 & 3D16-1865 (3rd DCA, April 12, 2017).

Hawaii HOAs (& Their Attorneys) Face Potentially Staggering Financial Damages For Using Non-Judicial Foreclosure Process Against Unit Owners To Collect Unpaid Maintenance Fees, Other Assessments

In Honolulu, Hawaii, Honolulu Civil Beat reports:

• It’s probably going to take years to unravel the legal and financial uncertainty now facing condominium associations and law firms that used nonjudicial foreclosures — private sales without supervision by courts — to collect unpaid maintenance fees or other assessments prior to 2012.
  
  That’s the best guess after the recent ruling by a federal judge in Honolulu that condominium associations were not legally eligible to use the streamlined, nonjudicial foreclosure process that allowed properties to be sold at auction with minimal notice to — or procedural protections for — the unit owners.
  
  In a 57-page ruling filed March 30, U.S. District Court Judge Leslie Kobayashi concluded condominium associations did not have the power under Hawaii law to pursue quick, nonjudicial foreclosures under Part I of the state’s foreclosure law, which gave special rights to lenders whose mortgage contracts include a “power of sale” clause.(1)
  
  Part I dated back more than a century to 1874, during the era of the Hawaiian Kingdom, and allowed mortgagees to foreclose without going to court, and subject only to the terms contained in their mortgages.
  
  During and after the 2008-2009 “Great Recession,” a small group of attorneys marketed themselves to condominium associations by offering to pursue nonjudicial foreclosures.
  
  Many cash-strapped condominium associations, facing budget woes caused by growing levels of unpaid maintenance fees by owners caught in the recession’s downdraft, jumped at the chance to use the quicker and less expensive foreclosure process. Those associations are now facing a growing possibility that these prior foreclosures will be found to have been unlawful.
  
  And that’s got to have lots of condo owners, managers and directors having trouble sleeping at night.
  
  [...]

For more, see Why Condo Associations Are Sweating After A Judge’s Ruling (Improper foreclosure procedures were sometimes used, a federal judge found, and the stakes could be staggeringly high).

See also, Wrongful Foreclosure Claims Rock The Condo World (A class-action lawsuit alleges at least 160 individuals had their property illegally foreclosed by 72 condominium associations).

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

(1) Galima v. Association of Apartment Owners of Palm Court, 1:16-cv-00023 (D. Haw. March 30, 2017.

Real Estate Operator Facing Bid Rigging Charges At Public Auctions Nixes Plea Offer, Rolls Dice, Goes To Trial & Gets Slammed By Jury w/ Guilty Verdict; Count Now Up To 65 In Ongoing Antitrust Probe Into Hanky-Panky At Northern California Foreclosure Sales

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

• A federal jury convicted real estate investor Glenn Guillory for his role in a conspiracy to rig bids at public foreclosure auctions held in Contra Costa County, California, the Department of Justice announced today [April 18].
  
  After a week-long trial before the Honorable Chief Judge Phyllis J. Hamilton in Oakland, California, the jury convicted Guillory yesterday [April 17] of conspiring to rig bids at foreclosure auctions in a conspiracy that operated from as early as June 2008 until about January 2011. Guillory was charged in an indictment returned by a federal grand jury in the Northern District of California on Dec. 3, 2014.
  
  The evidence at trial showed that Guillory and his co-conspirators agreed not to compete for real estate sold at foreclosure auctions in Contra Costa County. The conspirators negotiated payoffs for agreeing not to compete and held second, private auctions known as “rounds” to determine the amounts of the payoffs for the individuals who had participated in the bid suppression.
  
  Including Guillory’s conviction, 65 individuals have either pleaded guilty or been convicted after trial as a result of the department’s ongoing antitrust investigations into bid-rigging at public foreclosure auctions in Northern California (Alameda, Contra Costa, San Francisco and San Mateo counties). Indictments are pending against several other real estate investors who participated in the conspiracy.
  
  The investigation is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to real-estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.

Source: Northern California Real Estate Investor Convicted of Rigging Bids at Public Foreclosure Auctions.

Mobile-Area Real Estate Operator Gets 12 Months Prison Time Ordered To Cough Up $340K+ In Restitution For Role In Bid-Rigging Racket At Local Foreclosure Auctions

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

• An Alabama real estate investor was sentenced on Monday, April 10, 2017, to serve 12 months and a day in prison for his role in a bid-rigging conspiracy and a fraud scheme related to public real estate foreclosure auctions in Mobile, Alabama, the Department of Justice announced.
  
  Oscar Celso Anez pleaded guilty to bid rigging and conspiracy to commit mail fraud in the Southern District of Alabama on June 14, 2016. In addition to a term of imprisonment, Senior U.S. District Court Judge Callie V.S. Granade also ordered Anez to pay $343,561 in restitution.　
  
  Between March 2002 and November 2010, Anez conspired with others not to compete for selected foreclosure properties at public auctions in order to obtain the properties at artificially suppressed auction prices.  In addition, Anez and his co-conspirators held secret, second auctions for rigged foreclosure properties. The winner of the second auction obtained title to the property and made payoffs to co-conspirators. The money that the conspirators paid to one another would have gone to mortgage holders, homeowners and others with a legal interest in the property.　

For more, see Alabama Real Estate Investor Sentenced for Bid Rigging and Fraud at Public Foreclosure Auctions.

Search Continues For Florida Property Owners Claiming Fraudulent Homestead Exemptions To Score Improper Real Estate Tax Discounts

In Jacksonville, Florida, the Jacksonville Daily Record reports:

• If you are falsely claiming a homestead exemption, the Duval County Property Appraiser is looking for you. And it’s getting harder to hide.
  
  Since 2015, the appraiser’s office has filed nearly 1,000 liens for $5.1 million against property when owners claimed fraudulent homestead exemptions – and $3.1 million has been collected. “We’ve been very productive,” said Jerry Holland, property appraiser.
  
  Liens average about $5,000. The largest — more than $158,000 — was filed on waterfront property along Aladdin Road in Mandarin — while the smallest is $9.45.
  
  Under Florida Statute 196, the homestead exemption gives a tax discount on a homeowner’s primary residence by allowing $50,000 of the market value to be exempt from property taxes and $25,000 exempt from school taxes.
  
  Owners are entitled to the exemption if, on Jan. 1 of each year, they have made the property their permanent home or the permanent home of a person who is legally or naturally dependent on them.
  
  It’s fraud when a homeowner claims the exemption when the property isn’t their primary residence, or when the property is used as a rental or when rented as a vacation home for part of the year.
  
  ***
  If a property owner is caught, in addition to the back taxes that weren’t paid based on the exemption, there is a 50 percent penalty added and the full tax bill can be collected for as far back as 10 years if that’s how long it is determined the exemption has been improperly claimed, Holland said.
  
  He said when he took over the office in 2015, there was a backlog in the homestead fraud investigation department brought on by several years of city budget cuts that forced staff to work on the issue only part-time.
  
  He has since re-organized the office and now has a team dedicated solely to searching out improper exemptions.
  
  About two months ago, a third-party collection service was added to the fraud investigation effort. “They are able to cross-reference property records in other states. They find the ones we can’t find,” Holland said.
  
  The company receives a 28 percent commission on what it collects and the Duval County Tax Collector gets 2 percent of the back-tax collection. “Getting 70 percent of anything is better than getting 100 percent of nothing,” Holland said.
  
  The office has also hired a former Osceola County sheriff’s deputy who has been designated a reserve officer by the Jacksonville Sheriff’s Office to help the investigations.
  
  Holland said there’s no intent to arrest anyone for homestead fraud, but when a police officer contacts a jurisdiction outside Duval County seeking property records, it’s easier to get answers quickly. "She has a badge. It does give us an edge,” Holland said.
  
  Of the about $3 million that has been collected since the crackdown began, some people took a check to the tax collector soon after they were notified of the lien.
  
  Monthly payment plans are available if the property owner can’t resolve the entire balance immediately — but that comes with 15 percent annual interest on top of the back taxes and penalty.

For the story, see Homestead fraud: Crackdown reaps millions for city.

Maryland AG: 12 Screwed-Over Customers Of Now-Defunct Homebuilder Now Eligible For At Least Some Recovery For Financial Losses (Up To $50K) Through State Guaranty Fund

In Frederick, Maryland, The Frederick News Post reports:

• A builder operating in Frederick will pay more than $400,000 for violating laws designed to protect homebuyers, according to a final order from the Maryland Consumer Protection Division.
  
  The agency found that Nexus EnergyHomes, which worked on the North Pointe project along Bentz and Sixth streets in Frederick, violated the Home Builder Registration, Custom Home Protection, New Home Deposits and Consumer Protection acts when it failed to complete work for buyers who had paid deposits, according to the order.
  
  Frederick resident David Quinn bought a house from Nexus EnergyHomes and received compensation for incomplete work. The builder installed only eight of the 18 solar panels it was supposed to put on the house.
  
  “We’re back to a normal status,” he said when reached for comment on Thursday. “We’re just moving on with our lives.”
  
  He said he believed the order was justified, but he expressed concern for contractors who may not have been able to recover their losses. He noted that eight or nine contractors who worked on his house weren’t paid by Nexus.
  
  “It’s hard to see how justice will ever be done for those people who worked on Nexus’ homes,” he said.
  
  The Consumer Protection Division required the builder to pay restitution of around $151,000, economic damages of $235,600, penalties of $32,000 and costs of $6,500, Maryland Attorney General Brian Frosh announced Thursday [April 13].(1)
  
  The order resolves a dispute that began when Nexus agreed to build houses for 12 families in Anne Arundel, Frederick, Howard and Queen Anne’s counties, accepting deposits and payments from them. The company then failed to finish the promised projects.
  
  The builder also neglected to place the buyers’ deposits and payments in an escrow account or use a surety bond or letter of credit for their protection, according to the Consumer Protection Division. It further failed to pay subcontractors for work they completed.
  
  The order allows the affected homebuyers to recover their losses through the Home Builder Guaranty Fund up to $50,000.
  
  Nexus EnergyHomes’ homebuilder registration is suspended until it pays back the Maryland Home Builder Guaranty Fund, which includes 10 percent annual interest. The business has since closed.
  
  The North Pointe project will be completed by Lancaster Craftsmen Builders, which estimated that the project would be done by the end of 2017.
  
  The attorney for Nexus EnergyHomes did not immediately return a call and email for comment Thursday.

Source: Consumer Protection Division orders former North Pointe builder to pay over $400,000 for incomplete work, other violations.

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

(1) According to the state Attorney General, the Consumer Protection Division found numerous instances in which consumers had to pay subcontractors to avoid potential liens being placed against their homes as a result of the company’s failure to pay its obligations.

Title Agency Owner Who Illegally Used Mortgage Settlement Proceeds In Escrow Account As Personal Piggy Bank Gets 57-Month Prison Sentence, Ordered To Forfeit $464K, Pay $713K In Restitution

In Tulsa, Oklahoma, Tulsa World reports:

• The owner of a defunct Owasso title company has been sentenced to a 57-month prison term after pleading guilty earlier to fraud and money laundering charges.
  
  U.S. District Chief Judge Gregory Frizzell also ordered Regina Fran Webb to pay $713,245.90 in restitution as part of her sentencing Monday [April 10] in Tulsa federal court.
  
  Webb, 58, pleaded guilty Dec. 2 to theft of mortgage settlement funds and unauthorized use of a credit card.
  
  The two charges were part of a 28-count superseding indictment issued June 7 by a grand jury that accused Webb of financial institution fraud, money laundering, unauthorized use of a credit card and aggravated identity theft with alleged losses totaling more than $800,000.
  
  In one of the counts to which Webb pleaded guilty, she admitted to keeping $95,536 that was part of the proceeds intended to pay off the seller in a January 2011 property transaction that she oversaw.
  
  The other guilty plea relates to funds that were meant to pay off loans. Instead, the money was used by Webb to make a payment on an American Express credit card account that she opened in a former client’s name.
  
  Webb owned Owasso Title LLC and Owasso Real Estate Services at the time of the illegal transactions, which occurred between 2009 and 2012.
  
  The restitution order involves the eight victims of Webb’s fraudulent activity, which include title and mortgage companies, banks and American Express.
  
  In addition to the prison term, Webb was ordered to serve five years of post-custody supervised release and forfeit $464,500.
  
  Frizzell gave Webb until May 23 to report to prison. The case was investigated by the FBI and Criminal Investigation division of the U.S. Internal Revenue Service.

Source: Owasso woman sentenced for fraud, money laundering. escrow theft

Mortgage Broker Cops Guilty Plea To Pilfering $132K That He Promised To Hold In Escrow On Behalf Of Client Seeking Secured Loan

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

• Michael Pampalone, age 34, of Elizabeth, New Jersey, pled guilty today [April 11] to defrauding a Rensselaer, New York, resident of $132,450.
  
  ***
  As part of his guilty plea, Pampalone admitted that he stole money that he had promised to hold in escrow for a client seeking a mortgage. After the client sent him two wires totaling $132,450, Pampalone withdrew the money and used it for his own purposes.

Source: New Jersey Man Admits Wire Fraud (Mortgage Broker Stole More Than $100,000 from Rensselaer Client).

Cops Pinch Foreclosed Landlord On False Pretenses, Forgery Charges For Renting Out/Selling Bank-Repossessed House To 2 Different Buyer/Tenants After Having Already Lost Title To Premises

In Asheboro, North Carolina, WGHP-TV Channel 8 reports:

• Terri Willard’s dream were about to come true. She’s a single mom working full time while taking classes to get her master’s degree. On top of that she’s raising four young kids.
  
  She just moved into her new home on Willow Road in Asheboro, signing a lease with Triad Property Solution LLC’s Don Lee Essick on April 1.
  
  Turns out, Essick did not own the property.
  
  “Within a week we had a Realtor show up at our house basically saying that Lee doesn't own this house, it's owned by Fannie Mae, the bank, and our lease was invalid,” Willard said.
  
  Paperwork shows the home was foreclosed on Feb. 7. Willard wasn’t the only one surprised. Downstairs, another couple just signed a lease with Essick and were also being told by the bank they had to leave.
  
  “I mean we haven't even been able to unpack,” said Katherine Burgess. “I mean we still have everything in boxes, there's no point in unpacking if we have to pick up and move again.”
  
  “The last thing I need is to have to move again and uproot my children,” Willard said.
  
  The two say they gave Essick nearly $1,000 each between rent and deposit, and that’s not including the money they lost in moving expenses.
  
  “We thought that we were actually gonna purchase this house, and we thought on the 15th of this month that we were gonna give this man an additional $5,000,” Willard said.
  
  FOX8 spoke with Fannie Mae over the phone. A representative said Essick is not the manager of the property. Paperwork shows the Willow Street Land Trust, managed by Essick, took ownership of the house in 2013, but the bank says mortgage payments stopped around April 2016.
  
  “We trusted what he was telling us, until we found out things weren't true,” Willard said.
  
  Thursday [April 13] Essick was arrested on two charges of obtaining property under false pretenses and two counts of common law forgery for signing the April 1 lease as the property’s manager.
  
  Essick posted $2,500 bond Thursday afternoon. FOX8 confronted Essick at the Randolph County Jail asking, “Why would you sell them a home, knowing it was foreclosed on?”
  
  “I didn’t know it was foreclosed on,” Essick said.
  
  That’s not true. Notices from the Fannie Mae’s receiver shows Essick was notified of the foreclosure multiple times starting in January. Asheboro police, who led the investigation bringing the charges, confirmed on the record Essick “clearly knew” what he was doing in selling these tenants a foreclosed home.
  
  Essick manages other properties in Greensboro and Randolph County. FOX8 asked if this case was the only time he has done this.
  
  “I keep an A-rating with the BBB,” Essick said.
  
  That is true, although Triad Property Solutions LLC has received two complaints for not making mortgage payments on time and missing mortgage payments entirely. The Better Business Bureau says those cases have been closed, but will reevaluate Essick’s rating in light of these new allegations.
  
  The two families were set to be kicked out next week, but a representative says in light of the FOX8 investigation, Fannie Mae will extend that deadline 30 days and give each family $1,000 to help relocate. The two families are seeking low-income housing.
  
  Essick will see a judge for the first time on Monday [April 17]. The two felony counts of obtaining property under false pretenses could lead to up to four years in jail.

Source: Asheboro man charged after leasing single mom home he didn’t own.

Twice-Convicted Scammer Who Operated S. California Loan Modification Telemarketing Racket That Posed As Law Firm Gets 9+ Years For Role In Ripping Off Over 1,500 Financially-Strapped Homeowners Out Of Approx. $9 Million

From the Office of the U.S. Attorney (Santa Ana, California):

• An Orange County, California man was sentenced today [April 10] in U.S. District Court in Santa Ana, California to serve 109 months in prison including the last 12 months in a halfway house for his role as the owner and operator of a multi-million dollar fraudulent mortgage modification scheme that posed as a successful law firm, the Justice Department announced.
  
  Bryan D’Antonio, 50, of Brea, California, pleaded guilty to conspiracy to commit mail and wire fraud on Aug. 9, 2016. In addition to the term of prison imposed by U.S. District Judge David O. Carter, Judge Carter ordered D’Antonio to pay $3,826,977.95 in restitution.
  
  D’Antonio admitted that, between October 2008 and June 2009, he participated in a scheme with Ronald Rodis, Charles Wayne Farris, and others to induce homeowners to pay between $3,500 and $5,500 for the services of Rodis Law Group (RLG) and its successor entity, America’s Law Group (ALG). RLG and ALG advertised on radio stations nationwide, urging struggling homeowners to call a toll-free number and stating that the companies consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.”
  
  In fact, RLG and ALG were telemarketing operations that never had teams of experienced attorneys, and that collected these payments from distressed homeowners, without providing anything of value to the overwhelming majority of them. During much of the scheme, Ronald Rodis was the only attorney at RLG.
  
  ***
  D’Antonio was previously convicted of mail and wire fraud and sentenced to four years in federal prison for his participation in a medical billing scheme. He was also subject to a permanent injunction prohibiting him from having any involvement with any business that engaged in telemarketing or misrepresented the services it would provide. D’Antonio admitted that he started RLG while he was still on supervised release from his prior conviction. In violation of D’Antonio’s permanent injunction, RLG and ALG sold their services through an extensive telemarketing operation in which employees routinely misrepresented the services RLG and ALG would provide.
  
  ***
  In connection with his guilty plea, D’Antonio admitted that the RLG and ALG schemes fraudulently obtained approximately $9 million from more than 1,500 victims.
  
  “Mr. D’Antonio preyed upon victims who were already experiencing difficult circumstances and robbed them of their remaining financial resources,” said Assistant Director in Charge Deirdre L. Fike of the FBI’s Los Angeles Field Office. “Homeowners seeking financial assistance should thoroughly investigate businesses before investing their money in advance of receiving services.”
  
  D’Antonio’s co-defendants, Charles Wayne Farris and Ronald Rodis, both previously pleaded guilty to one count of conspiracy to commit mail and wire fraud. Farris and Rodis are scheduled to be sentenced on May 1.

Source: California Twice Convicted Felon Sentenced to Prison for Operating Fake Law Firms That Promised to Help Struggling Homeowners.

Ohio Pair Get At Least 7 Years Prison Time For Roles In Running Loan Modification Ripoff That Fleeced Financially Strapped Homeowners Out Of Over $1.1 Million

From the Office of the U.S. Attorney (Toledo, Ohio):

• Two Toledo-area men were sentenced to prison for stealing more than $1.1 million from hundreds of people through a fraudulent loan-modification scheme, said Acting U.S. Attorney David A. Sierleja and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
  
  Jason J. Keating, 38, of Toledo was sentenced to nine years in prison while and Christopher J. Howder, 40, of Perrysburg, was sentenced to seven years in prison.
  
  Keating was ordered to pay $1.1 million in restitution while Howder was ordered to pay $561,000 in restitution.
  
  Both pleaded guilty last year to charges of conspiracy to commit mail and wire fraud and multiple counts of mail fraud and wire fraud.
  
  Keating and Howder worked at Making Home Affordable USA (MHAUSA) from 120 10th Street in Toledo, where Keating was self-described president and Howder was the self-described underwriting manager.
  
  According to court documents filed in the case:
  
  The company used various names but homeowners were told MHAUSA had a very high rate of success and that customers could achieve modified interest rates as low as 2 percent.
  
  Prospective participants were told there was a flat fee for service, generally between $495 and $795. Participants were told to stop making monthly mortgage payments to their lenders and instead to pay a percentage of their mortgage to MHAUSA.
  
  Participants were told MHAUSA would hold these payments in a “stimulus reserve” account to demonstrate the participants could reliably make payments, and that once the loans were modified, the money would be turned over to the lenders.

Source: Toledo-area men sentenced to nine and seven years in prison for stealing more than $1.1 million through fraudulent loan-modification scheme.

Cops Invoke Civil Forfeiture Laws To Swipe Over $200K In Cash Proceeds From Sale Of House From Innocent Owner Without Actually Charging Or Proving A Crime, Then Texas Courts Allowed Them To Get Away With It

From a recent story in The Atlantic on law enforcement's use of civil forfeiture laws to rip off innocent people of their money and property without having to prove (or even allege) the commission of a crime:

• The U.S. Supreme Court receives thousands of appeals from the nation’s lower courts each year. It declines to hear almost all of them. But for Justice Clarence Thomas, one of those rejected cases earlier this month gave him the chance to challenge a widely criticized police practice: civil forfeiture.
  
  Leonard v. Texas reached the Court after Lisa Leonard sought to overturn Texas’s seizure of roughly $200,000 in cash from a safe in her son’s car. In 2013, Liberty County police officers pulled him and his girlfriend over along what the state described as a “known drug corridor,” a law-enforcement term that can be applied to most major interstate highways. Officers seized the money and argued in local courts that the state could keep it, alleging it was likely the profits from drug sales.
  
  Leonard, an IRS officer, said the cash was hers, denied it was related to any drug sales, and told the courts it constituted the proceeds from the recent sale of a house she’d owned in Pennsylvania. A bill of sale for the property had been found alongside the cash in the safe. Leonard testified that she started storing her money in safes after the stock market crashed in 2008, and that her son was bringing the money to Texas so she could buy him and his girlfriend a house there. The Texas courts sided with police, who only had to prove that a “preponderance of the evidence” showed the money was tied to drug activity.
  
  Leonard asked the Supreme Court to overturn their decisions on due-process grounds. Because Leonard hadn’t raised that claim in the state courts during her initial appeal, Thomas agreed with his colleagues’ decision to decline review of it at their stage of the legal process. But he also sent a clear signal that he’d like to revisit the issue in the future. “Whether this Court’s treatment of the broad modern forfeiture practice can be justified by the narrow historical one is certainly worthy of consideration in greater detail,” he concluded.
  
  ***
  “This system—where police can seize property with limited judicial oversight and retain it for their own use—has led to egregious and well-chronicled abuses,” Thomas wrote in his statement. He cited a New Yorker article on a small Texas town where police and prosecutors collaborate to seize cash and goods from out-of-town motorists passing through, then split the proceeds between themselves.(1) “These forfeiture operations frequently target the poor and other groups least able to defend their interests in forfeiture proceedings,” he noted.

For the story see Justice Thomas's Doubts About Civil Forfeiture (The Supreme Court justice reiterated his wariness of the controversial police tactic earlier this month. A new Justice Department report seems to support his concern).

See generally, Police Can Use a Legal Gray Area to Rob Anyone of Their Belongings (When officers categorize wallets or cellphones as evidence, getting them back can be nearly impossible—even if the owner isn’t charged with a crime).

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

(1) See The New Yorker: TAKEN (Under civil forfeiture, Americans who haven’t been charged with wrongdoing can be stripped of their cash, cars, and even homes. Is that all we’re losing?).

Brooklyn DA Bags Accused Title Hijacker Of Allegedly Using Forged Deed To Snatch & Flip Unoccupied House To Unwitting Buyer While Rightful Owner Was Retirement-Wintering In Florida; Victim First Alerted To Potential Ripoff When She Failed To Receive Annual Real Estate Tax Bill & Was Denied In Attempt To Make Online Payment

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

• Acting Brooklyn District Attorney Eric Gonzalez, together with New York City Sheriff Joseph Fucito, today [April 5] announced that a Nassau County man has been indicted for illegally transferring the title of a multi-occupancy Canarsie home from its true owner to himself— then selling the property to an unaware buyer. The defendant’s limited liability company is also named in the indictment.
  
  Acting District Attorney Gonzalez said, “This defendant allegedly stole valuable Brooklyn real estate from its rightful owner and brazenly resold it to an unsuspecting buyer. Thanks to the diligence and hard work of our prosecutors and investigators, we were able to expose this defendant’s shameful conduct of alleged fraud and deceit.”
  
  ***
  The Acting District Attorney identified the defendant as Kenneth Pearson, 56, of Nassau County, New York. He was arraigned [...] on an indictment in which he is charged with second-degree grand larceny, second- degree criminal possession of a forged instrument, first-degree falsifying business records and first-degree offering a false instrument for filing. He faces up to 7 ½ to 15 years in prison if convicted on the top count. The company, Jean Swilling, LLC, is also variously charged in the indictment. Bail was set at $75,000 bond or $25,000 cash.
  
  The Acting District Attorney said that, according to the indictment, in May 2016, the defendant stole a two-story residential building located on East 85th Street in Canarsie, Brooklyn, by filing—with the Office of the City Register—a real property deed transfer containing the forged signature of the property’s rightful owner. The deed and title were transferred to Jean Swilling, LLC, a limited liability company owned and operated by the defendant.
  
  In July 2016, once the title was transferred, the defendant negotiated and completed a deal to sell the home to an unsuspecting buyer for approximately $265,000. Neither the buyer nor his attorney was aware of the property’s fraudulent title.
  
  The Acting District Attorney said that, according to the investigation, the fraudulent transfer was discovered by the property’s rightful owner,(1) who filed then a complaint with the Brooklyn District Attorney’s Action Center.

Source: Long Island Man Indicted for Stealing Canarsie Home from 65-Year-Old Woman (Defendant Allegedly Transferred Ownership to Himself and Resold Property for a Profit).

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

(1) See Man Arrested For Allegedly Stealing Brooklyn Townhouse, Flipping It To Developers:

• Hillary Kerman, a retired Board of Education administrator, was in Florida last spring around the time when Kenneth Pearson, 56, allegedly first set eyes on her house on East 85th Street. There was a fire at the two-family house in the early 2000s, and since then it has sat vacant, with Kerman waiting for the right time to sell, she told Gothamist. When she returned to New York—she winters in Florida and now lives elsewhere in Brooklyn—she noticed that she hadn't received the tax bill she usually gets mailed each May.
  
  "I happened to be downtown for something else. so I went over to the Department of Finance to print [the bill]," she said. "I was even going to pay it online and it wasn't letting me go into my account. It was saying, 'Invalid.'"
  
  A clerk told her to try looking up the tax bill in a public-facing database and just mail in a check. But when she went to a computer, the owner of the building was listed as Jean Swilling LLC. She pointed this out to another DOF worker, who in turn directed her to another floor in the agency's office building. From there, she was told to go to the Brooklyn District Attorney's Office. It was late afternoon on the Friday before Memorial Day weekend, so she ran.
  
  Soon it became clear that someone, whoever was behind this LLC, had stolen her house by filing fraudulent paperwork saying that she had sold it for $65,000 that May.

Two Tenants, Lawyer Get Multi-Year Prison Terms For Roles In Using Forged Will To Steal Dead Landlord's House, Other Assets; Loss Estimated At Approx. $2.2 Million

From the Office of the U.S. Attorney (Toledo, Ohio):

• Three Toledo residents were sentenced to prison for forging a will to fraudulently gain control of an estate worth approximately $2.2 million, said Acting U.S. Attorney David A. Sierleja and [others].
  
  Susan M. Pioch [attorney], 60, was sentenced to more than nine years in prison.
  
  Kurt L. Mallory, 53, was sentenced to more than eight years in prison.
  
  Margaret L. McKnight, 42, was sentenced to four years in prison.
  
  All three were convicted last year following a jury trial of one count of conspiracy to commit bank fraud and mail fraud, 21 counts of bank fraud, seven counts of mail fraud and one count of aggravated identity theft. Pioch, McKnight and Mallory were convicted on additional counts of money laundering. McKnight was convicted on an additional count of structuring cash withdrawals, three tax counts and seven counts of causing a financial institution to fail to file a required report.
  
  ***
  Martin E. Fewlas executed a will in 1993 devising his entire estate to his brother. If his brother did not survive Fewlas, the estate was to go to his nephew and then his great-nephew, identified in the indictment as JRM.
  
  Fewlas owned the duplex located at 2557 Broadway Street in Toledo. He lived in the lower half and for approximately 10 years, McKnight and Mallory lived together in the upper half, according to court documents.
  
  Fewlas died on Aug. 28, 2010, leaving an estate worth approximately $2.2 million. On Sept. 2, 2010, McKnight, Mallory and Pioch – an attorney who had previously done legal work for McKnight and Mallory forged a will in Fewlas’ name. The forged will was drafted by Pioch and named McKnight as the executor and sole devisee of Fewlas’ assets. Pioch filed the forged will with the Lucas County Probate Court on or around Sept. 2, 2010. McKnight identified herself as executor of the estate and Pioch identified herself as attorney for the executor in probate court documents, according to court documents.
  
  By filing the forged will and concealing its fraudulent nature, Pioch, McKnight and Mallory succeeded in obtaining Probate Court authority to take possession of Fewlas’ assets. After obtaining those assets, they disbursed the assets to themselves for their own enrichment, according to court documents.
  
  ***
  JRM, Fewlas’ great nephew and the sole remaining devisee from the 1993 will, received nothing, according to the indictment.

Source: Three from Toledo sentenced to prison for forging will and stealing $2.2 million.

Payout By Pennsylvania's Attorney Ripoff Reimbursement Fund Could Top $4 Million To 47 Mostly-Elderly Victims Of Now-Dead Lawyer In $11+ Million Ripoff; One Rapidly-Aging Ex-Client: "We Would Like To Enjoy Some Of The Money Before All Of Us Croak!"

In Hummelstown, Pennsylvania, PennLive.com reports:

• After more than three years of waiting for word on whether they will ever see any of the more than $11 million dead Hummelstown lawyer Jeffrey Mottern(1) stole from them, victims of his investment scam finally received a bit of good news.
  
  The Pennsylvania Lawyers Fund for Client Security board notified 47 victims within the past couple of weeks that their claims have been approved for reimbursement, said the fund's executive director Kathryn Peifer Morgan.
  
  "Now we're waiting to see what the dollar amount is going to be," she said.
  
  Peifer Morgan was unable to put a timeline on how soon those determinations will be made. She indicated whatever they are, they must receive the lawyers fund board and state Supreme Court's approval before payments go out.
  
  Two of victims' claims were determined by the lawyers fund board not to be compensable for reasons she couldn't disclose.
  
  ***
  A lawsuit is pending in Dauphin County Court against Ameriprise and two local banks, Fulton Bank and Riverview Bank, to try to recoup some of the losses victims incurred in his so-called Ponzi scheme.
  
  Mottern had a financial relationship with those institutions that are alleged in court documents to have played a part in his scam. All three institutions deny any wrongdoing on their part. A trial date for the case is tentatively scheduled for May 2018.
  
  The claims made to the lawyers fund are a separate avenue Mottern's victims are pursuing to recover some of their lost savings. Money for that fund, established in 1982, comes from a portion of the annual fee paid by the approximately 65,000 lawyers who practice law in Pennsylvania.(2)
  
  ***
  The fund limits the maximum payout to each victim to $100,000 and places a $1 million aggregate cap on all claims made against a lawyer. However, there is a provision that allows the lawyers fund board to ask the state Supreme Court to waive the $1 million cap. Peifer Morgan said the board agreed to make such a request for the Mottern victims.
  
  She estimates the total payout from the fund could top $4 million for those victims.
  
  One of them, Paul Stokes of Middletown, said the notice he received from the lawyers fund offered him some hope that he might get some of the $700,000 he and his late wife Judith lost in Mottern's deception.
  
  Still, he added, "I talked to other people and the main concern any of us have is, is it going to take another two or three years for the board to make their minds up" on how much to award to each of the victims.
  
  Other victims, Kay and Robert Shaffner, who have since moved to Florida, also look forward to getting some of their money back. Robert Shaffner, a retired insurance agent who is now 75, had to get a job at Lowe's and is working 38 hours a week to help pay the bills after losing $413,000 in Mottern's rip-off, his wife said.
  
  Time is of the essence in resolving this case. Most of the victims are in the 70s and older. Two have died since Mottern's scam was discovered.
  
  Stokes said, "We would like to enjoy some of the money before all of us croak."

For the story, see Victims of dead lawyer's scam offered hope of recouping some money.

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

(1) Three days after the FBI raided his law office, Mottern committed suicide in his office at the age of 62, according to the story.

(2) 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 (February 2017) (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.

Convicted, Aging Ex-Lawyer Violates Probation, Faces Jail Threat For Failing To Make Meaningful Reimbursement To State's Client Security Fund For Money Shelled Out To Former Client Who Was Fleeced Out Of $600K+

In Stamford, Connecticut, the Stamford Advocate reports:

• A judge berated a disbarred attorney who has repaid less than $400 of the more than $600,000 he stole from his former car dealership client.
  
  Benson Snaider, 79, pleaded guilty in April 2012 to first-degree larceny for misappropriating an $800,000 check from the City of Stamford to Minchin Buick in 2005 as a partial payment for its property to construct the Stamford Urban Transitway.
  
  Snaider was given a five-year-suspended sentence, five years probation and ordered to pay $680,000 in restitution.
  
  Snaider’s probation was violated in January because he had only paid $180 since his conviction, according to court records. Snaider has since made another $200 in payments to the state’s Client Security Fund, which pays victims who lost money or property because of a dishonest attorney. The fund reimbursed Minchin for its loss.(1)
  
  The fund is comprised of yearly contributions from every lawyer in the state, including public defenders and prosecutors, like Senior Assistant State’s Attorney Maureen Ornousky, who argued the state’s position against Snaider at the Stamford courthouse on Thursday [April 6].
  
  Judge Gary White asked Snaider, who was represented by public defender Howard Ehring, if he was able to pay his taxes and the mortgage and fees for his condo.
  
  Ehring replied that his client has been making those payments, prompting White to argue Snaider has the funds to make restitution to the fund.
  
  White told Snaider to return to court on April 20 with $2,000. If he appeared a “penny short,” White threatened to send Snaider to jail.
  
  Snaider wrote a letter to the court after his parole was violated, arguing his only income is $2,100 a month from Social Security. He said he barely has enough money for living expenses.
  
  “The amount imposed was on it’s face impossible to obtain,” he wrote. Snaider also called his parole violation “unjust,” because the fund had already reimbursed Minchin and he did not have the assets to pay the restitution.

Source: Disbarred Stamford attorney ordered to pay restitution (Benson Snaider, 79, of Stamford, admitted to violating his probation by only paying $180 in restitution in almost five years when he owed $690,000 for stealing funds from a client).

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

(1) 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 (February 2017) (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.

Disbarred 2 1/2 Years Ago For Fleecing $200K From One Client, Ex-Lawyer Now Faces Criminal Charges For Ripping Off Over $300K From Another Client

In Santa Ana, California, The Orange County Register reports:

• A disbarred Newport Beach attorney made his initial court appearance Monday, April 3, on felony charges of stealing more than $300,000 from a client.(1)
  
  Patrick Lund, who was disbarred in October 2014, was arrested Friday [March 31] on a criminal complaint filed in February, charging him with attempted theft from an elder adult, grand theft, attempted grand theft and theft from an elder adult.
  
  Lund also faces sentence-enhancing allegations of property damage exceeding $200,000 and aggravated white-collar crime exceeding $100,000.
  
  In the spring of 2013, Lund agreed to help a 73-year-old client "facilitate the process" of paying back a $290,000 loan, but instead pocketed the money, changed his phone numbers and moved to Arizona, Senior Deputy District Attorney Pete Pierce alleged.
  
  Lund charged a fee of $12,500 to the client, Pierce said.
  
  According to the State Bar of California, Lund misappropriated nearly $200,000 from another client "for his own purposes" in 2011. Lund paid back $130,500, but never gave back the rest, according to the State Bar.

Source: Disbarred Newport Beach attorney in court on charges he stole $300,000 from client.

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

(1) The California State Bar's Client Security Fund is a discretionary fund that can reimburse clients who have lost money or property due to theft or dishonesty by a California lawyer. It is a State Bar program funded entirely by California lawyers. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

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 (February 2017) (includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

Attorney Gets Bar Boot For Negligent Handling Of Escrow Money Resulting In $100K In Losses to One Client

In Huntington Beach, California, the Northern California Record reports:

• Huntington Beach attorney Michael Vance Wright was disbarred on Jan. 6, 2017, by the State Bar Court of California. The decision to recommend the disbarment of the Orange County attorney stemmed from several counts of misconduct in one client matter in which Wright misappropriated nearly $100,000 of his client’s funds.(1)
  
  According to the State Bar, Wright was involved in an escrow agreement in 2014 between a Nigerian company’s CEO and an investment company. The CEO deposited $100,000 into a client trust account to help the investment company obtain a $5 million line of credit. Wright allegedly misappropriated $96,500 of the funds by transferring them directly to the investment company and kept the additional $3,500 for himself in escrow fees without helping the investment company receive its line of credit. The attorney disregarded many safeguards put into place for transferring the funds.
  
  In addition, Wright allegedly did not inform the CEO of his actions and on multiple occasions provided her with excuses as to why the investment company did not receive its line of credit and why her funds had not been returned. As of Jan. 6, the CEO still has not been reimbursed, though the disciplinary ruling states that $100,000 in restitution must be made by the attorney.

Source: Huntington Beach attorney disbarred for misuse of nearly $100,000 in client funds.

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(1) The California State Bar's Client Security Fund is a discretionary fund that can reimburse clients who have lost money or property due to theft or dishonesty by a California lawyer. It is a State Bar program funded entirely by California lawyers. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

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 (February 2017) (includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

Attorney Gets Law License Yanked For Gross Negligence In Losing Control Over Held Escrow Funds & Failing To Take Steps To Return Loot, Resulting In Over $300K In Client Losses

In San Diego, California, the San Diego Reader reports:

• David Q. Meyer has been disbarred by order of the California Supreme Court, according to State Bar records. Meyer was the escrow agent for an escrow firm named Ford & Weinberg. Meyer agreed to accept escrow funds from the company and put them in his client trust account.
  
  But Meyer didn't review the terms of the escrow agreement and relied on advice of a non-attorney employee of Ford & Weinberg. In five instances, Meyer failed to maintain the funds in his client trust account, and transferred them to an account over which he had no control, states the Bar.
  
  He committed "multiple acts of wrongdoing" through his "grossly negligent conduct" involving moral turpitude and breach of fiduciary duties, according to the State Bar. Meyer "has taken no steps to return the funds," and has taken no steps to notify law enforcement, according to the Bar. He has been ordered to pay $319,946 in restitution.(1)

Source: Attorney relied on non-attorney at Ford & Weinberg (San Diego's David Q. Meyer gets disbarred for losing control of funds).

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(1) The California State Bar's Client Security Fund is a discretionary fund that can reimburse clients who have lost money or property due to theft or dishonesty by a California lawyer. It is a State Bar program funded entirely by California lawyers. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

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 (February 2017) (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.