Former Housing Authority Executive Director Gets 37 Months, Hubby Gets 24 Months For Roles In Bilking Over $730K In HUD Cash Intended To Further Mission To Provide Low Income Tenants With Affordable Rental Housing

From the Office of the U.S. Attorney (Little Rock, Arkansas):

• [C]hief United States District Judge Brian S. Miller sentenced Rhonda Williams, 50, and her husband, Gary Williams, 59, both of Des Arc, Arkansas, to prison for their role in a scheme to steal money intended for use by the Cotton Plant Housing Authority.
  
  On September 2, 2016, Rhonda Williams and Gary Williams appeared before Judge Miller and pleaded guilty to conspiring to commit bank fraud and money laundering. Today, Judge [Brian S.] Miller sentenced Rhonda Williams to 37 months’ imprisonment, to be followed by three years of supervised release. In the same hearing, Judge Miller sentenced Gary Williams to 24 months of federal prison, to be followed by three years of supervised release. The Williams were jointly ordered to pay restitution of $732,177.80 and to forfeit $145,000 in cash seized from their home, the money in four bank accounts, a boat, and an SUV.
  
  “These defendants took public money that was meant to provide affordable housing to a low income population, and instead used it for their own personal gain,” Harris said. “This case is an example of how our office will continue working tirelessly to protect the public and eliminate this unacceptable fraud, waste, and abuse.”
  
  The Cotton Plant Housing Authority received its annual operating funds from HUD in the form of an annual distribution. Rhonda Williams served as the Executive Director of the Housing Authority and Gary Williams was the Housing Authority’s Maintenance Supervisor.
  
  From January 31, 2001 to December 31, 2014, the Williams conspired and executed a scheme where they used false and fraudulent pretenses to receive funds that were intended for use by the Housing Authority. As part of the conspiracy, the Williams lied about the reasons for the payment of Housing Authority money, and solicited and accepted bribes and kickback payments from Housing Authority contractors.
  
  In addition, the Williams caused the Housing Authority to pay for their personal expenses on their Housing Authority credit cards, and took Housing Authority equipment and materials and used them in the construction of their personal residence.

Source: Couple Sent to Prison for Scheme to Steal HUD Funds Intended for the Cotton Plant Housing Authority.

Feds Bag Former Housing Authority Executive Director For Allegedly Embezzling Over $336K Meant To Maintain Public Housing Facility For Low Income Residents; Charges Brought One Year After Defendant Abruptly Retired & Left State

In Detroit, Michigan, The Detroit News reports:

• The former head of the St. Clair Housing Commission embezzled more than $336,000 in low-income housing funds and spent the cash on booze, beauty products, bedroom furniture and homes for her family, federal prosecutors said Monday [August 7].
  
  Former Executive Director Lorena Loren, 55, was charged in federal court with conspiracy to commit federal program fraud during an eight-year scheme that benefited and involved relatives, including her husband and son, according to federal court records.
  
  Since 2008, Loren fraudulently used the housing commission’s credit cards to make $166,000 worth of purchases at Amazon, Wal-Mart and Sam’s Club, falsified lease agreements for low-income housing and used the money to pay for her own relatives’ homes, the government alleged.
  
  “Holy crap,” St. Clair Mayor Bill Cedar Jr. told The Detroit News. “I guess you never know what’s going on with people.”
  
  Loren was charged in a criminal information, which means a guilty plea is expected. She could not be reached immediately for comment Monday.
  
  If convicted, Loren could face at least five years in federal prison.
  
  Loren was charged one year after she retired abruptly, the mayor said. She moved to southeast Georgia and bought a $325,000 custom-built house in October, according to public records.
  
  The home is far from low-income housing. The five-bedroom, 2,858-square-foot home features a salt-water pool, 24-foot ceilings, walk-in closets, a game room and detached man cave.
  
  Loren was appointed executive director in 2003 and started stealing from the poor five years later, prosecutors alleged.
  
  She fraudulently obtained housing-assistance payments for properties in which she had a proprietary interest with family members or for the benefit of family members, according to court records.
  
  She falsified lease agreements and money intended to help low-income residents afford apartments was used to rent a home for her son, Ryan Loren, prosecutors alleged.
  
  Lorena Loren also told relatives to establish bank accounts so federal subsidy payments could be deposited and spent for their personal use, including to rent a home in Florida, according to court records.
  
  She lied while claiming her son-in-law was the landlord of a rental property for low-income residents, prosecutors alleged. The property turned out to be Lorena Loren’s home in Port Austin, Michigan, according to court records.
  
  Her son-in-law, Jaime Johnson, deposited the money into a bank account he controlled with Lorena Loren’s husband, Brian, the government alleged.
  
  The $166,000 worth of credit card purchases included adult and infant clothing, furniture, appliances, mattresses, food, beauty supplies, medications and other household items, according to court records.
  
  The money was supposed to maintain Palmer Park Manor, the commission’s low-income public housing facility, prosecutors alleged.

Source: Feds: Official blew money for poor on booze, family.

Ex-Housing Authority Director Cops Plea To Embezzling Over $86K In HUD Funds Meant To Further Affordable Housing Mission For Low Income Families

From the Office of the U.S. Attorney (Fort Myers, Florida):

• Acting United States Attorney W. Stephen Muldrow announces that Twaski Jackson (38, Lee County) today [August 1] pleaded guilty to a two count information charging him with stealing and embezzling thousands of dollars from the City of Fort Myers Housing Authority and the Lee County Housing Authority. Both agencies receive federal funds to further their mission of providing affordable housing to low income families. Jackson faces a maximum penalty of 10 years in federal prison for each count. A sentencing date has not yet been set.
  
  According to the plea agreement, Jackson served as the Director of Client Services for both housing authorities from 2012 until 2016. As part of his position, he had the authority to approve credit card disbursements and checks written on behalf of the agencies. Jackson used that authority to approve expenditures that benefited himself and his friends. Various personal charges were made, including payments of his own college tuition and personal trips. He also improperly paid a “vendor” (actually Jackson’s friend) who performed no services for the agencies, without authorization. The two then split the money.
  
  Over a three-year period, Jackson bilked the agencies for over $86,000. Jackson’s plea agreement requires him to forfeit the proceeds of his crime and to repay his victims.

Source: Former Ft. Myers Housing Director Pleads Guilty To Embezzling Thousands.

Lawsuit: Computer Hacker Dupes Homebuying Couple Out Of $1.57 Million In Closing Cash By Allegedly Commandeering Title Agency's Servers, Then Sending Them Phony Email Request For Funds; Victims Include $5 Million RICO Claim In Legal Action Against Closing Agent, Others

In Washington, D.C., WAMU-Radio 88.5 FM reports:

• When hopeful D.C. homebuyers Sean Smith and Erin Wrona were asked earlier this year to wire their title company $1.57 million, they took it as a routine request ahead of closing on the purchase of a five-bedroom, 2,300-square-foot Cleveland Park home.
  
  But when they went to the offices of Federal Title & Escrow a month later to sign the final paperwork, an attorney for the company informed them that the funds the couple thought they had wired had not ended up in escrow as expected. In fact, no one at Federal Title even knew the money had been sent.
  
  A new lawsuit now sheds some light on the mystery of the missing money: Smith and Wrona apparently fell victim to a hacker who had commandeered Federal Title’s servers and sent the couple an email asking that they wire the $1.57 million for the home purchase to a bank account that, unbeknownst to them, was controlled by the hacker.
  
  It’s a practice known as phishing, and while it’s not a new scam — it’s how hackers gained access to John Podesta’s email account last year, for one — it is fairly new in the realm of real estate transactions.
  
  Last year, the Federal Trade Commission and National Association of Realtors teamed up to warn homebuyers of phishing attempts:

• Hackers have been breaking into some consumers’ and real estate professionals’ email accounts to get information about upcoming real estate transactions. After figuring out the closing dates, the hacker sends an email to the buyer, posing as the real estate professional or title company. The bogus email says there has been a last minute change to the wiring instructions, and tells the buyer to wire closing costs to a different account. But it’s the scammer’s account.

• Unlike the victims in those scams, many of which involved closing costs involved in home purchases, Smith and Wrona lost almost the entirety of what they were going to pay for the house, spare the $200,000 they put down separately as a deposit. (The sales price was just north of $1.7 million.)
  
  In a statement, Federal Title spokeswoman Nikki Lyon says the incident stemmed from “what appears to be a cybercrime attack on our information systems.”
  
  “Federal Title discovered the attack and immediately reported it to the FBI. Federal Title continues to work with the FBI as they complete their investigation. Federal Title’s internal review has revealed that no other customers were affected by this attack,” she said.
  
  Those assurances are not enough for Smith, who works for a U.S. senator, and Wrona, a statistician with the U.S. Census Bureau.
  
  Last week, the couple filed a lawsuit against the company, alleging that Federal Title either conspired to defraud them of the $1.57 million or was so negligent in its online security protocols that it all but allowed the money to be stolen by someone else.
  
  “Federal Title either caused our money to be stolen or stole it, and we need to get our money back,” said Michael Nadel, the couple’s attorney. “We don’t have any evidence that it happened because of hackers other than Federal Title’s say-so.”
  
  Nadel also says Federal Title, which has offices in Friendship Heights and Logan Circle, failed to effectively communicate with Smith and Wrona ahead of the closing — a situation he attributes to the company being involved in the scheme.
  
  “Federal Title never called Sean Smith and said, ‘Bring your money to closing,’ and didn’t even bring it up until the middle of closing. So if they weren’t responsible for helping steal the money, it certainly seems like they knew well in advance of that closing that the money was gone. Their conduct shows that,” he said.
  
  The pair is asking not just for their $1.57 million, but also close to $5 million for an alleged violation of RICO — the Racketeer Influenced and Corrupt Organizations Act, the law best known for its use against the mob — plus punitive damages and attorneys’ fees.
  
  Federal Title’s Nikki Lyon denies that the company had anything to do with the money going missing.
  
  “While the investigation is ongoing, Federal Title wishes to unequivocally and categorically deny the plaintiffs’ allegations that FTE and its employees were somehow complicit with the person or persons who perpetrated this scheme,” she said in the emailed statement. “The allegations in the complaint are false and misleading and FTE will fully defend this matter.”
  
  Last month, Federal Title used its official blog to warn consumers of phishing scams like the one they say Smith and Wrona fell victim to.
  
  “Federal Title & Escrow Company will only send wire instructions to clients via email, in a secured format and only upon request,” said the company in the blog post.
  
  Lyon says there’s a lesson to be learned from this experience.
  
  “This incident should serve as a reminder to the public about the importance of cybercrime awareness and education,” she said.
  
  Smith and Wrona did ultimately buy the house. According to the lawsuit, the couple and their family “wired an additional $1.57 million to close the transaction.”

Source: Hackers Allegedly Steal $1.5 Million From D.C. Couple In Home-Buying Phishing Scheme.

For the lawsuit, see Snith, et ano. v. Federal Title & Escrow Company, et al.

Raleigh Feds: Local Man Who Acquired Title To Mortgage-Encumbered Homes At HOA Lien Foreclosure Sales Subsequently Recorded Phony Satisfactions Of Mortgage On Each Premises, Then Flipped Properties Purporting To Be Free & Clear To Unwitting Buyers, Pocketing Over $1 Million While Leaving Unpaid Lenders Holding The Bag

In Raleigh, North Carolina, WRAL-TV Channel 5 reports:

• A Wake Forest man made more than $1 million by swooping down on homes in foreclosure and using an intricate shell game involving fraud, forgery and offshore companies, according to federal authorities.
  
  Xavier Milton Earquhart faces 14 counts of bank fraud, five counts of engaging in monetary transactions involving criminally derived property and one count of aggravated identity theft. He is being held without bond in the Harnett County jail.
  
  Earquhart was arrested in Wake Forest in June 2014 when residents on Coral Bell Drive saw him drilling out the locks of a nearby house and called police. Police eventually dropped all charges against him when he showed that he had purchased the title of the $300,000-plus home, which the Heritage Wake Forest Homeowners Association had foreclosed on for nonpayment of dues, for $3,800.
  
  "Everything that occurred with this house was lawful," Earquhart told WRAL News at the time. "To say the least, it was very traumatizing."
  
  The arrest kick-started a federal investigation into Earquhart's real estate transactions that culminated in a recent indictment.
  
  Authorities allege Earquhart illegally obtained seven properties in Wake Forest, Cary, Holly Springs and Charlotte through HOA foreclosures, using aliases to bid on properties and funneling money through holding companies. He would produce fraudulent documents showing the mortgages had been paid off and that he had clean titles to the properties and would liquidate the holding companies as soon as the properties had been resold, according to the indictment.
  
  "He received money that he was not entitled to, so I would definitely call that stealing," said James Oliver, a real estate attorney with Hatch Little & Bunn in Raleigh, which isn't involved in the case.
  
  "He goes to sell the property or put a mortgage on the property. Someone does a title search. They see he owns it. They see that the mortgage has been satisfied. Of course, they don't realize it's fraudulent, and so the bank loans money," Oliver said. "When he'd get title, he'd transfer title to several different entities, which I think makes it more convoluted and difficult to track what's going on."
  
  The indictment lists Xavier Smart, Xzayvier Ernhart and David Imrich among the aliases used in the alleged scheme, which authorities allege cost banks a total of $920,000.
  
  "I can't imagine there are too many people out there filing fraudulent satisfactions and thinking they're going to get away with it," Oliver said.
  
  E.J. Stern, one of the Coral Bell Drive neighbors who first alerted police to Earquhart three years ago, said he's not surprised by the federal indictment.
  
  "The police had their suspicions. My neighbors and myself had our suspicions," Stern said. "I'm glad the justice system found a way to catch this guy."
  
  Earquhart also is accused of acquiring a homes on Knowles Street in Raleigh through fraudulent documents and using it as collateral to obtain $185,000 in bank loans, according to the indictment.
  
  "It's good to see people who aren't doing the right thing – making bad choices – be accountable for those choices," Stern said.
  
  As part of the indictment, federal authorities are seeking a court-ordered forfeiture by Earquhart of more than $1.1 million in cash, nearly $300,000 in gold bullion coins, a Rolex watch and any other property he gained through his real estate transactions.

Source: Man who bought HOA-foreclosed homes faces federal fraud charges.

Homebuyer Coughs Up $10K Downpayment To Purchase Fixer-Upper, Shells Out Thousand$ In Cash, Sweat Equity Over Eight Months To Improve Premises, Then Finds Out Seller Doesn't Have Title To Home; Felony Theft By Deception Charge Pending

In Athens, Alabama, The News Courier reports:

• Limestone County resident Tommy McLemore and his daughter, Marla, wanted to buy a decent home in a nice neighborhood that they could remodel.
  
  Marla found a candidate.
  
  A woman who said she was a certified Realtor sold them the house, which she said she owned, and even financed the sale.
  
  The McLemores paid the woman a total of $12,600 in the form of a down payment and additional payments. They hired workers to remodel the home. They also put in eight months of sweat equity themselves, only to learn the woman who sold them the house didn't really own it — at the time.
  
  The woman — Laurie Jones McGuire, 42, of 21075 Broadwater Drive — has been charged with felony theft by deception in connection with the sale, records show.
  
  “She was as slick as a button,” said 73-year-old Tommy to The News Courier Friday.
  
  According to Count 1 of the indictment, McGuire knowingly obtained, or exerted by deception, unauthorized control over more than $2,500 belonging to Tommy and Marla McLemore with intent to deprive them of the money.
  
  McGuire could not be reached for comment Friday at her real estate number. Her voicemail was not accepting messages.
  
  The journey's beginning
  
  Linda McLemore, Tommy's wife, said the adventure began when Marla came by their house one day to tell her father about a house at 433 Rogers St., near Athens State University, and they decided to buy it together and redo it.
  
  McGuire came by their home on New Cut Road off Alabama 99 and told them she owned the home, Linda said.
  
  They had agreed on a price of $31,000, Tommy said. He applied for a bank loan to pay for it but the process was taking a while, he said.
  
  McGuire said she needed to close the house as soon as possible, so she offered to sell and finance the purchase. Tommy said he paid McGuire $10,000 down in cash to lock in a 4 percent interest rate on the mortgage. Plus, he made $2,600 in other payments.
  
  Bad news knocks
  
  One night when Tommy and Marla were at the house, there was a knock on the door.
  
  “This lady and gentleman asked if we owned the house,” Tommy said, explaining they had bought it from Laurie McGuire.
  
  “They said Laurie didn't own the house, that it belonged to Ted Barnett of Barnett Real Estate in Ardmore,” Tommy said. “I liked to fell out. We had just had the carpet put down that day.”
  
  Tommy and Marla confirmed with Barnett that he still owned the home. He said he was selling it to McGuire but he still held the deed and she had never paid him. In addition, her contract for the home did not allow her to sell it.
  
  “She sold it to us under false pretenses,” Linda said.
  
  By then, though, the McLemores had gutted the home, renovated it and landscaped the yard, Linda said. Tommy had even installed a driveway himself, he said.
  
  They were nearly finished with the house, Linda said.
  
  Tommy and Marla reported the matter to Athens Police Department.
  
  Investigator Kelly Fussell looked into the matter, questioning the McLemores, Barnett and McGuire, and she believed McGuire had committed theft by deception. Police decided not to obtain a warrant initially charging her with a crime as police often do. Fussell sent his findings to the Limestone County District Attorney's Office so an attorney could present the matter to a grand jury and let them decide if a crime was committed. This sometimes occurs in cases of a “he said, she said” nature or cases, such as this one, that border on being civil court matters.
  
  The District Attorney's Office presented the case to a grand jury, which voted June 2 to indict — or formally charge — McGuire with first-degree theft by deception. She was arrested on the indictment warrant July 28. She was freed from the Limestone County Jail immediately after her arrest after posting bail of $5,000.
  
  [...]

For more, see Man claims he was defrauded on home buy.

Migrant Worker Loses Thousand$ After Buying Home Site On Land Contract; Completes Making All His Periodic Payments Only To Encounter Trouble Getting Deed Put In His Name

In Progreso, Texas, KRGV-TV Channel 5 reports:

• A man said the deed to a Rio Grande Valley lot he purchased was never transferred to his name.
  
  Everardo Garcia is blind and an amputee. He worked as a migrant across the U.S. but had to retire due to complications related to diabetes.
  
  Garcia said he’s spent all of the money he had on a plot of land since 2008. It was to build the home he and his wife always wanted.
  
  “I would give him payments. Every time I came from up north, I would hand him my income tax, too,” he said. “The way I would get the money, I would give it to the man. We don't know how to read. It wasn’t until my daughter said, ‘No, my dad gives this man too much money.’"
  
  Property attorney Armando Puente told CHANNEL 5 NEWS that’s due to the type of contract he signed. He said it’s known as a contract for deed.
  
  “It binds the buyer and the seller, on the certain properties, and sets out all the terms usually on a single or two pages. But basically it says, ‘When you finish paying me, I will give you a deed. At your expense, of course,’” Puente said.
  
  Puente explained these types of contract, written for a term of more than six months, is illegal. He said page 22 of the Texas Property Code 2016 Edition states the style of contract was banned in 1995.
  
  “At that point, there is nothing there to show that you had an interest in it, other than the piece of paper that you have in your hand,” he said. “Fraud can happen so easily, it’s frightening.”
  
  The attorney explained people who find themselves entangled in this style of contact may sue if they never receive their deed. He admitted it can be an uphill battle due to the lack of paperwork.
  
  Garcia said he wants to sue the person who sold the property. He said the only problem is he can’t afford an attorney.
  
  Puente said if you plan on purchasing a property be sure to sign a deed of trust contract. He said the deed will be transferred into your name during the life of your contract.

Source: Man Loses Thousands after Property Deed was Never Transferred. land contract for deed racket

NYC Feds Charge Duo In Short Sale Scam That Hid Non-Arm's Length Nature Of Transaction To Dupe Bank Into Taking $250K+ Haircut On Underwater Mortgage

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

• Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent in Charge of the United States Department of Homeland Security’s Homeland Security Investigations, announced today [August 3] the unsealing of a criminal Complaint charging MICHAEL RIZZI and EDWARD MONAHAN with bank fraud and conspiracy to commit bank fraud, in connection with a scheme to submit false documentation to a bank to make RIZZI’s sale of property to his friend and business partner look like an “arm’s length” transaction.
  
  ***
  According to the allegations in the Complaint[1] unsealed [] in Manhattan federal court:
  
  RIZZI purchased a property (the “Rizzi Property”) in 2007 with the assistance of a mortgage (the “Mortgage”) The Mortgage was acquired by a bank (“Bank-1”) that same year. Over time, RIZZI stopped paying the Mortgage and, in 2009, the Mortgage fell delinquent. In 2015, RIZZI contacted Bank-1 and requested a short sale due to financial hardship (the “Short Sale”).
  
  Bank-1 advised RIZZI that the Short Sale was required to be an “arm’s length” transaction, meaning that the buyer could not have any personal, familial, or business connections with RIZZI.
  
  Later that year, MONAHAN agreed to buy the Rizzi Property from RIZZI. In connection with the sale and closing of the Rizzi Property, RIZZI and MONAHAN both executed various documents in which they affirmed that the buyer and the seller were engaged in an “arm’s length” transaction, and the seller and buyer of the Rizzi Property did not have a personal or business relationship. RIZZI and MONAHAN were, in fact, friends and business partners. Among other things, RIZZI and MONAHAN were partners in the ownership of Nitecap Megastore, a Staten Island adult sex and smoke shop. MONAHAN also has posted photos and videos on social media, which depict RIZZI and MONAHAN socializing with each other.
  
  As a result of this scheme, Bank-1 suffered more than $250,000 in losses.

Source: Acting Manhattan U.S. Attorney Announces Fraud Charges Against Former New York City Police Officer And Staten Island Man (Michael Rizzi and Edward Monahan Are Alleged to Have Made False Claims in Connection With the Sale of a Staten Island Property).

Vegas Feds Indict Pair In Alleged Short Sale, Buyback Scam Designed To Dupe Lender Into Taking Haircut On Mortgage While Allowing Underwater Homeowner-Seller To Continue Residing On Premises, Regain Title In Future; Defendants Accused Of Failing To Disclose Non-Arm's Length Nature Of Transaction From Bank

From the Office of the U.S. Attorney (Las Vegas, Nevada):

• Dustin M. Lewis, 42, of Henderson, Nev., and Brian Sorensen, 49, of Las Vegas, were each charged with one count of conspiracy to commit bank fraud and one count of bank fraud. If convicted, Lewis and Sorenson each face a statutory maximum penalty of 30 years in prison and up to a $1,000,000 fine.
  
  According to allegations made in the indictment, from about August 15, 2011 to about January 17, 2014, Lewis and Sorensen conspired with each other to defraud OneWest Bank. The defendants allegedly devised and executed a scheme to avoid foreclosure so that Lewis could retain ownership of a 5,331 square foot, five-bedroom Henderson, Nev. home.
  
  As part of the scheme, Lewis submitted a fraudulent short sale application to the bank, which induced the bank to allow Lewis to sell the property to Sorensen’s family member for much less than Lewis owed under the existing mortgage loan. It is further alleged that Lewis did not disclose that he and Sorensen agreed that Lewis would continue to reside at the property and Sorensen would later cause the property to be sold back to Lewis free of the bank’s mortgage loan. It is further alleged that on or about July 21, 2017, Lewis then listed the property for sale at a price of $1,195,000.

Source: Two Men Indicted For Mortgage Fraud. leaseback arm's length transaction

Seattle Feds Tag Indictment On Former Owner Of Now-Defunct Closing Agency For Allegedly Siphoning Away Approx. $2 Million In Escrow Funds From Real Estate Transactions, Defrauding Homebuyers, Sellers, Financial Institutions

From the Office of the U.S. Attorney (Seattle, Washington):

• The owner of a now defunct real estate escrow firm was indicted last month by a federal grand jury on ten counts of bank fraud, and one count each of mail and wire fraud, announced U.S. Attorney Annette L. Hayes. LORI LYNN ANDREW, 48, of Cashmere, Washington, the owner of Hartman Escrow, Inc., was arrested and arraigned on the indictment August 3, 2017. The Washington State Department of Financial Services arranged for a receiver to take over the Tukwila, Washington escrow company in 2012 after finding evidence of fraud. ANDREW had her license to act as an escrow agent suspended in 2013 and her license has since been revoked.
  
  According to the indictment, beginning in about January 2011, and continuing until July 2012, ANDREW used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions.
  
  ANDREW made, or had others make, false settlement statements on the transactions listing false or inflated fees and charges to hide the fact that she was embezzling money. ANDREW forged signatures on various statements and created false invoices, statements and bills; she altered and deposited checks to her company account that should have gone to others; she took funds from her trust account and transferred them to her personal account for her own use.
  
  ANDREW used the money for casino payments, credit card bills and other personal expenses. ANDREW defrauded individual customers as well as Bank of America, Wells Fargo, Citi Bank, Chase and GMAC.
  
  In all the indictment alleges ANDREW defrauded the financial institutions and other customers of approximately $2 million.
  
  ***
  The case is being prosecuted by Special Assistant United States Attorney Hugo Torres and Assistant United States Attorney Norman Barbosa. Mr. Torres is a Senior King County Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.

Source: Owner of Real Estate Escrow Company Indicted for Bank, Wire and Mail Fraud (Defendant Falsified Documents, Altered Checks and Embezzled Money from Trust Account).

Media Investigative Report On Southeast Michigan 'Involuntary' Probate Scheme That Feasts On The Equity In Dead People's Homes Triggers Federal Criminal Probe; FBI Raids Real Estate Broker's Office While One Public Official Gets The Boot, Another Quits

In Lansing, Michigan, WXYZ-TV Channel 7 reports:

• The 7 Investigators continue to get results for grieving families in Michigan. The Attorney General is terminating one of the public officials accused of cashing in on a controversial probate practice, and another public official has resigned.
  
  And even though new legislation has been introduced because of our investigation, the Attorney General is now telling the 7 Investigators that he wants the changes to the law to go even farther.
  
  “They’re messing with my home -- where I live! How dare they,” said Joanne Zaremba.
  
  Several local families say they nearly lost their late relatives’ homes after some Attorney General-appointed lawyers called Public Administrators teamed up with real estate agent Ralph Roberts to cash in on probate estates.
  
  “I find properties. I believe there’s a benefit, so I then tell a public administrator, here’s the benefit there,” Ralph Roberts told 7 Investigator Heather Catallo in November 2016.
  
  The Public Administrators bill the estates for thousands of dollars in fees. Court records show that Roberts’ company, Probate Asset Recovery, often tried to take 1/3 of the value of the assets, plus Roberts earned real estate commissions (often 4% instead of the typical 3%).
  
  Oakland County Sheriff’s investigators and federal agents recently raided Ralph Roberts offices as part of an ongoing criminal probe.
  
  And now Attorney General Bill Schuette has terminated Kemp Klein lawyer Barbara Andruccioli from her Oakland County Public Administrator duties. A spokeswoman for the Attorney General says their office has received 5 complaints about Andruccioli since the 7 Investigators first reported on her in May.
  
  The 7 Investigators showed you in May how heirs like Zaremba said she had no idea that Andruccioli had opened an estate in Joanne’s late mother’s name.
  
  “She has a duty to the estate which means to the heirs of the estate. She’s completely failed on that,” said attorney Carol Kramer, who now represents Zaremba.
  
  After our initial investigation, the Attorney General also disciplined, and then later accepted the resignation of Macomb County Public Administrator Cecil St. Pierre.
  
  Now Wayne County Public Administrator Joseph Xuereb has resigned as well. He, too, had teamed up with Ralph Roberts during the last 3 years to open probate estates. Xuereb resigned after the 7 Investigators filed paperwork to record one of his upcoming hearings; it was a case that was filed in court after the Attorney General’s recent order to suspend foreclosure and tax forfeiture probate cases.
  
  In his letter to the Attorney General, Xuereb said his filing of the cases was “inadvertent” because he had misunderstood the order from the state.
  
  Two new bills have been introduced in Lansing to change the Public Administrator law to better protect heirs – but Attorney General Schuette's spokeswoman now says they don’t go far enough, and he wants criminal penalties added to the law.
  
  Attorney Xuereb also told the 7 Investigators that while he was working as a Public Administrator, he always tried to do what was best for the heirs, and made sure that they got notified about the probate proceedings.
  
  Barbara Andruccioli, the former Oakland County Public Administrator, is not commenting about her termination.

Source: Probate public officials terminated, resign after 7 Action News investigation (AG says new bills don't go far enough).

More On Email-Hacking Cyber Scams Targeting Real Estate & Closing Agents, Unwitting Homebuyers

In San Francisco, California, KPIX-TV Channel 5 reports:

• The San Francisco Bay Area, one of the hottest real estate markets in the country, is also turning out to be a prime target for cyber-criminals who are hacking realtors’ email accounts and sending home buyers false instructions to wire money.
  
  It happened to East Bay realtor Kristina Solovieva. Last year, criminals hacked her Gmail account, and waited for just the right time to strike. “The timing was impeccable, actually,” Solovieva said. Just when it was time for one of Solovieva’s clients to send the remainder of their down payment to close escrow, the scammers sent the buyers an email from Solovieva’s account.
  
  The email, seemingly from Solovieva, instructed the buyers to wire hundreds of thousands of dollars to an account. Luckily, the amount was off by $30 – enough to make the clients suspicious. “They were very savvy, and they did the math, and it didn’t add up,” said Solovieva.
  
  But some do fall for it. San Francisco attorney Matthew Borden is representing a buyer who wired over $500,000 to a scammer after allegedly receiving a false email from her realtor’s account. “She was crushed,” Borden said. “This was her life savings.” In this case, Borden blamed the realty company, Zephyr, for not protecting its accounts from intrusion. “First of all, they should have maintained good security themselves,” said Borden.
  
  Zephyr denied it is responsible. In an email to KPIX 5, company president Randall Kostick called it an “unfortunate case,” and said “no one at our company gave instructions concerning the wiring of her deposit funds (that was the scam artist who did that.)” It also said the FBI is investigating and it’s possible that the hack took place “in the title company’s system” or perhaps, the buyer’s email account. Kostick did acknowledge the email the victim received “did appear to originate from our agent.”
  
  Zephyr also said the problem is “much more prevalent than most people are aware of.” The National Association of Realtors and the FBI have recently issued warnings about sophisticated email scams targeting the real estate industry. The NAR’s warning advises “Start from the assumption that any email in your in-box could be a targeted attack from a criminal.”
  
  Matt Fuller, President of the San Francisco Association of Realtors, said realtors aren’t the only ones being hacked. “It can be the agent’s email, it can be the title company, it can be a lender, It can be a transaction coordinator,” he said.
  
  But the crime is always the same: impersonating someone involved in the transaction by sending emails from their account and provide instructions to wire money, at precisely the moment the client is expecting to make a payment. The Bay Area is particularly vulnerable because it’s a hot market and buyers are doing deals quickly, according to Fuller. “There is this urgency associated with transactions.”
  
  Solovieva believes the scammers were “watching us all along and reading all our correspondence … It’s creepy.”
  
  The California Association of Realtors is now advising real estate agents to include a “Wire Fraud Advisory,” in the mountain of paperwork presented to buyers. It says “While wiring funds is a welcome convenience, buyers and sellers need to exercise extreme caution.”
  
  Solovieva, who has since added layers of security to her email account, shares her hacking experience with clients, hoping to make sure the message hits home. “It’s not being discussed a lot, but it’s out there.”

Source: Scammers Target Real Estate Buyers Through Email Schemes.

See, generally:

• Wire Fraud Advisory Will Provide Much Needed Warning,
• American Land Title Association: Sample Wire Fraud Warnings You Can Use.

Some Phoenix-Area Condo Owners Find Themselves Being Squeezed Out Of Their Homes, Forced To Sell By Real Estate Operator Who Quietly Snatches Up 80% Controlling Interest In HOA, Then Votes To Disband Association

In Phoenix, Arizona, KNXV-TV Channel 15 reports:

• When you buy a home, the expectation is that it’s yours, unless you decide to sell or it goes into foreclosure.
  
  But if you own a condo in Arizona, there is a law that allows investors to push you out of your own home.
  
  Condo owner Courtney Hoogervorst is finding that out first hand. “It was always my dream to buy my first home in cash,” she says.
  
  And the 26-year-old did in October 2016. She paid $93,000 cash for her condo at Solstice Arcadia in Phoenix. “I was planning on keeping this house forever,” she says.
  
  Her neighbor Charlie Segovia had no plans of selling either. In 2009 he was hit by a truck and left in a coma for several days. He used the $20,000 from that settlement to buy his condo in 2010. “My dad would have been proud that ‘Charles you actually bought a place,'" he says.
  
  It’s a place that the 69-year-old could afford with his $800 social security check. “I thought I was set,” he says.
  
  And he was. Until he and his neighbors got a letter saying their complex was being sold, and they had 60 days to get out.
  
  Hoogervorst was shocked. “This can't be right I own this condo, I paid cash.”
  
  It happens more often than you think. We’ve spoken to homeowners around the Valley who were hit with same news in 2015 and 2016.
  
  In March 2016 condo owners in the Jamestown complex let us know they were being forced to sell their homes.
  
  We found it is the same group that is forcing Hoorgervorst and Segovia out of their homes now.
  
  What they didn’t know is that the local investment group was quietly snatching up enough units to take over their condo association.
  
  It's called condominium termination and it is perfectly legal. State law allows any condo association to disband and sell if 80 percent of the owners agree.
  
  County records show that an investor named Travis Karl and his investment group recently got control of enough units so that they could become the 80 percent holder.
  
  The way the law is written, everyone else has to sell, whether they want to or not.
  
  Owners are supposed to be paid “fair market value” which is to be determined by an independent appraiser. And the association—or in this case the investors—hires the appraiser of their choice.
  
  Segovia says his unit is valued at $60,000.
  
  Courtney says with improvements, she’s spent at least $108,000. She was offered $95,000.
  
  Both say the numbers aren’t nearly enough to buy them a comparable home. It also doesn’t account for the additional money they will have to spend on moving, first, last month’s rent and deposits or the cost of having to carry a mortgage if they are able to even find a place they can afford.
  
  They say there is nothing fair about it.
  
  “They’re treating us just like unit numbers, not like real people that have lives that matter,” Hoogervorst says.
  
  Investors are able to do this because state law says so. That means state lawmakers are the only ones that can make the change, so find your representative and let them know what you think here. [...]

Source: Hostile Takeover: State law allows investors to take homes.

Since-Disbarred Attorney Gets 2 1/2 To 7 1/2 Years For Fleecing 22 Clients Out Of Over $785K

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

• Nassau County District Attorney Madeline Singas announced that a now disbarred attorney, was sentenced today [August 2] to 2-1/2 to 7-1/2 years in prison for stealing hundreds of thousands of dollars from 22 clients.
  
  Steven Morelli, 61, who maintained an office in Garden City, pleaded guilty in front of Acting Supreme Court Justice Helene Gugerty on April 17 to three counts of Grand Larceny in the Second Degree (a C felony) and five counts of Grand Larceny in the Third Degree (a D felony).
  
  Prior to the plea, the defendant paid restitution in the amount of $170,000.00. As part of his sentence, the defendant must also pay restitution in excess of $600,000.00.(1)
  
  “This defendant’s clients trusted him to advocate on their behalf and protect their interests, but instead he betrayed them and stole hundreds of thousands in settlement funds,” DA Singas said. “This prosecution ensures that this unscrupulous lawyer will be held accountable for his crimes and that he will never practice law again.”
  
  DA Singas said that from February 2015 through August 2015, the defendant retained and misused settlement checks from four clients totaling $150,000.00. After a joint investigation was conducted by the NCDA and the NCPD Crimes Against Property Squad, he was arrested by Nassau County Police detectives for that crime in February 2016.
  
  The investigation continued after the initial arrest and uncovered 13 more victims, who had approximately $573,000.00 in stolen funds. The defendant was then re-arrested in May 2016 for those crimes. The joint investigation continued after the second arrest and revealed five additional clients who were victims of theft in the amount of approximately $64,000.00. In total, Morelli stole more than $785,000.00 from his clients.
  
  The defendant used the money for personal purposes and to carry on his law practice. Because of the defendant’s plea to a felony charge, he was automatically disbarred.

Source: Attorney Sentenced to Prison Time for Stealing More than $785,000 from Clients (Steven Morelli stole from 22 clients and was disbarred).

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(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United 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.

Florida Supremes Hand Out 3-Year Suspension For Lawyer For Misappropriation Of At Least $60K From His Trust Account

From a recent story in the Bradenton (Florida) Herald:

• John Pangallo, 13617 Wild Citrus Road, Sarasota, was suspended for three years, effective immediately, following a May 25 court order. Upon reinstatement, Pangallo will be placed on probation for three years and directed to attend ethics school, according to the release. Pangallo appeared to be causing great public harm, based on his misappropriation of at least $60,000 from his trust account,(1) according to a petition for emergency suspension. Pangallo was admitted to practice in 1991.

Source: Bradenton attorney suspended after petition claims she misappropriated funds.

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(1) In Florida, 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 an attorney.

For other "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in other states in the United States and in the Canadian provinces, 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.

California Lawyer Who Misappropriated $60K+ From Client, Then Stuck Her With A Rubber Check For The Cash Gets Bar Boot

From a recent story in The Orange County (California) Register:

• Timothy David Myers (license number 199356), 49, of Huntington Beach, was disbarred May 17 after he failed to respond or participate either in person or through counsel to six charges of misconduct involving a single client.
  
  The bar said Myers misappropriated more than $60,000 received for the client, issued her a check purporting to pay the $60,000 when there was insufficient funds to pay the check, and falsely stated he had invested her funds and was holding them overseas on her behalf.(1)
  
  Myers was previously suspended for 90 days and placed on probation for two years for failing to perform legal services with competence, failing to promptly return unearned fees, and committing “an act of moral turpitude” by making a false statement to the state bar. His probation was revoked and he was suspended for six months and until payment of restitution.
  
  Myers’ failure to respond to the new discipline charges led to disbarment.

Source: 2 Orange County attorneys disbarred; 2 more suspended.

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(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United 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.

Client Trust Account Shortages, Overdrafts Of Over $58K Lead To Bar Boot For Another Florida Lawyer

From a recent story in the Florida Record:

• Orlando attorney Paul R. Linder has been disbarred following an April 20 Florida Supreme Court order regarding allegations he overdrafted more than $58,000 from a client trust account.
  
  The state Supreme Court issued its order of disciplinary revocation, tantamount to disbarment, without leave to seek readmission. The Florida State Bar announced the discipline and the Supreme Court's order June 29.
  
  In Florida, court orders are not final until after time to file a rehearing motion expires. Attorneys disbarred in the state may not re-apply for admission for five years and even then they must pass through an extensive process that includes a rigorous background check and retaking the bar exam.
  
  Linder was admitted to the bar in Florida on Oct. 28, 1982, according to his profile at the state bar website. Linder has had no other discipline before the state bar for at least 10 years, according to his profile.
  
  On Oct. 6, 2016, an area bank alerted the state bar to an overdraft of $58,174.21 in Linder's trust account, which Linder alleged was immediately covered, according to a petition for disciplinary revocation filed with the state Supreme Court on March 14. The state bar requested Linder provide trust account records for 2016 but Linder failed to provide all of the documentation requested.
  
  On Feb. 7, 2017, the bank alerted the state bar to a second overdraft, this time for $454.96, which Linder said resulted from a hold placed on an insurance company settlement.
  
  A subsequent state bar audit found "a substantial shortage" remained in Linder's trust account, too little to satisfy liabilities owed to clients and third parties. The audit also determined the shortages were caused by Linder's transfer of client funds into his operating and personal accounts.
  
  The audit lead to charges that Linder improperly used client funds for a purpose other than which they were intended, a violation of rules that regulate the state bar.
  
  Linder agreed to reimburse the state bar's Clients' Security Fund(1) for payments imposed as a result of his misconduct, as well as costs incurred in his discipline. He said he "is extremely remorseful for his misconduct", according to the petition.

Source: Orlando attorney disbarred for overdrafting more than $58,000 from trust account.

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

(1) In Florida, 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 an attorney.

For other "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in other states in the United States and in the Canadian provinces, 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.