Illinois Man Gets Five Years For Using Forged, Fraudulent Documents To Steal Homes From Elderly Widow, Deceased Man's Estate

From the Office of the Illinois Attorney General:

• Attorney General Lisa Madigan [last week] secured a guilty plea from a Calumet Park man on two counts of theft over $100,000 for forging documents as part of a scheme to sell real estate right out from under elderly victims and their estates. Judge Douglas Simpson of the Circuit Court of Cook County, 6th District, Markham, sentenced Adrian Garner, 38, of Calumet Park, Ill., to five years in the Illinois Department of Corrections as a result of [last week's] plea.

• During 2004 and 2005, Garner used fraudulent documents as part of two separate schemes to obtain real estate. In May 2005, Garner used forged documents to fraudulently establish that he possessed the power of attorney on behalf of Myrtle Hickson, a 76-year-old widow. Garner misled Hickson, who is now deceased, and her family into believing he would help renovate Hickson’s home and sell it for the family at a profit. Instead, Garner obtained the home’s deed by using the unauthorized documents with the alleged power of attorney for Hickson. Garner then sold the home to his father in June 2005, and transferred nearly $114,000 in profit from the transaction to his business account.

• In the second scheme, Garner executed and used fake documents in December 2005 to fraudulently obtain part of approximately $100,000 in proceeds from the sale of a deceased man’s Chicago home.

For the Illinois AG press release, see Madigan: Calmut Park Man Guilty of Defrauding Chicago Senior in Real Estate Scam.

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Brooklyn Hotline For Victims Of Deed, Mortgage, Other Real Estate-Related Fraud

In Brooklyn, New York, the Kings County District Attorney announced:

• Kings County District Attorney Charles J. Hynes [...] announced the creation of a telephone hotline victims can use to contact the District Attorney’s new Mortgage Fraud Unit. The 12-person unit will investigate deed fraud, mortgage fraud, predatory lending and other real estate-related fraud. The number is (718) 250-2311.

Source: Kings County District Attorney Announces Real Estate And Mortgage Fraud Hotline.

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Attorney, Justice Of The Peace Held Liable For Damages In Now-Deceased Husband's Forgery Of Wife's Signature To Refinance Home

In New South Wales, Australia, On Line Opinion reports:

• [W]hen [Kaylene] Hall's husband found himself in financial difficulties, he told a friend he would refinance the family home to pay his debts. His wife was the only obstacle. If she found out how badly he was running his tank manufacturing business, their marriage would be over. However, he confided to his friend, he would solve this problem by forging his wife's signature and not telling her anything. The friend warned him not to do this, or Mr Hall would go to jail. Mr Hall ignored this advice and went not to jail, but to his grave. He died two years after carrying out his wicked plan and obtaining a private mortgage-secured loan [...].

***

• Mr Hall had at the time instructed Ben Gelin, a Bathurst-based solicitor, to act for him and Mrs Hall in effecting [the lender's] mortgage and supervising its registration. When the solicitor explained that both Halls would have to sign documents with him, Mr Hall said his wife was dying of cancer and could not go to the solicitor's office. When Mr Hall then offered to take the papers away for her signature, Mr Gelin said he would need to talk to Mrs Hall. Mr Hall replied that his wife would not agree to this because she was still bitter about how he, Mr Gelin, had behaved when he previously acted for a creditor against Mr Hall. Mr Gelin believed Mr Hall's lies, and had no contact with Mrs Hall. She did not have cancer. She knew nothing of her husband's financial difficulties, the mortgage loan or of her husband's visit to Mr Gelin.

In addition to finding Gelin liable to Mrs. Hall for his negligence, a court found that Justice of the Peace David Graham breached the duty of care he owed Mrs. Hall when he purported to witness forgeries of her signature on the mortgage documents without knowing her or seeing her sign. The court ruled that he had to pay 40 per cent of Mrs. Hall’s damages while 60 per cent fell to Mr. Gelin because of his failings.

For the entire story, see Thou shalt not bear false witness. DeedZetaTheft

I.D. Theft Suspect Convicted Of Swiping Property Title From Fellow Inmate To Post Bail, Then Fleeing Country With Girlfriend

In Southern California, The Orange County Register reports:

• A Tustin man who had tried to flee to Mexico was convicted [last week] of committing a $2.8 million fraud by stealing the identities of more than a dozen people who hoped to invest in real estate. Gene Anthony Franklin Jr., 34, held himself out as a legitimate real estate investor to secure his victims' personal information, then used the data to buy a home, obtain credit cards and pay his bills, said Deputy District Attorney Yvette Patko. He also illegally transferred properties from a fellow jail inmate to post his own criminal bail and flee the country, prosecutors said.

***

• While in custody [on identity theft charges], he was rooming in jail with Marvin Vernis Smith, who was convicted of killing his wife. Franklin became friends with Smith, and learned that Smith had transferred one of his properties to his daughter so she could pay for legal fees, prosecutors said. Franklin forged property transfer documents that showed that his ex-girlfriend – Iris Orozco – owned three of Smith's properties, valued at almost $2 million, around October 2007, prosecutors said.

• Using one of the properties as collateral, Franklin posted his $1 million and fled to Mexico with Orozco, prosecutors said. He was caught in March 2008, and brought back to Orange County.

For more, see Ex-fugitive is convicted in $2.8 million identity theft (Gene Anthony Franklin of Tustin duped convicted murderer so he could post bail, prosecutors said).

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Philadelphia Homeowner Loses Home To Title Fraud; Cost To Hire Lawyer To Unwind Scam Unaffordable For Victim

A recent story by The Associated Press on the apparent need for strengthening notary laws to protect unwitting homeowners from having their homes stolen out from underneath them by deed/title fraud scammers contained these excerpts on one victim who lost her home and, because retaining an attorney to file a civil lawsuit to undo the theft was unaffordable, was never able to get it back:

• The small row house had been unoccupied for months, but it was still a home. And if she had really wanted to sell it, Virginia Coontz says, she certainly would have spelled her name right on the title transfer. Even with her name wrongly spelled "Coonzt," the sale went through and she ultimately lost the house. Prosecutors said she was a victim of a title fraud ring that collected about $400,000 by selling off more than 80 properties — unbeknownst to the true owners — through the help of corrupt notaries.

***

• In 2004, Coontz and her teenage daughter left their home temporarily unoccupied when they moved in with her son. Then, in October 2005, relatives saw people coming and going from the property; Coontz arrived to find her valuables gone and bags full of her other belongings on the sidewalk. A confrontation and several phone calls led to a police report and discovery of the forged deed.

• Behind on her taxes and unable to afford a lawyer, Coontz gave up.(1) The house was sold at a sheriff's auction in 2007 for $15,600. Coontz, 49, now says she is unable to work due to depression. She and her teenage daughter continue to live with her son. She sleeps in the basement, and her daughter, on a living room couch.

Source: Tougher notary laws sought to curb house thefts.

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(1) Unlike auto theft (or any other theft of personal property) where the police will return the stolen property to its rightful owner (if they're lucky enough to physically recover it), no similar parallel exists when property owners have their homes stolen from them, even though the house itself has not been physically ripped out of the ground and absconded with. It is up to the victimized homeowner to retain a lawyer to file a civil lawsuit to legally unwind the mess created by the scammers by:

• voiding the forged deed, and
• where the scammers duped a mortgage lender into giving them a loan secured by the house, voiding the mortgage.

During this time, victimized homeowners must be sure to keep current on the real estate taxes, lest they risk losing the home in a county tax foreclosure. DeedZetaTheft

Virginia Man Charged With Using Stolen IDs To Steal Title To, Fraudulently Borrow Against, Two Homes

In San Bernardino, California, the Office of the San Bernardino District Attorney announced:

• [S]an Bernardino County District Attorney Investigators assigned to the Real Estate Fraud Unit traveled to suburban Washington D.C. and escorted wanted suspect, Duk Sung Jin, 30, of McLean Virginia, back to San Bernardino County to face felony fraud charges.

***

• Jin is facing felony charges of conspiracy and grand theft with an estimated total loss of over 1.2 million dollars. The victim’s identity was used to steal (2) two homes and (2) two vehicles. The homes went into foreclosure after the equity was drawn out of the homes in the form of 2nd mortgages in the victims' names.

For more, see Additional Suspect Arrested on Mortgage Fraud Charges.

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California Duo Sentenced For Tricking 94-Year Old Homeowner Into Signing Over Title To House; Court Orders Ownership To Be Restored In Victim's Name

The San Bernardino, California District Attorney's Office announced:

• A Victorville couple was sentenced to county jail on felony charges connected to real estate fraud and financial elder abuse. Joe Warf, 51, and Tracy Warf, 41, appeared in Victorville Superior Court on Friday, April 10, 2009. The pair was sentenced to 250 days and 365 days county jail, respectively, for financial elder abuse. Both will be placed on formal supervised probation for five years at the conclusion of their sentences.

• In June 2008, Joe and Tracy Warf deceived the 94-year-old victim into signing over his San Bernardino home to them. The San Bernardino County District Attorney's Real Estate Fraud Unit conducted an investigation and arrested Joe and Tracy Warf on November 24, 2009. The court has already ordered that title to the San Bernardino house be transferred back into the victim's name.

For the DA's press release, see Victorville Couple Sentenced in Real Estate Fraud/Elder Abuse Case.

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Florida Appeals Court Reinstates Lawsuit By Miami Widow Alleging Conspiracy To Defraud, Fraud, Negligence In Foreclosure Rescue, Home Equity Ripoff

A Florida appellate court reversed a lower court ruling that dismissed a case with prejudice brought by a 72-year old widow facing foreclosure who complained that she was tricked into signing away the title to her home by an alleged equity stripping, foreclosure rescue operator, Florida Foreclosure Placement Center ("FFPC").

According to the complaint, she was approached by an agent of the company who assured her that it was not a mortgage broker or realtor and that FFPC could help her save her home without losing ownership. After agreeing to FFPC’s help, the agent accompanied her to a Notary Public located near her Liberty City home where she signed a power of attorney in favor of FFPC. Two months later, she executed documents that purportedly would save her home from foreclosure without jeopardizing her ownership. The documents did not, however, preserve her ownership interest, but instead closed the sale of, and transferred title to, her home to a strwa buyer who she had never heard of or met and who was not present at the closing of this sale. This "sale" was financed with the proceeds of two loans in the total amount of $165,000 brokered by two of the alleged conspirators - Envision Funding, LLC and Cesar Jose.

In reinstating the lawsuit, the appeals court ruled that the widow's complaint sufficiently stated claims regarding the sale of her home against a title agent, a mortgage broker, and the broker's principal for negligence, fraud, and conspiracy to defraud, and that to the extent there wer pleading defects in the complaint, the homeowner should have been allowed to amend her claims.(1)

For the case, see Charles v. Florida Foreclosure Placement Center, 988 So. 2d 1157 (Fla. 3d DCA 2008).

(1) While this case is not precent-setting in any legal sense, it does, nevertheless, support the proposition that there are still lower court judges who are either intellectually lazy, or who operate with their head in the clouds when it comes to issues of home equity theft. Whether the 72 year old widow is able to prove in court that she had her house stolen remains to be seen. But the appellate court made it clear, in a unanimous decision, that the complaint should not have been dismissed without her having the opportunity to prove her allegations. Credit goes to her appellate attorney, James Jean-Francois, who took on the appeal on her behalf, and without whom she would have lost any chance to recover the title to her home. DeedZetaTheft

NYC Woman Charged With Swiping Three Manhattan Apartment Buildings From Dead Ex-Boyfriend's Estate

In New York City, the New York Post reports:

• A former exotic dancer with a body for sin and maybe a brain for it, too, stole three Upper East Side apartment buildings from her late ex-boyfriend and brazenly started collecting rent, authorities said. Flora Soto Hernandez, 54, was arrested Thursday on 21 counts of forgery and fraud for posing as a landlady, officials said. She's now cooling her heels on Rikers Island, on $250,000 bail. The former blonde bombshell claimed her ex, a wealthy property owner named Fred Zeiss, left the buildings to her when he died in 2002.

***

• Zeiss' brother, Alan, says the deed conveyances are forgeries. "This is one of the most brazen yet ludicrous schemes I've ever seen," said Alan Zeiss' lawyer, Mark Bederow.

***

• She even attempted to sell one of the buildings, at 405 E. 90th Street, a source said. Alan Zeiss countered by placing a lis pendens on the property, a legal notice that should have kept Soto from trying to sell the building. But that didn't perturb Soto. "She marched down to the County Clerk's Office with fake affidavits and tried to get them removed," said Bederow.

For more, see BUILDINGS 'STOLEN' (BOGUS LANDLADY SCAMMED EX'S ESTATE: DA).

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Manhattan DA Charges Brooklyn Man Of Using Forged POA Revocation, Bogus Deed & Mortgage In Attempt To Swipe Harlem Brownstone From Deceased Owner

From the Office of the New York County District Attorney:

• Manhattan District Attorney Robert M. Morgenthau announced [Monday] the indictment of a Brooklyn man for filing a forged deed and other fraudulent documents in an attempt to steal a Harlem brownstone. The defendant, ENRIQUE CASTILLO, also known as ENRIQUE FERNANDEZ, 52, was indicted on charges of attempted grand larceny, offering a false instrument for filing, and criminal possession of a forged instrument.

***

• [Carolyn] Todd, who died at age 57 in March 2005, was the lifelong owner of the Harlem brownstone. In January 2005, her health failing, Ms. Todd gave power of attorney to [her cousin, James] Bryant, who was then caring for her at his home in Ohio. A short time later, she conveyed the brownstone to him and his wife Debbie as joint tenants with right of survivorship. Mr. Bryant subsequently filed the deed conveying the property to him with the City Register.

• The investigation began when Mr. Bryant contacted the District Attorney’s Office in June 2008 after learning of [a] false mortgage and “Revocation of Power of Attorney.” When he was arrested in December 2008, CASTILLO was in possession of a forged social security identification card.

Go here for the Manhattan DA's entire press release.

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NYC Man Charged With Swiping Co-Owner's 75% Interest In Bronx Building; Also Accused Of Duping Notary Into Signing Off On Mortgage Satisfactions

In The Bronx, New York, the New York Daily News reports:

• A Manhattan businessman struck out in his fraudulent bid to sell a building across from Yankee Stadium, Manhattan federal prosecutors said Monday. Mark Benun, 35, hid several mortgages on the commercial property at 67-79 E. 161st St. by faking notarized documents, prosecutors said. Benun and an unidentified party had bought the building for $9.5 million in 2006 with borrowed money.

• Benun sold the property to an unidentified buyer in February for $6 million by claiming to be its sole owner. That deal called for Benun to get $4 million in cash and a note for $1.96 million, Manhattan federal prosecutors said.

• To dupe the buyer, prosecutors said, Benun created three bogus satisfactions of mortgages that were notarized. He conned a notary into signing off on the documents by claiming the individuals whose signatures were on them got stuck in traffic, prosecutors said. The feds traced money from the sale to a company controlled by Benun and to out-of-state accounts. Benun faces up to 10 years in prison.

Source: Businessman strikes out in fraudulent bid to sell building across from Yankee Stadium.

For the U.S. Attorney Attorney's press release, see Manhattan Property Owner Charged In Fraudulent Sale Of Jointly-Owned Building.

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Thieves Used Forged Signatures & Documents, Fraudulent Notarizations To Steal Two Tennessee Homes, Says Victimized Memphis Man

In Memphis, Tennessee, WREG-TV Channel 3 reports:

• It's not a burglary or a home invasion, but thieves across the Mid-South are on a mission to steal your greatest possession. They're looking for more than what's in your house -- they want the home itself. "I called 911, my son called 911. And we told the police officers, someone had broke into my house," Abdul Zarif said.But someone didn't just break into Abdul Zarif's North Memphis home, they stole it.

• Zarif says forged signatures and fraudulent documents cost him a second home, this time in Haywood County. Zarif blames two men -- Willie Lynch, the man who claims to own the house, and Talut El-Amin, the Notary Public who made it possible. When we first caught up with Lynch, he didn't have much to say. "I got deeds on it, I bought the house. That's all I'm gonna tell yall!" Lynch said. Talut El-Amin talked to us on the phone. He said he notarized the deeds for Abdul Zarif, but refused to talk to us on camera.

***

• The process of stealing a home is so simple, it just takes a few steps. All a thief needs is a blank deed, a forged signature, and a notary stamp. Once it's filed, the house is considered "sold". But new legislation, introduced after the WREG News Channel 3 Investigators exposed the problem, is designed to stop it. [...] As Zarif waits for help from Nashville, he's heading to court to fight for his homes. It's taken five months of trying to prove ownership of the property in Haywood County, but finally a judge agreed that Zarif is the true owner.

For more, see NC3 Investigates: House Stealing Scheme (New legislation could cut down on the problem, by raising penalties and jail time).

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(1) Reportedly, the house stealing bill is gaining support in Nashville will soon face a judiciary committee vote. You can keep tabs on the bill's progress by clicking here: http://wapp.legislature.state.tn.us/apps/BillInfo/Default.aspx?BillNumber=HB1637. DeedZetaTheft

Strengthen Notary Laws To Curb Deed/Title Fraud, Say Prosecutors; Requiring Seller Thumbprints On Deed Transfers May Offer Partial Solution

The Associated Press reports:

• [W]ith a notary seal, criminals can steal the title to a house, take out a mortgage, drain the equity in the property and even give themselves power of attorney to access a victim's bank accounts. "Notaries really are the gatekeepers for fraud in real estate transactions, yet we don't put in the type of mechanism that would help law enforcement track down the crooks," said Dave Fleck, a former Los Angeles County prosecutor specializing in real estate cases.

• States have widely varying rules for becoming a notary public, many not requiring a background check. About 20 states don't mandate that notaries keep journals of their transactions, and even fewer require a thumbprint from home sellers when notarizing property transfers — a regulation recently enacted to help combat title fraud in the Chicago area.

• Philadelphia District Attorney Lynne Abraham said stricter regulations in Pennsylvania may have prevented [...] and the heartache of dozens of [...] victims [of a recent deed theft scheme], including owners who lost title to their homes and unwitting buyers who spent thousands of dollars on properties they never really owned.(1) Abraham said a thumbprint requirement might have deterred criminals posing as home sellers because they likely would not have wanted to leave behind evidence of their identities.(2)

***

• A thumbprint requirement has been the law in California since 1996, providing an invaluable tool for tracking down forgers and also helping protect notaries from being victimized, Fleck said.

For more, see Tougher notary laws sought to curb house thefts.

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(1) In the scheme, ring members scouted for abandoned homes — the owners were dead or living elsewhere — looked up the property records and began the forgery process with the help of four notaries, prosecutors said. They then sold the homes, usually for a few thousand dollars, to unsuspecting families, many of them immigrants with little understanding of real estate procedures.

(2) Reportedly, the district attorney tried to add that mandate to legislation in Pennsylvania in 2000, along with a requirement to photocopy the ID cards of those seeking notary services. Her effort failed, partly because the Pennsylvania Association of Notaries said the proposals would be too onerous. Association president Marc Aronson said he believes such provisions would get more backing today. DeedZetaTheft

California Man Charged With Selling House Out From Under Vacationing Homeowners

From the Office of the Santa Cruz County, California District Attorney:

• Santa Cruz County District Attorney Bob Lee announced [last week] that Raymond Tate was arrested today in connection with a deed dispute involving property in Ben Lomond owned by Tom Decker and his wife Maria McArthur.

• The case began when the couple came back from vacation to find someone living in their house. The occupant, Daniel Judd had a grant deed from the seller, California Housing Association LLC, signed by Raymon Tate, the owner of the California LLC. The only problem was that Tate's California Housing Association LLC, didn't own the property. In 2007 Tom Decker and Maria McArthur had formed a Nevada LLC with the name California Housing Association, and they were the true owners of the property. An investigation by the District Attorney's office revealed the names of the true owners and the deed scam.

• District Attorney Bob Lee commented, "To come home and find someone living in your house is bad enough, but to then to prove to law enforcement that you really own the house, just adds insult to injury." Tate formed his California LLC on 3/26/09 and then sold the Decker's property on 4/2/09 to Daniel Judd.

Go here for the April 28, 2009 press release.

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Miami Man Convicted Of Using Stolen IDs To Rip Off Unwitting Homeowners' HELOC Accounts

From the U.S. Attorney's Office (Eastern District of Virginia):

• A jury convicted Henry “Uche” Obilo, age 29, of Miami, Fl., today of conspiracy to commit bank fraud involving a home equity line of credit fraud scheme that has been linked to $8 million in actual losses.(1)

***

• According to court documents and evidence adduced at trial, the defendant and other co-conspirators used fee-based web databases to search for potential victim account holders with large balances in home equity line of credit (HELOC) accounts. This information included name, address, date of birth, and social security number. Once the conspirators identified a victim, they used other online databases to obtain information commonly used in security questions, such as the victim’s mother’s maiden name. The conspirators then obtained credit reports on the victims in order to verify personal information and account balances.

• Armed with a victim’s personal information, the conspirators called the victim’s financial institution, impersonated the victim, and transferred the majority of the available money from the HELOC account into an account from which a wire transfer could be sent.

For more, see Jury Finds Miami Man Guilty in $8 Million Bank-Fraud Conspiracy.

(1) Obilo is the seventh individual convicted in this case, and the first to be convicted following a jury trial. The other six, who all pled guilty, include: Abel Nnabue, age 33, of Dallas, who was sentenced to 54 months on Jan. 30, 2009; Precious Matthews, age 27, of Miami, who was sentenced 51 months on Feb. 13, 2009; Ezenwa Onyedebelu, age 20, of Dallas, who was sentenced to 37 months on Feb. 27, 2009; Daniel Orjinta, age 42, of Nigeria, who was sentenced to 42 months on March 6, 2009; Brandy Anderson, age 30, of Dallas, who was sentenced to 2 years of supervised probation and 40 days of community confinement on Feb. 20, 2009; and Paula Gipson, age 33, of Dallas, who pled guilty on Feb. 26, 2009 and is scheduled to be sentenced on May 22, 2009. DeedZetaTheft

Caregiver Charged With Manipulating Stroke Victim Into Refinancing Home, Misapplying Proceeds For Personal Expenses

In Stamford, Connecticut, The Advocate reports:

• A 50-year-old Stamford woman is charged with scamming $66,000 from a former co-worker who was recovering from a stroke, police said, though the victim lost about $100,000 more in the alleged scheme. Bridget Gleason-Paniccia [...] was arrested after an investigation that began in 2007, when Stamford police received a complaint from the victim, now 57, who reported that 13 fraudulent credit card accounts worth $72,273 were opened in her name while she was hospitalized with a severe stroke in 2003, Sgt. Peter diSpagna said.

***

• Gleason-Paniccia moved into the victim's home weeks before a stroke put her into a hospital for two months, police said. During the victim's hospital stay, Gleason-Paniccia allegedly racked up thousands in credit card bills and convinced the victim it was her debt, police said. The stroke left the victim with several physical ailments and brain injuries, police said. When the hospital released her, Gleason-Paniccia became her care-giver, police said.

***

• Gleason-Paniccia allegedly manipulated the victim into refinancing her mortgage to pay off the credit card bills, police said. The victim got a $163,000 loan and paid off the credit card bills, but Gleason-Paniccia allegedly convinced her to open a joint bank account to keep the remaining $88,000, police said. [...] Gleason-Paniccia withdrew $66,000 from the account in increments, police said.

• It took four years for the victim to realize the extent of the scam. As she regained her awareness and mental capabilities, the victim turned to police and handed them 82 checks forged in her name, diSpagna said.

For more, see Stamford woman charged with scamming stroke victim. DeedZetaTheft

Land Registry Fraud A Concern In GB; £36M In Payouts For Errors, Deed Thefts Since '05

In London, England, the BBC reports:

• A major reform of property registration in England and Wales is needed to prevent "an exponential rise in fraud", a building society boss has said. Nationwide executive director Matthew Wyles said: "The system is too open and needs a root and branch review." Mr Wyles was responding to a BBC investigation which applied to change details of house ownership, without being asked for proof of identity.

***

• Last November Land Registry introduced new identity checks to be carried out on everyone involved in buying or selling property, but not for changes of correspondence address on the register. The body has paid out £36m in compensation for mistakes and fraud since 2005.

• Organised criminals have increasingly used Land Registry to help them transfer the ownership of a house fraudulently, to sell it or take out a huge mortgage on the property. [...] Julie Jenkins, head of fraud at Land Registry, told the BBC: "We need to ensure there's a balance between protecting the individual and protecting the property and that's what we're here to do, protect people's assets - one of the most important assets they've got."

For more, see Land register 'too open to fraud' (A major reform of property registration in England and Wales is needed to prevent "an exponential rise in fraud", a building society boss has said). DeedZetaTheft

New Mexico Couple Charged With Swiping Seven Properties Using Forged Deeds, Fraudulent Notarizations

In Valencia County, New Mexico, The News Bulletin reports:

• A former employee of the Valencia County treasurer's department and her husband have been arrested and charged with a slew of crimes involving felony fraud and forgery involving ownership of land in the county. On April 30, Gladys Vigil, a former clerk in the treasurer's office, and her husband, Victor Paul Vigil, were arrested on a criminal complaint filed in magistrate court by state police. Police allege the Vigils deeded property over to a company they owned without the knowledge of the current property owners. The initial investigation cites seven such properties and alleged false deeds.(1)

***

• [County Treasurer Dorothy] Lovato said all of the property was vacant, with no buildings. The criminal complaint charges that most of the property deed transfers were notarized by Gladys Vigil and signed by a Paul Vigil on behalf of Vigil Enterprises.

For more, see Ex-county employee charged with forgery (Complaint alleges woman, husband deeded property without owners' knowledge).

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(1) The investigation was triggered by a phone call from a woman who had not received a property tax bill for her deceased father's land and needed the information to complete the arrangements of his estate. Reportedly, the investigation revealed that the fraudulent deed transfer was puportedly executed by the father in 2006. Unbeknowst to the perpetrators, however, he died in 2005. DeedZetaTheft

B.C. Appellate Court Sides With Victims Who Lost Homes In Deed/Refinance Scams Involving Use Of Forged Documents; Duped Lenders End Up Holding The Bag

In Vancouver, British Columbia, The Canadian Press reports:

• The B.C. Court of Appeal wants the province to come up with stricter laws forcing lenders to do a better job of vetting mortgage applicants to ensure they aren't securing property that's been stolen. In a ruling issued [last] Monday, the Court of Appeal concluded that it shouldn't be good enough for anyone lending money for a mortgage to rely only on a title search to show who is the rightful owner of a property.

• But under the B.C. Land Title Act as it is currently written, the court found that lenders have only to do a search. A lower court judge concluded that if the property shows no liens and a lender gives out a mortgage based on that search, the lender has a valid mortgage and is entitled to be repaid. In other words, even if the rightful property owners get their property back, they are still stuck paying for mortgages they didn't take out, according to the lower court ruling.

• The Court of Appeal disagreed and instead concluded that the lender — not the rightful property owner — is the one out of luck in a fraudulent mortgage scheme.

***

• The Court of Appeal was examining two cases(1) where people fraudulently had their property transferred to someone else without their knowledge. Mortgages were obtained on the properties after the fraudster went to some people for a loan based on the equity in the property. The lenders advanced the money after doing a titles search and finding no liens on the properties.(2)

• But then the fraudster disappeared and the crime was discovered after the lenders began foreclosure proceedings. The victims of the frauds went to court(3) to have the mortgages declared void, but the lower court ruled the lenders followed the rules and the owners were out of luck. However, the Court of Appeal concluded lenders must ensure their mortgages are valid by taking steps to ensure that the registered owner obtained title to the property legally.(4)

For the story, see B.C. Court of Appeal overturns ruling on mortgage fraud.

See also,The Lawyers Weekly: Fraudulent mortgages nullified by British Columbia’s top court.

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(1) Gill v. Bucholtz, 2009 BCCA 137 (April 6, 2009); Re Oehlerking Estate, 2009 BCCA 138 (April 6, 2009).

(2) The story and the cases are silent as to whether the lender obtained a title insurance policy to insure its interest in the property. (Could it may be that no such insurance is available in British Columbia? Is it possible that the burden is on the homeowner to obtain insurance covering against the risk of having the title to his/her home stolen?) In the United States, the risk that title was obtained by forged documents is generally referred to as an "off-record risk" or "hidden hazard" that is typically covered by a title insurance policy. In the case of a mortgage company that lends money on a title acquired by forgery, having acquired a title policy to insure its interest would generally entitle it to indemnification for its loss, leaving the title insurer holding the bag. For a list of 35 off-record risks, or hidden hazards, that a title insurance policy generally protects a homeowner and mortgage lender against, see Title Insurance: What Risks Does It Protect A Property Owner Against? (footnote 1).

(3) It is important to note that the victimized homeowner has the burden in these types of cases to go to court (preferably with a real estate attorney who knows what he/she is doing) and file a civil lawsuit seeking to void the forged deed and mortgage. Failure to do so will likely result in a loss of the home. For an example of what could happen when the victim fails to go to court to void the forged deed and mortgage, see Oshawa mother faces eviction after alleged mortgage scam. For a story of a victim with legal bills piling up in his effort to get back the title to his home after he had it stolen out from under him, see Scam artists steal house (Richmond RCMP are investigating what is believed to the city's first-ever case of house theft).

(4) A little over a year ago, an Ontario Superior Court addressed a similar situation - one where a then-88 year old man had his home stolen from out from under him through the use of a forged power of attorney. The scammer subsequently pocketed the proceeds from a fraudulently obtained mortgage. The Superior Court decided the case in his favor, ruling that the mortgage lender should rightfully be left stuck holding the bag. For more on this story, see:

• Reviczky v. Meleknia, et al., (2007), 88 O.R. (3d) 699 • (2007), 287 D.L.R. (4th) 193 • 2007 CanLII 56494 (ON S.C.);
• The Toronto Star: Man, 90, off hook for loan: Court (Landmark ruling lifts $300,000 burden);
• Law Times: Bank didn’t take proper steps (Mortgage fraud decision will impact real estate industry);
• The Toronto Star: House fraud decision rocks industry (Bank `did not take steps to scrutinize the power of attorney,' judge rules). DeedZetaTheft