Maryland Feds Bag Two Guilty Pleas In Alleged "MKL Financial Diet" Equity Stripping, Sale Leaseback, Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

• Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty [Monday] to their participation in a scheme(1) in which they offered to help financially-vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

• Thomas, who was then a senior loan officer with a mortgage lender, and Brooke specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The defendants fraudulently represented to the homeowners that their “ lease/buy-back program” would help the homeowners to keep their homes. The homeowners were told that the “good credit” of another co-conspirator would be used to temporarily refinance their homes, that they had to sign their homes over to such co-conspirator and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to the co-conspirator by having their bank accounts directly debited by an account belonging to Brooke’s company “In the House Technologies” (IHT). Brooke allowed the IHT account to be used to deposit the proceeds of the equity-stripping scheme.

For the entire press release, see Senior Loan Officer and Conspirator Plead Guilty in Mortgage Fraud Scheme That Targeted Victims Through Local TV Ads (Defendants Agree to Forfeit Over $2 Million).

For the Statement of Facts contained in the Defendants' guilty pleas, see:

• U.S. v. Thomas,
• U.S. v. Brooke.

(1) The alleged scheme was referred to as the "MKL financial diet" purportedly headed by Michael K. Lewis, who is also currently under indictment. See Michael K. Lewis and Three Others Indicted in Mortgage Fraud Scheme - Allegedly Targeted Victims Through Local TV Ads.

WBAL-TV Investigates Another Baltimore-Area Foreclosure Rescue Operator

WBAL-TV Channel 11 I-Team reporter Barry Simms is hot on the tracks of another Baltimore-area foreclosure rescue operator who is in a legal dispute with another homeowner facing foreclosure. Yesterday, I put up a post on rescue operator Michael Powell, who Barry Simms was literally chasing around trying to get answers to some questions about Powell's rescue business (go here to watch that WBAL-TV report) (link no longer available).

Today's post is on rescue operator Michael K. Lewis, who reportedly considers himself a pioneer and calls his cure for people facing foreclosure the "MKL financial diet." Unlike Michael Powell (yesterday's featured foreclosure rescue operator), Lewis was amenable to an on-camera interview with Simms.

Reportedly, the MKL financial diet for the homeowner featured in the story involved, among other things, her filing bankruptcy, selling her home, and the renting it back for nearly double of what her mortgage payments were. The buyer ended up being Ernest Lewis – Michael Lewis’ brother.

Reportedly, the homeowner is in court trying to get her home back. Her attorney is Phillip Robinson, executive director of Civil Justice Inc., a Baltimore nonprofit group.

Go here to watch the WBAL-TV report. (which includes an excerpt of a TV commercial featuring Michael K. Lewis offering his foreclosure rescue services) (link no longer available).

To read the WBAL-TV online report, see Woman May Lose House After Answering TV Ad.

Go here for other posts on Michael. K. Lewis.

Final Conspirator Goes Down In "MKL Financial Diet" Equity Stripping Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

• Earnest Lewis, age 52, of Takoma Park, Maryland, pleaded guilty [Wednesday] to conspiracy to commit wire fraud arising from a scheme in which he and his conspirators offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

• Earnest Lewis, Michael Lewis and Winston Thomas specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The co-conspirators fraudulently represented to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes.

• Michael Lewis and Winston Thomas, a senior loan officer with a mortgage lender, told the homeowners that the “good credit” of Earnest Lewis would be used to temporarily refinance their homes, that they had to sign their homes over to Earnest Lewis and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to Earnest Lewis by having their bank accounts directly debited by an account belonging to co-conspirator Cheryl Brooke’s company “In the House Technologies.”(1)

For the entire press release, see Fourth Conspirator Pleads Guilty and Agrees to Forfeit $2 Million in Mortgage Fraud Scheme Targeting Victims with TV Ads.

(1) Earlier this week, Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland and Michael K. Lewis, age 57, of Takoma Park, Maryland all pleaded guilty in connection with the scheme.

Feds Seize Business Records Of Baltimore-Area Foreclosure Rescue Operator

In Baltimore, Maryland, WBAL-TV Channel 11 reports:

• The WBAL TV 11 News I-Team has learned that state and federal investigators have seized property of a Maryland man who claims he can help reduce your debt. Michael K. Lewis advertises on television, and he said in his ads that his mission is to help people get you out of financial debt. But he's currently under investigation, and one of his former network members said that she recruited others but quit because she didn't make any money. Court records show that federal agents seized documents, papers and computers from Lewis last week. Lewis was accused of illegally filing bankruptcies for clients -- an accusation he denies.

• In July, 11 News aired a story about Claretta Taylor and her fight to keep her home. She said she called Lewis after seeing his TV ad, and she got on his MKL financial diet that includes paying bills on time and monitoring spending. To stay out of foreclosure, Taylor said she agreed to sell her Baltimore city home to Lewis' brother, Earnest. Lewis told her that in a year, when her cash flow improved, she was to buy back the house. That didn't happen.

For more, see Feds Seize Alleged Shoddy Businessman's Belongings (Former Network Member Says She Made No Money).

Go here to view WBAL-TV Channel 11 video report (link no longer available).

Go here for other posts on Michael. K. Lewis.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Head Of Maryland-Based Foreclosure Rescue Firm Gets 78 Months For Role In Peddling Bogus Equity Stripping Sale Leasebacks To Homeowners In Foreclosure

From the Office of the U.S. Attorney (Maryland):

• U.S. District Judge Deborah K. Chasanow sentenced Michael K. Lewis, age 57, of Takoma Park, Maryland today to 78 months in prison, followed by three years of supervised release, for conspiracy and bankruptcy fraud arising from a scheme in which he and his conspirators offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

• According to his plea agreement, [...] Lewis aired television advertisements that targeted financially vulnerable individuals, representing that he could improve their credit, save their homes from foreclosure and assist them with bankruptcy. [...] Lewis specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The goal of Lewis and his co-conspirators was to steal the homeowners’ equity out of their property by inducing the homeowners to sell their property to Earnest Lewis and converting sale proceeds to the use of the conspirators. Lewis and his co-conspirators did this by fraudulently representing to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes. Lewis and Winston Thomas, a senior loan officer with a mortgage lender, told the homeowners that the “good credit” of Earnest Lewis would be used to temporarily refinance their homes, that they had to sign their homes over to Earnest Lewis and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes only by paying inflated “rent” and fees by having their bank accounts directly debited to an account belonging to co-conspirator Cheryl Brooke’s company “In the House Technologies.” Brooke then made payments to Earnest Lewis and Thomas, with the remaining funds being used by Michael K. Lewis and Brooke for their personal benefit.(1)

For the entire U.S. Attorney press release, see Leader of Mortgage Fraud Scheme Sentenced to 6 ½ Years in Prison - Targeted Victims with TV Ads.

See also, WBAL-TV Channel 11: Lewis Gets 6.5 Years In Prison For Mortgage Fraud (Michael K. Lewis Convicted Of Defrauding People Out Of Homes).

(1) Earnest Lewis, age 52, of Takoma Park, Maryland, was sentenced to 54 months in prison, for his role in the scheme. Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty to their participation in the scheme and face a maximum sentence of 20 years in prison for the conspiracy to commit wire fraud. Michael K. Lewis Financial Diet

Maryland Co-Conspirator Gets 54 Months For Role In Bogus Sale Leaseback, Foreclosure Rescue Scam; To Forfeit $2.25M In Proceeds From Criminal Acts

From the Office of the U.S. Attorney (Maryland):

• U.S. District Judge Deborah K. Chasanow sentenced Earnest Lewis, age 52, of Takoma Park, Maryland, [Wednesday] to 54 months in prison, followed by three years of supervised release, for conspiracy to commit wire fraud arising from a scheme in which the conspirators offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.(1) Lewis previously agreed to forfeit $2,228,878, generated as proceeds of the criminal activity [...].

***

• According to Earnest Lewis’ plea agreement, from at least 2004 until May 2008, Michael Lewis aired television advertisements that targeted financially vulnerable individuals, representing that he could improve their credit, save their homes from foreclosure and assist them with bankruptcy. [...] Together with Michael Lewis, Earnest Lewis and Winston Thomas specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The co-conspirators fraudulently represented to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes.

For the entire press release, see Conspirator Sentenced to over 4 Years in Jail in Mortgage Fraud Scheme.

See also, WBAL-TV Channel 11: Man Gets 4 Years In Jail For Mortgage Fraud (Earnest Lewis, Brother Convicted Of Conning Homeowners).

Go here for earlier posts on this prosecution.

(1) Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty to their participation in the scheme; sentencing is scheduled for Brooke and Thomas on September 11, 2009 and September 21, 2009, respectively. Michael K. Lewis, age 57, of Takoma Park, Maryland pleaded guilty to conspiracy and bankruptcy fraud in connection with the scheme and is scheduled to be sentenced on September 3, 2009. financial diet

Sentencing Hearing Begins For Maryland Man Convicted For Role In Equity Stripping Foreclosure Rescue Scam

In Baltimore, Maryland, WBAL-TV Channel 11 reports:

• A Maryland man who ran television ads claiming he could save homes from foreclosure was in court Thursday for the first day of his mortgage fraud sentencing. Michael K. Lewis pleaded guilty in May to conspiracy and bankruptcy fraud in a foreclosure rescue scheme.(1) He was supposed to be sentenced Thursday, but part of the hearing was suspended so the defense could locate six of its witnesses.

• "I thought this plan was there to help people," Lewis told 11 News I-Team reporter Barry Simms as he left the courthouse. Lewis still defended his plan to get financially strapped homeowners out of debt, something he called the "MKL Financial Diet." He blamed others for the fall of his business network. "Circumstances that were out of my control and things were being done that I knew nothing about," he said. [...] Lewis will be back in court Sept. 11. He could get up to 25 years in federal prison.

For the story, see Man Convicted Of Mortgage Fraud Claims Innocence (Sentencing Begins In Michael K. Lewis Fraud Case).

(1) See U.S. Attorney press release: Leader of Mortgage Fraud Scheme Confesses and Agrees to Forfeit $2 Million for Targeting Victims with TV Ads.

Baltimore Judge Denies Title/Escrow Company Dismissal Request In State AG's Foreclosure Rescue Suit

In Baltimore, Maryland, WBAL-TV 11 News I-Team reporter Barry Simms reports that a request filed by Laurel-based Cornerstone Title and Escrow to dismiss it from a foreclosure rescue lawsuit filed by Maryland Attorney General Doug Gansler was denied yesterday by Judge Martin Welch. An excerpt from the story:

• In July, homeowner Claretta Taylor told I-Team reporter Barry Simms about her struggle to keep her home. "I've become leery of people. I don't trust people now, especially when it comes to my finances. I scrutinize everybody," Taylor said. Taylor said that a television ad by Michael K. Lewis promised hope, so she signed up for his MKL financial diet. After scrutinizing the deals given to Taylor and about nine other homeowners facing foreclosure, Assistant Attorney General Scott Bailey filed a complaint in October.

• The complaint accused Lewis, his brother, Ernest, and other members of his so-called African-American Business Network of stripping the equity from the properties and charging numerous undisclosed fees. The attorney general's office said it believes Cornerstone Title and Escrow, based in Laurel, is involved in the foreclosure rescue scheme. "Each of the defendants played a role in the scheme. They should be held liable for that," Bailey said.

For more, see Company Tries To Get Out Of Foreclosure Scheme Case.

Go here for other posts on Maryland foreclosure rescue operator Michael K. Lewis.

For the Maryland AG's warning on foreclosure rescue, see Foreclosure Scams: Don’t Fall Prey to a Foreclosure Shark!

Go here for a list of Maryland organizations that provide foreclosure counseling to consumers in every region of the state.