Pennsylvania AG's Elder Abuse Unit Fast-Tracks Financial Crime Cases Involving Senior Victims

The Pittsburgh Tribune-Review recently ran a story about several financial scammers who preyed on the elderly in scams involving millions of dollars, and the work of the Elder Abuse Unit of the office of the Pennsylvania Attorney General in prosecuting those cases. Included in the cases was that of a Fayette County lawyer accused of stealing more than $100,000 in mortgage settlement payments from older clients. Mark Morrison, 49, of Hopwood, is awaiting trial. The AG's office is targeting these types of cases and encouarges seniors to come forward and report these crimes. For more, see Western Pa. scammers who prey on elderly targeted.

If a Pennsylvania attorney is representing you and screws you out of money or property through dishonest conduct, go to the Pennsylvania Lawyers Fund for Client Security for more information.

For other states, see:

• Directory Of Lawyers' Funds For Client Protection (American Bar Association - November, 2007);
• Check the USA Client Protection Funds Map; or
• try this "Google" search.

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Hawaii Passes Law To Protect Elderly From One Form Of Home Equity Theft

The State of Hawaii has passed three new laws directed to the protection of its senior citizens from scams, according to the Hawaii Reporter. Included in those laws is HB1336 SD1 (Act 50), which is designed to punish unscrupulous brokers who convince elderly homeowners to sign mortgages that cause them to forfeit the equity in their property or lose their home by imposing fines of up to $10,000 for each violation. For more, see Governor Signs Bill to Protect Hawaii's Seniors from Financial Abuse and Fraud.

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Another Pittsburgh-Area Senior Victimized; FBI Probing Mortgage Broker

KDKA-TV Channel 2 in Pittsbutgh, Pennsylvania is reporting that the FBI is investigating the lending practices of mortgage broker Carnegie Financial Group in Carnegie, Pennsylvania.

KDKA has been doing investigative reports on victims of this mortgage broker's lending practices recently. Last week, it was about an elderly couple who are losing their home to foreclosure (see Subprime Refinance Threatens Loss of Retired Pittsburgh-Area Couple's Home). In this report, an 82 year old woman is the victim of an unsuitable mortgage for which an inflated appraisal from a bogus appraiser was used. Reportedly, comparable sales for more expensive neighborhoods were used to estimate the value of the victim's home. Further, the appraiser who purportedly did the appraisal, Edward Underhill, was actually deceased when the appraisal was written. His son, Chester Underhill, was convicted earlier this year of passing himself off as his dead father and using his father’s appraisers license to conduct illegal and inflated appraisals to get commissions.

For more, see FBI Probes Carnegie Mortgage Lender.

Go here to watch the KDKA Channel 2 report (then click Play), by investigative reporter Andy Sheehan.

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Media Coverage Not New For D.C.-Area Foreclosure Rescue Operator

The foreclosure rescue operators referred to in the recent press release (see Hogan & Hartson Wins $3.3 Million Verdict in Pre-Foreclosure Scam Case) by the Washington, D.C.-area law firm Hogan & Hartson are not new to media and other coverage regarding their rescue operations.

1) The Daily Record (Baltimore, MD) published this story:

• Prince George's County Circuit Court awards $500K to victim (available online courtesy of findarticles.com)

2) CBS News did a 2004 Consumer Alert on Vincent Abell, Modern Management, and Calvin Baltimore. See:

• Loan Scam Targets Seniors' Homes (Washington Con Artists Preyed On Elderly People In Financial Trouble), or
• Watch the CBS Evening News Report on this D.C. foreclosure scam.

3) The Concord Monitor Online published this Washington Post article:

• From Foreclosure To The Cleaners

4) HomeOwners For Better Building has published this article:

• Cheated Out of House and Home

5) The Maryland law firm Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC has made available online this Federal Court decision involving Vincent Abell:

• Abell v. Devan, Case No. 06-1621 (D. Md. 2006) (link no longer available).

6) For other reports, see Google Search on Vincent Abell.

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Tree Trimmer Caught Clipping Customers, Pleads No Contest

In this 2004-2005 story, an unlicensed Northern California landscaper pleaded guilty to embezzling 3.1 million from five mostly elderly customers, four of whom took out multiple mortgages on their homes to invest money with him and were ultimately left facing foreclosure.

According to authorities, they suspected this scam artist of using his landscaping business as a front to get acquainted with his victims, establish trust with them, and then seek out their money to invest in a side business he had, talking at least four of them into borrrowing money against their home equity and "invest" it with him in exchange for a promise that he would keep up the payments on the loans.

Reportedly, when the arrest was initially made, police alleged that there were at least ten victims who were scammed, but the media reports indicated that some of them were ashamed and embarrassed to talk about it with investigators.

To read the media reports on this story, see:

Businessman faces prison for embezzling $3.1M from elderly - Silicon Valley/San Jose Business Journal (5-27-05)

Sheriff's deputies arrest Saratoga man, charge him with elder fraud - Saratoga News (11-3-04)

Landscaper is accused of clipping seniors - San Francisco Chronicle at sfgate.com (10-29-04)

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Cleveland Senior Loses Home To Repair Scam

WKYC-TV Channel 3 in Cleveland, Ohio reports that a 75 year old, recovering stroke victim with a fully paid off home of 50 years, fell victim to a door-to-door home repair scam that resulted in the loss of his home. Reportedly, a stranger showed up at the front door of the victim's home offering to fix up the front porch and add a little bit of carpeting. All the victim had to do was sign on the dotted line. So he did. What the victim unwittingly signed was an $80,000 mortgage that he can't remember signing and can't afford. The mortgage loan was subsequently sold, the new mortgage holder ultimately initiated a foreclosure action, and the victim's home was sold at auction. The victim is fighting to get it back. For more, see Predatory lenders target elderly man.

Go here to watch Channel 3 Video Report, by reporter Eric Mansfield.

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Ohio Man Charged In Home Repair Scam That Targeted Elderly, Unwitting Lenders

The Cleveland Plain Dealer reports that a joint investigation by State and Federal authorities have resulted in an indictment against Jerry Ponsky, of Chagrin Falls, Ohio and five others of nearly 90 counts of racketeering, theft, money laundering, forgery and other crimes. In essence, they are accused of using bogus home repair and financing schemes to rip off the elderly of their home equity. Authorities say that he left dozens of victims buried in debt and living in homes left derelict by unfinished repairs. According to the article, the authorities describe the scam as follows:

• "Ponsky and his collaborators would inundate run-down neighborhoods with leaflets and pin-up fliers advertising "federally guaranteed" home-improvement programs for senior citizens. When older people responded, Ponsky and his collaborators would create phony, inflated appraisals of their homes' value; use those fake appraisals to line up loans from unwitting lenders; and then pocket huge chunks of the money, leaving the victims buried in debt."
• "In some cases, Ponsky's purported "remodeling crews" would gut all or part of the victims' homes until they vanished after financing came through."

For the whole story, see Chagrin Falls man indicted for home-repair scam that preyed on elderly.

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Florida Woman Accused Of Fleecing Her Grandmother, Home Equity Drained, Property Foreclosed

Dana Guarscio, a 41-year-old Sarasota woman is in jail, accused of stealing every penny from her 88 year old grandmother, according to a report by WTSP-TV Channel 10, reported at tampabays10.com. In addition to being accused of emptying her grandmother's bank account and selling all her belongings, Sarasota Sheriff's detectives say Guarscio drained the equity from the woman's home, forcing the bank to foreclose and sell it.

The elderly woman has since had a stroke and is in a nursing home. See Woman accused of fleecing her Grandmother (no longer available online).

See also:

• Charge: Woman ripped off grandma (Sarasota County deputies say suspect took her grandmother's house and her money and sold her belongings) (Sarasota Herald-Tribune).
  revised 3-3-07 (9:05 p.m.)

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Jobless Subprime Originators Drifting To Reverse Mortgage Market

Reuters reports:

• "Between 12,000 to 15,000 displaced mortgage lenders may begin to seek employment in the growing market for reverse mortgages, an increasingly popular home equity loan for homeowners who are 62 years old or older, Goldman, Sachs & Co. and Wells Fargo Home Mortgage executives said at a mortgage conference."

This prospect has some bankers concerned that a rapid growth in this market may make it vulnerable to the fraud and increased litigation that has plagued the subprime market. One observer, a vice president at Goldman, Sachs & Co. in New York, asks:

• "As you look at what's going on in the subprime market, are those the types of folks who are really appropriate for pursuing reverse mortgages?"

For more, see Ex-subprime loan officers eye booming senior market.

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Commentary On Ex-Subprime Loan Originators Eyeing Move To Reverse Mortgage Market

For one reverse mortgage blogger's commentary on the recent Reuters' story Ex-subprime loan officers eye booming senior market, about former subprime mortgage loan officers gravitating to the reverse mortgage market, see Subprime brokers rushing out of the soup lines! (Out of work mortgage brokers flock to reverse mortgages).

For a BusinessWeek blogger's thoughts, see The mortgage mess of ... 2012.

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Elderly Risk Losing Homes In Reverse Mortgage Trap

The elderly "looking to cushion their retirement with reverse mortgages are at risk of losing their homes", according to an investigative report prepared by one consumer watchdog. The investigation "found glaring deficiencies in product information and vague default clauses that could be triggered by minor oversights."

To read more, see Elderly risk losing homes in reverse mortgage trap, in The Sydney Morning Herald.

California Reverse Mortgage / Annuity Scam Legislation

The State of California passed (in September, 2006) an amendment (SB 1609) to their existing statute that protects the elderly who obtain reverse mortgages (Cal. Civil Code Section 1923 et. seq.) in a further attempt by the state to stop home equity theft by unscrupulous lenders through the use of reverse mortgage scams. The key provision in the 2006 amendment prohibits lenders from requiring the purchase of an annuity by an elderly borrower when obtaining a reverse mortgage. For more information, see:

• Gov. Schwarzenegger Signs Legislation Protecting Seniors, Consumers from Fraud (includes video of Governor's announcement),
• Senate Bill No. 1609 (SB 1609), for the text of the California legislation amending the existing California reverse mortgage statute,
• California Civil Code Section 1923 et. seq., the existing state statute that protects the elderly in reverse mortgage transactions (in effect since 1998).

Editorial Note:

California may be the first state in the United States to have a statute specifically addressing the prevention of home equity theft by the unscrupulous use of reverse mortgage scams when its statute when into effect in 1998. I don't know of any other state that has such a statute (if anyone knows otherwise, please let me know).

Unless I'm mistaken, California was also the first state in the country (in 1979) to pass statutes specifically addressing the prevention of home equity theft by unscrupulous foreclosure rescue operators, covering both:

• foreclosure purchasers (Home Equity Sales Contract Act - Civil Code Section 1695 et. seq.) and
• foreclosure consultants, which include the "foreclosure sale surplus / excess funds operators" (Mortgage Foreclosure Consultants Act - Civil Code Section 2945 et. seq.)

Inasmuch as the other 49 states apparently failed to follow California's lead on regulating foreclosure rescue operators back in 1979 (it wasn't until a quarter century later when the State of Minnesota passed their anti equity stripping statute, Section 325N in 2004, expiring on 12-31-2009, that other states began to fall into line on regulating foreclosure rescue), I wonder if California will again be ignored on the issue of addressing home equity theft through reverse mortgage scams.

(If past is prologue, maybe we should just wait and see what Minnesota does on reverse mortgage scams before other states decide to fall into line on this issue as well. If so, we can all "set our alarm clocks for the year 2023"; 1998 + 25, if my math is correct.)

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Ohio Senior Scammed, $67K in Home Equity Lost

A Cleveland mortgage agent pleaded guilty yesterday of conning a 72 year old Garfield Heights woman out of $67,400 through a home loan scam, and faces up to 8 1/2 years in jail according to a report in The Mortgage Fraud Blog presented by The Prieston Group.

The prosecution was handled by Assistant County Prosecutor Michael Jackson of the Office of Cuyahoga County Prosecutor Bill Mason.

The victim has a civil lawsuit pending against the mortgage agent and her employer.

To read The Plain Dealer (Cleveland, Ohio) report on this story, see Law and Order, and then scroll down to Loan agent robbed woman, 72.

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California Woman Charged With Stealing Her Mother's Home Equity

In California, the Victorville Daily Press reported recently that Renee Ray, 53, of Victorville, was arrested and charged with forgery, filing a false or forged document and financial elder abuse in connection a scheme where she allegedly forged her mother’s signature to remove her name from the deed to their house in order to refinance the home. As soon as the mother, from Compton, caught on, she notified San Bernardino County District Attorney’s office Real Estate Fraud Unit. Reportedly, Ray is said to have refinanced the home three separate times, eventually raising the amount of the loan to $272,000 without ever telling her mother about the deed or the $145,000 she walked away with, according to officials. Bail for Ray was set at $500,000. For more, see Daughter arrested for forging signature.

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Court Date Postponed for Man Accused of Victimizing Tracy Couple

The man accused of victimizing the Tracy, California couple in a reverse mortgage home equity scam (reported in my December 10, 2006 post) has been postponed to early January, according to this report in the Tracy Press.

The suspect, who reportedly got the homeowners to unwittingly sign over their home of 30 years in a transaction they believed to be a reverse mortgage, was arrested for suspicion of forgery, grand theft, financial elder abuse and conspiracy and was originally scheduled to enter a plea this past Tuesday.

Authorities report that there may be at least two other homeowners that may be considered victims, and there may be other arrests involving the notaries and the individuals currently holding title to the homes belonging to the homeowners.

(I suspect authorities are currently attempting to work out a plea deal either with the suspect or with his alleged confederates in exchange for cooperation in obtaining convictions.)

In a related story, see Arrest puts reverse mortgages in spotlight, also reported by the Tracy Press.

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Elderly California Couple Allege $485,000 "Home Theft"

An elderly Tracy, California couple have allegedly been victimized by a "home equity theft" involving a "reverse mortgage" scam, according to this report in the Tracy Press.

Police have arrested and jailed the alleged scammer, who has been susbsequently released on $63,000 bail. The criminal charges involved are suspicion of:

1. forgery,
2. grand theft,
3. financial elder abuse, and
4. conspiracy.

Reportedly, the homeowners believed they were obtaining a reverse mortgage loan when, in fact, they were unwittingly signing over ownership of their home to the suspect. They found out that they were no longer the record owners of their home only after a neighbor made a comment to them about the couple "moving".

After recovering documents from the suspect's office pursuant to a search warrant, Tracy police believe that (1) there could be several more victims, (2) other individuals and businesses appear to have collaborated with the suspect, and (3) there may be more arrests made and charges filed.

The San Joaquin County District Attorney’s office has joined the investigation.

For the rest of the story, click here.

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Ex-Brooklyn Judge Under Indictment For Stealing $160K+ From Elderly Aunt Cops Misdemeanor Plea

In Nassau County, Long Island, The New York Law Journal reports (at Law.com):

• Michael J. Garson, a former Supreme Court justice in Brooklyn, pleaded guilty [last] Tuesday to a misdemeanor with a promise of no jail time, resolving charges that could have landed him in jail for five years. County Court Judge John L. Case of Nassau County promised Garson no jail time on two conditions: that he resigns from the bar and that he pays the final $48,000 in restitution ordered by a Manhattan judge for his mishandling of an elderly aunt's finances.

***

• The district attorney three years ago unveiled an indictment accusing Garson, who was a Supreme Court justice for a full 14-year term ending in 2006, of stealing more than $160,000 from his aunt, Sarah Gershenoff, while managing her financial affairs under a power of attorney. [...] Under the power of attorney, both Garson and his first cousin, Gerald P. Garson, an ex-Brooklyn justice who is in prison on a three- to 10-year term for bribery, were authorized to manage Gershenoff's finances. Michael Garson, however, took primary responsibility for handling her money.

***

• With [last] Tuesday's $48,000 payment, Garson has repaid Gershenoff a total of $219,000, reflecting the $163,000 ordered by [the Manhattan judge] plus interest. Gershenoff, who was 94 when the indictment was issued in May 2005, has since died.

For more, see Former N.Y. Justice Avoids Jail With Misdemeanor Guilty Plea (Garson resigns from Bar, makes restitution).

For story update, see Ex-Judge Avoids Jail for Forgery (7-7-08).

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Criminal Prosecutions Of Home Improvement & Repair Contractors

The following links are to recent stories involving home repair and improvement prosecutions and the criminal charges involved:

Connecticut - Police said Angelo Cassarino, a 38-year-old Babylon, New York man accused of bilking an elderly woman out of $1,851 during a home improvement project, was arrested on a warrant that charged him with second-degree larceny and second-degree reckless endangerment. Police said Cassarino did not properly secure a liner in the woman's chimney on Valley Circle, which could have blocked ventilation and cause a buildup of carbon monoxide in her house. Piping on the job also was smaller than it should have been, police said. About $8,800 in repairs are needed to fix the job, police said. See $1,800 Bilking (3rd story from top).

Massachusetts - William D. Chappell, of Worcester, who was hired to (1) install a new roof, and (2) rebuild a deck and paint the exterior of a house in Shrewsbury, was arrested for receiving over $11,000 for both jobs, and allegedly did not complete either job. He was charged with a violation of the Massachusetts home improvement contract statute; he is also wanted for a New York State probation violation for "grand larceny pertaining to the same type of contractor fraud scheme.” See City man held in home improvement case.

New York - Todd Clifford, of Webster, and who defrauded customers by taking money for work he didn't finish was sentenced to 6 to 12 years in prison, after pleading guilty to third- and fourth-degree larceny. See Contractor Gets 6 to 12 Years for Defrauding Customers.

Illinois - A DuPage County grand jury indicted Lubos Dubravsky, of Schiller Park, on felony charges of suspicion he defrauded a Naperville woman who hired him to install hardwood flooring, according to court records. He is charged with theft and home repair fraud. Authorities allege Dubravsky accepted a $3,000 down payment from the woman, but failed to provide any work. See Man accused of theft, fraud (3rd story from top).

Delaware - Delaware State Police detectives have obtained an arrest warrant for Donald J. Schulze (T/A Affordable Construction Inc.), of Millsboro, charging him with felony theft and home improvement fraud. The victim paid Schulze $11,345.77 to repair her mobile home that had been damaged by fire. Schulze allegedly received the money and only completed $2,000.00 worth of work on the property. See Police searching for Millsboro man.

Maryland - Kevin Robinson was sentenced to six months in jail after prosecutors said he accepted $23,000 for a contracting job he never completed. Prosecutors said Robinson took the money and didn't do the work. Robinson was sentenced after pleading guilty to failing to put money in an escrow account. Prosecutors said this may have been the first conviction in Maryland under the law involving contractor escrow accounts. See Man Sentenced To Jail In Contractor Scam (Prosecutors Say Man Took Money For Job He Didn't Complete).

Kentucky - Louisville Metro Police arrested Willie S. Baldon, of Louisville, for allegedly scamming an 86-year-old woman out of thousands of dollars in a home repair scheme. Police say he was paid for work that was never completed. He allegedly received $6,697.97 but no repairs were made to the woman's home. Baldon has been charged with exploiting an elderly person and three counts of theft by deception, according to his arrest citation. The department's crimes-against-seniors unit was involved in the investigation. See Police charge man with bilking elderly woman over home repairs (Nearly $7,000 paid; work never began).

California - Palm Springs Police Detectives are looking for help located a mother and son team wanted for 38 counts of Financial Elder Abuse and Contractor Fraud. An extraditable warrant has been issued for the arrest of Mary Agnes Stewart, 62, and her son, Joseph Cunningham, 44, for allegedly defrauding an elderly Palm Springs couple of approximately $800,000 over a four-month period by contracting to do remodeling work in the couple's Las Palmas area home. According to reports, they allegedly required the victims to pay large quantities of money in installments. They started demolition of the couple's home, and then fled without providing any materials or construction work. See Palm Springs Police Search for Elder Abuse Suspects.

For other posts on contractors accused of stiffing customers, go here and go here. contractors stiff subs customers zeta