Ventura DA Issues Advisory On Fractional Interest Deed Transfers In Foreclosure Rescue Scams

In Ventura County, California, District Attorney Gregory D. Totten has issued an advisory warning county homeowners facing foreclosure to look out for and avoid fractional interest deed transfers(1) promoted by foreclosure rescue scam artists as a way to avoid foreclosure.

Among other things, the advisory warns that, while the County Clerk Recorder's Office may be legally required to accept properly prepared documents for recording, it doesn't necessarily mean that the act of recording a fractional deed is lawful. Among the potential unlawful acts that may be committed in connection with a fraudulent scam involving a fractional interest deed transfer in California (which can be found in the California Penal Code and the California Civil Code), according to the advisory, are:

1. recording a false or forged document (Penal Code Sec. 115),
2. foreclosure consultant fraud (Civil Code Sec. 2945.4),
3. grand theft by false pretenses (Penal Code Sec. 487), and
4. fraudulent conveyance of land with intent to delay creditors (Penal Code Sec. 531),

For more, including an explanation of the fraudulent deed transfer scam, see "Fractional" Deed Advisory (English version) (Spanish version).

Go here for a brochure on the Ventura County DA's Real Estate Fraud Prosecution Program (English) (Spanish); and go here for the DA's Real Estate Fraud Unit webpage.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

(1) Anyone wanting some perspective on how the "fractional interest" home title transfer scam works (fractional interest title transfers on the eve of foreclosure, use of backdated deeds for this purpose, abuse of the Federal bankruptcy court system, conveyances to unwitting debtors in bankruptcy in far away places, the frequency of use of this scam, and other interesting points), you can read this detailed narrative from a real live case decided by a Texas bankruptcy court.

Two Oakland-Area Women Face 36 Felony Charges In Alleged "Fractional Interest Deed Transfer" Foreclosure Rescue Bankruptcy Scam

In Northern California, the San Jose Mercury News reports:

• Alameda County District Attorney investigators arrested two women in Livermore on Wednesday for allegedly running a real estate scam targeting homeowners facing foreclosure. Sonia Alburez, 37, owner of the Community Home Saver Program, and her employee Verena Silva, 42, of Union City, are facing 36 felony counts in at least 14 incidents throughout Alameda County. In the alleged scam, homeowners paid a fee -- between $1,500 and $2,500 each -- to have the women stall the foreclosure, but ended up losing their homes anyway.

***

• According to the District Attorney's office, the suspects would have property owners transfer a fractional interest of their property to fictitious company names via a grant deed. These companies had no real assets nor did they do any legitimate work. These company names were then added to the deeds at the recorder's office and the two women would file a petition with the U.S. Bankruptcy Court. The petitions would automatically stall foreclosure proceedings. But what the homeowners didn't know was that the banks that held the liens on the home would go to the bankruptcy court, get the grant deed overturned and foreclose the home anyway. Prosecutors believe there may be more victims.

For the story, see Women accused in alleged loan scam (Women reportedly said they'd stall foreclosure, but victims still lost their homes).

See also: San Francisco Chronicle: 2 arrests in Alameda County foreclosure scam.

For story update, see Alleged real estate scammer arraigned (Woman hit with eight felony counts after duping homeowners who still wound up in foreclosure).

Editorial Note:

As reported in an earlier post, some who are allegedly pulling this scam are actually putting the fractional ownership interest in the home facing foreclosure in the name of an unwitting person who recently filed for bankruptcy. The perpetrators are getting the names of recent bankruptcy filers in far away places by simply checking online bankruptcy resources and selecting individuals' names at random. For more on this, see Texas AG, Judge Slam Mortgage Rescue Operators In Fractional Interest "Foreclosure Delay" Bankruptcy Scam.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Butte County DA Issues Warning On Local "Fractional Interest" Foreclosure Rescue Scam

In Oroville, California, the Chico Enterprise Record reports:

• Local property owners who may be in the process of foreclosure are being warned by the Butte County District Attorney's and Clerk-Recorder's offices about a possible scam. The scheme is supposed to work by having the property owner grant a fractional interest in the property to a sham business entity, according to the District Attorney's Office. The property owner is also asked to pay the person who gains the fractional interest a monthly fee. The fractional owner then files bankruptcy for the sham business to stop foreclosure. The bankruptcy is found to be fraudulent, the foreclosure continues and the owner loses the property as well as the fees they paid to the scam artist.

• County Clerk-Recorder Candace Grubbs heard of the scheme from other county recorder offices and checked Butte County records. She found at least one suspicious case, referring it to District Attorney Mike Ramsey, whose office is investigating the circumstances. Ramsey said the case has ties to a similar scheme out of Alameda County.

• In Alameda, the district attorney has brought charges against two people who have gained fractional interests from property owners in Alameda, Fresno and Napa. The U.S. Attorney in Sacramento has indicted 19 people on similar charges, according to Ramsey. Property owners who may be approached in this manner are encouraged to contact Butte County's economic crime unit, 1-866-323-7283 [...].

Source: Foreclosure scam may be operating locally.

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Elderly, Infirm Foreclosure Rescue Scammer Dodges Prison Time After Guilty Plea In Fractional Interest Deed Transfer Bankruptcy Ripoff

In Los Angeles, California, the Contra Costa Times reports:

• 75-year-old Van Nuys man was ordered [] to spend a total of eight months in a halfway house and under home confinement for his role in a scheme that used phony bankruptcy filings to stall foreclosures of nearly 1,500 homes. Darwin Bowman pleaded guilty in February in Los Angeles federal court to bankruptcy fraud.


• U.S. District Judge Stephen V. Wilson, noting Bowman's age and ill health, sentenced him to four months in a halfway house and four months in home confinement, followed by three years under supervised release.


• "I don't think you ought to give him gold stars ... to my way of thinking he's a crook," Wilson said, but added that he would have a hard time sending Bowman to prison when the defendant's condition was taken into consideration. Bowman was the third person to plead guilty in the case.


• According to Assistant U.S. Attorney Evan J. Davis, the perpetrators of the scheme improperly postponed foreclosures on $725 million worth of mortgages and caused banks and lenders to lose out on loan payments from homeowners.


• Bowman -- and co-defendants Irving Cohen and Robin Phillips-- advertised a foreclosure rescue service that promised at-risk homeowners their properties could be saved in exchange for monthly payments of about $1,500, Davis said.


• After collecting the first fee installment, the defendants had the property owner sign a deed that granted a one-eighth interest in the home to a fictitious person. They would then file a bankruptcy petition in the name of the non-existent individual without the homeowner's knowledge, Davis said. The fraudulent bankruptcy filing triggered an automatic stay of the foreclosure proceedings in each instance.


• When a lender would succeed in having the bankruptcy case dismissed, the defendants would have their client sign another deed that granted another interest in the home to a different fictitious person. They would then file another bankruptcy case in the new fictitious person's name, according to the U.S. Attorney's Office.


• The fraudulent deeds and bankruptcy filings allowed the defendants to repeatedly postpone foreclosures while collecting $550,000 in fees from homeowners, prosecutors said.

For the story, see Van Nuys man sentenced to probation in foreclosure-rescue scam.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Two Admit Roles In Fractional Interest Deed Transfer Foreclosure Rescue Scam That Abused Bankruptcy Process To Stall Sales On 1400+ Homes

In Los Angeles, California, Westlaw News & Insight reports:

• Two people have admitted that they participated in a fraud scheme by using falsified bankruptcy petitions to delay foreclosures on more than 1,400 properties in California.(1) The scheme improperly postponed foreclosures on $725 million worth of mortgages and caused banks and lenders to lose out on loan payments from homeowners, according to a statement released by U.S. Attorney Andre Birotte of the Central District of California.

***

• Birotte said the three advertised a foreclosure rescue service that promised at-risk homeowners that their properties could be saved in exchange for monthly payments of about $1,500.

• After collecting the first fee installment, the defendants had the property owner sign a deed that granted a one-eighth interest in the home to a fictitious person, according to the charges. The defendants then filed a bankruptcy petition in the name of the nonexistent individual without the homeowner’s knowledge, Birotte said.

• The fraudulent bankruptcy filing triggered an automatic stay of the foreclosure proceedings in each instance. When a lender would succeed in having the bankruptcy case dismissed, the defendants would have their client sign another deed that granted another interest in the home to a different fictitious person, according to the charges. The defendants would then file another bankruptcy case in the new fictitious person’s name, prosecutors said.

• The fraudulent deeds and bankruptcy filings allowed the defendants to repeatedly postpone foreclosures while collecting $550,000 in fees from homeowners, Birotte said. While the defendants profited, lenders incurred legal fees to defend their interests in the bankruptcy cases and suffered unspecified losses on unpaid mortgages, he added.

Source: 2 admit roles in California foreclosure rescue scheme.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a report describing fractional interest deed transfer and other foreclosure scams involving the abuse of the bankruptcy court process.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

(1) Reportedly, Darwin Bowman, 74, pleaded guilty to bankruptcy fraud on Dec. 15 and Co-defendant Robin Phillips, 53, entered her guilty plea Nov. 29. A third defendant, Irving Cohen, 74, is still facing charges in the scheme, which operated between 2006 and July 2010, according to prosecutors.

Confusion Caused By Suspicious Deed Conveying Fractional Interests To Bankrupt People Recorded Day Before F'closure Enough To Void Subsequent Sale

In Fresno, California, The Fresno Bee reports:

• A bankruptcy judge on Wednesday reversed the foreclosure of the landmark Security Bank building on Fresno's Fulton Mall, giving its owners more time to find a buyer or settle its debts. Judge Whitney Rimel agreed with the building's owners, Fresno Pacific Towers Inc., that the foreclosure by East West Bank was tainted by a forged deed of trust and proceedings in another bankruptcy case in Los Angeles.

• Fresno Pacific Towers owes $5.2 million to East West Bank, and filed for bankruptcy on Jan. 18 to try to prevent the bank from foreclosing. But the bank held a foreclosure auction later that day for the 16-story, 86-year-old building. The bank was the only bidder, with an offer of $1.9 million. Within hours, the bank recorded a title change with the county.

• Rimel's ruling will force East West Bank to reconvey the title back to the ownership group. In a statement Wednesday evening, building co-owner and manager Saundra King said she was grateful for the ruling.

***

• Ravi Jain, an attorney for Fresno Pacific Towers Inc., said East West Bank received approval for the foreclosure from another bankruptcy court based on a forged second deed. That deed -- recorded in Fresno County -- assigned interest in the building to several parties who had filed for bankruptcy in Los Angeles last summer.

• Fresno Pacific Towers president John E. King testified Wednesday that the signature on the deed was not his. He and his sister, Saundra King, both said they knew nothing about the Los Angeles bankruptcy case until after the building was foreclosed.

• But there were earlier signs of trouble. East West Bank declared the building in default last summer, and a foreclosure sale was initially set for Nov. 18.

• Saundra King testified that on Nov. 16, she hired a Southern California firm, ASND Inc., to try to delay the sale. She said she and her brother sought more time to find a buyer and settle their debt to East West Bank before the bank foreclosed. King said she paid ASND about $5,000 in advance.

• On Nov. 17, a day after King hired ASND and a day before the auction, the forged deed was filed with the Fresno County Recorder's Office. The Nov. 18 auction was postponed, and an auctioneer said the delay was because of a bankruptcy filing. According to Jain, the auctioneer was referring to the Los Angeles bankruptcy case.

• Saundra King said she didn't learn about the forged deed until later in November. But she said "it didn't click that there would be a connection" between the document and ASND. She said she soon reported the forged deed to federal law-enforcement investigators.

• A second auction date in December was also canceled, again because of a bankruptcy which King said she knew nothing about. The Kings said it wasn't until January, after the bank took back the building, that they learned that there was a bankruptcy case in Los Angeles and a court order allowing East West Bank to foreclose.

• East West Bank's attorney, Thomas Geher, told the court it was obvious that ASND acted as an agent for the Kings and filed the fraudulent deed as a stalling tactic. "To believe ASND is not behind this is naive," Geher said. "The deed of trust was filed when the contract was signed," he added. "That's no coincidence. ... The debtor put all this in motion."

• Rimel, however, gave the benefit of the doubt to the Kings and said she "cannot conclude fraudulent intent by Mr. or Ms. King." She said the Kings' contract with ASND, resembles "foreclosure prevention schemes ... that have taken advantage of hundreds of thousands of people."(1) Because Fresno Pacific Towers Inc. was never notified of the Los Angeles proceedings, Rimel added, the owners were deprived of an opportunity to argue against the foreclosure order in that case.

For the story, see Fresno landmark's foreclosure reversed (Owners of Security Bank get time to find buyer or settle debt).

(1) The hiring of a foreclosure rescue operator on the eve of a foreclosure sale to stall the sale in exchange for a payment of $5,000, coupled with the almost immediate recording of a suspicious deed of trust to multiple people who are already involved in ongoing bankruptcy proceedings in another jurisdiction certainly points to a possible fractional interest deed transfer, foreclosure rescue bankruptcy scam, as Judge Rimel correctly points out.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure scams involving the abuse of the bankruptcy courts.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Texas Man Agrees To Plea Guilty In Fractional Interest Deed Transfer Foreclosure Rescue Scam

In Austin, Texas, the Austin American Statesman reports:

• A Lakeway man who has been accused of fraudulent business dealings at least twice has agreed to plead guilty in a new investigation involving allegations that he was paid to fraudulently delay foreclosures on behalf of distressed property owners, according to court documents.
• Frederic Alan Gladle, 53, is in jail awaiting his guilty plea to charges of bankruptcy fraud and aggravated identity theft. That plea is scheduled for Friday . He faces two to seven years in prison.
• From 2007 until his arrest in October, Gladle operated a business that helped distressed property owners delay foreclosure by paying a monthly fee — usually about $750 a month, according to prosecutors and charging documents.
• After clients signed up for his services, one of Gladle's salespeople had them sign deeds transferring a fractional share — usually one one-hundredth — of their distressed property, the documents said.
• The shares were transferred to an unrelated person who had previously filed a bankruptcy petition in court, the documents said. Those people were unaware that Gladle was using their names, which were obtained from online court records, the documents said.
• Gladle, or "a co-schemer operating at his direction," would then send a copy of the fractional deed and a copy of the unrelated person's bankruptcy petition to the lender that was expected to foreclose, the documents said.
• Because bankruptcy proceedings automatically delay foreclosure actions, the lender would not be able to immediately foreclose on Gladle's client's property, the documents said.
• Eventually, after the unrelated debtors claimed they knew nothing about owning the fractional interest, the foreclosure continued, according to the documents.
• Gladle would then go through the process again, causing further delay, the documents said. Through the course of the scheme, Gladle and his unnamed associates collected $1.6 million from clients and delayed the foreclosure sales of more than 1,100 properties, the documents said.(1)

For the story, see Lakeway man to plead guilty in scheme to delay foreclosures.

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Another Operator Gets Bagged By Feds For Allegedly Using 'Fractional Interest' Deed Transfers Of Financially Distressed Homes To Gum Up Foreclosure, Bankruptcy Process

From the Office of the U.S. Attorney (San Francisco, California):

• A federal grand jury in San Francisco indicted Walter Bruce Harrell, of Montara, with eight counts of bankruptcy fraud and two counts of making false statements in bankruptcy proceedings, United States Attorney Melinda Haag announced.
  
  The Indictment alleges that Harrell devised and executed a scheme to defraud creditors who were attempting to lawfully foreclose on numerous properties, and that he did so by delaying and obstructing foreclosure sales through the improper use of the federal bankruptcy process.
  
  According to the Indictment, Mr. Harrell, 71, is alleged to have arranged for property owners to grant fractional interests of between 2% and 20% of their properties to individuals whom Harrell had paid to file bankruptcy cases in the U.S. Bankruptcy Court for the Northern District of California. These actions invoked the “automatic stay” provision of the U.S. Bankruptcy Code, which halts foreclosure sales until the creditor seeks relief from the stay or until the bankruptcy case is dismissed.
  
  The Indictment alleges that Harrell’s scheme forced creditors to file motions to lift the automatic stays, or to wait until the debtors’ bankruptcy cases were dismissed, in order to proceed with the foreclosure sales.(1) A number of the creditors affected by the scheme were recipients of funds under the Troubled Asset Relief Program.
  
  The Indictment identifies at least six properties involved in the scheme, one of which was occupied by Harrell. The Indictment also charges Harrell with making false statements in bankruptcy proceedings with respect to two bankruptcy cases that Harrell paid an individual identified as “T.W.” to file.

For the U.S. Attorney press release, see Montara Man Charged With Running Bankruptcy Fraud Scheme.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Trio Charged In Foreclosure Rescue Scam Involving Fractional Interest Deed Transfers, Abuse Of Bankruptcy Process Affecting $750M In Mtgs, 1500 Homes

In Southern California, the Los Angeles Times reports:

• Federal prosecutors have accused three Southern California residents of running a massive foreclosure rescue scam that used phony bankruptcy filings to stall foreclosures of nearly 1,500 homes, involving $750 million in mortgages.

• The three suspects allegedly found homeowners on the verge of foreclosure and promised to ward off the proceedings for fees usually amounting to $1,500 a month.

• Prosecutors said the suspects secretly assigned partial ownership of the participating homes to fictitious people and filed bankruptcies using the fake names, forcing lenders to delay foreclosures for months or in some cases years.

• Irving Cohen, 74, of Van Nuys and Robin Phillips, 53, of Claremont have agreed to plead guilty to bankruptcy fraud charges, according to the U.S. attorney's office of the Central District of California. A third suspect, Darwin Bowman, 74, of Van Nuys was indicted in September and is awaiting a Feb. 8 trial at the federal courthouse in Los Angeles.

***

• The homeowners, who responded to advertisements placed by the suspects, did not know about the false bankruptcies or that fractional ownership of their homes had been transferred to fictitious people, prosecutors said. "The defendants in this case exploited bankruptcy rules as they methodically victimized lenders in their scheme and targeted vulnerable homeowners while enriching themselves," said Steven Martinez, assistant director in charge of the FBI's Los Angeles office, which investigated the case.

For more, see 3 Southern Californians accused of running foreclosure rescue scam (The suspects allegedly used phony bankruptcy filings to stall foreclosures of nearly 1,500 homes, involving $750 million in mortgages).

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a report describing fractional interest deed transfer and other foreclosure scams involving the abuse of the bankruptcy courts.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Scammer On Lam For 12 Years Bagged In Canada; Allegedly Ran Fractional Interest Deed Transfer F'closure Rescue Scam Involving Unwitting B'krpt Debtors

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

• Federal authorities have charged a former Los Angeles man with aggravated identity theft and having operated a foreclosure-rescue scam in Southern California and elsewhere that promised to postpone foreclosure sales for more than 800 distressed homeowners.
  
  Glen Alan Ward, 47, of Canada, was indicted [] in the Central District of California on two counts of bankruptcy fraud, one count of mail fraud and two counts of aggravated identity theft.
  
  In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which stemmed from federal charges in the Central District of California associated with a similar scheme. On April 5, 2012, Ward was arrested in Canada on a U.S. provisional arrest warrant based on the charges in the Central District of California. His extradition to the United States is pending.
  
  [The] indictment charges the defendant with identity theft and a scheme to defraud that took place from July 2007 to April 5, 2012, while he was a fugitive. According to the indictment, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward allegedly promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee.
  
  Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. The indictment alleges that Ward also obtained a copy of the debtor’s bankruptcy petition and directed his clients to execute, notarize and record a grant deed transferring a 1/100th fractional interest in their distressed home into the name of the debtor he provided.
  
  Then, Ward allegedly faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
  
  Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money.
  
  As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward collected more than $1 million from his clients who paid for his illegal foreclosure-delay services.(1)

For the Justice Department press release, see Twelve-Year Federal Fugitive Indicted for Fraud and Identity Theft in Nationwide Foreclosure Rescue Scam (Defendant Arrested by Canadian Authorities; Allegedly Collected More Than $1 Million from More Than 800 Distressed Homeowners).

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the U.S. bankruptcy courts.

Sacramento-Area Foreclosure Rescue Operator Gets 32 Months For Role In Fractional Interest Deed Transfer Bankruptcy Scam

In Sacramento, California, The Sacramento Bee reports:

• Charles C. Jamison assured potential customers he was a foreclosure stopper, someone who could, for a fee, save their homes from trustee sales. It worked for a while, until federal fraud stoppers stepped in. The 30-year-old Citrus Heights resident pleaded guilty in February and was sentenced Tuesday to two years and eight months in prison.

This is the scheme to which he admitted:

1. Distressed homeowners in the Sacramento region received fliers in which Jamison, using an alias, promised he could, through a program he called "Stop Now," halt an impending sale.


2. The charge: $1,000 a month, and he claimed that included mortgage payments.


3. Between July 2007 and May 2009, he persuaded desperate people to take desperate measures. Via notarized and recorded grant deeds, they transferred partial interests in their homes to fictitious entities created and controlled by Jamison.


4. Under the names of those entities, he then filed petitions in the U.S. Bankruptcy Court in Sacramento, resulting in automatic stays of foreclosure proceedings.


5. The lenders were delayed in foreclosing on properties in default, while being forced to pay lawyers to contest the sham bankruptcies.


6. According to a written plea bargain, "a reasonable estimate of the loss to the financial institutions cannot … be determined." Prosecutors and Jamison agreed his gain from the rip-off was between $120,000 and $200,000.

Source: Man gets prison term in foreclosure rip-off.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Ex-Fugitive Foreclosure Rescue Operator Gets 132 Months For Running Fractional Interest Deed Transfer Scam Involving Use Of Bogus Bankruptcy Filings To Fraudulently Delay, Postpone Public Auctions For 800+ Financially Distressed Homeowners

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

• Glen Alan Ward, 48, a former Los Angeles resident who fled to Canada and was a federal fugitive for 12 years, was sentenced [] to serve 132 months in prison for aggravated identity theft and bankruptcy fraud in connection with his leading role in a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners.

***

• According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee.
  
  Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided.(1)
  
  Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
  
  Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years.
  
  In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
  
  As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting from his clients who paid for his illegal foreclosure-delay services more than $1.2 million.

For the Justice Department press release, see Former Federal Fugitive Sentenced in California for Nationwide Foreclosure Scam (Collected More Than $1.2 Million from More Than 800 Distressed Homeowners).

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Captured Fugitive Cops Plea For Running Fractional Interest Deed Transfer Foreclosure Rescue Scam; Racket Using Stolen I.Ds To Gum Up Repo Process Spanned Nearly 15-Year Period

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

• A former Los Angeles resident, who fled to Canada and was a federal fugitive for 12 years, pleaded guilty today to aggravated identity theft and bankruptcy fraud in connection with leading a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners, [...].
  
  Glen Alan Ward, 48, pleaded guilty in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud.
  
  In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme.
  
  In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there.
  
  While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.
  
  On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.
  
  “Glen Alan Ward spent years preying on distressed homeowners and stealing the identities of bankruptcy debtors, all to pad his own pockets,” said Acting Assistant Attorney General Raman. “Now he faces years in prison for his crimes. This successful prosecution illustrates our commitment to tirelessly pursuing fraudsters and ensuring that sophisticated schemes that prey on vulnerable homeowners will not go unpunished.”

***

• According to the plea agreement filed today before U.S. District Judge Dale S. Fischer in the Central District of California, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure.
  
  Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy.
  
  Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
  
  Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, [...] could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years.
  
  In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
  
  As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country.(1)
  
  During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.

For the Justice Department press release, see Former Federal Fugitive Pleads Guilty in California to Massive Fraud and Identity Theft Scheme in Connection with Nationwide Foreclosure Scam (Defendant Collected More Than $1.2 Million from More Than 800 Distressed Homeowners).

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Foreclosure Rescue Scammer Convicted On State Charges Now Faces Federal Bankruptcy Fraud Allegations Involving Fractional Interest Deed Transfers

In Oakland, California, the San Francisco Chronicle reports:

• A Livermore business owner is facing federal charges for allegedly taking advantage of the mortgage crisis by running an elaborate foreclosure rescue scam, court records show. Sonia Alburez, 37, [...] is accused of inducing homeowners desperate to avoid foreclosure to transfer an interest in their properties to what turned out to be sham companies. She was charged Friday with four counts of bankruptcy fraud in U.S. District Court in Oakland.(1)

***

• She claimed that her company, Community Home Saver Program, could delay or stop foreclosure proceedings so long as homeowners transferred an interest in their properties as a gift to one of several companies and paid fees, authorities said.

• But her customers didn't realize that the companies in question were fictitious and bankrupt, authorities said. Alburez is accused of filing fraudulent bankruptcy petitions for properties in Fremont, San Ramon, Vallejo and Modesto from January to March to delay foreclosure proceedings.

For more, see Livermore woman charged in foreclosure scam.

See also: this report on the use of abusive bankruptcy court filings in connection with foreclosure rescue scams.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

(1) According to the story, Alburez and Verena Silva pleaded no contest earlier this year in Alameda County Superior Court in a similar case. Prosecutors said the women bilked more than a dozen homeowners of $1,500 to $2,500 a month in exchange for a plan the two allegedly said would save homes from foreclosure. Instead, the victims still lost their homes, as well as the money they paid Alburez and Silva. According to an earlier story, they were found guilty of two felony counts each of foreclosure rescue fraud and grand theft. loan modification

Bankruptcy-Based Foreclosure Rescue, Fractional Interest Deed Transfer Scams Finding Their Way Across The Country

In Kansas City, Kansas, The Kansas City Star reports:

• Federal investigators in Kansas are trying to derail a foreclosure scam that began in California and is sweeping the United States using bogus bankruptcies to dupe homeowners and lenders. The scams take advantage of the fact that a bankruptcy automatically delays home foreclosures, which are at record levels.

***

• The Department of Justice is investigating at least nine suspicious bankruptcies filed recently in bankruptcy courts in Kansas City, Kan., Topeka and Wichita, The Kansas City Star has learned. Kansas officials confirmed the federal investigation but declined to discuss it in detail. Bankruptcy officials in Missouri said they were aware of the scam and were reviewing court filings carefully. So far, they have not seen signs of the fraud. But legal experts said the phony filings also are turning up in Maryland, Nevada and Texas. They suspect it is just a matter of time before more are discovered in other states.

***

• Generally, the fraud works like this: Scammers approach people facing foreclosure and offer to save their property for an upfront or monthly fee. They persuade the homeowner to assign them a legal interest in the property. Then the scammers — often without the homeowner’s knowledge — transfer fractional shares in the property, often 5 percent or less, to third parties. These third parties are usually fictional, investigators say, although in some cases the scam artists have recruited homeless individuals. They then file bankruptcy petitions in the names of these third parties. Sometimes, as in the Kansas cases, it is in courts thousands of miles from where the property is located.

For more, see Foreclosure rescue scam makes its way to Kansas.

For a 1998 report issued by a California Federal Bankruptcy Court task force that details the types of foreclosure scams involving the abuse of the bankruptcy courts, see Final Report Of The Bankruptcy Foreclosure Scam Task Force.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Texas AG, Judge Slam Mortgage Rescue Operators In Fractional Interest "Foreclosure Delay" Bankruptcy Scam

From the Texas Attorney General's office:

• Texas Attorney General Greg Abbott's Bankruptcy and Collections Division successfully intervened in a federal bankruptcy involving an illegal residential foreclosure rescue scheme. In that case, Judge Stacey G.C. Jernigan sharply criticized fraudulent mortgage rescue schemes, which she referred to as “a new cottage industry of bottom feeders.”

***

• The case involved two fraudulent companies promising to stave off residential foreclosures: North American Foreclosure, L.L.P., of California, and Jireh Capital Services, L.L.C., a Dallas-area affiliate. Jireh and its operator, David Curtis, who cooperated with the Attorney General’s investigation, appeared in court and were ordered to pay a $48,000 civil penalty and $10,000 in attorneys’ fees. [...] Judge Jernigan ordered the North American and its president [Jeremy Mitchell a/k/a Jason Mitchell] to pay $100,000 in punitive damages as well as $48,000 in state civil penalties, attorneys’ fees and restitution [...].

***

• Curtis convinced the [homeowners] to convey one percent of their home’s value to an out-of-state person who was in bankruptcy, or would agree to file “bankruptcy.” The [homeowners] were told that by transferring a fractional ownership interest in their home to a third person in bankruptcy, they could automatically postpone their foreclosure date. [...] Under the “client agreement,” the [homeowners] were to pay North American $650 per month for as long as its “services” were needed.

The judge also referred North American and Jireh Capital to the U.S. Attorney’s Office for an investigation into potential criminal violations. For more, see Bankruptcy Judge Condemns Mortgage Rescue Scheme, Applauds Attorney General Abbott's Efforts (Calling defendants ‘bottom feeders,’ judge exacts punitive damages).

See also Texas couple taken advantage of in bankruptcy case, judge says.

For the related Federal Bankruptcy Court court documents setting forth all the underlying facts in this case, see:

• Final Judgment and Permanent Injunction,
• Summary of Facts, Judge's opinion and order (recommended reading for anyone wanting some perspective on "fractional interest" home title transfers on the eve of foreclosure, use of backdated deeds for this purpose, conveyances to unwitting debtors in bankruptcy in far away places, the frequency of use of this scam, and other interesting points).

Texas Man Gets 61 Months For Running Foreclosure Rescue Racket Involving Fractional Interest Deed Transfers To Unwitting Debtors In Bankruptcy

In Austin, Texas, the Austin American Statesman reports:

• A Lakeway man who pleaded guilty this year to bankruptcy fraud and aggravated identity theft after he was paid to fraudulently delay foreclosures was sentenced Thursday to two consecutive prison terms totaling 61 months.
  
  
• Frederic Alan Gladle, 53, also was ordered to pay $214,258 in restitution and was told that after his prison term he won't be allowed to work in the mortgage or financial industries during his three-year supervised release. He also had to forfeit belongings, including prepaid debit cards and cash, seized during an investigation. Gladle has 14 days to appeal the sentence.

***

• From 2007 until his arrest in October, Gladle operated a business that helped distressed property owners delay foreclosure by paying a monthly fee — usually about $750 a month, according to prosecutors and charging documents. Through the course of the scheme, Gladle and his unnamed associates collected $1.6 million from clients and delayed the foreclosure sales of more than 1,100 properties, according to the documents.
  
  
• After clients signed up for Gladle's services, one of his salespeople had them sign deeds transferring a fractional share — usually one one-hundredth — of their distressed property, the documents said. The shares were transferred to an unrelated person who had previously filed a bankruptcy petition in court, the documents said. Those people were unaware that Gladle was using their names, which were obtained from online court records, the documents said.
  
  
• Gladle, or "a co-schemer operating at his direction," would then send a copy of the fractional deed and a copy of the unrelated person's bankruptcy petition to the lender that was expected to foreclose, the documents said. Because bankruptcy proceedings automatically delay foreclosure actions, the lender would not be able to immediately foreclose on Gladle's client's property, the documents said.
  
  
• Eventually, after the unrelated debtors claimed they knew nothing about owning the fractional interest, the foreclosure continued, according to the documents. Gladle would then go through the process again, causing further delay, the documents said.

For the story, see Man sentenced to 5 years in scheme to delay homeowner foreclosures.

Pair Cop Guilty Pleas For Peddling Foreclosure Rescue Program That Used Fractional Interest Deed Transfers & Bogus Bankruptcy Petitions To Scam Upfront, Monthly Fees Out Of Unwitting Homeowners While Dragging Out Repo Process

In Sacramento, California, The Sacramento Bee reports:

• Two men have pleaded guilty to bankruptcy fraud in connection with a foreclosure rescue scheme.
  
  Jesse Wheeler, 36, of Roseville and Brent Medearis, 46, of Modesto entered guilty pleas today in U.S. District Court in Sacramento, according to a federal Department of Justice news release.
  
  On Dec. 1, 2011, a federal grand jury indicted Wheeler and Medearis along with Jewel L. Hinkles, also known as Cydney Sanchez, 63, of Los Angeles, and Cynthia Corn, 60, of Oakland, for a scheme allegedly run by Hinkles. According to court documents, Wheeler operated JW Financial Solutions in Roseville, and Medearis worked out of a Modesto office, both as affiliates of programs that Hinkles created.
  
  Hinkles was the founder and general manager of Horizon Property Holdings LLC, in Beverly Hills, according to court documents. From 2008 through 2010, Hinkles offered a service called "Save My Home" or "Homesaver" that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on their mortgages. Horizon offered the program directly to clients and also through "affiliates", who promoted and sold the program to clients, mostly in Northern California. Corn sold the program through Property Relief!, a South San Francisco affiliate, authorities said.
  
  The defendants allegedly told homeowners that they would save their homes from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, thereby reducing the homeowner's principal and monthly mortgage payment.
  
  To prevent foreclosure and to defraud the existing lenders, the defendants allegedly filed fraudulent deeds transferring an interest in the homeowner's property to a fictitious entity called Pacifica Group 49/II.
  
  In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacific Group 49/II as the debtor. The purpose of these petitions, authorities said, was to invoke the automatic provisions of federal bankruptcy law and bring an immediate halt to any foreclosure actions against a debtor's property.
  
  Because the fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, the defendants were able to pretend that they were providing a legitimate service and continue to collect fees from defrauded homeowners, according to federal authorities. To enroll in the Save My Home program, clients were required to make an initial payment of approximately $3,500 and pay monthly fees of up to $1,500. The Homesaver program required an initial payment ranging from $1,750 to $6,500 and monthly fees up to $850.(1)
  
  In all, the scheme collected at least $5 million from more than 1,000 clients.
  
  According to court documents, the defendants never arranged for the purchase of a mortgage from any of the clients' lenders and never negotiated a mortgage principal reduction for any of Horizon's clients.
  
  Wheeler and Medearis are to be sentenced Sept. 16 by U.S. District Judge William B. Shubb.
  
  Hinkles and Corn are scheduled for trial Aug. 6.

For the story, see Roseville, Modesto men plead guilty to foreclosure rescue scheme.

For the U.S. Attorney (Sacramento, California) press release, see Two Plead Guilty To Foreclosure Rescue Scheme.

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Sacramento Feds Score Another Guilty Plea In Foreclosure Rescue Scam That Falsely Promised Homeowners Easier House Payments Thru Discount Delinquent Mortgage Purchases; Used Fractional Interest Deed Transfers, Bogus Bkrptcy Filings Invoking Automatic Stay To Drag Out Legal Process & Continue Collecting Periodic Fees

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

• Jewel Hinkles, aka Cydney Sanchez, 63, of Los Angeles, pleaded guilty [] to bankruptcy fraud in connection with a foreclosure rescue scheme she ran, United States Attorney Benjamin B. Wagner announced.
  
  According to court documents, on December 1, 2011, a federal grand jury indicted Hinkles along with Jesse Wheeler, 36, of Roseville, Cynthia Corn, 60, of Oakland, and Brent Medearis, 46, of Modesto, in connection with the scheme. Wheeler operated JW Financial Solutions in Roseville and Corn operated Property Relief! in South San Francisco, both as affiliates of programs created by Hinkles. Medearis worked out of Modesto for Corn. Wheeler and Medearis previously pled guilty to bankruptcy fraud.
  
  According to court documents, Hinkles was the founder and general manager of Horizon Property Holdings LLC, in Beverly Hills. From 2008 through 2010, Hinkles offered a service called the “Save My Home” or “Homesaver” that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on homeowners’ mortgages. Horizon offered its program directly to clients and also through several layers of “affiliates,” who promoted and sold the program to clients, mostly in Northern California.
  
  The defendants allegedly told homeowners that they would save their residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, thereby reducing the homeowner’s principal and monthly mortgage payment.
  
  To prevent foreclosure and defraud the existing lenders, the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II.(1)
  
  In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The purpose of these petitions was to invoke the automatic provisions of federal bankruptcy law that bring to an immediate halt any foreclosure actions against a debtor’s property.
  
  Because the fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, the defendants were able to pretend that they were providing a legitimate service and continue to collect fees from defrauded homeowners.
  
  To enroll in the Save My Home program, clients were required to pay an initial payment of approximately $3,500 and monthly fees up to $1,500. The Homesaver program required clients to pay an initial payment ranging from $1,750 to $6,500 and monthly fees up to $850.
  
  In total, the scheme collected at least $4.9 million from more than 1,000 homeowners, including homeowners whose mortgages were owned by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
  
  According to the indictment, the defendants never arranged for the purchase of a single mortgage from any of the clients’ lenders and never negotiated a single mortgage principal reduction for any of Horizon’s clients.

For the U.S. Attorney press release, see Los Angeles Woman Pleads Guilty To Foreclosure Rescue Scheme.

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

Sacramento Feds Indict Five In Upfront Fee, Fractional Interest Deed Transfer Foreclosure Rescue Racket Employing Abuse Of Bankruptcy Courts

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

• United States Attorney Benjamin B. Wagner announced that five persons had been charged in a federal indictment, [...] in connection with a foreclosure rescue scheme. The five defendants, Jewel L. Hinkles aka Cydney Sanchez, 61, of Los Angeles; Bernadette Guidry, 43, of Irvine; Jesse Wheeler, 34, of Roseville; Cynthia Corn, 58, of Oakland; and Brent Medearis, 45, of Modesto; were charged in an indictment returned by a federal grand jury on December 1, 2011. Hinkles and Guidry are charged with eight counts of mail fraud. Each of the defendants except Guidry is charged with 16 counts of bankruptcy fraud.(1)

***

• The defendants allegedly told homeowners that for a substantial up-front payment and a monthly fee they would save the homeowners’ residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, or would reduce the homeowners’ monthly payment by negotiating a mortgage reduction with the lender.



• The indictment alleges that contrary to the defendants’ representations, they failed to arrange for the purchase of clients’ mortgages or to negotiate reductions in the mortgage debt owed by clients.



• To prevent foreclosure and defraud the existing lenders, the indictment alleges that the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II.



• In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The purpose of these petitions was to invoke the automatic provisions of federal bankruptcy law that bring to an immediate halt any foreclosure actions against a debtor’s property.(2)



• The fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, during which the defendants collected fees from defrauded homeowners. The indictment alleges that the defendants collected at least $5 million in fees from more than 1,000 clients.

For the U.S. Attorney press release, see Five Defendants Charged In Foreclosure Rescue Scheme.

(1) According to court documents, Hinkles was the founder and general manager of Horizon Property Holdings LC, located in Beverly Hills. From 2008 through 2010, Hinkles offered to the public a service called the “Save My Home” or “Homesaver” program that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on homeowners’ mortgages. Guidry was Horizon’s office manager and assisted Hinkles with promoting the foreclosure and “principal reduction” program. Horizon offered its program directly to clients and also through several layers of “affiliates,” who promoted and sold the program to clients, mostly in Northern California. These affiliates included Property Relief!, operated by defendant Cynthia Corn in South San Francisco, and JW Financial Solutions, operated by defendant Jesse Wheeler in Roseville. Defendant Brent Medearis sold the program out of Modesto as an affiliate of Property Relief!.

(2) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.