Wednesday, April 06, 2011

Suit Against Notorious D.C.-Area Foreclosure Rescue Operator To Undo Sale Leaseback, Equity Stripping Scam Allowed To Continue

In a preliminary ruling back in November, a U.S. District Court in Washington, D.C. refused to dismiss a lawsuit brought by a homeowner who was allegedly screwed-over in a sale leaseback equity stripping ripoff by by notorious, D.C.-area foreclosure rescue operators Vincent Abell, Calvin Baltimore, and Modern Management Company.(1)

Also named in the lawsuit is Wells Fargo which, in a separate transaction, allegedly made a predatory loan.

The court described the basis for the lawsuit as follows:

  • With respect to Abell, Baltimore, and Modern Management, [homeowner George R.] Hughes alleges violations of the D.C. Consumer Protection Procedures Act ("CPPA"), the Truth in Lending Act ("TILA") and the Home Ownership and Equity Protection Act ("HOEPA"), common law fraud, usury, and a claim for an equitable mortgage.

    As to Wells Fargo, Hughes alleges violations of CPPA and a common law negligence claim.

    And as against both Abell and Wells Fargo, Hughes seeks to quiet title to his primary residence after refinancing his mortgage.

    Hughes alleges that while he believed he was securing a loan to save his home from foreclosure, in fact, Abell, Baltimore, and Modern Management engaged in a scheme to defraud Hughes of his home.

    Arising from a separate transaction, Hughes alleges that Wells Fargo provided him financing on unconscionable terms and misrepresented material facts(2).

For the reasons discussed in its ruling, the court:

  • dismissed the usury charge as to Abell, Baltimore, and Modern Management on statute of limitations grounds,

  • allowed the lawsuit to proceed on the remaining allegations against all the defendants.

Representing the homeowner is the Legal Aid Society of the District of Columbia.(3)

For the ruling, see Hughes v. Abell, No. 09-220 (JDB) (D.D.C. November 17, 2010).

For the lawsuit, see Hughes v. Abell - Amended Complaint.

Go here for earlier posts on Vincent Abell.

(1) See DC High Court Affirms Punitive Damages Award Slamming Sale Leaseback Peddlers For $3.3M In Equity Stripping Foreclosure Rescue Ripoff for an example of earlier litigation involving Vincent Abell, Calvin Baltimore, and Modern Management.

Inasmuch as "both Abell and Baltimore have done time in federal prison for property schemes" according to a 2004 CBS News' story (see Loan Scam Targets Seniors' Homes (Washington Con Artists Preyed On Elderly People In Financial Trouble) (go here to watch related CBS News' video)), nothing short of additional criminal prosecution will put these guys out of business.

(2) With regard to the alleged predatory loan involving Wells Fargo, the D.C. Consumer Protection Procedures Act, according to the court, applies to real estate finance transactions like the one in this case, citing DeBerry v. First Gov't Mortgage & Investors Corp., 743 A.2d 699, 703 (D.C. 1999).

The court further noted:

  • Hughes's claim, as alleged, is analogous to other CPPA claims that have been sustained in this Circuit. In Williams v. First Government Mortgage & Investors Corp., 225 F.3d 738 (D.C. Cir. 2000), the D.C. Circuit upheld a jury verdict finding that the defendant had knowledge that there was no reasonable probability of payment on a refinanced mortgage requiring 57% of the plaintiff's monthly income. Id. at 744.

    Similarly, in Johnson v. Long Beach Mortgage Loan Trust 2001-4, 451 F. Supp. 2d 16 (D.D.C. 2006), the court declined to dismiss a complaint under section 28-3904(r)(1) alleging that loan payments would require more than half of the plaintiff's income. Id. at 38.

    Here, Hughes similarly alleges that Wells Fargo's terms require payment of nearly half of his income, or even more, given potential increases in the rate in the future. Hughes has satisfied his pleading burden, then, because he has alleged that Wells Fargo was aware that its terms would require approximately half of his income and that he had no prospects for increased income.

(3) The Legal Aid Society of the District of Columbia was formed in 1932 to provide civil legal aid to individuals, families and communities in the District who could not otherwise afford to hire a lawyer.

posted by Home Equity Theft Reporter at 4:04 AM

Tuesday, September 07, 2010

F'closure Rescue Operator At It Again As DC AG Slams Sale Leaseback Peddler w/ Suit Seeking To Void Title Transfers Violating Consumer Protection Law

From the Office of the District of Columbia Attorney General:

  • Attorney General Peter Nickles announced [] that the District has filed a Superior Court enforcement action against Vincent L. Abell, charging that he engaged in foreclosure rescue transactions that violated the District’s consumer protection law. The District’s complaint asks the Court to rescind the unlawful transactions.

  • According to the District’s complaint, Abell misled homeowners into believing that they were being offered loans that would prevent them from losing their homes to foreclosure. Instead, Abell had the homeowners sign documents that transferred the homes’ titles to him and converted the homeowners into Abell’s tenants.

  • Through these transactions, Abell obtained all of the equity in the homes for only a small fraction of its value. The homeowners victimized by Abell’s practices have typically been financially unsophisticated and desperate to save their homes from foreclosure. “We will not allow District homeowners to be preyed upon in this way,” Attorney General Nickles said.(1)(2)(3)

  • The District has also alleged that Abell sold condominium apartments in DC without posting the bonds or letters of credit required by District law.

For the DC AG press release, see Attorney General’s Office Files Action Against Foreclosure Rescue Scam.

For the DC AG's lawsuit, see District of Columbia v. Abell.

See also WTTG-TV Channel 5: DC Files Enforcement Action Against Foreclosure Rescue Scam, which also includes the story of DC resident Maria-Theresa Wilson, who was screwed over by Abell a couple of years back. She ended up suing him and scored a $3.3 million judgment against him, his company and a confederate named Calvin Baltimore. The judgment was upheld on appeal in a recent ruling. See Modern Mgmt Co. v. Wilson, 997 A.2d 37; 2010 D.C. App. LEXIS 283 (D.C. June 3, 2010).

(1) A 1988 ruling of the District of Columbia Court of Appeals supports the proposition that a home equity ripoff involving a sale of real estate with a contemporaneous leaseback of the premises to the seller, coupled with a right to buy back the property may be nothing more than a disguised usurious equitable mortgage masquerading as a true sale. See Browner v. Dist. of Columbia, 549 A.2d 1107 (D.C. 1988) (bold text is my emphasis and [alterations added], neither of which appear in the original text):

  • Moreover, if the transactions were in fact sales, as [the foreclosure rescue operators] contend, they were surely most extraordinary ones. When a homeowner sells his home, which is usually his most valuable possession, one would expect at least some measure of bargaining over the sales price. Here, there was none. In each instance, what the [foreclosure rescue operators] characterize as the "sales" price bore no relation whatever to the value of the equity. It is absurd to suggest that Mrs. Carroll would knowingly sell her home, in which she had an equity of more than $36,500.00, for $8,100.00. None of the "sellers" had placed his or her home on the market or expressed the slightest interest in selling it. Each "seller" remained in possession after the purported sale, and [the foreclosure rescue operators] were indeed depicting their service as one that would enable their clients to "save" their homes from foreclosure. Although the transaction also lacked one of the common characteristics of a loan -- an evaluation of the borrower's credit -- no such investigation was needed because the home itself, which in each case was worth far more than the amount expended by the [foreclosure rescue operators], served as their security.

  • It was therefore altogether reasonable for the trial judge to find that the depiction of each of these transactions as a sale and lease back was a transparent sham which masked an unlawful loan.

(2) For other stories on Vincent Abell and his foreclosure rescue racket, see:

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

posted by Home Equity Theft Reporter at 4:02 AM

Monday, June 07, 2010

DC High Court Affirms Punitive Damages Award Slamming Sale Leaseback Peddlers For $3.3M In Equity Stripping Foreclosure Rescue Ripoff

In Washington, D.C., notorious foreclosure rescue operators Vincent Abell ($2 million), the sole owner of Modern Management Company ($1.1 million), and Calvin Baltimore ($200K) are back in the news(1) as the District of Columbia Court of Appeals recently affirmed a jury verdict that slammed them with punitive damages of $3.3 million for scamming a local homeowner dealing with family health problems(2) and facing foreclosure out of her home that she owned for twenty-two years in an equity stripping, sale leaseback ripoff.(3)

The court also affirmed a jury award to the homeowner of $60,000 in compensatory damages as the group's liablity for common law fraud and for violating the D.C. Consumer Protection Procedures Act ("CPPA") for their various misrepresentations and omissions of material facts and for including "unconscionable terms" in the transaction, and which the trial judge tripled to $180,000 pursuant to the CPPA, D.C. Code § 28-3905 (k)(1).(4)

For the ruling, see Modern Mgmt Co. v. Wilson, Case Nos. 08-CV-18, 08-CV-85 & 08-CV-187 (D.C. June 3, 2010).

Representing the victimized homeowner was Jessica L. Ellsworth, with whom N. Thomas Connally III and Jeffrey D. Pariser were on the brief, with the firm Hogan Lovells in Washington, D.C.

See also:
(1) For other stories on Vincent Abell and his foreclosure rescue racket, see:
(2) A severe head injury at work prevented her from being able to work consistently. After her injury, she suffered two additional head injuries causing her to develop epilepsy and suffer seizures. She also spent much of her time caring for her elderly mother after the death of her father.

(3) The victimized homeowner filed suit alleging common law fraud, and statutory fraud pursuant to:
  • the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C.A. §§1961-1964.;
  • the District of Columbia Consumer Protection Procedures Act ("CPPA"), D.C. Code §§ 28-3901 to 3-905 (2001 & 2009 Supp.);
  • the Truth In Lending Practices Act ("TILPA"), 15 U.S.C.A. §§ 1635-1640;
  • the District of Columbia Loan Sharking Act, D.C. Code § 26-901 (2009 Supp.);
  • the District of Columbia Consumer Credit Services Amendment Act, D.C. Code §§ 28-4601 to -4603 (2001);
  • the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C.A. §§ 1602, 1639; and
  • the District of Columbia Usury Statute, D.C. Code § 28-3301 (2009 Supp.).
(4) The legal issues contested on appeal involved assertions by the defendants that:
  • the award of punitive damages against them was constitutionally excessive;
  • the trial court erred in permitting the victimized homeowner to pursue her RICO claims and admitting evidence that appellants had completed one hundred similar transactions, which caused the jury to inflate the punitive damages awards;
  • the compensatory damage award must be reduced by the amount of the settlement agreement the victimized homeowner reached before trial with appellants' former co-defendant;
  • the trial court erred in submitting to the jury the issue of whether the victimized homeowner was a "consumer" as defined in the CPPA; and
  • the jury verdict finding appellants liable for common law fraud and for violations of the CPPA was against the weight of the evidence.
The court affirmed on all points, except it did kick the case back to the lower court with directions to modify the compensatory damage award. The Court of Appeals ruled that the three co-defendants are entitled to a pro rata setoff against the $180,000 trebled compensatory award in the amount of $40,000, the amount a former fourth co-defendant, the law firm Houlon Berman, coughed up to "buy" its way out of this litigation pursuant to a settlement agreement with the homeowner before trial, thereby reducing the total "net" compensatory damages award to $140,000.

posted by Home Equity Theft Reporter at 4:08 AM

Thursday, April 05, 2007

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:

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

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

4) HomeOwners For Better Building has published this article:

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.

Go here , go here , and go here for other posts on elder financial abuse. zeta elder financial abuse

posted by Home Equity Theft Reporter at 12:02 AM

Monday, January 21, 2008

D.C. Foreclosure Rescue Operator Settles One Sale Leaseback Lawsuit; Denied In Request To Set Aside Verdict In Another

In Washington, D.C., The Washington Post reports:
  • Five D.C. residents who say they were tricked into signing away their homes have reached out-of-court settlements that enabled them to regain ownership and a total of $455,000. The settlements end a three-year-old lawsuit, a rare happy ending for the growing number of people who claim to be victims of foreclosure rescue scams. In the suit, the elderly plaintiffs alleged that to stave off foreclosure they signed paperwork for what they thought were loans that would cover missed mortgage payments. Instead, they had signed away their homes to Washington businessman Vincent L. Abell and his associates.

With respect to the buyback terms called for in the arrangements:

  • "The buyback terms were so onerous that there was no way to meet them," said N. Thomas Connally III, a lawyer at Hogan & Hartson, who, with AARP, represented the plaintiffs. "The arrangements were designed to fail from the start, and they allowed Mr. Abell to take ownership of the property by paying the former owner almost nothing." The monthly payments were often so high that many of the plaintiffs fell behind, lost their buyback option and ended up facing eviction, said Connally, whose firm worked on the case pro bono.

Regarding another case involving foreclosure rescue operator Vincent L. Abell:

  • Abell's legal troubles are not over. In March, after a two-week trial in D.C. Superior Court, a jury awarded more than $3 million in punitive damages and $60,000 in compensatory damages to Maria Wilson of the District, who had separately accused Abell, his company and Baltimore of defrauding her in a similar foreclosure rescue operation. On Jan. 9, Judge Mary A. Gooden Terrell denied the defendants' motions to set aside or reduce the verdict, Connally said. "Whether she'll ultimately be able to collect from those folks, who knows?" said Connally, who represented Wilson.

For more, see Homeowners in Alleged Scam Get Settlement (Payments to 5 D.C. Residents Conclude 3-Year Legal Battle).

Go here for other posts on Vincent Abell and his associate, Calvin Baltimore. elder financial abuse whale

posted by Home Equity Theft Reporter at 10:42 AM

Sunday, September 19, 2010

DC AG's Lawsuit Against Foreclosure Rescue Operator Alleges More Of The Same Use Of Sale Leasebacks To Rip Off Property Owners' Home Equity

A recent lawsuit filed by the Office of the District of Columbia Attorney General against local foreclosure rescue operator Vincent Abell alleges more of the same conduct that has earned him notoriety for allegedly ripping off homeowners in foreclosure through use of sale leaseback arrangements purportedly designed to help them keep their homes.(1)(2)

In addition, in a separate charge, Abell is accused of taking a rental apartment building that he purchased, converting it into condominiums, and peddling the units to buyers that contained wiring, gas lines, and electrical outlets that were improperly installed, not to mention water damage to drywall and roof leaks.

For the DC AG's lawsuit, see District of Columbia v. Abell.

Thanks to DC attorney Mike McKeown of Neighborhood Legal Services Program for the assist in obtaining the lawsuit.

For earlier posts and links to other stories on Abell, see:
(1) For the DC AG's press release announcing the commencement of this action, see Attorney General’s Office Files Action Against Foreclosure Rescue Scam.

(2) DC authorities once brought a successful criminal prosecution years ago against a sale leaseback peddler who operated in much the same way as Abell does. See Browner v. Dist. of Columbia, 549 A.2d 1107 (D.C. 1988), in which the DC Court of Appeals affirmed a criminal conviction of a foreclosure rescue operator where the trial judge found "that the depiction of each of these transactions as a sale and lease back was a transparent sham which masked an unlawful loan."

Inasmuch as Abell has reportedly "done time in federal prison for property schemes" according to a 2004 CBS News' story (see Loan Scam Targets Seniors' Homes (Washington Con Artists Preyed On Elderly People In Financial Trouble) (go here to watch related CBS News' video)), continuing to bring civil suits against him (that lack a threat of jail time) will probably not do much to stop him.

If local law enforcement is unwilling to go after him criminally for making these usurious loans to homeowners that masquerade as sale leasebacks (the [relatively toothless] DC usury statute [§28-3301 et seq], provides for fines of not more than $1,000 or imprisonment for not more than 1 year, or both under §28-3313 for willful violations), it may take a sharp, aggressive FBI agent to "prove up" federal criminal charges against him (ie. mail and/or wire fraud, conspiracy, RICO) in an attempt to permanently put Abell and his associates out of business.

posted by Home Equity Theft Reporter at 4:06 AM

Tuesday, February 24, 2009

Anatomy Of An Equity Stripping, Sale Leaseback Foreclosure Rescue Scam

An appellate brief filed a couple of years ago in the District of Columbia Court of Appeals tells the story of Maria Wilson, a Washington, D.C. homeowner who was victimized by foreclosure rescue operators Vincent Abell and Calvin Baltimore. The narative gives a step-by-step description of how Abell And Baltimore expropriated Wilson's home from her for practically no consideration.

As ugly of a story that it is, Ms. Wilson ultimately found herself the beneficiary of some pretty effective lawyering. Somehow or other, the parties wound up back in a D.C. trial court and, after a week-long jury trial, Ms. Wilson obtained a substantial jury verdict, including $3.3 million in punitive damages, against the perpetrators on account of the fraudulent sale-leaseback transaction. The eight-person jury found that the defendants — Vincent Abell, his company Modern Management, and his agent Calvin Baltimore — defrauded the plaintiff Maria Wilson and wrongfully took her home for a tiny fraction of its value.

For the story, see:

Shortly after the successful verdict in Maria Wilson's case, law firm Hogan & Hartson obtained very favorable settlements from many of the same defendants for five other D.C. homeowners victimized in similar sale-leaseback "expropriations" of their homes. Under the terms of the settlement, the defendants returned the homes of several of the victimized homeowners (many of them cleared of their old mortgages), plus more than $455,000 in cash compensation. See Hogan & Hartson Lawyers Save Homes for Washington D.C. Homeowners Victims Fall Prey to Mortgage Lending Scam.

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.).

posted by Home Equity Theft Reporter at 4:05 AM

Tuesday, February 23, 2010

Foreclosure Rescue Operators Try To Dodge Liability For Alleged Sale Leaseback, Equity Stripping Scam, Despite Binding Settlement Agreements

A recent court ruling by the District of Columbia Court of Appeals describes an attempt made by a couple of notorious D.C.-area foreclosure rescue operators(1) to wiggle their way out of out-of-court settlement agreements that they entered into with several equity stripping victims. The agreements were originally entered into after the victims brought suit against them.(2)

For the facts of the case, and the court's ruling, see Dyer v. Bilaal, 983 A.2d 349; 2009 D.C. App. LEXIS 573 (D.C. Ct. of App. 2009).

(1) Dennis Dyer, Vincent Abell, Modern Management Company, Marta Bertola, and other defendants.

(2) Six homeowners brought suit against the operators alleging fraud and other torts as well as violations of state and federal lending laws and consumer protection laws. The homeowners were allegedly offered bogus sale leasebacks arrangements that purported to help save their homes from foreclosure. Instead of merely signing loan documents in connection with what the homeowners thought was a mortgage refinance, they unwittingly transferred title to their homes for a fraction of their value and became tenants. See this CBS Evening News Report interviewing two of the victims of this foreclosure rescue scam.

In an unrelated case, a jury verdict of more than $3 million had been returned against three of the defendants in an almost identical suit brought by the same lawyers who were representing the plaintiffs in this case. See Wilson v. Abell, et al., Docket No. 04-7270 (D.C. Super. Ct., jury verdict March 27, 2007); a decsription of the facts in this case can be found in Appellate Brief: Wilson v. Modern Management, et al. (available online courtesy of Legal Aid Society of the District of Columbia). See also: Media Coverage Not New For D.C.-Area Foreclosure Rescue Operator.

posted by Home Equity Theft Reporter at 4:00 AM

Monday, April 02, 2007

Foreclosure Rescue Victim Wins $3.3+ Million Verdict Against D.C. Operator

The Washington, D.C. and Northern Virginia law firm Hogan and Hartson LLP has announced that it:
  • "has obtained a substantial jury verdict, including $3.3 million in punitive damages, against the perpetrators of a "pre-foreclosure" scheme in the Washington metropolitan area. After a week-long trial in the District of Columbia Superior Court, the eight-person jury found that the defendants — Vincent Abell, his company Modern Management, and his agent Calvin Baltimore — defrauded the plaintiff Maria Wilson and wrongfully took her home for a tiny fraction of its value. The jury also found that the defendants' scheme, in which they approach homeowners facing foreclosure and offer to help them "keep" their homes through a fraudulent sale-leaseback transaction, violated the D.C. Consumer Protection Act. The jury awarded Wilson compensatory damages of $60,000, and assessed punitive damages totaling $3.3 million against the three defendants."
For more, see Hogan & Hartson Wins $3.3 Million Verdict in Pre-Foreclosure Scam Case.

Editor's Note:

Because consumer protection laws typically call for an attorney fee award to be granted to the prevailing plaintiff (in this case, the foreclosure rescue victim), the foreclosure rescue operator in this case will, in all likelihood, be ordered to pay an additional amount to the homeowner's attorney for legal fees for violating the D.C. Consumer Protection Act. The amount could conceivably amount to several hundred thousand dollars or more (see, for example, the Nebraska case in Voiding A Title Transfer In A Foreclosure Rescue Transaction, where the attorney fees that the foreclosure rescue operators were ordered to pay added up to over $375,000).
.

posted by Home Equity Theft Reporter at 6:26 AM