Saturday, December 01, 2007

Two (Now Disbarred) New York Attorneys Charged With Client Ripoffs Totalling About $200K

From the Queens County, NY District Attorney's Office:
  • Queens District Attorney Richard A. Brown announced [Wednesday] that two attorneys have been charged separately with looting their respective escrow accounts and failing to return money they had been holding for clients. District Attorney Brown said, “According to the charges, the defendants not only violated the trust that their clients placed in them but they let down the entire legal system which counts on members of the bar to conduct themselves in an ethical matter. Each of the attorneys has been disbarred, and each now faces serious criminal charges.” District Attorney Brown identified the defendants as Arelia Taveras, 46, presently of Bloomington, Minnesota, and Mark Jacobs, 58, of Glen Head, New York.

The alleged thefts took place primarily in connection with real estate transactions. For more, see the Queens DA Press Release - Two Queens Attorneys Charged With Raiding Their Escrow Accounts And Stealing Nearly $200,000 From Clients.

For those ripped off due to dishonest conduct by a New York attorney and are trying to recover some or all of your loss, see The Lawyers Fund for Client Protection of the State of New York for more information.

For other states, see:

Queens DA Charge 4 In Mortgage Scam Involving I.D. Theft Of Dead Person

In New York City, Queens District Attorney Richard A. Brown and others recently announced criminal charges against four individuals with, among other things, artificially inflating the price of a Queens house by “flipping” the property before stealing the personal identity of a dead Queens woman to fraudulently take out nearly $500,000 in mortgage loans on the property. According to the DA:

  • In this particular case, the defendants are accused of sucking hundreds of thousands of dollars in equity out of a Queens house through financial chicanery before walking away and allowing the property to fall into foreclosure.
Those charged are Seerojnie Mohan, 40, of Roslyn, Long Island, and Carolyn Dixon, 49, Doodnath Siewsanker, 48, and Ramesh Hardial, 43, all of Queens.

For more, see Queens DA Press Release - Allegedly Provided Illegal Alien With Social Security Number, Used “Straw Buyer” To “Wash” Title and Stole Identity of Dead Woman to Take Out $500,000 in Mortgage Loans.

Illinois AG Sues Contractor For Allegedly Performing Shoddy Work

From the Illinois Attorney General's Office:
  • [Illinois] Attorney General Lisa Madigan [yesterday] filed a lawsuit in Madison County Circuit Court alleging that an Alton contractor collected approximately $27,000 in down payments for home improvement work that he failed to perform or completed in a substandard manner. Madigan's suit, against Gary Delp of River Bend Building and Contracting ... in Alton, stems from complaints that five consumers made to the Attorney General's Consumer Fraud Bureau. The consumers alleged that Delp entered into verbal contracts to install sewer lines and other home improvements. According to the consumers' complaints, Delp collected down payments ranging from $2,500 to $2,900 and then allegedly failed to perform the work or conducted the work in a substandard manner.

Illinois consumers who believe they have been screwed over in a home repair scam or any other consumer fraud can download a complaint form or call the Attorney General's Consumer Fraud Hotline at one of the numbers in the Illinois AG Press Release.

For more, see Illinois AG Press Release - Madigan Sues Alton Contractor For Failure To Fulfill Home Improvement Contracts.

Beware Of Homes Used As Indoor Pot Farms & Meth Labs

Some time ago, the San Francisco Chronicle ran two stories describing the potential problems that may arise from the use of homes / apartments by its occupants as marijuana grow houses and methamphetamine labs.

Whether it's mold, corroded pipes, ripped out interior walls, substandard / illegal alterations to the electrical system that create fire hazards, the production and dumping of toxic waste, toxic vapors that penetrate drywall, electrical conduits, wood and flooring, decontamination issues, financial responsibility for the clean-up, legal liability issues, and the "invisible legacy" that's left in the home for future occupants, the stories describe the health, safety, legal and financial concerns that may be of interest to landlords, property managers, current homeowners, and prospective homebuyers, not to mention the mortgage lenders whose loans are secured by affected homes, and the neighbors living near those homes and apartments used as indoor pot farms and meth labs.

In one account, a fire department discovered a meth lab in one unit of an apartment building when responding to a kitchen fire. Reportedly, the entire building had to be evacuated of its tenants and closed down for "clean up" -- which took about six months. For more, see:

Go here for some methamphetamine information resources.

Go here and go here for other posts on home based meth labs. meth lab zeta pot grow ops alpha

Builder Busted In Treasure Coast Indoor Pot Farm Raids; Mortgage Fraud Charges Possible

In Port St. Lucie, Florida, the Palm Beach Post reports:
  • A small Port St. Lucie home builder appears to be at the center of an investigation into a ring of marijuana grow houses that sprawled across St. Lucie County, where authorities on Tuesday raided 18 homes and seized 420 pounds of pot, officials said. Authorities said they arrested 10 people, including the owner of Global Home Builders of the Treasure Coast, and uncovered 10 indoor marijuana farms during pre-dawn raids. They also said they confiscated $57,000 cash, 38 grams of cocaine, four guns, nine cars and a boat. The investigation began in September, and resulted Tuesday in what Port St. Lucie Police Chief John Skinner called the area's biggest single-day bust of indoor marijuana farms.

For more, see Builder arrested in raids at pot farms. See also, 10 more houses raided for pot in PSL (TC Palm).

A WPEC-TV Channel 12 story reported that mortgage fraud charges may also be coming in connection with the homes that were raided. To watch the video coverage, see Grow House Bust (WPEC-TV Channel 12) and Video: Police arrest 10 people in raids of alleged marijuana grow houses (St. Lucie County Sheriff's Office).

For story update, see Mortgage Fraud Charges Tacked On To Three Suspects Facing Charges Of Running 10 Indoor Florida Pot Farms. pot grow ops alpha

Indoor Pot Farms "Sprouting Up" Throughout Northeast Ohio

WKYC-TV Channel 3 (Cleveland, Ohio) recently ran a story on the apparent explosion of marijuana grow houses in the heart of suburbia throughout Northeast Ohio. Reportedly, suburban homes where people don't expect crime and respect neighbors' privacy are the perfect cover for these operations. To view the Channel 3 video report, see Indoor marijuana farms popping up in suburban neighborhoods.

Go here to read the WKYC online story. For earlier WKYC stories on indoor pot farms in Northeast Ohio, with links to the video coverage, see:

Friday, November 30, 2007

Florida Halts Withdrawls From Municipal Investment Fund; Cities Spooked By Level Of Subprime Junk Investments

In Florida, the South Florida Sun Sentinel reports:
  • In an effort to halt what one official called "an investment world version of a run on the bank," state officials froze withdrawals Thursday from a $27 billion investment fund that local governments drained by almost half during the past two weeks.


  • The state-run program allows local governments and agencies to combine revenues in short-term investments at low financing costs, while earning interest with easy access to the money to pay bills. Earlier this month, the state notified local finance directors that some investments were exposed to sub-prime mortgage risk.


  • The freeze, in effect until Tuesday, was ordered by the State Board of Administration, composed of Gov. Charlie Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum. The SBA, which manages the fund that on Nov. 15 held about $27 billion, was left with a little more than $14 billion Thursday night.

For more, see State freezes 'run on the bank' at investment fund (when link expires, try here).

For yesterday's post on this story, see Some Municipal Governments Bailing Out Of Subprime Investments.

For a related story from Bloomberg, see Public School Funds Hit by SIV Debts Hidden in Investment Pools (11-15-07).

Bay Area Resident Facing Foreclosure Gets Nothing In Sale Leaseback Of Home; Sues Foreclosure Rescue Operator

In San Francisco, California, the San Francisco Chronicle ran a story on an area homeowner facing foreclosure and her experience with foreclosure rescue operator, Diversified Management Consultants, a Sacramento company. With her home loan in default and a leaky roof, she reportedly entered into a sale and leaseback arrangement with this company in which: (1) she would receive up to $100,000 from the home sale, (2) her rent would be half of her mortgage payment, (3) she'd get assistance in improving her credit score, (4) she'd have the chance to make money referring other people for similar lease-back plans, and (5) she was assured that she'd be able to buy back here home after two years. She said that the promised benefits didn't happen and that she signed away her house and got nothing.

Excerpts from the story:
  • [The homeowner] thinks she fell victim to a classic foreclosure rescue scam. She has filed a civil suit against the investors alleging that they used "predatory bait-and-switch tactics ... designed to take both her money and her home."


  • Public records show the new deed holder refinanced [the homeowner's] house with new mortgages totaling $698,000. That's $170,000 more than the $528,000 Bridgewater said she owed. In a typical sale, [she] would have received that $170,000 minus fees and commissions. Instead, fees and costs exceeding $165,000 were disbursed from the mortgages, her lawsuit said. The only item that directly benefited [she] was a new roof, valued at about $6,600.

  • A week after [the homeowner] signed over title, the investors said her monthly rent to stay in the house would be $2,900 - almost double what she had told them she could afford.

Assisting her with her lawsuit against the rescue operator and others is the Predatory Lending Clinic at the University of San Francisco, and the San Francisco law firm Liuzzi, Murphy & Solomon.

For more, see Enticing deals in the mortgage crisis often are too good to be true.

More On Local Judge's Involvement In North Jersey Home Flipping Scam

In a story posted this morning, the New Jersey Law Journal reports:
  • A Garfield, N.J., lawyer who is also the town's judge may have played a central role in a scheme to defraud lenders by obtaining mortgages based on inflated appraisals of run-down properties. A state civil suit points to Garfield solo [practitioner] William Colacino Jr. as the lawyer referred to in a federal criminal case as "W.C.," an unindicted co-conspirator whose legal services, law office, attorney bank accounts and legal assistant were allegedly used in the scheme.
  • The criminal scheme is laid out in an information charging Paramus, N.J., real estate agent Michael Eliasof with ... conspiring with 12 others to engage in monetary transactions involving more than $10,000 derived from wire fraud, with the object of laundering proceeds of fraudulently obtained mortgage loans.


  • The civil suit, Beggs v. Eliasof, L-2343-06, filed in Passaic County Superior Court last year, sues Colacino by name, along with Eliasof, for misrepresentation, fraud, unjust enrichment, malpractice, consumer fraud and negligence in connection with the purchase of four investment properties in 2004 and 2005, three in Paterson and one in Newark. Colacino allegedly handled the closings while Eliasof allegedly made false promises about repairing and managing the properties and paying off the mortgages. Other defendants include Paterson Management, identified in the criminal information as controlled by Eliasof and used in the flipping scheme, and William Ottavian, who allegedly held himself out as a licensed appraiser with a Pine Brook, N.J., company.
For more, see Lawyer-Judge May Be at Center of Land-Flip Fraud.

Go here for other posts on this story. naughty judges

NBC Nightly News On Nationwide Copper Theft Epidemic

The NBC Nightly News ran a story last night on the nationwide copper theft epidemic. Copper parts being ripped off from inside air conditioners, plumbing pipes taken from day care centers, wiring taken from lighting fixtures at Little League baseball stadiums, and construction sites being nailed are among the targets for copper thieves that has law enforcement agencies throughout the country with their hands full.

To watch the NBC report, see Hot copper: A surge in copper thefts nationwide is costing businesses billions of dollars. NBC's Peter Alexander reports from Las Vegas, Nevada.

Go here for other posts on Copper Thefts. copper metal theft zebra

Thursday, November 29, 2007

Some Municipal Governments Bailing Out Of Subprime Investments

(revised 11-30-07)
In Florida, the South Florida Sun-Sentinel reports:

  • The nation's subprime mortgage crisis is prompting Florida cities, counties and agencies ... to pull billions of dollars out of a state-run investment fund. The local governments are worried because a state agency has invested their money, plus billions of additional dollars, in funds that are backed by subprime mortgages, the risky loans that have triggered an international credit crunch.


  • [An Orange County, Florida official] said his office took its money out because the state was evasive when questioned about how much was invested in subprime funds and how stable those funds were: "One of the problems is transparency. We haven't been satisfied with the answers we've been given."

For more, see Sub-prime mortgage meltdown causes run on state-managed investment fund (Agencies pull out of state-run fund) (if link expires, try here).

See also, Orlando, Orange County yank millions from state fund (Orlando Sentinel): Reportedly, the Seminole County, Florida school system is so spooked about the subprime junk holdings held by Florida's state-run investment fund that it yanked almost its entire amount on deposit (about $100 million) with the fund. It left $1,000 in the account just to keep it open (if link expires, try here).

Observation: It sounds like those Florida municipalities slow to pull their cash out from this fund may be left "holding the bag."

For story update, see State freezes 'run on the bank' at investment fund (added 11-30-07) (if link expires, try here).

For a related story from Bloomberg, see Public School Funds Hit by SIV Debts Hidden in Investment Pools (11-15-07).

Mastermind Of "Wraparound Mortgage" Ponzi Scheme Pleads Guilty; Fraud Estimated At $29M

In a Federal Court in Harrisburg, Pennsylvania, Lancaster Online reports:
  • Wesley A. Snyder was visibly shaken and his voice cracked Wednesday as he waived his rights in federal court here, pleaded guilty to one count of mail fraud and admitted to engineering a mortgage scheme that defrauded more than 800 clients and investors of an estimated $29.2 million. About 60 of Snyder's victims packed the standing-room-only courtroom.

For more, see Mortgage broker pleads guilty (Snyder admits fraud; victims want redress).

Go here for an illustration of how the refi / wraparound mortgage scam works.

Go here and go here for other posts and links to earlier media reports on the Pennsylvania Ponzi scheme involving OPFM, Image Masters, and other companies operated by Wesley Snyder.

NYC Foreclosure Rescue Operator Is At It Again, Back In The News, Being Sued Again, & Under Criminal Investigation

(original post 11-28-07)
Home Savers Consulting Corp., a Brooklyn, New York-based foreclosure rescue operator is back in the news. This time, it's WABC-TV Channel 7 (New York City) that ran a story the other night featuring two more scam victims who unwittingly went to Home Savers for help when they were facing foreclosure. Instead of help, they got their homes sold from out from under them. In addition to the homeowners facing foreclosure, Channel 7 investigative reporter Sarah Wallace also spoke on camera to a couple of the straw buyers that Home Savers hired and were involved in the scam. They claim that they were unwitting participants in the scam as well.

Reportedly, the Home Savers' business office suddenly closed and Garth Celestine, one of the Home Savers' partners, has apparently gone into hiding, which is understandable because, in addition to a number of civil lawsuits filed against Home Savers, criminal investigations in two states are ongoing, according to Channel 7.

To stave off possible foreclosure, one victim has now filed for bankruptcy and the other is considering it.

One of the victims has brought a civil lawsuit against Homesavers and others, alleging a widespread conspiracy of fraud. To read the online transcript of the Channel 7 TV report, see A Home Mortgage Mess.

Go here to watch the WABC-TV Channel 7 report.

Go here for other posts on Home Savers Consulting Corp.

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.).

Cleveland Area Builder & Straw Buyer Sentenced In Fraud Scheme Involving 38 Houses & $15M+ In Fraudulently Obtained Loans

In Cleveland, Ohio, WKYC-TV Channel 3 reports:
  • Two people were sentenced to prison Tuesday in connection with what prosecutors describe as a mortgage fraud scheme in upscale Cleveland suburbs. Builder and developer, Edward Emery received a sentence totaling 34 months and a fine of $10,000. Emery admitted that he would nearly finish half million dollar homes, then set up an arrangement where people would get paid for work that was never done. Eloise Anderson will spend nearly a year in prison. Prosecutors say she signed a loan application with fraudulent information. She's been ordered to pay $35,000 in restitution. Prosecutors say the mortgage fraud scheme totaled $15,115,440 and involved 38 houses in Solon and Glenwillow. Twenty-seven of the homes went into foreclosure.

For more, see Two sentenced in connection with mortgage fraud case.

Go here to view WKYC-TV video report.

Go here for earlier posts on this case.

Southern California Realtor Associations Plan Publicity Campaign To Heighten Public Awareness Of Real Estate Fraud

In Southern California, The Californian reports:
  • The stepped-up efforts of two Realtor associations to fight real estate fraud will include a novel twist: a varied publicity campaign aimed at buyers, sellers, agents, authorities and the news media, representatives of the groups said last week. The efforts are not entirely new - directors of Southwest County's Realtor group began warning local brokers of a rash of suspicious transactions in 2005. [...] Those transactions have since sparked a rash of lawsuits, an investigation by securities regulators and administrative action by the California Department of Real Estate [Editor's Note: but no criminal prosecutions].

  • Still, leaders of the Realtor groups - with many others in the local real estate industry - say they have grown frustrated at the pace of the criminal investigations. And evidence of ongoing fraud is becoming a stain on the industry, they say. "We're going to do everything we can to shine as bright a light on this problem as we possibly can, partially with the hope that those with authority to act will act," said John Giardinelli, a Canyon Lake attorney who advises the Southwest Riverside County Association of Realtors and the Inland Valley Association of Realtors in the Riverside-San Bernardino area.

For more, see Realtor group puts the word out - again.

Criminals Find Mortgage Lending An Easy, Lucrative Industry To Get Into

In Michigan, The Detroit News recently ran a story reporting how easy it's been for those with criminal inclinations to "drift" into the mortgage lending business, and how rampant mortgage fraud has been in the state.
  • Danny Stokes used to sell drugs, before he discovered it was safer and more lucrative to sell mortgages. Samer Fawaz and Bashar Farraj were students in a mortgage fraud class where they learned to inflate appraisals and bilk lenders. They murdered one of their fellow con men in their Sterling Heights mortgage office when the scheme began to unravel. Nelson Sumpter served time for fraud in a scam that drew national media attention in 1994. That criminal record didn't stop him from beginning a new career as a loan officer. He was recently indicted for fraud. [...] Mortgage fraud was easy for Hani Mortada. And the money was a lot better than what he had earned as a part-time clerk at the Dollar Store [who] went from a struggling part-time college student in Dearborn to a mortgage loan officer with $25,000 in the bank and a Cadillac Escalade in his garage.


  • Sumpter, 42, of Pittsfield Township was indicted in September in what Wayne County authorities believe to be a scam to strip the equity from the homes of several elderly Detroit residents. The homes are now in foreclosure.

In describing how alluring the mortgage fraud business has been for criminals practicing their trade in other areas of criminal endeavor, a Wayne County assistant prosecutor explained:

  • "You don't have to pull a gun on someone. You don't have to be on camera with a dye pack (as you are when robbing a bank). You're sitting at a desk. Someone brings you coffee. There's a lot of money, and sometimes it doesn't take any more than one forged signature," he said.
A local FBI official had this observation:

  • "We are seeing people who two years ago were involved in drug trafficking," said Mark Bowling, supervisor of the FBI's regional office in Macomb County. They slide into mortgage fraud, he said, "because it's easier, it's safer and the amount of profit is incredibly high. Once they're in the mortgage fraud business, they see how easy it is."

For more, see Fraud deepens Michigan housing crisis (Metro Detroit's foreclosure explosion linked in part to mortgage scams).

Wednesday, November 28, 2007

Businesses Cleaning Up In Foreclosure "Clean-Up" Industry

In California, The San Bernardino County Sun reports:
  • Foreclosed homes all over the Inland Empire are turning into what Lisa Carvalho calls "trash-outs" - wooden and stucco carcasses with piles of junk left behind by former tenants. [...] It's partially Carvalho's job to get junk hauled out of these abandoned homes. [...] The company, among others, has its hands full cleaning out foreclosures in the San Bernardino and Ontario areas. Sometimes her workers stumble across gems - like prized computer parts. But it's been a potpourri of things, such as cars, computer monitors, stoves and washing machines.

For more, see Vacant houses: picking up the pieces (Business booms in collecting items left by residents hit by foreclosure).

Countrywide Subpoenaed; Possible False Foreclosure Claims Against Homeowners Being Investigated

Buried in an article in today's South Florida Sun-Sentinel is the following blurb:
  • The U.S. Trustee, the federal agency monitoring the bankruptcy courts, has subpoenaed Countrywide Financial, the nation's largest mortgage lender and loan servicer, to determine whether the company's conduct in two foreclosures in South Florida represented abuses of the bankruptcy system.

  • One of the inquiries involves Manuel Del Castillo and Maria E. Pena, Miami borrowers who filed for protection last May under Chapter 13 of the bankruptcy code. In July, Countrywide Home Loans filed a claim, saying that the borrowers owed almost $279,000. In the second case, the trustee has asked for documents relating to Countrywide's claim for almost $101,000 against William and Joyce Chadwick, borrowers in Boca Raton, who filed for Chapter 13 protection in October 2005. The borrowers in both cases objected to Countrywide's claims of what was owed.

Source: Business Briefing (4th thru 6th paragraph) (11-28-07).

See also, Foreclosure Charges by Lender Investigated (New York Times - 11-28-07) (may require subscription; if no subscription, try here).

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

For more on allegedly false claims being made by home lenders and mortgage servicing companies both in bankruptcy and non-bankruptcy proceedings, see:

Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics yak

39 Michigan Homeowners Lose Homes In Equity Stripping / Home Improvement Loan Scam

In Detroit, Michigan, The Detroit News reports:

  • The deceptions of Financial One LLC, a Delaware company, began with its name and didn't end until at least 39 people had lost their homes. Financial One wasn't in Delaware -- it was incorporated in Michigan. Those who walked through its doors in an office building in Lathrup Village looking for home improvement loans sometimes ended up homeless, with their equity stripped and their houses in foreclosure, according to state documents detailing the mortgage scheme.


  • The state issued a rare summary suspension of Financial One's license in February, citing "an imminent threat to the public welfare." Financial One's president, Johnnie Denham Jr., could not be located for comment this month by The Detroit News. An affidavit filed by state mortgage examiner Elliott Purty in support of the suspension of Financial One's license lists 39 homes -- 37 in Detroit -- where Financial One stripped $968,775 in equity out of the properties. Twenty-five of the homes are in foreclosure. "It sounds like they were making a living stealing people's houses," Day said. "They put together a group of rip-off artists to prey on people."

This story is an example that a homeowner need not be facing foreclosure to be victimized by an equity stripping scam. For more, see Equity skimming plagues region.

Editor's Note: In this case, there has been no reported prosecution of the scam artists. In a similar equity stripping / home improvement loan scam in which racketeering, conspiracy to commit racketeering, mortgage fraud, and grand theft charges were brought, see Florida Man Cops Plea In Combo Home Improvement Scam & Mortgage Fraud. foreclosure rescue

Snyder Stiffs Bankruptcy Trustee In Wraparound Mortgage Scam

In Berks County, Pennsylvania, Lancaster Online reports:
  • About 300 customers victimized by Wesley A. Snyder's multimillion-dollar mortgage scam were disappointed Tuesday when the broker failed to show up at a bankruptcy hearing in Berks County. Snyder, who is due in federal court in Harrisburg today to plead guilty to one count of mail fraud, was required to attend the meeting of creditors as part of the Sept. 18 bankruptcy filing of six of his companies, including OPFM Inc., Personal Financial Management and Image Masters. [...] Snyder's criminal attorney, Emmanuel H. Dimitriou, advised his client not to appear at Tuesday's hearing, held in the ballroom at the Inn at Reading.


  • Federal prosecutors have said Snyder sold "wraparound" mortgages to 811 customers over the past two decades, but forwarded $26 million less than he collected to the banks and other lenders that supplied the financing.

For more, see Snyder fails to show at hearing.

Go here for an illustration of how the refi / wraparound mortgage scam works.

Go here and go here for other posts and links to earlier media reports on the Pennsylvania Ponzi scheme involving Wesley Snyder.

Ex Florida Cop Going After Bogus Home Improvement Contractors

In Hernando County, Florida, the St. Petersburg Times has a story on retired Pinellas County, FL Sheriff's deputy Tim Greene, who is now bringing his cop mentality to his current job as a Field Investigator for the Hernando County Building Department and whose job description includes going after crooked, unlicensed home repair and improvement contractors. Excerpts from the story:
  • For the past 21/2 years, he's worked to catch fraudulent contractors who do business in the county without a proper license. "It's a mentality," he said. "You've got to have a mentality that people shouldn't be taken advantage of because they are young or old. What these guys are doing is wrong and illegal."

Among other things, Greene points out that, under state law, the contractor's license number needs to be on vehicles and all advertising, including business cards and phone book ads. He cautions against being confused between a contractor license number and an occupational license number, which doesn't count.

In certain cases, ex-cop Greene works directly with fraud detectives across the street at the Sheriff's Office. For more, see In pursuit of handy con men (The growing problem of unlicensed contractors has county investigators trying to root out the frauds).

Tuesday, November 27, 2007

Tampa Cops Arrest Suspect For Grand Theft & Organized Fraud In Alleged Foreclosure Rescue Scam

In a story that I apparently missed (and one that I'll file in the "better late than never" department), an August 4, 2007 article in The Tampa Tribune reported a story on a now defunct, Central Florida based foreclosure rescue operator known as 4 Solutions, its director Jose Oliveri, and a U.S. Secret Service investigation into the company for possible rescue scams that the Oliveri and the company may have engaged in.

In addition to this investigation, however, (and this is the part I missed) it appears that the local Tampa city cops jumped into the fray with their own foreclosure rescue criminal investigation, according to this excerpt buried in the article:
  • Oliveri's wife, Carmen Maria Oliveri, was arrested by Tampa police June 7 on charges of 'grand theft of $100,000 or more' and 'organized fraud over $50,000.' According to the arrest report, in August 2005, Carmen Maria Oliveri 'entered into a scheme to defraud' a homeowner. The report states that 'Jose and Carmen presented terms of a loan without disclosing to the victim that he was signing over the rights to the property' to 4 Solutions. The company sold the property without the person's knowledge. On June 7, the day of her arrest, Oliveri accepted a check for $2,400 from 'the victim,' saying they could buy back the property if they paid $30,000 and could get financing, according to the report.

For the article, see Foreclosure Prevention Company Is Under Investigation.

Go here for other posts on 4Solutions.

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.).

Counterfeit Title Insurance Company Checks Being Used In International Sweepstakes Fraud

According to a Stewart Information Services Corp. press release from Houston, Texas:
  • An international sweepstakes fraud is using counterfeit checks bearing the name of Stewart Title of Montgomery County. “Winners” are receiving a letter with a check and told they will win $62,500 if they wire $3,000 to a Canadian account for “international clearance fees.” “This sweepstakes offer is fraudulent,” said Michael B. Skalka, president, Stewart Title Guaranty Co. “Stewart has notified the appropriate authorities including the bank, and none of these checks will be honored if presented for payment. Stewart is cooperating with all criminal investigations regarding this matter.”
For more, see Counterfeit Checks Using Stewart Title’s Name Being Used in International Sweepstakes Fraud.

CBS2 Undercover Investigation Catches Foreclosure Rescue Operators In The Act

In Los Angeles, California, CBS2 investigative reporter David Goldstein conducted an undercover investigation that illustrates some of the problems faced by financially strapped homeowners trying to save their homes from foreclosure. Using an actual home in Whittier that was in foreclosure, hidden cameras, and an actress hired to play the part of the homeowner in trouble, a number of operators were recorded giving their pitch. Among those caught on video was a convicted scammer who, in addition to having a prior Federal conviction for making false statements on a mortgage loan application, was currently on probation for a state grand theft charge in 2005 in a case in which he attempted to defraud someone else out of their home. The fact that the terms of his probation prohibited him from working in the foreclosure business apparently did not deter him from plying his trade.

To view the video report, see Predators Prey On Homeowners Facing Foreclosure. For a transcript of the video, see David Goldstein Investigates Real Estate Fraud.

For an earlier undercover foreclosure rescue investigation by CBS2's David Goldstein (in April, 2007) caught on video, see Homeowners Targeted By Foreclosure Agents.

For the laws regulating the conduct of foreclosure rescue operators in California, see the California Mortgage Foreclosure Consultants Act (Section 2945 - Section 2945.11, California Civil Code) and the California Home Equity Sales Contract Act (Section 1695 - Section 1695.17, California Civil Code.

Fraudulently Obtained Mortgages Estimated At $80M+ In San Diego-Area Fraud Operation

In San Diego, California, Voiceof SanDiego reports:
  • In one of the first local cases in a national crackdown on mortgage and real estate fraud, four people connected with a San Marcos realty office have pleaded guilty to charges that they went to great and illegal lengths to secure mortgages for financially unqualified consumers, thereby pocketing more than $1 million in fraudulent commissions. [...] Alejandro and Emilio Lopez, two owners of Century 21 Eldorado in San Marcos, headed the "Lopez Team" of loan officers, loan processors and real estate agents. Ravinderjit Singh Sekhon was a loan officer there and Linda Velasquez was the office manager, acting as translator for Sekhon with Spanish-speaking clients. All four pleaded guilty earlier this month to charges related to the scheme.


  • With more than 200 clients wrapped up in this scheme, at $400,000 a loan, the fraudulent loans could total more than $80 million.

For more, see Mortgage Fraud Hits the Courts.

Central Florida Cash Back, Above Asking Price Deals Arouse Suspicions

In Lakewood Ranch, Florida the Sarasota Herald-Tribune reports:
  • The same group of colorful Californians who bought 15 units at the Bermuda on Osprey condo complex in Sarasota at inflated prices attempted at least three similar deals in Lakewood Ranch. Shane and Shawn Unruh approached homeowners around the River Club area in the summer of 2006. In each case, the Unruhs persuaded sellers to participate in deals paying anywhere from $95,000 to $150,000 above asking prices on the understanding that the Unruhs -- the buyers -- would get the extra money back at closing.

For more, see Manatee home deals raised eyebrows.

For more on this California "investor" group, see "Cash Back" Arrangement Being Used To Purchase Central Florida Condos; Deals Raising Eyebrows Among Local Real Estate Pros.

Foreclosure Rescue Scam Leaves Homeowner & Straw Buyer Holding The Bag

The Boston Globe reports on a foreclosure rescue operator called National Foreclosure Centers, who has left one financially strapped Massachusetts homeowner in more trouble due to an equity stripping deal, and an unwitting straw buyer in Florida holding title to five properties that are now in foreclosure. According to the story:
  • The company was run by Eric L. Turner, a Florida resident who had created a string of similar firms beginning in 2004, Florida incorporation records show: Foreclosure Solution Group, Saving the American Dream Inc., Home Savers USA Corp. and, in 2006, National Foreclosure Centers. Turner could not be reached for comment. The phone number for National Foreclosure Centers is no longer in service. The website directs visitors to a similar site for a new company called United Foreclosure Networks. People answering the phone at United Foreclosure said he worked there, but Turner did not return several messages left at the office or at his home in Plantation, Fla.

In April, the Massachusetts homeowner sued the Florida straw buyer, National Foreclosure, the closing agent, and the mortgage company that made the loan in the foreclosure rescue deal, accusing them of defrauding him out of his home and more than $100,000. The straw buyer has since returned legal title to the home to the homeowner, but the mortgage company still claims having a lien on the home. The lawsuit is continuing.

Turner, no stranger to trouble, was indicted in June on 16 counts of fraud in an unrelated case dating to 2001. He pleaded not guilty and currently awaits trial in a South Florida Federal court. In 2004, he settled civil charges in the matter brought by the Securities and Exchange Commission and agreed to pay more than $160,000 in penalties.

For more, see Default threat ignites scams (Firms prey on homeowners; A cautionary tale in Roxbury) (if link expires, try here).

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.).

Colorado Judge Uses Law To Legally "Swipe" Neighbors' Land

In Boulder, Colorado, The Denver Post reports:
  • Despite the surprise and outrage about a former Boulder County judge taking a neighbor's land through court maneuvers, there's nothing new about adverse possession — or even judges employing the law to net real estate.


  • "It's stealing with a law license instead of a gun," said Will Campbell, a Boulder resident and supporter of Susie and Don Kirlin. Former Boulder Judge Richard McLean and his wife, lawyer Edith Stevens, won one- third of the Kirlins' vacant land in south Boulder by using the law. McLean and Stevens argued that they had used part of the 4,700-square-foot lot to reach the garden and deck of their home virtually every day for 25 years. The Kirlins bought the land in 1984 and planned to build a retirement home there.


  • State Rep. Rob Witwer, R-Evergreen, and Sen. Ron Tupa, D-Boulder, are studying possible legislation to raise the bar to prove adverse possession. [...] "If you trespass for 18 minutes, you can be arrested," [Witwer] said. "If you knowingly trespass for 18 years, you can get the land for free. The law should not allow that to happen."

The article states that at least two other judges have also successfully pulled off similar legal maneuvers in years past. For more, see Land-seizure cases no rarity.

Go here for other posts on using the adverse possession legal mechanism to acquire title to property without having to pay for it. adverse possession alpha

Wisconsin Foreclosure Rescue Regulations Being Considered By State Legislature

In Wisconsin, an editorial in The Sheboygan Press highlights a few of the elements of the proposed Wisconsin state law intended to regulate foreclosure rescue, sale leaseback deals. In such deals, a homeowner facing foreclosure transfers title to a home to an investor, and then rents it back with an agreement to buy it back in the future. The investor provides the funds necessary to either pay off the existing mortgage, or at least catch up on the back payments, resulting in the cancellation of the foreclosure proceeding in court. While the Wisconsin legislature has yet to pass a law, foreclosure rescue legislation reportedly has bipartisan support. Currently, there are bills proposed both in the state Assembly and the state Senate. For more, see:

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.).

Monday, November 26, 2007

New Jersey Judge Relieved Of "Bench Duty" - Acted As Closing Attorney In Wide-Ranging Real Estate Fraud

In Garfield, New Jersey, the Herald News reports:
  • City Manager Thomas J. Duch has relieved Municipal Judge William C. Colacino Jr. of his responsibilities, after reports that Colacino was the closing attorney in a wide-ranging real estate fraud in Paterson. [...] Colacino has not been suspended but that could change if he is indicted, Duch said.


  • On Nov. 14, Mahwah real estate agent Michael Eliasof pleaded guilty to one count of conspiracy to commit money laundering. Eliasof oversaw an elaborate scheme between 2002 and 2005 to sell properties whose values were inflated to unqualified buyers. Colacino has not been named by federal prosecutors in court documents, but a review of mortgage applications and deeds by the Herald News showed that Colacino, who at one point had a private law practice, was the closing attorney on more than a dozen of those deals. [...] Last week, Colacino's assistant, Melanie Gebbia, pleaded guilty for failing to report to the Internal Revenue Service income she received in that same scheme.

For more, see Garfield removes municipal judge. See also, Garfield judge relieved of duties.

Go here for other posts on this ongoing story.

Go here for other posts on allegedly Naughty / Knuckleheaded Judges. naughty judges

Florida Couple Gets 4 Years For Stealing Land From The Dead

In Southwest Florida, The News-Press reports:
  • A Broward County couple convicted of stealing land from the dead in Lee, Charlotte and Collier counties will spend the next four years in federal prison. Howard and Sheila Henry fraudulently obtained between $200,000 and $400,000 in property from 2001 to 2005. They illegally acquired the property by forging documents and selling the land. The pair would use the Internet to find property with several years of unpaid taxes, then connect those properties to deceased people. [...] Both Henrys were convicted in federal court in Miami for charges in an unrelated real estate scheme and were sentenced late last year and early this year. They were both sentenced to less than four years and all sentences will run together.

For more, see Couple get 4 years for stealing land from dead.

Tampa-Area Real Estate Agent At Center Of Suspicious Transactions

In Tampa, Florida, the St. Petersburg Times reports a story of an anonymous letter accusing local real estate agent Lori Polin of contributing to the alleged mortgage fraud that has resulted in nine homes going into foreclosure. According to the story:
  • In a letter to Re/Max's Denver headquarters, the Pinellas Realtor Organization and many of her fellow agents, an anonymous sender claims Polin "artificially inflated" the prices of nine homes in Tampa and North Pinellas so buyers could get larger loans.

  • Most of the houses were mortgaged for far more than the actual sales price, with the buyer or a third party pocketing the difference. Except for well-documented renovations, such "cash-back-at-closing" transactions can be a sign of mortgage fraud. In one transaction, $109,000 went to a construction cleanup company although there is no evidence of any construction or cleanup up since the run-down Clearwater house sold last year.

  • That house and the others listed by the anonymous sender are all now in foreclosure proceedings, contributing to a Florida foreclosure rate that is the nation's third highest.
    "The buyers purchased multiple properties in short periods of time to avoid lenders detecting multiloan transactions and fraud," the letter charges. "Lori's contribution to this fraudulent activity has distorted property values and undermined neighborhoods."

For more, including reported details of several of the identified home sales which, on their face, doesn't paint Polin in a good light, see Unsigned letter accuses agent of mortgage fraud (Real estate agent says it may be a rival using smear tactics).

Cops "Foreclosure Evict" Right Family From Wrong Home

In Imperial, Missouri, the Suburban Journals of Greater St. Louis reports:
  • The Jefferson County Sheriff's Office is working to put a family they wrongly evicted back into their home. Ron and Sandy Page of Imperial came home Thursday to find all their belongings covered in tarps on their front lawn. Capt. Ralph Brown of the Jefferson County Sheriff's Office said the Pages had once owned the home deputies were supposed to go to, which was on the same road. "We had the right people, but the wrong address," he said. "They owned the property, but it went back to the bank. The bank wanted possession of the house."


  • When the sheriff's office realized the mistake, they worked quickly to get the Pages back into their home. "We hired a mover, put them up in a hotel, hired a cleaning crew and even bought them dinner," [Brown] said. Sandy Page said things were still "a little bit of a mess," but was satisfied the sheriff's office was doing everything possible to make amends.

For more, see Deputies carry out eviction order at wrong house.

NBC Nightly News On Renters Feeling The Mortgage Crunch

Last Wednesday night, the NBC Nightly News ran a report on the problems renters are facing when they unwittingly rent a place to live from a financially overextended landlord whose intent is to pocket the rent, stiff the mortgage holder out of its mortgage payments, and allow the property to go into foreclosure (referred to in some statutes as rent skimming or equity skimming). Two tenants are interviewed for the story: one is a grandmother that has already faced eviction on three separate occasions as a result of renting from three landlords who allowed their properties to go into foreclosure; the other is a family who reportedly got screwed over in a "rent-to-own" arrangement where the seller pocketed the rent without applying the funds to the mortgage payment.

To watch the news report, see Renters feeling mortgage crunch. NBC's Mike Taibbi reports from Minneapolis, Minnesota.

For other posts involving rent skimming and lease/option scams, see Tenants Unwittingly Renting Homes In Foreclosure I , II , III , and IV; and "Rent To Own" Scams I. equity skimming unwittingly gamma rent to own lease purchase option scams zebra

Sunday, November 25, 2007

Tips For Tenants To Avoid Hassles That Come When Renting From Landlords Facing Foreclosure

According to The Modesto Bee:
  • Being forced to move when a rental house is foreclosed on can disrupt renters' lives and prove costly. Housing and legal experts say there are steps renters can take to protect themselves.
For the protective steps recommended by the experts that renters can take (1) before you rent a home, (2) after you've rented a home, and (3) after foreclosure, see Tips for renters.

Note: Some of the information given in the story regarding the "notice to vacate" requirements is based on California law. Accordingly, that portion of the information may not apply to tenants outside California. Check the law of your home state for the applicable notice to vacate requirements. equity skimming unwittingly alpha beta gamma delta

Wall Street Journal On Tenants Facing Foreclosure Eviction

The Wall Street Journal reports:
  • As U.S. foreclosures soar, renters -- especially in small apartment buildings and single-family homes -- are paying a high price for their landlords' financial troubles. Across the U.S., thousands of people are being evicted.


  • Often, the small multifamily dwellings entering foreclosure are in older urban neighborhoods with a lower-income population. That's the same demographic, critics say, that was targeted by predatory lenders peddling mortgages with introductory "teaser" rates that reset to higher rates. "The biggest problem in this industry is that you could buy a three- or four-family home with no money down," said Anthony Rondeau, a vice president of Select Financial Mortgage Corp. in East Providence, R.I. "[Mortgage] brokers were shoving this through the system -- it didn't matter that I didn't do it, because someone else would."

For more, see Tenants Pay as Landlords Default (Foreclosures Void Leases, Bring Eviction Notices; Bigger-Building Benefit) (requires subscription; if no subscription, try here; then click link).

For posts related to tenant evictions due to foreclosure, see Tenants Unwittingly Renting Homes In Foreclosure I , II , III , and IV. equity skimming unwittingly gamma

Legal Services Agency "Inundated" With Tenants Facing Foreclosure Eviction

In Providence, Rhode Island, The Providence Journal recently ran a story on the problems local residents face when renting homes that end up in foreclosure. Among the problems is the stress being placed on a local legal services office by the increased demand of renters needing legal help and dealing with deteriorating pre-eviction living conditions:
  • The Rhode Island Legal Services office in Providence has been “inundated” with cases of tenants who are being evicted by banks involved in repossessing foreclosed houses, said Robert M. Sabel, the agency’s litigation director. “Before, it was an occasional case — once every four or five months,” Sabel said. “Now we’re seeing them daily.”
Some of the deteriorating pre-eviction living conditions for tenants caused by landlords in foreclosure are described as follows:
  • A landlord who stops paying the mortgage may fall behind on other bills. Then the faucets run dry and furnaces go cold.

For more, see Collateral damage.

For some information for Rhode Island tenants facing a foreclosure eviction, see Issues for renters facing foreclosure. equity skimming unwittingly gamma

Rent Skimming Problems In Minnesota

KTTC-TV (Rochester, Minnesota) reports on the local problems of financially overextended landlords pocketing tenant rentals while stiffing the mortgage holder out of its monthly mortgage payments:
  • Mona Hoeft with Olmsted County Housing and Redevelopment Authority says they receive tons of calls from families being tossed out on the streets including those receiving government subsidies. "Unfortunately there's not much a tenant can do other than move. There really is no protection for the tenant," says Hoeft. "It's frustrating for us to know we are paying money really for nothing. So the landlord can take that money we are paying them and use it for something besides paying the mortgage," says Hoeft.

For more, see Renters Rights. equity skimming unwittingly gamma

Tenants In Entire Building Forced Out Due To Rent-Skimming Landlord

In Rhode Island, a recent story by The Providence Journal describes the stress being placed on local social services agencies due to the increase in local residents facing financial struggles.

Among other accounts, the story tells of the actions of a local landlord that resulted in the displacement of all of his tenants (about nine rent-paying tenants) out of one building. In addition to milking the rent out of his building without paying the mortgage and the water bills, he allowed the property to fall into extreme disrepair, not to mention foreclosure. The tenants lost their water service and, shortly thereafter, local building inspectors deemed the building uninhabitable. The cops ended up coming by one day without notice and announced that the building had been condemned and ordered everyone to leave, giving them two hours to vacate the premises. The building is now locked and boarded up, awaiting further action by the city and a foreclosure sale by the mortgage holder - scheduled for December 7. For the story, see The worst of times?

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here, or here. equity skimming unwittingly gamma

Foreclosure Purchasers Liable For Refund Of Tenant Security Deposits In California

In California, The Modesto Bee reports on the story of a tenant in California who rented from a landlord facing foreclosure. After foreclosure, the tenant was forced to move, but was promised a refund of her security deposit by her now-former landlord. The landlord never refunded the money. According to the story, in California:
  • Civil Code Section 1950.5 states that the property's new owners "shall be jointly and severally liable with the landlord for repayment of the security" deposit. That means that if the previous owner/landlord doesn't follow the law and return the security deposit, then the new owners have to pay the tenant what is owed. In [this tenant's] case, that was $1,000.

After being contacted by The Bee, the foreclosing mortgage holder and now new owner sent the tenant a check for $1,000. For more, see New owners liable for refunding deposit. equity skimming unwittingly gamma

Some Tenants Victimized Multiple Times By Landlords Facing Foreclosure

In Northern California, The Modesto Bee reports on the problems many tenants are having with their landlords who are engaging in what some statutes call "equity skimming" (California law calls it "rent skimming"), the practice where financially overextended landlords rent out their property and pocket the rent collected from their tenants while stiffing the mortgage holder out of its monthly payments, thereby allowing the property to go into foreclosure:
  • It happened to Shari Torigian of Patterson three times in three years. Cheryl Vrba of Los Banos said it happened to her four times in four years. It is happening now to Alexis Grijalza of Modesto and her three children. Renters are being forced out of houses every day in the Northern San Joaquin Valley after homeowners default on mortgages and lenders foreclose. The result often is financial hardship for renters who had no clue their shelter was in jeopardy.

  • "It is stressful. Where are we going to stay now? We have three kids, and my baby was just born Oct. 3," lamented Grijalza, who recently learned the Vernon Avenue house she's been renting for more than a year was repossessed by lenders. The lenders insist she move, but Grijalza doesn't have a car or good credit. She's fearful she'll become homeless.

  • To convince her to move out, the lenders offered to pay her $1,500 if she'd leave in two weeks. That's called "cash for keys," a technique some lenders use to avoid the time-consuming eviction process. Many home renters say such compensation doesn't begin to cover the cost or hassle of moving.

After being screwed over three times in three years by landlords allowing their properties to go into foreclosure and before signing her next lease, tenant Shari Torigian reportedly checked out her most recent landlord's credit and references, researched public records about the home's ownership to assure it's not in the process of being foreclosed on, and insisted the owner sign a three-year lease that guarantees all her expenses will be paid if she's forced to leave.

The story also makes the following points on two laws that may provide protection to California renters in these circumstances:

  • California Civil Code Section 890-894 enables tenants to sue landlords who, during their first year of ownership, collect rent but don't pay their mortgages. Tenants can sue to recover actual damages, including moving costs and security deposits, plus attorney's fees and costs. The court also may award tenants exemplary dam-ages of at least three times the amount of actual damages.

  • California Civil Code Section 1950.5 [subsections (h) and (j)] enables tenants to sue their previous landlords and the current property owners, including lenders who get the property after foreclosure, for the return of security deposits.

For more, see A renter's dilemma: Foreclosures can hit those who don't own (Foreclosure pits unwary against landlords, lenders) (if link expires, try here).

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here, or here. equity skimming unwittingly gamma

Families Losing Homes Without Ever Missing Payments

The Sarasota Herald-Tribune reports:
  • In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment. They are renters in houses whose owners default on their mortgages — a large but little noticed class of casualties. [...] Many renters say they never even knew their buildings were heading for foreclosure. “This is an explosion,” said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. “This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.”


  • The [U.S.] House [of Representatives] on Thursday passed a broad mortgage act that includes protections for renters. The House act, which the lending industry has opposed, would require new owners to continue the leases of tenants for up to six months after foreclosure. [...] The House bill calls for new owners — usually lenders — to give tenants a 90-day notice before foreclosure, then continue leases for up to six months after. Renters without leases would have 90 days to leave the property.

Despite a lease that runs until January 2009, one of the tenants described in the story has reportedly already packed all nonessential items in their garage — everything but clothes, linens, cookware and furniture — in case they have to leave in a hurry. Said the tenant: “It’s not normal to live like this. And the worst part is not knowing if we’re going to have a note on the door tonight, tomorrow or the next day.”

For more, see As Owners Feel Mortgage Pain, So Do Renters.

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here, or here. equity skimming unwittingly gamma