Saturday, October 03, 2009

Ex-NH Prosecutor/Former State Lawmaker Cops Plea To Lying On Mortgage Loan Applications, Failing To Disclose To Lender Side Deal With Builder

In Concord, New Hampshire, the New Hampshire Union Leader reports:
  • A former part-time Hillsborough County prosecutor(1) pleaded guilty yesterday to defrauding two mortgage companies and could face a federal prison sentence when she returns to court in January to be sentenced, federal prosecutors said [...]. Brookline resident Paula Philbrook, 41, admitted that she inflated her income on applications in order to obtain more than $600,000 in mortgage financing to build two homes in Brookline. She falsely claimed she was living in one home, although she actually was leasing it out and had it on the market. And her mortgage application omits a key portion of the contract between her and her builder. The deal called for Philbrook and her builder to split the down payment and mortgage payments and share in the proceeds of the sale.

For more, see Ex-prosecutor admits $600k mortgage scam.

For the U.S. Attorney press release, see Former County Prosecutor Pleads Guilty To Mortgage Fraud.

(1) Reportedly, Philbrook is also a former state lawmaker - a member of the New Hampshire House of Representatives - who represented Nashua in the 1990s.

Minn. Man Charged With Leaving 95-Year Old, Dementia-Suffering Mom Behind In Rent; Accused Of Looting Bank Accounts, Persuading Her To Buy Him House

In Ramsey County, Minnesota, the Pioneer Press reports:
  • A 95-year-old Roseville woman, who suffers from dementia, had her bank account frozen and fell behind on rent after her son cashed thousands of dollars in checks from her account, a criminal complaint stated. Joel Allen Berntsen, 58, of Minneapolis, was charged with financial exploitation of a vulnerable adult.

According to the criminal complaint:

  • Berntsen told police he borrowed $290,000 from his mother in 2006 to buy a house in North Oaks. She also gave him $2,000 a month for house payments. But in 2008, the home — which was in his mother's name — went into foreclosure. The IRS later notified his mother that she owed $12,928 in back taxes on the home.


  • In March, Ramsey County Adult Protection said the woman qualified as a vulnerable adult, after a health care worker who took care of her called police because the woman's bank accounts were overdrawn because of the large amount of checks Berntsen cashed. In June 2006, the community organization Lifetrack Resources found the woman to be a vulnerable adult at risk of mental or financial exploitation.


  • Roseville police discovered that the woman was behind on her rent and that several of her checks had bounced because of insufficient funds. A review of her checking account at North Star Bank disclosed that between April 1, 2008, and March 1, 2009, Berntsen cashed 26 checks — 25 of them payable to himself.

For more, see Man charged with financially exploiting 95-year-old mother (Son, 58, charged with exploiting vulnerable adult).

See also, the Star Tribune: Son accused of duping his mom, 95, out of thousands (The charges say he wrote checks on her account and persuaded her to buy him a $290,000 house in North Oaks). FinancialAbuseOfElderlyAlpha

Two Charged With Throwing Tenant Out Of Foreclosed Home; Accused Of Nailing Windows Shut, Terminating Water & Electric Service

In Clawson, Michigan, WJBK-TV Channel 2 reports:
  • Two people in Clawson are accused of taking the law into their own hands and throwing a young mother out of her home. "They took everything, brought it out, cleaned it. I mean, the house was clean. It wasn't like it was trashed, but everything was out on my porch," said Amanda Champagne. The 19-year-old is renting a house in Clawson that's in foreclosure. Technically, she, her boyfriend and her two children have until December to get out, but two of her neighbors are accused of throwing her out early.

  • Police say 56-year-old Timothy Simon and 45-year-old Monica Kaufman went into the home on September 13 while she wasn't there, cleared everything out and made sure nobody could get in. The windows were actually nailed shut and there was even a no trespassing sign nailed to the front of the house. "They shut off the water. They shut my refrigerator off, so all my food spoiled," Champagne said. Police say the suspects said they were taking back their street and securing an abandoned drug house.

  • Police say they've been called to the home in the past for parties and loud music and Champagne has been arrested for disorderly conduct, but there have been no drug related arrests.(1)

For the story, see Two Accused of Throwing Mom Out of Home.

(1) A related story reports:

  • The renters, whom [police] said had a lease to rent the home until December even though it's in foreclosure, were out of the town. They returned to find all of their belongings -- clothing, a TV, video games -- on the front and back porch. [... Police] said the home "isn't the best looking house on the block" but the lawn was cut and the renters had a legitimate lease. [One investigator] said police had visited the house more than twice for loud music, animal complaints, but drugs didn't appear to be an issue.

See The Detroit News: Clawson neighbors charged in break-in of foreclosed home.

Tear Gas Raid At Oakland Apartment Building In Foreclosure Leaves Five Families Homeless

In Oakland, California, KTVU-TV Channel 36 reports:
  • Five families were still homeless [...] after being displaced by a standoff [...] at their East Oakland apartment building. They said they have been caught in the middle of two raids in just six months and that it's made their lives extremely difficult.

  • Tamesisha Marbray said her apartment was boarded up Monday afternoon when she tried to return home. Her home is the apartment building where Oakland Police and the Alameda County Sheriff's SWAT team conducted a raid on Friday. SWAT team members shot tear gas into the building during a search for a shooting suspect they believed was hiding inside. As it turned out, he wasn't there.


  • Residents said the smell of tear gas lingers in their apartments and on their belongings. One woman said her children didn't have clean clothes to wear to school. Tamesisha Marbray said she tried to salvage what she could for her newborn daughter and move their belongings into a relative's van. "All this stuff is brand new stuff. She'll never be able to wear it; it smells like gas," said Marbray. Adding to the residents headaches, a letter from the company managing the apartment building notified them that the building is in foreclosure.

For the story, see Raid At Troubled Apartment Building Leaves Families Homeless.

For follow-up stories, see:

Square-Off With Police Sharpshooters Fatal For Foreclosed Phoenix Homeowner

In Phoenix, Arizona, The Arizona Republic reports:
  • As officers closed in, Kurt Aho drank his beer, ignoring commands to drop his gun. Before police arrived he told neighbors he refused to surrender himself or the home he lived in for nearly 30 years. Faced with foreclosure and stacks of medical bills to treat a recurring battle with cancer, the 64-year-old squared off Tuesday against a team of Phoenix police sharpshooters moments after he shot out the tires of two trucks parked on his cul-de-sac near Bell Road and 31st Avenue.


  • Jeffrey Hobson said he shared a final beer with Aho moments before the confrontation. He said he worried when Aho told him he wanted to die. “He said, ‘When the cops get here either I'm gonna die by them or I'm gonna kill myself,'” said Hobson. “They gave him exactly what he wanted.”

For more, see Foreclosure may have sparked fatal clash with police. DeputyEvictionTheta

Friday, October 02, 2009

Communication Problems With Loan Servicer Jeopardize Homeowner's Forbearance Agreement, Resulting In Foreclosure Threats

In Jeffersonville, Indiana, The News and Tribune recently ran a column by a local homeowner who, despite entering into a seemingly valid forbearance agreement with her loan servicer, details the mess she's facing due to the subsequent communication problems she's having with the company's different departments, reflecting their apparent inability to handle her situation:
  • One collections employee actually offered a quote for this column explaining that, though it might seem the right hand doesn’t know what the left hand is doing, they’re operating on the principle of “prevalence.” I never caught on to what prevalence meant. This guy probably wasn’t authorized to talk to the media. He changed his mind about being quoted and didn’t want to identify himself.

Among the alleged screw-ups is the handling of one payment on her forbearance agreement, which the servicer pocketed and placed in “unapplied funds,” which she describes as those funds they already have, but you still owe.

For the story, see House might be lost in translation.

Media Intervention Helps Houston Widow Recover Foreclosed Home After Loan Servicer Screw-Up

In Houston, Texas, KRIV-TV Channel 26 reports on a local homeowner faced with financial trouble after Hurricane Ike hit, which caused significant damage to her home, only to be followed by a home repair scammer who pocketed $4,000 of her money without doing any repairs on her home:
  • Desperate to get her house back to normal, she asked her mortgage company, Merrill Lynch for an extension of her mortgage payments. The company agreed. And once the insurance money arrived, she was able to catch up on her payments. She also paid an additional $31,000 to her principal.

  • Days later she got a letter saying her home was being foreclosed. But things got worse. She then got a second letter stating her home was going to be auctioned off. She says she immediately called Merrill Lynch. '(I) finally got somebody and they said, 'OK, we're taking you off the foreclosure list. You should never have been on there.'"

  • Amanda thought her emergency as over; it wasn't. When she got home from shopping one day she discovered a 'notice of sale' posted on her front door. Her home had been sold and she had to move out.

Armed with documents showing that the homeowner had paid all her bills and that someone with the mortgage servicer had made a big mistake, Channel 26 intervened on Amanda's behalf. Neither her mortgage company or the attorneys involved in the foreclosure would discuss the issue; however, the homeowner ultimately received papers stating that the foreclosure was canceled and the sale rescinded.

For the story, see Error Lands Lady's House in Foreclosure.

Elderly Foreclosed Couple Resists Bogus Bank Employees Attempting Lock-Changing Scam To Bluff Them Out Of Home

In Redding, California, The Record Searchlight reports:
  • Everett and Delores Dale knew something wasn't right when two men pulled up to their Enterprise-area home one day unannounced and told them they needed to get out. Though the couple had lost their home to foreclosure on Sept. 2, the bank had not given the Dales a move-out date. But the men in the pickup were persistent. They advised the Dales they were representing Bank of America and would return in two days to change the locks, 80-year-old Delores Dale recalled.

  • The Dales would later learn they nearly became victims of a scam popular in Southern California. Posing as bank employees, the scammers go to a foreclosed home and give the occupant an ultimatum. Often, the victim will get scared and move out, leaving the house vacant. The scammers either move in or rent out the house until the bank catches on.

For more, see Foreclosure scammers hit Redding (Delores and Everett Dale are losing their home to foreclosure. Two men came to their door recently and told them they were there to change the locks, a scam that has been making the rounds in Southern California).

Pressure On State Bar To Implement Special Review Process To Discipline Florida Attorneys That Play Fast & Loose When Representing Foreclosing Lenders

In Sarasota, Florida, Sarasota Herald Tribune columnist Tom Lyons comments on the recent news from The Florida Bar, which will reportedly look into implementing a special review process to specifically discipline attorneys for foreclosing mortgage lenders guilty of playing fast and loose with their court filings in, and representations to judges presiding over, foreclosure actions:
  • Lawyer jokes aside, the legal system only functions as well as it does because most lawyers are honest. That is, most don't make flat-out lies and forgeries a routine part of their work. They spin the facts, yes, and they are adept at dodging and weaving around troublesome features of reality while presenting a case.

  • But filing fake documents to establish the right to take possession of someone's home? That's not something a lawyer should do. So what if that were suddenly happening in cases all over the nation? What if some law firms that specialize in bulk handling of mortgage foreclosures for the lending industry were having so much trouble finding original loan documents, and documents showing the ownership trail as debts were packaged and resold, that many started filing forged documents in their place?

  • That seems to be the fact, according to a study by a Florida Bar group. And Harley Herman, a lawyer who is part of a Florida Bar group pushing for a special review of ethics violations in foreclosure cases, says this is a serious problem.

For the story, see Foreclosure chicanery not a funny lawyer joke.

Ohio Lawmaker Calls For GAO Probe Of Lender Practice Of Initiating, Then Abandoning, Foreclosure Actions, Leaving Vacant Homes In Legal Limbo

From the Office of U.S. Senator Sherrod Brown (D-Ohio):
  • A growing number of lenders are refusing to take possession of homes after they have been foreclosed, leading to vandalism and neighborhood decline in Cleveland and cities across Ohio. In response to this alarming trend, U.S. Sen. Sherrod Brown (D-OH) called for a federal investigation of so-called “bank walkaways.”(1)


  • In a typical foreclosure, the lender assumes responsibility for the property once the foreclosure proceedings have been completed. The property is then put up for auction, [...]. In the event that no one meets the opening bid, the lender takes over the title of the home and tries to resell it. Because the lender owns the property, it has an interest in maintaining the home’s condition and dealing with tax liens.

  • In a rising number of cases across Ohio, however, lenders are refusing to take possession of foreclosed homes – leading to properties that are neither being sold at auction nor maintained by the lender. The result is an increase in vandalism and a decline in property values in the area surrounding the abandoned home. And foreclosed homeowners – who have been forced to leave their homes – are left with back taxes and housing code violations for homes at which they no longer live.

For Senator Brown's entire press release, see Brown Points to Rising Occurrence in Ohio of Lenders Refusing to Take Possession of Foreclosed Homes, Leading to Vandalism, Neighborhood Decline.

(1)I am concerned that bank walkaways are exacerbating the problems that homeowners are already facing as a result of the foreclosure crisis,” Brown wrote in a letter to the Government Accountability Office (GAO) requesting an investigation of the practice. “I am also concerned that bank walkaways could complicate government efforts to help stabilize distressed neighborhoods through the acquisition, rehabilitation, and resale of foreclosed properties.”

Thursday, October 01, 2009

MD AG Wins "Rescue" Scam Civil Suit; Settles w/ Lenders Who Financed Bogus Sale Leasebacks, Saves Homes For Some, Clips Closing Agent For $100K

In Baltimore, Maryland, The Real Estate Wonk Blog in The Baltimore Sun reports:
  • Stop me if you've heard this one before: Borrower needs help. Borrower goes to foreclosure-rescue business to get help. Borrower signs documents to get or start the process of getting the mortgage refinanced, only to discover later that the foreclosure-rescue specialists were really getting the home signed over to them. Such fraud has happened across the country, both before and after the housing market went downhill.

  • The Baltimore civil case, brought by the Consumer Protection Division of the Maryland Attorney General's Office, covered 13 properties, most in the Baltimore area. Once the homeowners unwittingly signed over their properties, Earnest Lewis pulled all their equity out with a new loan and split the money with the defendants, said Bill Gruhn, chief of the Consumer Protection Division. "Some of the homeowners have moved," he said. "Other homeowners are in their homes and we were able to facilitate settlements" with the lenders.(1)

For more, see Homeowner beware.

See also, Maryland Attorney General press release: Attorney General Gansler Announces Judgment of More Than One Million Dollars in Restitution and Penalties in Foreclosure Rescue Scam:

  • The [Consumer Protection] Division also entered into a consent order with Cornerstone Title & Escrow, Inc., a real estate settlement company, that the Division sued for participating in the scheme and for using practices that violated the Consumer Protection Act. Cornerstone denied the Division’s allegations and has not admitted any wrongdoing. [...] The consent order entered with Cornerstone requires the company to pay $100,100, [among other things].

(1) Last year, Massachusetts Attorney General Martha Coakley similarly reached a settlement with ten lenders and loan servicers who financed equity stripping ripoffs for a foreclosure rescue group who peddled bogus sale leasebacks to financially strapped Massachusetts homeowners facing foreclosure. The settlement impacted 26 residential properties, was designed to return homeowners to their financial position before they were screwed over in transactions that stripped their home equity, and provided an opportunity for the victims to reacquire the legal title to their homes. The victims' mortgage liens were to be reduced to the lower of the actual amount paid for prior mortgage loans on the property, subtracting any beneficial payments to the homeowners; or 80% of the then-current value of the properties, resulting in approximately $1.8 million in reduced mortgage obligations. See Court Approves Massachusetts Settlement With Lenders In Bogus Foreclosure Rescue; Case Involved AG Claims Of Equitable Mortgage, Usury, Etc.

Include Arkansas Supreme Court On List Of Legal Authorities Having A Problem With MERS' Business Model

Attorney Kathleen E. Kraft, with the Washington, D.C. law firm Thompson Coburn LLP, writes:
  • On March 19, 2009, the Supreme Court of Arkansas determined that Mortgage Electronic Registration Systems, Inc. (“MERS”) was not a necessary party to a foreclosure action involving the foreclosure of a junior mortgage, where MERS was not the true beneficiary of the senior deed of trust nor was specifically authorized by the lender to act on the lender’s behalf in the foreclosure proceedings. Mortgage Electronic Registration Systems, Inc. v. Southwest Homes of Arkansas, -- S.W.3d --, 2009 Ark. 152, 2009 WL 723182 (Mar. 19, 2009). Coming in on the heels of Landmark National Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177 (2008)(1) (also finding that MERS was not a necessary party to a foreclosure action), Mortgage Electronic Registration Systems, Inc. v. Southwest Homes of Arkansas places MERS on unstable ground in mortgage foreclosure actions.(2)

For more, see Another Nail in the MERS Coffin: Arkansas Court Rules That MERS Was Not A Necessary Party To A Foreclosure Action In Which MERS Served As Lender’s Nominee On The Senior Deed Of Trust.

(1) This 2008 ruling of the Kansas Court of Appeals was recently affirmed by the Kansas Supreme Court. See Landmark Nat'l Bank v. Kesler, No. 98,489, 2009 Kan. LEXIS 834 (August 28, 2009).

(2) In a separate, unrelated lawsuit, the following all star lineup of mortgage lenders have been named and identified as allegedly the controlling shareholders of MERS:

  • Citigroup, Inc., the now-deceased Countrywide Financial Corporation (now owned by Bank of America), Fannie Mae & Freddie Mac (both of which are sucking wind financially, and are currently operating under the control of the Federal government), GMAC-RFC Holding Company, LLC, (doing business as GMAC Residential Funding Corporation), HSBC Finance Corporation, JP Morgan Chase & Co., the late Washington Mutual Bank (now owned by JP Morgan Chase & Co.), and alleged "ghetto loans" peddler, Wells Fargo & Company.

See Homeowners In Foreclosure Being Clipped For Illegally Inflated Legal & Appraisal Fees, Says Lawsuit. EpsilonMissingDocsMtg

Cops: Wife Used Improperly Notarized POA In Sale Leaseback Of Home Without Hubby's Consent; Subsequent Use Of "Rubber" Rent Checks Gets Them The Boot

In Bantam, Connecticut, The Register News reports:
  • A Bethlehem woman is facing criminal charges for allegedly selling her marital home without her husband’s knowledge. Shelley Ciriello, 55, [...] is scheduled to appear in Bantam Superior Court Oct. 5.


  • Ciriello reportedly sold the house to Lurlyn Seigler of Boston, Mass. and agreed to rent it from the woman for $3,767 per month. But when the rent checks started to bounce, the woman filed a complaint at the Bethlehem Resident Trooper’s office in July. The couple was evicted in June, according to court records.

  • But even though his wife had been to court and making deals with Seigler, the eviction came as a surprise to James Ciriello. The husband didn’t know he was renting the house he purchased with his wife in 1974. Shelley Ciriello maintained the family finances and books for his business. “I never knew what she was doing with the accounts and the money,” James Ciriello told police in his statement. Ciriello reportedly used a power of attorney to negotiate the sale of the house and subsequent court actions.

  • A woman Ciriello worked with at a physician’s office in Waterbury notarized the power of attorney on Ciriello’s word that it was for her disabled brother-in-law. When police talked to the notary, she admitted she executed the document and added Ciriello was fired from the job for stealing co-payments from the office, according to the warrant. Ciriello admitted her husband was not involved in the sale of the house.

  • The couple owned the house free-and-clear after purchasing it from her husband’s parents. But Ciriello reportedly abused a line of credit, using the three-bedroom Cape as collateral.

For more, see Wife sold house, husband clueless.

Stranger Pays Back Taxes On Nursing Home-Bound 92-Year Old Alzheimers Patient's Vacant House, Then Rents It Out In Attempt To Lay Claim To Property

In Boise, Idaho, the Idaho Statesman reports:
  • On May 16, 2007, David Foldesi walked into the Ada County Courthouse and paid $8,875.62 in delinquent property taxes on [92-year old Marcella] Boylan's house. Both Boylan and her husband, Dudley, who died in 2005, had faced serious health problems - and the costs added up. When the taxes weren't paid on the house, the county started the steps toward putting it up for public auction - a process called a tax deed sale. The online auction was scheduled for May 19-21, 2007.

  • Once the county starts the tax-deed process, the county takes ownership of the property until it is sold or the delinquent taxes are paid, whichever comes first. In Boylan's case, the delinquent taxes were paid, by Foldesi, just three days before the auction. Once the delinquent taxes were paid, the county canceled the auction and granted a "redemption deed" to Boylan. Foldesi is named in the redemption deed as the person who paid the delinquent taxes.

  • But a redemption deed does not convey ownership of, or access to, a property - and neither does paying somebody's property taxes, county officials say. When Foldesi paid the taxes, that did "nothing more in this case than cancel the tax deed and all related proceedings," Ada County Treasurer Cecil Ingram said.

  • Foldesi thinks differently. When asked who gave him permission to rent out Boylan's house, he said: "The owners. Who are the owners? The tax deed holder." But neither Foldesi nor anyone else can hold a tax deed to the house, because there is no tax deed for this property, according to the county.(1) Only if the house had gone to auction could someone have bought the tax deed, which would have given that person ownership over the home. Some states do sell tax deeds or tax liens without an auction giving ownership to the person who pays off the tax bills. That may be part of the confusion.

For more, see Stranger rents out Boise woman's home without her permission (A Boise house belongs to a nursing-home resident, officials say, but a man profits from renting it out).

(1) Not surprisingly, Foldesi reportedly spoke only briefly to the Statesman before hanging up. He has not returned subsequent calls, including requests to see a tax deed for the house or a certificate of sale from the county, according to the story. DeedContraTheft hijack

FBI Probe Forces Shutdown Of Loan Modification Racket?

ProPublica earlier this week published a follow-up to a story (see Why Authorities Haven’t Stopped the Foreclosure ‘Rescue’ Boom) which focused on the antics of one loan modification outfit, Southern California-based 21st Century Legal Services (also known as Fidelity National Legal Services):
  • As we reported, four states obtained court injunctions barring the company from operating there, but those actions did little to slow the company down. Since then, however, we’ve learned that the company is under investigation by the FBI.

  • Last Wednesday, the FBI executed search warrants at eight locations in the Rancho Cucamonga area, said Laura Eimiller, spokeswoman for the FBI’s Los Angeles office. Both business and residential addresses were searched, she said, but she would provide no other details about the continuing investigation. Kathleen Moreno, the lawyer for 21st Century president Andrea Ramirez, confirmed that Ramirez’s residence was among those searched.

  • The FBI searches seem to have finally stopped the company from operating. Its Web site is down, and no one answers the phone. But as for whether its unhappy customers can hope to recoup their money, it’s far too early to tell.

For the story, see The Foreclosure ‘Rescue’ Boom on Marketplace.

Wednesday, September 30, 2009

Indiana Cop Cops Plea To Ripping Off Now-Deceased 89-Year Old Alzheimer's Victim Of Home, Cash

In Gary, Indiana, the Post Tribune reports:
  • Gary police Sgt. Joshua Wiley admitted he stole money and a home from his former neighbor who suffered from Alzheimer's disease and dementia and has agreed to repay $116,765 to the woman's estate. On the day his jury trial was scheduled to begin, Wiley pleaded guilty [...] to two felony charges -- theft and exploitation of an endangered adult.(1)


  • In court, Wiley admitted he knew that his former neighbor, Helen Chentnik, who died Dec. 22, 2006, at age 89, was an endangered adult who was not competent to make financial decisions on her own behalf. [...] Wiley obtained a fraudulent quit claim deed to Chentnik's home at 3630 E. 12th Ave., Gary and recorded the deed, knowing that it was signed by him while claiming to have Chentnik's power of attorney.(2)

For the story, see Gary police officer says he stole home, money of Helen Chentnik who suffered from Alzheimer's.

(1) Reportedly, under terms of the plea agreement, which Lake Superior Court Judge Diane Ross Boswell took under advisement, Wiley will be sentenced to eight years -- three years in the Lake County Community Correction Kimbrough Work Program and five years suspended and served on probation. The plea agreement calls for Wiley to serve his probation and Kimbrough Center sentence simultaneously. Wiley, 51, also must pay $53,255 within 30 days and the remaining $62,765 in monthly installments of $1,000, also starting within 30 days.

(2) According to the story, Wiley also looted Chentnik's credit union account "by using his influence on the victim or by using an ATM-debit card issued to the victim" to withdraw cash or buy items and services for his personal use without Chentnik's consent, according to the plea agreement. Wiley then reportedly opened a joint checking account for Chentnik and himself at Mercantile National Bank, deposited the woman's monthly Social Security and pension checks and funds from her credit union account, and then made withdrawals in cash and wrote checks for goods and services, the majority of which were for his personal use. FinancialAbuseOfElderlyAlpha DeedContraTheft

Ontario Man Admits To Defrauding Elderly Parents; Looted Bank Account, Used Forged POA To Pilfer Profits From Sale Of Home

In Peterborough, Ontario, The Peterborough Examiner reports:
  • A 44-year-old man pleaded guilty [...] to defrauding his parents of about $140,000 in a series of crimes that involved forging a power of attorney, selling his parents' home behind their back and racking up thousands of dollars in credit card debt in his father's name. David Edwardes-Evans pleaded guilty to 10 charges in Ontario Court of Justice including fraud, uttering a forged document and breaching court orders.

  • Edwardes-Evans began to defraud his parents after they both became permanent residents of a retirement home in June 2007, court heard. He shared power of attorney over his parents' finances with his sister, Crown attorney Paula Thompson said, and managed their accounts on their behalf.

  • About a month after his father moved to the retirement home, Edwardes-Evans began taking out credit cards in his father's name, using his father's own credit cards without permission and made withdrawals from his parents' joint bank account, Thompson said. He then tricked them into signing away their Oriole Dr. home and forged a power of attorney to sell the house, court heard. "The document had been forged ... in order to facilitate the liquidation of the home," Thompson said.

  • Police arrested Edwardes-Evans [...] after his sister discovered irregularities in her parents' accounts. By then, Edwardes-Evans had racked up $15,000 to $20,000 in credit card debt and had pilfered the profits from the sale of the home, Thompson said.

Source: Man guilty of defrauding parents. FinancialAbuseOfElderlyAlpha DeedContraTheft

Sacramento Feds Bag Two In Alleged Mortgage Scam Targeting Cambodian Immigrants; Home Buyers Left With Unaffordable House Payments, Facing Foreclosure

From the Office of the U.S. Attorney (Sacramento, California):
  • United States Attorney Lawrence G. Brown announced [...] that a criminal complaint was filed this morning charging IRENE SOTIRIADIS, 23, and HELEN SOTIRIADIS, 49, both of Manteca, with conducting a mortgage fraud scheme from March 2006 through November 2007 that caused losses to lenders estimated at approximately $5 million.


  • According to [the press release], an affidavit filed by a special agent of the FBI alleges that HELEN and IRENE SOTIRIADIS recruited as many as 25 members of the Cambodian immigrant community to purchase homes they could not afford in and around Stockton and Modesto. HELEN and IRENE SOTIRIADIS promised the Cambodians that after one initial high monthly payment, the homes would be refinanced to a payment of only $1,500 per month. After the initial monthly mortgage payments of $4,000 came due, HELEN and IRENE SOTIRIADIS refused to return phone calls to the victims, according to the affidavit. Most of the homes quickly fell into foreclosure.

For the entire U.S. Attorney press release, see Manteca Mother-Daughter Real Estate Team Arrested In Estimated $5 Million Mortgage Fraud Scam.

Scammer Stripped Of House & Vehicle, Gets 36 Months; Abused POA In $250K+ Ripoff Of Dementia-Suffering Senior

From the Office of the U.S. Attorney (Covington, Kentucky):
  • The United States Attorney’s Office and the Postal Inspection Service jointly announced [...] that a Ludlow, Ky. man was sentenced yesterday to 36 months in prison for financially exploiting a wealthy elderly woman out of more than $250,000. United States District Court Judge Danny C. Reeves also ordered 45-year-old Gordon Powell to forfeit a house [...] in Fort Wright, Ky. and a Cadillac Escalade both of which Powell purchased with a portion of the proceeds from his fraud.

  • Powell pleaded guilty to one count of wire fraud in May of 2009 and admitted that in 2006 he befriended an elderly Kenton County woman in her eighties who had no apparent family and suffered from dementia like symptoms. After learning she was wealthy, Powell persuaded the woman to make him her power-of-attorney which gave him the authority to make decisions on her behalf. After obtaining this authority, he liquidated hundreds of thousands of dollars of assets and transferred over $250,000 of the proceeds of the liquidation to his personal accounts. Powell then used money from these accounts to purchase the house and the car.

For the U.S. Attorney press release, see Ludlow Resident Sentenced 3 Years for Financially Exploiting a Wealthy Elderly Woman.

Blanket Receiverships Coming To Florida's Treasure Coast?

In Stuart, Florida, TC Palm reports on another financially strapped condominium association being screwed over by rent skimming, deadbeat landlords who are pocketing rents paid to them by their tenants and refusing to pay the monthly maintenance fees for their units:
  • The Whitemarsh Reserve Homeowner’s Association in Martin County is now facing this grim scenario with some of its owners, who are under foreclosure by the association, owing it more than $10,000 in delinquent fees. So its members are following the lead of dozens of other associations across the state and trying a new legal approach to solve this problem.

  • The Whitemarsh association is the first on the Treasure Coast to ask a judge for a court order to force delinquent landlords to turn over rent payments to the association. The association filed a petition [...] seeking what’s being dubbed as a “blanket receivership.” If approved, this would require tenants of these delinquent landlords to pay their rent to a court-approved, third-party receiver instead of the landlord. The association itself would not be in receivership, only those units that are under foreclosure by the association and occupied by a tenant paying rent.


  • In the past, solving this problem would have been cost-prohibitive for most associations because the receivership approach was used mainly on a unit-by-unit basis, [association attorney Ben] Soloman said. But the [Miami Beach-based] Association Law Group pioneered the group, or “blanket,” approach allowing a receiver to collect rent on an ongoing basis from all owners who fail to pay maintenance fees. “It’s not a new law, but we’ve reinterpreted the existing law to get a practical remedy for our clients,” he said.

  • More than 11 different lower courts across the state have approved this method, granting blanket receiverships to more than 30 associations. And one of Florida’s appellate courts also has upheld this method.(1)

For the story, see Homeowners association first in area trying to force those delinquent in paying fees to turn over rent instead.

Go here for other stories on blanket receiverships.

(1) Reportedly, the first of these receiverships was granted in March to a condo association in Miami Gardens. Officials said in the first month of the receivership program, that association more than doubled its monthly income. By 60 days, it was restored to its regular assessment receivable level.

Struggling SW Florida Condominium Association Seeks Blanket Receivership Appointment In Effort To Stay Afloat

In Naples, Florida, the Naples Daily News reports:
  • Some renters and foreclosed-on squatters at South Bay Plantation in East Naples may soon find red stickers on their front doors, warning that a receiver has been appointed for the struggling property and they have 48 hours to call. If they don’t, their locks will be changed. It’s a tactic the struggling 240-unit community’s new manager, S3 Association Management LLC of Davie, plans on using if Collier Circuit Judge Cynthia Pivacek grants South Bay Plantation Condominium Association’s emergency motion to appoint a receiver.


  • South Bay Plantation’s motion details a dire situation: Of the 240 units, only 110 sold and now only 35 diligent homeowners continue to pay monthly HOA fees. [...] The development’s monthly operating costs and expenses total about $34,039, but the association is collecting only $17,000 and is owed roughly $158,000 in delinquent assessments. “The increased burden on those unit owners who have been sharing the financial burden could result in a domino effect, forcing unit owners who have been making timely payments to potentially become delinquent and also face foreclosure proceedings,” the motion says.

For more, see South Bay Plantation residents may get locked out of homes.

Tuesday, September 29, 2009

Mass AG Obtains Indictments Against Foreclosure Rescue Operators Alleging Equity Stripping Ripoffs That Defrauded Homeowners, Banks, Investors

From the Office of the Massachusetts Attorney General:
  • Attorney General Martha Coakley’s Office announces that a Worcester County Grand Jury returned indictments [...] against an Oxford man, a real estate lawyer, a real estate paralegal and a notary public for their roles in a complex scheme in which fraudulent documents were used to defraud homeowners and mortgage lenders in numerous real estate transactions involving distressed properties in the Worcester County area. Allen Seymour, age 41, of Oxford, Raymond A. Desautels III, age 43, also of Oxford, Jason Passell, age 51, of Worcester, and Judith Piette, age 44, of Worcester, are charged [...].


  • According to authorities, Seymour targeted properties in danger of foreclosure. He personally approached the owners of these properties and presented a variety of rescue options. [...] Simultaneously, Seymour found individuals with good credit who were looking to begin investing in real estate. Many of these “investors” were told they would be helping homeowners in danger of foreclosure. [...] None of the proposals made to these “investors” matched the transactions presented to the homeowner.

According to the Massachusetts AG, Raymond Desautels, III, conducted all of the real estate closings and allegedly prepared fraudulent closing statements. Notary public Judith Piette allegedly notarized closing documents stating the homeowner had personally appeared before her and acknowledged they had signed the document voluntarily and for its intended purpose when, in fact, she never actually saw the homeowner. Jason Passell's involvement allegedly centered around the use of forged powers of attorney to facillitate the scams.

For the entire Massachusetts AG press release, see AG Coakley’s Office Announces Indictments Against Four People in Complex Mortgage Rescue Scheme.

Connecticut Law Now Bans Upfront Fees, Requires Licensing & Bonding When Offering Loan Modification Services; Maximum Mod Fee Limited To $500

In Hartford, Connecticut, The Day reports:
  • For the first time in Connecticut, firms and individuals offering debt relief they negotiate with a consumer's creditors will need to be licensed and will be prohibited from charging upfront fees.(1) A new law that goes into effect Thursday is designed to stop a growing number of scams by so-called “debt negotiators” who fraudulently claim to help consumers repay household debt, or credit card or mortgage debt, but instead charge hefty upfront fees, never reduce the debt and sometimes disappear - leaving the already-burdened consumer with even more expenses, and at times an even bigger debt load.

  • Attorney General Richard Blumenthal, who authored the new consumer-based legislation, said he's handled more than 100 complaints involving debt negotiators within the past year alone. And he said he's investigating as many as 10 firms for allegedly fraudulently promising to help consumers repay household or credit card debt or a delinquent home mortgage. He declined to name the companies.

For more, see Connecticut clamps down on 'debt relief' companies (Law requires licenses, bans upfront fees in effort to stop growth of scams).

In a related Connecticut Department of Banking press release, see State Banking Commissioner Howard F. Pitkin Announces Schedule of Fees for Debt Negotiators Under New Public Act:

  • A debt negotiator of secured debt, including Short Sales and Foreclosure Rescue Services, may impose a fee upon the mortgagor or debtor for performing debt negotiation services not to exceed five hundred dollars ($500). Such fee shall only be collectable upon the successful completion of all services stated in the debt negotiation service contract.

(1) Among other protections and requirements are: Filing a surety bond, Not refer to state licensing or bonding as an endorsement, Disclose 10-year criminal history on license application, Evaluate likelihood of success in reducing debt or saving a home before contracting with the consumer, Sign a written agreement with the consumer, Provide complete list of services, costs and results to be achieved, Perform services outlined in contract before charging fees, Adhere to fees regulated by the state banking commissioner, Allow a 3-day right of rescission for the consumer to cancel the contract, Comply with state law or have the contract voided and subject to enforcement.

Florida Bar To Consider Review Process For Ethics Breaches By Attorneys Bringing Foreclosure Actions Filed w/ Errors, False Statements

The Sarasota Herald Tribune reports:
  • The state group that disciplines lawyers is debating how to deal with reports of attorneys using errors and false statements to retake property in foreclosure cases.(1) [...] A section of The Florida Bar that seeks to give everyone equal access to the courts says stories like those prompted it to push for a special committee to review any ethical violations in foreclosure cases.

  • The Equal Opportunity Law section will present its case Friday at the Board of Governor's meeting that letting the behavior go will hurt the image of attorneys. And the resolution will be reviewed and a committee that looks at attorney discipline.

For more, see Foreclosure lawyers scrutinized for ethical violations.

(1) Reportedly, a study this summer that looked at the Sarasota County civil courts system found three of four foreclosure cases that went forward without the proper paperwork. And one Sarasota judge, after the attorney for a foreclosing lender assured her everything was in order, happened to glance at foreclosure paperwork and realized the two properties were in Miami, a few hundred miles outside her jurisdiction, according to the story.

New Jersey Landlord Beats Back RICO Suit Charge That Renting To Illegal Immigrants Constitutes "Harboring"

In Plainfield, New Jersey, reports:
  • A federal judge has denied an appeal of an earlier decision to dismiss part of a landmark lawsuit that challenged the rights of landlords to rent apartments to illegal immigrants. The suit, brought last July against the city-based Connolly Properties Inc., alleged that the company systematically marketed and rented apartments to illegal immigrants and kept them generally separate from other tenants. Citing RICO (Racketeer Influenced and Corrupt Organizations) statutes, which most commonly are used to target organized crime, the suit alleged that the practice constituted "harboring" aliens or helping them avoid detection by federal authorities.(1)


  • Presiding Judge William J. Martini, sitting in Newark, last week said in a decision letter to counsel that to be considered harboring, an entity's activities must "prevent government authorities from detecting (an) alien's unlawful presence." He said the activities alleged in the suit do not meet that description. "The only behavior that even comes close ... (is) segregating the illegal aliens from the other residents," Martini wrote, "but even this falls short of the overt types of behavior that the case law has recognized as preventing the government from detecting the presence of illegal aliens."

For more, see Appeal denied in landmark suit involving Connolly Properties.

(1) Reportedly, the case drew direct involvement from two national law groups, as the Washington, D.C.-based Immigration Reform Law Institute, or IRLI, sided with the plaintiffs in the case and the New York City-based LatinoJustice PRLDEF (formerly the Puerto Rican Legal Defense and Education Fund) sided with the defendants.

Monday, September 28, 2009

Effort To Reign In Loan Modification Rackets "A Giant Game Of Whack-A-Mole"?

ProPublica reports on the difficulties authorities around the country are having reigning in loan modification rackets, and shines light on one firm that continues peddling its services, despite a flood of homeowner complaints and a number of legal actions brought by various state authorities:
  • In a giant game of whack-a-mole, law enforcement agencies at all levels across the country have filed suit against 150 such companies, but they continue to proliferate, and the number of consumer complaints continues to rise. “This is a very big scam,” says California Attorney General Jerry Brown. “They’re all over the place, and as soon as you get one, they migrate to somewhere else.”

  • The case of one particularly aggressive firm, 21st Century Legal Services, shows just how ineffective authorities’ moves against the companies often are. Four states have sued 21st Century, and at least three more have open investigations. Over 150 consumers from more than 30 states have filed complaints against 21st Century with the Better Business Bureau. No active firm has more complaints.(1)

  • Yet the company forges on. Operating under a new name, Fidelity National Legal Services,(2) it continues to solicit consumers nationwide, even in states where authorities have won court injunctions.
For more, see Why Authorities Haven’t Stopped the Foreclosure ‘Rescue’ Boom.

Go here to read the internal emails and documents related to this story.

(1) An undercover tape (MP3, transcript), made by the North Carolina attorney general’s office shows a 21st Century salesman in action.

(2) Reportedly, Fidelity is registered at the same address as 21st Century. Its
pitch letter to consumers (see pages 4 & 5) is identical to 21st Century’s. It even appears to share the same employees.

Just Showing Up Buys Financially Troubled Homeowners Three Extra Months On Sarasota's Foreclosure "Rocket Docket"

In Sarasota County, Florida, the Sarasota Herald Tribune reports:
  • Florida "rocket dockets" have earned the reputation as a cold, heartless place where a lender can retake someone's home in less than two minutes. And in most cases, that's true: The judge orders the house sold in 30 days in a rapid-fire proceeding designed to speed through thousands of uncontested foreclosures clogging the court system. But in Sarasota County, the judge has started cutting a break to troubled homeowners who simply show up at the courthouse, giving them an extra three months to try to save their home or prepare to move out.


  • [Judge Harry] Rapkin can only do so much. By this point in the legal process, the homeowners have not raised any defense to the foreclosure suit for months. "If they've got their ducks lined up, I can't deny" the lenders, Rapkin told one homeowner Friday morning. Rapkin still gives the lender a final judgment. But instead of setting the sale 30 days out, like in those cases where the homeowner does not show, Rapkin gives more time to those who show up in court. "I can give you 120 days," Rapkin told one woman who came to court Friday. "In the meantime, hire an attorney."


  • The attorneys for lenders are not complaining about the extension, because many of the banks are in no hurry to retake homes, 12th Circuit Chief Judge Lee Haworth said.

For more, see Homeowners can slow down 'Rocket Docket'.

A Cautionary Tale On Assumed Mortgages

Ever wonder what the risks are of selling your home in a deal that allows the buyer to take over the payments on your existing mortgage?

A Philadelphia Inquirer opinion columnist and editorial page editor recently detailed a personal situation involving a mortgage he had on a home that he sold back in 1994 that came back to bite him some 15 years later.

For the story, see A cautionary tale about assumed mortgages (Or, Why Americans get so angry when there's a bank in the mix).

Oregon AG Indicts Mtg Broker/Loan Modification Firm Owner For Allegedly Cheating Homeowners In Foreclosure; Aggravated Theft, Forgery Among Charges

From the Oregon Department of Justice:
  • Attorney General John Kroger [...] announced the indictment of a Salem mortgage broker on charges of mortgage fraud, aggravated theft, forgery and identity theft. It is is the first indictment by the Attorney General's Mortgage Fraud Task Force. "We intend to prosecute mortgage fraud aggressively. If you cheat vulnerable Oregonians facing foreclosure, we will hold you accountable," said Attorney General Kroger.

  • Julian James Ruiz III, 38, is the manager and owner of American Home Modifications, a Salem-based loan modification company. He faces 17 counts of first degree aggravated theft, mortgage fraud, identity theft, aggravated identity theft, forgery in the first degree and criminal possession of a forged instrument in the first degree.

For the entire press release, see Mortgage Broker Indicted For Fraud (First indictment by the Attorney General's Mortgage Fraud Task Force).

Sunday, September 27, 2009

Kansas Supreme Court Ruling Unfavorable To MERS Getting National Attention?

In Topeka, Kansas, The Lawrence Journal World reports:
  • Some are touting a recent Kansas Supreme Court decision as a major development in the protection of people facing foreclosures. In Landmark National Bank v. Kesler, the court ruled unanimously that Mortgage Electronic Registration Systems had no standing to bring action in a foreclosure case.(1) According to some reports MERS holds some 60 million mortgages, over half of all new U.S. mortgages. While the case applies only to Kansas, folks who defend homeowners are saying courts in other states could take note of the ruling.

For more, see Kansas court ruling in foreclosure case getting national attention.

(1) While some (see, for example, Waking up to discover the mortgage market was a giant criminal enterprise) have apparently interpreted this case as holding that MERS had no standing to bring action in a foreclosure case, this is simply an incorrect interpretation. Nowhere in the court's ruling did it "hold" or "find" that MERS lacked standing in the case. It simply ruled that the lower court did not abuse its discretion in denying the motions to vacate a default judgment entered in the case and for joinder in a foreclosure action brought by a prior mortgage holder, and in holding that MERS (putatively representing, and asserting the legal rights of, the 2nd mortgage holder) was not denied due process when a foreclosing 1st mortgage holder failed to serve it with notice of the foreclosure action.

In order for MERS to vacate the default judgment entered in this case, it would have to demonstrate to the court that it had a tangible interest in the mortgage, and demonstrate any injury it suffered because it did not receive service of the foreclosure action from the first mortgage holder. In this regard, the court observed:

  • Counsel for MERS explicitly declined to demonstrate to the trial court a tangible interest in the mortgage. Parties are bound by the formal admissions of their counsel in an action. Dick v. Drainage District No. 2, 187 Kan. 520, 525, 358 P.2d 744 (1961). Counsel for MERS made no attempt to show any injury to MERS resulting from the lack of service; in fact, counsel insisted that it did not have to show a financial or property interest.

Given that the attorney for MERS made no attempt to either establish a tangible interest in the second mortgage, or show any injury suffered due to the lack of service, there was no need for the court to make any finding that MERS, generally, lacks standing, is a real party in interest, or (in cases like this one where it is a defendant as a putative second mortgage holder in a foreclosure action brought by the first mortgagee) is a necessary party in foreclosure actions. The court simply made the following finding, explicitly leaving unanswered the question of whether or not MERS was entitled to notice of the foreclosure action from the 1st mortgage holder:

  • Even if MERS was technically entitled to notice and service in the initial foreclosure action--an issue that we do not decide at this time--we are not compelled to conclude that the trial court abused its discretion in denying the motions to vacate default judgment and require joinder of MERS and Sovereign. The record lacks evidence supporting a claim that MERS suffered prejudice and would have had a meritorious defense had it been joined as a defendant to the foreclosure action. We find that the trial court did not abuse its discretion and did not commit reversible error in ruling on the postdefault motions.


  • We find that the district court did not abuse its discretion in denying the motions to vacate and for joinder and in holding that MERS was not denied due process.

Presumably, the next time MERS finds itself in a foreclosure action like this one in Kansas in which it seeks to vacate a default judgment, its legal counsel won't fail to make a vigorous attempt to demonstrate that MERS has a tangible interest in the second mortgage, and attempt to establish the injury it suffered by failing to receive service of a first mortgagee's foreclosure action. Only at that point will a Kansas court have the opportunity to consider whether or not MERS, generally, has a sufficient interest in the mortgages it attempts to foreclose so as to make it a real party in interest in the litigation, and whether it has legal standing to be heard in said litigation. EpsilonMissingDocsMtg

NY Times On MERS' Ruling From The Kansas Supreme Court

The New York Times reports:
  • WITH the mortgage bust approaching Year Three, it is increasingly up to the nation’s courts to examine the dubious practices that guided the mania. A ruling that the Kansas Supreme Court issued last month(1) has done precisely that, and it has significant implications for both the mortgage industry and troubled borrowers.

  • The opinion spotlights a crucial but obscure cog in the nation’s lending machinery: a privately owned loan tracking service known as the Mortgage Electronic Registration System. This registry, created in 1997 to improve profits and efficiency among lenders, eliminates the need to record changes in property ownership in local land records.
    Dotting i’s and crossing t’s can be a costly bore, of course. And eliminating the need to record mortgage assignments helped keep the lending machine humming during the boom.

  • Now, however, this clever setup is coming under fire. Legal experts say the fact that the most recent assault comes out of Kansas, a state not known for radical jurists, makes the ruling even more meaningful.

For more, see The Mortgage Machine Backfires.

In a related post on MERS being hammered in court, see Judge Slams Sloppy Lender Unable To Prove Note Ownership; Voids Debtor's $461K Home Loan; Docs Signed By Multiple Hat-Wearing VP Sinks Servicer, MERS.

(1) Landmark Nat'l Bank v. Kesler, No. 98,489, 2009 Kan. LEXIS 834 (August 28, 2009), affirming Kansas Court of Appeals in Landmark Nat'l Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177, 2008 Kan. App. LEXIS 138 (2008). EpsilonMissingDocsMtg

N. Virginia Code Enforcement Investigators Stumble Into Massive Straw Buyer Scam That Leads Feds To Bag 20 Suspects; As Many As 200 Homes Involved

In Fairfax County, Virginia, the Daily Press reports:
  • Mundane complaints about noise and parking problems in a Washington suburb led authorities to uncover a sweeping mortgage fraud scheme involving as many as 200 properties valued at more than $100 million, officials announced Thursday. Twenty northern Virginia residents were arrested, and authorities have warrants for four other people in what they said was just the first phase of the case, related to 35 houses. Most of those arrested are facing federal charges including wire and mail fraud. Eight of the 20 were arrested on state charges of using false statements to obtain property or credit.(1) Fairfax County Police and federal officials said real estate agents and mortgage brokers used straw buyers with good credit ratings and low income to fraudulently obtain loans they would never have qualified for. Properties were sold and resold within the alleged ring.

For more, see 20 arrested in Fairfax mortgage fraud bust.

See also, The Washington Post: Family Charged In Loan Fraud (Va. 'McMansions' Allegedly Became Boardinghouses):

  • The safety hazards of these new boardinghouses prompted Fairfax County to launch a Code Enforcement Strike Team in 2007. Deeper investigation uncovered the biggest mortgage fraud scheme in Fairfax history, officials said Thursday, and squads of officers arrested 20 people involved in allegedly cheating local banks out of more than $9 million.

(1) According to the story, the federal indictment states that real estate agents Ruben Rojas, 30, and his sister-in-law, Litcia Linares, 32, organized the fraudulent transactions, along with Rojas' sister, 28-year-old Lourdes Rojas Almanza, a loan officer, and his brother, Jaime Rojas. The other people charged in the scheme were straw buyers, many of whom bought multiple properties.

Minnesota AG Targets Three Outfits In Civil Suits Alleging Upfront Fee Rackets Promising Help With Credit Card Debt

From the Office of the Minnesota Attorney General:
  • Minnesota Attorney General Lori Swanson [...] filed three lawsuits against separate companies that promised consumers they would lower the interest rates on their credit cards in exchange for payments of up to $1,995 but then failed to provide the promised services.(1)


  • [The] lawsuits were filed against Priority Direct Marketing, a Washington corporation charging consumers fees of up to $1,590, Clear Financial Solutions, a Florida corporation that charged consumers fees of up to $999, and Moneyworks LLC, based in Georgia, which charged consumers fees of up to $1,995.

For the entire Minnesota AG press release, see AG Swanson Files Three Lawsuits Against Companies Claiming To Help Consumers Lower Their Credit Card Interest Rates (Swanson Warns Minnesotans To Be On Guard Against “Here Today, Gone Tomorrow” Companies That Charge High Fees for Supposed Debt Assistance Services During These Tough Economic Times Then Disappear).

(1) Swanson warned the public to be on guard against fly-by-night companies seeking high payments from consumers in exchange for supposed financial help. She said that many companies are aggressively seeking out struggling citizens to exploit during these tough economic times--in which people face record high levels of credit card debt and high credit card interest rates. After the citizen pays the money, however, the companies often disappear, fail to return phone calls, file bankruptcy, or go out of business, driving consumers even deeper into debt.

Justice Department Obtains Guilty Pleas In Cross Burning Incidents; Race-Based Harassment, Intimidation Used To Drive Families From Homes, Say Feds

In two separate incidents, the U.S. Department of Justice recently announced:
#1: Two Indiana Men Plead Guilty to Cross Burning:
  • Richard LaShure, 41, and Aaron Latham, 20, both of Muncie, Ind., pleaded guilty to conspiring to violate the civil rights of an African American family and to interfering with their housing rights by burning a cross in the family’s yard. According to the charging document, on July 25, 2008, the two men, acting with the assistance of a third participant, built a cross and poured gasoline on it, then set it on fire in the yard of an African-American family who lived in the neighborhood. They will be sentenced on Nov. 5, 2009.

  • This is the second case in two years in which the Civil Rights Division has brought charges for a cross burning that occurred in Muncie, Ind. Two men were convicted in 2008 for burning a cross at the home of a woman who had biracial children. "These two men used a despicable and unmistakable symbol of hatred, the burning cross, to intimidate a family because they are African American," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to prosecute this type of illegal, hateful behavior to the fullest extent of the law."


#2: Four Arkansas Men Convicted of Civil Rights Charges in Cross Burning Conspiracy:

  • The Justice Department announced that Jacob A. Wingo, Richard W. Robbins, Clayton D. Morrison and Darren E. McKim pleaded guilty [...] to conspiring to drive a woman and her children from their home in Donaldson, Ark., because they associated with African Americans. A fifth defendant, Dustin Nix, 21, pleaded guilty to similar charges in July 2009.

  • All defendants pleaded guilty in federal court in Hot Springs, Ark., to civil rights charges and charges of making a false statement to a federal law enforcement officer. Each admitted and pleaded guilty to a felony civil rights charge for conspiring with each other to force a woman and her young children from their home by threats and intimidation because she associated with African Americans. Wingo and Morrison also pleaded guilty to an additional civil rights charge related to their direct involvement in an attempt to burn a cross at the victims’ home to intimidate the victims into leaving. All four defendants also pleaded guilty to a related charge of lying to agents of the FBI in an attempt to cover their conduct.(1)


(1) In other related press releases from the U.S. Justice Department in connection with those charged with the use of fire to interfere with housing rights of others, a felony:

  • (4-27-2009) Anderson County Man Indicted for Cross-Burning: Steven D. Archer, 49, Heiskell, Tennessee, has been indicted by a federal grand jury on charges of willfully interfering with a couple's federal housing rights because of their race by burning a wooden cross, in violation of Title 42, U.S. Code § 3631(a), outside the residence in Anderson County that the victims were occupying.

  • (11-21-2008) Rutherford County Man Sentenced In U.S. District Court In Asheville In Connection With Cross Burning Incident (Defendant to Serve More Than Two Years in Federal Prison): Curtis Gene Worley, 51, of Spindale, North Carolina, was sentenced Wednesday to serve 28 months in federal prison, followed by two years of supervised release. Worley was indicted in October 2007 on one count alleging use of fire to injure, intimidate, and interfere with rights to occupy a dwelling because of race or color. According to information presented in open court during the hearings, Worley built and burned a cross on or near the property occupied by his neighbor, an adult African American female. See also: (10-25-2007) North Carolina Man Indicted In Cross-Burning Case: The indictment charged that Worley used a burning cross to intimidate and interfere with an African-American family because of race and because the family was occupying a dwelling. The indictment charges that Worley violated Title 42, U.S. Code § 3631(a), which provides criminal penalties for interference with the rights of citizens under the Fair Housing Act. Since 2001 and up through and including this prosecution, the Civil Rights Division brought 41 cross-burning prosecutions and convicted 60 defendants for these crimes.

    (6-6-2008) Muncie, Indiana, Man Sentenced to 121 Months in Cross Burning Case: Kyle Milbourn of Muncie, Ind., was sentenced by a federal judge [...] for a hate crime stemming from a cross burning last year that was directed at a woman and her three biracial children. Milbourn was convicted by a jury of one count of interfering with the housing rights of another person; one count of conspiring to interfere with civil rights; one count of using fire during the commission of a felony; and one count of tampering with a witness.

  • (4-23-2007) Two Men Plead Guilty In Lassen County Cross Burning: Kevin William Ridenour, 21, and Nicholas Edward Craig, 18, both of Westwood, California, each pleaded guilty in Sacramento to interference with housing rights, a felony. The crime relates to the burning of a cross outside the rectory of a Catholic church in Westport, California. The Priest who resides in the rectory is from Rwanda, central Africa, and was assigned to Westport by the Catholic Archdiocese of Sacramento in October, 2006. The defendants admitted that they did so in order to threaten and intimidate the Priest because of his race, and the fact that he was occupying the rectory building. They also admitted that, while building the cross, they discussed the fact that the "KKK" had used burning crosses to intimidate black persons.

  • (1-31-2007) Florida Man Sentenced in Cross Burning: Neal Chapman Coombs, a 50-year-old resident of Hastings, Fla., was sentenced to 14 months in prison, to be followed by three years of supervised release. Coombs pleaded guilty to a racially-motivated civil rights crime involving a cross burning. Coombs was charged with knowingly and willfully intimidating an African-American family that was negotiating for the purchase of a house in Hastings, Fla., by threat of force and the use of fire. Specifically, it was alleged that Coombs’ actions were motivated by the family’s race and that he burned a cross on property adjacent to the house. According to the press release, the plea agreement indicatedt that Coombs, who is Caucasian, made a remark about having a “house-warming,” and also made derogatory remarks about the visiting family.

  • (9-26-2006): Federal Jury Convicts Two for Cross Burning: A federal jury convicted Christopher Mitchell and James Bradley Weems of burning a cross in front of the home of an African-American man in Fouke, Ark. The jury convicted each defendant of one count of conspiracy to violate the victim’s civil rights. The evidence at trial established that Mitchell and Weems, attended a party where they discussed an African-American man who lived nearby, using racial slurs to describe him. The defendants, along with a third man, Christopher Baird, who had pleaded guilty to his role in the offense, used wooden boards to erect a cross. The defendants then planted the cross near the home of the African-American man and lit it on fire. Witnesses testified that as a result of the cross burning, the African-American victim and the family he lived with all moved from their home because they were too frightened to remain in the town.

  • (9-2-2004) Two Men Plead Guilty In Kentucky Cross Burning Case: Matthew Scudder, of Florence, Kentucky, who was 18 at the time the crime was committed, and James Foster, of Independence, Kentucky, who was 19, admitted to conspiring to threaten and intimidate an African-American couple and their two children in order to drive them from their Burlington home. Scudder admitted that on July 2, 2004 he burned a wooden cross on the family's lawn. Foster admitted that he helped carry out the plan.

  • (6-15-2004) Indianapolis Man Sentenced For Cross Burning: The Justice Department announced the sentencing of Jerry Dean Landis, of Indianapolis, Indiana, to 18 months in prison for his role in a July 2000 cross burning. Landis participated in the building and burning of a cross in the front yard of an African-American family in Indianapolis. Landis admitted that he and his associates took part in the cross burning in order to “send a message” to the family. Since 2001 and up through and including this 2004 prosecution, the Department prosecuted 29 cross burning cases, filing criminal civil rights charges against 46 defendants.

  • (2-9-2004) Macomb, Illinois Man Sentenced For Cross Burning Targeting Interracial Couple: Charles Lambert was sentenced to thirty-seven months in prison for his role in a July 2001 cross burning targeting an interracial couple. Forest Hatley, a co-defendant in this case, was previously sentenced to forty-one months imprisonment and three years of supervised release. Lambert and Hatley each admitted that they agreed to burn a cross at a home in Macomb, Illinois where an interracial couple lived. The defendants constructed a cross and doused it with gasoline. The two men then transported the cross to the victims’ yard, planted it in front of the home and ignited it. Lambert and Hatley also admitted this action was taken to intimidate the couple because of the male’s race and because he was living with a person of another race.

  • (1-29-2004) Georgia Man Sentenced For Cross Burning In Moultrie: The Justice Department announced the sentencing of Moultrie, Georgia resident Michael Craig Jordan for his role in an April 2002 cross-burning. Jordan pled guilty to criminal civil rights violations in November 2003. He admitted to participating in the April 2002 burning of a wooden cross with the purpose of preventing a biracial African-American and Hispanic couple - as well as their two young children - from moving into the house next door.