Saturday, February 13, 2010

Lender's 40 Cent Posting Error When Deducting Automatic Payment From Bank Account Leaves Homeowner In Fear Of Foreclosure

In Lee County, Florida, WINK News reports:
  • In the middle of the multi-billion dollar foreclosure crisis, there's a southwest Florida family that could lose their house over a 40 cent mistake. According to the homeowner, that mistake was his lender's fault. "I'm fearful to send them more money," said the homeowner, who is also afraid of losing his job for talking about the situation publicly. "Mark" said he modified his mortgage to match his lower income after a layoff and thought everything would be alright, until his lender took an automatic payment incorrectly. "They posted it 40 cents short ... three weeks later we get a letter saying you've missed your payment so you're out," said "Mark".


  • [Local foreclosure defense attorney Carmen] Dellutri said his phones are ringing off the hook with homeowners just like "Mark" who think they've resolved their mortgage issues.

For more, see Foreclosed Over 40 Cents? (Homeowner says mistake was lender's fault).

Name Of Famous Fictional TV Character Invoked In NYC Federal Fair Housing Lawsuit To Describe Alleged Race-Discriminatory Practices At Bronx Co-Op

In New York City, Courthouse News Service reports:
  • A real estate broker barred black people from two large "racially segregated enclaves" in the Bronx, telling them that residents of Silver Beach Gardens and Edgewater Park are "kind of prejudiced" and the co-ops are "Archie Bunker territory," the Fair Housing Justice Center claims in Federal Court.(1) "Silver Beach Gardens and Edgewater Park (the Co-ops) are a throwback of the very worst kind - two racially segregated enclaves with over 1,100 single-family homes occupied almost exclusively by white residents who evidently wish to keep it that way," the complaint states. (Parentheses in complaint.)(2)

For more, see Bronx Co-Op Called 'Archie Bunker Territory.'

For the lawsuit, see Fair Housing Justice Center, Inc. et al. v. Silver Beach Gardens Corporation, et. al.

(1) According to their website, the Fair Housing Justice Center is a 501(c)(3) non-profit group organized to challenge systemic housing discrimination, promote open and inclusive communities, and strengthen fair housing enforcement.

(2) According to the story, the Justice Center says "although the Co-ops purport to 'require' three references from existing Co-op shareholders for applying purchasers, this 'requirement' is not truly applied to whites, who are told that a seller or the sellers' friends - whom the applicants do not otherwise know - can provide the 'references.' "In stark contrast, African-American testers - plaintiffs Justin Carter and Lisa Darden - were told of the strict reference policy, never even offered the opportunity to view available properties, and steered away from the communities because there are very few people of 'any kind of ... ethnic color' living at the Co-ops."

Defendant Amelia Lewis, dba Amelia Lewis Real Estate, allegedly told the tester that she had "raised all three of her children in Edgewater Park" and the co-ops were "very nice ... mostly ethnic Irish, German, Italian ... there's some Puerto Rican, not many." Lewis allegedly told them that when "people of color" bought a house just outside Edgewater 15 to 20 years ago, a cross was burned on their lawn. "Lewis also stated that she had once 'gotten some Spanish in, but they were kinda light, you know' and they had references," the complaint states.

Unwitting Couple Purchase Property Once Used As Meth Lab; Now Face F'closure After Making 3+ Years Of House Payments On Toxic Home Used For One Week

In Prattville, Alabama, the Montgomery Advertiser reports:
  • The only room in this one-story house safe enough for human inhabitation is a small, non-ventilated room with a toilet, and even that is toxic. Brenda Maitland bought the house, hidden just off Alabama 59, about four years ago. It is where she, her husband and two young daughters were going to swim, ride their new horse, plant a garden -- make a home.

  • But just after a week of living there, Maitland's youngest daughter got sick: sore throat, earaches, watery eyes, burning skin. They were the same symptoms that Brenda Maitland came down with while scrubbing the house the week before the family moved in. "I thought it was the flu," she said. The people who lived there before them were heavy smokers -- so it could have been from that, the family thought.

  • But they learned it was far more than that. They learned they had bought a home that the previous owners had used as a methamphetamine lab. Standing outside the home recently -- the doors are locked, and nobody is allowed inside because of the toxicity level -- Maitland talked about when she found the house on-line.(1)


  • The Maitlands wish they had found out about this before moving in. The family has since paid their mortgage every month for three and a half years as advised by their attorney. About $1,200 a month -- more than $50,000 was spent on a house they lived in for just more than a week. They stopped making the payments in July, and the house was foreclosed a few months after.

For more, see Home hazardous: Family's residence in Prattville had been used as a meth lab.

For a story on meth-lab related lawsuits, see The National Law Journal: Meth Lab Residue in Homes Triggers Litigation (Lawsuits over contaminated homes focus on failure to disclose issue).

Go here for other posts on home-based meth lab horror stories.

(1) According to the story, they took six months to find the home after moving from Texas. It had grape and blueberry bushes, a green house, a pool. Azaleas lined the front sidewalk. Dogwoods welcomed them home. Before moving in, the family spent about $10,000 on hardwood floors, new furniture, a computer, stereo equipment. But it wasn't just the family that was coming in contact with the toxins. Not only did the poisons coat the house, they also coated many of the possessions that the family brought into it. The Maitlands were advised not only to leave the house as quickly as possible but to abandon most of their furniture and clothing. "I was told to keep everything in the house," Maitland said. "When the house was put under foreclosure in December, the flooring and everything that was in the house was toxic, so that has been removed and destroyed."

Alleged $2,500 Loan Modification Ripoff Leaves Denver Senior Facing Foreclosure; Ownership Of Home Of 25 Years In Jeopardy

In Denver, Colorado, KDVR-TV Channel 31 reports:
  • 70-year-old Connie Somerhalder thought she was going to stay in the home she has owned for 25 years. Instead, she just found out she got scammed out of $2500.00 and her home is in foreclosure. "I've been here almost 25 years, then somebody comes along and takes it all away, it hurts," Connie said. Connie lives on her Social Security income. She wanted to modify her existing home loan to reduce her monthly payment and contacted "American Mortgage Consultants," after hearing an advertisement on a local radio station.

  • "I thought they were helping me out."American Mortgage Consultants told Connie she would have to pay $2500.00 up-front, and she was told to stop paying her mortgage and don't contact the bank. "They told me not to contact the bank. They were taking care of everything." Six months later, Connie found out her home was in foreclosure and she had been scammed. "I cried a lot, believe me, I cried a lot," Connie told us.

  • We went looking for answers at the company's Aurora location. The door was locked and when the receptionist opened the door she wouldn't let us in."Please leave," she said. "I only work here. Oliver Maldonado (the company owner) is not here."

For more, see Loan modification scams running rampant in Colo.

Law Firm Uses "Reverse Foreclosure" To Stick Foot-Dragging Lender With Title To Unwanted Condo Unit; Has 82 More Cases In Pipeline

In Miami, Florida, Historic City Times reports:
  • In a process known as a “reverse foreclosure,” a Miami-Dade Circuit Court judge has forced a bank to take title to a property from a homeowners association. “It’s new, and it addresses what we think is a huge problem in Florida,” according to published reports from attorney Ben Solomon who represented the South Miami-Dade homeowners association in the case.

  • When the owner [in one case] stopped paying their monthly maintenance fee, the association foreclosed on the home, however, because of the bank’s lien, they could not sell it. The bank had foreclosed but hadn’t pursued the case for a period of 2 1/2 years, leaving the association stuck with a home — and no one paying dues.

  • Solomon said his firm is telling the judge that as the defendants in the bank’s foreclosure proceedings; they want a summary judgment — against themselves. Next, they request an immediate sale date; waiving their rights to a waiting period. Reportedly, Solomon’s firm has filed another 82 similar “reverse foreclosure” requests in courts around the state.

  • The association in this case has 3,000 homes and owns title to about a dozen of them through foreclosures, Solomon said. The reverse foreclosure can only be filed after a homeowner is out of the picture and the home is legally the property of the homeowner association. “That waiting period protects the consumer, but banks are taking advantage of the judicial backlog, and then in many cases they are canceling the sale date and resetting it”, according to Solomon. “What we did was tell the judge, we don’t need more time.” HSBC Bank USA, which acted as trustee in the case, declined to comment. Circuit Judge Jerald Bagley granted the homeowners association motion, and the title was awarded to the bank the same day.

  • We’re not saying they need to complete a foreclosure more quickly than normal,” Solomon said. “But there’s no good reason why that lender has taken 2 1/2 years to foreclose on this particular unit.”

Source: Ruling may help homeowner associations.

Friday, February 12, 2010

Ten Southwest Ohio Homeowners Demand Actual, Punitive Damages From BofA For Stiffing Them On Loan Modification Promises, Says Suit

In Cincinnati, Ohio, Business Courier of Cincinnati reports:
  • Lawyers at the Legal Aid Society of Southwest Ohio have filed a lawsuit against Bank of America, alleging it failed to follow through on promises it made to modify mortgage loans. The lawsuit was filed on behalf of 10 Ohio homeowners who participated in a federal “borrower outreach” program in Cincinnati last October.

  • Bank of America representatives agreed to modify their loans at the event, but it has never honored its commitments, the complaint contends. The homeowners relied on the bank’s promises and representations, missing out on other opportunities to address their financial problems, it said. The lawsuit was filed Feb. 10 in U.S. District Court for the Southern District of Ohio in Cincinnati.

  • Mark Lawson is one of three lawyers at the Legal Aid Society representing the plaintiffs. The homeowners now face imminent foreclosure and damage to their credit ratings, he said in a statement. The lawsuit seeks a court order compelling Bank of America to modify the loans and to pay actual and punitive monetary damages.

Source: Ohio homeowners sue Bank of America over mortgage program.

Loan Mod Outfit Settles Suit w/ State AG Alleging Unlicensed Activity; Agrees To Refund Customer Cash, Pay $5K Penalty, Promises Never To Do It Again

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Catherine Cortez Masto announced [] that an agreement has been reached with Focus 2000 Financial Corporation regarding its unlicensed loan modification program. The State of Nevada has alleged that Focus 2000 Financial Corporation operated a loan modification service without the proper licensing by the Nevada Mortgage Lending Division and took payment for services prior to the completion of the loan modification in violation of Nevada deceptive trade law.


  • As a result of the settlement, Focus 2000 Financial Corporation will agree to refund all monies paid by homeowners who did not have their loan modification completed and to pay a civil penalty of $5000. Focus 2000 Financial Corporation will provide documentation to show that refunds were paid as promised and has agreed not to engage in any loan modification or other credit repair activities without the proper licenses and permits.

Source: Attorney General Masto Announces Civil Agreement In Mortgage Fraud Case.

Failure To Allege Charging Of Excessive Interest In Sale Leaseback, Foreclosure Rescue Suit Fatal To Usury Claim

In a recent ruling awarding a six-figure judgment to a New Jersey homeowner/couple who were swindled in an equity stripping, foreclosure rescue ripoff, a Federal bankruptcy judge recharacterized a sale leaseback as an equitable mortgage, and granted relief on most of the Plaintiff/homeowners' claims. However, he refused to grant relief on a claim that the equitable mortgage violated the state usury statute. The judge's reason, according to the written ruling, follows:
  • Plaintiffs' pre-trial brief raises for the first time the allegation that this transaction violates the state criminal usury law. N.J. STAT. ANN. §2C:21-19. By Plaintiffs' calculation the annual interest rate could be as high as 227% . Charging interest over 30% per annum [in New Jersey] is a crime. They ask the court to treat their contract with Cleveland as illegal and refuse to enforce it. As a remedy they seek a return of their property and damages. This theory was not plead in the complaint and the court will not grant any relief based on the alleged violation of the state criminal usury statute.

The judge's refusal to grant relief on the homeowners' usury claim was based strictly on procedural grounds, and, given their success on other claims in the suit, may not have affected the total award they could have reasonably expected to obtain anyway. However, the ruling nevertheless serves as a reminder that, in any attempt to undo this type of deal by asserting that the arrangement was an equitable mortgage (ie. a loan disguised as a sale leaseback), it's a good idea to plead in the complaint that, if applicable, the state usury statute was violated(1).

For the ruling, see In re O'Brien (aka O'Brien v. Cleveland), Case No. 03-17448, Adversary Proceeding Case No. 08-1676; (USBC, D. N.J., January 22, 2010).

(1) Especially in states where certain violations of usury statutes render the debt unenforceable. For example, in Florida, willfully and knowingly charging interest on a loan in excess of 45% is a felony criminal offense and could ostensibly obliterate the foreclosure rescue operator's entire investment in the deal. Sec. 687.071(3), 687.071(7), Florida Statutes.

Rent Scammers Among Those Targeted By Brooklyn DA In Recent Real Estate Scam Sweep

In Brooklyn, New York, the New York Daily News recent report on indictments obtained by the Brooklyn District Attorney against 12 people in unrelated real estate scams described the following alleged rent scams ensnared by his probe:
  • Earl Davis placed an ad on Craigslist and collected a full year's rent in advance after giving the victim a forged lease,

  • Correction Officer Margareth Blanc collected more than $30,000 in federal rent subsidies with forged applications while living in her sister's apartment,

  • Deric Nelson worked a phony deed scam, making it look like he owned a building he'd already sold - then renting vacant apartments.

Reportedly, in one of the "phony landlord" rent scams, the suspect allegedly pocketed $16,250.(1)

Source: 3 lawyers and correction officer among 12 charged with real estate fraud.

See also, See also, Kings County District Attorney press release: Kings County District Attorney Charles J. Hynes, New York State Senator Carl Kruger And United States Senator Charles E. Schumer Announce Charges Against 12 People, For Real Estate And Mortgage Fraud.

(1) In addition, a fourth suspect, Todd Graham, was bagged on charges of Attempted Grand Larceny in the Third Degree and Grand Larceny in the Fourth Degree, for allegedly placing an ad on Craigslist for a rental apartment in a building he neither owned nor managed, and then pocketing the first month’s rent and security deposit from two different people, for the same apartment, according to the Brooklyn DA's office.

Thursday, February 11, 2010

Pennsylvania Attorney First To Cop Plea In Alleged Sale Leaseback, Equity Stripping Ripoff Targeting Homeowners Seeking Foreclosure Rescue

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:
  • A Doylestown lawyer admitted his guilt [] in federal court in connection with a $14.6 million mortgage-fraud scheme that victimized 35 homeowners from fall 2004 to June 2007. Stephen G. Doherty, 43, pleaded guilty to 15 counts of conspiracy, wire fraud and related bankruptcy and money-laundering offenses. U.S. District Judge Mary McLaughlin set sentencing for May 24.(1)


  • In fall 2004, Doherty mailed advertisements to distressed homeowners and referred respondents to co-defendant Edward McCusker, who owned a mortgage company. McCusker, who has pleaded not guilty in the case, allegedly told homeowners he could save their homes by getting a mortgage in someone else's name for a year, while they leased the house back at a rent they could afford.

  • Instead, court papers said McCusker, of New Hope, arranged for the homeowner's residence to be transferred to a straw purchaser, used fake documents to obtain a mortgage in the name of the straw purchaser and took proceeds of sales for himself and co-defendants.

For more, see Lawyer admits mortgage scam.

For the indictment, see U.S. v. McCusker, et al.

For an earlier post on the related indictment in this case, see Philly Feds: Two Lawyers Among Five Who Ran Bogus Sale Leaseback, Equity Stripping Racket Clipping 35 Homeowners Of $14.6M; Civil Suit Pending.

(1) According to the story, the government alleged that Doherty and four others targeted homeowners facing foreclosure, promised to help them save their homes, engaged in real-estate transactions with straw purchasers and obtained dozens of bogus mortgages. Reportedly, authorities said most of the victims did not ultimately lose their homes in the scheme. Doherty, a bankruptcy lawyer, admitted involvement with four mortgage scams involving homeowners in Chalfont, Quakertown, Perkasie and Lumberville. The Perkasie and Lumberville homeowners were clients of Doherty, the story states.

Mortgage company owner Edward McCusker and his wife, Jacqueline, of New Hope, Doherty's law partner Jeffrey Bennett, of Springfield, and John Bariana, of Mullica Hill, N.J. have pleaded not guilty. The criminal probe in this case may have been triggered by an earlier-filed civil lawsuit brought by some of the victims of this alleged scam against Doherty and others. See The Intelligencer: Suit claims 9 are victims of mortgage scheme. foreclosure rescue

St. Louis County Offers Free Service To Battle Real Estate Swindles Involving Use Of Forged Docs & Land Instruments In Home Equity & Title Ripoffs

In St. Louis, Missouri, the St. Louis Globe Democrat includes the following excerpt in a story reporting that mortgage fraud is the top priority of the white collar crime squad of the St. Louis-area FBI:
  • St. Louis County is doing their part in preventing mortgage crime by now offering a free property fraud alert service for residents. County property owners can register their names in the “Property Fraud Alert” through the county’s recorder of deeds web site.

  • Those who enroll will be alerted by their choice of phone or e-mail anytime a document is registered and recorded in their name. St. Louis County Executive Charlie Dooley said he hopes the service will help catch fraud before it’s too late to save residents “headaches and lawyer fees” to get property back.(1)In these economic times there are so many more scams going on,” Dooley said. “For some reason crooks find a hole and they use it against others.”

  • Dooley said signing up is simple and can be done by visiting the Property Fraud Alert web site and selecting St. Louis from the list of counties offering the service. Interested [St. Louis County] residents may also call 1-800-728-3858 to sign up. Aldrich said the county’s property fraud alert service is a good educational tool for the community. “The more information the public has to be aware of mortgage fraud will help prevent it,” he said.

For the story, see FBI: Mortgage fraud fastest growing white collar crime.

(1) At most, a successful criminal prosecution can result in the scammer being tossed in jail, and possibly, a court order compelling the scammer to pay restitution to the victim which, if the scammer is broke, is probably worthless. To go about undoing the mess created by the ripoff and have the title to the property restored in the name of the rightful owner, a victim would have to file a civil lawsuit:

  • to legally establish that the forgery of the deed, mortgage, and/or other land instruments used in the swindle occurred, and, if successful,

Loan Transfer Screw-Up Leaves Couple Facing Foreclosure; RESPA Suit Claims Original Lender Failed To Pass Along House Payments To New Mortgage Holder

In Lancaster, Ohio, The Columbus Dispatch reports on local couple Kreg and Audre Smith and the problems they now face due to a screw-up that occurred when their home mortgage loan was transferred from one lender to another:
  • The Smiths aren't rich, but neither did they struggle to make the $876 monthly payment. They arranged for Fifth Third to deduct the money directly from their Chase bank account. In November 2008, Fifth Third notified them that their mortgage had been transferred to U.S. Bank. A month later, Audre noticed that Fifth Third had deducted a payment for December. She assumed that money was passed on to U.S. Bank. The same thing happened in January, and Audre assumed the same thing.

  • Those assumptions, though, proved in error: On Jan. 12, 2009, U.S. Bank alerted the Smiths that they were two months behind in their payments and advised them to contact the bank's default counseling department.


  • In July came the inevitable: U.S. Bank filed a notice of foreclosure in Fairfield County. Audre sought help from the Ohio Poverty Law Center, which has since done battle with U.S. Bank in court. Douglas Rogers, a former partner with Vorys, Sater, Seymour and Pease who now works at the law center, took the Smiths' case.

  • He is arguing that the banks violated the Real Estate Settlement Procedures Act, commonly known as RESPA, which prohibits a transferred loan from being treated as delinquent if the original lender doesn't pass on the payment. Rogers wants the court to compel U.S. Bank or Fifth Third to resume the loan after bringing it up to date.

For more, see Bank glitch traps Lancaster pair in web of foreclosure.

Brooklyn Duo Dupe Homeowner Into Giving POA To Facilitate Refinance, Then Sell Home Out From Under Her, Says DA

In Brooklyn, New York, WNYC Radio 820 AM recently reported on the Brooklyn District Attorney's announcement of charges against 12 people for a variety of unrelated housing schemes. The following excerpt describes one of the alleged scams:
  • Prosecutors say two of the alleged repeat offenders, Russell Pitt and Nathan Farkas, convinced an unemployed Brooklyn woman to grant them power of attorney so they could refinance her home. Instead, prosecutors say they sold her home and kept the proceeds. Attorneys for both men could not be reached.

Source: Real Estate Scams Flourish in Brooklyn.

See also, Kings County District Attorney press release: Kings County District Attorney Charles J. Hynes, New York State Senator Carl Kruger And United States Senator Charles E. Schumer Announce Charges Against 12 People, For Real Estate And Mortgage Fraud.

Wednesday, February 10, 2010

Video "Tutorial" Demonstrates Use Of Dubious Affidavits, Assignments, Notary Acknowledgements By Lender, Law Firm In Foreclosure Actions

In Central Florida, St. Petersburg foreclosure defense attorney Matthew Weidner writes in his blog on a five-part video that hit You Tube last week that provides a great tutorial for the average homeowner interested in learning how foreclosing lenders and the foreclosure mill law firms that represent them use fraudulent affidavits, assignments, and document notarizatons in the course of processing a typical foreclosure. He says:
  • A reader of my blog emailed me [five] short YouTube Videos that shows in black and white in papers filed in courts across the country how employees of law firms and lenders are creating false affidavits and assignments then submitting these in courts as part of the Bank's campaign to take borrower's homes even though they have not established the legal right to do so. I love his quote, which I have printed above and give him great credit for pulling together video and documents that demonstrate some of the notary\affidavit fraud that is rampant in foreclosure cases around the country.


  • What these clips demonstrate is how law firms file foreclosure cases on behalf of lenders but then don't bother to have the proper paperwork they need to file the case created until after the case if filed. I have previously posted information about a woman named “Erica A. Johnson-Seck”. According to a deposition transcript taken of Ms. Seck and posted on this blog elsewhere, one of Ms. Seck's primary job functions is to sign the Assignments of Mortgage that banks use to throw a borrower out of a home.(1) What these videos demonstrate is that there are a handful of people like Ms. Seck whose job it is to sit in offices across the country, signing documents allegedly on behalf of lenders and MERS, which documents then form the basis for the lender to throw the borrower out of the home.

For more, see Foreclosure Fraud - Video Examples of False Affidavits Filed in Courts Across The Country ("You Can’t Have An Omelet If The Chicken Hasn`t Laid The Egg Yet!").

For the links to the 5-part You Tube video Bank Foreclosure Fraud (made available online courtesy of DinSFLA's Channel - STOP Foreclosure Fraud, on You Tube), see:

(1) Go here for Erica Johnson Seck's deposition, go here for a Motion For Sanction Of Dismissal With Prejudice in connection with the same litigation, and go here for links to other posts on Erica Johnson-Seck (available online courtesy of 4closureFraud - Fighting Foreclosure Fraud by Sharing the Knowledge).

Go here for other posts on attorney Matthew Weidner's blog referencing Erica Johnson-Seck.

Go here for other documents on fighting foreclosure, available online courtesy of 4closureFraud.

Illinois AG Targets Pair Of Mortgage Brokerages For Alleged Use Of Deceptive Marketing Practices In Peddling Reverse Mortgages To Seniors

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan [...] filed lawsuits against two mortgage brokers for using unfair and deceptive marketing practices to solicit seniors for reverse mortgages. “These companies used extremely misleading language in their advertising, sometimes even disguising their loans as government benefits that borrowers don’t have to repay,” Madigan said.

  • Many consumers have reported that they didn’t even know these offers were for reverse mortgages or a loan of any kind. That is unacceptable. Reverse mortgages are complex loans that should be taken out only after a consumer has had an opportunity to carefully consider his or her financial future and consult with a qualified housing counselor.”(1)

For the Illinois AG press release, see Madigan Sues Two Reverse Mortgage Brokers for Using Deceptive Marketing Practices To Target Seniors.

See also, Courthouse News Service: Illinois Company Scams Seniors, State Says.

For one of the lawsuits, see The People of the State of Illinois v. Hartland Mortgage Centers, Inc. (available online courtesy of Courthouse News Service).

(1) Madigan lawsuits targeted Woodridge, Ill.-based Hartland Mortgage Centers, Inc. (filed in Cook County) and Irvine, Calif.-based American Advisors Group, Inc., and its company president, Reza Jahangiri (filed in Sangamon County). Among the allegations made in the lawsuits is the use of solicitations that:

  • make a series of claims that falsely imply that seniors could be eligible for lifetime monthly income or lump-sum payments that are part of government benefit programs offered to all seniors. In fact, however, the defendants are offering loans that must eventually be repaid,

  • include false claims such as: “President Obama’s Economic Stimulus Plan Helps Seniors. If you are 62 years of age or older, you may be eligible to take advantage of an important U.S. Government Insured Program” and “The United States Congress has authorized a Reverse Lending program you do NOT have to pay back as long as you live in your home!”,

  • mislead consumers into believing that the reverse mortgages would only be offered for a short time, with many of the defendants’ mailers including purported “expiration dates.”

Short Sale, Reverse Mortgage Ripoffs Make FBI's 2010 List Of Top Five Real Estate-Based Scams

From the Office of the FBI (Salt Lake City):
  • Is someone letting you live in a home for free? Did a builder offer you deep discounts to move into a newly constructed house? Has a company offered to refinance your mortgage for a fee?

  • If the answer to any of these questions is “yes,” then you may be a victim of a scam. FBI special agents and the state investigators with the Utah Division of Real Estate have compiled a list of top five mortgage related scams in 2010.

For the FBI's list, see Salt Lake City FBI and Utah Division of Real Estate Name Top Five Mortgage Scams in 2010.

Pennsylvania Lawmakers Consider Making It Easier To Acquire Real Estate Through Adverse Possession; Aim Is To Reduce Blight, Say Supporters

In Pittsburgh, Pennsylvania, the Pittsburgh Post Gazette recently ran a story reporting that the state legislature is considering making it easier for people to acquire real estate through adverse possession. A bill proposes reducing the required time frame for filing an adverse possession lawsuit from 21 to 10 years, and in some rare cases only three years.(1) According to the story:
  • While the idea of taking another's property for one's own use without paying could be considered a hostile act, the spirit of the bill, supporters say, is to reduce blight. They argue that reducing the time frame required to file an adverse possession claim could reduce the likelihood that someone maintaining a home would abandon it, in turn helping stabilize vulnerable neighborhoods and improving the real estate tax base.

  • The Pennsylvania Bar Association, which represents more than 29,000 lawyers throughout the state, is opposed to making it easier for anyone to acquire someone else's property. "The bar's concern is that [the bill], as written, may have the unintended results of encouraging speculators to act as squatters who seize property from distant property owners, and increasing the potential for disputes between and among neighbors and family members as to the title to real property," said Louis Kodumal, an attorney at Vincent B. Mancini & Associates in Media, in southeastern Pennsylvania, in testimony before the state House Urban Affairs Committee in September.

For more, see Proposed change in law would benefit those who live in dwellings they don't own.

(1) The story profiles Kenneth Bumbrey, a Pittsburgh resident who is attempting to use adverse possession to acquire the home he has been living in for the last 23 years. The home was once co-owned by his grandmother and an aunt. Mr. Bumbrey's grandmother's will left her half interest in the property to six beneficiaries and their heirs. The other half interest belonging to the aunt passed to her only child, who ended up with a majority interest. Mr. Bumbrey's mother was one of six beneficiaries under the will. When she died in 1987, her share passed to her five children. As beneficiaries keep dying, their interests passed to their heirs, giving rise to an increasing number of fractional ownership interests in the home, which is currently co-owned by Mr. Bumbrey (who, by my calculation, owns a 1/60 "sliver" of title in the home - 1/2 x 1/6 x 1/5) with relatives scattered around the country (some of whom, he says, he may not even know). "There is just a zillion fractional interests making up now 40 percent of the property," a local housing advocate familiar with the case said.

Brookyn DA To General Public When Seeking Legal Assistance In Real Estate Deals: "Get An Honest Lawyer!"

In a New York Daliy News story on the recent announcement of indictments obtained by Brooklyn District Attorney Charles J. Hynes against a dozen suspects, including three current or former attorneys, allegedly involved in various unrelated, real estate-based swindles, DA Hynes offered some words of wisdom to the general public when seeking legal assistance in real estate transactions, as reflected in this excerpt:
  • "Ordinarily, in real estate deals, you would say, 'Get a lawyer,'" said Hynes. "Now you say, 'Get an honest lawyer.' You have to pay attention to the lawyers you hire, you have to get referrals."

Source: 3 lawyers and correction officer among 12 charged with real estate fraud.

Tuesday, February 09, 2010

Report: $200M Central Florida Mortgage Fraud Probe In The Pipeline; Ringleader, Title Agent Come Clean; Cooperate With Feds In Effort To Sack Others

In Central Florida, the Sarasota Herald Tribune reports:
  • Craig Adams, orchestrator of one of the largest real estate fraud rings in Florida history, has secretly spent more than a year and a half as an FBI informant, helping build cases against the people he once recruited into his schemes, the Herald-Tribune has learned. Federal court records show Adams has agreed to plead guilty to conspiracy charges at a later date and has pledged his help in an attempt to earn leniency. In at least one instance, Adams wore a wire to record a conversation with a key business associate.

  • So far he has laid bare at least $200 million in fraudulent property deals, incriminated more than 30 of his former business partners and given the FBI enough evidence to arrest his longtime title agent, Lisa Rotolo, the court records show. Adams' role as informant is described in a federal criminal complaint related to Rotolo's April arrest. [... Husband] Jay Rotolo told the Herald-Tribune his wife is also cooperating with what U.S. Attorney Brian Albritton's office calls an ongoing investigation.

  • "My wife has been working with the FBI for a year now," Jay Rotolo said. "Do you know what kind of a position this story puts her in? Yes, she got her finger in a mess, but we have never profited from any of this." The Rotolo complaint and supporting affidavit provide a glimpse into what could become the FBI's largest mortgage fraud case in Florida.

For more, see FBI builds its case in flipping schemes.

Go here for Federal complaint against Lisa Rotolo.

For earlier Sarasota Herald Tribune stories on this probe, see:

Trio Of "Legal Eagles" Among "Dirty Dozen" Bagged By Brooklyn DA In Unrelated Alleged Real Estate Swiping Scams

In Brooklyn, New York, the Brooklyn Daily Eagle reports:
  • Real estate fraudsters and rogue attorneys exploiting “a new breed of crime” were targeted Thursday by Kings County District Attorney Charles J. Hynes at a press conference announcing several recent mortgage fraud cases in Brooklyn. Hynes’ office has indicted 12 people for real estate crimes allegedly committed over the past several years, and as Hynes pointed out, several of the white-collar fraudsters were attorneys or otherwise close to the court system.


  • In one case, attorney Alan Rocoff is accused of blatantly stealing profits from the auction of a foreclosed church(1) that he was handling as court-appointed referee. Before dying in 2008, Pastor Robert Booker Sr. spent years in court trying to get back $218,000 in profits from the sale of the foreclosed church, which Rocoff auctioned off for $300,000 in 2005.


  • [In a second alleged scam,] One senior citizen and Marine Park homeowner, Jean Kemp, received a phone call in October 2009 demanding that she pay off the mortgage on her property. She thought it was unusual, since Kemp and her husband paid off their mortgage in 1987. “My house has always been my house!” said Kemp, a former banker. After reporting the strange call to state Sen. Carl Kruger (D-Brooklyn), who was at the press conference, Kruger’s attorneys discovered that a new $225,000 mortgage had been filed on the house by suspects Jarret Haber, an attorney, and Victor Koltun, both now charged with grand larceny.

  • Another [alleged] scam, involving a property in Borough Park, was allegedly committed by former attorney Alexander Landy, who was only a member of the bar from 2003 to 2006 before resigning over charges that he stole client funds. Landy allegedly got a $500,000 mortgage from Washington Mutual to buy the property in question. However, he ran the title agency responsible for filing the deed and mortgage, but did neither, and later sold the building without paying Washington Mutual.

For more, see Rogue Attorneys Indicted in Mortgage Scandal.

See also, Kings County District Attorney press release: Kings County District Attorney Charles J. Hynes, New York State Senator Carl Kruger And United States Senator Charles E. Schumer Announce Charges Against 12 People, For Real Estate And Mortgage Fraud.

(1) Some refer to this maneuver as "stealing the surplus." The "surplus" refers to that portion of the proceeds from a foreclosure sale over and above the funds needed to pay off what is owed to the mortgage lender initaiting the legal action. The surplus legally belongs to the foreclosed property owner, subject to any claims of subordinate lienholders, and assuming that neither of the following has already occurred:

(2) At the risk of nauseating regular readers of this blog with this continual reminder, for those who have been screwed out of their money and property by reason of the dishonest conduct (as opposed to careless or incompetent conduct, which doesn't qualify) of their attorneys licensed throughout the U.S. and Canada, and seek to recover some or all of the stolen loot, see:

Maps available courtesy of The National Client Protection Organization, Inc.

Bay Area Man Accused Of Swiping Three Condos Thru Forged Deeds, Then Pocketing $2.2M From Subsequent Refinance

In San Francisco, California, the San Francisco Chronicle reports:
  • A 45-year-old San Francisco tennis instructor has been charged with fraudulently obtaining ownership of three high-rise condominiums and borrowing $2.2 million against them. Winston Lum appeared Friday in San Francisco Superior Court but did not enter a plea to 16 felony counts including charges of grand theft, identity theft and forgery, related to a scheme that prosecutors called "an act of hubris difficult to fathom." Lum, who runs a tennis business called Slam and Bang Tennis, was being held on $7.5 million bail.(1) He does not yet have an attorney.

  • Prosecutors say that starting in January 2009, Lum forged the true owner's signatures on grant deeds for three condominiums at One Rincon Hill, put them in his name and recorded them with the city. He then borrowed $2.2 million against the units, which are worth a total of $7.5 million, prosecutors said.

  • The owner of the properties, identified in a civil lawsuit as Shirley Hwang, had never even met Lum, let alone authorized the transactions, prosecutors said.(2) She sued Lum and his lender, De Witte Mortgage Investors Fund, last year. A trial is set for May. "The whole thing is terrible," said Thomas Mayhew, Hwang's attorney. "Their own forgery expert confirmed that the signature on the deed was not hers ... but they still won't release the mortgage" out of Lum's name.

Source: Tennis teacher accused of condo scam.

(1) Reportedly, Lum was free on $45,000 bail at the time of his arrest while awaiting trial for separate burglary and theft cases, court records show. Those cases are still pending.

(2) Authorities say Hwang became suspicious when she started getting mail for Lum at her home, according to the story. She went to police in March after the management told her she no longer owned the unit in which she lived, the story states.

Sloppy "Sewer Service" Leads To Another Void Foreclosure Judgment

A recent court ruling by the Indiana Court of Appeals voiding a default judgment in a foreclosure action serves as a reminder to all attorneys and process servers (as well as homeowners who are fighting off foreclosure) that, when initial attempts to personally serve the defendants with the lawsuit fails, a diligent search for them must be made and properly documented before an alternative manner of serving the lawsuit can be used. Further, when the alternative manner is used, failure to comply with all the statutory technicalities associated therewith will provide additional grounds to render the judgment void.

In this case, representatives for a foreclosing first mortgage holder used minimal efforts (an online "People" search on Yahoo) in a failed attempt to locate the whereabouts of a second mortgage holder (an individual) to effect personal service before utilizing the alternative manner.- publishing the summons in the local newspaper. The court also found that compliance with the required statutory technicalities when opting for this manner of service was lacking. Consequently, the appeals court ruled that the lower court did not acquire personal jurisdiction over the second mortgage holder, thereby rendering the default judgment void.

For the specific facts in the case and the court ruling applying Indiana law, see Yoder v. Colonial National Mortgage, No. 32A01-0908-CV-393 (Ind. Ct. of App., February 3, 2010). sewer service

Monday, February 08, 2010

Ft. Myers Lawyer Hoses Couple Seeking Loan Mod Help; Accused Of Going AWOL w/ Clients' Trust Acct Cash; State Bar Obtains Emergency License Suspension

In Fort Myers, Florida, The News Press reports:
  • Last summer, it became clear to Brett and Nancy Pezzella they could no longer make the $1,900 mortgage payments on their Lehigh Acres home. Nancy had lost her job. They just couldn't afford it. After getting a referral from another law firm, Brett contacted Fort Myers attorney Joseph Troiano.

  • Troiano said that for a $3,000 fee, which Pezzella paid over three months, he could get the bank to modify the Pezzellas' mortgage. He started working on their case last June but didn't make much progress. "It seemed like (Troiano was) always losing our paperwork," Brett Pezzella said. Then the situation got worse. Troiano wouldn't respond to calls or e-mails. When the Pezzellas decided to pay Troiano an unannounced visit last week, they found the office closed and an eviction notice tacked to the door.


  • On Jan. 19, the Supreme Court of Florida suspended Joseph Anthony Troiano from the practice of law until further notice. A week earlier, the Florida Bar filed a petition for emergency suspension stating the facts "establish clearly and convincingly that (Troiano) appears to be causing great public harm by the misappropriation of client trust funds."

  • The Florida Bar presented two affidavits in support of its petition. One was from a client in Texas who said a $10,000 check Troiano wrote him Dec. 31, 2009, bounced. The account was supposed to have about $450,000 in it left over from the $1.1 million the client had entrusted to Troiano for various real estate investments. The second affidavit was from Troiano's office manager, Judith Carson. According to Carson's affidavit, the bank had returned checks totaling $197,432 for a trust account with insufficient funds. And five checks totaling $6,222 from the firm's operating account also had bounced.(1)(2)

For more, see Fort Myers lawyer goes missing, and so does money in his care.

(1) In addition to the legal trouble with the Florida Bar, Citimortgage filed foreclosure lawsuits last summer against Troiano and other co-owners of three units a high-rise luxury condominium in downtown Fort Myers, the story states.

(2) The Florida Bar's Clients' Security Fund compensates people who have been victims of of misappropriation or embezzlement of cash or property by a Florida-licensed attorney. For those ripped off by dishonest attorneys in other states and Canada, see:

Maps available courtesy of The National Client Protection Organization, Inc.

Feds Continue Probe Into Now-Defunct Closing Agent Accused Of Illegally Pocketing Real Estate Escrow Cash Intended To Pay Off Existing Mortgages

In Luzerne County, Pennsylvania, The Times Leader reports:
  • The U.S. Secret Service is still actively investigating Priority Search Inc., a defunct Kingston title search company, for allegedly keeping money owed to property sellers, according to Secret Service spokesman Bob Slama. Slama could not comment on the ongoing investigation, but an insider said charges are expected to be filed soon.

  • Dozens of victims have contacted the Secret Service to report claims against Priority Search, a Secret Service representative said in March. The U.S. Attorney’s Office also is involved in the investigation. The investigation became public in November 2008 after property sellers publicly complained that the company kept money from buyers that was supposed to be used to pay off mortgages and other outstanding property bills.

For more, see Area firm still under fed probe (Now-defunct title search company in Kingston allegedly kept cash owed to property sellers, Secret Service says).

(1) As a result of the closing agent's failure to pay an existing mortgage, the home seller in one case reportedly found itself in the position of having to sue his innocent homebuyer in order to get the buyer's title insurance underwriter to cough up the cash pursuant to the terms of the buyer's title policy.

Nebraska Supreme Court Ruling A Reminder That Signed Contracts In Sale Leaseback, Foreclosure Rescue Deals May Not Be Binding

A 2005 court ruling by the Nebraska Supreme Court ordered an Omaha-based foreclosure operator to return home titles to a dozen victims who were duped into signing contract documents based upon assertions that the papers were merely refinancing documents, when in fact they constituted title transfers of their homes coupled with contemporaneous leasebacks of the premises in which the victims were granted rights to repurchase.

In issuing its ruling in favor of the homeowners, the court provided the following analysis that serves as a reminder that signed contracts are not always binding(1) [bold text is my emphasis, not in original]:

  • Defendants contend that these written contracts were binding, based upon the rule that “[o]ne who signs an instrument without reading it, when he can read and has the opportunity to do so, cannot avoid the effect of his signature merely because he was not informed of the contents of the instrument.” See Bock v. Bank of Bellevue, 230 Neb. 908, 916, 434 N.W.2d 310, 316 (1989). They further contend that because plaintiffs had the contract documents available for review, plaintiffs could not have reasonably relied on any verbal misrepresentation. See Schuelke v. Wilson, 250 Neb. 334, 549 N.W.2d 176 (1996).

  • The general rule that one who fails to read a contract cannot avoid the effect of signing it applies only in the absence of fraud. See, Mayer v. Howard, 220 Neb. 328, 370 N.W.2d 93 (1985); Day v. Kolar, 216 Neb. 47, 341 N.W.2d 598 (1983). Restated, the rule that one who signs a contract is bound by its terms does not apply where the controversy is between the parties and the execution of the instrument was induced by fraud. The doctrine that the carelessness or negligence of a party in signing a writing estops him from afterwards disputing the contents of such writing is not applicable in a suit thereon between the original parties thereto when the defense is that such writing, by reason of fraud, does not embrace the contract actually made. West v. Wegner, 172 Neb. 692, 694, 111 N.W.2d 449, 451 (1961).(2)

  • Because the district court specifically found that each of the plaintiffs was fraudulently induced to sign what were misrepresented as loan documents, the general rule binding a party to a signed contract does not apply.(3)

For the court ruling, Eicher v. Mid America Financial Investment Corp., 270 Neb. 370, 702 N.W.2d 792 (2005) (made available online by

(1) This case also serves as a reminder that attorneys taking these cases need not accept them on a purely pro bono basis, but rather, a contingecy fee basis. Part of this ruling affirmed an attorney fee awarded to the defrauded homeowners' lawyers (and payable by the foreclosure rescue operator) of over $375,000.

(2) The U.S. Supreme Court, in FTC v. Standard Education Society, 302 U.S. 112, 116 (1937), also provides this admonition:

  • There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious. The best element of business has long since decided that honesty should govern competitive enterprises, and that the rule of caveat emptor should not be relied upon to reward fraud and deception.

(3) Similarly, in Moore v. Cycon Enterprises, Inc., (Case No. 1:04-CV-800), 2006 U.S. Dist. LEXIS 57452 (W.D. Mi. 2006), a Federal judge in Michigan made these observations when a foreclosure rescue operator asserted that the homeowner/couple should be bound by the terms of the contract they signed [bold text is my emphasis, not in original]:

  • The heart of this case is the determination of whether the transaction between the Moores and Cycon was a true sale and leaseback or whether it was in reality a loan. Cycon has offered a number of arguments supporting its position that the transaction was clearly an absolute sale and a leaseback, including: (1) the unambiguous terms of the closing documents establish that the Moores intended to sell their property to Cycon and lease it back from Cycon; (2) the Moores failed to read the closing documents and are therefore bound by the terms of those documents; (3) the parol evidence rule precludes the consideration of evidence of prior discussions between the Moores and Peltz as well as evidence of the Moores’ intentions regarding the transaction; and (4) the integration clause in the lease precludes the Moores from introducing evidence of their intentions regarding the lease.

  • While Cycon’s arguments would no doubt be fine, and certainly persuasive, grounds for summary judgment in a typical contract case, the Moores have invoked Michigan’s “equitable mortgage” doctrine in this case, as to which such arguments are not necessarily applicable. “The power of a court of equity to decree an equitable mortgage under proper circumstances and to construe an instrument in the form of an absolute conveyance as security for the payment of a debt, or the performance of some other obligation, is well established.” Judd v. Carnegie, 324 Mich. 583, 587, 37 N.W.2d 558, 589 (1949). See also Grant v. Van Reken, 71 Mich. App. 121, 125, 246 N.W.2d 348, 350 (1976) (“It is well settled that a court of equity can declare a deed absolute on its face to be a mortgage.”).

  • In Wilcox v. Moore, 354 Mich. 499, 93 N.W.2d 288 (1958), the Michigan Supreme Court, in discussing the doctrine, observed: Suffice to say that its purpose is to protect the necessitous borrower from extortion. In the accomplishment of this purpose a court must look squarely at the real nature of the transaction, thus avoiding, so far as lies within its power, the betrayal of justice by the cloak of words, the contrivances of form, or the paper tigers of the crafty. We are interested not in form or color but in nature and substance. Id. at 504, 93 N.W.2d at 291.

  • Because a court is concerned with the true intention of the parties based upon the surrounding circumstances in considering whether a transaction is an equitable mortgage, traditional legal principles, such as the parol evidence rule, do not apply. See Ferd L. Alpert Indus., Inc. v. Oakland Metal Stamping Co., 379 Mich. 272, 276, 150 N.W.2d 765, 767 (1967) (“One of the many exceptions to the parol evidence rule is that parol evidence may be admitted to prove that a written conveyance absolute in its terms was intended by the parties to operate only as a mortgage.”).

Bankruptcy Judge Disregards Terms In Sale Leaseback Docs In Home Sale; Recharacterized Equity Stripping F'closure Rescue Scam As An Equitable Mortgage

In a recent court ruling in favor of a homeowner/couple who were awarded a total of at least $690,000 for multiple violations of Federal and state law after being screwed over by a foreclosure rescue operator in a sale leaseback, equity stripping scam, a New Jersey bankruptcy court found that the transaction among the laws violated were the Federal Truth In Lending Act ("TILA") as amended by the Home Ownership and Equity Protection Act ("HOEPA") as well as the New Jersey Home Ownership Security Act of 2002 ("HOSA"), all of which regulate the origination of home loans.

In order for TILA, HOEPA or HOSA to apply, the homeowners first had to establish that the sale leaseback transaction constituted consumer credit. They attempted to do so by setting out to recharacterize the transaction as an equitable mortgage.

For the court's considerations in applying the law in recharacterizing the transaction as an equitable mortgage (which ultimately resulted in a monetary award to the homeowners for violations of TILA, HOEPA and HOSA that totaled at least $293,836.17), see New Jersey Sale Leaseback Of Home In Foreclosure Recharacterized As An Equitable Mortgage.

New York AG To Sue Landlord For Alleged Predatory Practices Intended To Drive Long-Term, Rent-Regulated Tenants From Their Homes

From the Office of the New York Attorney General:
  • Attorney General Andrew M. Cuomo [] announced his intent to sue Vantage Properties (“Vantage”), a major New York City landlord, to stop it from harassing tenants in rent-regulated apartments and to obtain monetary damages for tenants who have been victimized. The Attorney General has sent Vantage a five day notice letter, as required by statute, notifying the company of his intent to commence litigation against them.

  • Since March 2006, Vantage has purchased more than 125 buildings containing over 9,500 apartments – almost all of which are rent-regulated – throughout Queens, Harlem, and Upper Manhattan. The Attorney General’s legal action alleges that Vantage is taking action to force long-term, rent-regulated tenants to move out of their homes, and imposing significant rent increases on new tenants in order to increase profits. Vantage aggressively pressures long-term tenants by serving baseless legal notices and commencing frivolous Housing Court eviction proceedings.(1)(2)

For the New York AG press release, see Attorney General Cuomo Commences Legal Action Against Major New York City Landlord 'Vantage Properties' To Stop Tenant Harrassment (Cuomo Seeks Damages for Victims and Protection for Tenants in Over 9,500 Apartments).

Go here for the Five Day Letter notifying Vantage of the AG's intent to sue.

(1) According to the state AG press release, after purchasing a building, Vantage tries to evict some tenants by falsely claiming that they do not primarily live in their apartments or that they have failed to pay rent. Vantage’s actions are often based on information that is incorrect or information that Vantage should know is false. In some cases, Vantage refuses to cash rent payments from tenants, and then begins Housing Court eviction proceedings based on nonpayment of rent. Vantage’s actual business plans refer to their strategy of removing tenants from rent-regulated apartments as the company’s “Golub program.”

(2) Benjamin Dulchin, Executive Director of the Association of Neighborhood Housing Development, said, “Tenants and affordable housing across New York City are threatened as private-equity backed developers are purchasing a significant percentage of affordable, rent-regulated apartments. The Wall Street type level of competition and profit seeking of private equity financing is causing an epidemic of tenant harassment. ..."

Sunday, February 07, 2010

3Ls To Staff University Of Wisconsin-Madison Law School Foreclosure Mediation Clinic

The University of Wisconsin-Madison School of Law announces:
  • University of Wisconsin Law School students will help Dane County homeowners facing foreclosure take their cases through a mediation process with their lenders. Beginning in February, Dane County Circuit Court will require lenders to tell homeowners they have an option to mediate their foreclosure cases and notify them of available resources, including a clinic staffed by UW Law School students. [...] The mediation clinic will be staffed by three third-year UW Madison law students who will help homeowners understand their options in the foreclosure process while gaining experience working with clients in a real-world legal setting.

For more, see Law students to help with foreclosure mediation.

Ex-Mortgage Company Associate Cops Plea To Pilfering Customer Info From Loan Applications To Obtain Credit Cards & Go On Spending Spree

In Minneapolis, Minnesota, the Star Tribune reports:
  • Jason Alan Tauer worked for Ameriquest Mortgage Company as a mortgage associate for only six weeks. Turned out to be a pretty fruitful month and a half for Tauer -- and a pretty costly one to nearly 100 people and several financial institutions. Using personal information he lifted from the mortgage applications of nearly 100 people -- as well as mail and even items taken from gym lockers of a couple of hundred more -- Tauer eventually stole more than $150,000 from at least eight banks. [Last week], the 32-year-old Robbinsdale man pleaded guilty in federal court to bank fraud, access device fraud and aggravated identify theft.

For more, see Stolen mortgage info led to spree (Ex-Ameriquest worker took more than $150,000).

Banker Dodges Hard Time For Stealing $320K From Employer, Using Customer Info To Score Add'l $900K; Cops Plea After Failed Bridge-Jumping Suicide Try

In Lancaster County, Pennsylvania, Lancaster New Era reports:
  • Not many people would describe George L. Clayton Jr.'s experience as "a miracle and a blessing." After stealing more than $300,000 from the bank where he worked, Clayton realized the error of his ways. He forged loans to repay the money, making matters worse. Consumed with guilt, Clayton jumped from the Columbia-Wrightsville Bridge into the Susquehanna River. But he survived the jump, was rescued and then was arrested as he confessed his crimes.(1)


  • The incidents happened between January 2006 and June 2008 while Clayton was employed at Union National Bank in Manheim Township. After stealing about $320,000, Clayton filled out loan applications using stolen customer information to obtain about $900,000. He then opened secret checking accounts, depositing and withdrawing the stolen funds, according to court documents, to try to cover up the theft.

For more, see Banker gets house arrest for stealing (Took $300,000 from employer, then attempted suicide).

(1) Reportedly, Clayton asked the judge for mercy, telling him he intends to go forward from the experience and work hard to "make this life purposeful." Lancaster County Judge Jeffery Wright sentenced Clayton to five years in the Intermediate Punishment Program, which includes one year house arrest, followed by probation and 400 hours of community service. Rather than have him sit in prison at taxpayers' expense, Wright said he wanted Clayton "to work, and work long and hard," continuing to pay taxes as he repays his debt. "I hope tales of your redemption, may outlive your tale of transgressions," Wright told Clayton.

Ex-Loan Officer Cops Plea To Using Fraudulent Mortgage Application To Obtain $495K While Unloading Home On Unwitting Co-Worker

In Newark, New Jersey, The Record reports:
  • A former loan officer at a Hackensack real estate firm is facing prison time after admitting she devised a scheme to fraudulently obtain $495,000 in mortgage loans in the name of an unsuspecting co-worker, authorities said. [...] Between August 2006 and May 2008, [Monica] Cardona arranged to obtain loans from IndyMac Bank by submitting false mortgage loan applications and supporting documents in the name of an office cleaning woman. The woman had provided her birth date and social security number after being convinced that buying property was in her interest, but was not aware of the scheme, authorities said.

  • The bogus documents included inflated income and asset statements and false employment verifications to induce the lender to approve primary and secondary loans of $396,000 and $99,000, respectively, for the purchase a home in Westwood that Cardona owned.

For the story, see Former loan officer at Hackensack real estate firm pleads guilty in mortgage fraud scheme.

Indoor Pot Farm Industry Thrives In Las Vegas As International Groups Move In, Taking Advantage Of Foreclosure Glut, Cheap Rents

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:
  • The explosion in Las Vegas marijuana grow houses prompted Clark County Sheriff Doug Gillespie to create a special unit known as Team Six. Their job is to target the indoor pot farms. What they've found is a greater and greater concentration in the hands of international groups who have moved in to take advantage of foreclosed homes and cheaper rents.


  • In 2009, Las Vegas narcotics detectives busted 108 grow houses, some of them operating on a massive scale. A former auto repair shop was converted into the largest weed warehouse ever seen locally, with 2,000 plants worth an estimated $7 million.

For more, see I-Team: Who is Behind the Explosion in Las Vegas Pot Houses.