Saturday, August 04, 2012

Brothers File Lawuit To Stop Out-Of-Control NYC Co-Op Board From Booting Them From Apartment Their Now-Deceased Parents Lived In For 50+ Years

In New York City, the New York Post reports:
  • Don’t let the door hit you on the way out. An apparently heartless Greenwich Village co-op board is ousting the next generation of a family that has lived in its Fifth Avenue building for 57 years without an explanation, stunned residents say.

    Michael Del Terzo, who had hoped to raise his own son in his childhood home, and his brother now have just six months to vacate the building.

    I don’t see this as an apartment. It’s just like anybody else who wants to hang onto their home,” a teary Michael Del Terzo told The Post. “I do not want this as a weekend getaway. I did not view this as, ‘Let’s try to turn a profit.’ I want this as my home.”

    Del Terzo’s parents, Robert and Helen, first moved into 33 Fifth Ave. back in 1955, when Robert, a doctor and World War II veteran, opened a medical office on the first floor. Robert and Helen, a nurse, ran the practice for 30 years. At first, the building superintendent let them convert part of the space into a small studio apartment, but the couple quickly moved up to a fifth-floor apartment in the building.

    They had two sons, and eventually expanded, renting the apartment next door in 1965. When the building went co-op in 1985, Robert Del Terzo closed his practice and happily bought his family’s home. “My parents, at age 70 and 71, they thought this would give us all more stability,” Del Terzo said.

    The doctor died in 1988, and Helen stayed on, inheriting the co-op shares and living the next 22 years in the family’s combined apartments until she died there in November 2010, a day after her 96th birthday, with her family by her side.

    While one son currently lives in the home with his family, the brothers agreed to transfer the co-op shares to Michael, a successful Pennsylvania urologist who plans on moving home to New York with his wife and 10-year-old boy.

    The co-op requires any transfer of shares to get board approval. Expecting no trouble, Michael and his brother Robert submitted an application — and were stunned when they were rejected. “We had absolutely no inkling whatsoever” that the board would turn them down, Del Terzo said. “I just don’t get it.”

    The decision is just plain mean, said Del Terzo’s lawyer, who has filed suit against the board in Manhattan Supreme Court. “This is a highly unreasonable, unfair thing, to lock these people out after 57 years. Who would think that’s the right thing to do?” attorney Jack Malley said. “There should be a twinge in their stomachs. It was a heartless decision.”

    Co-op board president Nancy Cohen could not be reached for comment.

Disbarred Attorney Found Guilty Of $186K+ Ripoff From Elderly Clients

From the Office of the Massachusetts Attorney General:
  • A former Greenfield attorney has been convicted in connection with stealing more than $186,000 from an elderly couple he represented in a personal injury settlement case, Attorney General Martha Coakley’s Office announced [].

    After a three day trial, a Franklin Superior Court jury found defendant Edward Pepyne, Jr., age 59, of South Deerfield, guilty of the charge of Larceny over $250 of a Person Over Sixty Years of Age. Pepyne will be sentenced by Superior Court Judge John A. Agostini at a hearing on June 29.
  • In 2006, authorities believe Pepyne targeted an elderly husband and wife that had been in a serious automobile accident and offered to represent them in their personal injury claim. Investigators discovered that Pepyne and the elderly husband had known each other prior to the accident, and Pepyne used this relationship to offer his services as an attorney.

    Pepyne entered into an agreement that allowed him to keep one third of the funds he recovered for his clients in the personal injury claim. Pepyne settled his clients’ case prior to litigation and he eventually deposited the settlement funds into his business account he had at a local bank.

    Investigation revealed that instead of giving his clients the settlement proceeds they were owed, Pepyne lied to the couple and told them that he had to keep more than one third of the money he recovered on their behalf to pay for outstanding medical expenses.

    Investigators discovered that in reality no outstanding medical expenses existed. As a result of his scheme, Pepyne withheld more than $186,000 from his elderly clients and used those stolen funds for his personal use. Pepyne was later disbarred from practicing law in February 2010 after his activities were reported to the Office of Bar Counsel.(1)

(1) The Massachusetts Clients' Security Board of the Supreme Judicial Court manages and distributes monies in their recovery fund to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the Massachusetts bar acting as an attorney or a fiduciary. Go here for Case Summaries for Claims Decided by the Massachusetts Clients' Security Board of the Supreme Judicial Court (ie. results of claims filed by allegedly screwed over clients).

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

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

Suit: Minneapolis Couple Not 'In Good Hands' With Allstate; Say Insurer Cut $68K Check To Cover $204K Tornado Wreckage; Home Unlivable, In Foreclosure

In Minneapolis, Minnesota, KARE-TV Channel 11 reports:
  • When Jenae and Travis Hutchins got married nine years ago, they bought their first home, a two story house on Russell Avenue North ready for a young family. "We wanted something that was move right in and not have any issues," Travis said. "And that was this place for us."

    Until last summer's tornado, with winds of up to 130 miles an hour the Hutchins say damaged their home. "The house acted like a bellows, essentially," said Travis. "It came in and sucked out and that's why we have the floor ripples and the separation of this wall."

    But when the couple called their insurance company, Allstate, to claim $204,000 for repairs, they instead got $68,000, and now they're suing Allstate for the difference.

    "It couldn't be more of a Goliath vs. David situation," said George Antrim, the attorney representing Travis and Jenae Hutchins.
  • Travis and Jenae say they're frustrated they've waited more than a year without a settlement while they live in a rental with their home unrepaired, unlivable, and now in foreclosure.

Another Casualty Insurer Fails In Clutch; Danger From Developing Sinkhole Drives Georgia Family From Home After Getting Dropped From Coverage

In Albany, Georgia, WFXL-TV Channel 31 reports:
  • A woman whose home began sinking and falling apart while she was still living in it is fighting to have the foreclosure expunged from her record.

    When Tracy Singletary bought into the dream of home ownership in 2002, she couldn't imagine that 10 years later she'd be condemned to only the outside looking at her shattered dream. Year after year a small hairline crack in the foundation of the Savannah Lane home widened as Singletary began to notice more cracks popping up inside.

    When I was in the home, the interior of home there had cracks and breaks in the middle of the home,” says Tracy Singletary, former homeowner.

    After trying to convince insurance companies that the home was falling apart, her coverage was dropped. Singletary says at that point she had to leave because the safety of her family comes first.

Texas Homeowner's Lawsuit: 'My House Caught Fire & Casualty Insurer Is Stiffing Me On My Damage Claim!'

In Jefferson County, Texas, The Southeast Texas Record reports:
  • A Jefferson County man claims his insurance company refuses to compensate him for damages his property sustained in a fire.

    Michael Meeks filed a lawsuit June 15 in Jefferson County District Court against Texas Farmers Insurance Co. In his complaint, Meeks alleges he owned an insurance policy issued by Texas Farmers when his home at 3831 Fourth St. in Port Arthur caught on fire on June 18, 2010. The fire damaged the interior and exterior of the property, and Meeks filed a claim for damages, according to the complaint.

    However, Farmers denied Meeks's claim, saying it was not covered under the policy, the suit states. Meeks insists the fire was a covered occurrence.

Casualty Insurer Drags Feet Addressing Damage Claim As Frightened Homeowners Witness Mother Nature Swallow Up Family Home

In Bartow, Florida, ABC Action News reports:
  • Almost on a daily basis, Heather and James Williams find a new crack or a new gaping hole in their house. For the last eight months, the family has lived in a home that appears to be sitting on a sinkhole. As the problem worsens, they’ve seen pieces of wall and ceiling begin to crumble to the ground. [...] The cracks have gotten so bad that in some parts of the house, you can see clear into the backyard.

    As frustrating as the problem is, the bigger battle is now with their insurance. The Williams’ filed a claim back in December, but they say the company kept dragging their feet.

    After getting so fed up, they hired attorney, Brad Stewart from Frost Van den Boom & Smith in Bartow. “By the time they came to me, there had been no attempts by the insurance company to determine whether the house was being damaged by a sinkhole,” he said.
  • Sadly I see this kind of thing happen a lot,” he said. Stewart admits he’s biased, but his advice is to hire an attorney because he’s seen how companies will purposely try to overwhelm customers.

    The Williams’ are waiting to see what will happen with their claim. They don’t have the money to move out. “Personally, I don’t want to stay here,” said Heather Williams. “I’m scared.”
For the story, see Apparent sinkhole is slowly swallowing a Bartow home while owners battle insurance company (Homeowners discover new crack in home nearly daily).

Fla. Casualty Insurer Begins Yanking Homeowner Discounts For Hurricane Protections; Some Suspect Effort A Pretext To Jack Up Rates & Dodge 10% Cap

The South Florida Sun Sentinel reports:
  • Citizens Property Insurance's push to inspect homes and revoke discounts for hurricane-resistant features has drawn fire and questions.

    Premiums went up for nearly three-fourths of the 225,502 homeowners who have had the inspections. About 7 percent had decreases, and there was no change for 18 percent. The average inspection resulted in a $598 increase.

    State-backed Citizens is the largest property insurer in Florida with 1.4 million policies.

    We answer common questions about the inspections.

    Why is Citizens doing the inspections?

    Citizens found many forms used to verify discounts weren't filled out correctly and it appeared some customers were getting discounts they didn't deserve. Citizens plans to conduct about 138,000 more residential inspections this year.

    Some people think Citizens is using the inspections as a back-door way to raise premiums more than 10 percent a year – a cap set by state law. Citizens estimates premiums increased by $137 million based on inspections done so far. The insurer has spent $35 million on the inspections.
For more, see Citizens revokes hurricane-proofing discounts (Inspections draw fire and questions).

Friday, August 03, 2012

C. Florida City Commissioner Bagged By Taxing Authorities For Allegedly Claiming Double Homestead Property Tax Exemption; Forced To Cough Up $3K+

In Winter Springs, Florida, the Seminole Chronicle reports:
  • Although reports show Winter Springs Commissioner Avery Smith is facing penalties for claiming two homestead exemptions in Seminole County, her position in city government remains much safer than her checkbook.
  • Since Smith is a valid resident of Winter Springs and an elected commissioner, there must be a violation of the Winter Springs charter, as stated in Section 4.08b, performed in order to consider removing her from office, he said.

    However, she is still being ordered to pay $3,106.47 in fees and back taxes to the county, which she did on July 19, Seminole County Property Appraiser David Johnson said.

    The trouble first began on June 25 after Smith entered the public eye, filling the empty seat left by former Commissioner Gary Bonner.

    After accepting her position on the Board of Commissions, Smith signed an affidavit stating that she had lived in a Winter Springs residence for five and a half years, Lacey said. During that time, reports show a permanent residence in Casselberry was registered under Smith's name.

    A separate residence in Winter Springs was registered under her husband's name, Stuart Knoll, at the same time, and both had applied for a homestead tax exemption on their residences, Johnson said.

    After this discovery, a revised affidavit stating that Smith resided in Winter Springs for more than a year was submitted to the Board of Commissions, Lacey said.

    "State law allows Florida homeowners to claim up to a $50,000 Homestead Exemption on their primary residence," according to the Seminole County Property Appraiser Office's website.

    From the time Smith and Knoll were married, they became a single family unit, Johnson said. According to the website, a single family unit cannot apply for two homestead exemptions on two different permanent residences.(1)

    "Homestead exemption fraud is a serious case, and we take it very seriously," Johnson said. "The situation has kind of been resolved, but this has been an extremely rare situation."

    After Smith stated in the affidavit she signed that she lived in Winter Springs for the past five years, the Property Appraiser's Office found it inconsistent with its records and launched an investigation, he said.
(1) In Florida (and contrary to popular belief, particularly among uninformed government bureaucrats charged with the duty of setting tax valuations on homes and collecting real estate taxes thereon), state law and prior opinions issued by the state Attorney General appear to make pretty clear that, provided they otherwise qualify, there is nothing necessarily illegal or otherwise improper about a husband and a wife to each claim a homestead exemption on separate residences in certain circumstances ('double homesteads') (while formal opinions issued by the Florida Attorney General are not binding on any court, the Florida case law cited therein is certainly binding). See:
  • Florida Administrative Code Rule 12D-7.007(7):

    "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."

    Florida Attorney General Opinion 75 Op. Att'y Gen. 146 (1975), Husband And Wife Maintaining Separate Residences May Both Qualify For Homestead Exemption;

    Florida Attorney General Opinion 05 Op. Att'y Gen. 60 (2005), Homestead Exemption -- separate residences and homestead exemption. Art. VII, s. 6, Fla. Const.

    Wells v. Haldeos, Case No. 2D09-4250 (Fla. App. 2d DCA 2010).

Empty County Coffers, Fear Of Job/Program Cuts By Gov't Interest Groups Drive Push To Boost Law Enforcement Targeting Fraudulent Homestead Claims

In Miami, Florida, The Miami Herald reports:
  • For years — decades, really — Miami-Dade homeowners have been ducking property taxes by illegally claiming homestead exemptions, usually with impunity. [...] But these days, gambling on getting caught is a fool’s game.

    Homestead-exemption deceit has erupted into a red-hot issue in Miami-Dade and a crackdown is under way with all indications that it will only get tougher for tax cheats to elude detection.

    The price of getting caught: Up to 10 years of unpaid back taxes, plus a 50 percent penalty and 15 percent annual interest. The biggest tab this year: $403,329.70 on [one] property.

    Since January, six detectives from the Economic Crimes Bureau of the Miami-Dade Police Department have been working to bolster the muscle of 15 investigators at the Property Appraiser’s Office in nailing violators. That is up from two police detectives deployed in 2011 to tackle a backlog of some 3,500 complaints (now about 2,166) which typically come from tips from neighbors, estranged spouses and others.

    This May, Property Appraiser Pedro J. Garcia unveiled a new contract for software and services to flag suspicious claims among the 440,000 homestead properties.
    For July alone, the property appraiser, armed with smarter tools, filed $11 million in homestead liens. That compares with $8 million filed for all of 2011.

    Fueling the intensified scrutiny: money, of course.
    Starved for revenue, interest groups at the county, the school district and cities are clamoring for tougher enforcement of homestead- exemption rules in hope of bringing in revenue to help save public jobs and programs threatened by the budget ax.

    At the same time, the new use of data-mining tools to cross-check property records against an array of data from deaths to marriages to voter registrations to auto tags to water bills holds the promise of weeding out suspect exemptions in bulk, generating more and better leads than the hotlines and anonymous tips that have spawned many cases in the past.
  • Broward County Property Appraiser Lori Parrish, who has long advocated getting tough on homestead cheats, recently reeled in a [] whale for double homestead. In June, Michael and Susan Hooley were hit with a $325,459.16 in back assessments on their waterfront home at 1352 Seminole Dr. in Fort Lauderdale.

    The tax tab, covering 2007 through 2010, came after Ron Cacciatore, director of investigations for the property appraiser’s office, confirmed that Michael had purchased a second home in the Florida Keys and filed for homestead on it.

    Records show Michael was registered to vote in Monroe County. Still, married couples are only allowed a single homestead between them.(1)
For more, see Property-tax cheats facing crackdown (Illegal claims are costing Miami-Dade millions of dollars. The county is putting the squeeze on scammers).
(1) In Florida (and contrary to popular belief, particularly among uninformed government bureaucrats charged with the duty of setting tax valuations on homes and collecting real estate taxes thereon), state law and prior opinions issued by the state Attorney General appear to make pretty clear that, provided they otherwise qualify, there is nothing necessarily illegal or otherwise improper about a husband and a wife to each claim a homestead exemption on separate residences in certain circumstances ('double homesteads') (while formal opinions issued by the Florida Attorney General are not binding on any court, the Florida case law cited therein is certainly binding). See:
  • Florida Administrative Code Rule 12D-7.007(7):

    "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so. If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution. The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."

    Florida Attorney General Opinion 75 Op. Att'y Gen. 146 (1975), Husband And Wife Maintaining Separate Residences May Both Qualify For Homestead Exemption;

    Florida Attorney General Opinion 05 Op. Att'y Gen. 60 (2005), Homestead Exemption -- separate residences and homestead exemption. Art. VII, s. 6, Fla. Const.

    Wells v. Haldeos, Case No. 2D09-4250 (Fla. App. 2d DCA 2010).

Notary Cops Plea For Role In I.D. Theft Scam In Connection With Fraudulently Obtaining Several Mortgage Loans In Name Of Unsuspecting Victim

From the Office of the Ventura County, California District Attorney:
  • District Attorney Gregory D. Totten announced [] that on June 14, 2012, Ventura resident Elizabeth Ortiz (DOB 6/28/1974) pled guilty to a felony count of fraud related to a deed of trust. This case was investigated by the District Attorney's Real Estate Fraud Unit and the Oxnard Police Department.

    Ortiz, along with an accomplice, impersonated the victim and used the victim's identity to secure several residential real estate loans.

    Ortiz, who is also a notary public, placed her notary seal on deeds of trust that were fraudulently obtained. Her crimes were discovered through a credit history check that revealed the presence of several mortgage loans that were attributed to the unsuspecting victim.

Oakland-Area DA Issues Advisory Against Out-Of-State Operators Running Grant Deed Scams That Use Mailings To Solicit Unwitting Homeowners

In Oakland, California, the Office of the Alameda County District Attorney recently announced:
  • The Real Estate Fraud Unit of the Alameda County District Attorney’s Office is issuing a consumer advisory to Bay Area residents about recent mailings from private companies offering to obtain a copy of grant deeds or property title records for a high fee.

    The solicitations offer to obtain a copy of the grant deed for a high fee, which can be up to 20 times more than the actual cost charged by the County Recorder. In Alameda County, a copy of a grant deed can be obtained for as low as $3.50.

    Alameda County District Attorney Nancy O’Malley noted, “This mailer was sent from outside of California, and attempts to charge high fees for a relatively simple process. The Real Estate Fraud Unit of the Alameda County DA’s Office works to ensure the integrity and lawfulness of all real estate solicitations made to homeowners in our community.”

    Consumers are urged to shop wisely before engaging in any real estate related transactions. Homeowners interested in obtaining a copy of the grant deed to their property can go to the Alameda County Recorder’s website to see if they can save money by ordering their own grant deeds at:

    Go here for the Alameda County Recorder’s Office.

Thursday, August 02, 2012

Feds Squeeze City Of Santa Rosa, HOA For $50K+ To Settle Housing Discrimination Suit Over Alleged Improper Exemption Claim As Age-Restricted Community

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] announced an agreement with a California municipality and a homeowners’ association to resolve allegations of discrimination on the basis of familial status in violation of the Fair Housing Act. The settlement, in the form of a consent order, must be approved by the U.S. District Court for the Northern District of California.

    The department’s lawsuit, which was filed on Nov. 21, 2011, alleged that the city of Santa Rosa, Calif., and La Esplanada Unit 1 Owners’ Association, a homeowners’ association, unlawfully sought to restrict residency at a housing development to seniors aged 55 and older.

    While the law allows an exemption for senior housing, the suit alleged that neither the city nor the homeowners’ association took the steps, such as routine age-verification, necessary to qualify for an exemption to the Fair Housing Act.
  • The homeowners’ association [] is prohibited from excluding families with children from the development unless it affirmatively elects to become an age-restricted community for persons 55 years of age or older and conforms to the requirements of the Fair Housing Act.

    The Fair Housing Act's requirements include ensuring that at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older and ensuring there are proper age verification procedures in place.

    In addition, the homeowners’ association will provide compensatory damages to the aggrieved persons in an amount of $44,000 by providing a set-off to amounts it has claimed it is owed by the aggrieved persons.

    The consent order also requires the homeowners’ association’s officers, agents and employees, as well as city employees and agents with responsibilities related to zoning and land use to receive fair housing training, and requires the homeowners’ association and the city to pay $5,000 each to the United States as a civil penalty.

F'closing Bank Accused Of Booting Church Prematurely, Changes Locks w/o Title; Lack Of Sprinklers Leads To Loss Of School Operator's License, Default

In Sunrise, Florida, the South Florida Sun Sentinel reports:
  • The clock is ticking for 300 parishioners at the United Pentecostal Church in Sunrise. With the church in foreclosure limbo, Pastor G. Oliver Barnes says a banker arrived Tuesday morning without warning to change the locks. TD Bank has given Barnes and his flock two weeks to clear out, the pastor said.

    "We need more time – at least a few months," Barnes said. "We are at our wit's end." It turns out the bankers failed to change one of the locks, so Barnes plans to hold Sunday services at the church, perhaps for the last time.

    The bank won the church at a foreclosure sale on July 18, but had not yet taken title to the property when it changed the locks, Barnes says. The bank failed to give Barnes the required 10 days to object to the sale.

    "That's a no-no," said real estate attorney Gary Singer, who is not representing the church. "You need to follow the [legal] steps" in the foreclosure process.

    Edward Cochran, vice president of TD Bank in Boca Raton, referred questions to attorney Jon Swergold. Swergold could not be reached for comment Friday despite phone calls and emails.

    Barnes' attorney has requested an emergency hearing, but one has not yet been granted by the court.
  • The church paid $5.7 million for the property, a former temple at 7100 W. Oakland Park Blvd.

    Barnes said the church fell on hard times in 2009 after losing its charter school. The school brought in $20,000 a month – helping the church makes its $34,500 mortgage payment, Barnes said. The school lost its license after being cited by Sunrise officials for operating without fire sprinklers.

    With the church struggling to make its payments, Barnes said he asked the bank to let the church refinance its loan. The request was denied, he said.

Accused Vacant Home Hijacker Pinched For Allegedly Renting Homes She Didn't Own; Servicemember/Homeowner Away In Iraq On Active Duty Among Victims

In Yakima, Washington, KIMA-TV Channel 29 reports:
  • KIMA learned a suspected bogus landlord is now behind bars. Yakima police told us they've been on her tail for months. Detectives said she ripped people off by renting homes she didn't own. Action News discovered why it took the city so long to catch her and how you can keep it from happening to you.

    It's normally a given. When you meet with a landlord you assume the person actually owns the property. But that hasn't always been the case. Jade Chester's neighbor on Lincoln Avenue is a service member who was fighting in Iraq. Chester became concerned when a woman rented out the solider's property.

    "She rented out this back house," said Chester. Problem is police said Lashawne Rojas never had permission to rent out the Lincoln Avenue home. That home isn't the only place where she's done this city codes has a list of other homes and apartments here in Yakima.

    "She broke into five buildings that were vacant, changed the locks, came here opened up accounts and rented them out to people and collected rent," said code enforcement manager, Joe Caruso.

    City codes and police have been trying to find Rojas since March. They tell Action News Rojas went so far as to put water bills and at least one house deed in her name, using false documents.

    "I called YPD numerous times about her, but the problem was, we couldn't get a hold of the home owner," said Chester. The difficulty of tracking down that service member overseas allowed this issue to persist.

    It wasn't until Chester’s neighbor returned that Rojas was finally locked up forgery charges. It's likely this bogus landlord wasn't the only one taking money from tenants around town.

    "This is what's happening to our home owners here in Yakima,” said Chester. “It could happen to anybody it's an epidemic problem."
For the story, see Bogus landlord behind bars.

Homeowner's French Drain Installation To Ease Flooding Problem Leads To $589K In Invalid HOA Liens, Costing Her $50K+ In Legal Bills To Stop F'closure

In Mint Hill, North Carolina, WCNC-TV Channel 36 reports:
  • For Rosanna Wilfong, it started a decade ago. Her front yard was flooding. A pool of rainwater swelled until it was knee-deep. So she hired a company to install a French drain -- a kind of underground trench with a pipe to channel the water away from the foundation of her home.

    She said she spent $6,500 to install the drainage system. Her homeowners’ association forced her to spend another $6,500 tearing it out.

    It was only the beginning of a years-long legal battle with her HOA that ate up more than $50,000 in legal bills and almost cost her her home.
  • Simply removing the French drain didn’t satisfy the HOA board in Mint Hill’s St. Ives neighborhood. Wilfong, a grandmother, has documents to show the HOA asked her to grade the land. She said grading the front of the property would have led to the same flooding she was trying to correct.

    She said the conflict ultimately was not about flooding and grading and French drains. “It was about the money,” she said. “They wanted their money.”

    She’s referring to fines, which racked up at the rate of $400 per day, according to court documents. “They got to be $589,000,” Ms. Wilfong said. “The house wasn’t worth that much….I knew I was going to lose my house. We were all packed up.”

    Ms. Wilfong hired one attorney, then another, then a third. When her lawyer got documents from the HOA, she made a startling discovery. The HOA’s architecture review committee had approved the French drain. “I felt betrayed by the homeowners association,” she said.

    In a ruling earlier this year, Judge Richard Boner waived all the fines and she got to keep her home. But she still had to pay for her attorneys.

    This is a cash cow for the lawyers and the management companies,” said Chris Zbodula, who served on the St. Ives HOA board before having his own dispute. “They’re making an absolute killing on this.”

    The St. Ives HOA board kicked Zbodula off the board for missing meetings. He says the real reason is that he challenged the president for suing neighbors like Ms. Wilfong. “The only choice a homeowner has is to dig deep in their pocket with tens or even hundreds of thousands of dollars for what could be bogus charges,” Zbodula said.

Wednesday, August 01, 2012

Federal Court Slams Brakes On Dominican Republic-Based Upfront Fee Loan Mod Scam Pretending To Be In Chicago; Racket Targeted Spanish-Speaking Victims

From the Federal Trade Commission (Washington, D.C.):
  • At the request of the Federal Trade Commission, a U.S. district court has halted a nationwide scam operating from the Dominican Republic – but pretending to be in Chicago – that allegedly peddled fake mortgage assistance relief to financially distressed Spanish-speaking homeowners in the United States.

    The defendants promised to dramatically lower homeowners’ monthly mortgage payments in exchange for a hefty upfront fee, and collected more than $2 million in fees during the last three years, but failed to provide homeowners with the promised services, according to the FTC complaint.

    Speaking in Spanish and targeting homeowners behind in their payments or facing foreclosure, the telemarketers would empathize about the tough economy and claim to provide information about federal mortgage assistance programs, according to the complaint.

    In lengthy sales calls, the telemarketers would lie to create a sense of trust, falsely claiming to be affiliated with or approved by the consumers’ lenders or the government, and “making sure to mention President Obama or the Making Home Affordable Program by name,” according to documents filed with the court.
For the FTC press release and links to court documents, see FTC Action Halts Dominican Mortgage Assistance Scam That Allegedly Defrauded Spanish-Speaking U.S. Homeowners of more than $2 Million (Court Issues Restraining Order against Telemarketers Who Falsely Claimed Affiliation with Federal Mortgage Assistance Programs).

Investor Solicited To Help Restructure $500M In Sour Loans Buys Defaulted Debt Instead, Snatches Project Out From Under Hapless Developer By F'closure

In Las Vegas, Nevada, the Las Vegas Review Journal reports:
  • The developer of the Town Square shopping and office complex south of the Strip has sued the Connecticut investment fund that foreclosed on it last year, seeking more than $300 million in damages.

    According to the complaint filed in Clark County District Court late Wednesday, Miami-based developers Jeffrey and Jacquelyn Soffer and their company, Turnberry Capital, spent more than two years trying to restructure nearly $500 million in loans. The effort included bringing in Five Mile Capital Partners of Stamford, Conn., as a potential co-owner.

    However, the court papers contend that Five Mile covertly switched from partner to adversary, buying enough of the loans then in default to force a foreclosure and squeeze out the Soffers. Soffers' lawyers contended that this amounted to "stealing" the 1.2-million-square-foot project, noted for its mix of shopping, entertainment and offices set retro architectural style.

    "(Five Mile's) conduct was so egregious and vulture-like that it should be punished and made an example of," wrote Soffer attorney Daniel McNutt.

Vulture Funds Seek To Snatch Title To Small, Violation-Plagued NYC Rental Buildings With Delinquent Debt-Buying Spree Followed By Foreclosure

In New York City, The Real Deal reports:
  • Private equity firms such as Stabilis Capital Management, Madison Realty Capital and Onex Real Estate Partners have been buying debt on small, often severely distressed rental properties in secondary neighborhoods in New York City with little fanfare over the past year.

    The acquisitions resemble activity during the height of the market when private equity firms, often in partnership with local operators, purchased large portfolios of rent-regulated apartment buildings.

    Yet this post-boom trend is different in two significant ways: The properties are much smaller, and the buyers are seeking to gain control of them by buying the debt, instead of directly buying the buildings.

    The trend to buy debt on small properties in New York City mirrors a national investment strategy in which large funds are buying distressed single-family homes and converting them to rentals.

    In New York City, firms are targeting the non-performing debt on rental buildings that often have a high number of violations because the in-place owner cannot cover the mortgage and is cutting back on maintenance, several real estate professionals involved in this practice said.
For more, see Private equity firms snap up debt on small NYC rental buildings (NYC follows national buying trend, but city's real estate firms focus on violation-laden buildings).

Clueless Bidder At Foreclosure Sale Left Holding The Bag After Discovering $80K Townhome Just Purchased For $8K Comes With $184K Existing 1st Mortgage

In Tampa, Florida, WTVT-TV Channel 13 reports:
  • With home prices still down across the Bay Area, some people believe now is still a great time to buy an investment property. However, they are quickly learning a lesson: You'd better be careful what you bid on, even if the clerk of the court is selling it.

    Eric Dalhberg is an amateur investor who has learned a hard lesson after bidding on a property in Pasco County. "I thought I got a ridiculous good deal," said Dalhberg, who bought a three-bedroom townhouse in Wesley Chapel's Saddle Creek Manor for just over $8,000.

    What Dalhberg didn't realize is he did not buy a mortgage foreclosure from a bank, but rather a foreclosure brought on by the homeowners association. So when he took possession of the title, he learned the property had a first mortgage of $184,000. The debt was left by the previous owner.

    Nick Lang, a real estate attorney in St. Petersburg who is often hired by homeowners associations, has heard plenty of stories of amateur investors in the Bay Area making the same mistake.

    "They're acquiring it subject to a first mortgage. But the public is often unaware of that circumstance and there are probably inadequate available disclosures to the public with the clerk's offices in the various counties."

    Dalhberg says if he had known it was a homeowners, or HOA, foreclosure, he never would have bid on it. "Being a state-run auction, I really thought that, hey, it's the highest bidder wins. They did have the disclaimers saying buyer beware, but nowadays everything has that disclaimer and I just assumed."

Tuesday, July 31, 2012

Foreclosing Banksters Begin Feeling Effects Of Recent Georgia Appeals Court Ruling As Screeching Brakes Bring Some Sales To A Halt

In Forsyth County, Georgia, WSB-TV Channel 2 reports:
  • A metro Atlanta consumer attorney said he has already been able to halt a dozen foreclosures using a new ruling from the Georgia Court of Appeals. The latest case involves a Forsyth County home and lending giant Wells Fargo.

    "Having to move out of the dream home that my son and I built is the worst thing I could think of," said homeowner David Stripland. The recession hit his car dealership around the same time the housing crisis, cutting his home's value more than 60 percent. "You can't sell it, you can't re-fi, you have to get a modification," said his wife, Paulette.

    The Striplands said the process went on for more than a year. They then received a string of foreclosure notices from Wells Fargo. "Foreclosure. It's a shame," said Paulette through a stream of tears.

    The foreclosure has now been halted, after a recent ruling by the state appellate court. Wells Fargo does not hold the note. It only services the loan. The note holder is not clearly stated.

    The Striplands paid forensic auditors who found the loan has been divided up into dozens of securities sold to investors. "Once these notes are chopped up and turned into bonds, securities, whatever; who really owns it?" asked their attorney, Bob Thompson.

    But the Georgia Court of Appeals ruling in a case involving a Cobb County family and servicers Provident Funding, LLC, ruled homeowners have "a right to know" to whom they actually owe the money, lest they be "misled or confused."(1)

    "Even a dog in Georgia has the right to know who's kicking him," Emory law professor Frank Alexander told Channel 2's reporting partners at the Atlanta Journal Constitution. "These big banks and Wall Street have to follow the law of the land, just like I do," said Paulette Stripland.

    Channel 2's Jim Strickland learned just before 5 p.m. Thursday, Wells Fargo had halted the foreclosure. Thompson said most homeowners in peril should take action on their own. "Call and get it stopped and get yourself some time, because with time most people can work things out," he said.

    It is likely Provident will appeal to the state supreme court.

(1) See Reese v. Provident Funding Associates, LLC., A12A0619 (Ga. App. July 12, 2012). See also, Georgia Appeals Court: Failure To Include Name Of Actual Owner Of Mortgage Loan Sinks Foreclosure; Ruling Could Affect Tens Of Thousands Of Cases.

Bankster Agrees To Pay $12M To Settle DOJ Allegations It Ripped Off & Otherwise Trampled On Active Duty Servicemembers' Rights Under SCRA

From the U.S. Department of Justice (Washington, D.C.):
  • Capital One N.A. and Capital One Bank (USA) N.A. (together Capital One), have agreed to pay approximately $12 million to resolve a lawsuit by the Department of Justice alleging the companies violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced [].

    The settlement covers a range of conduct that violated the protections guaranteed service members by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts.

    The proposed consent order, which was filed simultaneously with the complaint, is one of the most comprehensive SCRA settlements ever obtained by a government agency or any private party under the SCRA.

Cape Cod Mobile Home Peddler Settles Civil Suit Alleging It Extorted Cash From Owners With Bogus Fees/Charges Under Threat Of Loss Of Leased Home-Site

From the Office of the Massachusetts Attorney General:
  • In a settlement resolving allegations that it strong-armed residents into paying $16,000 for memberships of questionable value, Peters Pond RV Resort in Sandwich will refund residents, pay an additional $200,000 in civil penalties and costs, and refrain from future unfair and deceptive practices, Attorney General Martha Coakley announced today.

    This company took advantage of elderly customers and retirees who invested a significant amount of money in their homes,” AG Coakley said. “It is difficult to believe that any business would try to strong arm people who worked and saved their entire lives so they could enjoy their golden years. We are thankful that these practices will end and that consumers will receive restitution.”

    The AG’s Office filed the original complaint in Suffolk Superior Court in August 2011 alleging violations of the Massachusetts’ Consumer Protection Act. In September 2011, the court ordered a preliminary injunction prohibiting any future intimidating sales tactics.

    Residents at Peters Pond originally purchased “park model homes” that appeared to be manufactured homes, often referred to as mobile homes, that are costly to move. Although the homes are owned by residents, the lots are leased from Peters Pond. Residents believed they could renew their lease indefinitely as long as they paid rent and abided by community rules.

    According to the complaint, the owners and operators of Peters Pond – Peters Pond RV Resort, Inc., Morgan RV Resorts, LLC, Ideal Private Resorts, LLC and Robert Moser – allegedly threatened consumers that if they did not purchase a new $16,000 membership, in addition to paying the annual $6,000 homeowners fee, they would lose their home-site and be forced to move their mobile homes at their expense and without compensation. The membership fees did not include any apparent benefits.

    Nearly 100 homeowners paid to join the club out of fear that they would lose their home, in which many had invested their life’s savings. Then, when residents tried to sell their homes, the defendants allegedly interfered with the homeowners' rights by preventing homeowners from using brokers to assist in the sale and charging a $2,000transfer fee.”

    The consent judgment filed [] provides refunds to consumers who paid for the membership program. Residents who feel they are owed money will file claims with the company. Additionally, the defendants will pay $200,000 to the Commonwealth in penalties and costs.

    The consent judgment also prohibits the defendants from continuing certain alleged unlawful sales practices, provides lease rate increase restrictions for current Peters Pond consumers and requires full itemized disclosure of all fees charged for goods or services provided, including any transfer fees. The defendants must also allow consumers to retain an appropriate broker to sell their homes.
For the Massachusetts AG press release, see Peters Pond RV Resort to Pay Restitution for Allegedly Strong Arming Residents into Buying Memberships (Management Company also Required to Pay $200,000 in Civil Penalties and Costs).

Banksters' Failure To Complete F'closure Process On Violation-Plagued Homes Leaves Some Cleveland Homeowners Holding The Bag, Facing Criminal Charges

In Cleveland, Ohio, The Plain Dealer reports:
  • Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January -- five years after her mortgage company filed for foreclosure -- that it was still in her name.

    Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.

    "I thought I had nothing else to do with that home," said Atterberry. "I was so embarrassed and humiliated by this."

    Her mortgage company didn't buy the house and never took it to sheriff's sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.

    These so-called "bank walkaways" are another troubling development in the foreclosure crisis, particularly in cities like Cleveland with weaker housing markets, say housing advocates and government officials.

    Lenders or mortgage companies decide they don't want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.

    But without that sale, the property can languish abandoned and ripe for vandalism. As liens and liabilities mount -- creating a so-called "toxic title" -- it becomes even harder to transfer the property. Neighborhoods and local governments are left to deal with the mess.
  • Properties left in 'legal limbo'

    Joseph Schilling, associate director of the Metropolitan Institute at Virginia Tech and an expert on abandoned property, said the issue of bank walkaways is increasing. Lenders may decide that given low prices and their mounting inventory of foreclosed property, it makes sense to walk away.

    "But as a result, it leaves the property in this type of legal limbo and it leaves the community and local government really holding the bag," Schilling said.

    The problem has gotten the attention of government officials who are trying to fill a void in Ohio law and force companies that foreclose on property to act. State Rep. Dennis Murray of Sandusky is drafting a bill he hopes to introduce in the next two months that would require lenders or mortgage service companies to take foreclosed properties to sheriff sale within a certain time -- or see their mortgage lien erased.

    The lender wouldn't be required to buy the property -- only to take it to sale. More time could be given to lenders working to keep people in their homes by restructuring the mortgage.
  • 'I see shocked people every single week'

    Some of the fallout that results when properties languish vacant and abandoned shows up in Cleveland Housing Judge Raymond Pianka's courtroom. "I see shocked people every single week," Pianka said. "They thought the burden was lifted because they filed bankruptcy or because somebody somewhere told them they're no longer responsible, and then they're pulled back in facing criminal code violations."

Monday, July 30, 2012

DC Feds Squeeze Plea Out Of Area Sale Leaseback Peddler For Running Equity Stripping Scam That Ended In Foreclosure, Eviction For Unwitting Homeowners

From the Office of the U.S. Attorney (District of Columbia):
  • Carline M. Charles, 41, who operated a business that supposedly would rescue distressed homeowners from foreclosure, pled guilty [] to conspiracy to commit bank fraud for her role in a mortgage fraud scheme that cost lenders at least $1 million, [...] As part of her plea agreement, she agreed to the forfeiture of a money judgment of $838,978, representing her share of proceeds of the crime.

    According to a statement of offense, signed by the defendant as well as the government, Charles represented herself as the owner of C & O Property Solutions, LLC, a company that offered refinancing options to homeowners in the District of Columbia and Maryland whose properties were facing imminent foreclosure.

    In fact, she was operating a scheme that ultimately involved 12 homes along with fraudulently obtained mortgages, financial losses for lenders, and evictions for many of the people who turned to her for help.

    Charles and others contacted homeowners through solicitation postcards or by telephone, using foreclosure and land records to identify people who were in financial distress. Charles told the homeowners that they could refinance their mortgage loans with the assistance of financial partners or investors so they could buy time to repair their credit.

    She assured them that their names would remain on the property deeds after thisrefinancing.” Later, after a period of about six months, according to Charles, the homeowners could refinance the mortgages and remove the partners or investors from the property deeds.

    While the homeowners believed they were refinancing their mortgage loans, in actuality they were selling outright their properties to straw purchasers recruited by Charles. Charles and others paid the straw purchasers fees of up to $10,000 per transaction in return for use of their personal information to purchase properties.

    All told, these actions led to mortgage lenders issuing loans of approximately $4 million. Charles arranged to siphon out roughly $1 million of this money from the properties for herself or her company. She used the money to pay her own personal expenses and to continue perpetuating the scheme.

    In addition, Charles required many of the distressed homeowners to pay a monthly “mortgage” payment, which she claimed would be forwarded to the lenders or placed in escrow. Many homeowners paid her, as required, providing a total of about $114,000.

    Charles forwarded the mortgage payments for a period of time, but eventually stopped doing so. This led to the foreclosure of 12 properties that had the fraudulently obtained mortgages, the evictions of most of the homeowners, and a loss to the lenders of between $1 million and $2.5 million.(1)
For the U.S. Attorney press release, see Business Owner Pleads Guilty in Mortgage Fraud Scheme That Cost Lenders More Than $1 Million (Homeowners Turned to Her to Avoid Foreclosure, Wound up Evicted).

(1) For more on this type of foreclosure rescue ripoff, see:

Cal. AG Score $4M Judgment Against Loan Modification Racket That Targeted 1,000+ Consumers; Civil Lawsuit Leads To Some Jail Time For One Scammer

From the Office of the California Attorney General:
  • Attorney General Kamala D. Harris [] announced defendants who ran a national loan modification scam were ordered to pay more than $4 million in penalties and restitution, including $2 million to consumers who were falsely promised modifications of their mortgage loans.

    More than 1,000 customers paid more than $2 million for loan modification services to Statewide Financial Group, Inc., which did business as US Homeowners Assistance and, and was based in Orange County. In July 2009, the Attorney General’s office shut down the business, which had been in operation since January 2008.
  • The Orange County Superior Court ordered that every US Homeowners Assistance loan modification customer should receive a full refund upon request. The defendants were also permanently enjoined from engaging in the conduct that led to the lawsuit and were ordered to pay $2 million in civil penalties. It is unclear, however, how much money will be recovered and available to pay refunds or penalties.

    The prosecution of this action took nearly three years, culminating in a multi-week bench trial in March 2012. The business’ owners, Zulmai Nazarzai and Hakimullah Sarpas and Fasela Sheren (who went by the name Sharon Fasela), were all found liable for violating California’s Unfair Competition Law and False Advertising Law.

    In a separate proceeding in late 2010, Attorney General Harris successfully prosecuted Nazarzai for contempt of court for his refusal to turn over $360,000 unlawfully taken by defendants as ordered by the court.

    He has been incarcerated in the Orange County jail since December 2010 because of his continued refusal to comply with the court’s order.
Go here for the court's Judgment and here for the court's Statement of Decision.

More On Trouble With Land Titles Arising Out Of Wrongful Foreclosures

Albany Law School Professor Elizabeth Renuart writes in Public Citizen's Consumer Law & Policy Blog:
  • [T]here is growing evidence that the parties to securitization deals handle and transfer the legally important documents that secure the resulting investments — the loan notes and mortgages — in a careless and, at times, fraudulent manner.

    Consequently, the foreclosing parties frequently do not possess the right to foreclose and the resulting sales may be unlawful. Defective sales harm homeowners when they lose their homes to the wrong party. Moreover, they could use the extra time afforded by a delayed or jettisoned foreclosure to find another solution, such as a loan modification or short sale.

    Wrongful foreclosures affect another important group, the purchasers. If title to the property is flawed as a result, those parties potentially buy nothing and can transfer nothing. Clear title to real property in the United States may be in jeopardy. The problem is most acute in non-judicial foreclosure states because doctrines of finality do not apply and state law may permit post-sale challenges.
See also:

Suit Tags Freddie, Fannie For Alleged Wrongful 'Government Entity' Exemption Claim To Dodge Deed Recording Taxes Upon Taking Title To Foreclosed Homes

In Dayton, Ohio, The Associated Press reports:
  • County officials in southwest Ohio have filed a class action lawsuit against two mortgage giants they say owe millions in unpaid taxes.

    Montgomery County filed a federal lawsuit Wednesday that says Fannie Mae and Freddie Mac wrongfully claimed various exemptions to avoid paying transfer taxes to state counties.

    Transfer taxes are owed to a county when a deed is recorded. The lawsuit claims the companies didn't pay transfer taxes involving banks that foreclosed on homes and new homeowners. Officials say both companies filed for exemptions as government entities and other inapplicable exemptions for an unspecified time.

    The lawsuit involves most state counties. Summit County has filed an individual case.

Sunday, July 29, 2012

Bail Set At $250K Each For Trio Accused Of Running Upfront Fee Loan Modification Foreclosure Rescue Ripoff Throughout Southern California

From the Office of the Ventura County, California District Attorney:
  • District Attorney Gregory D. Totten announced [] the filing of a felony complaint against Los Angeles residents Nino Vera (DOB 4/25/60), Rene Solis (DOB 1/17/60), and Hector Menendez (DOB 5/23/56).

    Vera is charged with nine counts of foreclosure consultant fraud and two counts of grand theft. Solis is charged with five counts of foreclosure consultant fraud and three counts of grand theft. Menendez is charged with two counts of foreclosure consultant fraud and one count of grand theft.

    The charges arise out of a fraudulent home loan modification and foreclosure rescue program operating across Southern California under the business name of “Sunset Beach Management.”

    The defendants are accused of collecting thousands of dollars in upfront fees from struggling homeowners while promising to modify mortgage loans and “save” their homes from foreclosure. The victims received no actual services from the defendants and, in addition to losing thousands of dollars, many lost their homes through foreclosure proceedings. Total victim losses are estimated to exceed $78,000.

    The arrests of Vera, Solis and Menendez in Los Angeles follow a two-year investigation by the District Attorney's Real Estate Fraud Unit. Bail was set for all three defendants at $250,000.

Ch. 13 Trustee Notorious For Invoking 'Show Me The Note' Defense To Divert Debtor Payments Away From Banksters To Other Creditors Tagged In BofA Suit

In Nashville, Tennessee, the Nashville Business Journal reports:
  • In a rare legal counter move, Charlotte, N.C.-based Bank of America has filed a lawsuit against Nashville's Chapter 13 bankruptcy trustee. It's the first time in recent Tennessee history that a large lender has sued a trustee of the court, according to a local bankruptcy attorney.

    The move marks an effort on behalf of the bank to put an end to a common defense tactic used by debtors and foreclosure judges in the aftermath of the mortgage meltdown. Known as "show me the note," the tactic forces a lender to offer up physical documentation that they actually own the mortgage.

    It's a method that has been successful in Nashville, where bankruptcy trustee Henry "Hank" Hildebrand has become well known for his efforts to force mortgage companies to produce the original note when filing a claim in bankruptcy proceedings. (Tennessee is a state that doesn't require judicial approval for foreclosures, so the process typically takes place in bankruptcy court.)

    But it can be a lofty order for lenders that, following the securitization boom, bundled up millions of home loans, sold them and packaged them into bonds. Bank of America is fed up.

    In mid-May, the bank filed a lawsuit (tucked away as an adversary proceeding in a consumer bankruptcy case) against Hildebrand for taking mortgage payments from the debtors, bypassing the bank and passing the cash along to other creditors.

    Hildebrand's defense? Bank of America had the mortgage but couldn't produce the underlying promissory note — often referred to as a "naked" mortgage.

    Bank of America fired back, citing cases in other states where original lenders didn't have to file a claim. Courts in Arizona and Massachusetts have recently ruled on the issue, partially siding with the banks.

    The rub? Bankruptcy rules in Tennessee still require a timely claim, the mortgage and the original note, rules that Hildebrand has followed to the tee during his tenure.

    The bank also charged in court documents that because of Hildebrand's methods, the debtors wouldn't have the chance for a "fresh start." "The trustee would affirmatively state that the term 'fresh start' is not found in the bankruptcy code, is undefined in the complaint and raises an ambiguous and confusing assertion to which the trustee cannot respond," Hildebrand said in his response to the lawsuit.

Couple Get Suspended Sentence After Copping Pleas To Fraudulently Scoring Section 8 Rental Benefits, Mortgage Loans

From the Office of the Massachusetts Attorney General:
  • [P]aulo Montenegro, age 45, and his wife, Rosana Pereira, age 48, each pleaded guilty in Middlesex Superior Court to charges of Larceny by False Pretense (3 counts) and Conspiracy to Commit Larceny by False Pretense (3 counts), in connection with fraudulently obtaining Section 8 public housing benefits and fraudulently obtaining mortgage loans from financial lending institutions.

    After the pleas were entered, Judge Maureen Hogan sentenced Montenegro and Pereira to two years in the House of Correction, sentence suspended for four years, and ordered Montenegro and Pereira to pay restitution and $25,000 each in fines.
  • Pereira and Montenegro misrepresented material information to the Cambridge Housing Authority and HUD in order to obtain the benefit of Section 8 public housing subsidies. Pereira, in conspiracy with Montenegro, under-reported her income and assets, and reported that she was unmarried, when in fact she was married to Montenegro, and they lived together, shared finances, and benefited from each other’s incomes.

    As a result of such misrepresentations, Pereira and Montenegro received the benefit of renting a three bedroom apartment in Cambridge at a greatly reduced rate, while the Cambridge Housing Authority and HUD covered most of the rent.

    For two years during the period when Pereira and Montenegro fraudulently benefited from Section 8 public housing subsidies, they were not even living in the Cambridge apartment that they were renting at a reduced rate; instead, they were living in a home in Weston that Montenegro had purchased for $860,000.
For the Massachusetts AG press release, see Weston Couple Pleads Guilty, Sentenced in Connection with Section 8 Public Housing Fraud and Mortgage Fraud (Defendants Defrauded Public Housing Subsidy Program and Mortgage Lenders).

Bay State Landlords Settle Housing Discrimination Charges Alleging Refusal To Rent To Families w/ Young Kids To Dodge Lead Based Paint Abatement Rules

From the Office of the Massachusetts Attorney General:
  • Multiple landlords have settled allegations that they refused to rent to families with children in order to avoid obligations to remove lead paint hazards, Attorney General Martha Coakley announced [].

    Under state law, it is illegal to discriminate against housing applicants because they have children or because the rental would require the landlord to abate lead hazards.
  • Celina Puszko and Alojzy Jackiewicz

    According to the complaint filed on June 22, in Suffolk Superior Court, Dorchester property owners Celina Puszko and Alojzy Jackiewicz discriminated against families with children under the age of six by refusing to rent to them in order to avoid their obligation to abate lead paint hazards. Along with the complaint, the parties filed a consent judgment, [...]. The consent judgment requires Puszko and Jackiewicz to delead at least one of their three rental units in Dorchester, to attend fair housing training, and to pay $3,000 in restitution and penalties.

    Gregory Howell and Scott Michels

    According to the assurance of discontinuance filed on June 25, Gregory Howell and Scott Michels, who jointly own four rental properties in Bourne, Wareham, and Fairhaven, posted a discriminatory advertisement for one of their Wareham properties on the website

    The advertisement specifically stated that certain families with young children were not eligible to rent the advertised rental property because the property had not been deleaded. Under the terms of the assurance, Howell and Michels agreed to attend fair housing training, delead the property, and pay a penalty of $3,000 to the Commonwealth.
For the Massachusetts AG press release, see Landlords Settle Claims of Housing Discrimination (Landlords Accused of Refusing to Rent to Families with Children Agree to Remove Lead Paint from Rental Properties).