Saturday, March 16, 2013

Pair Pinched In Alleged Attempt To Reclaim Home Lost In Foreclosure; Removed New Owner's Stuff From Premises After Breaking In, Changing Locks; Written Apology Saying They Believed Bank's Actions Were Unwarranted Led To Arrest

In Yavapai, Arizona, The Arizona Republic reports:
  • Two men were arrested [] on suspicion of theft, burglary and criminal damage after they are accused of attempting to reclaim a home just outside of Prescott and removing all of the legal owner’s property from the home, according to the Yavapai County Sheriff’s Office.

    Authorities said the men, identified as Brent Ten Pas, 57, and Steve Armstrong, 60, are suspected of putting up signs reading “Private Property/No Trespassing” around a home in the 300 block of Marapai Road in Gloom Creek, which were noticed by the legal homeowner on Feb. 15.

    The homeowner purchased the home from the bank in August 2012, furnished the home and was using it as a secondary residence, according to the Sheriff’s Office. The homeowner went to residence on Feb. 15 and found the signs.

    According to authorities, a note on the front door directed the homeowner to vacate the property immediately and warned that any remaining furniture would be placed in storage and further access would be considered trespassing. The note was signed with Ten Pas and Armstrong’s names, according to the Sheriff’s Office.

    The men had apparently boarded up the home, installed a security camera, changed the locks and placed the victim’s belongings in a Prescott Valley storage unit, authorities said.

    Sheriff’s Office deputies discovered that Ten Pas and Armstrong had been ordered to leave the home in February 2012, as it had been foreclosed upon by the bank, according to the Sheriff’s Office.

    On Feb. 21, the victim received a letter from the two men which included an apology and explained that they believed the foreclosure was unwarranted, stating that the victim “had just bought a stolen car,” authorities said.

    Deputies obtained warrants for Ten Pas and Armstrong on Feb. 28, at which point they were arrested.

Squatter Pinched For Allegedly Filing Land Documents To Title-Hijack Memphis Mansion; Invokes 'Sovereign Citizen' Status In Defense Against Criminal Charges; Held On $2M Bond

In Memphis, Tennessee, WPTY-TV Channel 24 reports:
  • After living the high life for about a week in a mansion that isn't hers, police arrested a squatter at the east Memphis estate overnight.

    Tabitha Gentry, 32, was arrested and charged with Aggravated Burglary, Criminal Trespassing and Theft of Property over $60,000.

    She claims to be a sovereign citizen of the Moorish National Movement, who believes the law does not apply to her. Gentry filed paperwork with the Shelby County Register of Deeds on February 25, claiming to seize the property on the 600-block of S Shady Grove "in the name of Allah, the Most High, Creator of the Heavens and Earth." The 10,000 square foot home is owned by Renesant Bank after going into foreclosure in August 2011.

    The bank posted a 24-hour eviction notice on March 5, which Gentry ignored. When confronted by ABC 24 just hours before her arrest, we asked what she planned to do if the police came to force her out. She simply replied, "I'll deal with them."

    Tabitha Gentry was booked at the Shelby County Jail at 2:45 a.m. on Friday, March 8. She is being held on a $2 million bond, [...]. The case is still under investigation. The Shelby County Sheriff's Public Information Officer, Chip Washington, stated additional suspects and charges are likely.

    This isn't Gentry's first tangle with the law. Last fall she was charged with Aggravated Assault for trying to run over a police officer during a traffic stop in south Memphis. At the time she provided police with a sovereign citizen identification card.

Out-Of-Town Homeowners End Up With 'Squatting' Problem When Dubious 'Nomad' Dupes Their Real Estate Agent Into Handing Over Keys To Unoccupied Residence & Moves In With Kids In Tow

In Boca Raton, Florida, the South Florida Sun Sentinel reports:
  • As the number of renters increases and empty homes abound, some people are finding creative ways to get themselves into new homes — without paying for them.

    If recent trends in South Florida are an indication, any vacant dwelling can become a target. Even occupied ones are sometimes not safe. And once people are in, it proves difficult to get them out.

    That's the situation in a neighborhood west of Boca Raton. A 39-year-old woman convinced a real estate agent to hand her the keys to an empty house, Palm Beach County deputies say. But the woman, Tamica Jordan, has never paid a dime to anyone. The owners, who live in Alabama, want her out of the house, but because of legal protections for tenants, it seems no one can make her leave any time soon.
  • Jordan's public records trail across California, Virginia and Florida in the past eight years shows a history of judgments filed against her for eviction. It is unclear whether she has since repaid these claims, but the records illustrate a nomadic cycle of moving in, paying no rent, getting evicted — and repeat.

    She arrived at the Silver Woods Court cul-de-sac with two children and little else. She introduced herself to neighbors and told them she came from California and worked at a bank.

    Jordan denied she is dodging rent, denied she had a pattern of evictions and denied that she has done anything to alarm her neighbors. She described herself as "a very peaceful person."

    "I don't know how to respond to that," she said of the accusations she is a "serial squatter." "That all sounds crazy." Yet Jordan has at least eight eviction filings and default judgments going back eight years and totaling at least $26,032.
  • On Feb. 28, Palm Beach County Sheriff's Deputy Joseph Caroscio confronted Jordan at the Silver Woods Court house, a report shows. The owner of the house, who lives in Alabama, called deputies to have her thrown out.

    But because she had her children there, her belongings and the keys, there was nothing the deputy could do. Caroscio wrote "it was clear that there was a miscommunication" or even "some type of fraud."

    Elaine Holland, a local Remax Realtor, was named in Caroscio's report, but in an interview she said another agent handled the listing. She would not detail Jordan's alleged strategy to obtain keys without any deposit or proof of employment. She said only that "somebody made a mistake" and that "there are lawyers working on this."

Bill Introduced In Texas Legislature To Curb Crackpots From Using Adverse Possession Affidavits As Self-Created Free Housing Vouchers That Provide Immunity From Criminal Trespass Charges

In Dallas, Texas, KXAS-TV Channel 5 reports:
  • A string of squatters attempting to use an old law to legitimize taking over empty houses has inspired a new bill that aims to prevent copycats from following in their footsteps.

    While some of the more high-profile squatting cases—like that of Kenneth Robinson, who made headlines last year for flaunting his "$16" Flower Mound house—have faded from the spotlight, their examples continue to linger.

    "It's still going on in Denton County, we've heard about it in Houston. I get calls regularly from Alabama, Kentucky," said Tarrant County Constable Clint Burgess, who had to study up on the law of adverse possession when apparent squatters, including Robinson, began presenting him with obscure affidavits two years ago. "We had never seen anything like it," Burgess said.
  • Tarrant County has managed to crack down on the practice by refusing to accept the affidavits at the county clerk’s office and prosecuting abusers. But Burgess encouraged State Sen. Jane Nelson, who represents Denton and Tarrant counties, to sponsor legislation that would prevent the scam from bleeding into other parts of the state.

    Under the new law, filed last week, anyone interested in gaining ownership of an unused property would have to send written notice to the last known address of each person who holds an interest in it, from mortgage lenders to homeowners. "This bill simply states what a reasonable person would expect—that property does not convey simply by squatting," Nelson wrote in a statement.
  • While a squatter may not stand a chance to legally acquire a home he entered illegally, the use of adverse possession affidavits has still slowed down what is typically a straightforward process—swiftly filing a charge or a warrant against the suspected squatter.
  • That sort of confusion allowed some of the initial North Texas cases to remain in legal limbo for weeks, and in some cases months before authorities had the information they needed to evict a squatter.
  • While the new legislation could thwart the abuse of adverse possession in Texas, it remains a problem in other areas of the country still recovering from the foreclosure crisis.
 For the story, see New Bill Aims to Limit Squatters' Abuse of Obscure Law (The state law would target people who believe an “adverse possession” affidavit is a ticket to taking over an empty foreclosed home).

Freddie Dumps Recently Foreclosed Home Once Used As Meth Lab, Leaving First-Time Buyers Holding The Bag; Victims Advised to Walk Away As Cost To Remediate Exceeds Property Value

From the foothills of Oregon's Cascade Mountains, ABC News reports:
  • The Hankins family had been saving for five years when they saw a starter home for sale for only $35,000. They jumped at the chance and purchased the home in the foothills of southern Oregon's Cascade Mountains.

    "One of my favorite memories was painting Ezra's room green, and he wanted to help so he helped dad," Jonathan Hankins told ABC News. "This is our home, this is great. It seemed too good to be true."

    The house was a foreclosure advertised "as is." The Hankinses took out a loan instead of a mortgage and had a carpenter friend check it out instead of spending money on an inspector.

    "We knew there were a couple of broken windows. We knew the furnace was probably on its way out," Hankins said. "Overall, the house had great bones. Little did we know that those bones would be contaminated and poisonous."

    After weeks of sanding, priming, plumbing and painting, Hankins started getting dry mouth, nose bleeds and sinus headaches, and the house had a strong urine odor. Their dream house appeared to be making them sick.

    Turns out the little starter had a secret past. It was once used as a meth den, and all the dangerous chemicals had seeped into the floors and ceiling.

    "We ordered a test kit which only cost us $50," Hankins said. "The results came back at nearly 80 times our state's lowest level of contamination."

    It's been seen before on the AMC drama "Breaking Bad." The hit show follows meth dealers who use a super lab with ventilation. But in the real world, "home cooking" all those dangerous chemicals leaves behind such high levels of poison, you have to put on hazmat suits to conduct a standard test.

    Months later, the meth residue was still there.

    "Contractors that specialize in clandestine meth lab clean-up have quoted us costs that are more than what the house is even worth," Hankins said.

    Lawyers told them to walk away quietly because it's only illegal to sell a house with a problem if you know there is a problem. "It's horrifying," Hankins said. "It's like a nightmare, you know, a home buyer's nightmare."

    The Hankinses said the seller, Freddie Mac, should have known about the danger and that meth residue should require a warning, like lead paint and asbestos.

    "It's very easy for them to come in and say, 'Well, we didn't live there, so we have no knowledge of it," Hankins said. "They didn't know some of those homes may be contaminated.

    "The Hankins chose to forgo a home inspection or any other environmental test and bought the home in 'as is' condition," Freddie Mac said in a statement to ABC News. "We empathize with the Hankins [family] but neither we nor the listing agent had prior information about the home's history."

    Real estate mogul Barbara Corcoran said buyers can't depend on the government, their lender or the seller to warn them.

    "All Jonathan and Beth had to do was talk to the neighbor before they bought that house," she said. "Every neighbor who's next door to a meth house knows what's going on. They see the cops coming in. Or you could go the police station, talk to the police."

    Freddie Mac may have not known what was in the house, but the local police department did. Officers went to the home 34 times while the previous owner lived there. "We've been to this house several times," Chief Jim Hunter said. "We made undercover narcotics buys on at least three occasions."
  • The Hankinses continue to pay the mortgage on their empty home and rent a second house to live in.

    Freddie Mac said the couple should have done their own testing and the house was bought "as is."

    But for the Hankins family, they may never buy another home again. "Home ownership is the American dream, right?" Hankins said. "And when your dream becomes a nightmare, [it] makes it really hard to want to go back and start all over again."

$500 Meth Inspection Helps Prospective Buyers Dodge Costly Bullet; Test On Recently Foreclosed Home That Was Since Fully Renovated By New Owner Reveals High Level Of Contamination

In Lynnwood, Washington, KCPQ-TV Channel 10 reports:
  • A local family has a warning for home buyers after nearly purchasing a home contaminated with meth.

    Kendall and Ryan Appell put an offer on a home in Lynnwood that had been completely renovated with hardwood floors, stainless steel appliances and granite countertops.

    The home used to be a rental property, went into foreclosure and then was bought at auction. The Appells started talking to neighbors and what they heard raised some red flags.

    “One neighbor made a mention that the people lived there before may have been into some shady dealings. He even said it might have been a drug house at some time,” said Ryan Appell.

    The Appells decided to hire a company to test the home for meth contamination.

    Theresa Borst, of Bio Clean Inc., swabbed inside vents, cabinets, and a wood stove in the Lynnwood home and found dangerously high levels of meth contamination throughout the house. The acceptable level in the state is 0.1 micrograms per 100 cubic centimeters. The home registered at 30 micrograms in some areas.

    “All of a sudden it was like if we stayed here, we could die. Our dog would live about six months and would die because of the levels of chemicals in this place,” said Ryan. “We’re a married couple and the thought of in the next five to 10 years bringing kids into that house was pretty terrifying, so I feel like we lucked out to get out of it when we did,” said Kendall.

    Had they gone through with the deal, contractors said, the Appells might have had to spend up to $100,000 stripping the house to the studs and rebuilding it to make it livable. They said the $500 they paid for the testing was well worth it.

    Borst said of the foreclosed properties they test, 90 percent come back with meth contamination. Borst said it’s wise to contact the health department and local police to see if there is any history of drug manufacturing or use.

    Just like with the Appells, it’s a great idea to talk to as many neighbors as you can, too, about the former tenants.

80,000+ Meth Labs Seized Since 2004 Represent Small Fraction Of Homes Infected With Toxic Contaminants

CNNMoney reports:
  • Call it crystal, crank, or ice, you don't want to live in a house where methamphetamine was cooked up. Many Americans, however, unwittingly purchase homes or rent apartments contaminated with the drug's poisonous residue.

    There have been nearly 84,000 meth lab seizures since 2004, according to the Drug Enforcement Administration. But only a fraction of meth labs, as few as 5%, get discovered by authorities, according to Mark Woodward, a spokesman for the Oklahoma Bureau of Narcotics and Dangerous Drugs Control.

    "Millions of people live in properties that were used as meth labs," said Joseph Mazzuca, who co-founded Meth Lab Cleanup in Athol, Idaho, with his wife, Julie. Last year, his company booked more than 1,500 jobs inspecting and decontaminating homes.
  • Meth labs can turn up anywhere. Last year, one was found in a building of million-dollar-plus apartments on Manhattan's West Side. But the root of the problem lies in America's heartland. In states like Missouri, Arkansas and Oklahoma, thousands of meth labs are discovered each year.
  • For every pound of meth produced, five to seven pounds of chemical waste is left behind. Meth molecules can cling to walls and floors, accumulate in carpets and cabinets and penetrate materials like insulation and drywall, according to Glenn Morrison, an associate professor of environmental engineering at Missouri University of Science and Technology. And they can be re-emitted for months or even years.

    Short-term exposure to these chemicals can lead to headaches, nausea, dizziness and fatigue. Over a long period, liver and kidney damage, neurological problems, and increased risk of cancer can occur, according to the Minnesota Department of Health.
For the story, see My home was a former meth lab.

Friday, March 15, 2013

Illinois Homeowner Tags Mortgage Lender, Contractor For Alleged Premature Foreclosure Trash Out; Says Many Personal Items Were Swiped, Never Returned; Seeks $250K+ In Damages

In Madison County, Illinois, The Madison-St. Clair Record reports:
  • A Madison County woman is suing a mortgage company she claims unlawfully entered her deceased father’s home and destroyed property.

    Diana Rogers filed a lawsuit Feb. 11 in Madison County Circuit Court against Reverse Mortgage Solutions Inc. and National Field Network LLC.

    According to the complaint, Rogers acquired a home on Perch Drive in Highland after her father passed away. Prior to his death, Rogers’ father had secured a reverse mortgage from Live Well Financial Inc., the petition says. Rogers says the home was foreclosed on in January 2012 but says she remained entitled to the premises through Feb. 24, 2012.

    Rogers says Reverse Mortgage Solutions was hired to oversee and manage the sale of the property following the foreclosure. That company allegedly hired National Field Network to act on its behalf.

    Rogers says she had undergone shoulder surgery prior to the foreclosure and had temporarily moved into her son’s home about a mile away from her own house. She says she visited the home daily to check mail and care for her cat. The home was furnished and all utilities were functioning, according to the complaint.

    On Feb. 8, sixteen days prior to the date Rogers was legally required to surrender the property, she says two people acting on behalf of RMS and National Field Network went on to the property without permission and drilled out the lock on the front door. She says the workers “removed and disposed of numerous valuable items, decimated the home and left the contents not removed from the home in a state of ruin.” Rogers claims many of the items taken from the home have never been returned.

    Rogers accuses RMS and National Field Network of intentional trespass, negligent trespass, trespass to chattels, conversion and conspiracy. She contends the defendants knew they had no right to be on the property and cause damage but acted with gross negligence and wanton disregard.

    The former homeowner is asking to be awarded more than $250,000 in damages for loss of property, mental anguish, humiliation and inconvenience.

Another Foreclosure Trash Out Contractor Screws Up; Victimized Property Owner Says Outfit Made Off With $150K Worth Of Stuff; Cops Punt On Criminal Probe - Say It "Happens All The Time ... Is Not A Crime"

In Coupland, Texas, the Austin American Statesman reports:
  • The workers who were supposed to clear out his neighbor’s foreclosed house instead cleaned out Mike Moors’ barn, making off with his wife’s wedding dress, their love letters, his boat, his backhoe, the works.

    Moors wants to know where his stuff is and when he’ll get it back. The answer might be never.

    “Are my things in storage somewhere?” asked Moors, 53, an unemployed construction worker who has been asking the same questions for more than a month. “Have they sold it at auction? How do I explain to my wife that she may never get her wedding dress back? There were many other heirlooms taken that are priceless.”

    Safeguard Properties, the Ohio company that hired the crew to prepare the house next door for foreclosure in December, acknowledges the error and says an insurance company is verifying Moors’ claim and will soon have information for him. But not yet.

    Moors cannot imagine how the mistake was made in the first place. A fence separates his property on County Road 460 from his former neighbor’s land. And there isn’t a home on Moors’ land, just a barn.

    Moors, who lives in Taylor, discovered his belongings were missing in late January when he drove by the property, which he hopes will be the site of his retirement home. At first he thought he had been ripped off. He didn’t see his 16-foot fiberglass boat. A closer look revealed that the metal barn was broken into. The bolts on a metal rail fence securing the barn were cut off, and the fence was removed. Missing were his $15,000 Case 580 backhoe, a small printing press for sign-making and two locked construction trailers on wheels that were parked on either side of the barn.

    A neighbor, Joe Diaz, saw it all. Three men in trucks and carrying clipboards showed up and began hauling things off. “They were here all day and part of the night. They couldn’t get the backhoe out so they dragged it out and put it on a trailer,” Diaz said.

    Diaz said he was suspicious but not enough to call police: “I hadn’t seen Mr. Moors in a couple of months so I assumed the worst and thought he’d died or something. This was happening in broad daylight; I thought it was legit.”

    This type of thing has been known to happen. In 2008, a Cedar Park couple who just bought a previously foreclosed house came home to find all their belongings missing. Field Asset Services workers hadn’t heard of the sale and believed the house was still in foreclosure. The company apologized; the couple sued.

    Records from the national Better Business Bureau show that Safeguard Properties, which has a “C” rating and 33 complaints against it, was alleged to have made virtually the same mistake in 2011. The records don’t indicate where it occurred, but they say Safeguard failed to respond to the BBB’s attempt to resolve it. The Texas Attorney General’s Office confirmed late Friday that two complaints have been filed against the company in the past.

    Moors estimates the value of the missing items at $150,000, but he says he doesn’t want money. The contents of the trailers included a late aunt’s antique ceramic figurines and a 100-year-old trunk that once belonged to the grandfather of his wife, Janine.

    There also was a cedar chest with her wedding dress that she wore Nov. 16, 1985, a wedding reception book and love letters that Mike Moors and his wife had exchanged when they were dating.

    “When I think about that wedding dress, it makes me so sad that it’s gone. Nothing, nothing can replace it,” Janine Moors said.

    Mike Moors filed a theft report with the Williamson County Sheriff’s Office on Jan. 24. He said Detective Brian Johns sent him an email that said Safeguard Properties was responsible, but that the company was acting in good faith. Case closed. “This happens all the time, not that it makes it right, but it is not a crime,” Johns told Moors in the email.(1)

    Frustrated, Mike Moors said he spent the next few weeks calling and sending registered letters to county officials, the lender CitiMortgage and Safeguard Properties. He finally filed a claim in February.

    Sue McConnell, a spokeswoman with the BBB in Ohio, said that, according to its records, no government agency has taken action against Safeguard.

    Safeguard isn’t providing any details about Moors’ belongings. Diane Roman Fusco, a spokeswoman for the company, said the information is confidential, but that Moors can get the details from claims solution specialist Lisa Horvath. Mike Moors said he called Horvath on Thursday, and she told him the information was confidential.

    “She also told me it’s not necessary to get the media involved. She said, ‘I promise I will do the right thing,’” Mike Moors said.

    Janine Moors hopes for more than a promise. “A woman plans her whole life for her wedding day and choosing that dress,” she said. “And when you don’t have it anymore, it wants to make you cry.”
For the story, see No answers after foreclosure crew empties wrong building.

(1) I guess this case qualifies as a "civil matter."

Buyer Who Bought Home With Delinquent Loan For All Cash Faces Foreclosure Anyway As Servicer Returns Money Along With Foreclosure Notice

In Pittsburgh, Pennsylvania, WPXI-TV Channel 11 reports:
  • A local man is facing a mortgage mess. He paid cold hard cash for his house, but the lending company is still foreclosing. So he called Target 11's Robin Taylor for help.

    "I bought this house. Legally, it's all registered in the prothonotary's office. They money is there and I'm still getting foreclosed on," said Noel Norris of Leechburg, Pa.

    I did some digging and discovered hundreds of similar complaints against Ocwen Loan Servicing. Last fall, the Better Business Bureau issued a warning about the company. Homeowners say they've made their mortgage payments, but the company is foreclosing anyway. It's been a real nightmare for Norris.

    His mother owned the house he grew up in. She fell behind on her mortgage payments, so Noel decided to buy the home.

    Noel closed on the property Oct. 5, 2012. Ten days later, Ocwen Loan Servicing sent his money back along with a foreclosure notice.

    "You buy the house. You send them the money for the house and they send it back to you?" I asked.

    "The money was wire transferred to their account, guaranteed funds. It's in there. My attorney did that. They turned around and sent me a check back," said Norris. The payoff quote was $74,000, but Ocwen is charging interest and penalties as if the money was never paid.
  • For Noel, it's been frustrating, but a settlement has finally been reached, allowing him to stay in his home. He told me he couldn't afford to fight Ocwen any longer. "The legal system's not free. It might not be perfect, but it's not free, for sure," said Norris.

Thursday, March 14, 2013

Banksters Play Critical Role In Internet Payday Lending Racket; Refuse Account Holders Requests To Immediately Terminate Automatic Withdrawals, Leading To Customer Overdrafts, Fat Fees

The New York Times reports:
  • Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

    With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

    While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.
  • For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts.

    Roughly 27 percent of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.
  • While the loans are simple to obtain — some online lenders promise approval in minutes with no credit check — they are tough to get rid of. Customers who want to repay their loan in full typically must contact the online lender at least three days before the next withdrawal.

    Otherwise, the lender automatically renews the loans at least monthly and withdraws only the interest owed. Under federal law, customers are allowed to stop authorized withdrawals from their account. Still, some borrowers say their banks do not heed requests to stop the loans.

    Ivy Brodsky, 37, thought she had figured out a way to stop six payday lenders from taking money from her account when she visited her Chase branch in Brighton Beach in Brooklyn in March to close it. But Chase kept the account open and between April and May, the six Internet lenders tried to withdraw money from Ms. Brodsky’s account 55 times, according to bank records reviewed by The New York Times. Chase charged her $1,523 in fees — a combination of 44 insufficient fund fees, extended overdraft fees and service fees.

    For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from and a $700 loan from in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

    Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

    “I don’t understand why my own bank just wouldn’t listen to me,” Ms. Baptiste said, adding that Chase ultimately closed her account last January, three months after she asked.
For more, see Major Banks Aid in Payday Loans Banned by States.

See also, Dimon Pledges to Change JPMorgan’s Practices on Payday Loans:
  • Jamie Dimon, the chief executive of JPMorgan Chase, vowed [...] to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers’ checking accounts.

Recently-Convicted County Treasurer Bagged In Tax Lien Auction Bid-Rigging Racket Now Tagged Along With Several 'Deep Pocket' Entities In Civil Suit Seeking Class Action Status

In Edwardsville, Illinois, Courthouse News Service reports:
  • A longtime Madison County treasurer rigged tax lien real estate auctions for his political allies, a class action claims in Madison County Court.

    Plaintiff Virgil Straeter claims Frederick Bathon, Madison County treasurer from November 1998 through 2009, conspired with several companies and auctioneer James Foley to carry out the scheme.
    Bathon has pleaded guilty to federal antitrust charges and promised to reveal his co-conspirators as part of the plea deal, according to the complaint.

    "During his tenure as treasurer, and particularly in connection with the tax sales over which he presided from 2003 through 2008, Bathon colluded and conspired with Jim Foley and others, who called the sales as auctioneer, and with the buyers, who were also contributors to his re-election campaign, to rig the bidding at the sales so that the winning bid would always or nearly always by made by one of the members of the conspiracy at or near the statutory maximum 18 percent interest rate," the complaint states.

    Bids in the tax-lien auctions start at the state's maximum 18 percent annual rate, and are bid down toward zero, with the low bidder awarded the lien certificate.

    Straeter says the scheme forced distressed property owners to pay inflated prices to redeem their properties and avoid foreclosure. In some cases, Straeter says, the owners were unable to reclaim their property because of the conspiracy. Straeter says the scheme caused him to pay higher prices to reclaim 11 of his properties. All of those properties were bid at the 18 percent maximum, according to Straeter.

    "Since Bathon stepped down as treasurer and competitive bidding was reintroduced to the process, the average interest rate has been below 4 percent for each sale," the complaint states.
    Straeter claims approximately 10,000 properties were subject to the tax lien conspiracy.

    The class consists of all property owners whose property was auctioned off to the co-defendants, or who had to reclaim their property at inflated rates from 2003 to 2008. They seek actual and punitive damages for violations of the Illinois Antitrust Act, civil conspiracy, spoliation, breach of fiduciary duty and negligence.
  • Named as defendants are Bathon, Foley, Madison County, RLI Insurance Company, Western Surety Company, Land of Lincoln Securities, Prairie State Securities, VI Inc., SI Securities, Sabre Group, Empire Tax Corp., Vista Securities, former Madison County Clerk Mark Von Nida and seven individual buyers.

Cleveland Housing Advocacy Group Steps Up To Salvage Two Mismanaged Local Lease-To-Own Programs That Left 90 Rent-Paying, Aspiring Homebuyer-Families Facing Foreclosure

In Cleveland, Ohio, The Plain Dealer reports:
  • A bailout of two rent-to-own programs will allow more than 90 low-income families to buy their houses in Cleveland's Glenville neighborhood, according to the Cleveland Housing Network.

    The housing advocacy agency has led a rescue that included buying mortgages and paying back taxes and penalties to keep the houses out of foreclosure and in the programs, said Rob Curry, the agency's executive director. "They're totally back from the edge," Curry said Monday.

    The programs date to the 1990s, when investor-backed partnerships built and leased the houses to low-income families with provisions allowing the renters to buy at below-market prices after 15 years.

    Most of the money to build the houses came from large corporations wanting to invest in low-income housing in return for substantial federal tax credits.

    But problems surfaced two years ago, when some renters looking to buy their houses discovered that the partnerships' management company had for years failed to pay property taxes.

    In April, 2011, Huntington National Bank moved to foreclose on a loan to one of the partnerships, Northeastern Neighborhood Homes Limited Partnership II, because more than $95,000 in taxes and penalties going back to 2007 had not been paid.
  • In launching a rescue effort, the Cleveland Housing Network and Neighborhood Progress Inc. negotiated to buy the mortgages, held by Huntington and Chicago-based Urban Partnership Bank, at discounted prices. [...] Carrie Rosenfelt, community development relationship manager at Huntington Bank, said Huntington sold its mortgage at a discount because of the Cleveland Housing Network's experience working with rent-to-own programs.

Wednesday, March 13, 2013

Multi-State Probe Targets Banksters' Role In Collecting Delinquent Consumer Debt Peddled Out To Collectors For Pennies On The Dollar; Investigators Round Up The Usual Suspects

Reuters reports:
  • The largest U.S. banks face a multi-state investigation into whether they helped debt collectors pursue faulty judgments against credit card customers, according to people familiar with the matter.

    At issue is whether weak record-keeping by banks or a failure to pass accurate information to collection agencies harmed consumers.

    The allegations against the banks echo those central to last year's $25 billion federal-state mortgage settlement to resolve charges that the banks "robo-signed" documents and pursued foreclosures with faulty information.

    This latest probe targets the same banks, including Bank of America (BAC.N), JPMorgan Chase (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N), said the sources who spoke on condition of anonymity because the investigations are continuing.

    As with the mortgage cases, the investigation focuses on the banks' poor paperwork and their weak tracking of the debts.

    When they sold delinquent credit card debt to the buyers, often at only a few cents on the dollar, they allegedly failed to provide them with the evidence that the borrowers owed the money. It is unclear, however, if the incomplete information was used to pursue borrowers who were not delinquent.
  • The probe against the banks marks an expansion of the scrutiny that to date has largely focused on the debt collectors.
  • Investigators are finding that the banks often did not provide buyers of the debt with evidence that individual credit card accounts were delinquent. Instead the banks only provided basic information about how much money they thought was owed and who the borrower was, without providing original contracts, past statements, or other additional documentation.
  • Despite a lack of documentation, consumer advocates and people familiar with the investigations say debt buyers still pursued court rulings that allowed them to potentially garnish wages and debit bank accounts.

    Consumers usually fail to contest the court proceedings, these people said, because they often don't receive the notices, don't know how to respond, or cannot take the day off work, and courts enter default judgments against them.

    "A lot of these debt buyers are flooding state courts attempting to collect debts that they've bought for pennies on the dollar," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "They're filing these affidavits about how much is owed, and who owes it, but the reality is, they have no information."

Nevada AG Scores Plea In Criminal Prosecution Of Upfront Fee, Debt Reduction Mortgage Refinance Ripoff

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Catherine Cortez Masto announced that on March 6, Gary Dimattia, 62, of Las Vegas, pled no contest to ten felonies in connection with his operation of a mortgage lending fraud scam, including four counts each of mortgage lending fraud and theft, one count of multiple transactions involving fraud and deceit in the course of enterprise or occupation, and one count of pattern of mortgage lending fraud.
  • Operating under the name Financial Link Services, Dimattia peddled a so-called “Balance Reduction Program” promising to arrange to have investors purchase his clients’ mortgages from their lenders and refinance his clients at current market value, thereby eliminating negative equity and reducing monthly payments.

    He typically charged $3,495-$3,895 up front but failed to deliver the promised services or refund the fees.

Missouri AG Tags Loan Modification Outfit In Civil Suit; Phony Promises Of Attorney Involvement, Unlicensed Practice Of Law Among Allegations

From the Office of the Missouri Attorney General:
  • Attorney General Chris Koster [] filed a lawsuit against two related businesses that purported to provide loan modification and mortgage relief to desperate homeowners.

    Koster’s suit is against Legal Helpers Debt Resolution, LLC and Mortgage Law Group, LLC, as well as the companies’ managing partner, Jason Edward Searns; senior partner, Thomas Macey; and senior partner, Jeffery Aleman.

    The lawsuit alleges that the defendants preyed on vulnerable Missouri consumers who were already dealing with difficult financial circumstances, especially during the economic downturn. The defendants allegedly lured consumers with promises of mortgage modifications or debt settlements, then encouraged them to pay the companies, rather than their creditors. As a result, many consumers defaulted on their obligations and never received the services the defendants promised.
  • Specific allegations in the lawsuit state the businesses broke Missouri’s consumer protection laws by:

    (1) Misrepresenting to consumers the results the defendants could achieve and the time necessary to achieve promised results;

    (2) Persuading consumers to stop making payments to their lenders and creditors while failing to inform the consumers of the legal consequences that could result from withholding those payments;

    (3) Taking upfront payments from consumers for debt relief and loan modification services;

    (4) Failing to provide services as promised to consumers;

    (5) Failing to place legally required notifications of consumers’ rights in contracts;

    (6) Misrepresenting that the defendants’ services would be performed by attorneys licensed to practice law in Missouri, and:

    (7) Engaging in the practice of law in Missouri without a license to do so.

Tuesday, March 12, 2013

Foreclosure Rescue Rackets Tagged By Feds For Peddling Forensic Loan Audits & "Mass Joinder" Lawsuits Dodge Criminal Prosecution, Reach Civil Lawsuit Settlements

From a recent Federal Trade Commission press release:
  • The defendants behind an alleged mortgage relief scam have agreed to settle FTC charges that they deceived cash-strapped consumers into believing they could hold onto their homes and reduce their mortgage payments by either suing their mortgage lenders in so-called “mass joinder” lawsuits or buying “forensic loan audits.”

    All of the defendants, including two individuals and seven companies, will surrender assets and be prohibited from making deceptive claims about any product or service, and all but one are banned from marketing mortgage- and debt- relief services.
For more, including links to pertinent court filings, see Marketers of Alleged "Mass Joinder" and "Forensic Loan Audit" Mortgage Relief Services Scams Settle FTC Charges, Agree to Surrender Assets and Halt Deceptive Conduct (All But One Defendant Banned from Marketing Mortgage- and Debt-Relief Services).

Bay State AG Settles One, Files Another Civil Suit In Effort To Pursue Upfront Fee Loan Modification Rackets; Allegations In Latest Filings Include Charge Of Unlicensed Practice Law

From the Office of the Massachusetts AG:
  • Following separate actions brought by her office this week against two financial companies and a law partnership, Attorney General Martha Coakley is warning consumers about potential scams that attempt to take advantage of struggling homeowners.

    Both cases allege unfair and deceptive acts and practices in connection with foreclosure-related services, including improper charging of advance fees. Under Massachusetts law, consumers should not be charged advance fees for foreclosure-related services.

    “We allege these defendants preyed on distressed homeowners, often requesting advanced payment in violation of the law,” AG Coakley said. “We continue to see many foreclosure and loan modification scams that prey upon borrowers who are desperately trying to save their homes. Homeowners should be aware of their rights and know that our office has resources available to help them.”

    In the first action, a Brighton company and related law firm have agreed to pay a total of $20,000 in restitution to consumers and the Commonwealth for allegedly charging illegal advance fees for loan modifications. According to an assurance of discontinuance, filed [] in Suffolk Superior Court, iMod Corporation (iMod), and Lombardi and Stephenson, an affiliated law firm, charged Massachusetts residents advance fees for foreclosure-related services. In addition to restitution for consumers, the defendants have agreed to no longer charge consumers advance fees for foreclosure-related services, and will notify potential clients that free loan modification services are available.

    In the second action, a Lawrence financial company and its owner have been sued for using the foreclosure crisis to prey upon homeowners and provide legal advice without a license.

    According to the lawsuit, filed in Suffolk Superior Court on Wednesday, Pinnacle Financial Consulting, LLC (Pinnacle), and its owner, Robert Burton (Burton), allegedly engaged in unfair or deceptive conduct while marketing, soliciting and providing loan modification, bankruptcy petition preparation and financial advising services.

    The allegations include misrepresenting to consumers the services they could provide, exaggerating the benefits of their services, charging unlawful advance fees, practicing law without a license, failing to take any action to provide the promised services after receiving payment, and refusing to provide refunds upon request.

    Defendants allegedly targeted minority and non-native English speakers desperate to save their homes from foreclosure. The AG’s Office has obtained a temporary restraining prohibiting the defendants from dissipating or concealing assets and destroying records.
For the Massachusetts AG press release, see AG Coakley Targets Financial Companies for Predatory Loan Practices, Warns Homeowners About Foreclosure Relief Scams (AG’s Office Obtains $20,000 Settlement with iMod Corporation, Files Lawsuit Against Pinnacle Financial for Soliciting Massachusetts Consumers with Foreclosure Relief Scams).

Virginia AG Continues Use Of Civil Suit Settlements To Prosecute Blatant Loan Modification Ripoffs

From the Office of the Virginia Attorney General:
  • Attorney General Ken Cuccinelli announced [] that his office has reached settlements with two affiliated mortgage loan modification companies for allegedly charging illegal advance fees before performing "foreclosure rescue" services for their customers, and failing to follow through on promises to deliver those services.

    The attorney general alleged that Virginia Beach-based Rysnglo Financial Management, LLC, and Los Angeles-based Mae Global Enterprises, LLC violated the Virginia Foreclosure Rescue law by charging and receiving large advance fees from consumers in connection with services to prevent foreclosure. Virginia law prohibits a supplier of foreclosure avoidance or prevention services from charging or receiving a fee prior to the full performance of the services it has agreed to perform, if the transaction does not involve the sale or transfer of residential real property.

    According to the attorney general's complaint, consumers typically contracted directly with Mae Global, but paid money to Rysnglo. Rysnglo would provide portions of the fees it received to Mae Global, which was supposed to provide the services. The companies charged consumers fees ranging from $6,000 to $15,000 to help them obtain mortgage loan modifications.

    In another service offered, consumers could supposedly purchase their home, free and clear of their mortgage, for a fraction of the outstanding balance of their mortgage. At least one consumer allegedly paid $80,000 for this service.
  • The settlements include the following key terms:

    The commonwealth is granted judgments against Rysnglo and Mae Global in amounts totaling $248,200 for restitution to consumers.

    The commonwealth is granted judgments against Rysnglo and Mae Global in amounts totaling $85,000 in civil penalties for their alleged violations of the Foreclosure Rescue law and the VCPA.

    The commonwealth is granted judgments against Rysnglo and Mae Global in amounts totaling $25,000 for reimbursement of attorneys' fees and costs.
  • "I am unaware of a single instance where consumers received promised services from the Rysnglo or Mae Global,"(1) Cuccinelli said. "My office is committed to pursuing those who prey on Virginia citizens experiencing financial difficulties."
For the Virginia AG press release, see Cuccinelli announces settlements with Virginia Beach, L.A.-based mortgage loan modification companies (Commonwealth will obtain $358,000 in judgments for customer restitution, civil penalties, and attorneys' fees).

(1) If this is true, one wonders why a criminal prosecution (ie. grand theft, theft by deception, etc.) wouldn't have been more appropriate.

Victimized Homeowners Expecting $125K In Restitution From NJ AG Civil Suit Tagging Loan Mod Ripoffs Yields Measly $4K

In Philadelphia, Pennsylvania, KYW-TV Channel 3 reports:
  • Mortgage delinquencies in Pennsylvania and New Jersey are on the rise. Often desperate times call for desperate measures, but before you shell out money to a company to help save your home, 3 On Your Side Consumer Reporter Jim Donovan has a warning for you.

    “We were very vulnerable and you know, they preyed on that,” says Misty Corsey. Corsey had hoped to lower her mortgage payments when her husband’s hours were cut. A company called Mortgage Foreclosure Experts promised to help for a $2300 upfront free.

    According to Corsey, “We were guaranteed to get our mortgage under one thousand dollars.” That would have been a savings of over $500 a month, but what did she really get? Corsey says, “They did get me a modification for about $15 dollars cheaper.”

    “I thought I did everything right,” says Kim Jagielski. Jagielski had hired Mortgage Foreclosure Experts after being laid off. She says, “He said they can help me get a remodification, that I was doing something wrong on my own, that they were there to help me.”

    Jagielski paid $2,300 too and didn’t get anything in return. She says, “They won’t respond. They won’t call.”

    In March 2011, Mortgage Foreclosure Experts was one of 11 unlicensed companies that the New Jersey Attorney General targeted for providing illegal modification services. The State fined the companies and sought $125,000 in restitution.

    But now, two years later, only three of those companies have ever paid up, and only a measly $4,000 was given back to customers. Mortgage Foreclosure Experts wasn’t among those three companies, and has never forked over a cent.

Monday, March 11, 2013

S. Florida Woman Accused Of Grand Theft, Uttering Forged Instrument For Allegedly Hijacking Title To Home, Then Attempting To Evict Occupant

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • In South Florida, thieves will try to steal anything — even your home.

    A Lauderhill woman is accused of filing bogus paperwork at the Broward Government Center to transfer a Southwest Ranches property to her name and seize ownership of the home. She even tried to evict the woman who lived there.

    Neither the renter nor homeowner knew Marlene Baptiste, now charged with grand theft — and neither had any inkling she had set her sights on the property in the 6900 block of Southwest 185th Way, authorities said. Although Baptiste, 39, is now charged with grand theft, her case highlights how vulnerable South Floridians' homes are to strangers' attempts to seize them.

    Homeowners should use public records online to their advantage — just as thieves do, said Sunrise real estate lawyer Gary Singer.

    "It's impossible really to stop someone from fraudulently signing your name and filing it in the public record," he said. "Your house is your biggest investment. Just like protecting yourself against identity theft, you have to also check your public records and make sure no funny business is on it, because it does happen."
  • According to a Broward Sheriff's Office report, Baptiste was arrested Feb. 26 and charged with grand theft over $100,000, uttering a forged instrument and refusing to supply a DNA sample.
  • The Sheriff's Office said visitor logs and surveillance video showed Baptiste enter the Broward County Governmental Center, 115 S. Andrews Ave., and file the fraudulent quit claim deed in October.

    Last May, Eddie Banks, 40, allegedly took it a step further — after fraudulently recording a deed, he moved into a bank-owned Oakland Park home in the 800 block of Northeast 47th Court.

    When a bank representative contacted authorities, Banks called the Sheriff's Office to report someone had broken into his home. Banks was ultimately charged with burglary and grand theft.

Elderly Scam Victim Loses 14 Rental Properties To Foreclosure After Entrusting Accused Perpetrator With Making Monthly Mortgage Payments Out Of Rent Collections; Suspect Hit With $250K Bail In Alleged $220K+ Ripoff

From the Office of the Ventura County, California District Attorney:
  • District Attorney Gregory D. Totten announced [] the filing of a felony complaint against Julietta Quinones ( DOB 3/12/68) of Port Hueneme. Quinones is charged with seven felony counts of grand theft, along with an aggravated white-collar crime enhancement alleging the thefts involved the taking of more than $100,000. The case was investigated by the District Attorney's Real Estate Fraud Unit.

    The 70-year-old victim owned 14 rental properties throughout Ventura County. The victim entrusted Quinones to make the victim's monthly mortgage payment on each property and provided the defendant with signed, blank checks for that purpose. Rather than pay each respective mortgage, Quinones used the victim's checks for personal expenses. As a result, the victim lost all 14 rental properties. Quinones is accused of stealing in excess of $221,708 over a period of three years.
  • Quinones remains in custody in lieu of $250,000 bail and faces a maximum sentence of nine years in state prison.

Antitrust Feds Notch Two More Pleas In Ongoing Probe Into Northern California Foreclosure Auction Bid-Rigging Rackets

From the U.S. Department of Justice (Washington, D.C.):
  • Two Northern California real estate investors have agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

    Felony charges were filed [] in the U.S. District Court for the Northern District of California in Oakland against Peter McDonough of Pleasanton, Calif., and Michael Renquist of Livermore, Calif.

    Including [these] pleas, 29 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

    According to court documents, for various lengths of time between November 2008 and January 2011, McDonough and Renquist conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif .

    McDonough and Renquist were also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.

    The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Renquist was also charged with additional counts for his involvement in similar conduct in Contra Costa County, Calif.

    “The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
For the Justice Department press release, see Two Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure Auctions (29 Individuals Have Agreed to Plead Guilty to Date).

See Illegal Bid Rigging Racket? Or Mere Innocent 'Joint Bidding' Arrangement? for the distinction between what bidders can and can't do when engaged in cooperative bidding with others at public auctions.

Recent Bid-Rigging Prosecutions Have Tax Lien Investors' Trade Group Seeking Training From Antitrust Feds To Keep Members Out Of 'Sherman Act' Hot Water

In Washington, D.C., Reuters reports:
  • Solo investors, specialty investment firms and others who buy up property tax liens for a profit are studying the finer points of U.S. antitrust law after watching comrades in their niche face charges of bid rigging.

    A Department of Justice lawyer familiar with a series of recent cases in New Jersey has signed on to speak at a training session next month for the National Tax Lien Association. The training is part of a plan to inform members about antitrust pitfalls in the auctions where liens are bought and sold. It will be at the association's annual meeting in Miami.
  • Fear of criminal prosecution rippled through the industry in the past few years as the Department of Justice's Antitrust Division brought cases of alleged bid rigging in the local auctions where the lien sales take place.

    Bid-rigging convictions can mean prison time and millions of dollars in fines under the Sherman Act.

    "No one would ever violate the Sherman Antitrust Act if they knew the significance of the penalties," said Brad Westover, executive director of the National Tax Lien Association.

    The association began regular training sessions at its annual meeting last year, Westover said. At his request, the Antitrust Division has agreed to send a trial attorney from New York this year.
  • Westover said he tells his members to assume there is a federal agent at every tax-lien auction in the country. "We don't want to venture anywhere near something that could look on the wrong side of the law," he said.
For the story, see After busts, tax-lien industry asks for antitrust training.

See Illegal Bid Rigging Racket? Or Mere Innocent 'Joint Bidding' Arrangement? for the distinction between what bidders can and can't do at public auctions.

Sunday, March 10, 2013

U.S. Senator Requests DOJ Probe Into Suspected LPS' Racket That Allegedly Employed Improper Fee Structure, Resulting In Double Billing Of Fees For Legal Services

The Wall Street Journal reports:
  • A U.S. senator has asked Attorney General Eric Holder to investigate the business practices of a company that provides technology services to lenders and other companies that process foreclosures.

    In a letter sent to the Department of Justice on Thursday, Sen. Ron Wyden (D., Ore.) raised concerns over the business practices of Lender Processing Services Inc. LPS +0.04%, a Jacksonville, Fla.-based company that offers software and logistical services for mortgage companies.

    The letter alleges that LPS employed an improper fee structure that resulted in double-billing homeowners or mortgage investors for legal services related to the processing of foreclosures and bankruptcies.

    It also says that the firm’s business model may have been responsible for sowing what became known as “robo-signing,” where bank attorneys and paralegals improperly signed off on foreclosures.

Jury Convicts Title Agent Of Using Mom's I.D. To Illegal Score Reverse Mortgage On Her Own Home, Used Proceeds To Make "Hard Money" Loans; Made Bogus Reps In Subsequent Short Sale

From the Office of the U.S. Attorney (Miami, Florida):
  • A Miami title agent and former mortgage broker was found guilty [...] for her role in a “reverse mortgage” fraud scheme in connection with a loan worth more than $400,000, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.

    After a six-day jury trial [...], a federal jury convicted Yesenia Pouparina (aka Yesenia Campos), 40, of four counts of wire fraud and one count of mail fraud for her role in securing a fraudulent Home Equity Conversion Mortgage (HECM), commonly referred to as a reverse mortgage loan, and making false representations related to the occupancy of the property and its subsequentshort sale.”
  • According to court documents and evidence presented at trial, Pouparina, a licensed title agent in the state of Florida, devised a scheme to obtain a reverse mortgage loan on her own property in the name of her mother, an individual who failed to meet the requirements of the HECM program.

    Pouparina submitted to a lending institution a false loan application and doctored records in support of that application, misrepresenting her mother’s eligibility to participate in the HECM program.

    Pouparina acted as the title agent for the loan and disbursed the loan proceeds directly to her own personal bank accounts.

    Pouparina also enriched herself by collecting fees generated by the loan, and also profited by using the loan proceeds in connection with her business as ahard money lenderin other mortgage deals.

Law Firm Secretary Pinched For Allegedly Swiping Escrow Account Cash & Lawsuit Settlement Proceeds, Forging Client's Signatures & Pocketing Their Checks

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • A former secretary at a Deerfield Beach personal injury law firm has been accused of forging client checks and stealing nearly $25,000, according to an arrest affidavit. Charged with grand theft, Vanessa Belotte, 29, of Coral Springs, is being held at the Main Jail on $25,000 bond.
  • "[Belotte's] fraudulent activities amount to $24,916.30; however, the final amount of loss may increase, as it is difficult to ascertain at the present time whether any additional forged checks will be discovered," Detective John Calabro, of the Broward Sheriff's Office, wrote in a Feb. 25 arrest affidavit.

    In a prepared statement, one of the firm's partners, Andrew Berrio, said: "Fuentes & Berrio are working closely with the few clients involved, as well as law enforcement, during this ongoing investigation and assure that the clients will ultimately suffer no economic loss."

    According to the arrest affidavit, as many as 11 clients were affected.

    Embezzlement suspicions were first sparked when it was discovered in November 2012 that five fraudulent debits — three payments to Florida Power & Light totaling $700 and two payments to Comcast for a total of $521 — had been made from a client's trust account in October 2012.

    A subsequent investigation "uncovered an even bigger fraud," including the discovery at Belotte's old desk of "notepads where she practiced client's signatures," and "incriminating correspondence" on her work computer, the arrest affidavit said.

    Aside from the five unauthorized debits, beginning in August 2012, Belotte was also involved in the forgeries of at least nine checks that should have been mailed to clients, according to the affidavit.

    When notified, the clients informed investigators that "they did not receive their checks and that their signatures were forged," the affidavit said. In one instance, the affidavit says, Belotte changed a client's mailing address to her own Coral Springs home address.

    And on another occasion, Belotte sent a letter to a client advising that the firm no longer wanted to represent him. She then called the insurance company and settled the case. When the settlement check arrived at the law firm, instead of arranging for the client to pick it up, Belotte "negotiated the check through the same previously described fraudulent means," the affidavit said.

    It was not immediately clear if Belotte had retained an attorney to represent her.

Oakland Feds: Paralegal Settled Lawsuits, Then Swiped Settlement Proceeds Out From Under Unwitting Law Firm Employer, Clients

From the Office of the U.S. Attorney (Oakland, California):
  • Ana Lissa Reyes, of San Lorenzo, Calif., was arraigned [] on an information charging her with multiple counts of mail fraud and tax evasion, United States Attorney Melinda Haag and IRS Criminal Investigation Special Agent in Charge Jose M. Martinez announced.

    According to the information, Reyes is alleged to have worked as a secretary, office manager and paralegal for a Bay Area personal injury law firm.

    From about 2006 through June 2011, Reyes, without authorization, settled claims without the knowledge of the law firm or its clients and stole the settlement proceeds.

    It is also alleged that Reyes engaged clients without the law firm’s knowledge and stole client retainer fee payments. To carry out the scheme to defraud, Reyes created a bogus company to correspond with clients without the law firm’s knowledge and to defraud the clients into believing their cases were ongoing.
For the U.S. Attorney press release, see Paralegal Charged In Scheme To Defraud Bay Area Law Firm And Its Clients.

For the formal charges, see U.S. v. Reyes.