Saturday, April 13, 2013

Connecticut Feds: Fairfield Housing Authority Executive Director Pilfered $30K From Agency Tasked With Helping Provide Affordable Housing For Eligible Low-Income Families, Elderly

From the Office of the U.S. Attorney (Hartford, Connecticut):
  • David B. Fein, United States Attorney for the District of Connecticut, [] announced that a federal grand jury [...] has returned an indictment charging ELIZABETH JO GUTIERREZ, 47, of Ridgefield, with one count of theft concerning programs receiving federal funds. The indictment alleges that GUTIERREZ embezzled $30,000 from the Fairfield Housing Authority.
  • The Fairfield Housing Authority administers federal housing programs for the U.S. Department of Housing and Urban Development with the mission of providing affordable housing for eligible low-income families and the elderly.

    According to the indictment, GUTIERREZ served as the Executive Director of the Fairfield Housing Authority from approximately July 2010 to December 2011. In the summer of 2011, GUTIERREZ issued two checks, each in the amount of $15,000, from the Fairfield Housing Authority’s checking account and subsequently deposited them into her own checking account.

Proposed Laws Regulating Condo Development Aim To Curb Horror Stories Caused By Builders, Converters That Peddle Problem Units To Unwitting Homebuyers

In Edmonton, Alberta, The Calgary Herald reports:
  • Changes to the Condominium Property Act won't come fast enough for Trish Millard, who worries she'll have to walk away from her Rutherford-area condo.

    She bought it new for $280,000 five years ago. Problems followed.

    First the residents discovered the attic was built without fire separations after a small fire on the third floor. The condo corporation filed a lawsuit against the developer, builder and architect.

    Last fall, a city safety inspector found their balconies did not meet the building code.

    They've added that to the $2-million lawsuit and have already spent about $70,000 in legal fees trying to recoup the cost of repairs. Millard doubts they'll see a penny. If they don't, she figures each owner will be asked to pay $40,000 to $50,000 to cover all the repairs. "I've had two financial advisers tell me to just walk away from it," she said.

    Changes to the Condominium Property Act that could protect people like Millard were in a discussion paper released in February by Service Alberta. Condo owners and others in the industry have until May 2 to give their opinions. The survey can be found online at

    Changes would affect hundreds of thousands of people living in the nearly 8,000 condo buildings in Alberta. "From top to bottom, I believe this act needs a look," said Manmeet Bhul-lar, Minister of Service Alberta. "I'm hoping for changes as soon as possible. Tell us what you think the act needs to have."
  • It's easy to find horror stories regarding structural problems in relatively new buildings. Condo residents across Edmonton have been struggling with leaky stucco applications.

    In Leduc, a long list of safety problems resulted in temporary evictions for Bellavera Green residents.

    Structural issues forced Fort McMurray's Penhorwood Condominium residents out one day at midnight.

    The problems might reflect a different system of enforcement. City safety code officers inspect single-family homes an average of 12 times at many points during construction, but for condo buildings or anything taller than three storeys, professional architects and engineers are involved, says city staff.

    Inspectors generally visit the site only for complaints or at the request of the builder, visiting a minimum of twice for inspections.

NYC Landlord Tags High-Powered Local Real Estate Broker In Lawsuit For Intentionally Concealing Income Level To Score Deep Discount On Rented Residence

In New York City, bigtime real estate operator Harry Macklowe recently filed suit against one of his tenants, well-known, high-powered local real estate broker Carol Cohen, for allegedly intentionally concealing her income level to avoid high-income rent deregulation of the rented premises she currently resides in.

Cohen is accused of availing herself of the protection of the local rent control/rent stabilization law to keep her monthly rent artificially low and way below fair market value when, according to the landlord's suit, her high income level disqualifies her from such statutory protection.

Reportedly, she pays $3,000 per month, while a similar apartment two floors up goes for three times as much, according to a recent story in the New York Post.

For the lawsuit, see 737 Park Ave. Acquisition LLC v. Cohen, et al.

See also, The Real Deal: Macklowe sets sights on Carol Cohen’s rent-stabilized unit at 737 Park Avenue (Litigious landlord wants state regulators to inspect broker’s tax returns).

Lawsuit: Niece Used 4-Year Charade To Dupe HOA, Landlord Into Thinking Dead Aunt Was Still Alive To Keep Deceased's $287/Month Rent Stabilized Brooklyn Apartment

In Brooklyn, New York, the New York Post reports:
  • A Brooklyn scammer spent four years fooling her dead aunt’s co-op board into thinking the woman was still alive, to keep living in the rent-stabilized apartment for $287 a month, a lawsuit charges.(1)

    Brenda Williams, 55, gave neighbors regular health updates on Debbie Vaughan long after the woman died at age 93 in 2007 — and pulled out all the stops to keep board members at the Prospect Park building from trying to contact the woman, the lawsuit says.

    Williams claimed “her aunt was paranoid and senile and if we knocked on the door, she would have a heart attack,” said the co-op board’s president, Diana Hansen-Young. The suit was filed Phillip Cramer, the apartment's owner.

    The alleged scam was uncovered in 2010, when Hansen-Young and a plumber went into the apartment on Vanderbilt Avenue to fix a leak. [...] When Cramer checked death records, he found that Vaughan had died almost four years earlier.

    Cramer is now trying to evict Williams from the 550-square-foot apartment, which has hardwood floors, exposed brick and high ceilings — and should rent for about $2,200 a month. Cramer had kept Vaughan’s rent low — even as the neighborhood gentrified — because of her advanced age, poor health and poverty, the suit says.

    Before Vaughan’s death, Williams told Cramer she lived with her aunt and helped out by “cooking for her, bathing her, and taking her to doctors, supermarkets, church and senior-citizen centers,” the suit charges.

    But Williams really lived down the block with a boyfriend, said attorney Peter Sanders, who filed the $405,000 suit in Brooklyn Supreme Court on March 20.

    She moved into the apartment after her aunt died,” Sanders said. “She would pay the rent by money order with her aunt’s name years after her aunt died.”

Friday, April 12, 2013

Foreclosure Fraud Settlement Checks To Begin Going Out; Most To Get Paltry Payments

Bloomberg reports:
  • Rust Consulting Inc. will begin sending $125,000 checks to 1,135 borrowers deemed most harmed by botched foreclosures in 2009 and 2010 that led to a $9.3 billion settlement between regulators and U.S. mortgage servicers.

    The consulting firm is distributing $3.6 billion that servicers including JPMorgan Chase & Co. (JPM) and Bank of America Corp. agreed to pay to settle claims they improperly seized homes in the wake of the subprime mortgage crisis, according to a statement from the Office of the Comptroller of the Currency and Federal Reserve.

    Payments will begin to go out April 12, with as many as 90 percent of more than 4 million affected borrowers expected to receive their checks this month, according to the regulators. The agencies expect the process to extend into mid-July, and they are still working on payments to borrowers from servicers that had been affiliated with Goldman Sachs Group Inc. (GS) and Morgan Stanley. (MS)

    Those at the top of the scale for potential harm will receive $125,000, and the 2.6 million categorized at the lowest of 11 rungs of potential harm will get $300, the regulators said. The remainder of the settlement money from the 13 servicers who signed on is meant to be used to prevent future foreclosures.

    After a rash of botched foreclosures during the previous decade’s housing-market collapse, an earlier 2011 settlement called for the servicers to hire outside consultants to review the cases one-by-one and compensate borrowers based on actual harm. After the process was beset by delays, those reviews were mostly scrapped in the current settlement, which is meant to give some level of payment to every borrower who went through foreclosure during the two-year period.

    The Government Accountability Office said in a report released last week that insufficient guidance from the OCC and Federal Reserve slowed down the earlier review process. A Senate subcommittee will examine the relationship between regulators and outside consultants in an April 11 hearing.

State Regulator Commences Enforcement Action Against 32 Outfits Peddling Loan Modification Services To Financially Strapped Washington Homeowners

From the Washington State Department of Financial Institutions:
  • The Consumer Services Division of the Washington State Department of Financial Institutions (DFI) announced today that it filed 32 Statements of Charges against businesses preying on Washington homeowners facing foreclosure. This action follows another multi-company sweep DFI conducted in September 2012 when it issued 40 Statements of Charges against unlicensed businesses offering loan modification services to Washington residents.

    Of the 32 Statements of Charges in this latest round of enforcement actions, 31 are against businesses located outside of Washington, about half of which are attorneys or affiliated with attorneys.
For the DFI press release, see DFI Charges 32 Companies In Continuing Effort To Combat Unlicensed Loan Modification Activity (DFI seeks full restitution, prohibition from operating in Washington, $426,000 in fines).

Go here for the list of 32 alleged rackets cited by DFI.

WV Supremes: State Consumer Protection Statute Provides No Relief For Allegedly Screwed Over Couple Where Mortgage Constituted A "Commercial" Loan (As Opposed To A Consumer Or Agricultural Loan)

In Charleston, West Virginia, The West Virginia Record reports:
  • The state Supreme Court has ruled against a Preston County couple who sought to have a bank loan characterized as a “consumer loan” rather than a “commercial loan.”

    Doing so might have found them relief under the West Virginia Consumer Credit and Protection Act. The court issued the unanimous memorandum opinion affirming the Circuit Court of Preston County’s Order Granting Summary Judgment to the bank on March 29.

    Wayne and Dorothy Miller took out three loans through Clear Mountain Bank in 2008-2010. After the bank foreclosed on certain collateral, the Millers asserted that the bank violated the West Virginia Consumer Credit and Protection Act.

    The circuit court entered summary judgment for the bank, finding as a matter of law that the WVCCPA did not apply because the loans were commercial loans and the WVCCPA only applies to consumer transactions.
For more, see Preston couple can’t bring loan claim under consumer protection statute.

For the West Virginia high court ruling, see Miller v. Clear Mountain Bank, Inc., No. 11-1430 (W.V. March 29, 2013)

Thursday, April 11, 2013

Flooded With Vacant Rundown REOs, Detroit's 'Non-Foreclosure' Sales Inventory Fails To 'Appraise Out' - Leads To Lost Home Equity For Selling Owner-Occupants Despite Buyer Willingness To Pay More

In Detroit, Michigan, Bloomberg reports:
  • In most American cities, a limestone home with a large front turret and paneled library would have a waiting list of buyers at $135,000. In Detroit’s Rosedale neighborhood, it almost didn’t sell at all.

    The first offer of $150,000 fell through when the 2,600- square-foot (242 square-meter) Tudor style home appraised for $85,000, dragged down by comparisons with sales of foreclosed homes in nearby rundown areas, said Tom Goddeeris, executive director of the non-profit Grandmont Rosedale Development Corp., which rehabbed the home. A $135,000 offer squeaked by after a $110,000 appraisal, he said.

    We felt we had little choice but to take the second offer, although there were obviously willing buyers at higher prices,” said Goddeeris, who estimates similar mismatches between market value and appraisals mean the association loses about $15,000 on each home they fix up and sell in the 5,500 property area. About 10 percent of Rosedale’s homes are vacant.

    Flawed appraisals and a dearth of normal, non-foreclosure sales to serve as comparisons have put mortgages out of reach for most potential buyers, even in the best neighborhoods like Grandmont Rosedale that are the focus of officials’ efforts to revive Detroit. In a city of about 700,000, there were just 578 mortgages for purchases last year, according to RealtyTrac, an Irvine, California-based data provider.

Stripped Of R/E License For Collecting Upfront Fees For Foreclosure Rescue Services, Suspected Con Artist Continues In Business; Says 'We No Longer Do Loan Mods, We Peddle An 'Educational Packaging Service' For $1,995!' Victim: Refund Guarantee Paid With Rubber Checks

In Petaluma, California, KABC-TV Channel 7 reports:
  • Police in Petaluma are getting complaints about a local company that has been stripped of its real estate license. They're accused of taking money from homeowners for services they never performed.

    The Department of Real Estate revoked Mortgage Modifiers of its real estate license in October, but the doors of the company remain open and some of its clients are wondering how that's possible. 7 On Your Side decided to take a look at what's going on.

    Lisa Marvier's home sits on 1.6 acres in Novato. It's also known as Farm Girl Nursery. It is a you-pick farm and summer camp for kids. Both the home and the property are currently underwater.

    "This is my dream. This is the home we built from scratch and I certainly don't want to lose it," said Marvier.

    Deanna Reade's home in Windsor is also underwater. Like Marvier, Reade is struggling to save her home. She heard about a company known as Mortgage Modifiers in Petaluma from a friend. She said the company promised to get her mortgage lowered by $1,000 a month.

    "The original loan was supposed to be modified down to basically what our home was valued at now," said Reade.

    Marvier says she received similar promises when she met with Miguel Lopez. Lopez is described in court papers as the president of Mortgage Modifiers.

    "When I met with him and he showed me the numbers. He showed me that everything could be reduced. The interest rate could be reduced, the principal could be reduced," said Marvier.

    Marvier and Reade are just two of the people who have filed complaints with Petaluma police.

    "No service was ever completed. They ask for a refund which supposedly was guaranteed to them and they never got a refund," said Petaluma Police Lt. Tim Lyons.

    The department says it has received 11 complaints about Mortgage Modifiers and they are aware of other complaints as far north as Cloverdale and Ukiah. Mortgage Modifiers sublets space in an office park in Petaluma, but the company has no signage on the office.

    In October, the Department of Real Estate upheld a judge's decision stripping the real estate licenses of both Miguel Lopez and Mortgage Modifiers. Both were found to have illegally collected advance fees for performing services for borrowers in connection to loans.
  • Lopez was not available [...], but by email he told us he didn't need a real estate license. He said, "This company does not conduct loans and or real estate, such a license is not needed. This company provides a packaging service."

    "This is the whole entire packet that you received from Miguel. It's his educational package that he claims is for the $1,995," said Reade.

    She said the package included a request for a modification, her financial and loan information, a property value report and other documents.

    Reade showed us emails from Lopez promising he would make sure the file became a priority in the lender's eyes. In the emails Lopez urged her to let him do all the calling and faxing to the lender. However, Lopez denies the $1,995 he charged is an advanced fee.

    "We offer a packaging service. Clients pay for the package and nothing more," said Lopez.

    Marvier, however, isn't buying any of that. "To know from the start here to the end that it was all a lie, I don't trust anyone anymore," said Marvier.

    The Petaluma Police Department has forwarded all of the complaints to the state attorney general.

    The contract both Marvier and Reade signed guaranteed a refund if the educational financial package submitted to the lender does not render a positive outcome. Reade received two refund checks that both bounced. Marvier's refund request was denied.

Kansas Homeowner Gets Probation, $5K Fine For Recording Phony Lien Satisfaction Prior To Attempting Home Refinance

From the Office of the U.S. Attorney (Topeka, Kansas):
  • A woman from Wabaunsee County, Kan., has been sentenced to two years federal probation and ordered to pay a $5,000 fine for mortgage fraud, U.S. Attorney Barry Grissom said today.

    Linda Kay Miller, 51, Alma, Kan., pleaded guilty to one count of bank fraud. In her plea, she admitted fraudulently submitting false documents to New Century Bank of Manhattan, Kan., in an effort to obtain a $200,000 mortgage loan. Miller admitted she created documents falsely stating that a $65,000 second mortgage on her home in Wabaunsee County had been paid in full. She filed the false documents with the Wabaunsee County Register of Deeds.
For the U.S. Attorney press release, see Wabaunsee County Woman Sentenced For Mortgage Fraud.

Wednesday, April 10, 2013

Captured Fugitive Cops Plea For Running Fractional Interest Deed Transfer Foreclosure Rescue Scam; Racket Using Stolen I.Ds To Gum Up Repo Process Spanned Nearly 15-Year Period

From the U.S. Department of Justice (Washington, D.C.):
  • A former Los Angeles resident, who fled to Canada and was a federal fugitive for 12 years, pleaded guilty today to aggravated identity theft and bankruptcy fraud in connection with leading a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners, [...].

    Glen Alan Ward, 48, pleaded guilty in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud.

    In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme.

    In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there.

    While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.

    On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.

    “Glen Alan Ward spent years preying on distressed homeowners and stealing the identities of bankruptcy debtors, all to pad his own pockets,” said Acting Assistant Attorney General Raman. “Now he faces years in prison for his crimes. This successful prosecution illustrates our commitment to tirelessly pursuing fraudsters and ensuring that sophisticated schemes that prey on vulnerable homeowners will not go unpunished.”
  • According to the plea agreement filed today before U.S. District Judge Dale S. Fischer in the Central District of California, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure.

    Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy.

    Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.

    Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, [...] could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years.

    In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.

    As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country.(1)

    During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.
For the Justice Department press release, see Former Federal Fugitive Pleads Guilty in California to Massive Fraud and Identity Theft Scheme in Connection with Nationwide Foreclosure Scam (Defendant Collected More Than $1.2 Million from More Than 800 Distressed Homeowners).

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

LA Sheriff: Scammer Used Forged Deeds, Phony Mechanics Liens On 100+ Properties To Snatch Surplus Cash From F'closure Sales, Fraudulently Score Secured Loans, Squeeze 'Shake Down' Cash From F'closing Lenders; Suspect Held On $1.24M Bail

From the Office of the Los Angeles County Sheriff:
  • A 36 count felony complaint against 30-year old Anna Moskovyan of Van Nuys was filed by the Los Angeles County County District Attorney's Office on March 21, 2013. The complaint alleges multiple counts of Grand Theft, and the Recording of False and Fraudulent Documents related to over 100 properties in Los Angeles County and beyond.

    On March 28, 2013, detectives from the Los Angeles County Sheriff's Commercial Crimes Bureau arrested Suspect Moskovyan when she appeared at Glendale Court on an unrelated matter.

    It is alleged that between April 2010, and June 2012, Moskovyan committed numerous sophisticated fraudulent acts of various types throughout Los Angeles County. Those fraudulent acts allegedly included the following:

    1. Moskovyan identified real estate properties that were scheduled for tax lien sales by the Los Angeles County Treasurer and Tax Collector’s Office. Moskovyan then recorded forged Grant Deeds at the Los Angeles County Recorder’s Office transferring ownership of the properties from the rightful owners to herself. She then filed claims to receive the “excess proceeds” from the tax lien sales. In other words, she fraudulently claimed the rights to receive the money left over after a property is sold and the tax liens were paid off.

    2. Moskovyan recorded dozens of phony Mechanic’s Liens, for painting work which was never done, on the titles of real estate properties which were in foreclosure. Several financial institutions paid Moskovyan to remove the fraudulent Mechanics Liens in order to clear the titles so the properties could be foreclosed upon and resold.

    3. Moskovyan fraudulently transferred the ownership of two real estate properties to herself by recording forged Grant Deeds. She then applied for, and received, loans using the fraudulently obtained properties as collateral.

    Moskovyan’s alleged activities, which netted her approximately $100,000, came to light when several of the property owners and their families filed complaints with the Los Angeles County Department of Consumer Affairs.

    The investigation was conducted by the Los Angeles County Sheriff’s Real Estate Fraud Team, the Los Angeles County Department of Consumer Affairs, and the Los Angeles Police Department.

    Mechanic Liens were recorded on properties in Altadena, Canoga Park, Canyon Country, Cerritos, Diamond Bar, Downey, Hacienda Heights, La Canada, La Mirada, La Puente, Lakewood, North Hollywood, North Hills, Northridge, Monterey Park, Valencia and Valley Village.

    The forged Grand Deeds were recorded on properties in Compton and South Los Angeles.

    Search warrants were executed at Suspect Moskovyan’s office in Glendale and her residence in North Hollywood which produced allegedly certified copies of the forged Grant Deeds and forged Mechanic’s Liens she had allegedly fraudulently recorded at the Los Angeles County Recorder’s Office.

    Suspect Moskovyan is currently in custody with a bail of $1.24 million. The next court date is April 16, 2013. Los Angeles Superior Court case number BA409181.
For the Los Angeles County Sheriff's press release, see Arrest Made in Sophisticated Real Estate Fraud of 100 Properties in Los Angeles County.

Philly DA: Local Scammer Used Dirty Deeds To Hijack Title To Five Homes, Skimmed Rent & Security Deposits From Unwitting Tenants In Leasing Apartments He Had No Relationship With

From the Office of the Philadelphia, Pennsylvania District Attorney:
  • The Philadelphia District Attorney’s Office has charged 41-year-old Dwayne Stewart of West Philadelphia with “stealing” five properties in the City and County of Philadelphia, theft from at least 12 additional victims in fraudulent real estate scams and passing bad checks to victims including the City of Philadelphia Recorder of Deeds Office.(

    The long term investigation lead by the Southwest Detective Division of the Philadelphia Police Department revealed that houses at 2545 N. Newkirk Street, 916 W. Huntingdon Street, 2613 W. Harold Street, 3025 N. Warnock Street and 2148 Reese Street were all stolen by Stewart from an elderly victim through the creation and recording of fraudulent deeds. Stewart then, in several instances, sold or tried to sell these stolen homes to unsuspecting buyers.

    In addition, using both Newkirk St., Huntingdon St. and other properties in Southwest Philadelphia Steward defrauded apartment seekers and apartment owners by unlawfully renting out apartments, accepting deposits and payments for apartments with which he had no relationship. In several cases, without the knowledge of the true owner or the rental agency, Stewart left the unsuspecting tenants stranded with no home.(1)
For the Philadelphia DA press release, see Dwayne Stewart Arrested for “Stealing Houses” in Philadelphia.

(1) Stewart has been charged with :
  • Forgery (F-3)- 7 counts,
  • Theft-Unlawful Taking or Disposition (F-3)- 13 counts,
  • Theft-Unlawful Taking or Disposition (M-1)- 3 counts,
  • Att. Theft-Unlawful Taking or Disposition (F-3)- 1 count,
  • Theft by Deception (F-3)- 13 counts,
  • Theft by Deception (M-1)- 3 counts,
  • Att. Theft by Deception (F-3)- 1 count,
  • Receiving Stolen Property (F-3)-7 counts,
  • Receiving Stolen Property (M-1)- 3 counts,
  • Deceptive Practices (F-3)- 1 count,
  • Tampering w/Public Records/Information (F-3)- 8 counts,
  • Tampering w/Records or Identification (M-1)- 8 counts,
  • Defiant Trespass (F-3)- 1 count,
  • Securing Execution of Docs (M-2)- 10 counts,
  • Bad Checks (M-1)- 1 count,
  • Bad Checks (M-2)- 4 counts.

    Tuesday, April 09, 2013

    Justice Dept. Settlement With BAC, Saxon To Yield $115K+ To Servicemembers Screwed Over By Allegedly Unlawful Foreclosures

    From the U.S. Department of Justice (Washington, D.C.):
    • The Justice Department announced [] that under its 2011 settlements with BAC Home Loans Servicing LP, a subsidiary of Bank of America Corporation, and Saxon Mortgage Servicing Inc., a subsidiary of Morgan Stanley, 316 service members whose homes were unlawfully foreclosed upon between 2006 and 2010 are due to receive over $39 million in monetary relief for alleged violations of the Servicemembers Civil Relief Act (SCRA).

      Under the first settlement, Bank of America is required to pay over $36.8 million to service members whose homes were unlawfully foreclosed upon between 2006 and 2010. Each service member will receive a minimum of $116,785, plus compensation for any equity lost with interest.

      Bank of America has already begun compensating 142 service members whose homes were illegally foreclosed on between 2006 and the middle of 2009. Under the same agreement, Bank of America agreed to provide information about its foreclosures from mid-2009 through the end of 2010. As a result of that review, Bank of America will now pay 155 service members upon whose homes it illegally foreclosed.

      Borrowers receiving payment under this settlement may receive an additional payment under a settlement between Bank of America and federal banking regulators -- the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System -- if the foreclosure occurred in 2009 or 2010. Payments provided under the federal banking regulators’ settlement will bring the total amount received by eligible borrowers to $125,000 plus equity where applicable.

      Under the second settlement, Saxon Mortgage Services Inc. is in the process of paying out over $2.5 million to 19 service members whose homes were unlawfully foreclosed upon between 2006 and 2010. Each service member will receive a minimum of $130,555.56, plus compensation for any equity lost with interest.

    Convicted Felon Duped Disabled Senior Into Signing Over Title To Her Home Under Guise Of Getting Reverse Mortgage, Then Converted Entire Equity To His Own Use: Lawsuit

    In Vancouver, Washington, Courthouse News Service reports:
    • A mortgage broker defrauded an elderly disabled woman of her house by having her sign it over to him and telling her it was a reverse mortgage, the woman's guardian claims in court.

      Jeanine Wyman sued Sheldon Harmon, his business Lighthouse Financial Group et al. in Clark County Court. Wyman, through her attorney-in-fact, accuses Harmon of victimizing her through equity skimming, a felony.

      Harmon ran the Lighthouse Financial Group until the State of Washington revoked his license in 2010. Federal prosecutors in Portland, Ore. charged Harmon with bank fraud and money laundering in 2012. He was accused of using phony leases to persuade a bank to loan him more than $3 million to refinance his office in Vancouver, Wash., across the Columbia River from Portland.

      Wyman claims Harmon victimized her when she tried to refinance her home.

      "Sheldon Harmon advised Ms. Wyman that she was elderly and disabled and thus qualified for a 'reverse mortgage,'" the complaint states. "In fact, Harmon was operating an equity skimming scam.

      "As part of the equity skimming operation Harmon had plaintiff execute documents which she understood would result in a reverse mortgage whereby she would continue to own and live in the property for the remainder of her life or until she wished to sell. During that time she would receive monthly payments that would cover the taxes and insurance on the property. Lighthouse/Harmon would also pay the existing mortgage on the property and any liens.

      "In fact, the papers executed were a quit claim deed transferring title to the property to Harmon." (Citation to Washington law omitted.)

      Harmon applied for a home equity credit line with defendant MacQuarie Mortgage USA, and "converted all equity in the property to his own use," according to the complaint.

      "The transaction was part of an ongoing business transaction with MacQuarie whereby Harmon acquitted other properties in the same manner.

      "MacQuarie knew or in the exercise of any diligence would have known that the transaction was fraudulent and an equity skimming transaction," the complaint states.

      "The facts that would have been uncovered with any inquiry include at least the following: Ms. Wyman continued to reside in the home. Ms. Wyman believed she still owned the home subject only to the reverse mortgage. The consideration for the 'purchase' of the home currently valued by MacQuarie at $200,000 was less than $15,000, consisting of paying the existing mortgage balance of approximately $11,000 and compromising an IRS lien.

      "The least inquiry would have disclosed that Harmon's interest had been acquired in a transaction that was a felony under Washington law." Wyman says Harmon and MacQuarie entered into similar deals on at least five other houses, and that "each transaction was a felony."

      "Sheldon Harmon was convicted of multiple felonies arising out of his operation of Lighthouse ... and was sentenced to federal prison," the complaint states.

      To top it off, MacQuarie scheduled a March 22 auction to sell Wyman's home at foreclosure. Courthouse News could determine by press time whether the foreclosure sale went through.

      Harmon, who is in his 30s, is "currently a resident of the federal penitentiary in Utah," according to Wyman's complaint.Also named as defendants are Kyra Harmon and Northwest Trustee Services.

      Wyman seeks an injunction, quiet title and damages for fraud and criminal profiteering.

    Homeowner: Couple Claiming To Be From Mortgage Company Broke Into My Home & Ripped Me Off

    In Athens, Georgia, AthensPatch reports:
    • A man said he arrived at his Altarstone Drive residence around 12:30pm on April 2. He saw a white woman and a white man loading items into a silver pickup truck in his back yard.

      When the resident confronted them, they told him they were from the mortgage company and were there to clean the house out becuase it was going into foreclosure. The man said he checked with his mortgage company and was told no one should be cleaning out the house.

      When the resident tried calling the number the couple gave him, they hung up on him. A laptop, jewelry, clock, desk top computer, and TVs were stolen. The total value was $8,300. No further descriptions were given of the suspects. He believes the truck was a Toyota.

    Monday, April 08, 2013

    Report Documents 'Debtors' Prison' Practices Alive & Well In Seven Ohio Counties; ACLU Official: Jailers Spend More To Incarcerate People Than They Collect In Many Cases

    The American Civil Liberties Union recently announced:
    • The U.S. Constitution and Ohio state law prohibit courts from jailing people for being too poor to pay their legal fines, but in several Ohio counties, local courts are doing it anyway. The ACLU of Ohio [] released The Outskirts of Hope, a report that chronicles a nearly yearlong investigation into Ohio’s debtors’ prisons and tells the stories of six Ohioans whose lives have been damaged by debtors’ prison practices.

      “Being poor is not a crime in this country,” said Rachel Goodman, Staff Attorney at the ACLU Racial Justice Program. “Incarcerating people who cannot afford to pay fines is both unconstitutional and cruel—it takes a tremendous toll on precisely those families already struggling the most.”

      The law requires that courts hold hearings to determine defendants’ financial status before jailing them for failure to pay fines, and defendants must be provided with lawyers for these hearings. If a defendant cannot pay, the court must explore options other than jail.

      “Supreme Court precedent and Ohio law make clear that local courts and jails should not function as debtors’ prisons,” said Carl Takei, Staff Attorney at the ACLU National Prison Project. “Yet many mayors’ courts and some municipal courts jail people without making any attempt whatsoever to determine whether they can afford to pay their fines.”

      Beyond the questions of legality, debtors’ prison practices make no financial sense since courts routinely spend more to jail defendants than they would recover in fines.

      “Not only are these courts violating the law, they are actually losing money doing it,” said ACLU Director of Communications and Public Policy Mike Brickner. “In every case we profiled for The Outskirts of Hope, the county spent more money than it collected to incarcerate people for failure to pay fines. In many cases, it spent more than the defendant owed in the first place.”

      “These practices are legally prohibited, morally questionable, and financially unsound. Nevertheless, they appear to be alive and well in Ohio,” added Brickner. “It’s like something out of a Charles Dickens novel.”
    For the ACLU press release, see ACLU Report Exposes Debtors’ Prison Practices in Ohio (Investigation into Eleven Ohio Counties finds that Seven are Illegally Jailing People for Inability to Pay Fines).

    Thanks to Deontos for the heads-up on the report.

    'Republic of uSA' President Goes Down In Jury Verdict For Using, Teaching Others To Use Bogus Bonds To Pay Taxes, Giving Guidance In Filing Retaliatory Liens Against Gov't Officials Who Dared Interfere With Processing Crackpot Paperwork

    From the Office of the U.S. Attorney (Montgomery, Alabama):
    • After a five-day trial, a federal jury in Montgomery, Ala., found James Timothy Turner, 57, also known as Tim Turner, of Skipperville, Alabama guilty of conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the Internal Revenue Service (IRS), failing to file a 2009 federal income tax return, and falsely testifying under oath in a bankruptcy proceeding, announced Sandra J. Stewart, Acting U.S. Attorney for the Middle District of Alabama.

      The FBI began an investigation after Turner and three other individuals sent demands to all fifty governors in the United States ordering each governor to resign within three days or beremoved.”

      The FBI’s investigation revealed that Turner was the self-proclaimed “President” of the so-called sovereign citizen group “Republic for the united States of America” (“RuSA”).

      As “President,” Turner traveled the country in 2008 and 2009 teaching others how to defraud the IRS by preparing and submitting fictitious “bonds” to the United States government in payment of federal taxes. Witnesses at trial testified that Turner used special paper, financial terminology, and elaborate borders in an effort to make the fake bonds look “real” and thus, more likely to succeed in defrauding the IRS.

      Turner was convicted of sending a $300 million “bond” in his own name and of aiding and abetting others in sending fifteen other “bonds” to the Treasury Department to pay taxes and other debts. The evidence at trial also established that Turner taught people how to file retaliatory liens against government officials who interfered with the processing of fictitiousbonds.”

      Turner himself actually filed a purported $17.6 billion maritime lien in Montgomery County, Alabama, Probate Court against another individual.

      “The jury’s verdict in this case sends a message that defrauding the government and others through the use of bogus financial documents will not be tolerated,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “Disagreement with the law is no excuse for the real harm caused by these self-interested tax defiers.”

      “These sovereign citizen groups use these retaliatory tax liens and fraudulent tax schemes as weapons against the United States and its citizens,(1) stated Acting U.S. Attorney Sandra J. Stewart. It is only the hard work of law enforcement that can stop these criminals from using these financial weapons. I would like to thank the law enforcement officers who worked vigilantly on this case to bring this criminal to justice.”

    (1) The filing of retaliation liens (a long-time favored 'paper terrorism' tactic) against government officials by crackpots and others believing in this self-help remedy has led at least one state attorney general to issue a consumer alert addressing the problem. See Texas Attorney General: Wiping Out Fraudulent Liens.

    It has reportedly also moved at least three state legislature to pass a statute specifically addressing the problem of retaliatory liens as used against public officials, but reportedly not as used against private citizens or businesses. See:
    Federal law specifically addresses this problem in 18 U.S.C. 1521 - Retaliating against a Federal judge or Federal law enforcement officer by false claim or slander of title.

    For a report on retaliatory liens, generally, see Anti-Defamation League's The Militia Watchdog: Paper Terrorism's Forgotten Victims: The Use of Bogus Liens against Private Individuals and Businesses.

    Minneapolis Couple Cop Fraud Pleas In Harassment Scheme Carried Out By Filing $114 Billion In Retaliation Liens Against Public Officials, Others Having Any Connection With Loss Of Their Home In Foreclosure

    In Ramsey County, Minnesota, the Star Tribune reports:
    • A Brooklyn Park couple pleaded guilty to 12 counts of fraud in connection with a $114 billion — yes, with a B — harassment scheme whose “financial and economic terrorism” victimized numerous public servants in response to their Minneapolis home’s foreclosure nearly three years ago.

      Thomas W. Eilertson, 45, and Lisa Joan-Connery Eilertson, 49, pleaded guilty in Ramsey County District Court and are scheduled to be sentenced June 7 for the plot that targeted prosecutors, a judge, Hennepin County Sheriff Richard Stanek and various bureaucrats.

      The case began when the defendants’ Minneapolis home in the 4400 block of Cedar Avenue S. was foreclosed upon by their mortgage company in 2009, resulting in a Hennepin County sheriff’s sale that December. In response, the Eilertsons — on the advice of someone they met on the Internet — began filing Uniform Commercial Code liens against anyone associated with their economic misfortune.

      For example, the complaint pointed out, the Eilertsons filed one claim against attorney Steven Bruns for $5 million because of “a trespass.” Bruns represented the lender during the foreclosure.

      Each lien was filed at the Minnesota secretary of state’s office in St. Paul under the name “Blessings of Liberty,” leading the defendants to believe this would shield them from civil and criminal liability.

      While the defendants filed numerous and sometime duplicative liens against a host of individuals covering 2009 and 2010, the lion’s share of the $114 billion total came from a May 27, 2010, claim against seven public employees to the tune of $110.2 billion, according to court documents.(1)

      Those named in the 267-page claim included Stanek, County Attorney Mike Freeman and two of his assistants, and others in county government.

      In February 2010, the Hennepin County Sheriff’s Office referred the case to St. Paul police.
    For the story, see Minnesota couple admit to $114B harassment scheme aimed at public officials (Their targets had connections to ’09 home foreclosure).

    (1) The filing of retaliation liens (a long-time favored 'paper terrorism' tactic) against government officials by crackpots and others believing in this self-help remedy has led at least one state attorney general to issue a consumer alert addressing the problem. See Texas Attorney General: Wiping Out Fraudulent Liens.

    It has reportedly also moved at least three state legislature to pass a statute specifically addressing the problem of retaliatory liens as used against public officials, but reportedly not as used against private citizens or businesses. See:
    Federal law specifically addresses this problem in 18 U.S.C. 1521 - Retaliating against a Federal judge or Federal law enforcement officer by false claim or slander of title.

    For a report on retaliatory liens, generally, see Anti-Defamation League's The Militia Watchdog: Paper Terrorism's Forgotten Victims: The Use of Bogus Liens against Private Individuals and Businesses.

    Sunday, April 07, 2013

    Closing Agent Gets 4 1/2 To 13 1/2 Years For Refinance Ripoffs; Pocketed Portions Of Loan Proceeds, Left Pre-Existing Liens Unpaid, Leaving Homeowner With Multiple Mortgages

    From the Office of the Westchester County, New York District Attorney:
    • Westchester County District Attorney Janet DiFiore announced that Loronda Murphy (DOB 07/13/64) of 4 Heather Lane, Greenwich, Connecticut, was sentenced [] to 4 ½ to 13 ½ years in prison on her September 2012 guilty plea to:

      a) one count of Residential Mortgage Fraud in the First Degree, a class "B" Felony,
      b) one count of Residential Mortgage Fraud in the Second Degree, a class "C" Felony,

      From April 2009 to June 2009, operating under the home mortgage closing company Settle One Corporation, with an office located at 428 Main Street in Armonk, New York, the defendant, Loronda Murphy along with real estate attorney Scott Forcino, engaged in what amounted to a home mortgage fraud "Ponzi" scheme.

      The targeted homeowner/victims each took out a new mortgage on their home through Settle One Corporation with the understanding that real estate attorney Scott Forcino would oversee their closing and that money from their new mortgage would pay off their pre-existing mortgage.

      However, Forcino instead allowed Murphy to fraudulently assume the role of attorney for each closing, and, much to the homeowner's surprise, rather than paying off their pre-existing mortgage, Murphy instead stole portions of their new loan money and left their pre-existing mortgage unpaid.

      Murphy's theft then left the homeowner with the unsustainable burden of having multiple mortgages on their family home at one time.

      Over this time period the pair defrauded five victims including Murphy's father.

    Real Estate Attorney Cops Multiple Guilty Pleas In Connection With Ripoffs Totaling Approx. $2M In Closing Cash, Buyer Deposits From Real Estate Transactions

    From the Office of the Westchester County, New York District Attorney:
    • Westchester County District Attorney Janet DiFiore announced [] that Kevin Hymes (DOB 01/30/73) of 3 Evergreen Road, North Castle, New York, pled guilty to:

      * two counts of Grand Larceny in the Second Degree, class “C” Felonies,
      * two counts of Grand Larceny in the Third Degree, class “D” Felonies,
      * one count of Scheme to Defraud in the First Degree, a class “E” Felony,

      relating to the theft of approximately $2,000,000.

      Over a five and one half year period, between Jan. 1, 2007, and June 27, 2012, the defendant, who was a real estate attorney with an office in White Plains, defrauded several individuals and entities by making false representations in connection with real estate closings.

      In March 2010, the defendant while acting in his capacity as attorney for two clients in connection with the sale of real property, stole $318,453.33 by concealing the date and time of the real estate closing and by failing to forward the monies.

      Between May 20, 2010, and June 22, 2010, acting in his capacity as attorney for the seller of property, the defendant stole a $33,000 deposit from a prospective purchaser.

      Between Nov. 8, 2010, and Nov. 9, 2010, the defendant acting in his capacity as attorney for the seller of property, stole a $10,000 deposit from a prospective purchaser.

      Between March 21, 2011, and April 13, 2011, the defendant, acting in his capacity as an attorney for the seller of property, stole $123,500 by failing to forward the deposit and by personally using the money.

      Additionally, the defendant also stole approximately $1.4 million dollars in his capacity as a closing agent for several banks.

    Playing Fast & Loose With Trust Account Cash Common Charge Running Through Recent Attorney Disciplinary Orders From Florida High Court

    From a recent news release from The Florida Bar:
    • The Florida Bar, the state's guardian for the integrity of the legal profession, announces that the Florida Supreme Court in recent court orders disciplined 22 attorneys; disbarring five, suspending 13 and publicly reprimanding four. Three attorneys received more than one form of discipline. Two were placed on probation and one was ordered to pay restitution.
    The following Florida attorneys have been disciplined for playing fast & loose with their clients' money sitting in the lawyers' trust accounts, among other things:
    • G. Walter Araujo, 102 E. 49th St., Hialeah, suspended for 30 months, effective 30 days from a March 11 court order. (Admitted to practice: 1997) Araujo admitted to the Bar that for numerous years he’d accepted clients from and shared fees with a non-lawyer. Additionally, Araujo did not maintain proper trust account records. A review of his trust account records as of March 31, 2010, showed a shortage of approximately $8,497. He also improperly solicited a client who had sustained injuries in an automobile accident. Araujo sent a representative to the woman’s house offering legal services, even though she had not contacted anyone seeking such services. (Case No. SC11-1998)

      Jacqueline Jeannette Bird, 254 E. 6th Ave., Tallahassee, suspended for 18 months, effective retroactive to March 4, 2011, following a March 11 court order. (Admitted to practice: 1988) Bird was hired by a client to represent her in a personal injury matter. Bird failed to negotiate subrogation reductions for the client with her insurer, but falsely stated that she had done so. On a number of occasions, Bird refused to respond to the client’s attempts to receive her settlement funds until a complaint was filed with The Florida Bar. She also commingled personal and trust funds. (Case No. SC11-818)

      Jeffrey A. Blau, 213 E. Davis Blvd., Tampa, suspended until further order, following a Feb. 28 court order. (Admitted to practice: 1978) Blau was found in contempt for repeated failure to respond to a trust account subpoena and failure to show good cause for non-compliance. (Case No. 12-2518)

      Mark F. Dickson, 10940 N.W. 15th St., Pembroke Pines, disbarred effective immediately, following a March 11 court order. (Admitted to practice: 1975) Dickson was found guilty of engaging in multiple offenses of misconduct. In at least seven legal matters, Dickson was involved in misappropriation of more than $1.6 million in client funds for personal use, forgery and false notarization. He entered into numerous settlements without client authorization or knowledge, failed to keep proper trust accounting records, failed to communicate adequately with clients, and gave false testimony to The Florida Bar. (Case No. SC12-683)

      Chaz Robert Fisher, P.O. Box 93, Hudson, N.H., suspended for 90 days, effective 30 days from a March 11 court order. (Admitted to practice: 2004) Fisher is also a member of the New York and Massachusetts state bar associations. When approached by a client’s father to represent his severely disabled child, Fisher accepted the job and became the successor corporate co-trustee of a trust for the child, while the father was designated as the individual trustee. In his handling of the trust matters, Fisher violated Rules Regulating The Florida Bar regarding competence and diligence, performed duties that were a conflict of interest and failed in safekeeping property by not segregating funds deposited and retained in a trust account. (Case No. SC12-1189)
    • Brian Eldon Gray, 1040 Bayview Drive, Suite 610, Fort Lauderdale, suspended until further order, following a Feb. 15 court order. (Admitted to practice: 1995) According to a petition for emergency suspension, Gray appeared to be causing great public harm by misappropriating client trust funds. In multiple instances, Gray did not apply funds entrusted to him for specific purposes but used them in a matter similar to a Ponzi scheme. (Case No. SC13-149)
    • Ronald James Kurpiers II, 707 N. Franklin St., Sixth Floor, Tampa, to be publicly reprimanded by the Board of Governors, following a March 11 court order. (Admitted to practice: 2002) Kurpiers failed to follow trust accounting rules in the handling of an estate and he falsely said he witnessed a document being signed regarding the estate when he had not. (Case No. SC12-1696)

      Albert Richard Meyer, 200 Knuth Road, Suite 101, Boynton Beach, suspended for 60 days, effective 30 days from a March 11 court order. (Admitted to practice: 1992) In the course of handling foreclosure defense and loan modification cases, Meyer became associated with two separate non-legal entities, who engaged in improper solicitation of clients. Meyer also shared legal fees with non-lawyers. (Case No. SC12-515)
    • Lafe Rainier Purcell, 1403 W. Colonial Drive #A, Orlando, suspended until further order, following a Feb. 20 court order. (Admitted to practice: 1997) According to a petition for emergency suspension, Purcell misappropriated client funds and abandoned his law practice. Numerous payments from Purcell’s trust account were made for his personal benefit or that of his law firm. He also commingled trust funds with his law firm operating funds. Purcell failed to respond to a request from the Bar to produce his trust account records. A Bar investigator learned that Purcell broke his lease and moved out of his law office without giving notice. (Case No. SC13-151)
    • Mark David Swanson, 1521 Alton Road., 684, Miami Beach, disbarred effective immediately, following a March 11 court order. Further, Swanson shall pay restitution of $10,000 to one client. (Admitted to practice: 1984) Pursuant to the terms of a retainer agreement, Swanson accepted $10,000 from a client in a pending criminal appeal, but failed to take any action on the client’s behalf. In another case, he never responded to a request to release guardianship funds for a minor who had become of age. (Case No. SC11-1478)