Saturday, June 15, 2013

Attorney Admits To Looting An Escrow Account, Co-Conspiring With Another To Rip Off Off $4.7M In Bogus Real Estate Deal

From the Office of the U.S. Attorney (New York City):
  • Preet Bharara, the United States Attorney for the Southern District of New York, announced that EDWARD ADAMS, a New York-based attorney, pled guilty [] in Manhattan federal court to conspiracy to commit wire fraud in connection with his participation in a fraudulent real estate scheme.

    As part of that scheme, ADAMS and a co-conspirator misappropriated millions of dollars in escrow funds that should have been safeguarded for investors in a real estate development project. The real estate project was never developed and investors lost all of their money. ADAMS pled guilty before U.S. District Judge John G. Koeltl.

    According to the Information, statements made during [the] guilty plea proceeding, and a Complaint previously unsealed in Manhattan federal court:

    Beginning in early 2008, ADAMS and James Monahan, a former sergeant in the New York City Police Department and the owner of a real estate investment company called Panam Management Group, Inc., negotiated with another real estate investment company to solicit investors for a project Monahan claimed to be constructing in the Dominican Republic.

    In connection with the project, ADAMS and Monahan executed agreements that required investor funds to be deposited into escrow accounts that were to be managed by ADAMS. From October 2008 through February 2009, approximately $4.7 million in investor funds were deposited into the escrow accounts. Shortly after the deposits were made, the funds were improperly withdrawn by ADAMS and Monahan without disclosure to investors.(1)

    In an effort to hide the fact that the funds had been removed from the escrow account, Monahan mailed a forged letter on the stationery of a major bank to investors in May 2009 claiming that their money was safely deposited with that bank. However, by June 2009, all of the investor funds had been taken from the escrow accounts. At that point, almost no work had been performed on the purported project in the Dominican Republic. None of the money was returned to investors.
For the U.S. Attorney press release, see New York Attorney Pleads Guilty To Participating In Multi-Million Dollar Real Estate Fraud Scheme.

(1) The Lawyers’ Fund For Client Protection Of the State of New York may find itself being asked by the victims to step up and cover at least some of the losses they suffered. The Fund exists to protect legal consumers from dishonest conduct in the practice of law in the state, to preserve the integrity of the bar, to safeguard the good name of lawyers for their honesty in handling client money, and to promote public confidence in the administration of justice in the Empire State. It attempts to secure these goals by, among other things, reimbursing client money that is misused in the practice of law.

According to the Fund, "typical losses covered include the theft of money from estates of dead clients; escrow funds in real property closing; settlements in personal injury actions; and money embezzled from clients in investment transactions" up to a maximum of $300,000 for each client loss.

For similar "attorney ripoff reimbursement funds" that cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

California Bar Recommends Boot For Attorney Who Played 'Hide & Seek' With Escrowed CMO, Pocketing $400K In Accrued Interest Owed To Rightful Owners; Judge: Lawyer "Fails To Understand & Appreciate The Basic Duties Of A Fiduciary ... Misconduct Displays Shocking Lack Of Basic Honesty"

From The State Bar of California:
  • A State Bar Court hearing judge has recommended the disbarment of a Beverly Hills attorney for misappropriating about $400,000 in interest from two investment vehicles that he agreed to hold in escrow pending their sale.

    In each case, Jon A. Divens, 57, [bar # 145549] agreed to hold in escrow a collateralized mortgage obligation (CMO), a type of investment vehicle that owns an underlying pool of mortgages. When the proposed sales of the CMOs fell through, Divens hid the CMOs from their rightful owners for months and transferred the monthly interest payments to his personal investment accounts.

    State Bar Court Judge Richard A. Platel rejected Divens’ argument that he was entitled to the interest under article 8 of the California Uniform Commercial Code and found him culpable of three counts of moral turpitude.

    “It is clear from the evidence that, from day one, respondent never intended on returning the Cobalt CMO or the FNMA CMO or the interest income they generated to the rightful owners,” Judge Platel wrote in the April 17 decision. “Respondent displays a complete lack of insight and recognition of the wrongfulness of his misconduct. What is more, the record establishes that, after 23 years as a member of the State Bar of California, respondent fails to understand and appreciate the basic duties of a fiduciary. Finally, respondent’s misconduct displays a shocking lack of basic honesty.”(1)
Source: Beverly Hills Attorney Facing Disbarment For Pocketing Interest On Escrow Money.

(1) The State Bar of California Client Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a California-licensed attorney.

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

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

State Bar Judge To Attorney Attempting To Shift Blame To Scheming Client In Investor-Screwing, $1M Trust Account Ripoff: "When Your Sole Job Is To Protect The Henhouse, You Are Not Allowed To Trust The Fox With The Chickens!"

From the California Bar Journal:
  • A Woodland Hills attorney has been stripped of his law license for misappropriating nearly $1 million intended for movie projects. Robert M. Victor [#156232], 47, was disbarred April 7, 2013 and ordered to make restitution and comply with rule 9.20 of the California Rules of Court.

    Two different film companies had entered into agreements with Victor's client, Rosemax Media LLC, in 2011 under the auspices that they would be working together to produce films. The film companies, Triton Films Inc. and SBDL Productions LLC, wired their investment money to Victor's client trust account with the understanding that Rosemax would also invest in the film project. The consolidated funds were to remain untouched in the trust account until all agreements involving the films were finalized and executed.

    Instead, Rosemax never followed through with its agreed-upon investments, and Victor immediately began to disburse money at the request of Rosemax CEO Joseph Q. Bretz. Less than two days after Triton deposited the first $375,000 of its $500,000 investment in a movie to be called “The Zone,” Victor had removed all of Triton’s funds through transfers to his firm and various parties. Similarly, SBDL’s $475,000 investment in a film titled “Light Years” shrank to $33,336.10 within three days of deposit.

    Both Triton and SBDL asked for confirmation that Rosemax had deposited the money it had agreed to, $1.5 million in the case of Triton and $925,000 per its agreement with SBDL. After the companies continued pressing the issue, Victor provided them with account statements which turned out to be bogus, bearing no reference to Victor or his firm and a different account number than Victor’s client trust account. Even after SBDL filed a civil action in court accusing Victor of conversion, fraud, negligence and racketeering, Victor continued to draw on the company’s funds in his trust account.

    The State Bar Court found Victor culpable of two counts of misappropriation and two counts of failure to cooperate in a State Bar investigation. At the time of the court’s Sept. 21, 2012 disbarment recommendation, Victor had not repaid any of the money to Triton or SBDL.(1)

    At trial, Victor argued that Rosemax’s CEO Bretz had swindled both him and the two companies and “spent considerable time and energy seeking to explain how impressive and charismatic Bretz was in the entertainment world,” State Bar Court Judge Donald F. Miles wrote in his recommendation.

    Miles dispelled that notion, saying Triton and SBDL had taken steps to protect themselves from Bretz and were only put at risk because Victor disregarded his fiduciary duties.

    When your sole job is to protect the henhouse, you are not allowed to trust the fox with the chickens, no matter how reassuring that carnivore may purport to be,” Miles wrote.
Source: Disbarred attorney scammed film partners in movie making deal.

(1) The State Bar of California Client Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a California-licensed attorney.

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

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

Indicted Law Firm Office Manager Wins Race To Prosecutor's Office, Copping Quick Plea, Then Spilling The Beans On Attorney/Boss In Alleged $1M+ Fee-Padding Conspiracy That Fleeced Unwitting Client

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • The former office manager of a Broward County law firm admitted stealing money from the Seminole Tribe of Florida and helping her former boss — an attorney — to pad legal bills paid by the tribe.

    Maria Hassun, 66, of Coral Gables, pleaded guilty to one count of theft from Indian tribal organizations at a hearing in federal court in Fort Lauderdale, records show. Hassun was indicted earlier [last] month with her former boss Frank Excel Marley III, 39, of Southwest Ranches.(1)

    Federal prosecutors said Marley billed the tribe close to $3.2 million and more than $1 million of that was fraudulently obtained in a conspiracy between October 2006 and early 2011.

    Marley, now at the Excel Law Group in Davie, has pleaded not guilty to one count of wire and mail fraud conspiracy and nine counts of theft from Indian tribal organizations. Hassun was Marley's administrative assistant and office manager at The Marley Firm in Miramar.

    Marley was retained in 2006 to represent the tribe on sports and entertainment issues and help it to obtain Federal Communications Commission licenses and equipment to build radio stations at the Brighton and Big Cypress reservations.

    Hassun admitted [] that she followed Marley's instructions to inflate his billable hours and billed the tribe "for travel, conferences, phone calls and meetings that did not occur."

    "Marley told … Hassun that he needed to make a specific dollar amount, then later told Hassun to be creative in figuring out how to inflate the invoice to reach the specified dollar amount," according to Hassun's plea agreement.

    Hassun agreed to pay restitution of $148,658, the amount prosecutors said she deposited in her bank account during the conspiracy. She faces up to five years in prison and a $250,000 fine when she is sentenced Aug. 9.(2)
Source: Former law firm worker admits stealing from Seminole tribe.

From the U.S. Attorney's Office:
(1) See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observations on the so-called "race to the courthouse/prosecutor's office" that frequently takes place during the early stages of these "multi-target" criminal probes and conspiracy prosecutions:
  • When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.
(2) The Florida Bar's Clients' Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a Florida-licensed attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Friday, June 14, 2013

Woman On Maternity Leave Scores $13K Fair Housing Settlement For Allegedly Being Told By Lender That It Would Be Willing To Make A Home Loan To Her, But Only After She Returns To Work

From the Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it has reached a Conciliation Agreement with Primary Residential Mortgage, Inc. (PRMI), in Salt Lake City, UT, settling allegations that the lender denied a Baltimore, Maryland woman a mortgage loan because she was pregnant and on maternity leave.
  • Refusing to approve a mortgage loan or to provide refinancing because a woman is pregnant or on maternity leave violates the Fair Housing Act’s prohibitions against sex and familial status discrimination.
  • The woman, who applied for the loan in her name, and her husband filed a complaint with HUD alleging discrimination after one of PRMI’s loan officers told her that she was a “good risk” and that the lender would be willing to finance her loan, but only after she returned to work. After being unable to get a loan from PRMI, the woman and her husband applied for a loan with another lender and were approved.

    Under the terms of the agreement, PRMI will pay the woman $13,000 and adopt a parental leave policy with respect to loan applications to ensure compliance with the fair lending requirements of the Fair Housing Act. In addition, PRMI’s loan officers, processors, underwriters and decision makers will be trained on the Act and the new policy. The Parental Leave Policy applies to men as well as women who are on parental leave due to the birth or adoption of a child and prohibits inquiries concerning a person's future parental leave plans.
For the HUD press release, see HUD, Utah Mortgage Company Settle Pregnancy Discrimination Claim (Baltimore family denied approval based on maternity leave status).

HUD, Bankster Settle Fair Housing Allegations That Lender Discriminated Against Two Pregnant Women On Maternity Leave In Unrelated Cases Involving Home Financing Transactions; Victims Each Pocket $18K; Feds: Bias Prohibitions Also Apply When Men Take Paternity Leave

From the Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it has reached two Conciliation Agreements with SunTrust Mortgage, Inc., settling allegations that the Richmond, VA-based lender denied mortgage loans to a couple in Port St. Lucie, FL, and another couple in Ashland, VA, because the women were on maternity leave.

    The Fair Housing Act makes it unlawful to discriminate in residential real estate-related transactions based on race, color, national origin, religion, sex, disability, or familial status. These prohibitions include denying a mortgage because a person is pregnant or takes maternity or paternity leave.
  • A Port St. Lucie, FL, woman and her husband alleged that SunTrust had pre-approved them for a mortgage loan, but 14 days before closing, a loan officer informed them that the loan would not be approved unless she returned to work.

    In the Ashland, VA, case, a couple alleged that the bank had provided a construction-to-permanent mortgage loan but delayed its conversion to a permanent loan until after the woman returned from maternity leave. The Fair Housing Act requires lenders to provide full and fair access to home mortgages regardless of a person’s sex or familial status, including pregnancy.

    Under the terms of the agreements, SunTrust will pay each couple $18,000, adopt a parental leave policy that prohibits discriminatory mortgage lending due to parental leave, and train their employees on the fair lending requirements of the Fair Housing Act. The Parental Leave Policy specifically prohibits asking mortgage applicants about their intent to take parental leave in the future. The policy also provides that mortgage applicants on or scheduled to be on parental leave may still qualify for loan approval and funding.
For the HUD press release, see HUD And Suntrust Bank Settle Maternity Leave Discrimination Claims (Bank to pay two couples who were denied loans).

Recorded Restrictive Covenant Prohibiting Use Of House As Group Home For Disabled Persons Leads To $90K Fair Housing Settlement; Listing Brokerage, Law Firm Each To Cough Up $45K; Prospective Buyer Scores $78K, Buyer's R/E Agent Pockets $12K For Initiating Complaint With HUD

From the Department of Housing & Urban Development:
  • The U.S. Department of Housing and Urban Development (HUD) announced [] a $90,000 Conciliation Agreement with Coldwell Banker Residential Brokerage and the seller of a home in Worcester, Massachusetts, settling allegations they violated the Fair Housing Act by preventing the sale of a house to be used as a group home for persons with disabilities.

    The Fair Housing Act prohibits discrimination in rental or sales transactions based on disability, including preventing a home sale because the home is going to be used by persons with disabilities.
  • The prospective buyer planned to rent the house to a non-profit organization that provides supportive housing for persons with disabilities. When Erwin Miller, the executor of the estate learned the house would be used as a rental property, he agreed to sell the home on the condition a restrictive covenant was attached to the property. Miller stated in an email, “If they rent to a responsible family it is okay, BUT no unrelated individuals, students, dorm! Neighbors will fight this.”

    Donna Truex, Miller’s attorney, at Bowditch & Dewey, LLP, recorded a restrictive covenant prohibiting the use of the house as a group home for disabled persons. Miller’s real estate agent, an independent contractor associated with Coldwell Banker Residential Brokerage, then emailed the restrictive covenant to the prospective purchaser’s sales agent, thereby prompting the prospective purchaser to withdraw from the sale.

    The prospective purchaser and his sales agent subsequently filed a complaint with HUD, alleging the restrictive covenant that prohibited future owners of the home from using it as a group home for individuals with disabilities.

    After receiving the complaint, HUD filed its own Secretary-initiated housing discrimination complaint alleging that the actions of the seller, real estate agent Maureen Kelleher, and attorney Donna Truex violated the Fair Housing Act.

    Under the terms of the agreement, which was negotiated by HUD’s Regional Counsel in Boston, Coldwell Banker Residential Brokerage and Bowditch & Dewey will each pay $39,000 to the prospective buyer and $6,000 to his sales agent.

    Coldwell Banker Residential Brokerage and Bowditch & Dewey, LLP, will provide their employees with fair housing training. In addition, Bowditch & Dewey, LLP, will donate 100 hours of free legal services directly related to fair housing and 100 hours of free legal services directly related to the promotion of disability rights.
For the press release, see HUD Settles Discrimination Claim With Coldwell Banker Residential Brokerage And Home Seller (Brokerage firm, seller will pay $90,000 for preventing sale of house).

NYC Fair Housing Watchdog Scores $385K In Settlement With 675-Home Bronx Co-op Over Allegations That Rule Requiring Prospective Homebuyers Submit Three References From Existing Shareholders Discriminated Against African Americans

In New York City, the Fair Housing Justice Center reports:
  • District Court Judge Robert P. Patterson, Jr. approved a settlement between the Fair Housing Justice Center (FHJC) and the Edgewater Park Owners Cooperative, Inc. (EPOC). The agreement resolves a lawsuit filed in February 2010 in which the FHJC alleged that two housing cooperatives located in the Throggs Neck area of the Bronx and a real estate broker were discriminating against African American prospective home buyers.

    Prior to filing a lawsuit, the FHJC conducted a testing investigation in 2009. The complaint alleged that Edgewater Park, a community with 675 homes, and Silver Beach Gardens, a community with 350 homes, required that prospective buyers provide three (3) references from existing shareholders and that this reference rule discriminated against African American home buyers.
  • The settlement provides a general injunction requiring EPOC to abide by fair housing laws and permanently eliminate the 3 shareholder reference requirement. [... In addition to other non-financial terms], the agreement provides that EPOC will make a payment of $385,000 to the FHJC to cover damages, attorney’s fees, and costs.
  • FHJC Executive Director Fred Freiberg stated, “This settlement opens up housing opportunities to prospective buyers of all races. We urge all cooperative and condominium communities in the New York City region to fully comply with fair housing laws by removing policies or procedures that restrict access to housing based on race or other protected characteristics.”

    The FHJC entered into a settlement with Silver Beach Gardens in May 2011 for injunctive relief, which included removal of the 3 shareholder reference requirement, along with a monetary recovery of $115,000.

    The defendant real estate broker, Amelia Lewis, also settled with the FHJC and agreed to pay damages to two African American testers and surrender her real estate license.
For the press release, see Bronx Co-op Community Welcomes All Buyers (Discriminatory Reference Rule Abolished).

Thursday, June 13, 2013

Tacoma Feds Score Multi-Year Prison Sentences For Sovereign Citizen Pair Convicted Of Filing False Liens In Retaliation Against Government Officials

From the Office of the U.S. Attorney (Tacoma, Washington):
  • Two men, who previously resided in Pierce County, Washington were sentenced [] in U.S. District Court in Tacoma for their illegal actions associated with a militant anti-government group, announced U.S. Attorney Jenny A. Durkan.

    KENNETH WAYNE LEAMING, 57, of Spanaway, Washington, was sentenced to eight years in prison for three counts of filing false liens against federal officials, and one count of harboring federal fugitives and being a felon in possession of firearms.

    His co-conspirator, former Tacoma resident DAVID CARROLL STEPHENSON, 57, was sentenced to 10 years in prison for a single count of filing false liens against a federal official. STEPHENSON is already serving an eight year prison sentence for tax fraud. Both men were convicted at trial in March 2013. At sentencing U.S. District Judge Ronald B. Leighton said Leaming had earned “every day” of the prison term. Leaming “flaunts authority, he harasses law abiding people who have an obligation to the people to serve.”

    Judge Leighton imposed a ten year sentence, above the guidelines range, on STEPHENSON saying he, “cannot, will not live his life without doing harm to others. He is the master manipulator, the puppeteer... He is in my mind a very dangerous man.”

    These defendants tried to mask their crimes with the cloak of free speech and beliefs,” said U.S. Attorney Jenny A. Durkan. “They thought they were immune from the law or the justice system, but now their frauds aimed at taxpayers and public servants need to come to an end. A lengthy prison term is the best way to protect the public from their schemes.”

    When investigators served a search warrant at LEAMING’s Spanaway home on November 21, 2011, they found six firearms. LEAMING was prohibited from possessing firearms because of a prior felony conviction of operating an aircraft without a pilot’s license. Additionally, investigators determined that two wanted federal fugitives from Arkansas had been living with LEAMING in his home. Finally, the search revealed that LEAMING and STEPHENSON, who was an inmate at the time in an Arizona federal prison, had been conspiring to file liens against various federal officials including the Arizona prison warden and the head of the Federal Bureau of Prisons.

    The men identify themselves as members of the ‘Sovereign Citizen’ movement. ‘Sovereign Citizens’ profess a belief that both state and federal government entities are illegitimate. Members of this group often engaged in so-called “freedom driving,” i.e., driving about without state-required licenses, either for their vehicles or themselves. When contacted by local law enforcement, members of the group often bombard local officials (from the officer, to local judges, to mayors and other members of local government) with frivolous liens, false claims, and sometimes threats of violence. Many members of this same group had previously come to the attention of federal law enforcement for engaging in various fraudulent tax schemes, wire fraud schemes, and (occasionally) inappropriate communications with various members of federal law enforcement and the judiciary.

    In asking for a ten year sentence for both men, prosecutors wrote to the court that only a long prison term would protect the public. About STEPHENSON they wrote, “This is not the case of a defendant who continues to run afoul of the law because of a substance abuse addiction or a history of childhood abuse. Rather, this is a defendant who simply chooses to remain defiant, despite court after court telling him that he must stop, and despite multiple stints in prison. At this point, removal from society is the only way in which the public can be kept safe from the defendant’s crimes.”

    As for LEAMING, prosecutors provided information to the court about his repeatedly holding himself out to victims as a lawyer who could solve their problems, when in fact his actions may have damaged their case. About the crimes from the March 2013 conviction prosecutors wrote: “Defendant’s possession of firearms is particularly disturbing in light of several facts. First is obviously his disdain for government. Second is his possession of various items of police equipment, including numerous badges, light bars, and a Crown Victoria sedan modified to appear to be a police vehicle. Last but not least is Defendant’s repeated invocation of the shooting of government officials in Southern California by a disgruntled former police officer - which again appeared to be a veiled threat to engage in violence himself if he is prevented from pursuing his “‘petitions for redress,’” prosecutors wrote in their sentencing memo.

    Two other defendants active in the Sovereign Citizen movement have already been sentenced to prison for their criminal conduct. David Russell Myrland was sentenced in 2011 to 40 months in prison for making threats against elected officials in Kirkland, Washington. And in 2012 Timothy Garrison was sentenced to 42 months in prison for assisting in the filing of false tax returns.
For the U.S. Attorney press release, see Two Members Of The So-Called ‘Sovereign Citizen’ Movement Sentenced To Long Prison Terms (Defendants Claim to be Tax and Law Experts Damaging Victims and Ensnarling Justice System).

NC Man Allegedly Filed False, 147-Page $3M Lien Against Gov't Employee Who Presided Over Court Hearing That Led To Foreclosure Sale Of His Real Estate; Watchdog Group: Sovereign Citizens Continue "Clogging Up The Court With Indecipherable Filings ..."

In Raleigh, North Carolina, the News & Observer reports:
  • A man who lost a block of three Raleigh townhouses to foreclosure late last year has been arrested on a charge of filing a false $3 million lien against the property of the Wake County court clerk who presided over a foreclosure hearing.

    Court officials say the lien and a second one that he Sullivan Colin, 36, was trying to file Friday when he was arrested, are part of harassment of court officials by adherents of a "sovereign citizen" movement that denies government authority.

    Colin was taken into custody at the Wake County Register of Deeds office Friday afternoon when he went there to file another lien, officials said, and was arrested Friday evening.

    Police charged him with two counts of filing a false lien March 26 against the personal property of Nicole Brinkley, a court clerk who had presided over a foreclosure hearing in which Colin lost properties at 3521, 3523 and 3525 Herndon Oaks Way after lawyers for JP Morgan Chase filed a claim last November.

    Blair Williams, chief assistant clerk of court in Wake County, said the 147-page lien that Colin filed in March appeared to be similar to a 150-page document he was trying to file when he was arrested.

    The lien is the first instance in Wake County, Williams said, of members of a “sovereign citizen” or “sovereign nation” movement filing civil court actions against court officials. There have been cases in western North Carolina, Williams said.

    Police said Colin had said at the foreclosure hearing that he would file the claim.
  • Monday, he was being held in the Wake County Detention Center in lieu of a total bail of $500,000.

    The Southern Poverty Law Center, an organization that tracks extremist movements in the U.S., said members of the sovereigns movement “believe that they – not judges, juries, law enforcement or elected officials – get to decide which laws to obey and which to ignore, and they don’t think they should have to pay taxes.”

    Adherents, the center said, “are clogging up the courts with indecipherable filings....”

NYC Judiciary Kiboshes 'Honor System' Method Of Oversight In Connection With Attorneys Acting As Court-Appointed Foreclosure Referees & Their Handling Of Proceeds From Public Sales; Recently-Discovered Surplus Snatching Scandal Where Lawyer/Politician Allegedly Used Unclaimed Funds As Campaign Piggy Bank Triggers Reform

In Brooklyn, New York, the New York Post reports:
  • State Sen. John Sampson’s alleged embezzlement scheme has sparked specific reform in how city courts handle foreclosure suits, The Post has learned.

    The Brooklyn Democrat was indicted last month for allegedly looting $440,000 from four foreclosure accounts he had been appointed to safeguard.

    Officials say the alleged scam was aided by a total lack of supervision over the cash raised by the auction of foreclosed properties. “Because of the Sampson situation, we realized we had no way to check up if the referee was complying with the law,” said Lawrence Knipel, the Brooklyn Supreme Court administrative judge for civil matters. “We weren’t double-checking.”

    Under the new rule, judges must confirm that money from foreclosure auctions is properly deposited with the clerk and not pocketed by crooked lawyers.

    The oversight began about two weeks ago. Similar monitors will be instated in the other boroughs. “Very shortly, this will be administered citywide,” Knipel said.

    The reform could also have been accomplished with a change to the statewide law, but it was unclear how long that would take or whether it would ever happen, a court source said.

    Civil judges assign attorneys, or “referees,” who are paid $500 to oversee the auction of a foreclosed property, pay off the mortgage and return any leftover money to the homeowner.

    Until the recent reform, there wasn’t any mechanism that checked for excess money that should be returned to the homeowner, which allowed crooks to make off with the dough. But now when the winning bid exceeds the amount owed on the house, the clerk will alert the judge and it will be the judge’s responsibility to check 60 days after the auction whether the money was properly deposited, Knipel said.

    In a bizarre coincidence, in 2001 Knipel assigned Sampson a Windsor Terrace property that the politician allegedly used as a piggy  bank. Prosecutors say Sampson, 47, used the money to finance his failed 2005 bid for Brooklyn district attorney. Sampson has pleaded not guilty to the embezzlement charges.

Reverse Mortgage Backfires On Another Elderly Homeowner; Now-Widowed Hubby Finds Himself Needing To Cough Up $300K Or Face The Boot From Home Of 40 Years After Being Talked Into Taking Name Off Deed When Refinancing Residence

USA Today reports:
  • As America's population ages, the hard sell is on for reverse mortgages. Promising happier days ahead, the former "Fonz," actor Henry Winkler, is giving the hard sell in relentless television ads. But the housing crash and the fiscal state of today's seniors are causing many of these loans to backfire.

    Reverse mortgages were originally designed for seniors who wanted to take out their home equity to spend during retirement. Unlike a regular mortgage, they require no monthly payments, and the borrower can take out a lump sum or receive regular payments.
  • "It sounded good," said Robert Bennett, a homeowner in Annapolis, Md. He and his wife, Ophelia, took out a reverse mortgage at the end of 2008 for about $300,000. They did it to pay off their regular mortgage and stop making monthly payments. At the time, the lender told them only Ophelia's name would go on the loan, as she was 10 years older. The older the borrower, the less risk the lender takes on.

    "In the case of some couples, they make a decision up front to remove one member of the couple from the title in order to get more money or in order to qualify for the mortgage," said [the National Reverse Mortgage Association's Peter] Bell.

    Bennett said his lender told him he could be added to the mortgage later, but when Ophelia died, just a month after the loan was made, he found out that was not the case.

    "It was set up bad," Bennett said, "I wasn't thinking that — that I would be crossed out completely if she died."

    Bennett is now fighting foreclosure, trying to save the home he has lived in for nearly 40 years. To stay, he would have to pay back the $300,000, but the house is now worth about half that, so he could never get a loan to cover it. Like millions of others, Bennett has no equity in his home.

    Experts argue reverse mortgages often are being used today for all the wrong reasons. Seniors now have less home equity, less savings and more debt.

    "This was originally contemplated as something you could draw money from over a long period of time, as a way of supplementing your income or providing income when you had not others. Now a lot of people are looking to reverse mortgages as a quick fix," said David Certner of AARP.

    About 9.5% of the 775,000 reverse mortgages outstanding are delinquent, far higher than the rate on regular mortgage loans. While lenders are pushing them aggressively, fewer are being made today, due to the drop in home values. Advocates say they can be a valuable tool, if used correctly, and that there are ample safeguards.
  • The Consumer Financial Protection Bureau is now looking at new rules to protect consumers, which could include stricter supervision of lenders and more transparency for borrowers.

Wednesday, June 12, 2013

Oregon Man Pinched On Suspicion Of Hijacking Possession Of Vacant Foreclosures, Then Pocketing Cash From Subsequent Rentals; Suspect Allegedly Used Online Craigslist Ads To Reel In Unwitting Tenants

In Sherwood, Oregon, KPTV Channel 12 reports:
  • If 40-year-old Jason Dimicelli is your landlord, deputies want to hear from you. Lincoln County deputies say he is responsible for a Craigslist scam that has put renters in multiple counties out of their homes.

    Dimicelli was arrested in May for renting out a Newport home without the owner's permission. Further investigation has linked Dimicelli to residential properties in Lincoln, Clatsop, Yamhill and Washington counties.

    In Sherwood, Shelly Taylor believes she was a victim of the scam. She had been renting a home there from Dimicelli for only two weeks when she started noticing red flags – the home had no smoke detectors, and basic maintenance had been neglected. Further research showed the home was actually bank-owned.
  • Although she only actually lived there two weeks, Taylor says she had already paid Dimicelli $2,000 and done hundreds more in upgrades to the home – including replacing the missing smoke detectors. Now Taylor says she is out the money, and out of a place to rent.

    Deputies say many of the homes in the investigation were either in foreclosure or bank-owned. They are currently investigating how their suspect was able to get into the homes and change the locks.

Jacksonville Pair Face RICO, Organized Fraud/Schemes Charges In Alleged Adverse Possession Real Estate Hijacking & Rental Scam Peddled Online; Cops To Prospective Tenants: Stay Away From Websites Like Craigslist When Looking For Houses!

In Jacksonville, Florida, WJXT-TV Channel 4 reports:
  • Two people were arrested [] for gaining adverse possession of seven properties and renting them out to families, the Jacksonville Sheriff's Office announced at a news conference [...].

    One of those families who was victimized may have been military and new to Jacksonville, police said.

    Rosemary McCoy, 55, and Elton McCall, 38, are charged with racketeering, organized fraud, engaging in schemes, conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, and trespassing.

    The duo told tenants they had a property management company named Going Global, which was just a cover, police said. They said the two have been collecting monthly rent of $700 to $1,000 since October after advertising the houses on Craigslist.

    Most of the properties were bank-owned and had been or were in the process of foreclosure, police said.
  • Channel 4 spoke with one of the victims of this scheme, a renter who asked Channel 4 to keep his identity a secret. "they did everything legitimate," said the renter. "Had a lockbox on the door, gave us a tour through the house."

    This renter couldn't believe it when he heard from Channel 4 that his landlords, who he pays each month, don't own the house he's been paying rent for since September 2012. The renter also didn't know that the McCoy and McCall were arrested. [...] "Everything seemed legit?" asked Channel 4's Scott Johnson. "Everything," answered the renter, who police tell us is just one of many who were scammed by McCoy and McCall.

    Police said investigators have been keeping a close eye on adverse possession applications at the city clerk's office, which is where they became suspicious. Investigators said McCoy and McCall also collected utility payments, water, cable, etc., and they operated the utilities in their names.
  • McCoy and McCall recently applied for adverse possession of an additional six houses, police said. Investigators are urging potential renters to stay off of websites like Craigslist when looking for houses.
For the story, see 2 arrested in adverse possession cases (Duo accused of racketeering, organized fraud).

Tenant Advocates Accuse Foreclosing Bankster, Law Firm Of 'Constructive Eviction' By Rendering Premises Uninhabitable To 'Persuade' Occupants To 'Voluntarily' Vacate; Family Of 8 Left Literally 'In The Dark' - Other Tenants Successfully 'Scared Out'

In Chicago, Illinois, Progress Illinois reports:
  • Eight members of the Shaw family, including a 14 month-old baby, have been living without gas or electricity for nearly a week, according to parents Shantisha and Ezekiel. Their two-bedroom garden apartment in Englewood, on Chicago’s South Side, is flooding and has mold damage. The two apartments above them are vacant, with broken and boarded-up windows.

    “We can’t live like this any more,” said Shantisha Shaw, 36, regarding the home she’s shared with her family since February 2011. A stroke survivor, Shantisha is permanently disabled and lives with her husband and six children.

    The Shaw’s landlord was foreclosed upon last year and Freedom Mortgage Corp. took over the deed for the building on December 14, as indicated by the Cook County Clerk of the Circuit Court.

    But neither Shantisha, nor her husband, Ezekiel Shaw, said they were notified the building was being foreclosed upon. They said they were not given a 90-day notice to vacate, nor were they provided any instructions indicating where they should send their monthly $550 rent — which includes utilities — following the foreclosure.

    The Shaws say they were not provided with any landlord or contact information pertaining to who would be responsible for maintaining the property after the foreclosure. “We’ve been left in the dark, literally,” said Ezekiel, 45. “What are we supposed to do?”

    He said he’s been given the run-around:

    In February the Shaws received an eviction notice from Pierce & Associates, a leading Chicago-based foreclosure law firm. “Demand is hereby made upon you for immediate surrender of possession of the above premises,” the February 4 letter, identifying Pierce & Associates as attorneys for Freedom Mortgage, states.

    “But we don’t have any money, I don’t know what they expect us to do,” said Shantisha. She said the building's utilities were shut off last week and “it’s been like hell”:

    It is under these conditions that the Shaw family is receiving support from the Keep Chicago Renting Coalition, which hosted a press conference and rally this week outside the family’s home at 6936 South Green St.

    According to the group, city law — the Chicago Residential Landlord Tenant Ordinance — requires that landlord notify renters about foreclsoure filings within seven days of the legal action. The coalition also notes that the Illinois Mortgage Foreclosure Law obligates those who take over foreclosures to notify renters of their acquisition of the property within 21 days of securing it. None of this happened in the case of the Shaw family.

    Additionally, Pierce & Associates should have given the Shaw family 90 days to vacate the premises, the coalition alleges, as mandated by the federal Protecting Tenants at Foreclosure Act of 2009.

    The coalition of community, social service and labor organizations also alleges that Freedom Mortgage violated the Chicago Residential Landlord Tenant Ordinance by failing to maintain the property after they acquired ownership.

    “We want Freedom Mortgage to assume responsibility as new owners of the property, and we need Pierce & Associates to apply best practices regarding renters’ rights,” said Dan Kleinman, policy director for Action Now. “When a law-abiding tenant is willing and able to continue paying rent, they deserve the opportunity to keep their lease. And if the bank absolutely refuses, they need to provide a form of compensation that dignifies what the renter is going through.”

    The group has reached out to the office of Illinois Attorney General Lisa Madigan. Kleinman said officials expressed interest in helping the coalition pursue the correct means of redress for the Shaw family. “We need to send a clear message to, not only banks, but the legal firms that represent them, that the law has to be followed and renters’ rights have to be respected,” he said.

    Kleinman accused Pierce & Associates of “constructive eviction”, which is the illegal practice of rendering a property uninhabitable in the interest of persuading a tenant to leave the premesis on their own volition.

    “The Shaws have done nothing wrong,” he said, noting the buildings’ other tenants have already been “scared out.”

Indianapolis Tenant-Couple Face The Boot After Finding Out Premises Was In Foreclosure; Phony Landlord Was Homeowner's Ex-Hubby

In Indianapolis, Indiana, WISH-TV Channel 8 reports:
  • An Indianapolis couple is scrambling to find a new place to live after accidentally finding out their house is in foreclosure. It only took a minute for panic to fill Claudia Mason's chest.

    "First was who are you?" A man was taking pictures of her house.

    "i Came on out and asked him what he was doing and found out that he was putting notices up on our house for a sheriff eviction," said Claudia.

    Just days prior, Claudia and her husband Craig signed their second year's lease. They thought it must be a mistake but after a quick check by the man with the camera. "Not only was the house completely foreclosed, but who we had been paying rent to didn't own the house now or ever," said Claudia.

    Turns out, the landlord had been taking the Mason's rent checks while they lived in a house owned by his ex-wife. Meanwhile, the house was falling into foreclosure.
  • A simple search of public records revealed a long history of financial problems for the landlord; a handful of lawsuits, over $30,000 in property taxes due and he filed for bankruptcy in 2002.

    "We've had to completely drain our savings. We've had to scrap and scrounge so that we can get first months and deposit on a new property plus moving expenses," said Craig. "We found out that in 26 days we are basically going to be homeless," said Claudia.

Tuesday, June 11, 2013

Cops: HOA Prez Pilfered $148K Of Association's Funds From 66-Unit Condo, Then Blew It At Nearby Casino; Arrest Culminates 2+ Year Probe Triggered By Financial Discrepancies Found By Replacement Board Members

In Pembroke Pines, Florida, the South Florida Sun Sentinel reports:
  • Luck finally ran out for a Pembroke Pines condo association president accused of gambling away the community's maintenance money at a casino.

    Nancy Marquez, 58, was arrested on charges she stole $148,012 from the French Villas condominium association, Pembroke Pines police said. Taken into custody, she admitted she commingled association funds with her own and used the cash to gamble at Seminole Hard Rock Hotel & Casino in Hollywood, investigators said.

    "It made my day when I got the call," said current condo board member Paul Coffman upon hearing of Monday's arrest.

    Coffman said he and fellow board members found financial discrepancies in January 2011, when he replaced Marquez as association president for the 66-unit building in the 600 block of French Drive. "We got the invoices and everything for the two years that she was on the board and started going through them," he said. "Some things caught our eye that just weren't right."

    The board contacted police, who carried out an investigation that more than two years later resulted in Marquez's arrest.

    Because of the inquiry, Coffman and other board members couldn't publicly discuss the missing money — even to concerned condo residents, Coffman said. Meanwhile, bills were being paid late because of the shortage of funds, Coffman said. "When people kept complaining, you had to bite your tongue," he said.

    The association received notices from the city of Pembroke Pines that the water would be shut off unless utility bills were paid. Florida Power & Light Co. sent notices threatening to switch off electricity that powered hallway and parking-lot lighting in the community.
  • She was arrested on charges of grand theft and perpetrating a scheme to defraud. She was freed from jail Tuesday on $7,500 bond, records show. [...] In Pembroke Pines, the French Villas condominium association has since managed to pay down its debt through the satisfaction of liens against foreclosed units, Coffman said. As they sold, the association received a percentage of the money, Coffman said.

    "We were getting enough money to makes ends meet," he said. "We have caught up." The debt problems have not disappeared altogether, but the association is in better shape. "We're not sailing yet," he said. "We're still in a dinghy, but we're catching up."

HOA Treasurer Pinched, Accused Of Improperly Dipping Into Community's Till In $260K+ Ripoff Over Four Year Period

In Columbia, County, Georgia, WJBF-TV Channel 6 reports:
  • Nestled neatly along a country road, the Stratford neighborhood is relatively quiet and peaceful. But, the news of an arrest in the case of stolen homeowners association money has punctured the typical silence.

    Neighbor Song Sparks says, "everybody let their guard down because over a number of times the community was thriving, the grass was being cut, everything was being done. We assumed the statements that we got looked pretty on paper."

    However, the ugly truth soon reared its head when the dollars and cents didn't add up. It turns out, Stratford Homeowners Association treasurer Laurie Wainwright-Vanover was suspected of taking more than $200,000 from the coffers.

    According to the police report, it happened over a four year period through credit cards and ATM transactions. Homeowner's Association president Tom Gorta says, "obviously, you have to be more vigilant than anything and what you take out of this is trust no one."
  • Laurie Wainwright-Vanover has been released on a $40,000 bond. [...] Deputies arrested Laurie Wainwright Vanover of Andover Court and charged her with Larceny - Theft By Taking (Felony/Misdemeanor), Financial Transaction Card Fraud, Computer Theft, and Theft By Conversion (Felony/Misdemeanor).

    Investigators say, Vanover is accused of stealing $267,663.08 from the Stratford Community Association between November 2008 and December 2012. 

Sticky-Fingered HOA Treasurer Gets 15 Days House Arrest For Embezzling $26K From Outside Employer, Then Using Partial Proceeds To Dodge Jail Time In Earlier $10K HOA Ripoff

In Bonney Lake, Washington, the Bonney Lake-Sumner Herald reports:
  • Bonney Lake woman Jeanette Kay Sturtz, 57, was sentenced Wednesday to 30 days community service and 15 days house arrest after pleading guilty to embezzling more than $35,000 from her homeowners association and a Puyallup landscaping company.

    Sturtz was charged March 5 for the theft of nearly $26,000 from Blue Sky Landscape Service, where she worked as a financial controller. [...] In the declaration of probable cause for the case, deputy prosecutor Lisa Wagner noted that the thefts from Blue Sky began the same month thefts from Sturtz's homeowner's association ended.

    Sturtz was charged in 2011 with the theft of $10,600 from the homeowner's association where she was treasurer. The charges were dismissed under an El Cid diversion program when it was determined she had paid back what she had taken. The Blue Sky case led prosecutors to believe she had embezzled from her employer in part to pay back the association.

    "In (the homeowner's association) incident the defendant had admitted to stealing $10,600.00 from her homeowner's association, and she said that the thefts occurred from February to September 2010," Wagner wrote in the probable cause papers. "That latter date is important because the records in the present case show that the defendant began stealing from Blue Sky Landscaping in September, 2010."

    In light of the new embezzlement case, the theft charge in the association case was reopened. Sturtz originally pleaded not guilty March 20. With her plea of guilty to two counts of theft in the first degree, prosecutors agreed to recommend she be sentenced as a first-time offender. Twelve charges of forgery were dismissed from the case.

Monday, June 10, 2013

Bankruptcy Appeals Panel OKs Foreclosing Lender's Pursuit Of Deficiency Judgment Despite Failing To File Action Within State Law-Mandated 90-Day Period After Non-Judicial Sale

  • Pierce v. Carson (In re Rader), 488 B.R. 406 (9th Cir. BAP 2013) -

    A chapter 7 trustee objected to the unsecured deficiency claim of a mortgage lender that remained after the lender obtained relief from the automatic stay and proceeded with a foreclosure. The trustee contended that the claim should not be allowed because the lender did not comply with a state law requirement that an action must be commenced within 90 days after a non-judicial sale to preserve the deficiency claim.

    The bankruptcy court overruled the trustee’s objection, and on appeal the bankruptcy appellate panel affirmed.
  • The Rader courts took a diametrically opposite approach. [...] However, on a broader note, the court concluded that the state statute was preempted by the Bankruptcy Code.

Oregon Supremes Issue Split Decision In MERS Foreclosure Cases

In Salem, Oregon, The Oregonian reports:
  • The Oregon Supreme Court on Thursday cleared the way for banks to return to their preferred out-of-court method of foreclosure.

    The high court found that Mortgage Electronic Registration Systems Inc., a lending industry cooperative for cataloging loan ownership, can't foreclose on mortgages itself -- as was common in the early years of the foreclosure crisis -- because it's not the beneficiary of a deed of trust.

    The court did rule in favor of MERS and lenders, however, by ruling that not all transfers in ownership of a loan need to be recorded in county records before out-of-court foreclosures can proceed. With those ownership records now considered complete, foreclosures can proceed outside the court system at a lower cost to lenders.

    The recording decision reverses part of a ruling by the Oregon Court of Appeals, a lower court, that had been the final word in state law until Thursday. After the appellate court issued its decision in July 2012, most lenders diverted their foreclosures into the court system to avoid possible legal challenges.
  • The rulings came in the form of two opinions. The decision in Brandrup v. ReconTrust Co. (PDF), written by Justice David V. Brewer, answers four questions sent to the state's high court by the U.S. District Court in Portland, which was considering several foreclosure challenges. As a federal court, it defers to state law in foreclosure matters.

    In the other, Niday v. GMAC Mortgage LLC (PDF), Brewer wrote an opinion that applied the answers it set out in Brandrup and affirmed the appellate court's finding. The Supreme Court ruled MERS didn't prove it has authority to foreclose non-judicially, and it remanded real estate agent Rebecca Niday's foreclosure case back to the circuit court that had granted summary judgement against her.

Wells First To Settle Fair Housing Suit Alleging It Maintained & Marketed REOs In White Neighborhoods Better Than In Black Neighborhoods, Turning Those Vacant Homes Into Dilapidated Eyesores; Suits Against Two Other Banksters Remain Pending

The Blog of Legal Times reports:
  • Wells Fargo Bank agreed to pay $42 million to settle a complaint that it failed to maintain foreclosed properties in minority neighborhoods, turning the vacant houses into dilapidated eyesores.

    The National Fair Housing Alliance and member organizations sued Wells Fargo in April 2012, alleging in an administrative complaint filed with the U.S. Department of Housing and Urban Development that the bank violated the Fair Housing Act.

    The complaint alleged Wells Fargo’s so-called "real estate owned" properties in white areas were much better maintained and marketed than the properties in African-American and Latino neighborhoods. For example, houses in minority areas often had ill-kept yards, broken doors, peeling paint or boarded-up windows.

    “Many neighborhoods across the country have been seriously damaged by the foreclosure crisis, including the impact of [real estate owned] homes on property values, curb appeal, and tax revenue for schools,” said Shanna Smith, head of the National Fair Housing Alliance. “Our joint efforts will help lay the foundation for the industry to get some of those neighborhoods back on their feet.”

    The housing groups filed similar complaints against Bank of America and U.S. Bancorp, which are still pending.

    Wells Fargo—represented by Skadden, Arps, Slate, Meagher & Flom partners Anand Raman and Joseph Barloon, who are both based in Washington—is the first to settle.

    According to the plaintiffs, who turned to Joseph Sellers and Peter Romer-Friedman of Cohen Milstein Sellers & Toll, it’s the first-ever agreement regarding the equal maintenance and marketing of bank-owned homes.

    Wells Fargo agreed to provide $27 million to the fair housing organizations to promote home ownership, property rehabilitation and development in 19 communities of color, including areas of Baltimore, Washington D.C. and Prince George’s County.

    Another $3 million goes to the housing organizations to cover costs and attorney fees. The bank will also pay HUD $11.5 million to support neighborhoods in an additional 25 cities.
Source: Wells Fargo Pays $42 Million in Fair Housing Case.

See also:

Sunday, June 09, 2013

Minnesota Couple Claiming Sovereign Citizen Immunity From Prosecution Get Nearly Two Years For Filing $114 Billion In Bogus Liens Against Gov't Officials In Retaliation Over Home Foreclosure

In Ramsey County, Minnesota, the Pioneer Press reports:
  • A former Minneapolis couple who filed fake liens against public officials were sentenced Friday to nearly two years in prison after a judge denied their attempt to withdraw their guilty pleas.

    Thomas Eilertson, 45, and Lisa Eilertson, 49, were taken into custody immediately upon sentencing by Ramsey County District Judge Lezlie Ott Marek.

    "These people are selfish, they're bullies -- in fact, they are paper terrorists," said John Ristad of the Ramsey County attorney's office.

    On Thursday, the couple sent a 97-page fax to the court, Ristad said. Among the documents were IRS forms "with my name, (County Attorney) John Choi's name, Judge (Teresa) Warner's name and, Your Honor, your name," Ristad said.

    The fax also included evidence of "attempts to bully the local newspapers, demanding retractions and threatening sanctions," Ristad said.

    The judge agreed with Ristad that the Eilertsons had violated the plea agreement by failing to remove liens they had filed against officials such as Hennepin County Sheriff Rick Stanek, Hennepin County Attorney Mike Freeman and Steven Bruns, an attorney who represented the lender during the foreclosure of the Eilertsons' Minneapolis home.

    The paperwork for the lien removal was sent to the Eilertsons' new address in Coleraine, Minn., but the couple returned it, unopened. They also failed to return calls from the probation department to set up a pre-sentence investigation interview, the judge said.

    Thomas Eilertson said he had "no idea" that Ristad was going to be sending the paperwork for the lien removal. He also said he believed that "with the rescission of the plea, everything went back to square one."

    The judge said that since she had not ruled until Friday on the Eilertsons' motion to withdraw their pleas, they should have continued as they were ordered at the plea hearing. It was "very clear what they needed to do" before sentencing, Marek said.

    Had the Eilertsons complied with terms of the plea agreement, they would have been given stayed prison sentences, with a maximum of four months in the Ramsey County workhouse.

    Thomas Eilertson called Ristad's description of some of the couple's recent actions "blatant lies." "I object to prison," he said. "I'm not a criminal."

    He asked the judge to delay his entry into prison for two days so he could prepare the couple's 12-year-old daughter "for what's about to happen to our family." The judge said no. "Oh, my god," Lisa Eilertson whispered. Thomas Eilertson then asked for a stay of sentence pending an appeal, but Marek again denied the request. "Oh, no, please," his wife said. A deputy told her to be quiet.

    The Eilertsons filed false liens against 12 victims, using the name "Blessings of Liberty," according to criminal complaints filed in Ramsey County District Court.

    The Hennepin County sheriff's office referred the case to St. Paul police for investigation because several victims are Hennepin County officials.

    The Eilertsons' activities stemmed from 2009, when their home at 4448 Cedar Ave. S. in Minneapolis went into foreclosure. They were evicted in July 2010.

    A person they corresponded with online gave them instructions on how to file Uniform Commercial Code liens against people in retaliation for their economic problems. They were told that filing under the name "Blessings of Liberty" shielded them from civil and criminal liability. (It did not.)

    The Internet acquaintance said the liens, which are claims against an asset, would allow the Eilertsons to "do death by a thousand paper cuts." The liens, filed in 2009 and 2010 with the Secretary of State's office in St. Paul, totaled $114 billion.

    "We never wanted to file liens against anybody," Lisa Eilertson said Friday. "We just wanted answers." Asked if she wanted to say anything more before her sentencing, Lisa Eilertson said, "I don't consent. I don't consent to this."

    Marek signed an order Friday directing the Secretary of State's office to remove the liens.

NC AG Slams Brakes On Real Estate Operator Allegedly Peddling Homes Using Land Contract/Contract For Deed Racket; Would-Be Buyers In Possession Under Unrecorded Purchase Agreements Say Their Land Was Mortgaged Out From Under Them By Seller

From the Office of the North Carolina Attorney General:
  • A North Carolina company that nearly cost more than 20 Surry County residents their homes has been barred from selling real estate in installments, Attorney General Roy Cooper announced today.

    “People who wanted a place of their own made payments in good faith but almost lost their homes anyway,” Cooper said. “We work to stop deceptive land deals to keep consumers from getting hurt.”

    Cooper alleges that Nichols Land Company misled consumers who entered into installment contracts with the company, promising them that they would own the property in time but then borrowing against it and defaulting on those loans. As a result, more than 20 consumers nearly lost their homes to foreclosure.

    Under a judgment approved by Wake County Superior Court Judge G. Wayne Abernathy on Tuesday, Nichols Land Company (Nichols) and its managers, James A. Nichols, Samuel J. Nichols, Roger L. Nichols, and Tina Nichols, are permanently barred from selling real estate through installment sales.

    The court order prohibits the defendants from any property sales where the consumer agrees to pay the purchase price in five or more payments while the defendants retain title to the property. If the defendants violate the order, they will have to pay $200,000 in civil penalties.

    As outlined in Cooper’s complaint, Nichols began offering Surry County land for sale through installment contracts starting in 2000. Under these contracts, consumers were told that if they put down a non-refundable deposit, paid monthly installments, and paid the annual property taxes to Nichols rather than to local government, they would eventually own a piece of property after a period of years.

    Cooper contends that in 2007, Nichols borrowed a total of $600,050 from two banks, using the land it had supposedly sold to consumers as collateral. Nichols continued to market and sell properties even after taking out loans against them. When Nichols failed to repay the loans, the banks began to foreclose on the properties.

    As alleged in court filings, Nichols continued to accept payments from buyers and never informed them about the impending foreclosures.

    Many buyers were already living on the properties and had spent their own money to improve them by putting in wells, septic systems, foundations and driveways. Consumers would have lost their homes—and the money they’d spent buying and improving the property— if the banks hadn’t agreed to extend them credit to prevent the foreclosures.
For the North Carolina AG press release, see Surry County real estate seller banned from installment sales, AG says (Nichols Land Company took payments for land, didn’t tell residents that banks were foreclosing).

Trash-Out Subcontractor For Now-Notorious Foreclosure Property Management Outfit Pinched For Allegedly Pilfering $42K+ From Home

In Wolcott, Connecticut, the Republican American reports:
  • A Maryland man was charged Wednesday with stealing more than $42,000 worth of valuables and a handgun from a Breezy Knoll home while working for a subcontractor of a property management company, according to court documents.

    The property management company, Safeguard Properties, was the focus of a recent report by the Huffington Post(1) in which a former employee claimed he had received a "constant barrage" of complaints about subcontractors breaking into homes to steal heirlooms, artwork and weapons.(2)
For more, see Maryland man tied to theft in Wolcott.

(1) See Safeguard Properties Internal Documents Reveal Rampant Complaints Of Thefts, Break-Ins.

(2) For those homeowners who've been screwed over by wrongful trash-outs, lock-outs, etc. by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:
For examples of filed lawsuits involving illegal bank break-in, "trash-out" lockout cases, see:

B.C. Regulator: Many Scam Victims Left Destitute After Being Conned By Dubious Investment Peddler Into Borrowing Against Their Homes To Buy Shaky Securities

In Vancouver, British Columbia, The Vancouver Sun reports:
  • A Victoria-area financial adviser has been accused of illegally selling more than $65 million worth of high-risk securities to hundreds of investors, many of them seniors, leaving a trail of financial devastation.

    In a notice of hearing Thursday, the B.C. Securities Commission alleged that from June 2007 to December 2010, David Michaels — doing business as Michaels Wealth Management — advised 484 clients to purchase more than $65 million worth of “exempt-market” securities without being registered to advise in securities.

    The notice also alleges he defrauded investors by “repeatedly and falsely” claiming that he gave up his earlier registration as a stockbroker because he had lost faith in the stock market when, in fact, he had relinquished his licence in the face of an investigation.

    The notice says he targeted retirees through monthly seminars, a weekly show on CFAX 1070 radio and one-on-one meetings, and that he promoted the securities as being less risky than publicly traded stocks and in some cases recommended that investors borrow against their homes to finance the purchases.

    The securities were, in fact, extremely risky. They included investments in a couple of oil and gas start-up companies, a company that bought insurance policies at a discount from terminally ill people, and a long-term care facility development in Sidney.

    For Michaels, it was a very lucrative business. According to the notice, he collected nearly $5.8 million in commissions and marketing fees from the issuing companies during the material period.

    For investors, however, the investments were disastrous: “Almost all of the roughly $65 million invested by Michaels’ clients is now worthless, leaving many of them destitute while their home equity loans remain,” the notice alleges.
For more, see B.C. Securities Commission launches hearing in alleged $65-million investor fraud (Victoria-area financial advisor David Michaels accused of perpetrating massive fraud).

For the British Columbia Securities Commission press release, see BCSC alleges that Vancouver Island man illegally advised hundreds of people and perpetrated fraud.

For the formal charges, see Notice of Hearing: In re Michaels.