Saturday, April 04, 2015

Tax Preparer Gets Two Years For Filing Tax Return That Falsely Claimed Entitlement To 1st-Time Homebuyer Credit

From the Office of the U.S. Attorney (Oklahoma City, Oklahoma):
  • WILLIAM DAVID GREEN, a tax preparer from Yukon, Oklahoma, was sentenced to serve 24 months in federal prison for preparing a false tax return for a client, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Green was also ordered to pay $171,362.00 in restitution and serve one year of supervised release upon his release from prison.

    Green was charged by information on August 14, 2014, with two separate counts. Count One alleged that Green prepared a false tax return for a taxpayer that falsely represented on Line 69 that the taxpayer was entitled to first-time homeowner credit in the amount of $7,266 when he knew the taxpayer was not because he did not purchase a home in 2008. Count Two charged Green with obstruction of the administration of Internal Revenue laws by preparing the 2010 tax return reflecting a balance of $5,046 due to the IRS from the taxpayer, collecting a check from the taxpayer payable to the IRS in that amount, depositing the check into his business account by altering the payee portion of the check and endorsing the check, failing to file the taxpayer’s tax return, and spending the money intended for the IRS for his own purposes.

    Green pled guilty to both counts on September 3, 2014. Green was sentenced to serve 24 months in federal prison, serve one year of supervised release upon his release from prison, and pay $171,362.00 in restitution. He was ordered to report to the Bureau of Prisons on May 4, 2015, to begin serving his sentence.

Friday, April 03, 2015

Philly Feds Put Pinch On Local Real Estate Operator Who Allegedly Conspired w/ Title Agent Cohorts To Illegally Pocketing $643K+ In Loan Closing Proceeds Intended For Lien Payoffs; Allegedly Made "Lulling" Payments To Prior Lienholders For Years After Perpetrating Ripoff In Failed Attempt To Dodge Discovery & Keep Scam From Imploding

From the Office of the U.S. Attorney (Philadelphia, Pennsylvania):
  • Dean Rossi, 49, of Warrington, PA, was arrested [] in connection with an alleged mortgage fraud scheme, announced United States Attorney Zane David Memeger. Rossi, a real estate investor who owned numerous low-income properties throughout the Philadelphia area, was charged by indictment, [...], with conspiracy, mail fraud affecting a financial institution, and bank fraud.

    The indictment alleges that Rossi misappropriated in excess of $643,000 from real estate closings. After obtaining bank loans to purchase or refinance residential properties, Rossi allegedly teamed up with title/closing agents to divert a substantial portion of the loan proceeds. According to the indictment, Rossi received cash from the settlements that otherwise should have been used to pay off prior mortgages and tax liens on certain properties.

    To prevent the scheme from being detected, Rossi allegedly continued to cause payments to be made on the prior existing mortgages years after those loans were supposed to have been paid in full.(1)

    If convicted, the defendant faces a possible advisory sentencing guideline range of 46 to 57 months in prison, up to five years of supervised release, a fine of up to $4 million, and a $400 special assessment.
Source: Bucks County Real Estate Investor Arrested On Fraud Charges.

For the indictment, see USA v. Rossi.

(1) These payments made to avoid/postpone detection are sometimes referred to as "lulling" payments (ie. as in "lulling the scam victims to sleep" while preventing (or deferring) ultimate implosion and detection of the scheme by law enforcement authorities).

Thursday, April 02, 2015

Expiring Statute Of Limitations In Foreclosure Cases A Growing Headache For Banksters?

In Miami, Florida, The New York Times reports:
  • In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

    She is like a ghost of the housing market’s painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

    Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

    The reason, lawyers for homeowners argue, is that the cases have dragged on too long.

    There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jersey and New York, where lenders must get judges to sign off on foreclosures.

    Wanda Darden, at home in Riverdale, Md. Her mortgage has bounced among three loan servicers, leading to increasing mix-ups. “I either get conflicting answers or no answer at all,” she said.

    However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.


    [T]he laws in places like Florida could prove to be a wild card. In a state where “hanging chads” helped decide the 2000 presidential election, a legal technicality could help settle the state’s foreclosure crisis.

    Lawyers for homeowners in Florida contend that lenders have five years to file for foreclosure after a homeowner defaults, normally after several months of missed payments, and the mortgage is “accelerated,” meaning that the bank says that the debt is due all at once. Banks say they have many more years to file for foreclosure, arguing that the five-year clock resets every time a homeowner misses a monthly payment — regardless of when the mortgage was accelerated. Some Florida judges have agreed.(1)

    The statute of limitations does not halt a foreclosure case that is continuing in court. But in some Florida courts, homeowners’ lawyers have argued that once a foreclosure is dismissed even for technical reasons, the lender cannot refile a new foreclosure to seize the home if the statute of limitations has passed. Still, the lender has some recourse: It can keep a lien on the house that must be paid off if the property is ever sold.

    The issue is now before the Florida Supreme Court.
For more, see Foreclosure to Home Free, as 5-Year Clock Expires.

Thanks to Deontos for the heads-up on this story.

(1) In an analogous case, involving the application of the statute of limitations when challenging (on unconscionability grounds) an escalation clause in a 99-year ground/land lease that became enforceable every five years, a Florida appeals court held that the statute of limitations for commencing such a challenge began at the time of the first escalation, and that the statute of limitations does not reset each time the escalation clause became effective (ie. every five years). See Garden Isles Apartments No. 3, Inc. v. Connolly, 546 So.2d 38 (Fla. 4th DCA 1989):
  • The subject escalation clauses were first enforced in 1975 and 1976 respectively. Contrary to appellants' argument that a new cause of action arose each time a new five-year escalation clause became effective, we hold that the cause of action in this case accrued at the time of the first escalation and that the complaint filed in 1986 was well beyond the applicable five-year statute of limitation periods which commenced in 1975 and 1976.
If the theory applied by the Florida appeals court in the Garden Isles case has any applicability to the statute of limitations in mortgage foreclosure cases, one may reasonably argue that the cause of action for commencing a foreclosure action accrues at the time of the first default, and that a new cause of action does not arise each time a homeowner misses a monthly payment. Just a thought.

Wednesday, April 01, 2015

Jury Belts Attorney, Three Others w/ Guilty Verdicts For Roles In Scheme To Fraudulently Commandeer Control Of Vegas-Area HOAs For Purpose Of Directing Construction Defect Litigation & Repair Work To Outfits Owned By Other Co-Conspirators

From the U.S. Department of Justice (Washington, D.C.):
  • Following a 14-day trial, a federal jury in Las Vegas returned guilty verdicts [] in a case against a Las Vegas attorney and three others for their roles in a scheme to fraudulently take control of homeowners’ associations (HOAs) for the purpose of directing the HOAs’ construction defect litigation and repair work to a law firm and construction company owned by other co-conspirators.

    Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office, Special Agent in Charge John Collins of Internal Revenue Service Criminal Investigation’s (IRS-CI) Las Vegas Field Office and Sheriff Joseph Lombardo of the Las Vegas Metropolitan Police Department made the announcement.

    Keith Gregory, 61, of Las Vegas, Salvatore Ruvolo, 86, of Henderson, Nevada, David Ball, 47, of Las Vegas, and Edith Gillespie, 54, of Las Vegas, were found guilty [] of conspiracy to commit wire and mail fraud. Gregory and Ball were also convicted of two counts of wire fraud each, Ruvolo was convicted of three counts of wire fraud, and Gillespie was convicted of one count of wire fraud. Ruvolo was found not guilty of one count of mail fraud. Sentencing hearings are scheduled for June 17, 2015, before U.S. District Judge James C. Mahan of the District of Nevada.

    According to the evidence presented at trial, from approximately August 2003 through February 2009, the defendants engaged in a complex scheme to direct construction defect litigation and construction repairs at more than 10 condominium complexes in the Las Vegas area to a law firm operated by a co-conspirator and a construction company, Silver Lining Construction, owned by Leon Benzer. In order to accomplish the scheme, the defendants and their co-conspirators identified HOAs for condominium complexes that had potential construction issues that could result in construction defect litigation and require repair. They then sought to take controlling interests on the identified HOAs’ boards by purchasing units in the condominium complexes and running for election to the boards.

    Specifically, the evidence at trial demonstrated that Benzer and others, including Gillespie, enlisted “straw purchasers” to use their names and credit to purchase condominiums in the identified complexes. Ruvolo, Ball and Gillespie, among others, acted as straw purchasers, and the evidence demonstrated that Gillespie provided false information on her loan application in connection with the purchase of a condominium in furtherance of the scheme.

    According to the evidence, Ruvolo and Ball then sought to be elected to HOA boards in the complexes where they had purchased condominiums. Other straw purchasers were directed to transfer a partial interest in their condominiums to other co-conspirators to make them look like homeowners who could stand for election to the HOA boards. To ensure that conspirators won the HOA elections, the defendants employed deceitful tactics, such as submitting fake and forged ballots, and hiring complicit attorneys to run the elections as “special election masters,” who presided over the elections and supervised the counting of ballots.

    The evidence demonstrated that, once elected, the conspiring board members, including Ruvolo and Ball, met with Benzer and other co-conspirators in order to manipulate the selection of property managers, contractors, general counsel and construction defect attorneys to represent the HOAs. Gregory, an attorney licensed in Nevada, agreed to become the general counsel for two HOAs and to take direction from Benzer.

    At trial, the evidence showed that 33 of the 37 condominium units purchased as part of the scheme went into foreclosure. Over the course of the scheme, more than $7 million in construction contracts were awarded to Benzer’s company from a single HOA. Several million dollars in legal fees were also directed to another co-conspirator. Benzer compensated each of the defendants for their participation in the fraud scheme. For example, the evidence demonstrated that Ruvolo received monthly payments of approximately $2,000, and Ball received $5,000 per year, for acting as straw purchasers and board members. Benzer also directed approximately $90,000 in HOA-related legal work to Gregory and paid him approximately $12,000 in kickbacks.

    On Jan. 23, 2015, Benzer pleaded guilty to one count of conspiracy to commit mail and wire fraud, fourteen counts of wire fraud, two counts of mail fraud, and two counts of tax evasion. He is awaiting sentencing.

Tuesday, March 31, 2015

Pair Convicted Of Clipping Homeowners By Peddling So-Called "Zero Mortgage Program" Debt/Lien Elimination Racket That Involved Recording Phony Affidavits, Bogus Deeds Of Reconveyance & Other Dubious Title Documents Get 38-96 Months In Nevada Slammer

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Adam Paul Laxalt announced that Alex Soria, 69, and Sonia Rodis, 55, both of Las Vegas, were each sentenced [earlier this month] on one felony count of a pattern of mortgage lending fraud. The couple misrepresented to homeowners a fraudulent mortgage elimination program that involved the recording of affidavits, deeds of reconveyance and other title documents that failed to eliminate their mortgages. The fraud was committed between May 2010 and October 2011.

    “It is unacceptable for individuals to prey on hurting homeowners,” said Laxalt. “My office will aggressively pursue those who victimize hard-working Nevadans seeking home mortgage assistance.”

    Soria and Rodis operated this mortgage lending fraud scam out of their business, BioGreen Teck, LLC. They targeted members of their Filipino community, among others, collecting approximately $63,000 in payments from their victims.

    Eighth Judicial District Court Judge Jessie Walsh sentenced Soria to 38 to 96 months in Nevada state prison. Soria was immediately taken into custody. Rodis was sentenced to 38 to 96 months in Nevada state prison with her sentence suspended for a period of probation not to exceed 5 years. The couple was ordered to pay restitution totaling over $63,000.

    The case was prosecuted by Chief Deputy Attorney General Jeff Segal and Senior Deputy Attorney General Raya Swift.

    To read the criminal Information for Alex Soria, click here. To read the criminal Indictment for Sonia Rodis, click here.
Source: Attorney General Laxalt Announces Sentencing of Las Vegas Couple in Mortgage Assistance Scam.

For earlier story, see 3 people arrested in alleged home mortgage scam:
  • [Formar Nevada AG Catherine Cortez] Masto said Soria and Rodis would, for a fee, prepare documents called “affidavits of fact and deeds of full reconveyance,” offcials said. They promised homeowners these documents in a so-called Zero Mortgage Program would eliminate their mortgages and continue their ownership, authorities said..

Monday, March 30, 2015

Another Real Estate Investor Gets Caught In Antitrust Feds' Crosshairs w/ Indictment In Ongoing Squeeze Targeting Bid-Rigging Activities At Foreclosure Sale Public Auctions

From the U.S. Department of Justice (Washington, D.C.):
  • A federal grand jury in Raleigh, North Carolina, returned a one-count indictment against a real estate investor, charging him with conspiracy to commit mail fraud as part of a scheme related to public real estate foreclosure auctions, the Department of Justice announced [].

    The indictment, filed in U.S. District Court of the Eastern District of North Carolina on March 18, 2015, charges real estate investor Rodney S. Daw, of Raleigh, with conspiracy to commit mail fraud affecting a financial institution. The department alleged that the scheme defrauded homeowners, financial institutions and others with a legal interest in selected foreclosure properties, for the unlawful purpose of obtaining money and property through fraudulent pretenses, representations or promises.

    The indictment charges Daw with conspiring with others to, among other things, make and receive payoffs from co-conspirators in exchange for agreements not to compete in public auctions, and to divert money away from homeowners, financial institutions and others with a legal interest in selected properties. Several financial institutions suffered actual monetary losses as a result of the conspiracy. According to the indictment, Daw participated in the mail fraud conspiracy beginning at least as early as December 2002 and continuing until at least April 2005.

    This action marks the fourth state in which a defendant has been indicted in our ongoing investigation into illegal conduct at public real estate foreclosure auctions,” said Assistant Attorney General Bill Baer of the Antitrust Division. “We will continue to vigorously pursue those individuals who sought to capitalize on this nation’s financial crisis by seeking personal gain at the expense of homeowners and financial institutions.”

    “This federal indictment illustrates the FBI’s commitment toward assisting the U.S. Department of Justice’s Antitrust Division in ensuring that those who engage in real estate investments and transactions do so on a level playing field,” said Special Agency in Charge J. Britt Johnson of the FBI’s Atlanta Field Office. “The FBI asks that anyone with information regarding such activities as alleged in this indictment contact their nearest FBI field office.”

    To date, two individuals have pleaded guilty in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes in the North Carolina real estate foreclosure auction industry.

    The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine.

    This charge stems from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Field Office, with the assistance of the U.S. Attorney’s Office of the Eastern District of North Carolina. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in North Carolina should contact the Washington Criminal II Section of the Antitrust Division at 202-598-2507, [...](1)
Source: North Carolina Real Estate Investor Indicted for Conspiracy to Commit Mail Fraud.

Go here for earlier posts on foreclosure sale bid rigging rackets.

(1) As has been pointed out in earlier posts, suspects who have been pinched on bid-rigging charges and are considering copping guilty pleas should first consider whether their alleged unlawful bid rigging racket was really nothing more than an innocent, lawful joint bidding endeavor. See Illegal Bid Rigging Racket? Or Mere Innocent 'Joint Bidding' Arrangement?

Sunday, March 29, 2015

Civil Rights Feds Muscle Homeowner's Association Into Settling Fair Housing Charges Alleging Use Of Overly-Restrictive Policies Unlawfully Restricting Access By Kids To Common Areas, Amenities; Six Victimized Families To Slice Up $100K Pie While Feds "Wet Beak" By Pocketing $10K

From the U.S. Department of Justice (Washington, D.C.) (via Fair Housing Defense blog):
  • The Department of Justice [] announced a settlement agreement between the United States, the Greenbrier Village Homeowner’s Association Inc. (Greenbrier), Gassen Company Inc. (Gassen) and an individual Gassen employee to resolve a lawsuit filed on Nov. 25, 2013.

    The lawsuit alleged that Greenbrier and Gassen unlawfully discriminated against residents with children by issuing and enforcing rules regarding the use of common areas at the Condominiums of Greenbrier Village. The settlement includes a commitment from Greenbrier to establish a new non-discrimination policy in accordance with the Fair Housing Act, pay a $10,000 penalty to the United States and pay $100,000 to six families that suffered as a result of the discrimination.

    “The Fair Housing Act prohibits housing providers from discriminating against families with children,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “This means more than just allowing those families to live at the property. It means giving these families fair access to the common areas and amenities.”

    “Housing discrimination has no place in Minnesota,” said U.S. Attorney Andrew M. Luger of the District of Minnesota. “This case reaffirms the long-held principle of our civil rights laws that families come in all shapes and sizes. Arbitrary rules that restrict the rights of children to enjoy the places where they live are not acceptable.”

    Families with children have the right to live in condos that don’t meet federal requirements to qualify as housing for older persons,” said HUD Assistant Secretary Gustavo Velasquez for Fair Housing and Equal Opportunity. “HUD is sending a clear message to homeowners associations and management companies that they must comply with the Fair Housing Act.”

    According to the settlement agreement and documents filed in court, Greenbrier and Gassen allegedly engaged in a pattern of discrimination by creating and enforcing rules in a manner that prevented children from equal enjoyment of common areas and making statements that indicated a preference against families with children. The United States alleged that the defendants required children to be supervised at all times when in a common area, prohibited or unreasonably restricted children from using the common areas and selectively enforced the common area rules by issuing warnings and violation notices to residents with children, but not to adult residents engaging in the same activities.

    According to the settlement agreement, at least six families suffered as a result of Greenbrier and Gassen’s alleged discrimination. Greenbrier agreed to a financial settlement with each of the families, totaling $100,000. Greenbrier will also adopt and implement a new anti-discrimination policy, its board members and staff will undergo training on the Fair Housing Act, with a specific emphasis on discrimination on the basis of familial status, and Greenbrier will pay a civil penalty to the United States.