Saturday, May 09, 2015

Use Of Testers Posing As Prospective Renters Leads To Another Landlord Agreeing To Cough Up Cash To Settle Housing Discrimination Allegations; Families w/ Kids Were Segregated In Certain Buildings & Restricted To Certain Floors, Apartments In 224-Unit Complex: Feds

From the Office of the U.S. Attorney (Boston, Massachusetts):
  • The U.S. Attorney’s Office and the Justice Department [] announced an agreement with J & R Associates, the owner and operator of the Royal Park Apartments in North Attleboro, Mass., to resolve allegations of discrimination against families with children in violation of the Fair Housing Act.

    The lawsuit, filed [] in U.S. District Court in Boston, alleges that J & R Associates discriminated against families with children seeking to rent units at Royal Park Apartments by maintaining and enforcing policies that segregate families with children in certain buildings and restrict them to certain floors and units within the 224-unit complex.

    The allegations are based on evidence generated by the Department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.

    Under the terms of the agreement, which is in the form of a consent order and still must be approved by the Court, J & R Associates will establish a settlement fund in the amount of $135,000 to compensate victims of their discriminatory practices. The defendant also will pay $7,500 in civil penalties to the United States. The agreement requires J & R Associates to take steps to ensure that families with children no longer are restricted from renting units anywhere at Royal Park Apartments.

Friday, May 08, 2015

Nevada Judge Hammers Loan Modification Scam Artist With 8-20 Years In Slammer Over $11.5K Ripoff Of Handful Of Homeowners Facing Foreclosures

From the Office of the Nevada Attorney General:
  • Nevada Attorney General Adam Paul Laxalt announced that Stephen Choate, 62, of Pahrump, was sentenced last week on a charge of a pattern of mortgage lending fraud. Choate ran a scam to defraud clients of $11,500 in fees under the guise that he would obtain loan modifications for them. He cheated homeowners between November 2010 and February 2012.

    “The Attorney General’s Office will prosecute those who aim to defraud homeowners,” said Laxalt. “Nevadans seeking assistance with their mortgages are urged to consult HUD-approved counselors. Under Nevada law, it is generally unlawful for a non-attorney to collect upfront fees for loan modification work before the homeowner signs a contract with their lender modifying the loan.”

    Fifth Judicial District Court Judge Robert Lane of Nye County listened to testimony of more than nine victims before imposing the sentence. Judge Lane sentenced Choate to a minimum of eight years and a maximum of 20 years in prison. He was also ordered to pay $11,500 in restitution, plus additional sums for monthly fraud protection and legal fees.
Source: Attorney General Laxalt Prosecutes Pahrump Man for Mortgage Lending Fraud.

For the criminal charges, see State of Nevada v. Choate.

Editor's Note: To compare the 8 to 20 year-sentence given by the state court judge for ripping off a handful of homeowners out of $11,500 in this case with the 12-year sentence handed out to an attorney by the federal judge in a case involving a loan modification conspiracy ripping off several thousand homeowners out of $13,000,000, see Attorney Who Used Boiler Room Racket Disguised As Sham Law Firm To Victimize Over 3,000 Homeowners In Loan Modification Ripoff Gets 12 Years In Federal Slammer; Cohort Gets 5 Years; Conviction Total Reaches 13 In 1st American Law Center Scheme.

Thursday, May 07, 2015

Attorney Who Used Boiler Room Racket Disguised As Sham Law Firm To Victimize Over 3,000 Homeowners In Loan Modification Ripoff Gets 12 Years In Federal Slammer; Cohort Gets 5 Years; Conviction Total Reaches 13 In 1st American Law Center Scheme

From the Office of the U.S. Attorney (San Diego, California):
  • Two defendants were sentenced [] for their roles in defrauding more than 3,000 homeowners across the nation through a sham law firm in Oceanside, California.

    Dean Gregory Chandler, the former President, Chief Executive Officer, and attorney for the company, 1st American Law Center, was sentenced to 144 months. Michael Eccles, a manager in the company’s telemarketing call center, was sentenced to 60 months.

    The two defendants were each convicted of multiple felony counts in November 2014, after a three-week jury trial. Chandler was convicted of 8 felony counts: three counts of mail fraud, three counts of wire fraud, and one count of conspiracy and money laundering. Eccles was convicted of five counts: conspiracy and two counts each of mail fraud and wire fraud.

    The 1st American Law Center Scheme

    According to evidence presented at trial, Chandler created 1st American Law Center in 2009 in partnership with convicted drug trafficker Gary Bobel (who has been separately convicted and sentenced for his role in the scheme). Chandler arranged to have Bobel oversee the call center and its teams of telemarketers, who pitched loan modification services on behalf of the law center. Those telemarketers, including Eccles, promised potential clients that a panel of attorneys would pre-screen applicants’ financial information to ensure that only the most qualified applicants would be approved as clients of the law firm; that a team of attorneys would negotiate with clients’ mortgage lenders; that those attorneys would draft all documents to be submitted to the mortgage lenders; that the “attorney retainer fee,” which averaged $3,495, would be preserved in an attorney-client trust account until the client was satisfied; and that clients were protected by a money-back guarantee.

    As presented at trial, Michael Eccles was promoted to manager of the call center in December 2009, and he took advantage of the new position to script additional lies for the telemarketers to use with clients, including that the law firm had been in business since 1992; that they had been successfully modifying loans for over 20 years; that they had helped over a hundred thousand homeowners; and that it took attorneys on average 200 hours to complete a successful loan modification – all to suggest that the clients could take hope and comfort in the expertise and established success of the “law firm” they had hired. The telemarketers even persuaded homeowners to pay the company's fees instead of using their limited funds to stay current on their mortgage payments.

    Witness testimony and documentary evidence at trial proved that Chandler had almost no role in the loan modification process, and that nearly all of the statements made by telemarketers to the clients were lies. Chandler, the attorney, did not pre-screen all of the applications or negotiate with lenders. Rather than successfully modifying 98% of their client’s mortgages, as they claimed, the firm failed to modify three out of every four loans. Instead of keeping clients’ payments in an attorney trust account, they were funneled into various other accounts to pay co-schemers, sales commissions, and company expenses. Instead of having funds available to deliver on its money-back guarantee, the firm failed to provide refunds to untold numbers of clients who requested them.

    For his part, Chandler served as the face of the law firm, and the firm’s commercial, website, and brochure featured Chandler’s name, image, and state bar license number. Chandler reviewed telemarketer call scripts submitted to him for approval, and also listened in real time and on recordings to telemarketer calls to clients.

    Chandler Lied While Trying to Stay One Step Ahead of the Feds

    According to evidence at trial, however, Chandler’s chief role was to mislead regulatory and enforcement agencies that threatened the law firm’s profitable operations. In that capacity, in October 2009 Chandler lied under oath in a sworn declaration to an Assistant Attorney General at the California Department of Justice. Multiple witnesses testified that the statements in Chandler’s declaration were false. And when the constant customer complaints threatened the company’s bottom line, Chandler also lied repeatedly to the Better Business Bureau in efforts to try to inflate the law center’s sagging ratings. For his role in the scheme, Chandler earned over $275,000 in about a 14-month period. In July 2010, after the Federal Bureau of Investigation and Internal Revenue Service executed a search warrant at his law firm, Chandler also drained one of the firm’s bank accounts of $16,500 and used it for his own benefit, instead of to pay employees or refund victims. This transaction was the basis of the money laundering charge.

    Victims Speak

    During the trial, multiple victims of the defendants’ fraudulent scheme came from across the country to testify about their experiences. For example, a couple from Evansville, Indiana, both in their 70s, related how they contacted 1st American Law Center to avoid losing the home where they had spent 27 years raising a family, which was specially modified to accommodate their paraplegic son’s wheelchair. Due to medical problems, which forced the husband to retire as an auto mechanic, the couple fell behind on their payments. The couple put their faith in the promise that an attorney would negotiate with their lender. They also counted on the money-back guarantee if the firm was unsuccessful. The couple ultimately lost their home, and their money.

    With today’s sentencings, thirteen individuals have now been sentenced as a result of the fraudulent operation of 1st American Law Center. Gary Bobel received a sentence of 92 months. Telemarketer Shelveen Singh, who operated out of Riverside, was sentenced to 110 months. Other convicted telemarketers include Travis Iverson, Scott Spencer, Johnny Hearn, Anthony Calandriello, Mark Spencer, and Roger Jones. Information Technology Director Steven Gersztyn was convicted and sentenced for lying to federal agents during the investigation of the case, and Amy Hintz and Sarah Grimm were each convicted of theft of government property for stealing documents while making copies of evidence in the FBI’s custody.

    Federal Law Enforcement Condemns Loan Modification Schemers

    United States Attorney Laura E. Duffy commented, “The real tragedy of this case is that the defendants chose to profit from the suffering of others. In difficult economic times, they exploited a particularly vulnerable segment of our population—homeowners who were desperately trying to make ends meet and stay in their homes.”

    “Mr. Chandler and Mr. Eccles misused and abused their positions of trust to prey upon those who were financially vulnerable and desperate to save their homes,” said FBI Special Agent in Charge Eric S. Birnbaum. “The sentences imposed today reaffirm our commitment to hold accountable the guilty who profit by taking advantage of vulnerable people.”

    “The defendants used a slew of lies to sell their loan modification services and obtain money from distressed homeowners throughout the United States,” said IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “Loan modification scams thrived for a time, but that time is gone, and as the sentences imposed today show, it’s time for those responsible to face judgment.”

Wednesday, May 06, 2015

Now-Disbarred Lawyer Gets Two Years For Forging & Recording $1.4M In Phony IRS & Mortgage Lien Releases On His Two Houses, Then Applying For Loans Secured By The Homes

From the Office of the U.S. Attorney (Boston, Massachusetts):
  • A Boston area attorney, who was disbarred in 2007 after practicing law for more than three decades, was sentenced to federal prison [] for tax and bank fraud violations. His crimes arose in connection with recording fraudulent tax and bank releases on his seaside Marblehead home and his vacation home in Edgartown on Martha’s Vineyard. Both properties were later foreclosed on.

    John C. McBride, 66, was sentenced [] to two years in prison, two years of supervised release, and restitution to be determined at a later date. In January 2015, McBride pleaded guilty [...] to bank fraud and endeavoring to obstruct and impede the due administration of the Internal Revenue laws.

    In early 2008, McBride, a now-disbarred criminal defense lawyer, recorded six fraudulent federal tax lien releases against his Marblehead home, in order to obtain a $288,000 loan secured by that property and deprive the IRS of its nearly $700,000 secured interest. McBride prepared the releases himself, without the knowledge or authorization of the IRS, and forged the signatures of IRS officials on them.

    In March 2008, McBride attempted, unsuccessfully, to record two similar fraudulent tax lien releases against a second home he owned in Edgartown, on Martha’s Vineyard. In 2011, McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America, which was to have been secured by his Edgartown property. In connection with that loan application, McBride falsely told the bank that there were no liens on the Edgartown property and that he was not then in bankruptcy. In fact, there were substantial liens on the property and McBride’s bankruptcy case, which he had filed in 2009, was still ongoing. In furtherance of his effort to obtain the bank loan, McBride prepared and recorded a fraudulent and unauthorized discharge of mortgage which purported to discharge a more than $700,000 existing mortgage on his Edgartown property. Bank of America discovered that the discharge was fraudulent before the loan closed, and no funds were disbursed to McBride.

Tuesday, May 05, 2015

WV Woman Who Fell Behind On House Payments Now Faces Up To Five Years For Creating & Submitting Phony Documents In Court In Attempt To Save Home From Foreclosure

From the Office of the U.S. Attorney (Martinsburg, West Virginia):
  • Amanda Bishop, 35, of Martinsburg, was convicted [] in federal court after she submitted fraudulent mortgage documents during court proceedings, United States Attorney William J. Ihlenfeld, II, announced.

    An investigation by the Federal Bureau of Investigation revealed that Bishop fell behind on her mortgage payments and subsequently created and submitted to the court fake bank statements purporting to show that she had made mortgage payments in the amount of $1,848.00 on Nov. 17, 2010 and Dec. 15, 2010.

    Bishop pled guilty [] to one count of “False Declaration Before Court,” for which she faces up to five years in prison and a fine of up to $250,000.00.(1) Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Source: Martinsburg woman convicted of falsifying mortgage documents.

(1) Apparently, banksters have de facto immunity from prosecution for the crime of "False Declaration Before Court" when engaging in similar conduct (ie. creating and submitting phony documents in court in connection with a foreclosure matter).

Monday, May 04, 2015

Dozen California DAs Succeed In Gaining Order Of Publication Of Unpublished State Appeals Court Decision Upholding Felony Convictions Of Crackpot Who Hijacked Ownership Of Nine Vacant Homes & Homesteaded Them; Prosecutors Say Ruling Contains Significant Points Of Law That Will Benefit Courts, Parties In Future Cases Of Title Clouding Due To Recorded Bogus Title Documents

In Southern California, Metropolitan News Enterprise reports (actually, the story came out in August, 2013, but its still merits noting here):
  • A Court of Appeal decision upholding convictions of a man who fancied himself a Robin Hood, in turning over unoccupied homes he didn’t own to people in need of shelter, contains significant points of law, according to 12 prosecutorial offices that succeeded in gaining an order for publication.

    The opinion, by Justice Betty Ann Richli of the Fourth District Div. Two, affirms convictions of Eugene Denman, who quitclaimed nine distressed properties in Riverside to himself—despite a lack of title to them—then homesteaded them.

    A jury found him guilty of 20 counts of recording false documents—quitclaim deeds and homestead declarations—in violation of Penal Sec. 115, and nine counts of perjury, in violation of Sec. 118, inasmuch as the documents were filed under penalty of perjury.

    The sentences were enhanced based on findings of the jury, pursuant to Sec. 12022.6(a)(1), that the properties that were the subject of three of the counts had as value of at least $65,000, and pursuant to Sec. 12022.6(a)(2), that the other properties were worth more than $200,000.

    Another enhancement was based on §186.11(a)(2) which requires a sentence boost where there is a “pattern of related felony conduct involves the taking of, or results in the loss by another person or entity of, more than five hundred thousand dollars ($500,000).”

    Based on Denman’s chicanery, titles were clouded and the true owners suffered financial harm.

    Defendant’s Contentions

    Denman, who represented himself at trial, argued that a quitclaim deed merely releases all interest which the party holds, and the fact that he held no interest did not render the deeds false documents. Richli replied:

    While defendant is technically correct that he attested in the quitclaim deed that he was only transferring whatever title or interest he possessed, it was clear based on the evidence he had absolutely no interest in the property. The documents themselves were false in that they transferred an interest that he did not have to himself and then he recorded the document, clouding the title of the true property owners. Adopting defendant’s reasoning would be in direct contradiction with the purpose behind section 115 to preserve and protect the integrity of public records. Based on the purpose of the statute and the fact that section 115 has been broadly construed, the quitclaim deeds could reasonably be considered false documents by the jury.”

    Denman also contended that sec. 12022.6(a) does not apply. It provides for an enhancement where “any person takes, damages, or destroys any property” of specified value “in the commission or attempted commission of a felony.”

    He “took” no property, the appellant argued. Richli wrote:

    However, the People proceeded on a theory that defendant damaged the properties by clouding title, not that he took the properties. Section 12022.6 does not define damage. The ordinary meaning of damage is ‘loss or harm resulting from injury to person, property, or reputation.’ (Webster’s 9th New Collegiate Dict. (1991) p. 323.) Here, by not being able to sell their properties because of the cloud on title, each of the victims suffered loss of the assessed value of their property.”

    In similar vein, Denman insisted the enhancement under Sec. §186.11(a)(2) was invalid because he “took nothing.” To that, Richli responded by noting that 17 of the parcels of property were found to have been worth in excess of $200,000, and commented:

    As such, the evidence here is substantial to support the enhancement that the total aggregated loss for two or more counts exceeded $500,000.”

    The opinion also holds that Denman is entitled to additional conduct credits and that Riverside Superior Court Judge Jean P. Leonard erred in failing to impose a mandatory restitution fine.

    Letter-Writing Campaign

    Court of Appeal filed its opinion in the case on July 12, and six days later, the Office of Attorney General made a request for publication. The court, one week after that, wrote to the Supreme Court explaining why it thought publication was not warranted.

    It changed its mind, and told the Supreme Court so, by letter of July 31. By then, it had received communications from eight district attorney’s offices—those in the counties of Los Angeles, Fresno, Imperial, Riverside, Sacramento, San Bernardino, San Francisco, and Yolo.

    Subsequently, behests to publish came from the county prosecutorial agencies in the counties of Kern, Orange, and Monterey.

    Late Monday, the court filed its publication order.

    Lacey Urges Publication

    Los Angeles County District Attorney said in a July 30 letter to the Court of Appeal division’s presiding justice, Manuel A. Ramirez:

    “On July 12, 2013, this Court filed an unpublished opinion in People v Denman addressing the application of Penal Code section 115 to quitclaim deeds resulting in the clouding of title, and whether the enhancements under Penal Code sections 12022.6 and 186.11, can be satisfied based on a temporary loss to the victim without a verifiable similar gain to the defendant. Thereafter, the California Attorney General and the Riverside County District Attorney filed letters with the court asking that the opinion be published.

    “I am the District Attorney of Los Angeles County, and I have read the final unpublished opinion and foregoing requests for publication. I fully join in those requests and ask this Court, pursuant to California Rules of Court, rule 8.1120(a), to publish the Denman opinion for the benefit of the courts and parties in future cases involving the same issues.”

    Sacramento District Attorney

    Sacramento District Attorney Jan Scully said, in part:

    “…I am interested in the opinion because it provides important guidance in cases where individuals with no title or interest in properties file quit claim deeds transferring title to themselves. We have experienced this conduct in our county.

    “First, the opinion holds that recording these types of false quitclaim deeds can constitute a violation of Penal Code § 115(a). Second, the opinion establishes that clouding of title with such fraudulent quitclaim deeds constitutes the types of damage and loss required under Penal code §§ 12022.6 and 186.11. Further, the opinion holds these damages and losses may be measured by the assessed value of the property.

    “These are all points new to the overall body of published law in this area. The court’s decision advances new interpretations and clarifications of these Penal Code provisions. Moreover, given the frequency of fraudulent conduct in real estate matters, especially following the recent housing crisis, this decision involves a legal issue of continuing public interest
Source: C.A. Publishes Opinion Based on Pleas From Prosecutors (Upholds Convictions of Man Who Filed Quitclaim Deeds to Himself to Properties He Didn’t Own).

For the court ruling, see People v. Denman, (2013) 218 Cal.App.4th 800 [159 Cal. Rptr. 3d 812].

(1) It remains to be seen if the law applies only to the crackpots filing fraudulent quit claim deeds and homestead declarations, or will it apply equally to banksters who cloud title to real estate by filing fraudulent trust deed/mortgage assignments.

Sunday, May 03, 2015

Woman Cops Plea To Fraudulently Scoring $135K+ In Section 8 Housing Subsidies By Purporting To Be A Low-Income Tenant In A Building She Owned & Controlled; HUD Duped Into Sending Rent Checks To A Fabricated Landlord

From the Office of the U.S. Attorney (Boston, Massachusetts):
  • A Boston woman pleaded guilty [] to stealing over $135,000 in public housing benefits, which she obtained by lying about her living situation and employment. Astride Dubuisson, 42, waived indictment and pleaded guilty to an Information charging her with stealing public money.

    In 2006, Dubuisson applied to the Department of Housing and Urban Development (HUD) for housing benefits, claiming that she needed help paying rent for an apartment on Vernon Street in Hyde Park. In fact, Dubuisson owned the entire Vernon Street building, which would disqualify her from receiving benefits.

    Based on her falsehoods, HUD approved her application and began sending benefits checks to a fabricated landlord. From 2006 to 2013, Dubuisson cashed those government checks, which totaled more than $135,000, and repeatedly lied about her ownership of the property and her income.