Saturday, July 18, 2015

'Homeless' Real Estate Developer: 'I Paid $2.2M For Living Space In Landmark Upper West Side Building 16 Years Ago & I Still Can't Move In Because Co-Op Board Keeps Changing The Rules On Me!'

In (guess where???), the New York Post reports:
  • He bought the Manhattan apartment space for more than $2 million in 1999 — and is still waiting to move in!

    Prominent real estate developer Robert Siegel says he’s been blocked from occupying his would-be new home — the former ballroom at the famed Dakota building — for 16 years because its co-op board has been using half of it for tenant storage.

    Siegel, 54, claims in a new $55 million lawsuit that he purchased the space for $2.2 million after the board promised he’d be able to convert it into four bedrooms and install an air-conditioning system.

    A year later, the board told him that they’d only approve his proposed plans if he coughed up another $1.8 million to buy additional shares of cooperative stock, on top of paying $1.1 million in additional maintenance fees, the Manhattan Supreme Court papers say.

    Siegel said he paid the extra dough — but the board of the tony West 72nd Street complex, where John Lennon lived and was fatally shot, changed the rules on him again.

    He says in his suit that they “secretly” amended its certificate of occupancy to “change the legal use of one-half of the apartment to non-habitable storage space.”

    “That is a beautiful space, with high ceilings,” said broker Dolly Lenz. “Today, it would be worth $40 million, if not more. It is my favorite building in the city.’’

    Siegel, a dad of four, notes in his suit — filed by lawyers Steven Sladkus and Jay Goldberg — that he and his family have bounced from place to place and have never spent a single night in the iconic building.

    “The Siegel children . . . have never known one apartment as their home, despite Mr. Siegel’s ownership of the apartment for the past 16 years,” the suit says.

    Siegel is suing the board for fraud, breach of contract, constructive eviction and other related causes of action. Sladkus and Goldberg, as well as a lawyer for the Dakota, declined comment.

Phony Rental Agent Gets 1 To 4 Years In State Pen For Fleecing Prospective Tenants Out Of Upfront Security Deposits, Application Fees On Unavailable Apartments

In New York City, The Real Deal (NYC) reports:
  • Juan Valoy was sentenced to one to four years in prison [] as a result of a scheme to defraud immigrants in the Washington Heights area by collecting fake security deposits on unavailable apartments.

    Valoy pleaded guilty to the plot — which involved distributing fliers to members of the Hispanic community and showing them apartments that were in some cases already occupied.

    He collected thousands of dollars in supposed application fees and security deposits, and then failed to follow through on his promises to the applicants, in some cases severing contact completely.

    “Exploiting trust in order to commit theft is not capitalization—it’s a crime,” said Manhattan District Attorney Cyrus Vance. “In this case, the defendant preyed on a community of immigrants, stealing thousands of dollars and leaving his victims broke and without a place to live.” More than 20 complaints were filed against Valoy.
Source: Fake broker sentenced to prison for Washington Heights scam (Juan Valoy targeted Hispanics and collected thousands in security deposits).

For the Manhattan DA press release, see DA Vance: Juan Valoy Sentenced To 1 1/3-To-4 Years In State Prison For Washington Heights Apartment Scam (Defendant Targeted the Hispanic Community and Stole Thousands of Dollars from Victims by Charging Fraudulent Fees).

Friday, July 17, 2015

S. Jersey Man Charged With Multiple Counts Of Theft By Deception, Misapplication Of Entrusted Property After Allegedly Pocketing $146K From Four Homeowners, Promising Phony Loan Modifications, Other Loan Assistance

In Burlington County, New Jersey, the Cinnaminson Patch reports:
  • A Cherry Hill man who held himself out as a mortgage loan specialist has been charged with theft and other charges that he allegedly used $146,000 for personal expenses that had been paid to him by four Burlington County residents seeking loan assistance, authorities said on Wednesday.

    Mark L. Begley, 50, was charged with second degree theft by deception, two counts of third degree theft by deception, second degree misapplication of entrusted property, two counts of third degree misapplication of entrusted property, third degree filing a fraudulent or false income tax return, two counts of third degree failure to pay/remit taxes and third degree failure to file a return.

    He allegedly targeted four victims, including a Cinnaminson couple that gave him nearly $21,000; a couple in Edgewater Park that gave Begley More than $110,000; and two Maple Shade residents who paid Begley $15,100 for services that were never received.

    Begley was arrested [...] after a search warrant was executed at his home, according to Burlington County Prosecutor Robert D. Bernardi, Maple Shade Police Chief Gary Gubbei and Special Agent in Charge Charles Giblin of the New Jersey Department of Treasury, Office of Criminal Investigation.

    Begley allegedly claimed he was a mortgage loan specialist whose services included assistance with procuring reverse mortgages, mortgage refinancing and assorted loan modifications.

    Begley allegedly generated documents for his clients to sign in an effort to convince them that he was working with lenders and mortgage companies on their behalf.

    Instead, he allegedly pocketed the money that had been paid to him by clients for the purpose of securing mortgage and loan modifications.

    He would allegedly accept payment and indicate the funds would be placed in an escrow account pending the outcome of his negotiations with mortgage companies and lenders on behalf of the clients. The funds were never deposited into an escrow account. Instead, Begley allegedly took these entrusted funds and used them for his personal expenses.

    Begley also allegedly failed to file a personal income tax return in 2012, filed a false or fraudulent income tax return in 2011 and failed to pay personal income tax in 2011 and 2012.

    He was lodged in Burlington County Jail on $100,000 bail.
For the story, see Cherry Hill Man Defrauded Cinnaminson Couple, Others: Prosecutor (Mark Begley allegedly defrauded residents in Cinnaminson, Maple Shade and Edgewater Park).

S. California Woman Faces 2-6 Years After Admitting She Clipped Financially Distressed Homeowners Out Of Thousand$ By Making False Promises For Loan Modifications, Other Foreclosure Relief

In Los Angeles, California, City News Service reports:
  • A 30-year-old Costa Mesa woman pleaded guilty [] to federal charges stemming from a foreclosure rescue fraud scheme that targeted homeowners with bogus promises of mortgage relief. Najia Jalan entered her plea in Los Angeles federal court to charges of mail fraud and aggravated identity theft.

    Jalan faces between two and six years in federal prison when she is sentenced Oct. 5 by U.S. District Judge R. Gary Klausner, according to the U.S. Attorney’s Office.

    Jalan — who is not a licensed attorney — used company names such as the National Legal Help Center, United National Mortgage Protection Center, OC NonProfit, American Consumer Law Center to trick victims into paying her substantial fees for fake services, prosecutors said.

    Jalan used various aliases to attract struggling homeowners by deceptively promising foreclosure relief or mortgage modifications to make consumers’ payments substantially more affordable, court papers show.

    She promised to obtain results within a certain period of time, charging homeowners unlawful advance fees, ranging from $1,000 to $3,000 and in some cases more than $10,000, prosecutors said.

    The Consumer Financial Protection Bureau sued Jalan and a co-defendant in 2012 in connection with the National Legal Help Center, which falsely claimed that they would provide legal representation for consumers even though the defendants were not attorneys and consumers received no actual legal representation, according to the agency.

Thursday, July 16, 2015

Florida Appeals Courts Continue Reversing Lower Court Screw-Ups In Foreclosure Cases, Highlighting Importance Of Hiring Competent Counsel When Fighting Off Sloppy Banksters (& Snoozing Trial Judges)

Three recent appeals court rulings indicate that Florida homeowners continue having problems finding trial judges competent in foreclosure matters to hear and issue correct rulings in their cases. Fortunately for the homeowners who were victimized by the unfavorably incorrect rulings in these cases, they were represented by counsel who appealed the rulings and successfully obtained reversals of the trial judges' screw-ups.

In one case, the trial judge improperly allowed the foreclosing bankster to enforce the note and mortgage, despite the fact that said note and mortgage was actually owned by its wholly-owned subsidiary. On appeal, Florida's 4th District Court of Appeal reversed the trial judge, noting that the parent entity has no right to enforce a note and mortgage owned by a subsidiary entity absent evidence that the parent entity acquired such right.

Not only did the parent entity not own the note and mortgage, a notice of a transfer of servicing rights filed in the court file purporting to be proof the parent entity acquired the servicing rights for the note was found not to be competent evidence because it was never authenticated and admitted into evidence at trial.

For the ruling, see Wright v. JPMorgan Chase Bank, N.A., Case No. 4D14-565 (Fla. 4th DCA July 1, 2015) (foreclosure judgment reversed and dismissed).

Editor's Note: Information contained in this appeals court ruling indicates that the foreclosure action commenced in 2009 (the trial court case file number - CACE 09-065166). Being that we are now in the year 2015 (more than five years after the case was originally filed), and being that the appeals court, in reversing, directed judgment in favor of the homeowners, dismissing the foreclosure on the mortgage for the bankster's failure to prove its standing, I wonder if the five-year Florida statute of limitations clock on refiling this foreclosure action has now expired. See, generally:

In a second case, the trial judge's screw-up involved admitting the foreclosing bankster's loan transaction records into evidence where there was no testimony as to whether the prior servicer’s records had been checked or verified for accuracy and no evidence the foreclosing bankster's witness had any knowledge of prior servicer’s recordkeeping system. Again, it was a Florida appeals court that came to the rescue to clean up the mess, stating, among other things, "We conclude that the foundation [for admissibility of business records into evidence] laid in this instance was woefully inadequate."

For the ruling, see Channell v. Deutsche Bank Nat. Trust Co., No. 2D14-2318 (Fla. 2d DCA June 24, 2015) (affirmed in part; reversed in part; remanded).

In the final case, the trial judge improperly failed to dismiss a foreclosure action where the foreclosing bankster, when initiating the action and including a lost note count in its original complaint, attached a copy of the note to its complaint that lacked an endorsement. Once again, it was the appeals court that was called upon to reverse the ruling.

For the ruling, see Eagles Master Ass', Inc. v. Bank of America, N.A., No. 2D14-1047 (Fla. 2d DCA June 26, 2015) (reversed).

Editor's Note: The court noted that the forever-infamous, now-disbarred foreclosure attorney David Stern played a role in this case when the foreclosure was initiated, only to be yanked in midstream not long before the commencement of The Florida Bar probe into his extensively-reported on handiwork that ultimately led to his unceremonious boot from the legal profession.

Reference: Carlton Fields Jorden Burt Real Estate Update (July 7, 2015).

NC Appeals Court: Foreclosed Property Owner's Affidavit Expressing Subjective Belief Of Collateral Value May Be Enough To Stiff-Arm Bankster Seeking To Score Deficiency Judgment

From a client alert from North Carolina law firm Parker Poe:
  • It shouldn’t be that hard to get a deficiency judgment in North Carolina. To start with, unlike some other states, North Carolina does not have a “one-action” rule and allows lenders to recover deficiencies on almost all commercial and residential loans. And the facts are typically straightforward for suit– the lender acquired the property at a public foreclosure sale and now the borrower owes the remaining balance of the debt. It should be simple to get a judgment, right?

    Not so fast, says the North Carolina Court of Appeals. In a decision issued on July 7, 2015 (United Community Bank v. Wolfe), the Court handed borrowers with North Carolina loans a powerful tool to ensure that, absent advance planning, lenders will almost always have to go through a full jury trial in order to obtain a deficiency judgment. And that thought can be a mighty strong deterrent for a lender pursuing an otherwise collectible deficiency.


    What’s unique about the UCB decision is that it allows borrowers to avoid the lender’s summary judgment motion based on nothing more than a borrower’s subjective belief about the value of the property.

    The UCB court analyzed a long line of North Carolina decisions which held that an owner of real estate is presumed to be competent to give an opinion as to the value of the property. Those cases led the court to accept the borrower’s affidavit as sufficient to overcome summary judgment, even though the affidavit said nothing more than that borrower “believes the property was at the time of the foreclosure sale worth the amount of the debt it secured.” Period. End of story.

    Providing that one sentence biased opinion (with no other evidence of value at all) is now sufficient for a borrower to avoid summary judgment and ensure a jury trial. Lenders better get used to reading that sentence because it’s about to become standard in every borrower affidavit contesting summary judgment in a deficiency action.
For an analysis of the facts and the applicable law, see It Just Got Harder to Get a Deficiency Judgment in North Carolina.

For the court ruling, see United Community Bank v. Wolfe, No. COA14-1309 (N.C. App. July 7, 2015).

California Appeals Court: Tender Of Outstanding Loan Balance Not Required To Halt Foreclosure When Claiming Violation Of "Dual Tracking" Prohibition In State's Homeowner's Bill Of Rights

From a recent post in the Money & Dirt blog (California):
  • Many claims based on flawed foreclosure sales never get out of the starting gates because the borrower fails to allege a pre-lawsuit “tender” of all amounts due on the loan.

    But as illustrated in a recent decision by the California Court of Appeal (Second District in Los Angeles) — Valbuena v. Ocwen Loan Servicing, LLC — a tender is not required to state a claim under the Homeowner’s Bill of Rights (HBOR) for violation of the prohibition on “dual tracking” (foreclosing on a loan while negotiating with the borrower to avoid foreclosure).


    The [appeals] Court observed that nothing in the [California Homeowner's Bill of Rights (Civ.Code,[4] §§ 2920.5, 2923.4-.7, 2924, 2924.9-.12, 2924.15, 2924.17-.20) ("HBOR"), effective January 1, 2013] requires that a borrower tender the loan balance before filing suit based on a violation of the statutory requirements. “Indeed, such a requirement would completely eviscerate the remedial provisions of the statute.” The Court further noted that the rationale for the tender rule — preventing the unnecessary setting aside of completed trustee’s sales based on improper notice where the borrower had no ability to pay the loan amount even on proper notice — served no purpose in cases seeking monetary damages (not the setting aside of the sale) based on statutory violations (not defective notice).

    The Court concluded: “In short, we agree with plaintiffs that a tender of the amount due under the loan is not required to state a cause of action under section 2923.6.” The Court also agreed with plaintiffs that the issues of whether plaintiffs had submitted complete documentation supporting their loan modification request, and whether Ocwen had provided a “reasonable timeframe” for plaintiffs’ submission of a complete application, were not suitable for determination on a demurrer..
For an analysis of the facts, and the applicable California law, see Tender Not Required for a “Dual Tracking” Claim.

For the court ruling, see Valbuena v. Ocwen Loan Servicing, LLC, (Cal. App. 2d Dist. Div. 5, May 21, 2015).

Wednesday, July 15, 2015

Co-Conspirator Cops Plea For Role In Title-Hijacking Scam Targeting Vacant Fannie, Freddie Foreclosures; Confederates Used Forged Deeds To Pilfer & Flip Over A Dozen Homes, Pocketing $3M+

From the Office of the U.S. Attorney (San Diego, California):
  • Norwegian businessman Mohamed Daoud has pleaded guilty to laundering the proceeds of a complex scheme to steal real property.

    According to his plea agreement, between July 2012 and February 2013, Daoud helped to launder some of the millions of dollars in proceeds generated by a group of confederates who posed as the real owners of Southern California homes in order to “sell” the properties to unsuspecting buyers – who later learned that they had actually purchased nothing. Immediately after each sale, Daoud admitted, the confederates would disburse the money, ensuring that the funds vanished and the buyers could not recover their stolen money.

    During his guilty plea, Daoud admitted that he worked with a co-conspirator who used Daoud’s company, “Norway LLC,” as well as other business names, to pretend to acquire title to properties. The co-conspirator created fake deeds that made it appear the true owners had transferred the property to these companies, when in fact, the deeds were just forgeries, and the true owners had never really deeded the properties to anyone. He then arranged to have the forged deeds and other official documents recorded at the county recorder’s offices, so that the title records would make it appear that he was the property owner.


    Daoud admitted that during his participation in the money laundering conspiracy, his confederates induced at least six different buyers to purchase properties they did not own, leaving them with worthless claims to title and generating at least $1.4 million in proceeds from the fraud. Daoud received approximately $270,000 of the proceeds.

    Another co-schemer, Daniel Deaibes, pleaded guilty in March 2015 to participating in the fraud. Deaibes admitted that he and others continued to operate the scheme until November 2014 (when Daoud, Deaibes, and another co-defendant were each indicted and arrested). In total, Daoud and Deaibes have admitted that they and their confederates fraudulently sold or attempted to sell at least 13 homes for more than $3 million.

    As Deaibes admitted during his guilty plea, the schemers even took steps to thwart efforts by the true owners to regain clean title to the properties. In one instance, true owner Fannie Mae discovered that a fraudulent grant deed had been recorded on a property it owned in Rowland Heights, California. Shortly after discovering the fraudulent deed, Fannie Mae filed a lawsuit to recover control over the property and notify prospective buyers of the fraudulent deed. Undeterred, the schemers created a fake “Withdrawal of Lis Pendens” in an effort to proceed with the fraudulent sale. When Fannie Mae won a judgment in its favor and obtained a court finding that the deed was fraudulent, they created a fake “Satisfaction of Judgment” and recorded that fraudulent document as well.

    Most of these properties were actually owned by Fannie Mae and Freddie Mac -- government sponsored enterprises with a mission to provide liquidity, stability, and affordability to the United States housing and mortgage markets.

Sovereign Citizen Defendant Accused In Debt Elimination Scam Opts Against Upcoming Trial, Jumps Bail & Goes On The Lam Instead; Accused w/ Others Of Flipping Seven Mortgage-Encumbered Homes After First Filing $4.5M+ In Phony Lien Satisfactions, Pilfering Over $3 Million

In Honolulu, Hawaii, KHNL-TV Channel 35 reports:
  • A Punahou graduate facing dozens of felony charges is on the run and now the FBI and U.S. Marshals are on the look-out for the woman accused of making millions in an elaborate real estate scam.

    48-year-old Jennifer McTigue has been out on bond awaiting federal trial for the last year and a half, but officials say she failed to appear for a hearing on June 30. According to the FBI, she has since turned off her phone and hasn't checked in with anyone.

    "She is gone. She has fled, but the good news is that we believe she remains here on O'ahu. We've checked with all the airlines who have combed their flight manifest and we have no indication of her leaving O'ahu -- that said you don't have to be James Bond to leave Hawai'i. It's entirely possible that she might have left under other means," said FBI agent and spokesperson Tom Simon.

    McTigue and two other alleged co-conspirators were indicted in January of 2014 on 45 counts -- including mail fraud, wire fraud and money laundering.(1) The three are accused of acquiring properties from distressed homeowners and falsifying agreements with them to appear as if their loans had been paid off. Prosecutors say they then sold the properties, raking in more than $3 million. Both Marc Melton and Sakara Blackwell have since pled guilty and have agreed to testify against McTigue at her trial.

    "We believe the evidence in this trial will show that she orchestrated a massive mult-million dollar fraud to rip off homeowners, banks and the title owners in Hawai'i. We want to have that opportunity and prove that in court, instead she believes the rules don't apply to her," said Simon.

    McTigue has chosen to represent herself and has been using the defense that federal courts don't have jurisdiction over her.

    "She is a sovereign citizen different than the Hawaiian Sovereignty movement in that she believes in none of the laws of the U.S. She is the kingdom of one -- Jennifer McTigue," Simon explained.

    Officials are concerned others within the anti-government extremist group may be helping McTigue.

    "There's an underground railroad of Sovereign Citizens on the U.S. mainland who've been known to spirit people away from the arms of justice and my fear is that Jennifer McTigue may have fallen into that group and they're assisting her in some way," Simon said.
Source: Authorities seek fugitive believed to be hiding on Oahu.

For story update, see Fugitive in $3-million fraud case arrested in Kaimuki ("Acting on a tip, federal agents and Honolulu police arrested fugitive Jennifer McTigue at a home in Kaimuki Saturday night ... [and] who is scheduled to go to trial next week in a $3-million real estate fraud case.").

(1) See Honolulu Women Arraigned On Indictment For Fraudulent Debt Elimination Scheme:
  • The Indictment describes transactions involving seven specific properties and alleges that McTigue, Melton and Blackwell fraudulently obtained the releases of over $4.5 million in mortgages or other financial liens against those properties. The indictment alleges that the defendants then sold the properties for prices totaling over $3.3 million.

Tuesday, July 14, 2015

Suspect's Attorney In Alleged Loan Modification Scam Invokes 'Crappy Businessman' Defense, Saying Client's Conduct Not Criminal; 'All He Did Was Prepare Packages'; Defendant To Dodge Bail Increase From $215K To $325K If He Forks Over Passport

In Sonoma County, California, KGO-TV Channel 7 reports:
  • A Sonoma County man accused of bilking dozens of distressed homeowners out of tens of thousands of dollars faces 19 new criminal counts.

    Miguel Angel Lopez now faces a total of 64 criminal counts, not including dozens of enhancement charges, which would add to his prison sentence if convicted. Many of his victims Monday saw the suspect for the first time since his arrest five weeks ago and emotions ran high.

    Lopez walked to the front of the courtroom before judge Shelly Averill to enter his plea. He was then asked to sit down because prosecutor Caroline Chen was granted a private meeting with the judge and the defense attorney. Averill later announced that 19 new criminal counts were added to the charges, that includes nine charges for mortgage fraud and nine charges for grand theft.

    Lopez, who is out on bail, refused to talk to ABC7 News after being approached by 7 On Your Side's Michael Finney Monday.

    Later, his attorney Stephen Turer called the charges a witch hunt.

    "Because I don't think what he did was criminal," Turer said. "He is a bad business man, but there's a big difference between being a bad business man and a criminal."

    7 On Your Side pressed Turer on whether Lopez took advanced fees from clients for mortgage modifications in violation of state law. "What advantage did he take? He said he'd prepared packages, he prepared the packages," Turer said. "He said he wasn't responsible for carrying out further actions, he didn't."

    Following the hearing, those who call themselves victims of Lopez were feeling pretty good.

    "I wish he was with the inmates," said Glenda Corde, a Santa Rosa resident. "I wish he wasn't free to walk around." "I was losing hope, but after today I think that he's going to need to do some jail time," said Lisa Marvier, a Santa Rosa resident.

    Lopez is scheduled to be back in court July 8 to enter his plea.

    The prosecutor from the State Department of Justice requested that bail be raised from $215,000 to $325,000. The judge said she would deny the request as long as Lopez turns over his passport.

Scammer Who Used Gov't-Sounding Labels In Naming His Outfits To Dupe Struggling, Loan Modification-Seeking Homeowners Into Believing An Affiliation With Federal Housing Programs Existed Gets 140 Months In Slammer

From the Office of the U.S. Attorney (East St. Louis, Illinois):
  • [J]onathan L. Herbert, 36, of Lighthouse Point, Florida, was sentenced to 140 months in federal prison for wire fraud, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced.

    In commenting on [the] sentence, United States Attorney Wigginton stated: "The stiff sentence imposed by Judge Herndon is entirely appropriate. The fraud scheme conducted by this defendant was particularly heinous. Herbert stole money by taking advantage of our citizens’ trust in government.

    He labeled his fraudulent companies as ‘federal’ or ‘government’ related. He took money that his victims thought was being paid toward their mortgages. This crime caused severe financial hardship for the victims, and even caused a few of them to lose their homes. We hope that the long prison sentence Herbert received will cause other criminals to think twice before engaging in similar fraud schemes. As always, whether a person steals money by pointing a gun or does so with a pen and a crafty ruse, my office will continue to protect the good people of Southern Illinois and elsewhere."


    Herbert outright swindled 247 struggling homeowners out of more than $470,000 with false claims that he was affiliated with federal housing aid programs, including HAMP, and could modify homeowners’ mortgage loans in order to make their payments more affordable. Instead, Herbert set-up businesses with names including ‘Federal’ with sham mailing addresses located in Washington, D.C. (addresses which were really just UPS mailboxes); instructed homeowners to mail their ‘modified’ mortgage payments to him at the addresses; re-routed homeowners’ payments to himself in Florida; and pocketed the proceeds himself for personal expenses and to keep the scam operating.


    In addition to the 140 month prison sentence, United States District Judge David R. Herndon also ordered Herbert to serve 5 years of supervised release following his release from prison, and ordered Herbert to pay restitution to the victims of his crime. Judge Herndon gave the parties additional time to calculate the exact amount owed in order that all losses would be the subjects of restitution.

    Herbert conducted his fraud scheme from a strip mall office located in Fort Lauderdale, Florida. As part of his guilty plea, Herbert admitted that he usually contacted his victims through unsolicited telephone calls, introducing himself as a "federal loan officer" with the "Federal Debt Commission," "Federal Mortgage Marketplace," or "Federal Assistance Program." Herbert used these names and titles in order to deceive the victims into believing that his fraudulent program was either operated, or approved, by the federal government. Herbert told his victims that they qualified for a loan modification because of financial hardship or some type of illegal conduct engaged in by their lenders.

    After the initial phone calls, Herbert mailed letters to the victims who expressed interest in his bogus loan modification programs. These letters congratulated the victims on their acceptance into the program, quoted a new monthly mortgage payment rate, and directed the victims to begin sending their monthly mortgage payments to one of two addresses located in Washington, D.C. The Washington, D.C., addresses were for mailboxes which Herbert had rented at UPS Stores. Pursuant to forwarding orders Herbert put in place with these UPS stores, the victims’ payments were forwarded to Herbert in Florida.

    Herbert admitted that he did not apply any of the money he received from the victims to reduce their home loan debt. Instead, he used the money he received from the victims for his own personal expenses and to continue his fraudulent operation. In the plea agreement, Herbert acknowledged that the total of the losses sustained by the victims as a result of his fraud scheme is approximately $750,000.

Monday, July 13, 2015

Trio Used Forged Deed To Steal Our Property, Then Tried To Extort Us By Offering To Sell It Back, Says Church Trustee In Civil Suit To Void Conveyance, Quiet Title

In Jefferson County, Texas, The Southeast Texas Record reports:
  • A Beaumont church filed a lawsuit against three individuals on grounds of alleged property conversion in 2013.

    New Friendship Missionary Baptist Church, an unincorporated church acting through trustee Joe Lewis, filed a complaint against Houston residents Cecil Phillips, Andrew Watkins and Rodney Thomas in Jefferson County District Court on June 11, claiming fraud in a June 2013 attempt to convey the church property to a business entity.

    The complaint claims that the defendants tried to transfer ownership of the real property occupied by the plaintiff, located at 1817 Sabine Pass Ave. in Beaumont, to an entity called Iamsavednow Fellowship, presumed to be owned by Thomas.

    According to the suit, the purported deed fails to convey anything and is out of compliance with Texas Property Code.

    The grievance also states that on or about May 31, Thomas attempted to extort money from the plaintiff by trying to sell it its own property; and that none of the defendants have the authority to act on behalf of the church.

    The plaintiff alleges that the filing of the deed for record compromised its title and needs to be removed by court order. Alleging slander of title, conspiracy, and fraud, New Friendship requests declaratory relief and asks the court to void the deed in question to establish the church as true and lawful owner of the property.

    The plaintiff seeks up to $100,000 in compensation for actual and exemplary damages, pre- and post-judgment interest, attorney’s fees, expenses, and costs. The plaintiff is represented by Mel Shelander of Beaumont.

Lawsuit: Middle Tennessee Real Estate Operator Used Forged Documents, Phony Notary Acknowledgements In Massive Scheme To Fraudulently Exercise Redemption Rights Over Realty Sold For Unpaid Taxes; Victimized Former Owners, Heirs Of Dozens Of Properties Seek Class Action, RICO Certification

In Nashville, Tennessee, the Nashville Post reports:
  • A Nashville company specializing in the acquisition of distressed properties is facing allegations it used forgery and fraud in a massive scheme to purchase tax-sale properties for pennies on the dollar.

    A 133-page complaint filed [...] in Davidson County Chancery Court details the alleged scheme perpetuated by REO Holdings LLC and its principals Charles E. Walker, Jon Paul Johnson, Julie Coone and Merdan Ibrahim.

    The company is alleged to have illegally acquired properties through Tennessee's property-tax sale redemption process. Under the law, a property sold by the county for unpaid property taxes may be bought back by the original owner or the heirs of the owner within one year of the tax sale by paying the purchase price plus 10 percent.

    According to the claim of the plaintiffs in this case — former owners and heirs of owners of dozens of properties in Middle Tennessee — REO Holdings would would first identify properties sold to satisfy unpaid property taxes, particularly those with absentee owners or owners unlikely to assert interest.

    They would then allegedly create false instruments such as affidavits of heirship or transfers of title and "append forged signatures and notary acknowledgements." Then, the plantiffs claim, REO would assert redemption rights using the instruments. In other cases, the claim says, REO would simply create property transfers whole cloth.

    In some cases, the plaintiffs say REO would simply copy signatures or use names of property owners that were similar to the legitimate owners. The claim says the signatures are obvious forgeries, even if "guilefully made."

    The complaint contains numerous assertions from notaries whose stamps appear on the documents that they have no record of notarizing the documents through which REO redeemed or acquired properties. One out-of-state notary was "so appalled at the Defendants fraud that ... she immediately contacted the Davidson County District Attorney."

    The plaintiffs are seeking class-action status and are claiming wire and mail fraud, slander of title and a number of similar claims. In addition, plaintiffs are seeking certification as a RICO case, because the alleged scheme is so involved and wide ranging.

    The court is asked to enjoin the defendants from any property transfers or execution of legal instruments, to set aside effected earlier acquisitions and hold the principals individually liable.

    Eugene N. Balso Jr. and Paul Krug of Balso & Nelson are representing the plaintiffs. Calls to REO Holdings were not returned.
Source: Nashville real estate company faces allegations of fraud and forgery (Class-action claim says REO Holdings lied to acquire cheap land).

For the lawsuit, see Family Trust Services, LLC, et ano v. REO Holdings, LLC, et al.

Antitrust Feds Bag Two More In Ongoing Northern California Foreclosure Sale Bid-Rigging Probe; Guilty Plea Tally Now Up To 56 With Multi-Count Indictments Pending Against 19 Others

From the U.S. Department of Justice (Washington, D.C.):
  • Two Northern California real estate investors pleaded guilty for their role in bid-rigging conspiracies and mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced [].

    Real estate investors John Shiells, of Danville, California, and Miguel De Sanz, of San Francisco, each pleaded guilty to three counts of bid rigging and three counts of mail fraud in the U.S. District Court of the Northern District of California in Oakland, California, today. Both were charged in an indictment returned by a federal grand jury in the Northern District of California on Nov. 19, 2014.

    “These defendants took turns paying others or being paid by others to not bid at foreclosure auctions, all so that the conspirators could buy properties at reduced prices,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The defendants and their co-conspirators corrupted these auctions and deprived lenders and homeowners of auction proceeds that were rightfully theirs.”

    To date, 56 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, multi-count indictments are pending against 19 real estate investors that have been charged for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties.

    According to court documents, Shiells and De Sanz agreed not to compete to purchase selected properties at public real estate foreclosure auctions, designated which conspirator would win the selected properties and refrained from bidding on the selected properties at the public auctions. This collusion began in Alameda County as early as June 2007; in Contra Costa County as July 2008; and in San Francisco County as early as November 2008. The deals continued until approximately January 2011.

    Both Shiells and De Sanz were also charged with using the mail to carry out the schemes to fraudulently acquire the titles to selected properties sold at public auctions in Alameda, Contra Costa and San Francisco counties, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries.

Sunday, July 12, 2015

Low-Income Tenants: Ripe Targets For Scammers Running Fake Websites Offering Assistance In Scoring Section 8 Rent Subsidies

In Colorado Springs, Colorado, KXRM-TV Channel 21 reports:
  • Scammers are targeting low-income families who are seeking affordable housing.

    The scammers are targeting some people who are using Section 8 housing, and they are using fake websites to do it.

    Officials said at first the website looks like a normal way to sign up for a voucher and wait list, but it will eventually ask for more information, leading you down a road that could cost you a lot of money.

    “The way it works, is if somebody is interested in low income housing, they can go online or talk to the local housing authority(1) and they request a voucher to be put on a waiting list,” Jeff Markle, Director of Marketing and Events for the Better Business Bureau, said.

    But that’s where the scammers can take advantage of people. “They’ve gone and created certain websites to make it look like a specific housing authority,“ Markle said.

    Some websites are asking for personal information, including your social security number.

    “And also requesting payment for an application fee or a payment for their first month’s rent, saying low income housing is available if they wire them the money for the first month,” Markle said.

    And Markle said those are all major red flags for a scam. “So the legitimate website won’t ask for payment, won’t ask for social security, and information like that, so that’s how you spot it,” he said.
Source: New scam targeting people looking for affordable housing.

(1) Go here to find the various local housing authorities that administer HUD low income housing programs throughout the country.

Scheme Designed To Extort Investment Property, Money From Two Cops & Others Thru Threats Relating To Non-Existent Criminal Tax Probe Ends In Prison Sentences For Mortgage Broker (12 Months), Lawyer/CPA (27 Months)

From the Office of the U.S. Attorney (Trenton, New Jersey):
  • A Millstone, New Jersey, man was sentenced [] to 12 months in prison for conspiring to extort victims out of money and property by falsely stating they were the subjects of IRS criminal investigations, U.S. Attorney Paul J. Fishman announced.

    Robert G. Cusic Jr., 46, previously pleaded guilty [...] to an information charging him with conspiracy to commit extortion under fear of economic harm. [...]

    According to documents filed in this case and statements made in court:

    Cusic, Thomas G. Frey, 55, of Edison, New Jersey, and another conspirator (identified only as CC-1), schemed to extort and to defraud four victims, including two police officers, by falsely representing to the victims that they were the subjects of criminal investigations, principally by the IRS, in connection with investment properties some of them owned. Cusic falsely represented that while at a property formerly owned by one of the victims, Cusic encountered two IRS special agents (SA-1 and SA-2) who questioned him extensively about some of the victims.

    Frey, a lawyer and certified public accountant, falsely told the victims he had ongoing communications with SA-1 about the purported investigation and had a special relationship with SA-1. Frey told the victims if they paid up to $20,000 each, he would call SA-1 and have the investigation converted from a criminal tax investigation to an IRS “desk audit,” a civil matter. Frey and CC-1 falsely stated that if the victims did not retain his services and pay the fee, the investigation would likely result in the arrest of certain victims.

    Cusic admitted the goal of the conspiracy was to obtain approximately $80,000 in fees for Frey and to cause the victims to sell certain of the properties to Frey and others. Cusic stood to receive a portion of any fees paid by the victims, a percentage of the sale price of each of the investment properties sold to Frey and others, and property management fees on any of the properties sold.

    In addition to the prison term, Judge [Anne E.] Thompson sentenced Cusic to serve three years of supervised release and ordered him to pay a $3,000 fine.

    Frey previously pleaded guilty [...] to two counts of an indictment charging him with conspiracy to commit extortion under fear of economic harm and conspiracy to commit wire fraud. He was sentenced on April 27, 2015, to 27 months in prison.