Saturday, October 17, 2015

Nephew Convicted Of Abusing POA To Fleece Now-95-Year Old Uncle Out Of $350K In Life Savings; Defendant's Actions Caused Victim's Home To Be Lost To Foreclosure, Forcing Him Into Veterans Home, Then Stiffing Facility Out Of Care Costs Despite Having Available Cash

In Lehigh County, Pennsylvania, reports:
  • A Lehigh County judge revoked bail Thursday moments after a jury convicted a Pen Argyl man of stealing his elderly uncle's life savings.

    Scott Lee Bartholomew, 54, of the 100 block of Acker Street in Pen Argyl, was taken to Lehigh County Jail following his trial.

    The jury deliberated a little more than an hour before finding Bartholomew guilty of theft and related crimes, according to the Lehigh County District Attorney's Office.

    His 95-year-old uncle, Wilbur B. Stiles, is a World War II Air Force veteran who worked as a wildlife biologist with the U.S. Department of the Interior.

    He formerly lived in Allentown and at Cedarbrook Nursing Home in South Whitehall Township but now lives in a veterans center in the Scranton area, prosecutors said.

    Bartholomew used power of attorney to steal from Stiles and converted about $351,000 for his own use, prosecutors said.

    The trial began Monday. After Thursday's verdict, Judge Robert L. Steinberg revoked bail for Bartholomew, who had been free on bail. Sentencing was set for Dec. 2.

    Bartholomew was convicted of theft by unlawful taking, theft by deception, theft by failure to make required disposition of funds, receiving stolen property and dealing in proceeds of unlawful activities.

    The crimes happened from January 2006 to June 2012, the district attorney's office previously said. Bartholomew was removed as power of attorney in February 2012.

    Chief Deputy District Attorney Charles F. Gallagher told jurors that Stiles had accumulated substantial savings during his lifetime and had owned a home in Allentown, the district attorney's office said.

    After Bartholomew was appointed as power of attorney in 2003, Stiles' savings dwindled, his home went into foreclosure and Stiles was placed in a nursing facility, prosecutors said. Bartholomew was charged in August 2012.

    He used Stiles' money for his own benefit and didn't pay for Stiles' care at a veterans home even though money was available for that, the district attorney's office said.

    The investigation was led by Sgt. Michael Sorrentino of the South Whitehall Township Police Department, who is a member of the district attorney's Elder Abuse Task Force. The Institute for Protective Services assisted the investigation.

Cops: Suspect Reeled In, Fleeced 76-Year Old Homeowner Out Of $9K With Phone Call Convincing Him His Home Was In Foreclosure, Falsely Promising Victim To Stop Foreclosure

In Linden, New Jersey, reports:
  • A Piscataway woman faces charges of scamming a 76-year-old city man out of $9,000 in a scheme that authorities say may be targeting Indian-Americans.

    Mahwish Chaudry, 31, was arrested Sept. 25 for the scheme in which she told the victim he was in danger of losing his home, police said.

    Last May, Chaudry called the man claiming she was employed by a financial company and that his home was in foreclosure, said police Capt. James Sarnicki.

    He said Chaudry then told him that she could drive him to the bank to make a cash withdrawal and turn the money over to her to save his house. The victim complied and gave Chaudry $4,000 in cash, the captain said.

    Several days later, the woman called the victim again and said they needed more money to prevent the foreclosure, Sarnicki said. He said this time Chaudry was accompanied by a second woman, and the two of them drove him to a local bank where he withdrew $5,000 and gave it to them.

    The victim subsequently reported the incident to police and Detective Kenneth Mikolajczyk investigated the case and obtained an arrest warrant for Chaudry, Sarnicki said.

    He said Chaudry was released pending a court hearing.

    Police warned that this scam may be occurring in the Indian-American community and ask that any other victims come forward to their local police departments.

Friday, October 16, 2015

Disbarred Attorney Back To His Old Ways? Recording Forged Deed, Mortgage Satisfaction, Creating Other Dirty Docs, Pocketing Homeowner Mortgage Payments, Buyers' Downpayments On Sales Of Home He Didn't Own, Screwing Over Title Company Among Allegations Facing Disgraced Ex-Lawyer Charged w/ $1M+ Heist

From the Office of the Kings County, New York District Attorney:
  • Brooklyn District Attorney Ken Thompson [] announced that a disbarred lawyer has been indicted for allegedly stealing over $1 million from an investor, potential home buyers and a title insurance company when conducting various scams in connection with two distressed properties in Brooklyn. In the course of the schemes, which allegedly ran between February 2011 and June 2015, the defendant used numerous forged documents and falsely represented himself as a practicing attorney.

    District Attorney Thompson said, “This defendant allegedly concocted elaborate schemes to defraud in which he stole money from acquaintances and strangers, falsely claimed to be an attorney when it suited his schemes and filed numerous forged documents with public agencies. We’ve put an end to these fraudulent acts and will now fully prosecute him for committing such fraud.”

    The District Attorney identified the defendant as Domenick Crispino, 52, of 148 Main Street in Staten Island. He was arraigned [] before Brooklyn Supreme Court Justice Danny Chun on a 21-count indictment in which he is charged with second-degree grand larceny, second-degree criminal possession of a forged instrument, practicing law without a license and related counts. He was ordered held on $500,000 bond or $250,000 cash bail. The defendant faces up to 15 years in prison if convicted of the top count. His next court date was scheduled to December 9, 2015.

    The District Attorney said that, according to the indictment, between February 15, 2011 and June 29, 2015, the defendant allegedly engaged in various schemes to enrich himself from two private homes in Brooklyn that were subject to foreclosure actions: 35 Bay 7th Street in Bath Beach and 1848 West 7th Street in Gravesend.

    Crispino was disbarred in 1999 amid allegations of felony larceny,(1) for which he was later convicted. Despite that, he represented himself as an attorney and offered to help the owner of the Bay 7th Street property keep her house after failing to make mortgage payments. The homeowner, who knew the defendant through her late brother, wanted her elderly father to remain in the family home. According to the indictment, in June 2011, Crispino advised Bruce Abdenour, a friend of the homeowner who was assisting with loan payments, to assume ownership of the property and write checks to Meritus Group, a company Crispino owned, so they can be held in escrow while the defendant negotiated the mortgage with the banks, which would later allow Abdenour to sell the house.

    Through April 2013, Abdenour issued checks totaling $597,750 to Meritus and Crispino. The defendant allegedly used these funds by writing checks to himself, making cash withdrawals and making debit card purchases, according to the indictment. After the elderly resident of the home passed away, Abdenour asked Crispino for proof that he was holding onto the payments. On February 28, 2014, the defendant emailed Abdenour an allegedly phony escrow agreement with Merrill Lynch, which had a foreclosure action on the house.

    In April 2014, Crispino sent a contract of sale to the lawyer of two sisters who were interested in buying the Bay 7th Street property and collected 10% down payment totaling $86,800, the investigation found. In December 2014, Abdenour was informed during the closing that the mortgage would have to be paid from the proceeds of the sale, not from the now-empty escrow account, and the deal was cancelled. Neither he nor the potential buyers got any of the payments back and he subsequently reported Crispino to the District Attorney’s Office. The property was foreclosed on and sold in an auction in January 2015 with a mortgage surplus of about $410,000. In June 29, 2015, the defendant filed a claim on the surplus on behalf of Abdenour’s company without permission or authority to do so, according to the indictment. The defendant did not obtain those funds.

    In 2011, according to the indictment, Crispino also initiated business dealings relating to the West 7th Street property, which was the subject of a foreclosure action. On February 15, 2011 he filed a deed, allegedly bearing the owner’s forged signature, with the city’s Department of Finance, purporting that Meritus Group bought the house for $10. In June 2012, he signed a contract of sale on the property, accepting a 10% down payment of $47,500. The defendant allegedly spent all that money and stopped returning calls from the potential buyers’ lawyer.

    On February 21, 2014, Crispino filed an allegedly bogus satisfaction of mortgage with the City Register, falsely claiming the mortgage on the property had been paid. A month later, he signed a contract of sale with another buyer for the same West 7th Street home. At the May 2014 closing, he collected checks totaling $97,936 from the buyer’s lawyer, according to the investigation.

    There was a lien, as well as Environmental Control Board violations on the property that needed to be paid before the sale could be finalized. The buyer paid $152,850 to Liberty Land Abstract, the title insurance company, which held it in escrow, plus $112,000 to the law firm representing the lien holder. After the lien was cleared and the violations paid, Liberty issued Meritus Group – the purported owner of the property – two checks for a total of $151,540.27, the investigation found.

    The District Attorney said that all told, Crispino allegedly stole from Abdenour, from the three potential buyers and from Liberty a total of $981,436.27. He allegedly spent all this money on personal expenses by writing checks to himself, making cash withdrawals and making debit card purchases. He also caused a potential buyer to pay $112,000 to clear the lien, which she wouldn’t have paid had she known about the phony deed, for a total alleged larceny of $1,094,417.27.
Source: Disbarred Lawyer Indicted for Stealing Over $1 Million by Conducting Fraudulent Real Estate Deals (Staten Island Resident Allegedly Made Bogus Sales of Two Brooklyn Homes He Didn’t Own by Pretending to Be an Attorney and Filing Forged Documents, Including Deed Falsely Claiming a House Was Sold to Him for $10).

(1) See The New York Times: Lawyer Charged With Stealing $2 Million From 14 Clients (11/9/1999).

Real Estate Broker Who Forged Deed To Swipe Home Gets Break As Judge Suspends All But Two Months Of 20-Year Sentence; Defendant Faces Add'l Forgery, Grand Larceny Charges In Unrelated Case

In Prince George, Virginia, The Hopewell News reports:
  • A local real estate broker, and owner of a realty company in Hopewell, has been sentenced to two months imprisonment after being convicted on two counts of forgery.

    Donna Howlett, 55, of Charles City, was sentenced in Prince George Circuit Court on Thursday to two counts of felony forgery after a judge ruled that she forged another woman’s name onto a quick-claim deed and falsely transferred ownership of a home and property over to her own company, Anchor Real Estate LLC.

    Howlett previously pleaded not guilty to both charges on May 7, where her case was originally heard before Judge W. Allan Sharrett, who delayed any ruling on the matter to take it under advisement.

    Because the acts of forgery created lingering headaches for a multitude of parties trying to recover lost finances, where a group of lawyers representing varying clients expressed faint hopes of finding a resolution to this matter, Sharrett ruled above the commonwealth’s request.

    “The ripple effects are tremendous,” Sharrett said, before he handed out 20 years imprisonment, with 19 years and 10 months suspended, for a two month active sentence. [...] Howlett will surrender herself to the Department of Corrections on Dec. 1, at which point she will serve the two month sentence.

    Monetary restitution will be determined at a later point.

    Howlett also faces two additional charges of forgery and one charge of grand larceny in Prince George in an unrelated case.
For the story, see Real estate broker gets jail.

Thursday, October 15, 2015

Co-Owner Of Loan Modification Boiler Room Operation Gets 20 Years For Role In Fleecing 4,000+ Homeowners Out Of $7M+ For Services That Were Never Provided

From the Office of the U.S. Attorney (Los Angeles, California):
  • Four people who worked at a Rancho Cucamonga business that offered bogus loan modification programs to thousands of financially distressed homeowners – victims who lost more than $7 million when they paid for services that were never provided – were sentenced [] to federal prison, with one of the leaders of the scheme being ordered to spend 20 years in custody.

    The Southland residents sentenced [] were convicted of federal fraud charges for their roles in a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure.

    The defendants sentenced [] by United States District Judge Virginia A. Phillips were:

    • Christopher Paul George, 45, of Rancho Cucamonga, a co-owner of 21st Century, who was sentenced to 20 years in federal prison;

    • Crystal Taiwana Buck, 40, of Long Beach, a sales “closer” who persuaded numerous victims to pay fees to 21st Century, who received a sentence of five years;

    • Albert DiRoberto, 62, of Fullerton, who handled both sales and marketing – which included making a commercial for 21st Century and preparing talking points to respond to negative publicity – was sentenced to five years in prison; and

    • Yadira Garcia Padilla, 38, of Rancho Cucamonga – who handled client complaints and refund requests, and who posted bogus positive reviews about 21st Century on the Internet – was sentenced to four years in prison.

    George, Buck and DiRoberto were sentenced after being found guilty by a federal jury in June on various fraud charges. Padilla pleaded guilty in 2013.

    In addition to the prison term, Judge Phillips today ordered George to pay $7,065,117 in restitution to victims of the scam. Buck, DiRoberto and Padilla were ordered to return to court next month for restitution hearings.

    A total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation conducted by the Federal Bureau of Investigation; IRS - Criminal Investigation; the United States Postal Inspection Service; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Federal Housing Finance Agency, Office of Inspector General.
For more, see 4 Involved in Inland Empire Loan Modification Scam that Targeted Financially Distressed Homeowners Sentenced to Federal Prison (Co-Owner of 21st Century Legal Services Receives 20-Year Prison Term).

Running Loan Modification Racket That Clipped Upfront Fees Out Of 1,000+ Homeowners Among Alleged Real Estate Frauds That Lands Long Island Pair In Hot Water w/ Local Feds

From the Office of the U.S. Attorney (Central Islip, New York):
  • An eleven-count indictment was unsealed [] in United States District Court for the Eastern District of New York charging David Gotterup, also known as “David Gott,” and Jason Green with conspiracy to commit mail fraud, wire fraud, and bank fraud in connection with a scheme to defraud homeowners who were attempting to modify their mortgage loans, and related mail fraud counts. The indictment also charged Gotterup with conspiracy to commit wire and bank fraud in connection with a scheme to improperly obtain mortgage loans, and related bank fraud counts, disaster loan fraud, and aggravated identity theft.


    According to court filings, from 2008 to 2012, Gotterup and Green defrauded distressed homeowners who were seeking relief through government mortgage modification programs by convincing more than a thousand homeowners to pay thousands of dollars each in advance fees based on false promises.

    Gotterup also defrauded financial institutions and the Federal Housing Administration by obtaining mortgages on properties in Brooklyn and Queens by falsifying loan applications and providing false documentation to support the loan applications. In addition, Gotterup used another person’s social security number in connection with these schemes.

    After Hurricane Sandy in 2012, Gotterup also applied for a low-interest disaster relief loan from the U.S. Small Business Administration (SBA), allegedly using false information to support the application. As a result, Gotterup received a loan of $113,900 from the SBA. Instead of using the funds to repair property damaged in the disaster, Gotterup used the money to pay for personal expenses, including wedding-related expenses in Cancun, Mexico.
Source: Two Long Island Men Arrested For Defrauding Homeowners In Loan Modification Scheme (David Gotterup also Charged with Defrauding Banks, Committing Identity Theft and Filing False Claims to Obtain Disaster Relief Money After Hurricane Sandy).

Wednesday, October 14, 2015

Buying Into Trump Building Leads To Buyer's Remorse For Unit Purchasers; HOA: Trump Used Fine-Print Chicanery To Financially Run Roughshod Over Complex's Operation

In Panama City, Panama, The Associated Press reports:
  • The directors of the Trump Ocean Club met July 28 on urgent business. They needed to fire Donald Trump.

    The building's residents and condo owners had invested in the namesake, a 70-story waterfront tower along Panama Bay, on the strength of Trump's reputation. But during the four years that Trump Panama Condominium Management LLC had managed the property, Central America's largest building, a team installed by the Trump family was accused of running up more than $2 million in unauthorized debts, paying its executives undisclosed bonuses and withholding basic financial information from owners.

    The Trumps had done all of this through fine-print chicanery, the board said. A clause in many residents' purchase agreements prevented them from voting against the Trump company's wishes. That allowed the Trumps to install their top employee as chairman and the residents' representative on the board — even though the Trumps' actual stake in the building's residential area was merely a storage closet on the 15th floor.

    The Trump Organization sent its response days later. "Your letter is a complete sham," wrote the Trumps' top lawyer, Alan Garten. He accused the board of ingratitude and criminal trespassing. After refusing to accept being fired, Garten declared that Trump's company was quitting — and demanded a $5 million termination fee.

    Whether wheeling and dealing with Wall Street bankers, debating political rivals or running a condo association, Republican presidential candidate Donald Trump has advanced his interests by leveraging his outsized reputation, canniness and aggression. The Trump Organization's adventures in Panama provide a window into how these traits have filtered into his business empire — and the style of management that could be expected in a Trump White House.

    Transparency and close attention to expenses are not strengths. Squeezing the most from contractual language is.
For more, see Condo owners in Panama tell Trump: You're fired!

This isn't the first time Trump has been accused of using the fine print to slip & slide his way out of liability in a case relating to developments bearing his name. See, for example:

Lawsuit: Homeowners Were Tricked Into Signing Over Their Title, Equity In Co-Op Townhomes To Real Estate Operators, Leaving Them Homeless

In DeKalb County, Georgia, WXIA-TV Channel 11 reports:
  • Some residents of a DeKalb County town home co-op have filed a class action lawsuit alleging fraud and racketeering that has left them homeless.

    They claim an investment firm and the board of directors for Eastwyck Village Towne Houses deceived them into signing-over the homes, which were then turned into apartments.

    "This is an emotional, real life issue. Of someone coming to steal you. Just rob you," said Keva Scott, who lived in Eastwyck Village Towne Homes for 9 years until last November. "I purchased a place for me to be and it had potential in my mind because of the ownership aspect of it, but I was displaced.

    Scott, Duncan Hansford and Vivian Robinson-O'Neal have filed a lawsuit individually and on behalf of about 100 people who lived in the complex as shareholders in the town home co-op.

    They said they paid their mortgage regularly for 30 years.

    "I had them print out where I paid and it was always on time," said Robinson-O'Neal.

    "Every month, on time. Never late," said Scott of her mortgage payments.

    But they claim that, in October, the investment company, Saleem and Company, LLC and the Eastwyck Village Town Houses Board of Directors told them the mortgage and taxes for the co-op had not been paid for two years and they faced foreclosure.

    "They told people, if you don't sign this document, you're going to lose your home, either way, why not give it to us," said Scott.

    The women said many people signed thinking everything would be okay but then learned they no longer had equity in the property.

    "They said, you get nothing. You're renters. You're basically renters," said Scott.

    The townhouses are now called The Legacy at Eastwyck apartments.

    The class action complaint alleges racketeering and fraud.

    "The fraud they committed has taken a significant amount of property (and) has divested people of their ownership interest in a co-op," said Jeffrey Sakas, attorney for the plaintiffs.

    "They neglected the people that were there in order to rehab the spaces that were available, so they can rent to other people," said Sakas. "The fraud they committed has taken a significant amount of property… the value of 56 acres of prime real estate on Candler road next to I-20 is a very nice amount of money."

    An email was also sent to the company requesting a response.

    A drive through the property shows many of apartments appear occupied and work is taking place on upkeep.

    In November, a DeKalb County judge will hear arguments on this case and decide whether this class action lawsuit will be allowed to go forward.

Tuesday, October 13, 2015

S. California Woman Gets 70 Months For Lead Role In Sovereign Citizen-Related Mortgage Elimination Racket; Approximately 400 Homeowners Clipped Out Of $15K Each In Scam Involving Filing Forged Bankruptcy Paperwork Without Clients' Knowledge To Delay Foreclosure, Eviction

From the Office of the U.S. Attorney (Los Angeles, California):
  • A Whittier woman was sentenced [] to nearly 6 years in prison for her lead role in a scheme that falsely promised to eliminate mortgage debts for approximately 400 distressed homeowners who each paid a $15,000 fee, totaling nearly $4 million in victim payments.

    Instead of working on behalf of the homeowners, the woman simply sent worthless “Sovereign Citizen” paperwork to lenders—paperwork that did nothing to affect the mortgage of a single homeowner.(1)

    Maria Marcela Gonzalez, 45, was sentenced by Judge Stephen V. Wilson in United States District Court in Los Angeles, for two counts of making a false bankruptcy declaration. In rejecting her request for a probationary sentence and imposing the 70-month sentence, Judge Wilson said that the defendant’s actions were “callous and in gross disregard of the law.”

    Gonzalez, who pled guilty in July of this year, started the Crown Point Education Inc. scheme in early 2010 and operated from offices in Montebello. She admitted in her plea agreement that she spoke at seminars to recruit distressed homeowners and salespersons in the Crown Point program and ran the day-to-day operations of the scheme. Many of the victims were primarily or exclusively Spanish speakers.

    In her plea agreement, Gonzalez admitted that she and others promised distressed homeowners at these seminars that, in exchange for fees that were generally $15,000 per property, Crown Point would eliminate the homeowners’ mortgages within six to eight months through a secret process that involved sending packets of documents to lenders. Even though she told victims that she could eliminate their mortgage woes, Gonzalez admitted in her plea agreement that the process had never been successful. Gonzalez failed to tell distressed homeowners that earlier Crown Point clients had lost their houses to foreclosure and been evicted from their houses.

    In the plea agreement, Gonzalez admitted that she worked with co-schemer Jude Lopez, who was also convicted and sentenced to a probationary term, and Ernesto Diaz, who was charged but failed to appear and is currently a fugitive.

    Lopez admitted in his plea agreement that he filed bankruptcy documents in the names of Crown Point clients to delay foreclosure and eviction. Diaz admitted in his plea agreement that Crown Point filed many bankruptcy documents without the knowledge of the company’s clients and that signatures of debtors and notaries were forged on many documents filed with the bankruptcy court.(2)

    The claims made to distressed homeowners were based on discredited Sovereign Citizen claims that mortgages are invalid because the banks did not actually lend the money used to fund mortgages, and the notes were securitized. The case against Gonzalez, Diaz, and Lopez was conducted by the Federal Bureau of Investigation.

Columbus Man Bagged For Allegedly Running Mortgage Elimination/Relief Racket; He Fleeced $74K In Fees From Over A Dozen Homeowners, Say Local Feds

In Columbus, Ohio, The Columbus Dispatch reports:
  • A federal grand jury has charged a Columbus man with fraud, money laundering and tax evasion in connection with his mortgage fix-it business.

    Gary Jones, 52, ran 3Arck Capital Group, a company that claimed it could erase or modify mortgages that homeowners couldn’t pay, according to the U.S. attorney’s office.

    Jones charged $4,000 to $8,000 for each mortgage amelioration, as he called it, for at least 13 people between 2010 and 2012, the indictment says. He collected $74,700 in fees from those customers.

    But “no mortgages were ever successfully eliminated or reduced through the program,” the indictment says, and the fees paid by homeowners went into Jones’ personal bank accounts.

Bankster Spin Job Hides Fact That Ongoing Public Relations Effort Purporting To Be Goodwill Campaign Is Really Its Court-Ordered Penance For Robosigning Scandal

Columnist Matt Taibbi writes in Rolling Stone:
  • If you still don't believe our brethren on Wall Street have planet-sized cojones, check out this story.

    All over the country, Wells Fargo is making headlines for launching a multimillion-dollar homeowner assistance program called HomeLIFT, which among other things offers $15,000 down payment grants to prospective home-buyers.

    Local mayors in big cities from one end of the country to the other are showing up at ribbon-cuttings and throwing rose petals at the bank for its generosity. Newspapers in turn are running breathless profiles of the low-income homeowners who will now get to buy dream homes thanks to the bank's beneficence.

    Some knew, some didn't, but all are leaving out one key detail: Wells Fargo was forced to launch HomeLIFT.
For more, see Wells Fargo's Master Spin Job (Reporters and politicians are lining up to congratulate Wells Fargo for its multimillion-dollar neighborhood grant program – but they're leaving out one small detail).

Monday, October 12, 2015

Tampa Jury Slams "Secret Sinkhole" Sellers For Failure To Disclose 21-Foot Drop Underneath Home To Buyers Before Sale; Convicted Couple Declined Insurer's Offer To Fix Years Earlier, Pocketing $153K Settlement Instead Before Unloading It Onto Unwitting Family w/ Five Kids; Prosecutor: "Defendants Put Lipstick On A Pig & Sold It To Suckers!"

In Tampa, Florida, WFLA-TV Channel 8 reports:
  • A federal jury found a Spring Hill couple guilty of wire fraud, after selling their house to a family with five children and failing to disclose the gigantic sinkhole underneath. The guilty verdict was read Thursday.

    Glenn and Kathryn Jasen face up to 20 years in prison. Sentencing is scheduled for January, and prosecutors are also seeking financial restitution for the couple, now stuck with the worthless house.

    8 On Your Side exposed the sale last fall, when the new buyers discovered the sinkhole and lost their homeowner’s insurance. 8 On Your Side uncovered the Jasens had years earlier cashed an insurance settlement check for $153,000 and failed to fix the hole. They cashed in again when they sold the house.

    Weeks after Kelly Magbee and Thomas Jaje moved in with their family, Citizens Property Insurance dropped their coverage, putting them at risk for foreclosure. That’s how long it took for Citizens to figure out it had already paid out the hefty sinkhole claim to the previous homeowners.

    The insurance company even had an engineering report on the home that pointed out a 21-foot drop – which ended up right under Magbee and Jaje’s 1-year-old baby boy’s bedroom.

    Citizens also failed to file that sinkhole certification with the Hernando County Property Appraiser, as required by Florida law.

    When no one would help the family, stuck with the sinking house, they called 8 On Your Side. A year later, a jury heard the story.

    That’s because federal prosecutors and the Florida Department of Law Enforcement launched their own investigation. At first, they only went after Glenn Jasen, and he agreed to plead guilty. But then he fired his attorney and hired heavyweight Victor Martinez, a criminal defense lawyer in Tampa.

    That set off a high-profile battle. The U.S. Attorney’s Office fired back by indicting both Glenn Jasen and his wife, Kathryn, who also signed the disclosure forms, promising no knowledge of a sinkhole or a sinkhole claim.

    Authorities vowed to send a message to others with sinkhole claims who might be tempted to lie on disclosure forms and sell their homes to unsuspecting families.

    The federal jury trial, the first of its kind in the country [ie. federal wire fraud prosecution for lying on a real estate sales disclosure form], started on Monday.

    Kathryn Jasen took the stand and was asked why the couple didn’t fix the house. She answered that they did cosmetic repairs and that someone with Citizens told her it was safe to stay in the house.

    The defendants put lipstick on a pig and sold it to suckers,” U.S. Attorney Tom Palermo told the jury. He asked Jasen who at Citizens told her the house was safe, and she said she could not remember.

    Palermo asked Jasen why she and her husband put in new carpet and landscaping but failed “to fix the thing that was eating your house.”

    Victor Martinez represented Kathryn Jasen and said she did nothing wrong.

    Attorneys for the couple had a different story for the jury. They say their real estate agent, Clara Ward, filled out the paper work with the wrong answers and mislead them into thinking the correct answers were there when they signed the form. They said the agent, who was having financial difficulties, even used a computer program to manipulate the form.

    But the jury didn’t buy that defense, taking less than two hours to return a guilty verdict.

    Thomas Jaje and Kelly Magbee were thrilled with the verdict and happy the trial is over. They have been stuck paying mortgage for the sinkhole house and rent for another house. They moved out of their home after a large crack appeared down the living room floor.

    “We just want to get on with our lives and out of that house,” he said.
Source: Spring Hill couple accused of lying about sinkhole found guilty.

For the U.S. Attorney news release, see “Secret Sinkhole” Sellers Guilty Of Wire Fraud ("In March 2015, the family heard what sounded like a car crash in the earth beneath their house. They soon discovered a crack running across the floor of the house, and immediately had to evacuate.").

See also, Spring Hill couple face federal trial after misleading home buyers about sinkhole:
  • Well-known Tampa Criminal Defense Attorney Victor Martinez [...] says this is a “civil matter” and filed a motion to dismiss the whole case. But U.S. District Judge James Whittemore [didn't buy] the argument and denied the motion.

    This is a case that is getting a lot of attention in the legal community because it is the first case of its kind – federal charges for lying on real estate disclosure forms. It could set precedent and could signal to other home sellers that they could also face federal charges for lying about a sinkhole.

Local Cops Pinch Home Improvement Contractor For Allegedly Fast-Talking Nearly $500K Out Of Elderly Homeowners In Exchange For Shoddy Renovations While State AG Probes Into Suspect's Possible Unauthorized Use Of I.D. Info To Score Loans Secured By Victims' Homes

In Baker, Louisiana, The Advocate reports:
  • A handful of elderly neighbors in a Baker subdivision shelled out nearly $500,000 to a fast-talking contractor for extensive renovations of their homes, but according to city Police Chief Mike Knaps, the contractor pocketed the cash while performing shoddy work.

    Tanweer Bhatti, the owner of Baton Rouge-based Southern Siding Co. Inc., was arrested Monday on two counts each of residential contract fraud and theft of assets of aged persons.

    He is accused of defrauding two residents of the Parkwood Terrace Subdivision in south Baker beginning in June 2014.

    Knaps said a third warrant for Bhatti, 63, is forthcoming for defrauding another Parkwood Terrace resident and that Bhatti also is wanted in St. John the Baptist Parish on similar counts.

    The Louisiana Attorney General’s Office also is investigating Bhatti for possible mortgage fraud, Knaps said, after the contractor allegedly used his victims’ credit information to take out loans against their homes.

    After a news conference Monday, Baker officers walked Bhatti from inside the Police Department past several of his alleged victims and reporters to a waiting car.

    As he walked by, he said he did nothing wrong.

    “He was a good talker,” 81-year-old Margerie Nichols, a 42-year Parkwood Terrace resident and one of Bhatti’s customers, said after Bhatti left.

    “We don’t want anyone to go through what we went through,” said Linda Perkins, another Baker customer of Bhatti.

    Lt. Greg Brown, a Baker detective, said Bhatti was “talkative” and “pushy,” pressuring the elderly victims to sign off on contracts for extensive work to their homes.

    After receiving payment upfront, Brown said, the contractor performed inadequate work and failed to complete or even start much of the promised work.

    Brown pointed out numerous issues with remodeling work at Jacqueline Hunt’s home on Hico Drive, including crooked tiles, large gaps around the door frames, warped siding, a tilting bathtub, missing door handles, and sloppy and splattered paint throughout the home.

    A bathroom and kitchen in Hunt’s home still have aging cabinets and appliances despite stipulations in the $99,700 contract to fully remodel both rooms, Brown said. According to a warrant, Bhatti also attempted to charge Hunt another $44,000 to finish the kitchen.

    Bhatti also took out a $30,000 loan on Hunt’s home, Brown said, bringing the total cost of a remodeling job for the 68-year-old retired schoolteacher to $129,700.

    Estimates by other contractors peg the cost of cleaning up and fixing Bhatti’s work at Hunt’s house at more than $81,000, according to a warrant.

    The victims of the alleged fraud declined to speak in detail about their experiences, citing potential civil suits against Bhatti to recover the money they paid him for the work.

    Knaps called Bhatti “a snake in the grass” and said he hoped the judge in the criminal case would also consider ordering him to pay reparations if convicted.

    The Louisiana State Licensing Board for Contractors found in July that Bhatti had violated state law by performing contracting work over $75,000 without the required licenses. According to the warrant, his residential building contractor’s license had expired in 2013.

Long Island Outfit Masquerading As Government Agency To Cough Up $500K For Role In Leaving Homeowners Seeking Home Improvement Assistance Holding The Bag

In New York City, the New York Post reports:
  • A shady Long Island firm that misled homeowners by portraying itself as a government agency will have to fork over more than $500,000 to its victims and the city, public records revealed [].

    The firm, Housing Rehabilitation Assistance, promised to connect homeowners with competitively priced contractors, city officials said.

    Instead, it referred them to the New York Construction Co., which was operated by three people who controlled HRA.

    According to the city’s Department of Consumer Affairs, HRA misled potential clients with an eagle logo and official-sounding initials — the same used by the city Human Resources Administration.

    It looked like a government agency,” said Joselyn Smith-Greene, who shelled out about $40,000 to NYCC for work on her Queens Cape Cod home that was never finished.

Sunday, October 11, 2015

Long Island Town Gets Tripped Up By Undercover Testers, Allegedly Discriminatory Zoning Code That Violates Fair Housing Act; Eligibility Requirements That Allegedly Create Preferences In Favor Of Residents From Predominantly White Suburbs Leads To $200K Settlement

In New York City, the Fair Housing Justice Center reports:
  • On October 1, 2015, Magistrate Judge A. Kathleen Tomlinson of the Eastern District of New York signed an order that resolves fair housing claims brought by the Fair Housing Justice Center (FHJC) and Long Island Housing Services, Inc. (LIHS) against the Village of Great Neck Plaza.

    The lawsuit alleged that the Village zoning code discriminates against African Americans by imposing eligibility criteria for affordable housing that gives a preference to local residents. The Plaintiffs allege that these preferences perpetuate residential racial segregation in the predominantly white Nassau County suburb. The lawsuit also alleges that the Nassau County Industrial Development Agency (NCIDA), which is not a party to this settlement, provided financial assistance for affordable housing in the Village of Great Neck Plaza subject to the Village zoning code’s discriminatory requirements and preferences.

    The two plaintiff fair housing organizations cooperated on a joint investigation in 2013. Each organization used undercover testers to determine whether and how the Village’s residency preference system was being applied by the Village to screen applicants for 19 affordable apartments in a newly constructed 94-unit rental development called The Maestro.

    The testing revealed that the Village was enforcing durational residency preferences by giving the highest priority to long-term residents of the predominately white Village of Great Neck Plaza, the next highest preference to long-term residents of the predominately white Great Neck Peninsula, and the lowest preference to long-term residents of Nassau County. The testing also documented that the Village applied an illegal age requirement and excluded applicants with disabilities with live-in home health care aides.


    Under the order, the Village will inform housing developers about the expanded zoning categories, the existence of available land for development, and the incentives that the Village will make available for the development of affordable housing. The plaintiffs FHJC and LIHS will provide fair housing training to the Village Trustees, the Mayor, and employees responsible for planning, zoning, and other land-use activities.

    In addition, the Village agreed to pay $200,000 to the plaintiffs in damages and attorney’s fees.
Source: Discriminatory Zoning Claims Against Village of Great Neck Plaza Resolved (Agreement Ends Use of Discriminatory Preferences and Fosters Development of Additional Affordable Housing Units).

Connecticut Town To Fork Over $150K To Settle Real Estate Developer Lawsuit Alleging Town Violated Fair Housing Law By Improperly Rejecting Affordable Housing Development Proposal Based On Discrimination Of Minorities

In Darien, Connecticut, the Darien News reports:
  • The Town of Darien has settled a 4-year-old lawsuit against the Planning & Zoning Commission claiming the town rejected an affordable housing development proposal on the basis of discrimination against minorities.

    Plaintiff Chris Hamer will be paid $150,000 under the settlement, according to his attorney, New Haven-based John Williams.

    Two years ago, a federal judge dropped the name of former Planning and Zoning Commission Chairman Fred Conze from the suit, granting him legislative immunity for his actions, but ruled the claims against the town should proceed. The case had been set to go to trial last month, Williams said.

    Williams said the settlement represented a vindication of Hamer’s claims.

    “I think the settlement is a terrific settlement that sends a message about how to treat people more fairly,” Williams said. “There has been a political change in Darien and hopefully the new leadership will take a lesson from this and do away with the old policy of ‘whites only.’”

    Filed in November 2011 by Hamer, the suit brought claims under the Fourteenth Amendment against the town and Conze, contending the Planning & Zoning Commission denied him permits in 2008 to build 10 affordable residential units on Oak Crest Drive, and worked with neighbors of Hamer to file a lawsuit which resulted in him losing the land in foreclosure.

    The litigation also claimed the town was attempting to exclude minorities, specifically blacks, from moving into town by denying affordable housing projects to keep housing prices too high, according to the suit.

    Conze referred questions about the lawsuit to Darien Town Attorney John Wayne Fox.

    Fox emphasized that the settlement had been put forward by the town’s insurance company who will pay the settlement, and who recommended accepting it.

Consumer, Civil Rights Feds Reach Settlement With NJ Bank Resolving Allegations That It Discriminated Against Blacks, Latinos When Making Home Loans

From the Consumer Financial Protection Bureau (via Public Citizen's Consumer Law & Policy Blog):
  • [T]he Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) announced a joint action against Hudson City Savings Bank for discriminatory redlining practices that denied residents in majority-Black-and-Hispanic neighborhoods fair access to mortgage loans.

    The complaint filed by the CFPB and DOJ alleges that Hudson City illegally provided unequal access to credit to neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania. The bank located branches and loan officers, selected mortgage brokers, and marketed products to avoid and thereby discourage prospective borrowers in predominantly Black and Hispanic communities.

    If the proposed consent order is approved by the court, Hudson City will pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and outreach, and a $5.5 million penalty. This represents the largest redlining settlement in history to provide such direct subsidies.
For more, see CFPB and DOJ Order Hudson City Savings Bank to Pay $27 Million to Increase Mortgage Credit Access in Communities Illegally Redlined (Bank Illegally Denied Black and Hispanic Neighborhoods Fair Access to Mortgages).

Lawsuit Triggered By Long Island Non-Profit Fair Housing Group's Probe Leads To Settlement Between Feds, Real Estate Developer & Architect Resolving Disability Discrimination Allegations In Designing, Constructing Three Rental Housing Complexes

From the Office of the U.S. Attorney (Brooklyn, New York):
  • Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, [] announced the filing of a consent judgment and order in United States v. Sayville Development, et al., Civil Action No 07-CV-3622 (JFB/ARL), to settle alleged violations of the Fair Housing Act.

    In its complaint, the United States alleged that defendants engaged in a pattern or practice of discrimination against individuals with disabilities in the design and construction of a rental housing complex for senior citizens on Long Island, New York, called Sayville Commons Apartments.

    Subsequent investigation revealed that the same defendants had designed and constructed two additional complexes, Broadway Knolls Apartments in Holbrook, New York, and Oak Creek Commons Condominiums in Oakdale, New York.[1] All three were developed by defendant Paul Aniboli and designed by defendant Stephen Fellman, an architect. The consent order, which still must be approved the U.S. District Court for the Eastern District of New York, provides a comprehensive plan to remedy the violations at the three complexes.

    Litigation in this case revealed hundreds of violations of the Fair Housing Act’s requirement that apartments in the complex be designed and constructed to be accessible to and usable by individuals with disabilities. Violations include a lack of wheelchair accessible routes between dwelling units and common areas, excessively steep cross slopes and running slopes on such accessible routes, kitchen sinks and ranges that were inaccessible, outlets and thermostats that were too high or too low, and door thresholds that were too high.

    The consent order provides a comprehensive plan to remedy the violations at the three complexes. It requires defendants to perform substantial specific retrofits, including fixing the accessible routes, high door thresholds and out-swinging bathroom doors, inaccessible thermostats and outlets, and inaccessible kitchen ranges. In addition, defendants have agreed to be bound by the terms of the consent order for three years, which provides, in part, that they will complete a Fair Housing Act training course and report to the United States any new construction in which they are involved.

    The consent order also provides for relief for four aggrieved parties, who, due to disability, had difficulty moving about their own apartments or throughout the complex because of the Fair Housing Act violations. Defendants will pay $40,000 toward compensation for the aggrieved parties, including Long Island Housing Services, a non-profit fair housing organization whose investigation led to this lawsuit, a civil penalty, and a retrofit fund to be used for certain retrofits made at a tenant’s request.