Saturday, April 02, 2016

Out-Of-State Landlord's Remodeling Plans For 56-Unit Building Equates To Mass Eviction For Over 150 Jackson Hole Tenants; Scarcity Of Affordable Rentals Spells Trouble For Those Getting The Boot

In Jackson Hole, Wyoming, the Jackson Hole News & Guide reports:
  • Tenants in the 56-unit Virginian Village Apartments are being kicked out, and some of them have just a month to find a new place to live. The owners of the property sent letters out this week telling people they have to move so the complex can be remodeled.
    An attorney representing the landlord, Bedford Investments of Napa, California, said his clients are attempting to sell the complex, and that won’t happen unless it’s fixed up. The apartments are 26 years old.

    “It’s just become readily apparent to my clients that in order to get the building sold they’re going to have to fix it up,” attorney James Lubing said.

    Tenants said that most people were on month-to-month leases and that rent was $920 for a one-bedroom. They estimated more than 150 people live in the complex. The landlords offered some assistance by waiving the last two weeks of rent for people who must vacate.

    The situation at the Virginian Village Apartments is just the latest in a series of blows endured by renters in Jackson Hole in the past year.

    The owners of Blair Place Apartments, Jackson’s largest complex, announced a rent increase last summer in excess of 40 percent.

    The Bank of Jackson Hole kicked long-term tenants out of the Pioneer Motel in November.

    The building was dilapidated. Residents reported regular power outages and, at times, no running water, but renters still said it was the best they could do for housing in Jackson Hole.

    The situation doesn’t look to be improving in the near future, especially with the busy summer tourist season around the corner.

    [Tenant Yese] Rodriguez said she and her mother have already begun their housing search, but they aren’t too optimistic. “Today we went to pretty much every apartment building,” she said. “Everywhere there’s a waiting list.”

    [Ashleigh] Yost has lived in her unit for more than a year. She was at a loss for how she’ll find a new place in the middle of the summer, when the rental market is tightest. “I have no idea, literally no idea,” she said.

Hundreds Of South Florida Seniors Face Mass Evidtion From 255-Unit Building As Foreclosure, New Purchaser's Plans To Convert Premises Into Assisted Living Facility Leaves Current Residents Facing The Boot w/ Few Options

In West Palm Beach, Florida, WPTV-TV Channel 5 reports:
  • Hundreds of senior citizens in West Palm Beach have been put on notice that they will need to move out of their homes at Joseph's Village Senior living facility. The 255-unit facility used to be a non-profit run by the state but it went into foreclosure and was purchased by Regal Senior Care Management.

    The property manager tells NewsChannel 5 ownership is now transitioning from Joseph's Village to an assisted living facility, which is leaving hundreds of tenants with few options.
    "We are going above and beyond to find our tenants alternative housing," said property manager Joseph Brown. NewsChannel 5 asked Brown to do an on-camera interview to discuss how management is assisting residents with finding new housing and also why tenants didn't receive more warning that they would need to move. Brown declined the request Friday afternoon. We will be following up with Joseph's Village managers and owners to find answers to our questions.

Another Mass Eviction Due To Apartment Building Foreclosure Claims Over Two Dozen Victims, Putting Them Out On The Street, Fearing Loss Of Security Deposits

In Hallandale Beach, Florida, WPLG-TV Channel 10 reports:
  • Families say they are being forced from their homes in Hallandale Beach after their apartment building went into foreclosure.

    An eviction notice telling families they have 30 days to vacate their home was left on the front doors of tenants.

    "I just moved in January, so I was not expecting to move. I have a year lease," Fallon Hayes said.

    The building, home to 26 people and one storefront, is under foreclosure.

    Tenants saw the court order about four months ago, but property managers promised in writing that it was only the result of "miscommunication" and that tenants were not in danger of being evicted.

    "They're slumlords," another tenant, Mattie Mongo, said. "They take your rent this day and the next day they give you an eviction. What kind of person is that?"

    "We only have I'd say about two weeks to find a home, but with no money because the owner wants to keep our security deposit and charge us $22 a day after the first," Yvette Caro said.

    Even though the building is in foreclosure, "For Rent" signs are still on display. Local 10 News reporter Terrell Forney was told that one man moved in earlier this month, only to be given an eviction notice a few days later.

    "They're putting us out on the streets," Caro said. Tenants said they have no money to pick up and move somewhere else. "I don't know. We need help," Mongo said.

    Tenants said there are also growing concerns that security deposits won't be refunded.

Failure Of Aging Septic Tank Triggers Mass Eviction In Boise-Area Trailer Park; Low-Income Residents Fear Loss Of Their Mobile Homes As Lack Of Funds May Prevent Them From Moving Structures From Rented Lots

In Nampa, Idaho, KBOI-TV Channel 2 reports:
  • Limited water at a Nampa trailer park has been increased from one hour of usage, to five hours of usage []. This comes nearly a month after the restrictions were first put in place.

    Emotions were running high Saturday afternoon when Dean Leavitt, the owner, met with his tenants to explain the situation: a failing septic system is forcing Leavitt to evict the residents; they face as little as 30 days to pack their things.

    "I do, I get a little emotional," a choked up Leavitt told KBOI 2News. "They're great people. I've known them really well and this is awful to be losing their home."

    He said the residents now have until April 17 to move out. If he didn't increase the water usage from one hour to five hours, residents would have been forced to move out in seven days. But if they use too much water in those five hours per day, the septic system could completely fail, very quickly.

    "If the field floods then we get a 7-day notice and we're done," he said.

    Many of the tenants live paycheck to paycheck. One reason why he said he charges them so little. "I've kept it that way because these people need it," he said.

    But residents say it will cost thousands of dollars to move their trailers, which is money they don't have.(1)

    "It's not easy because we have known him for 20 years," said Alma Diaz to a translator. "He's been a great property manager, he's always fixed our issues. But we wish he would have told us sooner what's going on so we had more time to plan out what to do."

    Now, Leavitt says he's forced to close up shop. The future is left uncertain for all those involved, although the community has stepped in.

    "I don't know what will happen if they can't do anything with it (the trailer) and they leave it here. I don't know if I'll be stuck with it... I don't know," he said.
Source: Conflicted heartbreak comes as landlord lifts water restrictions, forced to evict tenants.
(1) For a description of what some of the residents are up against regarding moving their mobile homes, see Nampa trailer park residents get more time, options before eviction:
  • For about half of the Rushmore residents, that answer may be trailer parks run by Boise-based QBS Property Management. Manager Michelle Gomez said that the parks’ owner, who asked to remain anonymous, called her [...] and told her to do whatever she could to help the displaced residents.

    Eleven of the 17 affected mobile homes are owned by the tenants, and QBS is working with eight of those owners to relocate their trailers to one of the seven QBS-run parks in the Treasure Valley, Gomez said.

    “We're basically just fronting the money ... and they'll pay us back a certain amount a month, added to their space rent,” she said, adding that repayment would take five years.

    At least four and up to six of the eight trailers were manufactured before 1976, which means they’ll need rehabilitation to meet requirements for the QBS-run mobile home parks, she said. An electrian and a plumber will assess the needs and cost for each trailer, and then the owner will decide if it’s worth it, she said.

    Rehabilitation work will likely cost several thousand dollars per trailer, and just the move — tearing down, relocating and setting up — could cost an estimated $3,000 to $5,000 per trailer, she said, adding that all of the work would be done at cost. QBS also will assess a one-time $500 fee for lawyer and other costs in establishing the contracts, she said.

New Landlord, Planned Upgrades, Increased Rents Leave Hundreds Of Families In 551-Unit Twin-Cities Area Building In Fear Of Getting The Boot

In St. Louis Park, Minnesota, the Minneapolis Star Tribune reports:
  • Hundreds of families could be forced out of affordable housing in St. Louis Park, as the new owner of one of the Twin Cities’ largest apartment complexes begins an upgrade of sprawling Meadowbrook Manor.

    New lease agreements are going out to some 350 households, with rent increases of $100 to $125 a month. Residents must undergo a criminal record check and prove they have income of at least 2½ times the monthly rent. About two-thirds of the residents at the 551-unit complex are on month-to-month leases.

    On Wednesday, nearly two dozen government, community and faith leaders met at City Hall to discuss how they can help families who may be forced to move.

    “We want to wrap our arms around those folks so they get the support they need, whether they continue to live at Meadowbrook or not,” said St. Louis Park Mayor Jake Spano. “In most communities, that is not what would happen.”

    Earlier this year, Helen Bigos sold Meadowbrook to her son Ted. Bigos Management, which operates more than 40 apartment complexes in the Twin Cities, declined to comment.

    A similar scenario is playing out in Richfield, where the new owner of the 700-unit Concierge apartments is upgrading the complex, raising rents and evicting residents who can’t pass background checks and meet income standards.
For more, see Hundreds of families could be forced out of Meadowbrook Manor in St. Louis Park (As upgrade begins, leaders and families prepare for change). mass eviction

Resurgent Housing Market Continues Fueling Mass Evictions As Investors Snap Up Aging Apartment Buildings, Then Jack Up Rents To Unaffordable Levels For Existing Tenants; Local Legal Aid Head: "We Are Seeing Unprecedented Wipeouts Of Low-Income Tenant Complexes"

In Sonoma County, California, The Press Democrat reports:
  • Anahi Cisneros, a business major at Sonoma State University and the first in her family to attend college, is trying to focus on her studies. Instead, she has spent most days for the past month and a half helping her parents search for a new apartment after they received an eviction notice in February.

    The family’s search in Sonoma County’s increasingly tight rental market has been frenetic.

    “We don’t know where we’re going to go,” said Cisneros, 19, whose family is one of eight being evicted from a small apartment complex in Petaluma. “We’ve been looking but we can’t find anything. We’re all really stressed out.”

    The families, many of whom have lived in the eight-unit complex for more than a decade, said they were not given a reason when asked to leave.

    “I didn’t move out, I was kicked out. I don’t know why. I’m a good tenant,” said Jesus Torres, 69, who lived with his wife in their apartment at 200 Walnut St. for nearly 42 years until this month. “I thought I was going to die in that apartment.”

    The tenants — most of whom are Latino — said a new owner raised their rents by about $700 shortly after buying the apartment complex in mid-December. Tenants were then served 60-day notices to vacate their apartments on Feb. 2, even if they were willing to pay the higher rents, according to tenants who shared copies of the eviction notice.

    The new property owner, listed as Milad Sabetimani on a notification delivered to the tenants, did not return multiple calls seeking comment.

    The move underscores a growing trend in Sonoma County’s resurgent housing market, where investors have been snapping up apartment buildings and raising rents, local real estate agents and housing rights attorneys said.

    We are seeing unprecedented wipeouts of low-income tenant complexes — often substandard, and often immigrant-occupied,” said Ronit Rubinoff, executive director of Legal Aid of Sonoma County, a program that offers free legal advice to renters. “Tenants are being turned out all at once in order to raise rents and in many cases, people are being issued eviction notices on top of huge rent increases.”

    Sales of apartment buildings in Sonoma County have risen significantly since the depths of the recession, said Scott Gerber, managing director for San Rafael-based Bradley Real Estate. Nearly 200 apartment buildings, totaling 3,729 units, have been sold in Sonoma County since 2013, he said. [more]

Friday, April 01, 2016

Arizona Contractors' Ripoff Reimbursement Fund OKs $352K Payout To 38 Homeowners Who Were Screwed Out Of Money By Two Pool Builders

The Arizona Registrar of Contractors recently announced:
  • On Monday, March 14, the Arizona Registrar of Contractor’s (AZ ROC) Residential Recovery Fund began sending Recovery Fund Payout Notification letters to claimants injured by two Phoenix-based pool installers, Camelback Pools doing business as Paddock Pools and RIG Constructions doing business as Cameo Pools.

    Of the combined 78 administrative complaints filed against the two companies in 2015, 46 individuals filed Recovery Fund Claims. After reviewing claims and eligibility requirements, AZ ROC’s Recovery Fund will pay out a total of approximately $352,620.00 to 38 residential property owners.

    Seven claims were found ineligible due to property classification, hiring the contractors while their licenses were already suspended, and using an unlicensed entity to complete the project.

    The Registrar’s Residential Recovery Fund is available to eligible complainants after a licensed contractor has been found to be in violation of Title 32, Chapter 10 with a maximum payout of up to $30,000 per claim, up to $200,000 per residential license.

    Between Camelback Pools and RIG Construction’s three licenses, two were residential licenses; meaning a maximum potential payout of up to $400,000.00.

    Only one complaint - received in Feb. 2016 - remains under investigation. This case and a civil matter may result in two more payouts but will not cause the total payouts to exceed $400,000.00.


    On Thurs., July 16, 2015, AZ ROC revoked the three licenses held between Camelback Pools doing business as Paddock Pools and RIG Constructions doing business as Cameo Pools, both based out of the Phoenix-area.

    The revocations follow two orders of summary suspension on licenses assigned to Camelback Pools and RIG Construction and two citations alleging a combined 24 counts of violations of Title 32, Chapter 10 of the Arizona Revised Statutes filed on May 29, 2015.

    The Orders revoking the licenses concluded AZ ROC’s investigation and legal process for twelve complainants, while an additional sixty-six complaints continued working through the AZ ROC administrative process. In total, and not including the recently opened case, the Registrar investigated 50 cases against Camelback Pools and 28 against RIG Construction.

    If eligible, these individuals were able to file claims with the Residential Recovery Fund.

Upstate NY Homebuilder Owner Gets 2 To 6 Years For Failing To Deposit Customer's Construction Money Into State-Required Escrow Account, Putting Pocketed Loot Towards Personal Uses Instead

In Rochester, New York, the Democrat & Chronicle reports:
  • The owner of a construction company who stole money from one of his customers was sentenced [] to two to six years in state prison.

    John Cahoon, 36, owner of Cahoon Construction Company, was convicted of third-degree larceny in February.

    Authorities said Cahoon stole money from an Ogden man who contracted Cahoon's company to build a house. The man made payments to the company for the construction but the funds were never placed in an escrow account as required by law. Instead, Cahoon used the funds for his personal use, authorities said.

    A restitution hearing is scheduled for April 28.

Five Members Of Albany-Area Home Repair "Crime Family" Get Multi-Year Prison Sentences For Targeting, Fleecing Nearly A Dozen Elderly Homeowners Out Of $42K; Prosecutors Invoke "Hate Crimes" Statute To Enhance Penalties; Victims Feared Losing Their Independence If Family Members Found Out About Ripoffs

In Albany, New York, the Albany Times-Union reports:
  • One by one, they pleaded for leniency. They blamed their addictions and abusive childhoods. One begged not to be sentenced to die behind bars. Another wept about the baby she hardly knows. One by one Friday, acting state Supreme Court Justice Roger McDonough sent them to prison anyway.

    Their 18-month crime spree bilked nearly a dozen frail victims in Albany, Colonie and Bethlehem out of tens of thousands of dollars for shoddy or non-existent home repairs — a scam prosecuted as a hate crime against the elderly.

    The victims included a 90-year-old woman with Alzheimer's, a developmentally disabled man and Korean War veteran mourning the loss of his wife.

    McDonough blasted the five co-conspirators as a "crime family" and seconded a detective's description of them as army ants who targeted the most vulnerable and used them "like an ATM machine."

    "I don't want to die in no prison. I don't think I've got six months to go," pleaded John Risto, 61,stooped heavily as he sat on his wheeled walker before the judge. "I'm just begging the Lord," Risto said, his voice ghostly and aided by an oxygen canister. "I'd get down on my hands and knees right now, but I wouldn't be able to get back up."

    McDonough said he hoped Risto would survive his sentence but noted his victims were just as frail when he and his fellow scammers preyed on them. "Perhaps it's one of life's cruel ironies that you seem to be in an extremely vulnerable position now," McDonough said before sentencing him to one-to-three-years for felony conspiracy as a hate crime, slightly less than the maximum allowed by his plea bargain.

    Comparatively, Risto got off light.

    Henry Hicks of Albany, who authorities called a career felon and a central figure in the scheme, was sentenced to 8-to-16 years despite what Assistant District Attorney Jessica Blain-Lewis described as his extensive cooperation with investigators. Hicks, 59, was the first to plead guilty but wound up with the stiffest punishment.(1)
    Jessica Paradiso sobbed when she spoke of her three children, including one born just before she was arrested. "I just want to go home to my baby," the 28-year-old Schenectady woman said. "I don't even know him."

    McDonough – invoking Dante's "Inferno," the first part of a 14th-century epic poem that describes a circle of Hell occupied by those who commit fraud — chastised Paradiso for thinking only of herself and failing to once mention her victims during her plea for leniency.

    He gave her 6-to-12 years, the maximum under her plea. ("Paradiso" is the name of the third part of the poem.) Blain-Lewis said Paradiso was recorded on phone calls from jail arranging to have checks forged to funnel money into her commissary account.

    McDonough prodded Paradiso's boyfriend and father of three of her children, Brian Barr, 37, of Schenectady to publicly acknowledge he targeted the elderly because they were so vulnerable before branding him a "villain" and a "scoundrel" and sentencing him to the maximum 71/2-to-15 years under his plea to grand larceny and conspiracy.

    Barr's mother got the maximum too. "I'm very sorry about what happened to the people in this case," said Susan Barr, 58, of Altamont, who will serve 2-to-4 years for conspiracy. "I wouldn't want it to happen to me."

    The defendants must also pay $42,000 in restitution.

    A sixth defendant, John Waterson of Albany, faces between 3 1/2 and 7 years in prison at sentencing next month. He pleaded guilty to grand larceny but without the hate crime provision. Charges are pending against Frank Chrysler of Watervliet, said Cecilia Walsh, a spokeswoman for District Attorney David Soares.

    Under state law, a hate crime is one in which the perpetrators target their victims because of their race, color, national origin, gender, religion, age, disability or sexual orientation and carries enhanced penalties.

    Blain-Lewis said some victims not only feared losing their money but also their independence.

    "We had victims say to us point blank that they did not want to tell anyone what happened for fear that their family would remove them from their home
    ," she said.
For the story, see 5 scammers get prison for hate crimes against elderly in Albany County (Five from 'crime family' go to prison in hate crime case).
(1) Apparently, the 'general rule' that the defendant who wins the 'race to the prosecutor's office' to cooperate against/snitch on his co-conspirators gets the best plea deal did not apply to this career criminal in this case. See generally, United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring):
  • "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

Thursday, March 31, 2016

Lawsuit: Home Hijacker Used Forged Deed To Snatch Title To Rented $850K South Florida Home Out From Under Couple Living In Brazil; Scam Discovered When Tenant Was Refused Entry Into Gated Community

In Parkland, Florida, the South Florida Sun Sentinel reports:
  • A Brazilian couple's lawsuit claims a South Florida company stole ownership of their Parkland home using a fraudulent quit-claim deed with a forged signature.

    "My client never signed anything, never sold their home, this came as a total surprise to them," said Elias Hilal, a Fort Lauderdale attorney who is representing the married couple, Hectory Ferreira and Audrey Nieman. "They are the rightful owners and have maintained their property in good standing."

    Hilal said Ferreira and Nieman have owned the home since 2011. The home is assessed at $566,000, according to the property appraiser.

    The couple lived in the house, [...] for several years and then rented it to a family friend after they moved back to Brazil.

    The friend, Andres Walter, was denied entry into the gated community on Feb. 19, according to the lawsuit. A security guard told Walter that the house had been sold, the suit says.
    "My client was not in the U.S. at the date Powermind claims he signed the deed in person in Palm Beach, that is something that is indisputable," Hilal said. "There was never any contract or any agreement between my client and Powermind, in fact, they had never heard of that company."

    Powermind has nine days remaining to respond to the lawsuit filed in Broward Circuit Court. The lawsuit seeks to nullify the quit-claim deed, and $5,000 in damages and court fees.
For the story, see Couple files lawsuit claiming company stole ownership of Parkland home (Homeowner says his signature was forged on quit-claim deed transferring ownership of his $850,000 Parkland residence).

Indiana Passes Law Targeting Surplus Snatchers Who Dupe Unwitting Real Estate Tax-Delinquent Homeowners Into Signing Over Rights To Excess Funds Generated By Tax Foreclosure Sales

In Indianapolis, Indiana, The Herald Bulletin:
  • A newly enacted law aimed at preventing tax sale fraud was praised [] by Indiana Attorney General Greg Zoeller.

    County auditors and other local officials who work in the tax sale process of homes where delinquent property taxes are owed recently alerted the Attorney General’s Homeowner Protection Unit to a fraud scheme.

    In the scheme, the fraudsters approach distressed property owners who are delinquent on their property taxes, and convinced them to sign quitclaim deeds in exchange for minimal amounts in order to seemingly make their delinquent tax problem go away, Zoeller said.

    Typically the homeowners don’t know they are legally entitled to receive the surplus between the tax owed and the price the house sold for at auction. Some victims were entitled to surplus amounts upwards of tens of thousands of dollars that they lost.

    Last month, Zoeller’s office filed a $9 million lawsuit against various entities for allegedly perpetrating this scheme against at least 48 vulnerable Hoosiers, swindling them out of amounts ranging from $2,000 up to $900,000.

    Senate Enrolled Act 355 addressed gaps in state law to prevent homeowners from being cheated out of surplus tax sale amounts to which they are entitled, he said.

Florida Appeals Court KO's Couple's Homestead Exemption Claim To Avoid Sale Of Family Home When They Had 2nd Thoughts About Selling & Attempted To Back Out Of Deal w/ Prospective Buyer

In Miami, Florida, the Daily Business Review reports:
  • Homeowners who backed out of the sale of their Miami property can't use the state's homestead protections to avoid the deal, the Third District Court of Appeal ruled [].

    Ali and Soledad Mirzataheri changed their minds after signing a contract agreeing to sell their three-bedroom house to FM East Developers LLC. They refused to close after FM East paid a deposit and completed property inspections, prompting the would-be buyer to file a lis pendens on the house and a lawsuit to force the sale and collect damages.

    In trial before Miami-Dade Circuit Judge Samantha Ruiz-Cohen, the Mirzataheris won summary judgment on FM's claim for specific performance of the contract. But they lost their subsequent bid for an emergency motion to discharge FM's lis pendens or force it to post a bond.

    Both sides challenged the ruling. FM petitioned to quash the summary judgment. The homeowners argued the state constitution prevented FM from suing for specific performance of a valid agreement for the sale of their homestead.

    The Third DCA consolidated the appeals, reversed summary judgment and upheld Ruiz-Cohen's decision to keep FM's lis pendens in place.

    "Contrary to the trial court's finding, as a matter of law specific performance is not precluded by Florida's Constitution as a remedy to enforce a contract for the sale of homestead property where the contract is executed by both spouses," District Judge Leslie Rothenberg wrote in a unanimous decision with Judges Kevin Emas and Ivan Fernandez.
Source: Appeals Court Finds No Homestead Protection (may require paid subscription; if no subscription, try here, then click the appropriate link).

For the court ruling, see Mirzataheri v. FM East Developers, LLC, Nos. 3D15-1437, 3D15-2330 (Fla. App. 3d DCA, March 16, 2016).

Wednesday, March 30, 2016

Inside The Title Insurance Cartel: How The Industry Became The Bulletproof Behemoth It Is Today

In New York City, The Real Deal (NYC) reports:
  • [T]itle insurance, which in 2014 reaped an operating income of $12.2 billion and net income of over $800 million, has always been an opaque corner of real estate. Though technology has made title searches simpler and cheaper for firms, buyer premiums have continued to rise, given that the industry colludes to keep prices artificially high and uses political clout to block competition, effectively functioning as a cartel.

    Title insurance rates in New York are regulated by the state, and since 1993, underwriters have worked together to propose uniform rates through a membership organization, the Title Insurance Rate Service Association (TIRSA), which is led by the industry’s dominant players — Stewart’s John Frates is currently president. While underwriters may file their own rates — deviating from the industry standard — almost none do.

    Attempts to regulate the industry more closely have failed. An effort Gov. Andrew Cuomo launched last year to crack down on kickbacks and “inducements” is now dead in the water, according to several sources. And even the Treasury Department’s new requirement that title companies must disclose the identities of buyers who purchase luxury Manhattan real estate anonymously is said by many experts to lack teeth.

    “People speak about title insurance seldom with the understanding of the vital role that our industry plays in ensuring that the great and good people of the State of New York have clear ownership to their homes,” Old Republic’s chief underwriting counsel Marvin Bagwell said at the 2013 hearing. But part of that lack of clarity seems to be by design; firms are able to get away with so much precisely because it’s so difficult to answer this question: How does the title insurance industry work?

    The Real Deal attempted to find out. [...more...]
For more, see Special Report: Inside the title insurance cartel (How the industry became the bulletproof behemoth it is today).

Another Innocent Spouse Finds Herself Losing Her Share Of Marital Home Due To Hubby's Fumbled Finances That Resulted In Federal Tax Lien For Over $600K In Unpaid Income Taxes

From a client alert from the law firm Miles & Stockbridge P.C.:
  • In United States v. Smith, [...], the U.S. District Court for the Western District of Washington allowed the Federal government to foreclose on the taxpayers’ primary residence in satisfaction of a Federal tax lien.

    Mr. and Mrs. Smith, the taxpayers, were a married couple living in Washington State. Mr. Smith worked as an airline pilot, supplying the Smiths’ primary source of income, and managed the couple’s finances. Mrs. Smith managed the couple’s household.

    In 1983, Mr. and Mrs. Smith purchased a residence in Washington State (the “Residence”). The couple failed to pay Federal income taxes for the period 1999-2004, resulting in a judgment against Mr. Smith of $626,814.32. Subsequently, the government foreclosed on a vessel and two parcels of land owned by the Smiths in execution of the judgment.

    The foreclosure proceeds were insufficient to satisfy the amount owed. Consequently, the government filed an action to foreclose on its liens against the Residence. In defense of the enforcement action, the Smiths argued as follows: (1) the government could not foreclose on Mrs. Smith’s share of the Residence in satisfaction of Mr. Smith’s debt; (2) Mrs. Smith is entitled to innocent spouse relief with respect to the judgment; and (3) Mr. Smith did not receive sufficient notice of the Federal tax lien.

    Under Washington law, debt incurred by a spouse during the course of marriage is presumed to be community debt. The taxpayer must introduce clear and convincing evidence to overcome this presumption.

    Special “innocent spouse relief” provisions apply to taxpayers living in community property states (including Washington). Specifically, a taxpayer in such a state can claim innocent spouse relief if: (1) the spouses live apart; (2) one of the taxpayers acted as if he or she was solely entitled to the income subject to the tax at issue and failed to notify the spouse claiming relief of the income before the due date for the applicable tax return; or (3) the spouse claiming relief (i) did not file a joint return for the year, (ii) did not report the disputed income item on his or her individual return, (iii) did not know, or had no reason to know, of the disputed income item, and (iv) demonstrates that it would be inequitable to include the disputed income item in his or her gross income. I.R.C. § 66.

    Under section 6320 of the Internal Revenue Code, the Federal government must notify a taxpayer in writing of the filing of a notice of Federal tax lien. The notice must advise the taxpayer of his or her right to an administrative hearing. However, a notice of Federal tax lien is valid and retains its priority regardless of whether the taxpayer receives such notice.

    The court held that Mrs. Smith failed to introduce clear and convincing evidence to overcome the presumption that the tax debt was a community debt.

    The court also denied Mrs. Smith’s claim for innocent spouse relief – she continued to live with Mr. Smith, she failed to introduce evidence that Mr. Smith alone was entitled to the income at issue, and she failed to introduce evidence that she was unaware that Mr. Smith had earned the income at issue.

    Lastly, the court rejected Mr. Smith’s argument that he had failed to receive sufficient notice. The court noted that even if he failed to receive the 5-day notice, the Federal tax lien was still valid.

    Taxpayers living in community property states should be advised of the special provisions applicable to debts incurred during a marriage. Due to Washington’s community property laws, the Smiths’ residence was subject to foreclosure to satisfy a tax debt incurred during the Smiths’ marriage. In order to preserve the non-debtor spouse’s right in community property, at least under Washington law, such spouse must have sufficient evidence to show that a tax debt is not a community debt. Where the non-debtor spouse has benefited from the failure to pay Federal taxes, it may be difficult to satisfy this standard.

For the court ruling, see U.S.A. v. Smith, Case No. 3:14-cv-05952-RJB (W.D. Wash., February 8, 2016).

For another story of an unwitting wife finding herself on the short end of a battle with the IRS due to her hubby's propensity for playing fast & loose with his federal tax obligations, see Despite Not Owing Any Money, Innocent Wife Loses Her Share Of Co-Owned Marital Home Over Hubby's $1+ Million Unpaid Corporate Federal Tax Lien (Court: As Long As She's Compensated For Her Share As Required By Statute, She's Outta Luck).

City Rent Restriction, Inability To Lease Home Leads To Foreclosure For Army Contractor's Single Family Home While He Was Serving In Iraq; Prospective Buyer Rejected Purchase After Learning Of Restriction; State Supreme Court Declines To Hear Appeal Challenging Local Statute, Says Loss Of Home Moots Issue

In Winona, Minnesota, Fox News reports:
  • Homeowners, beware.

    Property rights advocates say the right to rent is being threatened at the local government level, as cities across the country push restrictions on exactly how and to whom Americans can lease out their lofts and living quarters.

    The California city of Ojai earlier this year voted to make all rentals under 30 days illegal, according to a recent report. Airbnb rentals have faced regulatory challenges everywhere from New York to San Francisco. And several Minnesota cities have imposed limits on renting, drawing legal challenges but no resolution in the courts.

    “This is about the ancient right to be left alone,” Institute for Justice attorney Anthony Sanders told Fox News. “Regulations on rental properties are allowed, but to completely prohibit someone from renting out their property to another law-abiding citizen? There are huge constitutional problems with that.”

    The institute, a national law firm, is representing Ethan Dean in his case against the city of Winona, Minn.

    Dean, who completed five tours as a U.S. adviser and Army contractor with the Human Terrain System in Afghanistan and Iraq, owned a three-bedroom home near Winona State University. While he was on his fourth mission in Afghanistan between 2011 and 2012, he arranged to rent his home to students of the university.

    “I started getting nasty notes from the government while I was in Iraq,” Dean told Fox News. “The notes were from the city treasurer telling me that it was illegal to rent out my home. I had no idea what they were talking about.”

    He then learned officials in Winona imposed a restriction on the number of homeowners who can rent out properties in specific neighborhoods. According to Dean, Winona explained a “30 Percent Rule” -- allowing only 30 percent of homes in a neighborhood to be rentals. Dean’s block was 78 percent rental properties when the ban was enacted, but his neighbor’s permits were apparently grandfathered in.

    “They told me I had to kick the kids out of my house, and if I didn’t, I’d be fined $450 a day,” Dean said. “But I let the kids stay there another six months. The emails continued to come to me in Iraq.”

    Sanders said this regulation restricted Dean from even selling his home, as any time a potential homebuyer expressed interest, they quickly backed out after learning the house was not rental-certified.

    Rules regarding renting property to students reach into neighborhoods and cities across the country.

    Just last fall, the city of Hamden, Conn., proposed requirements for landlords to obtain certain permits in order to rent to college students.

    The government is potentially forcing people into foreclosure,” Sanders said.

    The case in Winona was decided on behalf of the city in the lower courts, but during the time the case went into appeal, Dean lost his home to the bank.

    Dean was on his fifth tour in Afghanistan and, unable to rent out his property, struggled with the mortgage. “I couldn’t rent it, and I couldn’t come back and live in it. I was in Afghanistan serving our country.”

    Representatives with the city of Winona and their attorneys have not responded to requests for comment from Fox News.

    Winona’s official court brief did, however, say the city had the authority to enact the 30 Percent Rule due to its broad police powers, claiming this rule was a reasonable way to deal with housing problems created by college-student renters.

    After Dean lost again, the case eventually ended in the Minnesota Supreme Court – where, in August 2015, the court claimed the case was moot because the bank owned Dean’s home at that point. The matter is still up in the air in Minnesota, as the courts did not decide on the constitutionality of the rule.

Tuesday, March 29, 2016

Real Estate Paralegal Gets 24 Months For Siphoning $440K Out Of Law Firm's Closing Escrow Account For Her Personal Use, Then Failed To Report Pilfered Proceeds As Income On Her Federal Tax Returns

From the Office of the U.S. Attorney (Wilmington, Delaware):
  • [P]enni Enama, age 50, of Lewes, Delaware, was sentenced [...] to 24 months in prison, and full restitution. The defendant pleaded guilty to violations of wire fraud and tax evasion, in December 2015.

    According to court filings and statements made at the sentencing hearing, the defendant was employed by a law firm in Delaware. In May 2007, she began embezzling funds from the firm’s escrow account. The defendant was a real estate paralegal, and she used her access to a closing escrow account to divert at least $439,824.40 to her personal use. The defendant fabricated additional real estate closing parties in the firm’s records, and she used the additional funds to pay her personal credit cards and/or deposit the funds into her personal bank accounts. The defendant did not declare the embezzled funds on her federal income tax returns for the 2011-2013 tax years.

    Judge [Gregory M.] Sleet commented that the defendant’s conduct was “quite involved, quite calculated, and disturbingly so.”

    U.S. Attorney [Charles M. Oberly, III] stated, “In yet another case involving a major breach of trust, Ms. Enama stole substantial funds from her employer, causing injury to both the law firm and its attorneys. While Ms. Enama was, until caught, living a dream life with stolen funds, she will now dream for the next two years that crime does not pay.”

Feds Score Guilty Plea From Another Loan Modification Racket Ringleader Who Presided Over Ripoff That Stung Over 1,000 Homeowners Out Of Over $3 Million

From the Office of the U.S. Attorney (Bridgeport, Connecticut):
  • ARIA MALEKI, 33, of Santa Ana, Calif., pleaded guilty [] before U.S. District Judge Stefan R. Underhill in Bridgeport to conspiring to defraud homeowners across the United States who were seeking mortgage loan modifications.

    According to court documents and statements made in court, MALEKI and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees.
    Acting as representatives of these entities, MALEKI and his co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services.
    Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

    MALEKI presided over the entire structure of this scheme. As a result, more than 1,000 homeowners suffered losses totaling more than $3 million.

Philly Feds Indict Pair Who Allegedly Fleeced Over 110 Victims Out Of More Than $400K Peddling Phony Home Loan Modification Services

From the Office of the U.S. Attorney (Philadelphia, Pennsylvania):
  • An indictment, [...], charges two friends, Daniel Sheehan, 41, of Gloucester City, NJ, and John Hoban, 42, of Bellmawr, NJ, in a scheme to defraud distressed homeowners seeking help out of more than $400,000, announced United States Attorney Zane David Memeger. The pair is charged with wire fraud conspiracy and eight counts of wire fraud. Sheehan is additionally charged with 18 wire fraud counts and one count of interstate transport of stolen property. As a result of the alleged scheme, more than 110 people were defrauded, several of whom lost their homes.

    According to the indictment, between September 2012 and February 2015, Sheehan, a mortgage modification professional, represented to a dozen clients that he could help them modify their mortgages through the Home Affordable Mortgage Program (“HAMP”) or the Home Affordable Refinance Program (“HARP”).

    Instead, it is alleged, Sheehan: took fees from his clients without ever submitting the loan modification paperwork he promised; deceived his clients by representing to them that he had secured a new mortgage for them; directed many of his clients to make their mortgage payments to him until their new loan paper work arrived; had Hoban pretend to be a bank representative to lull the client into a false sense of security; and used his clients’ mortgage payments for his own purposes rather than that for which those payments were intended.

    Several of Sheehan’s clients’ homes went into foreclosure and at least two went to Sheriff’s sale.

Monday, March 28, 2016

Nephew Hit w/ Felony Charges For Allegedly Pilfering Nearly $640K From His 83-Year Old, Widowed, Dementia-Stricken Aunt; Use Of POA To Obtain $1.1 Million Reverse Mortgage On Victim's Home Among Alleged Bad Acts

In Salisbury Township, Pennsylvania, The Morning Call reports:
  • When Bernard J. Daday II became his 83-year-old aunt's power of attorney agent in 2004, he promised to take care of Helen Sipes' finances and protect the money she'd saved during her 50-year marriage to Dr. Earl K. Sipes, chief of surgery at Sacred Heart Hospital.

    "To the contrary," Lehigh County Detective Ralph D. Romano wrote in an affidavit of probable cause, "Bernard John Daday plundered the estate of Helen Daday Sipes in the final years of her life."

    Daday, 57, of West Allen Street in Allentown, is accused of stealing nearly $640,000 from his aunt and her estate. He's charged with numerous felonies, including theft by deception, receiving stolen property, theft by unlawful taking or disposition, and dealing in proceeds of unlawful activities.
    According to Romano's affidavit:

    Helen Sipes was a registered nurse who worked side-by-side with her husband until their joint retirement in 1995. The couple did not have any children, and she was the sole beneficiary of her husband's estate, which was worth $1.8 million at the time of his death in 1998.

    Helen Sipes suffered from dementia, court records say, and Daday was in charge of paying her household and health care bills.

    In 2011, family members became concerned about how Daday was handling Sipes' finances, the affidavit states. Her health was declining and the 16-room Salisbury Township home she'd shared with her husband was in disrepair, according to the filing.

    Upon learning that Sipes' taxes had not been filed or paid since 2007, her great-niece, Allentown attorney Abigail Gross, filed a motion to take over power of attorney duties, the affidavit says. In March 2012, Lehigh County Judge Edward Reibman granted the motion.

    Gross "was able to determine that the financial affairs of Mrs. Sipes were in complete disarray," the affidavit states. "Her residence was in need of drastic repair due to a lack of maintenance; there was no heating oil in the house since bills were not paid; her checking account was overdrawn … payments to her medical and personal caregivers were well overdue."

    Court records say Sipes owed more than $90,000 in debts that had accrued since Daday became her power of attorney agent.

    Prosecutors say he wrote dozens of checks to himself and to his business, Integrated Facilities Corporation Systems in Schnecksville, as well as Kutztown University, where his daughter was enrolled.

    Investigators also allegedly discovered that Daday had taken out a $1.1 million reverse mortgage on Sipes' house, depreciating the home's worth by more than $600,000.

    From June 2004 until Sipes' death in September 2012, Daday allegedly "through various bank transactions, intentionally stole at least $639,220.76 from the assets of Helen Daday Sipes and he has never repaid anything to Mrs. Sipes or the estate," court records state.

Cops Pinch Indiana Man For Allegedly Using Forged Deeds To Transfer Title To Five Of His Unwitting Elderly Father's Rental Homes; Investigator: Dad Stated That Son "Has A Little Con In Him, & I'm Not Sure Where He Gets It"

In Anderson, Indiana, The Herald Bulletin reports:
  • The son of an Anderson businessman was arrested [] on suspicion he attempted to transfer Section 8 properties without the permission of his father, who has owned some of them for as long as 30 years.

    Madison County sheriff's deputies arrested Ben Thomas Jewell Jr., 54,[...], on preliminary charges of Class C felony forgery and Class D felony theft. He faces three counts for each charge.

    Ben T. Jewell Sr., who is believed to be in his 80s, also owns Tommy J’s Pizza, 1000 W. Third St., and Tommy J’s Pizza Café at Hoosier Park Racing & Casino. The younger Jewell manages the restaurants.
    [A]ccording to an arrest warrant affidavit prepared by HUD Special Agent Jarred Burns, Jewell Sr. said to investigators, “Ben has a little con in him, and I’m not sure where he gets it.”

    At question are several properties owned by Jewell Sr. that an Anderson Police Department investigator and special agent with the U.S. Department of Housing and Urban Development’s Office of Inspector General believe may have been transferred by Jewell Jr. to a third party without his father’s permission.

    According to the affidavit, the problem came to the HUD special agent's attention in October 2014 as he investigated alleged fraud involving one of the properties at 1025 Morton St., Anderson. The problem came to light because of a commercial fire claim made to Erie Insurance, the affidavit said.

    Though Jewell Sr. had submitted the claim on the property, an Erie Insurance investigator noticed the current owner of the property appeared to be Steve Wagner of Wagner Properties.

    Burns located five quitclaim deeds at the Madison County Recorder’s Office, showing each property was transferred for $12,500, the affidavit said.

    Mr. Jewell Sr. advised that none of the signatures on the Quit Claim Deeds were his. He said he never sold these properties to anyone, and doesn’t even know Steve Wagner,” the affidavit said.

    According to the affidavit, Jewell Jr. admitted during an interview with investigators on Feb. 6, 2015, he had signed the quitclaim deeds. Jewell Jr. said he transferred the properties in an effort to lower the assessed value based on a lower sales price.

    “He also admitted that while his Dad (Ben Jewell Sr.) has allowed him to sign numerous documents for him in the past, his father was not aware of the fact that he (Ben Jewell Jr.) signed the Quit Claim Deeds and transferred the properties to Steve Wagner of Wagner Properties,” the affidavit said. “Ben said his father would not have gone along with his plan of transferring the properties to Steve Wagner.”

    Jewell Sr. said he had asked his son to appeal the assessed values of the properties but never authorized any other action.

    “He said that Ben is not listed on any of his financial accounts and has no rights or authorizations to sell or transfer any of his property,” the affidavit said.

Sunday, March 27, 2016

Manhattan Feds In Midst Of Sweeping Probe Into Environmental Health & Safety Conditions In Apartments Run By NYC's Biggest Landlord, & Possible False Claims It Filed w/ HUD Related To Those Conditions

In New York City, The New York Times reports:
  • Federal prosecutors in Manhattan are conducting a sweeping investigation of environmental health and safety conditions, including cases of elevated blood lead levels, in public housing and homeless shelters and the possibility that the New York City housing and homeless agencies filed false claims to federal housing officials for payment related to the conditions.

    The investigation was disclosed [] in a letter from the office of Preet Bharara, the United States attorney for the Southern District of New York, and in a judge’s subsequent order, which were both filed in federal court.

    The order, from Judge Deborah A. Batts, compels the city’s Department of Health and Mental Hygiene to produce information about the cases of elevated blood lead levels among residents and complaints of “unsafe, unsanitary or unhealthful conditions” in public housing and homeless shelters.
    The Housing Authority, known as Nycha, has been struggling with deteriorating conditions in its aging complexes and is already under the supervision of a court-appointed special master to address issues of mold among the 178,000 apartments it manages.

    The agency has blamed a lack of money to address maintenance needs and major capital projects because of deep cuts in federal funding over more than a decade.

    But the court documents noted that Nycha is required to comply with federal requirements regarding lead-based paint and to maintain public housing “so that it is decent, safe, sanitary and in good repair.” The investigative demand said the investigation “concerns possible false claimssubmitted by the city to the Department of Housing and Urban Development, which is a major source of funds for the Housing Authority.
    The public housing stock of red brick towers dates as far back as the 1930s and 1940s — with many still likely to contain lead paint — and the agency has struggled to keep up with a backlog of work orders, including for lead paint removal.

Prosecutors: Ex-Boston Housing Authority Official Pilfered $20K In Program Funds Intended To Benefit Poor, Elderly Tenants; Theft Led To Shutdown Of Division Addressing Issues For Senior Citizen & Disabled Residents In Public Housing Throughout City

From the Office of the Suffolk County, Massachusetts District Attorney:
  • Suffolk County District Attorney Daniel F. Conley, Boston Police Commissioner William B. Evans, Massachusetts Inspector General Glenn A. Cunha, and U.S. Department of Housing and Urban Development Inspector General David A. Montoya [] announced that the former head of a Boston elder services program has been indicted for stealing thousands of dollars that were intended to benefit the city’s seniors.

    As the result of a multi-agency investigation, a Suffolk County grand jury [] returned indictments charging ALFRED G. DAVIS (D.O.B. 5/20/45) of Lynn with two counts of larceny over $250 and single counts of forgery and uttering.

    The investigation revealed that Davis was the director of elder services for the Boston Housing Authority in 2008, when the Robert Wood Johnson Foundation named him a “Community Health Leader” and awarded him a grant of $105,000 to help improve the health of Boston seniors living in public housing, along with a $20,000 stipend to be used for his personal development as a community health leader. However, Davis – a 20-year employee of the BHA – never informed the housing agency of the grant funds that were intended to benefit its elderly residents, prosecutors said.

    Davis used some of the funds to fulfill the grant’s intended purpose but is alleged to have misused $20,000 for his own personal use, making a series of ATM withdrawals from the grant account totaling $5,400 and receiving approximately $9,900 directly from the foundation after he submitted a forged invoice for a senior fitness program that had already been funded, prosecutors said. [...] Davis allegedly used the siphoned philanthropic funds to pay for personal expenses, including travel expenses in Las Vegas, New Orleans, and Barbados; expensive meals; a mattress; virility supplements; and collectible coins, prosecutors said.

    As a result of the theft, the Elder/Disabled Housing Division of the Boston Housing Authority was eliminated and its operations subsumed by other City of Boston offices.

Despite Conviction After 8-Day Jury Trial, Former Housing Authority Executive Director & Hubby Dodge Prison Time, Get 1-Year On House Arrest For Defrauding Gov't By Hiding Property Ownership Of Rental Houses, Covering Up Their Roles As Landlords While Improperly Pocketing Over $100K In Section 8 Subsidies Paid On Behalf Of Their Tenants

In Greenbelt, Maryland, The Washington Post reports:
  • A Maryland couple who failed to disclose that they owned federally subsidized rental properties, even as one of them held a county job related to public housing, was ordered to pay more than $300,000 after they were convicted of fraud in federal court.

    Carla and Raymond Carter covered up their role as landlords while Carla Carter worked as deputy director of the Prince George’s County Housing Authority, federal prosecutors said.

    In that job, Carter was not allowed to receive money from the federal government for renting out property to low-income tenants. But the Mitchellville couple had been renting properties they owned in Bowie and Capitol Heights since 2004 to tenants who used Housing Choice Vouchers to pay their rent.

    According to prosecutors, when Carter took the job in 2007, she did not stop. Instead, the couple listed someone else, who did not own the properties, as the owner on federal paperwork.

    They received more than $100,000 from the federal government, which pays rent for families with the vouchers to live in private housing, prosecutors allege.

    After they were convicted following an eight-day jury trial, the couple faced up to 20 years in prison for wire fraud and money laundering. A judge instead sentenced them to three years of probation each [], including one year of home confinement, U.S. attorney’s office spokeswoman Marcia Murphy said.

    She said that Carla and Raymond Carter were each ordered to pay a fine of $100,000. And together, they were ordered to forfeit $112,355 in either property or cash.

    Their attorney, Robert Bonsib, had argued at trial that the Carters were good landlords who never cheated their needy tenants. After their conviction, he said he thought they never should have been prosecuted.

    “This is not a situation where somebody got money for services they did not provide. These folks gave the county a bang for their buck. They provided good quality housing for Section 8 tenants,” Bonsib said at the time.

Joint Probe By Feds, Guam AG Bags Housing Authority Employee, Two Others In Alleged Palm-Greasing Racket To Improperly Peddle Eligibility For Section 8 Housing Subsidies

From somewhere way out in the Pacific Ocean, more specifically, in Hagåtña, Guam, KUAM News reports:
  • While she had resigned from her position following a joint investigation by federal and local authorities, a former housing specialist at the Guam Housing and Urban Renewal Authority has now been indicted for her alleged involvement in receiving bribes. A Superior Court of Guam grand jury has issued an indictment to 54-year-old Antonia Mayo-San Nicolas (aka, Toni Mayo).

    The former GHURA housing specialist recently resigned from her position amid allegations of fraud.

    A joint investigation was launched earlier this year by HUD's Inspector General's Office, the FBI and the Attorney General of Guam after a tip was received that Mayo was allegedly soliciting a bribe from a Section 8 client. Mayo had been working at GHURA for more than ten years.

    Mayo, along with Mattos Johnson and Albert Salas Buendicho, are listed as defendants on the indictment. Mayo is being charged for receiving a bride from three individuals for certification for Section 8 eligibility. She's also being charged for theft by deception by receiving payments from two of those individuals by promising to have someone at the Department of Revenue & Taxation fix their taxes so they could be eligible for Section 8 assistance.

    Johnson is listed as one of the Section 8 recipients involved in the scheme and is being charged for giving bribes to Mayo. He's also being charged with obstructing government function for telling federal agents untruthful statements when contacted by Mayo after she was told not to contact any Section 8 recipients who paid her a bribe. Buendicho is named as taking part in the bribery scheme. He was charged earlier this week with guilt established by complicity to receiving a bribe and conspiracy.

    In response to the investigation and the allegations of fraud, GHURA executive director Michael Duenas says ethics workshops for every division within GHURA along with its board and senior manager were underway. Last month, Section 8 staff were also being trained on prevention and detection of fraud, abuse and waste.

Ex-Housing Authority Executive Director, Secretary Get Multi-Year Prison Sentences For Pocketing Over $14K In Palm Grease From Poor Tenants In Exchange For Allowing Them To Skip Over Others On Section 8 Waiting List

In McAllen, Texas, The Monitor reports:
  • Two former Hidalgo Housing Authority officials were sentenced to prison [] for taking more than $14,000 in bribes to allow people to skip a waiting list for subsidized housing.

    Susana Munguia, 61, and Lubina Pedraza, 54, both of Hidalgo, were facing up to five years in prison after pleading guilty to one count of conspiracy to commit bribery last July.

    Judge Micaela Alvarez sentenced Munguia to 57 months in prison followed by three years of probation and ordered her to pay back $14,497 in restitution. Pedraza was ordered to pay back the same amount in restitution and serve the same probation time but received a lesser sentence of 46 months in prison.

    Munguia served as the housing authority’s executive director and Pedraza was a secretary between July 2011 and May 2014 when they admitted to abusing their positions as public officials and asking for bribes to allow residents to skip the Section 8 wait list, according to court documents.

Postal Inspectors Bag Suspect Accused Of Targeting Poor Renters, Clipping Over 250 Unwitting Victims Out Of Upfront Fees In Exchange For False Promises Of Getting Them Section 8 Housing Subsidy Vouchers

In Providence, Rhode Island, WJAR-TV Channel 10 reports:
  • If you're looking to take advantage of federal housing help, keep an eye out because there are scammers making fraudulent offers.

    An ad claims it can help save renters hundreds of dollars with a Section 8 voucher.

    "They had to send a $10 check or money order for the initial application," said Christopher Cizin, a US postal inspector. "They were notified they were approved, and they needed to send $299 for the second phase."

    Section 8 Housing is federally-funded assistance for almost 5 million low income households.

    Postal inspectors said the ads were placed in penny-saver magazines, with more than 250 victims losing thousands of dollars.

    "The victims were extremely sad and scared because the money that they paid to the scam was money that they could have right now to pay for their current rent," said Cizin.

    Postal inspectors in New York caught up with the suspect after one of his employees became suspicious.

    "They saw a lot of money coming in, and nobody was receiving what they were doing, they felt like it was a scam," said Cizin. "As far as we know, he was taking the money and spending it on himself."

    Mirza Orriols of the Housing & Urban Development Department shared similar sentiments.

    "It is unfortunate that we do have folks that do this type of scams," said Orriols. "Sometimes they prey on the very elderly, the very poor folks that don't know any better or don't have this information, and that is a shame."