Saturday, August 06, 2016

Pennsylvania Lawyers Fund For Client Security Soon To Consider Possible $4 Million Payout To Partially Reimburse Ripoff Victims Of Now-Deceased Attorney; Fund Recently Green-Lighted $3.4 Million Payment To 31 Clients Of Another Lawyer Currently Doing 15-Year Prison Term For Unrelated Fleecing

In Hummelstown, Pennsylvania, reports on the struggle former clients of now-deceased attorney Jeffrey Mottern are having trying to recover at least some of the $11.3 million Mottern swindled from them. An excerpt:
  • [B]ecause lawyers are involved and they charge fees, Mottern's victims know they stand no chance of getting all of their money back. But many hold out hope of recovering some of it – if not in their lifetime, at least in their heirs'.

    Aside from the pending lawsuit against Ameriprise and the two local banks, there is a pending claim filed with the Financial Industry Regulatory Authority's Office of Dispute Resolution to try to recover money from Ameriprise.

    An arbitration hearing on that claim is scheduled to begin Aug. 22, which if successful, could help to partially cover victims' losses.

    Then there's the the Pennsylvania Lawyers Fund for Client Security, a fund that exists to provide financial relief to individuals who file claims alleging a financial loss as a result of actions by a Pennsylvania licensed lawyer.(1) It is funded through $45 of the $200 lawyers pay annually to keep their law license active in Pennsylvania.

    Like the court system, it too is a slow process and claims are reviewed in the order in which they are received.

    The fund caps each claimant's award at $100,000 and has a $1 million aggregate cap on claims made against any single lawyer, although there is a provision that allows the fund's board to ask the Supreme Court to waive that cap for cases involving catastrophic losses if the fund's resources allow.

    Such a waiver was recently granted in case involving former Gettysburg lawyer Wendy Weikal-Beauchat, who pleaded guilty to stealing more than $6.3 million from clients. She is serving a 15-year prison sentence. Next month, the fund will begin paying out over two fiscal years a total of $3.4 million to Weikal-Beauchat's 31 victims whose claims were approved, said the fund's executive director Kathryn Peifer Morgan.

    The Mottern victims' claims are the next ones to be evaluated that could require a court waiver to the fund's $1 million aggregate cap, she said.

    "The board is going to be looking at that at our September board meeting and evaluating when would be the appropriate time to start addressing it, given our financial resources," she said.

    Fifty claims have been filed by Mottern victims alleging a combined loss of $14.9 million. Peifer Morgan said some of the claims are seeking reimbursement of the fictitious interest that Mottern claimed their original investment had earned, but the fund is not permitted to cover that part of a loss.

    Given the $100,000 cap on an individual victim's award and assuming the $1 million cap is waived, Peifer Morgan estimates combined, the fund's maximum payout to Mottern victims would be a little over $4 million.

    Despite the large claims that victims of lawyers' misdeeds have filed with the fund seeking relief in recent years, Peifer Morgan said the number of lawyers stealing clients' money that come to the fund's attention represent less than 1 percent of all lawyers admitted to the Pennsylvania Bar.

    Moreover, she said the number of victims' claims the fund received in the fiscal year that ended on June 30 is down from the prior year "so that's encouraging."

    But to many of Mottern's victims, the experience they had with an attorney they entrusted with their nest eggs left a sour taste in their mouth when it comes to lawyers.

    [Ken] Felty is one of them. "I don't trust lawyers. I don't trust trusts. I don't trust anybody that wants to invest my money," he said.

    [93-year old Kathryn] Swartz, on the other hand, said she does have faith in the lawyers who are trying to recover money that she and other victims lost in Mottern's scam.

    As for Mottern, she said, "I don't have any good thoughts about him."
For the whole story, see Dead Hummelstown lawyer's investment scam continues to haunt victims.

Go here for other stories in connection with this attorney's ripoffs.
(1) For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

New Jersey Lawyers’ Fund for Client Protection Coughs Up Nearly $500K During 2nd Quarter 2016; Payouts Made To Reimburse Clients For Losses Caused By Lawyers' Who Either Failed To Refund Unearned Fees, Or Who Pilfered Pilfered Entrusted (Escrow/Trust Account, Estate) Funds

The New Jersey Lawyers' Fund For Client Protection recently announced:
  • During the second quarter of 2016, the New Jersey Lawyers’ Fund for Client Protection, funded by the state’s lawyers and judges, paid $492,591.59 to clients for losses caused by 17 lawyers, the Board of Trustees announced today.

    The purpose of the fund is to pay on behalf of the honest majority of lawyers for the wrongdoing of the few who are suspended or disbarred for misappropriation. In its 47-year history, the fund has paid claims against a total of 775 attorneys. There are 97,486 lawyers licensed in New Jersey.

    The fund operates under the authority of the Supreme Court pursuant to Court Rule 1:28. The court appoints the seven trustees, five attorneys and two public members, who serve staggered 5-year terms without compensation. The trustees consider clients’ claims and make awards when it is determined that the loss was caused by dishonest lawyer conduct, under fund rules.

    Cases involving legal malpractices and negligence are handled through civil court actions and fee disputes through the district fee arbitration committees established by the Supreme Court.

    For a claim to be paid, the attorney against whom it is filed must have been a member of the bar, acting as either attorney or fiduciary, at the time of the incident; and unless deceased, must have been disbarred or suspended from the bar, or convicted of embezzlement or other misappropriation of property.

    A claimant can receive up to $400,000 if the claim is approved, and the fund can pay up to $1.5 million in claims against any one lawyer. Special permission can be granted by the Supreme Court to exceed the aggregate limit.

    To receive a claim form, write to the New Jersey Lawyers’ Fund for Client Protection, Richard J. Hughes Justice Complex, P.O. Box 961, Trenton, NJ 08625-0961, or call 855-533-FUND (3863). The form must be completed, signed and returned with copies of any proofs of the transaction. There is no filing fee. Claimants assisted in their claims by practicing attorneys receive their representation free of charge. Fund Director Daniel R. Hendi welcomes inquiries about the Fund’s purpose and operation.(1)
Source: Lawyers’ Fund for Client Protection Releases Second Quarter Report.

Go here for a list of the second quarter claim awards, the basis for each claim, and the status of each attorney under the Supreme Court discipline system.
(1) For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Foreclosure-Facing Lawyer Who Duped Unwitting Divorce Client To Stash $78K Inheritance In Attorney's Trust Account To Purportedly Protect It From Estranged Spouse's Claims, Only To Promptly Pilfer It To Pay Off Delinquent Mortgage Gets Bar Ticket Temporarily Yanked For 42 Months; State Court's Client Protection Fund Steps Up, Comes Through With Full Refund To Victim

In Beloit, Wisconsin, the Beloit Daily News reports:
  • A Beloit attorney’s law license has been suspended because she reportedly took money a client had transferred to a trust fund and used the client funds to pay her own home mortgage.

    Mary K. Biester had her law license suspended for three years and six months, according to a ruling by the Supreme Court of Wisconsin [...]. The suspension is retroactive to Nov. 25, 2014, which is one year after a previous suspension imposed on Biester.

    [It] also ordered Biester to pay $8,712.86 to the Wisconsin [Office of Lawyer Regulation for the costs of this proceeding].

    According to documents from the Office of Lawyer Regulation, Biester was representing a client in a divorce matter in 2008. The client had inherited a large sum of money and Biester advised her client to transfer $78,000 of the inheritance into Biester’s client trust account for safekeeping.

    Biester said the transfer should be made to protect those funds from her husband.

    At the time, Biester was experiencing financial problems and her home was the subject of a foreclosure action.

    Biester took funds from the trust account to pay off her personal mortgage, according to the Office of Lawyer Regulation documents.

    There was a possibility that criminal charges might be filed agains Biester stemming back to her first disciplinary action, but in order to protect her Fifth Amendment right against self-incrimination, proceedings were stayed in the later matter.

    In March of 2015, the Wisconsin Department of Justice had determined it would not criminally prosecute Biester.
Source: Local attorney has license suspended after misusing client funds.

Editor's Note: According to the ruling by the Supreme Court of Wisconsin, Biester's victimized client "[s]ubsequently made a claim to the Wisconsin Lawyers' Fund for Client Protection, which awarded her a full refund of the $78,000 due to her being the victim of fraud." The court also ordered that Biester reimburse the client protection fund for said amount. See Office of Lawyer Regulation v. Biester, 2016 WI 74 (Wis. July 22, 2016).

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Attorney Under Bar Probe For Allegedly Bilking Money From Veterans While Acting As Their Financial Guardian Consents To Having His Law License Yanked

In Memphis, Tennessee, the Memphis Flyer reports:
  • A Memphis attorney under investigation by the Veteran's Adminstration (VA) for mishandling veterans' finances has been disbarred, though the record of the event has been sealed.

    Keith Lamonte Hobbs was the financial guardian to several veterans in the area. He came under investigation by the VA for allegedly bilking money from those veterans.

    The Tennessee Supreme Court's Office of Professional Responsibility suspended Hobbs' license in February. The office announced Friday [July 22] it had disbarred Dobbs on Thursday. Hobbs must pay the board's costs, expenses, and court costs for his hearing within 90 days.

    "Mr. Dobbs consented to disbarment because he could not successfully defend himself on charges made against him with the Board of Professional Responsibility alleging that he violated Tennessee Rules of Professional Conduct," reads a statement from the Supreme Court's board.

    However, a court rule "requires that Mr. Dobbs' consent to disbarment be maintained under seal."

Indiana Supremes Finally Get Around To Disbarring Lawyer Currently Serving 50-Year Sentence For Looting Funds Entrusted To Him By Investors In Connection With Ponzi Scheme That Caused Over $200 Million In Losses To Victims

The Indiana Lawyer reports:
  • The Indiana Supreme Court disbarred Indianapolis attorney Tim Durham [] because of his “fraudulent looting of funds entrusted to him by investors.” Durham is currently serving a 50-year sentence for 10 counts of wire and securities fraud.

    Durham was convicted in 2012 for his role in a complex Ponzi scheme to defraud investors in his Akron, Ohio-based Fair Finance Co. Prosecutors claimed he looted the company to support a lavish lifestyle and other failing businesses of his. Investors in the company lost more than $200 million when the company closed in November 2009.
    He appealed his 50-year sentence last year, but that was upheld.
    The justices agreed, releasing a 3-page per curiam decision [] disbarring Durham in Indiana. He was admitted to practice in 1987.

    “Respondent’s convictions on ten felony counts involved an ongoing scheme of wire and securities fraud that spanned several years and caused over $200 million in losses to thousands of victims. We have consistently imposed disbarment where an attorney exhibits a pattern of conversion of client funds,” the opinion states. “We see no reason to reach a different result with respect to Respondent’s fraudulent looting of funds entrusted to him by investors.”

Friday, August 05, 2016

Unsophisticated Buyer Finds Himself Owning A Pig In A Poke; Shells Out $11K For Vacant Lot For Future Home Site, Then Finds Out Additional $75K Needed To Install Water & Sewer Lines

In Edinburgh, Texas, KRGV-TV Channel 5 reports:
  • An Edinburg family's dream of a house in the country turned into a land deal disaster. A hard working family wants their hard-earned money back.

    Jorge and his son, George Robledo, are like a lot of hard working Rio Grande Valley middle class families, who work in the oil fields.

    The Robledos dreamed for a bigger house for their family in the country.

    The son went overseas to work in the oil fields in South Africa. He sent money home, until they had enough for a down payment for some land. They had $11,000 saved.

    George Robledo and his dad thought they found their piece of heaven two years ago in an underdeveloped area in Edinburg, owned by Jose Mora Garza.

    George Robledo wants his money back from this land deal. “He told us his story, we told him our story, you know we got along, so you know, I’m a first-time buyer. I went along with him. I trusted him. I felt good about it”, he said.

    Jorge Robledo said Garza appeared more helpful after the down payment paid Garza’s property taxes. He said Garza offered to clear off the lot of the tall grass.

    He said Garza told him after the first payment he would clean up the lot.

    Jorge Robledo said the dream fell apart after the money was paid.

    He said the land drawings were not legal or accurate. There was no sewer or water access. It was going to cost $75,000 to put in water and sewer lines.

    George Robledo said he felt shocked and helpless. “I just didn't understand. There are rules to the land, I just learned about the regulations, obviously and the sewage that make sense to me,” he said.

    They have a stack of papers showing everything the Robledos tried to do to get their money back over an 18-month period.

Foreclosure Caseloads Triggered By Reverse Mortgage (Property Tax & Homeowners Insurance) Defaults More Than Double For Two NYC Non-Profits; Problem (Obviously) Centers Around Taking Loan Proceeds In Lump Sum & Spending It Rather Than Pocketing Steady Monthly Disbursements, Paying Bills As They Arise

In Howard Beach, Queens, the New York Post reports:
  • When Frederick Feil took out a reverse mortgage on his Howard Beach home, he thought he was ensuring a comfortable future — not putting himself at risk of becoming homeless.

    Feil, 67, who has a heart stent and undergoes dialysis treatments, is desperately fighting to prevent Finance of America Reverse from tossing him out of his home.

    Feil took out a $353,000 reverse mortgage in December 2011, using all but a few thousand dollars to repay an earlier mortgage and cover hefty origination fees. Feil told The Post he fell behind on property taxes while in the hospital last year — and unexpectedly found himself in foreclosure last March when Finance of America Reverse called the entire balance, which has ballooned to $449,583.85 from interest and other charges, due.

    Feil claims Finance of America’s servicer, Reverse Mortgage Solutions, gave him the runaround when he called about the default. The amount is not listed in the foreclosure complaint, which made it tough for him to catch up. Feil turned to lawyer Jennifer Levy of JASA Queens,(1) which provides assistance for the elderly including legal services, she claims the case is riddled with errors.

    Levy says Finance of America’s lawyer finally disclosed in May that the arrears totaled $15,375.

    A reverse mortgage is more trouble than help,” said Feil. “If I had known it would be this bad, I would have sold my house.”
    Legal services firms have seen a sharp uptick in these foreclosure cases in the past year, mainly triggered by unpaid property charges. Often the homeowner isn’t told how much is owed or whether arrears are for property taxes or homeowners insurance, lawyers said, adding that the delinquent charges average about $10,000.

    JASA’s reverse-mortgage foreclosure caseload has tripled to 30, while Legal Services NYC’s(2) caseload has more than doubled. Because reverse-mortgage foreclosures lack the protections — including mandatory settlement conferences and a 90-day notice requirement — instituted for traditional borrowers after the 2010 robo-signing scandal, these seniors are at risk of losing their homes far more quickly than forward-mortgage borrowers, who get an opportunity for negotiations overseen by the court.

    Noting that Congress approved the repayment guarantee for lenders to help seniors, JASA lawyer Donna Dougherty said that for servicers “to not be willing to sit down with an 85-year-old and work out a water or tax bill for $20,000 seems to go directly against congressional intent.”

    Some borrowers run into trouble by taking their reverse mortgage payment in a lump sum and spending it, rather than receiving steady disbursements over time to help meet expenses such as taxes.
For the story, see Taking out a reverse mortgage ruined my life.
(1) JASA is a non-profit social services agency in New York City that provides needed assistance, including legal services, to older adults with the goal of keeping them living in their homes with independence and dignity.

(2) Legal Services NYC is a non-profit public interest law firm providing civil legal services for low-income residents of New York City.

Within Days Of Being Listed For Sale, Elderly Woman's Home Gets Roped Into Craigslist Online Rent Racket; Forced To Post 'Not For Rent' Notice On "For Sale" Yard Sign To Warn Possible Scam Targets

In Everett, Washington, the Everett Herald reports:
  • After 30 years in her north Everett home, Barbara Birman decided it was time to downsize.

    It took her the winter to make up her mind. She loves the two-bedroom along Grand Avenue overlooking Puget Sound, but it’s getting harder to keep up with the yard.

    The house was listed three weeks ago Tuesday.

    Within a couple of days, it was used in a scam on Craigslist, a classifieds website. Someone in another state, or more likely another country, stole the pictures from the listing and pretended to be Birman online, offering the house for rent.

    A neighbor saw the ad and alerted Birman. The scammer sought a monthly rent of $1,200. That’s closer to the starting price of an upscale studio apartment around here. The neighbor also reported the ad and had it removed.

    The next day, Birman was talking to a woman in a leasing office at a downtown apartment building. The woman recognized Birman’s address. She said she had seen that home in a rental ad on Craigslist and exchanged emails with the scammer. The woman shared the emails with Birman.

    The situation was “making me uneasy,” Birman said.
    After talking to the woman in the leasing office, Birman was headed home and saw two people at her house, walking on the porch and looking in the windows. “By then, I was freaked out,” she said. The unexpected visitors had seen the bogus ad.

    Then a man from King County called. He found Birman’s real number after a phone call with the scammer, who he said had an accent that sounded African.

    The scammer claimed to be moving to California for a new job and promised to put the keys in the mail upon receipt of the first month’s rent and a deposit, a total of $2,000. The scammer made several mentions of God and blessings.

    “It’s really sick,” Birman said. “He goes on about himself and what a fine fellow he is.”

    No one she talked to had sent the scammer any money.

    It’s now been a week or two since anyone has mentioned the ad, and Birman hopes the scammers have moved on. She and the real estate agent put up a notice on the “For Sale” sign in her yard, making it clear the home is not for rent.

Thursday, August 04, 2016

City Of Sea Tac, Washington Slammed For Secretly Sabotaging Couple's Land Development Plans, Strong-Arming Them Into Relinquishing Ownership Of Prime 4.23 Acre Real Estate Parcel (Inverse Condemnation); Judge Awards Over $18+ Million In Damages, Etc.; Suggests Bar Complaint Filing Against City Attorney May Be Appropriate

In Seattle, Washington, The Seattle Times reports:
  • A West Seattle couple sued the city of SeaTac and have been awarded $18 million after proving city officials sabotaged their development plans, strong-armed them into giving up their property and illegally withheld city emails and documents that demonstrated the deception.

    A three-month-long civil trial revealed the shadowy subterfuge behind a secret land grab that was orchestrated by the city of SeaTac, replete with backroom deals, baldfaced deceptions, and a mayor intent on driving Somali refugees from the neighborhood.

    The aim of it all: to wrestle 4.23 acres of prime real estate from entrepreneurs Gerry and Kathy Kingen, according to the judge and jury who heard the case.

    The West Seattle couple sued the city and won, proving in court that SeaTac officials intentionally sabotaged their development plans, strong-armed them into giving up their property and then violated the state’s Public Records Act by withholding city emails and documents proving the deception.

    The trial judge also concluded the former SeaTac mayor wanted condos built on the site, believing they would price out Somalis who had moved into “his neighborhood.”

    In January, a King County Superior Court jury awarded the Kingens more than $9.3 million in damages for their claims of misrepresentation, inverse condemnation(1) and interference with business expectancy. Earlier this month, Judge Richard McDermott also found the Kingens had proved promissory estoppel — basically, they had relied on the city’s promises, to their detriment. The judge also awarded the Kingens $1.2 million in attorneys’ fees and ruled the couple was entitled to interest on the damages, totaling $7.5 million.

    All told, the Kingens were awarded just over $18 million.

    McDermott also issued a blistering summary of the case, criticizing the city for its dealings with the couple and saying there’s evidence the SeaTac City Attorney’s Office “participated in this profound and unacceptable pattern of deception.” The judge also suggested a bar complaint may be warranted.
For more, see SeaTac ordered to pay $18 million to couple it cheated in secret land grab.
(1) A government taking without due process or payment of compensation is often referred to as an inverse condemnation:
  • Inverse condemnation is a term used in the law to describe a situation in which the government takes private property but fails to pay the compensation required by the 5th Amendment of Constitution. In some states the term also includes damaging of property as well as taking it.

    In order to be compensated, the owner must then sue the government. In such cases the owner is the plaintiff and that is why the action is called inverse – the order of parties is reversed, as compared to the usual procedure in direct condemnation where the government is the plaintiff who sues a defendant-owner to take his or her property

    The taking can be physical (e.g., land seizure, flooding, retention of possession after a lease to the government expires, deprivation of access, removal of ground support) or it can be a regulatory taking (when regulations are so onerous that they make the regulated property unusable by its owner for any reasonable or economically viable purpose).

    The latter is the most controversial form of inverse condemnation. It is considered to occur when the regulation of the property's use is so severe that it goes "too far," as Justice Holmes put it in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), and deprives the owner of the property's value, utility or marketability, denying him or her the benefits of property ownership thus accomplishing a constitutionally forbidden de facto taking without compensation. Reference: Wikipedia.

POA Abuse At Center Of Charges Against Two Iowa Women Accused Of Stealing Over $460K From Their Elderly Dad's Bank Account, Selling His House & Using Proceeds For Their Personal Use While He Was In Health Care Facility

In Sidney, Iowa, WOWT-TV Channel 6 reports:
  • Two women have been arrested for allegedly stealing from their father.

    Sixty-two-year-old Roberta Hovey of Omaha and 59-year-old Rebecca Cook of Centerville, Texas face charges of first-degree theft and dependent adult abuse by financial exploitation.

    The Fremont County Sheriff's Department was notified by the Iowa Department of Human Services that a house belonging to a resident of a Sidney health care facility was sold and the money was used by Hovey for her personal use.

    An investigation uncovered other financial transactions occurred between 2013 and 2015, including the purchase of vehicles and large payments between Hovey and her sister Cook that depleted their father's bank account. He had more than $466,000 in the account when the women took control of his affairs as powers of attorney.

Wednesday, August 03, 2016

Jersey City Man Cops Guilty Plea To Recording Forged Lien Satisfaction To Create Impression That Existing Mortgage Was Fully Paid, Then Using Purportedly Free & Clear Property As Security To Score Another Loan

In Hudson County, New Jersey, The Jersey Journal reports:
  • Former state Senate and Assembly candidate Bruce Alston faces up to three years in prison and $133,500 in restitution after pleading guilty to theft by deception stemming from a 27-count indictment alleging a sophisticated mortgage fraud scheme.

    Alston, 44, of Jersey City, was indicted along with his sister, Gail Alston, 50; his mother, Helen Alston, and ex-girlfriend Maisha Taylor, 42, of Newark, authorities said.

    Helen Alston pleaded guilty to conspiracy to commit theft, but the 70-year-old is expected to get a probationary sentence only.

    "I'm just glad it's over," Bruce Alston said after pleading guilty Thursday. He also said he has already paid back $172,000 to one of two mortgage firms involved in the scam. "I'm glad it's resolved and something that me and my family can put behind us."

    The charges against the two other defendants are expected to be dropped, officials said.

    Bruce Alston admitted taking out a mortgage for a Jersey City property and then filing fraudulent paperwork that made it appear the mortgage had been fully paid off.

    He then secured a second mortgage to purchase a property.

    His mother was charged with allowing the money from the scam to be deposited into her bank account. The crimes occurred between Oct. 1, 2011, and Oct. 31, 2015.

    Among the charges filed against various defendants in the case were theft by deception, conspiracy, theft by failure to make required disposition of property received, making a simulated document, tampering with public records or information, falsifying records, forgery and wrongful impersonation, the complaint says.

    Bruce Alston could have faced five to 10 years in prison if convicted on the count to which he pleaded guilty.

    In January 2012, Bruce Alston and Taylor were charged with conspiring to sell a parcel of Jersey City real estate they did not own and then using the sale proceeds to buy the property themselves, authorities said at the time. Those charges were later dropped after the alleged victim died.

    Bruce Alston will be sentenced on Oct. 28 by Hudson County Superior Court Judge Mitzy Galis-Menendez in the Hudson County Administration Building in Jersey City. Helen Alston will be sentenced by Galis-Menendez on Oct. 20.

Cops Haul In South Florida Man For Allegedly Using Forged Deed, Land Documents To Hijack Title, Possession Of Abandoned Home In Foreclosure

In Weston, Florida, the South Florida Sun Sentinel reports:
  • A 44-year-old man who has been squatting in a Weston home for at least a year has been arrested for attempting to take ownership of the residence through a quit-claim deed, according to the Broward Sheriff's Office.

    Compton R. Maycock-Beckles Jr. was arrested July 18, charged with grand theft, criminal use of personal identification information and three counts of unlawful filing of false documents or records.

    The home, at 2015 Lakeshore Drive, belonged to Gary Warren. He and his then-wife Beverly Jane-Warren bought the house in 2006 for $465,000, according to county property records. The house was assessed this year at just under $400,000, according to the Broward County Assessor's Office.

    The couple separated, moved out and later divorced and the house went into foreclosure, Warren said.

    But several fraudulent documents pertaining to the ownership of the property were filed with the county, investigators said, all containing Warren's forged signature. The documents named Global Management the trustee of the property, gave its "agent" Compton Maycock power of attorney for Warren, and transferred ownership of the home to Global Management, according to the arrest report.

    "I didn't sign any of them, I had no idea what was going on," Warren said.

    Warren, 66, is disabled and lives with his 35-year-old daughter Jessica Underhill in Palm Beach Gardens. "This whole situation is scary," Underhill said.

    Maycock-Beckles Jr. drew the attention of officers after a deputy saw him walk out of the house on June 17 and drive off in a car parked in the driveway. Maycock-Beckles was stopped a short time later and arrested for driving with a suspended license. Several inconsistencies surfaced as to his address, according to the arrest report.

    Warren, a retired operations manager for a construction company, said deputies showed up at his home in Palm Beach Gardens on July 6 to ask him if he knew what was going on with his Weston property. Although he was still the legal owner of the property, Warren said he assumed that the house had gone into foreclosure years ago.

    The foreclosure process on the home has restarted.

Kansas City Feds Pinch Pair For Allegedly Filing Serial Bogus Bankruptcy Petitions To Keep County From Foreclosing On Approximately Three Dozen Rental Homes

From the Office of the U.S. Attorney (Kansas City, Missouri):
  • Tammy Dickinson, United States Attorney for the Western District of Missouri, announced [] that a Raytown, Mo., man and a Kansas City, Mo., man have been indicted by a federal grand jury for engaging in a bankruptcy fraud scheme in order to prevent dozens of rental properties from being sold by the county for failure to pay property taxes.

    Kenneth Mabrie, 66, of Raytown, and Curtis Jones, 53, of Kansas City, were charged in a five-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, July 20, 2016. That indictment was unsealed and made public [] upon the arrests and initial court appearances of Mabrie and Jones.

    According to the indictment, Mabrie and Jones failed to pay Jackson County property taxes on approximately 37 rental properties they owned in Kansas City, Mo. They filed for bankruptcy protection on the day of, or a few days before the properties were scheduled to be sold by the county at auction, the indictment says, which prevented the sale. Their bankruptcy petitions were dismissed shortly thereafter. The total delinquent county property tax due and owing by Mabrie and Jones on the properties listed in the bankruptcy petitions was $173,640.

    The indictment charges Mabrie with one count of bankruptcy fraud and charges Mabrie and Jones together in five additional counts of bankruptcy fraud.

    Mabrie failed to pay Jackson County property taxes on at least 23 rental properties he owned in Kansas City from 2006 through 2013, the indictment says. The properties would go into foreclosure and be scheduled to be sold by the county via auction, a process that takes four years.

    Mabrie filed a bankruptcy petition in 2011 listing eight tax delinquent properties, five days prior to the auction sale. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the indictment says, the bankruptcy petition was dismissed for failure to file necessary information.

    Jones filed a bankruptcy petition in 2012 listing 31 tax delinquent properties, five days prior to the auction sale. Seventeen of the properties were deeded from Mabrie one day prior to the bankruptcy filing. Seven of the properties were included in the petition filed by Mabrie in 2011. Two other properties were actually owned by Holman Investments, LLC, a Mabrie business, at the time of the filing. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.

    Jones filed a bankruptcy petition in 2013 listing 29 tax delinquent properties, on the same day as the auction sale. Two of the properties were deeded from Mabrie on the same day as the bankruptcy filing. Twenty-six of the properties had been included in the 2012 petition. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.

    Following the filing of the bankruptcy petitions, Mabrie continued to collect rent on the rental properties. Mabrie also continued to receive Housing Assistance Payments totaling $18,722 through the Housing Choice Voucher Program (HCVP), commonly referred to as “Section 8” tenants. This program is funded by the U.S. Department of Housing and Urban Development and administered by the Housing Authority of Kansas City, Mo.

Tuesday, August 02, 2016

Failure To Request Home Builder To Provide Lien Waivers From All Outfits Who Worked On Home Or Supplied Construction Materials Before Making Final Payment Leaves Homebuyer Holding The Bag On $150K+ In Mechanics' Liens From Stiffed Subcontractors

In Sioux Falls, South Dakota, the Argus Leader reports:
  • Lynne Buus built her dream home through Daniels Construction, Inc. that year, but the dream dissipated quickly.

    Within months of her December 2008 closing, Buus was holding well over $150,000 in mechanic’s liens on the $519,000 home, effectively pushing the price to $669,000. The subcontractors hadn’t been paid.

    Buus sued Daniels Construction, Inc. and Jim Daniels personally, but she didn’t follow through. Daniels and his company were in no position to pay, her lawyer said, and a legal battle could run into six figures.

    The debt-laden company stopped filing annual reports as a South Dakota corporation in 2010 and officially dissolved through the Secretary of State in 2015.

    “I had to pay it all,” Buus said.
    Buus had alleged that Daniels closed on the home knowing that the subcontractors hadn’t been paid. Making the case against Daniels Construction was one part , but proving that Daniels – who had employees who handled various tasks for the company – was personally aware of the issues wouldn’t have been as simple as a case against the company.

    If she’d won, lawyer Tom Nicholson said, there was no assurance that the liens would be paid if other creditors had their own claims.

    “She was between a rock and a hard place. She could have spent a bunch of money to get a fraud judgment – which was not a foregone conclusion – then she’d have had to stand in line,” Nicholson said.

    The prospect of spending that money without the promise of a return made Buus’ mind up for her. She and her husband decided to focus their time and finances elsewhere.

    “We’re just peons,” Buus said. “We have to pay our own bills.”

    Jon Van Patten, a professor at the University of South Dakota School of Law, said disputes of this nature are relatively common. A contractor can't waive a lien from a subcontractor.

    “When the contractor brings you the bill, you have to say ‘bring me the lien waivers,’”
    Van Patten said.

    Without those waivers, the subcontractors are free to come to the property owner with the liens.

New Mexico AG Files Civil Suit Seeking To Slam Brakes On Attorney-Led Group Accused Of Duping Homeowners In Foreclosure Out Of Money, Title & Possession To Their Homes In Exchange For Phony Promises Of Legal Assistance

From the Office of the New Mexico Attorney General:
  • [T]he Office of the Attorney General filed a lawsuit and sought a temporary restraining order against a New Mexico attorney, Johsua R. Simms, and a group of non-attorneys, who the Attorney General alleges take advantage of consumers in financial distress and who are trying to avoid a foreclosure on their homes. The non-attorneys often did business under the name "Praedium Preservation" and that business was headed by Mukthiar S. Khalsa.
    In its 56 page complaint, the Office of the Attorney General ("OAG") alleges that Simms and the non-attorneys violated both federal and state laws and abused court processes for their own gain.

    The OAG alleges that Defendants did so by engaging in a scheme to take money, deeds, and powers of attorney from consumers facing foreclosure after Defendants told consumers that Defendants could "fight the foreclosure" for the consumer. Instead, Defendants in some cases placed their friends or family in homes which are being foreclosed upon to live rent-free and failed to assist the consumer in the foreclosure.

    Also, the OAG alleges that these Defendants filed sham lawsuits and other false or deceptive pleadings in the courts and county clerks' offices for the purpose of delaying foreclosures or to trick judges into signing orders giving the defendants titles to homes.

    In addition, the OAG alleges that the non-attorneys engaged in the unauthorized practice of law by giving homeowners legal advice and pleadings to file in the homeowner's foreclosure case, and that Simms entered his appearance in some cases without the knowledge or consent of the homeowner.

    Consumers who have had contact with Praedium Preservation, Khalsa or Simms should call the OAG's Consumer & Environmental Protection Division at 505-222-9100.

Another Ringleader Who Headed Loan Modification Racket Gets Shipped Off To Federal Prison, Getting 9+ Years In Slammer For Screwing Over 1,000 Financially Strapped Homeowners Out Of Upfront Fees Totaling $3+ Million

From the Office of the U.S. Attorney (Bridgeport, Connecticut):
  • ARIA MALEKI, 33, of Santa Ana, Calif., was sentenced [...] in Bridgeport to 112 months of imprisonment, followed by three years of supervised release, for heading a mortgage loan modification scheme that defrauded more than 1,000 struggling homeowners across the United States.

    “This defendant presided over a scheme that preyed on struggling homeowners in Connecticut and across the United States, falsely offering mortgage relief in exchange for thousands of dollars that the victims clearly could not afford to spend,” said Deirdre M. Daly, U.S. Attorney for the District of Connecticut. “The investigation revealed that the participants in this scheme specifically targeted homeowners who were behind on their mortgage payments, whose homes were ‘under water,’ or who had recently experienced a financial hardship, such as a lost job. This is an appropriate sentence for a defendant who profited handsomely from such heartless, criminal conduct. I thank our federal and state law enforcement partners in New England, New Jersey, California and Oklahoma for investigating this matter, shutting down this scam and bringing those responsible to justice.”
    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. [...] As a result, more than 1,000 homeowners suffered losses totaling more than $3 million.

Monday, August 01, 2016

Federal Judge To FBI: OK To Plant Warrantless Audio Recording Devices Outside Courthouse In Effort To Bust Real Estate Investors Suspected Of Bid Rigging At Public Foreclosure Sales; Bugs Called "Unsettling" But Not Illegal

In Oakland, California, The Recorder reports:
  • A federal judge in Oakland has ruled that government agents didn't violate the Fourth Amendment when they planted audio recording devices outside courthouses in Alameda and Contra Costa counties without a warrant.

    U.S. District Chief Judge Phyllis Hamilton wrote that while it was "unsettling" for the devices to be planted near courthouse entrances in Oakland and Martinez, it wasn't illegal.

    "Having listened to the recordings at issue, the court finds that defendants did not take steps to protect the privacy of the conversations that were audibly recorded," wrote Hamilton in a 17-page order handed down [last week].

    Hamilton's decision comes in a criminal antitrust case targeting investors alleged to have conspired to manipulate public real estate auctions held outside the courthouses during the height of the foreclosure crisis. Prosecutors from the Department of Justice's Antitrust Division have secured more than 50 guilty pleas in related cases as part of a sweeping probe of auctions across the Bay Area.

    In Friday's decision, Hamilton wrote that the investors couldn't reasonably expect that conversations held at audible levels in public would remain private.

    While she agreed with the defendants that "it is at the very least unsettling that the government would plant listening devices on the courthouse steps," she wrote that it is "equally unrealistic" for anyone to believe that conversations held in public can remain private, given the prevalence of cameras in storefronts, front porches "and in the hand of nearly every person who owns a smartphone.

    "There are no cases which establish a bright line rule one way or the other," she wrote.

    In making their argument to suppress evidence, defense lawyers argued that the courthouse steps are a regular site for attorneys to have private conversations with clients. But Hamilton dismissed that argument, finding that it was "unlikely, and certainly unreasonable" for attorneys to discuss sensitive matters "where they could easily be overheard by other attorneys, prosecutors, law enforcement officers, security personnel, court staff, judges and other bystanders."

    "As an aside," she wrote, "it has been the court's observation that conversations near the courthouse entrance are frequently overheard by unintended and unseen listeners, even from inside the courthouse."
    The motion to suppress was largely modeled off a similar motion filed last year challenging courthouse recordings in a case involving auctions held outside the San Mateo County courthouse. U.S. District Judge Charles Breyer in San Francisco, who is overseeing the San Mateo case, has yet to rule whether those recordings were legal or not.
For more, see Courthouse Steps Listening Devices Not Illegal, Hamilton Says (may require subscription; if no subscription, GO HERE, then click the appropriate link).

For the court ruling, see U.S. v. Marr, et al.

Indiana Appeals Court: Surplus Proceeds From 2nd Mortgage Foreclosure Sale Belongs To Homeowner, Not 1st Mortgage Holder; Sneaky Bankster Almost Gets Away With Illegally Snatching Away Excess Sale Proceeds By Duping Empty-Headed Trial Judge To Award It The Cash

In Bloomington, Indiana, The Indiana Lawyer reports:
  • A trial court misapplied the law regarding disbursement of surplus sale proceedings from a sheriff’s sale when it ordered the full surplus to the bank that owned the first mortgage on the home, the Indiana Court of Appeals held. The law requires the surplus to go to the mortgage debtor.

    John and Manee Edler had two mortgages through Regions Bank on their Bloomington home, the first mortgage was on the property; the second mortgage was related to a home equity line of $30,000.

    In June 2013, Regions Bank alleged the Edlers were in default on the second mortgage only, with a balance of $22,933.56. The complaint did not allege any default regarding the first mortgage. In a foreclosure decree, the judge stated the second mortgage is superior to all other liens and claims, except the first mortgage.(1) The decree ordered the home sold in a sheriff’s sale, which David Jenner bought for $82,600.(2)

    Regions petitioned for a portion of that amount to cover the second mortgage and then the rest of the surplus to be applied to the first mortgage. The court granted the full $82,600 to Regions. The Edlers filed a motion to correct, which was denied, seeking the surplus. John Edler passed away while this appeal was pending.(3)

    Judge Michael Barnes turned to Indiana Code 32-30-10-14, which governs mortgage foreclosure sales and surplus sales proceeds. This statute requires surplus directed to the “mortgage debtor, mortgage debtor’s heirs, or other persons assigned by the mortgage debtor.” The COA also cited two cases from the 19th century to support its reversal.

    “This case is slightly unusual in that Regions obviously had notice of the foreclosure action on the second mortgage but chose to make no effort to foreclose on the first mortgage or otherwise have its rights adjudicated with respect to the first mortgage. Having chosen this course of action, Regions could not essentially reverse course by seeking the surplus sales proceeds, in clear contravention of the foreclosure statutes and relevant case law,” Barnes wrote.

    He also noted how Regions now decides to collect the debt associated with first mortgage is beyond the scope of this opinion.(4)

    Manee Edler v. Regions Bank, and Jenner Properties, LLC, 53A01-1512-MF-2264, is remanded with instructions to distribute the surplus sale proceeds to Manee Edler.
Source: COA: Woman, not bank, entitled to foreclosure surplus funds.

For the court ruling, see Edler v. Regions Bank, 53A01-1512-MF-2264 (Ind. App. July 21, 2016).
(1) The outstanding balance on the first mortgage was approximately $60,000, per the court ruling.

(2) According to the court ruling, Jenner then "invested approximately $100,000.00 in renovating the property and reached an agreement to sell it to a third party for $199,000.00."

(3) The Edlers had fallen behind on both mortgage payments after Mr. Edler developed cancer, per the court ruling.

(4) In footnote 5 of the ruling, the court also noted that it offers no opinion as to the effect of its holding on Regions’s agreement with Jenner to release the first mortgage, or the pending sale of the property by Jenner to a third party.

Sunday, July 31, 2016

Seven Suspected Molotov-Cocktail-Tossing Latino Street Gang Members Get Bagged For Allegedly Using Violence, Intimidation To Drive Black Residents Out Of Their Homes

From the U.S. Department of Justice (Washington, D.C.):
  • Seven Los Angeles men were charged in a 10-count indictment [] with participating in the 2014 firebombing of residences of African Americans living in the Boyle Heights section of Los Angeles. The defendants were also charged for their roles in a racketeering enterprise that used violence and intimidation to control the perceived territory of the Big Hazard street gang.

    On June 22, 2016, a federal grand jury returned an indictment under seal charging the defendants, all of whom are members and associates of the Big Hazard or Hazard Grande (Hazard) street gang, with a variety of violations stemming from the racketeering enterprise and related to the alleged firebombing that occurred on May 12, 2014, which was intended to drive African Americans from the Ramona Gardens Housing Development (RGHD). The RGHD is a federally and city funded housing development that is occupied primarily by Hispanic residents and located in Boyle Heights.

    Carlos Hernandez, aka Creeper and Rider, 31; Jose Saucedo, aka Lil’ Moe, 22; Francisco Farias, aka Bones, 25; Joseue Garibay, aka Malo, 23; Edwin Felix, aka Boogie, 23; Jonathan Portillo, aka Pelon, 21; and Joel Matthew Monarrez, aka Gallo, 21, were charged with conspiracy to violate civil rights; conspiracy to use fire and carry explosives to commit another federal felony; attempted arson of federal property; using fire and carrying explosives to commit another federal felony; aiding and abetting; violent crime in aid of racketeering and interference with housing rights. Hernandez and Farias were also charged with possessing, using, carrying a firearm during a crime of violence, and Felix was also charged with making a false statement to the FBI.

    “The defendants used firebombs to drive the victims from their homes because of their race,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This is a hate crime. Such violence and intimidation have no place in our society.”

    The Firebombing

    The indictment alleges that, in early May, Hernandez led a Hazard meeting at a location in the gang’s territory near the RGHD which was attended by the other defendants. During the meeting, Hernandez allegedly told the group that they were going to use Molotov cocktails to firebomb residential units in the RGHD that were occupied by African-American families. According to the indictment, Hernandez allegedly told the defendants during the meeting that the purpose of the firebombing was to “get the n****** out of the neighborhood,” or words to that effect.
    If convicted of all counts listed in the indictment, Saucedo, Garibay, Portillo and Monarrez face a maximum sentence of 110 years in prison. Hernandez and Farias face a maximum sentence of life in prison, and Felix faces a maximum penalty of 115 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors.

    An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.

    The investigation was conducted by agents and detectives with the LAPD’s Hollenbeck Division; the LAFD; the ATF; and the FBI Los Angeles Division’s Civil Rights Squad. The case is being prosecuted by Assistant U.S. Attorneys Mack E. Jenkins and Douglas M. Miller of the Central District of California and Trial Attorneys Patricia Sumner and Julia Gegenheimer of the Civil Rights Division’s Criminal Section.
For more, see Seven Los Angeles Men Charged for Firebombing African-American Residences.

See also, L.A. Gang Firebombed Black Neighbors to Get Them ‘Out of the Neighborhood’:
  • Two years after seven do-or-die loyals of one of L.A.’s original Latino gangs allegedly tossed Molotov cocktails into their neighbors’ homes to “get the n—-ers out of the neighborhood,” the law finally caught up with them.

    [...T]he feds unsealed what is being called the one of “largest civil rights indictments in local history,” alleging that the gang members ruthlessly waged a race-fueled campaign against innocent African American families—all with young children—to get them off their prized turf.

Ohio Supreme Court Slams Brakes On Liability Insurer's Attempt To Automatically Deny Coverage To Landlord Sued By Prospective Tenant For Alleged Discrimination Under Fair Housing Act

From a recent article appearing in the insurance industry publication, Claims Journal:
  • [T]he Ohio Supreme Court recently considered application of the inferred-intent doctrine(1) in a federal fair housing discrimination lawsuit. Granger v. Auto-Owners Ins., 144 Ohio St.3d 57, 40 N.E.3d 1110 (Ohio 2015).

    In Granger, the insured [ie. the landlord] owned various rental properties. Those properties were insured by Auto-Owners Insurance Group with a primary dwelling policy that included landlord-liability coverage and a second umbrella policy. The primary policy was issued by Auto-Owners Mutual Insurance Company and the second policy was issued by Owners Insurance Company.

    Both policies covered personal injuries. However, the definition of what constituted a “personal injury” differed between the policies. The primary policy defined “personal injury” in terms of causes of action, i.e., libel, slander, defamation, false arrest, invasion of privacy, wrongful eviction, etc. The definition of “personal injury” contained within the umbrella policy was broader in scope. The umbrella policy definition included reference to particular types of damages rather than only particular types of causes of action. The broader definition of “personal injury” in the umbrella policy included within the definition “humiliation.”

    The insured refused to rent one of the insured properties because the proposed renter was African-American and had a six year old son who would be living with her at the property. It was determined that the insured had discriminated against the tenant on the basis of familial status and race in violation of 42 U.S.C. 3604 and R.C. 4112 .02(H). Part of the damages sought by the putative tenant was emotional distress.(2)

    The umbrella policy also contained an intentional act exclusion. Specifically, the policy excluded coverage when “the personal injury … was expected or intended.” Auto-Owners asserted that the exclusion was applicable. Auto-Owners argued that “discriminatory intent is inferred as a matter of law for purposes of an intentional act exclusion under an umbrella policy of insurance on a claim for pre-leasing housing discrimination.” 144 Ohio St.3d at 64, 40 N.E.3d at 1117.

    Auto-Owners was seeking application of the inferred-intent doctrine. Under the inferred-intent doctrine, “when there is no evidence of direct intent to cause harm and the insured denies the intent to cause any harm, the insured’s intent to cause harm will be inferred as a matter of law in certain instances.” Auto-Owners argued that it could be inferred as a matter of law from the nature of the insured’s act—pre-leasing housing discrimination—that the insured intended to cause the putative tenant’s personal injuries and, therefore, the exclusion applied.

    The Ohio Supreme Court in Granger disagreed.

    Previously, the Ohio Supreme Court had rejected the “substantially certain” test in inferred-intent cases. 144 Ohio St.3d at 65, 40 N.E.3d at 1118. Under the “substantially certain” test, any harm that was substantially certain to result from an intentional act would fall under the intentional act exclusion of the policy.

    The Ohio Supreme Court adopted a different test for application of the inferred-intent doctrine. Under Ohio law, “the doctrine of inferred intent applie[d] only in cases in which the insured’s intentional act and the harm caused [were] intrinsically tied so that the act [had] necessarily resulted in the harm.” 144 Ohio St.3d at 65, 40 N.E.3d at 1118.

    The Ohio Supreme Court then found that humiliation was not so intrinsically tied to pre-leasing discrimination that the insured’s act necessarily resulted in the harm suffered by the putative tenant.

    While acknowledging that emotional distress damages were available under the law to victims of housing discrimination, the Court found that such damages were not automatically awarded.

    Therefore, the Court remanded the case to the trial court so that the trier of fact could determine whether the insurance company was able to demonstrate that the insured intended to cause humiliation to the putative tenant without the benefit of the inferred-intent doctrine removing that burden of proof.
For the article, see Ohio High Court Rejects Inferred-Intent Doctrine in Fair Housing Discrimination Case.

For the court ruling, see Granger v. Auto-Owners Ins., 144 Ohio St.3d 57, 40 N.E.3d 1110 (Ohio 2015).

See also, Landlord Owed Defense In Bias Row, Ohio High Court Says (may require subscription; if no subscription, TRY HERE, then click the appropriate link for the story).
(1) In Ohio, the inferred-intent doctrine is a judicially-created rule that liability insurers often rely on when attempting to wiggle their way out of providing coverage denying coverage to a policy holder when the insurer claims that the conduct of an insured that gives rise to harm was as a result of an intentional act, thereby triggering the intentional act exclusion in the insurance policy (which allows the insurer to deny coverage).

The court describes the inferred-intent doctrine as follows:
  • Under the inferred-intent doctrine, "when there is no evidence of direct intent to cause harm and the insured denies the intent to cause any harm, the insured's intent to cause harm will be inferred as a matter of law in certain instances." Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, ¶ 9, citing Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34, 36, 665 N.E.2d 1115 (1996), paragraph one of the syllabus.
(2) A summary of the facts that led up to the landlords' lawsuit against the insurance company (including a description of their alleged conduct that triggered the fair housing lawsuit against them), as roughly abstracted from the court ruling, follows:
  1. In June, 2010, the prospective tenant ("Kozera") first made contact with the landlord.
  2. After being discouraged by the landlord from applying for a vacant apartment available for rental on the subject premises, a four-unit property in Akron, Ohio, Kozera contacted the Fair Housing Contact Service, Inc. ("FHCS"), a local, independent non-profit fair housing organization, which investigated her housing discrimination claims by using trained testers to interact with the landlord ("Granger").
  3. One tester inquired about the property by e-mail, and Granger replied, "Truely [sic] a lovely and large apartment and in a very well keep [sic] apartment house. No pets or children."
  4. Granger later sent an additional e-mail to the same tester, stating, "Yes it is still available as I am selective as to who [sic] I rent to and I run a background check on any possible tenant, just so you know. It is an adult apartment house so it is quite [sic] and very will keep [sic] with no children or pets permitted."
  5. He sent a proposed lease to at least one tester; one of its terms was "No children or pets are permitted—period."
  6. Further, FHCS related that Granger told only an African-American tester that he ran background checks on prospective tenants because "he didn't want a rapist in the building"; he did not make the same comment to a Caucasian tester.
  7. Based on information from Kozera and the testers, FHCS contended that Granger had discriminated against Kozera, an African-American, on the basis of familial status and race in violation of 42 U.S.C. 3604 and R.C. 4112.02(H).
  8. In March, 2011, (nine months after her initial contact with the landlord), Kozera, along with FHCS, filed a fair housing lawsuit in federal court against Granger and one, Steigerwald, (Granger's partner/co-landlord), individually and in their capacities as trustees of the trust that held title to the subject rental property).
  9. Kozera claimed that she had "experienced out of pocket costs and emotional distress as a result of Defendants' conduct"; FHCS alleged that it had "expended its resources and was harmed in its mission by Defendants' conduct."
  10. In May, 2011 (two months after getting hit with the fair housing lawsuit), Granger and Steigerwald forwarded the lawsuit to their insurance agent, who then contacted the insurance company, seeking coverage under one of the policies, including the providing of a legal defense to the fair housing lawsuit (ie. the insurer's "duty to defend"),
  11. A month later, citing various reasons, the insurer denied coverage on one of the policies; they immediately requested coverage under their second policy (the umbrella policy), but they never heard back from the insurer,
  12. On July 11, 2011, Granger and Steigerwald settled the federal case with Kozera and FHCS for $32,500. Separate payments went to the two plaintiffs: $5,000 to Kozera and $27,500 to FHCS.
  13. On July 22, 2011 (less than two weeks thereafter), the landlords, Granger and Steigerwald, sued the insurance company (unfortunately for the insurance agency and the individual insurance agent, they too got roped into the landlord's lawsuit) for claims relating to the insurer's failure to provide coverage.

Fair Housing Suit: Landlord Failed To Grant Reasonable Accommodation To 20-Year Tenant Who Suffers From Multiple Sclerosis After Removing Her Wheelchair Lift From Back Entrance Of Apartment Building For 2-Month Construction Project, Leaving Her Trapped In Her Home

In Chicago, Illinois, Courthouse News Service reports:
  • A wheelchair-bound Chicago woman has been trapped in her apartment for days because her landlord refuses to replace a wheelchair lift that's been removed for a 2-month project, the woman claims in court.

    Julie Falco sued her property manager, Mod Management Services, and property owner Thomas Scheidt [] in Federal Court.

    Falco, who has multiple sclerosis, has lived in the north side apartment building for 20 years, she says in the complaint. As the disease progressed, it left her unable to climb the stairs to her apartment.

    Falco says she herself got the money to install the lift, by "secur(ing) funding through the Mayor's Office for People with Disabilities to install a wheelchair lift at the back entrance of her apartment building."

    To her surprise, she says, Mod Management refused to let her install the lift for more than a year. With help from an attorney, she got it installed in February 2015. Now, 17 months later, her nemeses are removing it.

    The landlord and property manager informed her on July 6 "that on July 9, 2016 the porch behind her building would be replaced as part of a project projected to last two months," the complaint states.

    Falco says they refused any of the accommodations she requested: a different apartment during construction, delaying the work until they can figure out how to get her a lift, and reinstallation of the lift after the work is done.

    She says her attorneys at Access Living of Metropolitan Chicago(1) called Mod Management "to identify the concerns she had with the project — namely, that she would have no way to enter or exit her apartment and that the lift would be damaged."

    But on June 30 the porch was torn down "except the area where her lift is installed," leaving debris that she had difficulty getting through, and on July 8, she says, Mod Management "demolished the porch behind Ms. Falco's apartment and took out the lift," but assured her it would be back up within a day.

    But it wasn't she says. According to the July 12 lawsuit, she still has "no way to get in or out of her apartment" and "is still trapped."

    Mod Management Services did not respond to a voicemail requesting comment.

    Falco seeks punitive damages for Fair Housing Act violations and retaliation, and an injunction ordering the defendants to learn about, and comply with, the Fair Housing Act.

    She is represented by Charles Petrof, with Access Living of Metropolitan Chicago.
Source: Trapped by Unreasonable Landlord, Woman Says.
(1) Access Living of Metropolitan Chicago is a Cook County, Illinois-based non-profit organization that supports, and advocates for the rights of, people with disabilities. Among other things, its Legal Team implements legal strategies to promote those rights through litigation to enforce federal, state and local civil rights laws, including the Americans with Disabilities Act, the Fair Housing Act, Section 504 of the Rehabilitation Act, and related laws, which prohibit discrimination against persons with disabilities.

City Council Nixes 23-Unit Mixed Use Development On Split 4-4 Vote; Developer Responds By Filing Fair Housing Lawsuit, Alleging 20 Examples Of City's "Exclusionary Practices" That Disproportionately Affects Minorities

In Lansing, Michigan, the Lansing State Journal reports:
  • The City of Lansing and three City Council members are listed as defendants in a lawsuit filed [last] week by a local housing developer who claims the federal Fair Housing and Civil Rights acts were violated after a controversial council vote.

    A filing with the U.S. District Court Western District of Michigan [] names developer Sam Saboury as the plaintiff in a complaint that "addresses the City of Lansing's ongoing discriminatory acts and pattern and practice of effectively preventing affordable housing opportunities, which disproportionately affects minorities residing in the City of Lansing."

    Contacted Thursday by the Lansing State Journal, Saboury wouldn't confirm he's the plaintiff. "I don't know the process," Saboury said. "I'm not supposed to talk to anyone until later."

    At-Large Council Member Carol Wood, First Ward Council Member Jody Washington and Third Ward Council Member Adam Hussain are listed as defendants in the filing that also mentions about 20 examples of what Saboury's attorneys describe as "exclusionary practices." The case is assigned to Judge Robert Jonker, according to the court's Lansing office.

    Saboury's complaint states he was subjected to discriminatory conduct by the defendants when approval was not granted for a payment in lieu of taxes agreement for a $5.9 million, 23-unit mixed-used development in Old Town. The project, proposed for Washington Avenue, also included 5,000 square feet of commercial retail space.
    The lawsuit follows a Fair Housing Act complaint that Mayor Virg Bernero said was filed in May by a resident. The complaint was sent to the U.S. Department of Housing and Urban Development and alleges that council members' 4-4 vote on tax breaks for Saboury's project was a violation.
For more, see Developer sues Lansing, City Council members (Developer alleges city, three City Council members violated fair housing and civil rights acts. Mayor Virg Bernero says he hopes members named in lawsuit "learn something from this experience.")

Another Residential Real Estate Developer Gets Belted With Disability-Based Housing Discrimination Suit; Inaccessible Bathrooms & Inadequate Kitchen Space For Wheelchair-Bound Residents Among Alleged Conditions Existing In Eight Of Builder/Landlord's Central Ohio Apartment Complexes

In Columbus, Ohio, The Columbus Dispatch reports:
  • Two housing advocacy groups have filed a federal lawsuit accusing a major Columbus developer of violating the Fair Housing Act in eight of its central Ohio apartment complexes.

    The Central Ohio Fair Housing Association and the Miami Valley Fair Housing Center filed the suit [] against Metro Development and affiliated companies.

    The suit alleges that the apartment complexes violate federal law by failing to include, among other things, accessible bathrooms, adequate kitchen space for a tenant in a wheelchair, accessible mailboxes and a handicapped-accessible route to the entryway.

    Jim McCarthy, president and CEO of the fair-housing groups, said “the most glaring” problem is bathrooms that do not allow someone in a wheelchair to close the door behind them and transfer from the chair to the toilet. In addition, the complexes lack entrance ramps, forcing tenants in wheelchairs to climb curbs.

    I’m not sure how someone in this day and age could fail to recognize that this isn’t accessible,” McCarthy said.