Saturday, August 13, 2016

Tampa Family Gets Fleeced For $7,000 After Paying For House Rental For Home In Foreclosure, Then Not Allowed By Lawyer/Owner To Move In

In Tampa, Florida, WFTS-TV Channel 29 reports:
  • A Tampa family paid thousands of dollars to lease a house, but they said the owner refused to leave or even give them their money back.

    And they later learned that house was in foreclosure. Now the homeowner is suing the family saying they backed out of the agreement.

    We were going to move in here with three children,” said Joezette Hite, who saw a rental listing for a South Tampa Home on Zillow in June. She says she called for an immediate showing, then quickly signed a year-long lease.

    “We needed to move in by the 29th at the latest, because were closing on our house on the 30th. And I asked him could we move a few days prior and he said absolutely,” Hite said.

    The house is owned by Tampa attorney James Lee Clark and was marketed by Florida Recovery Property Solutions, Llc.

    The Hites paid a total of $7,000 for a deposit and first and last months' rent.

    But when they tried to move in, she says Clark was still there. [...] She had to rent three storage units to store her own belongings, then stay in a hotel until she could find another place to rent.

    But she says Clark refused to return her money.

    “They have sent their certified letters as undeliverable back. I have showed up at James Lee Clark’s office because he's an attorney here in Tampa, but the people there say he hasn't been there in weeks,” she said.

    Hite later learned Clark's house received a final foreclosure judgment two days after she signed a year-long lease, something she says Clark and Florida Recovery Solutions never disclosed.

    “They received a letter from the court that it's going to be auctioned off in a couple of months,” she said. The current auction is scheduled for October 19.
Source: Foreclosure house at center of rental dispute (Tenant says she paid thousands but couldn't move in).

South Florida Man Pinched For Allegedly Pocketing Over $7,000 In Deposits From Prospective Tenants For Homes He Had No Authority To Rent

In Broward County, Florida, the South Florida Sun Sentinel reports:
  • A Sunrise man used Craigslist to advertise rental properties he had no authority to rent, police said.

    The properties in Plantation and Fort Lauderdale turned out to be boarded up or in foreclosure and created awkward encounters for duped renters when the owners or other customers showed up.

    Stephen Plante, 23, of Sunrise, is accused of renting out two apartments and a townhome and collecting more than $7,000 after signing fake leases.
    Plante was identified through a photo lineup and surveillance video at the business where he cashed the money orders, police said.

    In [two] Plantation cases, police noticed the lease agreements had discrepancies, wrong addresses and incorrect rental dates.
    The police report did not indicate how Plante was tracked down as a potential suspect, but did say a fingerprint was left behind when the money order was cashed. [One] bamboozled renter identified Plante in a photo line-up, authorities said.
    Plante faces multiple charges of grand theft, fraud, intentional false advertising and burglary. He remained in Broward's jail Friday on bonds totaling $33,300.

Landlord Agrees To Cough Up $125K To Settle False Claims Act Allegations That It Stiffed Section 8 Renters By Pocketing Their HUD-Provided Utility Reimbursement Funds

From the Office of the U.S. Attorney (Scranton, Pennsylvania):
  • The United States Attorney’s Office for the Middle District of Pennsylvania announced [] that Sherman Hills Realty LLC and Park Management LLC (collectively referred to as “Sherman Hills Realty”), have agreed to pay $125,000 to resolve allegations that Sherman Hills Realty violated the False Claims Act.

    The United States alleges that Sherman Hills Realty failed to provide qualifying tenants with utility reimbursement funds and instead kept the funds. The funds were provided by the United States Department of Housing and Urban Development (HUD) to Sherman Hills Realty to be disbursed to low and no income tenants at the Sherman Hills Apartments in Wilkes-Barre, Pennsylvania.

    According to United States Attorney Peter Smith, this settlement agreement resolves allegations that Sherman Hills Realty, which has its headquarters in Brooklyn, New York, was an owner and manager of a multifamily property located at 300 Parkview Circle, Wilkes-Barre, PA (Sherman Hills Apartments) and failed to provide some of the qualifying low and no income tenants at the facility with utility reimbursement funds during the period April 1, 2011 through April 30, 2014.

    Pursuant to a Housing Assistance Payments (HAP) contract, Sherman Hills Realty was required to submit to HUD accurate utility reimbursement requests for qualifying low and no income tenants on each of the monthly vouchers submitted to HUD. Pursuant to the HAP contract and HUD policies and regulations, Sherman Hills Realty had an obligation to provide Sherman Hills Apartment tenants with utility assistance payments or credit the funds back to HUD. Sherman Hills Realty was not permitted to retain funds for utility assistance payments if the funds were not provided to the tenants. The purpose of the funds is to assist very low or no income tenants with the provision of basic necessities.

    Sherman Hills Apartments was taken over by another company in April 2014.

    According to Brad Geary, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General, “This settlement is the latest example of our continued effort to collaborate with the Department of Justice as a means to protect HUD subsidized residents with the greatest financial needs. This agreement could not have occurred without the selfless efforts of prosecutors and investigators, who ensured HUD's program was not compromised at the expense of its tenants."

    The case is the result of an investigation by the United States Attorney’s Office for the Middle District of Pennsylvania and the United States Department of Housing and Urban Development, Office of Inspector General. The case was litigated by Assistant United States Attorney Timothy S. Judge.

    Tenants and former tenants of Sherman Hills Apartments seeking information concerning utility reimbursement funds that may have been wrongfully withheld by Sherman Hills Realty LLC and/or Park Management LLC should contact the Philadelphia Regional Office of the U.S. Department of Housing and Urban Development, 100 Penn Square East, Philadelphia, PA 19107 at (215) 656-0500.

Section 8 Tenant Faces Felony Theft By Deception Charges For Allegedly Having Unauthorized Tenant Living With Her, Failing To Report Income To Housing Authority Which Would Have Changed Her Subsidy-Receiving Status; Investigator: Rules Violations Yielded Suspect $48K+ In Unentitled Benefits

In Monroe County, Pennsylvania, the Pocono Record reports:
  • A warrant has been issued for a Canadensis woman who is accused of Section 8 housing fraud, according to a press release from the Monroe County District Attorney’s Office.

    The DA's office is seeking information on Christine Nazario, 35, who is facing eight felony counts of theft by deception.

    Detective Joseph Coddington of the District Attorney’s office began an investigation of Nazario after she was arrested in 2015 by state police.

    The alleged fraud came to light when Nazario and her husband were arrested by the state police at their Tego Lake address in Middle Smithfield Township for endangering the welfare of children. Charges were filed state police in that incident in September 2015.

    Coddington’s investigation found that Nazario allegedly had an unauthorized tenant living with her from 2013 to 2016. The investigation further found that Nazario had unreported income which would have changed her Section 8 status.

    Section 8 HCVP (Housing Choice Voucher program) is intended to assist low to very low income households in obtaining decent and adequate housing. Tenants receiving assistance in the Section 8 HCVP are required to meet certain income and eligibility requirements. Under Section 8 HCVP, all or a portion of the tenant’s rent is subsidized by the U.S. Department of Housing and Urban Development (HUD) through "Housing Assistance Payments" (HAP) made on the tenants’ behalf. The amount of the HAP is calculated according to HUD guidelines, which takes into account the size, composition, and income of the household.

    Nazario is required annually to certify her information with the Housing Authority of Monroe County, and provide information regarding the identity of all household members and any and all income earned by anyone residing in the residence, by completing a "Personal Declaration Form".

    Nazario allegedly received $48,106 in benefits she was not entitled to.

Former Housing Authority Executive Director Gets 48 Months In Prison For Pocketing Approx. $1.5 Million In Palm Grease In Exchange For The Awarding Of Business & Contracts, & Failure To Pay Income Tax On Illegal Payments

From the Office of the U.S. Attorney (Hartford, Connecticut):
  • [M]ICHAEL SIWEK, 56, of North Haven, was sentenced [...] in Hartford to 48 months of imprisonment, followed by three years of supervised release, for receiving approximately $1.5 million in bribes while serving as the executive director of the West Haven Housing Authority, and for failing to pay taxes on the illegal income.

    According to court documents and statements made in court, [...] SIWEK was the executive director of the West Haven Housing Authority (“WHHA”), an agency that received federal funding. As parties of his duties, SIWEK had substantial discretion over awarding WHHA business and contracts. From approximately February 2007 through February 2012, SIWEK received approximately $1.5 million in payments from individuals in exchange for the awarding of business and contracts with the WHHA and entities that the WHHA controlled.

    SIWEK received these bribes through wire transfers and check payments to himself individually, and to Four Star Development Company LLC, a limited liability corporation that he controlled. SIWEK also received payments that were characterized as “loans,” but which were not subject to any terms or conditions typically associated with commercial loans.

    In addition, SIWEK did not report these payments to the IRS, and filed false tax returns that underreported his income and tax liability.

    Judge Shea ordered SIWEK to pay restitution in the amount of $1,503,096.91, and back taxes, penalties and interest totaling more than $363,000.

Friday, August 12, 2016

Tenant's Failure To Shut Off Gas After Disconnecting Clothing Dryer When Vacating Premises Leads To Explosion, Killing Property Inspector, Leveling Home, Severely Damaging Neighboring Houses; Officials Rule Incident Accidental

In Omaha, Nebraska, the Omaha World-Herald reports:
  • As natural gas filled a Benson home for two days, a voicemail waited on Clara Bender-Rinehart’s work cellphone alerting her to the potential danger.

    Her relatives and friends may never know whether she heard that message.

    The property inspector was killed midday Monday when the gas ignited, exploding as she stood in the kitchen. Officials have concluded that her death was the result of an accident.

    Natural gas leaking from the gas line of a disconnected clothes dryer was the cause of the blast that occurred about 12:15 p.m. Monday, Omaha fire officials announced Wednesday.

    The explosion leveled the home at 3858 N. 65th St. and caused severe damage to others.

    Bender-Rinehart, 30, an employee of Certified Property Management, had been inspecting her fourth home Monday.

    The Omaha Fire Department completed its investigation Wednesday and released a time line that started with an evicted tenant moving out and ended with the explosion.

    On Saturday, [the tenant] moved out of the house with help from friends, fire officials said in a press release. A clothes dryer was one of the last items removed, investigators said.

    The dryer was disconnected from the gas line, but the gas line was not shut off, allowing gas to leak into the home.

    Later Saturday, two friends of [the tenant] went back to the home to grab a couple of items and told [her] that they had smelled natural gas.

    [She] then left a voicemail on Bender-Rinehart’s work cellphone late Saturday, but investigators don’t know if Bender-Rinehart heard it.

    Fire investigators found Bender-Rinehart’s phone and Omaha police listened to [the tenant]’s voicemail, said Fire Battalion Chief Tim McCaw.

    Chief Deputy Douglas County Attorney Brenda Beadle said that because authorities ruled the explosion to be an accident, no charges would be filed.

    Mark McDonald, president of NatGas Consulting in Boston, which investigates natural gas explosions, said those removing the dryer most likely would have known the gas was leaking.

    “Once you disconnect the gas line, you’re going to know it,” McDonald said. “It’s going to smell, it’s going to make a hissing sound.”

    McDonald is not directly involved in the investigation and offered analysis based on dozens of gas explosion cases his company has investigated.

    He said residents should hire a licensed professional to handle appliances connected to gas lines and install a methane detector that would sound even with small amounts of natural gas present.

    Likewise, Bender-Rinehart ought to have been able to smell the gas, he said. The air should still have smelled of natural gas if the gas was odorized properly.

    The gas would have reached an explosive level, McDonald said.

    Omaha fire officials couldn’t pinpoint the exact ignition source, but McDonald said it could be anything — a cellphone call, light switch, static electricity or something else.

    He said residents should always call the utility company any time they smell gas.

    Metropolitan Utilities District officials could have prevented the explosion even if they had been notified Monday, after two days of natural gas leaking, McDonald said, although it would have been difficult.

    You basically have a bomb sitting there,” he said.

    Jeremy Aspen, the president of the management company, said he and another co-worker are sure that Bender-Rinehart knew to call MUD if she smelled gas.
    Natural gas fueled the home’s furnace, water heater, stove and clothes dryer.

    [Aspen] said the house was rented without a washer or dryer, which means any washer or dryer in the house probably belonged to the tenant. “We didn’t have a dryer there,” Aspen said.
    Aspen said that although disconnecting the gas line from the dryer was the “catalyst” that led to the blast, he recognizes that there was no malice involved.

    “To assign blame for an accident probably isn’t going to get us any closer to having this resolved in our minds, and of course it doesn’t bring Clara back,” he said.

    Bender-Rinehart’s husband, Jake Rinehart, expressed a similar sentiment.

    “This was an accident and our family is not angry and we don’t blame anybody for this situation, as tragic as it is,” he told the news media Wednesday. “It just happens. I only hope that we can all learn from this going forward, not only being more cautious in daily routines but also in the procedures and steps taken to ensure the safety of employees and people we serve.”

Brooklyn Landlord Who Illegally Subdivided 2-Family Home Into A No-Permt, 11-Unit Firetrap Housing 23 Tenants Faces Manslaughter Charges After Flames Swept Through Premises, Leaving One Dead, Nine Injured; Blaze Traced Back To Electric Water Cooler Plugged Into Overloaded System That Overheated, Exploded

From the Office of the Kings County, New York District Attorney:
  • Brooklyn District Attorney Ken Thompson, together with [other New York City officials] announced that the owner of a Flatbush apartment building that was illegally subdivided has been indicted on manslaughter and other charges stemming from a fatal fire that left one tenant dead and nine others, including four children, injured.
    The District Attorney identified the defendant as Luckner Lorient, 78, of East Flatbush, Brooklyn. He was arraigned [...] on a 14-count indictment in which he is charged with second-degree manslaughter, criminally negligent homicide, second-degree reckless endangerment, third-degree assault and endangering the welfare of a child. The defendant was ordered held on bail of $1 million cash or $2 million bond and ordered to return to court on August 10, 2016. He faces up to 15 years in prison if convicted of the top count.

    The District Attorney said that, according to the indictment, Lorient was the owner of 1434 Flatbush Avenue, a three-story, wood-frame building with a commercial space on the first floor, residential apartments on the second and third floors, and a cellar. The second and third floor apartments were designed to be one-family railroad apartments, but had allegedly been illegally converted by Lorient into SROs (single-room occupancy), with six separate rooms on the second floor and five separate rooms on the first floor. A total of 23 tenants occupied those 11 rooms.

    On November 19, 2014, at approximately 12:39 a.m., a fire enveloped 1434 Flatbush Avenue, according to the indictment, after a water cooler on the second floor ignited as a result of being connected to an overloaded electrical circuit. The fire spread quickly to the floor, walls and ceiling of a living room and simultaneously spread through the second floor hallway and up the stairs to the third floor. Twenty of the 23 tenants were home at the time, most of them sleeping.

    The tenants on the second floor escaped on their own or with the assistance of firefighters. The tenants on the third floor were either trapped or overcome by smoke and lost consciousness. Firefighters rescued six unconscious tenants from rooms and hallways on the third floor. Many of the tenants suffered moderate to severe smoke inhalation and three were seriously burned. A 24-year-old man, Jeff Frederic, died of smoke inhalation.

    Lorient, who was the pastor of a church located on the ground floor, is alleged to have recklessly disregarded safety issues, despite numerous violations and vacate orders variously issued by the New York City Department of Buildings, Department of Housing Preservation and Development and the New York City Fire Department dating back more than 10 years. It is alleged that Lorient filed false documents asserting he was no longer operating the building as an illegal SRO, but after inspections confirming his assertions he quickly converted the building back to the illegal SRO.

    Furthermore, it is alleged, because of the conversion there were power strips and multiple extension cords in every room, and stretched into hallways, and electrical outages due to overloads were a common occurrence – which Lorient knew because of notices of violations received from HPD.

    In fact, according to the investigation, nearly every room had a television and refrigerator and many had air conditioners, space heaters, microwaves, cell phone chargers, laptops and hot plates – seriously comprising the electrical system. A tenant on the second floor had an electric water cooler. The overloaded system caused a wire to the water cooler to overheat and erupt.

    In addition, the building failed to offer two means of egress, as required by law, and the single fire escape for the building was inoperable.
For more, see Flatbush Landlord Indicted for Manslaughter in Connection With Fatal Fire That Left One Dead and Nine Injured (Defendant Illegally Subdivided Apartments Leading to Unsafe Conditions).

Murder Suspect Allegedly Confesses To Killing Friend, Then Hijacking Title To Victim's Home With Forged Deed

In Kingman, Arizona, the Mojave Valley Daily News reports:
  • A Kingman man will be arraigned [] in the stabbing death of his friend. Richard J. Polaski, 62, is charged with first-degree murder.
    The Las Vegas Metro Police Department contacted the Mohave County Sheriff’s Office about Polaski, who was a patient at the Western Arizona Regional Medical Center for a drug overdose, according to court documents.

    Polaski told Metro police that he killed his friend, John Holland, in July 2015 and buried him in the backyard of his home in the 3700 block of Lass Avenue in Kingman. Polaski sold that property and moved onto Holland’s property in the 3800 block of Northern Avenue after allegedly forging documents to put the deed in his name.

    Sheriff’s deputies contacted neighbors, who said they had not seen Holland, who had no living relatives, in more than a year. The Northern Avenue property was previously owned by Holland but was now in Polaski’s name. Sheriff’s deputies also searched the Lass Avenue property and found a hole filled with cement.

    According to police reports in the case, on July 27, 2015, Polaski went to Holland’s Northern Avenue home and found him in his office. An argument began about money that Holland reportedly owed Polaski. Holland reportedly had a handgun and knife on his desk and threatened to blow Polaski’s head off, court documents stated.

    Polaski allegedly picked up the knife and stabbed Holland in the stomach several times until he died. He allegedly placed Holland’s body in a trash can and drove back to his home. He hired workers to dig a hole in his back yard. He then placed Holland’s body in the hole, poured lye on the corpse and filled the hole with cement. He also hired other workers to pour more cement on top of the cement he already poured.

    Since the murder, court documents stated, Polaski forged documents to put Holland’s property in his own name and forged documents to put Holland’s Merrill Lynch account in his name so he could access money.

    Polaski was arrested July 12 after a medical emergency at the Pioneer Hotel & Gambling Hall in Laughlin. He contacted casino security and Metro police and allegedly confessed to Holland’s murder.

Thursday, August 11, 2016

Another Judge Weighs In, Slams Brakes On FBI's Use Of Warrantless, Secretly-Planted Recording Devices Outside Courthouse To Bag Participants In Suspected Foreclosure Sale Bid Rigging Racket; Antitrust Feds Have Already Bagged Over 50 Guilty Pleas To Date In Sweeping Probe Of Auctions Across Bay Area

In San Francisco, California, The Recorder reports:
  • A federal judge has barred prosecutors from introducing evidence picked up by recording devices planted outside the San Mateo County courthouse without a warrant.

    In a 19-page decision issued [last week], U.S. District Judge Charles Breyer found that federal investigators had "utterly failed to justify" a warrantless surveillance program which picked up more than 200 hours of recordings, including at least one private conversation between a judge and a prosecutor.

    "Even putting aside the sensitive nature of the location here, defendants have established that they believed their conversations were private and that they took reasonable steps to thwart eavesdroppers," wrote Breyer, finding that the recordings violated the defendant's Fourth Amendment rights.

    Breyer's decision comes in a criminal antitrust case targeting investors alleged to have conspired to manipulate public real estate auctions held outside the Redwood City courthouse in 2009 and 2010. 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 during the foreclosure crisis.

    A spokesman for DOJ declined to comment on Breyer's decision.

    Latham & Watkins partner Daniel Wall, one of the lead defense lawyers in the case, said Breyer's decision highlights how the intrusion beyond the defendants.

    "[The case] illustrates what a danger this is to everybody's privacy rights" when the government is allowed to turn recording devices on in public and keep them on for long periods without judicial oversight, Wall said.

    Between December 2009 and September 2010, the FBI used hidden microphones in four locations outside the San Mateo County Courthouse in Redwood City to collect more than 200 hours of audio recordings near the auctions site. Breyer noted that the microphones picked up conversations "regardless of whether that person was a defendant, a county employee, an attorney, a judge, or a member of the public."

    Breyer wrote that among the notable conversations picked up was one between an unnamed San Mateo Superior Court judge and a county prosecutor discussing case loads, attorneys that appeared before the judge, and "a request from the judge that the prosecutor not blame his deputies for certain events." Another recording captured two women discussing intimate relationship issues, including one telling the other about someone stuffing a dollar bill down her bra, something Breyer noted might be "slightly blue for the pages of the Federal Supplement."

    Breyer wrote that "the FBI's electronic surveillance program recorded conversations that speakers would not have participated in had FBI agents or members of the public, rather than hidden microphones, been in close physical proximity to them."

    His decision runs counter to an opinion last month from his colleague, U.S. District Chief Judge Phyllis Hamilton, who declined to suppress recordings picked up by devices placed outside courthouses in Alameda and Contra Costa counties.(1) Although Hamilton found the placement of the devices "unsettling," she wrote that defendants hadn't taken steps to protect the privacy of the conversations that were recorded.

    In the San Mateo case, Breyer held three days of evidentiary hearings, including a prolonged examination of the agent who placed devices in four locations near the Redwood City auction site. Breyer found that the defendants had taken steps to make sure their conversations weren't overheard. The judge noted that techniques that don't require judicial sign off, including body microphone recordings by a cooperator and an undercover agent posing as an investor, had failed to pick up the group's conversations.
For more, see Breyer: Courthouse Bugs Violate Fourth Amendment (may require subscription; if no subscription, GO HERE, then click the appropriate link for the story).
(1) See 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.

Ongoing Federal Antitrust Probe Into Atlanta-Area Foreclosure Sale Bid-Rigging Rackets Nets Another Guilty Plea

From the U.S. Department of Justice (Washington, D.C.):
  • A Georgia real estate investor pleaded guilty [] for his role in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

    James R. Patterson Jr. admitted that he agreed with other real estate investors to rig auctions of foreclosed homes in Gwinnett County from May 2007 until at least November 2011. According to court documents filed in the U.S. District Court for the Northern District of Georgia, Patterson and his co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids. The winning bidders then paid off the conspirators who had refrained from bidding against them. As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders and in some cases, to the people who owned the foreclosed homes.

    Including the individual pleading [], twenty-two defendants have been charged in connection with the Justice Department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Twenty of those have either pleaded guilty or agreed to plead guilty.

    These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.
    For more information about the task force, please visit Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit

Wednesday, August 10, 2016

HOA Tags NYC Developer With $67 Million Lawsuit, Alleging Condo Buyers Were Promised "Premier Luxury Caliber" Building, But Were Left Holding The Bag With Crumbling, Leaky Mess

In New York City, the New York Post reports:
  • The residents of a Midtown high-rise were promised a building of “premier luxury caliber” — but all they got was a crumbling, leaky mess, a $67 million lawsuit charges.

    When The Alexander was being built on East 49th Street near Second Avenue in 2008, its developer promised amenities like an Equinox gym and roof decks, as well as fine touches such as marble and bronze elevators and white-oak flooring, according to the suit by the building’s condo owners.

    But the 24-story building is now rife with dangerous code violations and sloppy, unfinished work, the owners charge in the suit, filed in Manhattan Supreme Court last week against developer Alexander Gurevich and others.

    Gurevich “represented to prospective purchasers that the Turtle Bay condominium and its units would be of a premier luxury caliber and would be designed and constructed with the highest quality of materials and workmanship,” the suit says.

    “However, this was not the case at all.”

    The suit says cracks and leaks permeate the building, including on the roof, balconies and terraces, causing water to flood some condos — which, according to the real estate website StreetEasy, sell for as much as $1.9 million for a two-bedroom.

    Cracked glass on the common roof deck is held together with clear tape, and windows aren’t sealed properly to keep out drafts and noise, the suit says.

    Terra-cotta roof tiles are loose and in danger of falling, and no emergency signs were ever installed, the suit says.

    The five-member board of managers says several high-end amenities promised in the building’s “offering plan” are nonexistent, too.

    A promised gym, “cold-storage room” for perishable-food deliveries and mail room were never built, the suit says.

    The manager panel claims in the complaint that The Alexander’s initial board was stacked with Gurevich cronies who failed to pay the building’s water and sewer bills for five years. Now, they say, condo owners will have to shell out roughly $320,000 as part of a 10-year repayment plan, with another $122,000 in interest.

    “The board felt it was very necessary to pursue these claims based on the various conditions alleged in their complaint,” said their lawyer, Steven Sladkus.

Report: Government Decision To Exempt Lawyers From Ban On Pocketing Upfront Fees For Negotiating Mortgage Reduction Plans Opened Floodgates For Loan Modification Rackets

From a recent investigative report from The Center For Public Integrity:
  • [A]ttorney-affiliated firms that aggressively market mortgage reduction plans have mushroomed in the past few years because of a loophole in a government program called “loan modification.”

    Created in 2009, the program was designed to help struggling homeowners facing foreclosure brought on by the recession. But a government decision to exempt lawyers from a ban on charging advance fees for modification services has led to scams that have cheated thousands of homeowners.

    Many homeowners who were supposed to benefit instead lost millions of dollars to firms that promised them loan modifications and other foreclosure-relief services that they failed to deliver, a Center for Public Integrity investigation has found.

    Since 2010, these practices have drawn tens of thousands of consumer complaints to federal and state authorities, sparked multiple legal and ethical concerns over what constitutes the legitimate practice of law, and raised questions about how aggressively states have monitored the conduct of lawyers who profit from the schemes, the Center’s investigation found.

    The Center identified more than 1,000 attorneys — more than one-third of them in California and Florida — who participated in loan-modification and foreclosure-prevention schemes that resulted in either law enforcement actions or disciplinary reviews by state legal authorities.
For more, see Lawyers exploit foreclosure ‘rescue’ fee loophole (Government decision enriches attorneys, stings homeowners).

Tuesday, August 09, 2016

Central Florida Closing Agent Faces Charges For Allegedly Swiping $1.3 Million From Real Estate Escrow Account; Allegedly Tells Investigator She Intends To Pay It Back, But Gives No Answer As To How She'll Raise The Cash; Title Insurer Steps In To Cover $1.17 Million Tab

In Orlando, Florida, the Orlando Sentinel reports:
  • Victims of an alleged million-dollar fraud by Orlando title agent Leaza Lopez say they trusted her because of her parents’ reputation as a Central Florida real estate couple – Michael and Linda Nabavi.

    Lopez is charged with stealing about $1.3 million in funds she was supposed to hold in escrow for her clients. Although her parents are not charged, several victims said they only did business with Lopez because they knew the Nabavis.

    “Her family has been in real estate for a long time, and we trusted her mom. So we assumed she was legitimate,” said Orlando businessman Base Maali, who said he lost a $50,000 deposit in the alleged fraud.

    Contacted by phone, Linda Nabavi declined to comment on her daughter’s charges. She is currently a real estate agent for Century 21 Carioti.

    Lopez has pleaded not guilty to the charges, which include organized fraud and stealing escrow funds. Efforts to reach Lopez and her attorney for comment on this story were not successful. According to court records, she told investigators that her troubles began when she missed two months of work following a surgery in 2014.

    Lopez stated she intended to repay all the funds she diverted, but could not provide any answer of where she would get the money,” stated an affidavit filed by the investigator for the Statewide Prosecutor’s office.

    The Nabavis have owned real estate and title companies for years in Central Florida, including their current company Platinum Property International.

    Another group of buyers told investigators they lost $120,000 that Lopez was supposed to be holding to close on a short sale. Jason and Rachel Costa of Orlando lost money on that deal, and said they used Lopez only because they knew the family – Rachel’s sister once worked for Nabavi at Platinum, the affidavit said.

    The investigation went through the the state’s Division of Insurance Fraud; Lopez, a licensed title agent, was arrested in March. She is also facing a civil lawsuit by First American Title Insurance Company, which appointed her to her original position as title agent, according to a state news release. First American had to cover at least $1.17 million of the losses, the state said.

    During a five-month period in 2014, consumers filed multiple reports to police and to the state, alleging that Lopez had stolen their money – failing to forward escrow payments to the appropriate mortgage companies.

    According to state records, Lopez’ husband Miguel Lopez was president of Lopez’s company, Olde World Title, when it was formed in 2011.

    The charges state that at least ten clients of Olde World Title had their escrow funds stolen. Lopez tried to conceal the fraud by making mortgage payments to some of seller’s mortgage companies, but stole the funds held in escrow for the hopeful buyers.
For the story, see Orlando real estate family rocked by daughter’s fraud charges (At least ten clients of Olde World Title had their escrow funds stolen, state officials charged).

Continued Rise In Judge-Appointed Guardianships Heightens Abuse Concerns Of Expanding Lucrative Court-Sanctioned Racket That Takes Over, Exercises Undue Control Over Disabled, Vulnerable Elderly (& Their Money/Assets)

Insurance industry publication Advisor News reports:
  • Dave Demming says the rise in the number of court-appointed guardianships among elderly clients is a troubling trend that he has seen in his 37-year career as a financial advisor.

    “We have to submit documentation that supports the funding request then wait for the guardian’s decision to approve disbursement of funds from the estate,” said Demming, who manages some $350 million in assets near Cleveland. “Any time a funding request is submitted, legal fees are assessed, which eventually drains my client's estate.”

    Demming’s issue involves the resource-draining bureaucracy surrounding clients, but it is a small piece of a larger problem of abuse that led to the formation of the Americans Against Abusive Probate Guardianships (AAAPG) in 2013.

    Sam Sugar launched the South Florida-based advocacy agency due to the growing numbers of family members complaining about professional guardians and probate courts having undue control over their disabled and elderly loved ones.

    "Professional guardianship is a cottage industry emerging nationwide that is becoming more organized and powerful as lawyers and probate judges realize what a gold mine it is to take over the lives and assets of elderly Americans to the detriment of their heirs," Sugar said.

    Once a court-appointed guardianship is established, the elderly person's finances are under the complete control of the appointed-guardian who may or may not be a loving family member.

    Court-appointed guardianship over the elderly is on the rise. Some 37 percent of judges, court managers and clerks who responded to a Center for Elders and the Courts survey revealed that guardianship filings have increased over the last three years and 43 percent noted an increase in caseloads.
    Among families where the patriarch or matriarch was born prior to 1946 there can be a substantial retirement nest egg at stake. In fact, boomers and Gen X-ers are expected to receive some $41 trillion from their World War II generation parents as they pass away.

    Guardianship attorneys appointed by courts are stealing billions from vulnerable elders sometimes on their own and other times working with unscrupulous family members,” said Jack Halpern, CEO of My Elder Advocate, a national franchise that works with families to solve elder care-related issues. “This has happened to a number of my clients.”

    State courts have appointed guardians to oversee the finances, health care and other needs of older adults who are unable to handle their own affairs but several reports note a rising number of allegations of financial exploitation, physical abuse and medical neglect by guardians.

    It's just another indication of how this racket has infiltrated and corrupted our most sacred judicial process and turned it into a cash cow for the stakeholders in this predatory legal system, which threatens every single older adult in America,” Sugar said.

    According to a survey in 2014 by the federal agency Administrative Conference of the United States, 60 percent of court personnel said they did not review credit or financial reports on prospective guardians.

    “In the instances where the judge and court-appointed guardian are conspiring financially, the care of my client does not tend to end well,” Demming said.

Monday, August 08, 2016

Trump Dodges Bullet In 'Trump University' Litigation As Court Denies Public Release Of Embarrassing Videotapes Of Mogul's Deposition Testimony; Judge: "[E]very Reason To Believe That Release Of Deposition Videos Would Contribute To Ongoing 'Media Frenzy' ... Increasing Difficulty Of Seating Impartial Jury"

In San Diego, California, Courthouse News Service reports:
  • After a media scramble to get a hold of Donald Trump's deposition videos taken for the class action lawsuit against the now-defunct Trump University, a federal judge [last week] declined to release hours of tapes to the handful of national media outlets that requested public access to them.

    Multiple media outlets, led by The Washington Post, requested to intervene in the case Cohen v. Trump to get access to deposition videos taken of the GOP nominee on two separate occasions in late 2015 and early this year.
    [U.S. District Judge Gonzalo] Curiel was tasked with deciding if particularized harm would result from the public release of the tapes, and balancing the public and private interests at stake if harm was found. He found Trump's argument that releasing the deposition tapes would cause a "media frenzy" and could potentially "taint the jury pool" had some merit, pointing out courts have found audio and video tapes "were subject to a higher degree of potential abuse" than transcripts.

    "Given the context of the case and the timing of media interveners' request, it is nigh-inevitable that 'cut' and 'spliced' segments of defendant's deposition videos would appear in both media reports and in political advertisements aired nationwide prior to the trial date in November, increasing the likelihood that prospective jurors would be exposed to information about the case, as well as to evidence that could be introduced at trial to impeach defendant's testimony," Curiel wrote in the order.

    But Curiel did find several factors weighed in favor of disclosure, including legitimate public interest in the content of the videos, the media's desire to provide the electorate with insight into Trump's demeanor and Trump's public celebrity as an "experienced public figure."

    Since the videos have not been filed as evidence, however, "the presumption of public access is substantially weaker," Curiel wrote.

    "There is every reason to believe that release of the deposition videos would contribute to an ongoing 'media frenzy' that would increase the difficulty of seating an impartial jury," Curiel reiterated.

Texas Woman Hit With Tax Foreclosure Notice Due To Hike In Property Assessment When Her Brother Placed His Mobile Home On Her Land

In Linn, Texas, KRGV-TV Channel 5 reports:
  • A foreclosure notice had one Rio Grande Valley woman on edge. She said a home on her property that does not belong to her is causing her trouble.

    Mary Lillian Lane owns and lives in a tiny prairie home in Linn, Texas. Lane said six years ago her land was disrupted when her brother moved his home onto her property.

    She said he did not report to the Hidalgo County Appraisal District. Lane started receiving property tax bills for her house and her brother's house. Lane paid her taxes and said her brother did not.

    She said she was being punished for something she didn't do and wants out from her brother's tax problems.

    In March, Lane received a foreclose notice for not paying property taxes. She went to the Hidalgo County Appraisal District and the collection lawyers to see if they would split the taxes.

    Lane wanted separate property tax bills.

    “When I got the letter…threatening me to repossess my house and the land, my other brother and I went over there and they tried to help us. They told us ‘well bring the affidavit and all that,’ so we did,” she said.

    Because Lane was able to get paper work and affidavits to the Hidalgo County Appraisal District, she was able to split the property taxes with her brother.

    Jorge Gonzalez with the Hidalgo County Appraisal District said Lane's case is unusual, but not unfixable. Gonzalez said if there is good evidence and documentation, settlements like this are possible.

    “What we would do is just allow them to have their own account for the building alone that way they pay their own taxes for the building alone,” said Gonzalez.

    Lane is pleased with the outcome and said she feels better.

    CHANNEL 5 NEWS tried getting a hold of Lane’s brother, but all of the calls went unanswered.

    Gonzalez said if the brother continues to ignore the property tax notices and does not pay, his house is in jeopardy of foreclosure.

Maryland's Little-Known Annual Property Tax Credit Saves Baltimore Homeowner's Paid-Off Home From Possible Real Estate Tax Lien Foreclosure

In Baltimore, Maryland, WJZ-TV Channel 13 reports:
  • Achieving the American Dream of home ownership comes at a price. For some, that price is too high. Now a local consumer group is spreading the word about a little-known tax credit that can mean the difference between keeping or losing your home, WJZ’s Amy Yensi reports.

    Loretta Jefferson packed the last 20 years of her life into boxes, fearing she would lose her home. “I was anxious. I was thinking, ‘Well, where am I going to live now?'” said Jefferson.

    The 69-year-old retired secretary paid off her Brooklyn row home, but couldn’t make ends meet to pay the taxes. That put her at risk of a tax lien foreclosure.

    “Oh my gosh. I’ve been in this house all these many years. And now for about $1,000 or so dollars, I’m going to lose my house,” said Jefferson.

    In a last-ditch effort, she applied for the Homeowner’s Property Tax Credit. A few weeks later, she got the news she had been hoping for. “One thousand and two hundred two dollars and ninety seven cents,” Jefferson said.

    The tax credit has been around since 1986. Most homeowners who qualify don’t even know it exists.

    “Of the people that were seen, that were in danger of tax lien foreclosure, ninety percent–had they taken the credit–would have been able to save their homes,” said Marceline White, who runs the Maryland Consumer Rights Coalition.

    White says Baltimore City and Prince George’s County have the highest foreclosure rates in the state, and this renewable tax credit of up to $1,200 a year can be a big help.

    “To qualify your home has to be valued at $300,000 or less and your income has to be $60,000 or below,” said White.

    To earn the Homeowner’s Property Tax Credit for 2016, you must apply by September. To learn how, CLICK HERE or call 211.

Sunday, August 07, 2016

Campaign To Harass NYC Rent-Stabilized Tenants Out Of Their Homes Continues; Recent Lawsuit Accuses Landlord Of Failing For Six Months To Fix Cooking Gas To All Apartments After City-Ordered Shut-Off Due To Problem In Boiler Room; Free Hot Plates Distributed To Each Family Of Little Help

In Bushwick, Brooklyn, Bushwick Patch reports:
  • A group of Bushwick tenants who have lived at 36 Linden St. without cooking gas for six months are suing the city and ICON Realty Management, the building's owner, in the hope that a housing court judge will force the issue to be resolved.

    City records show that the Department of Buildings ordered the gas shut off at the property in late January due to a problem in the boiler room. A DOB spokesman said [] that ICON has been issued a permit to fix the problem, but has yet to have its work tested.

    Nicole Denuccio, a tenant leader who has lived in the building since 2012, said ICON gave out hot plates to the nearly 20 apartments that haven't been able to use their stoves and burners, though many have broken.

    She also said the company cut some of the affected tenants' rent bills by 25 percent, including hers.

    But boiling water on a hot plate can take an hour, she said, time she doesn't have, considering that she works two jobs and is in school. "A lot of times, I'll buy food out, and that's a significant cost," Denuccio explained.

    What's more, while her gas was free, the hot plates use electricity. That, combined with takeout bills, has surpassed the rent savings she was given, Denuccio said.

    ICON did not immediately return a request for comment [].

    The tenants' suit was filed by lawyers from Brooklyn Legal Services(1) in June, and a hearing is scheduled for Friday. The tenants will be rallying outside their building at 1:30 p.m., along with a collection of fair housing advocates.
Source: Bushwick Tenants Headed to Court After 6 Months Without Cooking Gas (Nearly 20 units in a Bushwick building haven't had cooking gas since January).

For a follow-up story, see Bushwick Tenants Say 6 Months Without Cooking Gas Is Part of Owner's Plan to Force Them Out:
  • [A] housing court judge ordered Icon Realty Management, the building's owner, to install electric stoves in the gasless units within a month, according to Adam Myers, an attorney with Brooklyn Legal Services representing the tenants.
(1) Brooklyn Legal Services is part of Legal Services NYC, a non-profit organization providing legal services for low-income residents of New York City.

Over 1,000 Poor Tenants (600+ Of Which Are Kids) In 346-Unit NW Indiana Public Housing Complex Located On Superfund Site Told To Start Packing Bags, Get Ready To Take A Hike; Local Housing Authority Files Application To Demolish Aging Premises After EPA Issues Warning That Soil Is Loaded With Lead, Arsenic; HUD Says Tenant Protection Vouchers To Be Made Available To Booted Families

In East Chicago, Indiana, The Times of Northwest Indiana reports:
  • The East Chicago Housing Authority wants to demolish all 346 units at the West Calumet Housing Complex and a hearing has been scheduled for next week, according to a notice posted on the agency’s website.

    Between 1,000 and 1,200 residents — including approximately 670 children — were told by the city [last] week it would be safer for them to temporarily relocate from the complex because the city and housing authority recently were notified the soil is highly contaminated with lead and arsenic.

    The city was notified Sunday about the levels of contamination, Carla Morgan, city attorney for East Chicago, said in response to a public records request.

    The housing authority has submitted a “demolition or disposition” application to the U.S. Department of Housing and Urban Development, and the federal agency is in the process of reviewing it, spokeswoman Elena Gaona said. She did not have information [] on how soon that review might be completed.

    In a statement, HUD said it can provide “tenant protection vouchers” for affected families to relocate after a review of a demolition or disposition application.

    HUD said it is working to process the city housing authority’s application and is committed to expediting the review process for the allocation of vouchers.

    “HUD does not yet have a timetable for when residents will have their vouchers,” the statement said. “As soon as it is available, we will share it with the East Chicago Housing Authority so they can share it with residents.”

    Residents do not currently have a deadline to move and will not be immediately losing their homes, according to a statement from HUD.

    “The East Chicago Housing Authority is first working to secure vouchers for these families before the demolition or disposition proceeds,” the HUD statement said.

    It’s long been known the soil at West Calumet Complex and other areas of the city’s Calumet neighborhood are contaminated, but residents were not expecting to have to leave their homes during remediation.

    A USS Lead facility once operated on the site, and a 79-acre tract encompassing the neighborhood was added to the Superfund National Priorities List in April 2009. West Calumet Housing Complex and Carrie Gosch Elementary School occupy the first of three zones within the Superfund site that the EPA has targeted for cleanup.

    A copper smelter, lead refinery and secondary lead smelter operated in the neighborhood from 1906 to 1985, according to the EPA. The housing complex was built in the late 1960s and early 1970s. The EPA was established in December 1970.

    The EPA issued a proposed cleanup plan in 2012 that called for removing up to 2 feet of contaminated topsoil and replacing it with clean soil, including up to 6 inches of topsoil. The agency began mulching bare ground in June, posted warning signs and has sent letters to individual residents informing them of soil test results at their homes.

    Several residents have told The Times letters they received from the EPA in June say lead and arsenic levels found in the ground outside their homes in late 2014 far exceed cleanup levels set by the federal agency.

    The EPA said it has not yet determined a date for soil removal. The agency is planning to reach out to the community before any excavation is done, spokeswoman Rachel Bassler said [].

State Regulators Backpeddle On Nursing Home Shutdown Order Six Days Before Scheduled Close; Change Of Plans To Allow Facility To Stay Open, Those Among The Four Dozen Vulnerable Residents Who Were Abruptly Forced To Leave Invited To Apply For Readmission

In Port Orange, Florida, The Daytona Beach News-Journal reports:
  • State health care regulators relented on their original order to shut down a Port Orange assisted-living facility after its mishandling of sexual assault claims, records show.

    Six days before Grace Manor Assisted Living and Memory Care was required to close its doors, the Florida Agency for Health Care Administration issued an amended order, changing its ruling from a license “suspension” to a “restriction,” a lesser requirement that allows the ALF to remain open.

    The facility was originally ordered closed by Tuesday. Now the owners of Grace Manor have until the same day to implement a list of 11 conditions to come into compliance, including firing its current administrator and retraining all current and new employees to deal with suspected elder abuse.

    In the new order, the immediate moratorium on new patient admissions remained unchanged.

    Grace Manor houses about four dozen residents in a single-level building at 1321 Herbert St. operated by Thrive Senior Living in Atlanta. AHCA officials previously said it was undertaking efforts to coordinate their relocation.

    That appears to no longer be the plan.

    Shelisha Coleman, a spokeswoman for the agency, said, “If residents want to return, they must be appropriately assessed” before coming back to Grace Manor, and the facility must “receive approval for each resident requesting to return.”

    “Subsequent to the suspension order, leadership of Grace Manor provided details to the agency of actions they have taken, including removal of the executive director," Coleman said in an email. "Although leadership is important, we must have assurances that similar events will not occur in the future.

    “Therefore, in addition to the initial steps taken by Grace Manor, the agency imposed restrictions on the license in lieu of proceeding with the license suspension at this time.”

    The about-face by regulators is not uncommon in ALF governance. In fact, it happens often, said Brian Lee, executive director for Families for Better Care, a Tallahassee-based group that advocates for improving long-term care for seniors.

    “There’s some truth to the fact that AHCA doesn't want to cause more harm to the residents that aren’t directly affected by this but indirectly affected by what’s happening in this particular situation,” Lee said, adding that moving from one place to another can be stressful for some residents.

Real Estate Developer Agrees To Kick In $5,200 Per Lot-Leasing Household To Ease Relocation Trauma For Booted Residents In Asheville Mobile Home Park; Clears Way For Construction Of 290-Unit Complex

In Asheville, North Carolina, the Citizen-Times reports:
  • Maria Escobedo and her Lakeview Mobile Home Park neighbors already knew they’d be receiving some money to find new homes when they arrived at the Asheville City Council chambers on June 14.

    Nick Hathaway, partner and director of development at Hathaway Development in Atlanta, had promised them a total of $250,000 – though he had no legal requirement to donate any money.

    By the end of the council meeting that day, however, members of the more than 50 households that composed the wooded, tranquil community in South Asheville had learned Hathaway would be gifting them an additional $40,000.
    The more than 200 Lakeview residents, including about 65 children, received notices Jan. 31 that they would have to move by July 1, [...].

    Hathaway Development had bought the property on which the mobile home park sat. The company plans to build 290 apartments in a four-building complex, called Skyland Exchange, at 55 Miami Circle and 70 Allen Ave.

    Each household would receive $1,000 to assist with the transition, according to the notice. “We didn’t feel that was enough,” [attorney Susan] Chitwood said. “They were about to endure this huge trauma.”

    Plus, relocating a mobile home would cost an average of $11,200, according to research [...].
    Each household will receive about $5,273. Homeward Bound, an Asheville nonprofit organization that helps homeless people find places to live, is scheduled to disburse the money Aug. 1. [... T]he final settlement also included the stipulation that residents would not have to move until Aug. 31.

    Hathaway said he plans to have the apartment complex be ready for move-in by Halloween next year.
For the story, see Mobile home park residents get extra $40,000 to move (Generosity and morality prevailed where the law didn’t exist).

Gentrification-Minded Los Angeles Landlord's Eviction Notices Have Nearly 60 Families Scrambling, Facing The Boot As Local Law Prohibiting Uncontrolled Dispossessions, Rent Hikes Not Applicable To Multi-Unit Structures Built Post-1978

In Los Angeles, California, EGP News reports:
  • Los Angeles Mayor Eric Garcetti reminded renters last week that they have rights under the city’s Rent Stabilization Ordinance, but as one group of tenants in Highland Park has found out, those rights don’t apply to everyone.

    The city ordinance provides protections against eviction and rent hikes to some tenants living in older apartment dwellings, but not to the nearly 60 families living at the Marmion Royal apartment complex at 5800 Marmion Way, across the street from the Highland Park Gold Line Station. The tenants are facing eviction by the property’s new owners, Skya Ventures and Gelt Ventures, who purchased the property from Azusa Pacific University for $14.3 million.

    In May, Skya’s president, Gelena Skya-Wasserman, told real estate news site The Real Deal that they plan to renovate the building’s façade and apartment units, and to upgrade security and add new amenities to the complex, which according to The Real Deal was 91% leased when the property changed hands.

    Residents and housing advocates [] denounced the evictions as another example of families being displaced by gentrification of the Northeast Los Angeles neighborhood.
    Protections under the Rent Stabilization Ordinance or RSO, apply to multi-unit buildings built before 1978; the Marmion Royal was built in 1987.

    The lack of protections for tenants like those at the Marmion Royal has allowed landlords to raise rents as high as they want and has led to a flood of no-fault evictions at the same time that the demand for housing is on the rise, claims the NELA Alliance, a group of local activists documenting gentrification in Northeast L.A.
    [One resident] said tenants attempted to come to an agreement with the owner that would allow them to return to their apartments once the remodel is complete, but while he was amenable to allowing them to return, their new rent would be nearly double what they now pay.

    There’s also the additional cost of finding a new place to live while construction is going on, making the deal unaffordable.