Saturday, September 24, 2016

Slow-Paying California Client Security Fund Estimates Shelling Out $8 Million For Year 2016 To Theft Victims Ripped Off By Their Attorneys

In San Francisco, California, the Northern California Record reports:
  • The California Client Security Fund, managed by the State Bar of California, provides a chance at reimbursement for those whose money is taken by a dishonest attorney.(1)

    The California State Bar website tells the story of Jewell Matthews, a pastor, who recently received $3,000 from the fund as reimbursement for the fee she and her late husband paid to California attorney Philip Kramer in 2010. The couple was struggling with mortgage payments for their Pennsylvania home when a letter from Kramer arrived, offering his services to help find a solution to their payment problem.

    The couple didn’t think twice about trusting Kramer. The fact that he was an attorney, coupled with the name of the Matthews’ mortgage lender used in the document, gave it perceived legitimacy. Matthews attributed her naiveté to her trusting pastoral nature and desperation. When Kramer took their money without providing any work, the Matthews tried unsuccessfully to contact him.

    The Matthews were not the only victims of Kramer’s dishonest dealings. The State Bar and the Attorney General’s office shut down his office in 2011. He was disbarred for collecting advanced fees from clients without providing representation.

    The California Client Security Fund does not move quickly, but it does move, as Matthews can attest to. She is grateful to receive the money, even though it is six years after Kramer cheated her and her husband.

    The fund’s director, Lori Meloch, estimated that $8 million in reimbursements will be awarded in 2016. Approximately 700-800 people are reimbursed by the fund each year. But it is a lengthy process; Meloch tells people it can take up to two years before their application is considered.

    California has more than 150,000 lawyers. When someone believes they have been cheated by one of them and wants retribution, they need to start the process by filing a complaint with the State Bar. If the bar investigates accusations and finds the lawyer has taken money illegally, usually by not providing services, the complainant may be awarded restitution through the fund. There is a cap of $50,000 on payouts that occurred before Jan. 1, 2009, and a $100,000 cap on losses that occurred on or after Jan. 1, 2009.

    A victim of attorney fraud must fill out an application, available on the State Bar website, to get the reimbursement ball rolling. The complaint must be due to actual loss of money, which the attorney received. It can’t be simply a matter of dissatisfaction with the attorney’s performance.

    The fund was established in 1972 to protect consumers from dishonest lawyers. It covers the loss of money or property to a dishonest lawyer. It does not provide compensation due to lawyer incompetence or malpractice.

    The types of dishonest actions that can qualify under the fund include
  • theft or embezzlement;
  • failure to refund unearned attorney fees;
  • borrowing money from a client without the intention or ability to repay;
  • taking a client’s money or property purportedly for use as an investment when no investment is made; and
  • an act of dishonesty or deceit that causes a client to lose money or property.
Source: California's lawyer-backed fund gives victims of attorney fraud chance to recover money.
(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.

Nassau County DA Pinches Disbarred Attorney For Allegedly Fleecing Dead Client Out Of Over $400K; Estate Beneficiaries Still Await Proceeds From Sale Of Home

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced that a disbarred attorney was arrested [] for allegedly stealing more than $400,000.00 from an estate he represented.

    Robert Alan Wagner, 63, of Bellmore, was arraigned [...] and is charged with grand larceny in the second degree (a C felony). Bail was set at $200,000 bond or cash and the defendant is due back in court on September 12. Wagner, who was also ordered to surrender his passport, faces up to five to 15 years in prison if convicted.

    “This defendant is charged with stealing more than $400,000 in estate funds that he held for a client, and using that money for his own personal purposes,” DA Singas said. “Attorneys hold a special position of trust with their clients, and stealing from those grieving from the loss of a loved one is especially despicable.”

    DA Singas said that Wagner was retained by the executrix of an estate to represent her in February 2013. In December 2013, the deceased woman’s property was sold for approximately $450,000.00. After the appropriate deductions and expenses, the approximate balance of $407,000.00 was to be deposited in the defendant’s escrow account and to be used for estate related matters, including distribution to the beneficiaries of the estate.

    Although the money was deposited in December 2013, at one point in February 2014 the balance in the account had been depleted to $300.00. In addition, none of the proceeds from the sale of the home had been distributed to the beneficiaries of the estate.

    Between July 2014 and March 2015, the defendant allegedly misappropriated or used other funds to pay the beneficiaries. One beneficiary, however, who was entitled to $100,000.00, still had not received any money by May 2015. The defendant allegedly provided the beneficiary with multiple excuses and no payment was forthcoming. Wagner allegedly used the money to pay for personal expenses and to carry on his law practice.

    The executrix of the estate and the beneficiary filed a complaint with the NCDA in July 2015.
Source: Disbarred Attorney Arrested For Stealing More than $400,000 from Estate Funds (Robert Wagner faces up to five to 15 years in prison).
(1) The Lawyers’ Fund For Client Protection Of the State of New York manages and distributes money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the New York bar acting as an attorney or a fiduciary.

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.

Nassau County DA: Attorney Held $25K Of Clients' Home Sale Proceeds In Escrow Pending Receipt & Recording Of Mortgage Satisfactions; He Never Obtained Documents & Pocketed His Clients' Cash Instead

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced the arrest of a disbarred attorney yesterday who is accused of stealing $25,000 from clients he was representing in the sale of their home.(1)

    Timothy Daly, 53, of Hempstead, was arrested and charged with grand larceny in the third degree (a class D felony). If convicted, he faces up to 2-1/3 to 7 years in prison. He is due back in court on September 16 and was released on his own recognizance.

    “Attorneys have a special obligation to act in the best interests of their clients,” said DA Singas. “This defendant is charged with stealing from clients who entrusted him with their home purchase and using their money to pay his rent and line his pockets. My office is committed to holding him accountable.”

    DA Singas said Daly was hired by the complainants to represent them in the sale of their residence in Queens. On the day of closing in August 2011, Daly agreed in writing to hold in escrow $25,000 of the sale proceeds until he sent two original satisfactions of existing mortgages to the title company for recording. Daly, however, allegedly failed to obtain the satisfactions and his clients never received the money owed to them.

    The NCDA began investigating the case in June 2016 when the complainants, who had to obtain the satisfactions of mortgage on their own, filed a complaint.

    Daly was disbarred by the Appellate Division, Second Department, on July 24, 2013 for professional misconduct unrelated to this matter.
Source: Disbarred Attorney Arrested for Stealing $25,000 from Clients (Timothy Daly, 53, Allegedly Used Homebuyers’ Escrow Funds to Pay His Rent).

(1) The Lawyers’ Fund For Client Protection Of the State of New York manages and distributes money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the New York bar acting as an attorney or a fiduciary.

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.

Law Enforcement Finally Catches Up To Attorney Recently Disbarred For Commingling, Misappropriating Client Funds; Theft By Misapplication Of Property Charge Brought For Defendant's Alleged Failure To Distribute Nearly $44K Belonging To Dead Client's Estate

In North Haverhill, New Hampshire, the Valley News reports:
  • A 63-year-old Woodsville attorney has been indicted by a Grafton County grand jury on accusations that he failed to distribute nearly $44,000 he had been holding on behalf of the estate of a Haverhill farmer.(1)

    Gary J. Wood, who operated a law office on Pine Street in the village of Woodsville, faces a felony count of theft by misapplication of property.

    He was disbarred this summer, according to documents on the state Bar Association’s website, for allegedly commingling and misappropriating clients’ funds.

    According to his Martindale-Hubbell online profile, Wood earned a law degree from Franklin Pierce Law Center in 1980.

    The indictment asserts Wood deposited $43,927 from the estate of Haverhill resident Irving W. Thayer, into his attorney trust account, at the request of the estate’s executor, Alan Rutherford, a Haverhill real estate appraiser and registered tax preparer.

    Wood was supposed to later return the money to the estate but “recklessly” failed to make the payment “and treated the said funds as his own,” according to the indictment.
    According to the state Bar Association’s website, Wood came under scrutiny in November when he failed to file his annual trust accounting certificate, an auditing system that ensures attorneys either don’t possess any client’s assets or funds, or if they do, ensures the funds are held in compliance with Supreme Court rules.

    Because he failed to produce the certificate, the Supreme Court in December suspended him from practicing law in New Hampshire.

    The next month, the Supreme Court ordered Wood produce a second certificate, this time to show that he had completed and met minimum continuing education requirements for New Hampshire lawyers. Though he had never rectified his first suspension, the Supreme Court again suspended Wood from practicing.

    In May, the Professional Conduct Committee, a board that works under the New Hampshire Supreme Court Attorney Discipline System, recommended to the court that Wood be disbarred.

    The recommendation came after an auditor reviewed Wood’s attorney accounts and found that he “misappropriated client funds,” according to a Supreme Court order, published on the state Bar Association website on July 20.

    “The audit demonstrated that attorney Wood misappropriated client funds in his possession, routinely paid himself before they were earned, commingled client funds with his own funds and operated his Interest on Lawyers Trust Accounts with a deficit or out of trust,” the Supreme Court order reads.

    Wood was formally disbarred on July 11.
Source: Woodsville Attorney Indicted.
(1) The Public Protection Fund has been established by the New Hampshire Supreme Court to provide some measure of reimbursement to victims who have lost money or property because of theft or misappropriation by a New Hampshire attorney, and occurring in New Hampshire during the course of a client-attorney or fiduciary relationship between the attorney and you. The Fund is administered by the New Hampshire Bar Association, through a nine-member committee, under the general oversight of the New Hampshire Supreme Court. The Fund is funded by annual contributions made by attorneys who are members of the New Hampshire Bar Association.

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.

Cops Bag Law Firm's Legal Secretary For Allegedly Filching Nearly $200K From Employer's Dead Clients

In Freeport, Pennsylvania, the Pittsburgh Tribune-Review reports:
  • A legal secretary stole nearly $200,000 from seven estates she oversaw at the Tarentum-based law firm where she worked, the Allegheny County District Attorney's office said [].

    Joy Hale, 57, of Freeport is charged with seven counts of theft and 21 counts of forgery, court records show.

    Hale's bookkeeping — in which investigators said the forgery and theft spanned more than two years — came under scrutiny in May when Sandra Smith noticed discrepancies in the estate of her father, which was being handled by attorney Bill Krzton's Three Rivers Law Firm, according to a criminal complaint.

    Law firm officials could not immediately be reached for comment.

    When Smith approached Krzton about the mistakes, he responded: “You probably just made a mistake somewhere; you are not meant to understand this.”

    Krzton asked Hale to look over the estate paperwork, police wrote. Smith met later with Hale and Krzton, and Hale produced bank statements later found to be altered, police said. Smith discovered the alterations when she checked Hale's documents against documents from the bank.

    Investigators found $96,480 missing from Smith's father's estate, coming from 20 monthly checks Hale made payable to herself with Smith's forged signature, according to the complaint.

    Police said Hale admitted to signing the forged checks and creating false bank statements to cover up the theft.

    Hale told police she needed the money to help with medical care of her son in Georgia, according to the complaint, and her husband had been laid off.

    According to the complaint, when police asked Hale if she'd stolen from other estates, her attorney — Krzton — spoke up. He told police Hale had stolen about $3,000 from Krzton's aunt's estate in 2013, and he'd allowed Hale to pay back the stolen funds through her wages.

    Investigators searched Hale's bank records and discovered she'd stolen money from six other estates, totaling $94,547, according to the complaint.
Source: Tarentum legal secretary charged with stealing nearly $200,000 from estates.

(1) If the attorney is found to have some responsibility for the failure to properly safeguard his clients' money, the victims of this theft may be eligible for some reimbursement for their losses from the Pennsylvania Lawyers Fund for Client Security, which was established by the Supreme Court of Pennsylvania in 1982 to reimburse clients who have suffered a loss as a result of a misappropriation of funds by their Pennsylvania attorney.

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.

Friday, September 23, 2016

Nassau County DA Pinches Long Island Man For Alleged Home Improvement Ripoff, Accused Of Grabbing $7K For Work That He Subsequently Never Performed; Complaint Filed With County Consumer Affairs Office Yields Referral To Prosecutor

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney announced that a Bellmore man was arrested [] for a “take the money and run” scam, in which he allegedly took $7,000 from a homeowner for home improvement work that he did not perform.

    Joseph Policaro, 41, of Bellmore was arrested [] by NCDA investigators and charged with grand larceny in the third degree (a D felony) and operating a home improvement business without a license (an A misdemeanor). If convicted, he faces a maximum of 2-1/3 to 7 years in prison. He is due back in court on September 1 and was released on his own recognizance.

    “This defendant claimed to be a contractor and stole thousands from a Bellmore resident for home improvement work that he never performed,” said DA Singas. “Today’s arrest serves as a reminder to the public to check contractors’ licenses before hiring them, and a warning to unscrupulous contractors that those who scam Nassau residents will be prosecuted.”

    On July 25, 2015 the homeowner entered into a contract with Policaro to perform home improvement work on the exterior of the home, and paid the defendant $7,000. When the work did not begin as scheduled, the defendant allegedly made excuses claiming that he was “running late or he was “delayed.” The complainant filed a complaint with the Nassau County Office of Consumer Affairs, which then referred the case to the NCDA’s office for investigation in March 2016.

    The investigation revealed that Mr. Policaro allegedly spent the homeowner’s funds on expenses unrelated to the complainant’s home including assorted debit card purchases for personal expenses at Wal-Mart, Speedway, Stop & Shop, gas stations and convenience stores. He also paid vendors for expenses unrelated to the complainant.
Source: Unlicensed Home Contractor Arrested for Taking Money for Work He Never Performed (Joseph Policaro Allegedly Took $7,000 and Repeatedly Told Victim He was “Running Late” or “Delayed”).

Home Improvement Contractor Gets Jail Time For Fleecing Four 80+ Year Old Homeowners (Including One With Alzheimers') Out Of $40K+; Probe Triggered By Initial Review, Subsequent Complaint Filed By Local Social Services Agency Serving The Elderly

In Honesdale, Pennsylvania, the Wayne Independent reports:
  • Texas Township business Borsdam's Plumbing and Electrical Services is “effectively dead” after its co-owner was sent to jail [] for home-improvement fraud.

    Wheelchair-bound David Borsdam, 70, of Honesdale, was sentenced to spend 20 days to five years, less one day, in Wayne County jail in connection with him scamming four elderly victims out of thousands of dollars. The defendant also cannot ever again work in the home-improvement business.

    President Judge Raymond Hamill said the case was not an instance of simply a businessman overcharging customers, but an intentional act to defraud “vulnerable” victims. “This is a criminal, a criminal, act,” the judge emphasized during the sentencing hearing.

    Borsdam could have been sentenced to between nine months and seven years in prison, but the judge said he was imposing a lighter term due to the defendant's frail health.

    Borsdam in July pleaded no contest to the felony charge. A defendant who pleads no contest doesn't admit guilt but concedes there is enough evidence for a conviction.

    He and his wife and co-defendant, Betty Jane Borsdam, also must pay $41,400 in restitution to the victims.

    Betty Borsdam, 70, also of Honesdale, was earlier placed in the Accelerated Rehabilitative Disposition program, which allows non-violent, first-time offenders to have charges dismissed if they complete a probationary period.

    Defense lawyer Richard Henry told the court, “Effectively the (Borsdams') corporation is dead.”

    The investigation into the business at 1903 Roosevelt Highway began in 2015, when the Wayne County Area Agency on Aging reported to police the financial exploitation of several elderly residents.
    The victims were all in their mid- to late 80s at the time of the crimes, one of whom suffers from Alzheimer's disease and was forced into an assisted living facility after being scammed.
    In one instance, the aging agency gave state police 15 contracts for work completed by Borsdam's at the Texas Township residence of an 81-year-old woman who paid the company $64,697 between October 2014 and July 2015.

    A certified inspector with the aging office reviewed the Borsdam's work and said the prices were “extremely high and the homeowner was taken advantage of,” according to court papers.

    In another incident, police investigated work performed by Borsdam on a leaking toilet at the High Street residence of a senior citizen.

    Borsdam submitted an initial proposal for $2,736, but later said more work needed to be done for approximately $18,891, according to court papers.

    An acquaintance of the victim, suspicious of the price jump, contacted Jim Miller Plumbing & Heating. Miller found much of the work to be unnecessary.

    Documents prepared by Betty Borsdam revealed the victim was “grossly overcharged, man hours were exaggerated” and materials were marked-up in excess of industry standards, police said.

    Also, a review of checks used by some of the victim indicated the checks were only signed by the victim but made out by and to David Borsdam, police said.

Judge Belts Home Improvement Grifter With 8 Consecutive 1 To 2 Year Sentences (8 To 16 Years Total) For Fleecing Over $163K In Ripoffs Covering Eight Homes, Mostly Elderly Homeowners; Defendant Stole By Signing Contracts, Pocketing Substantial Upfront Deposits, Performing Shoddy, Incomplete Work

From the Office of the Bucks County, Pennsylvania District Attorney:
  • An unlicensed Langhorne contractor was sentenced [] to serve eight to 16 years in state prison for bilking multiple homeowners of more than $163,000.

    The scope of John New’s home-improvement crime wave covered three counties, eight homes and 11 victims, most over age 60. It spanned nearly five years under three corporate entities, each unlicensed or fraudulently licensed and insured.

    Left in New’s wake were unfinished kitchens, bathrooms, roofs, patios and tens of thousands of dollars in lost deposits. Several victims had to shell out many thousands more to correct substandard work that New did complete.

    To Bucks County Senior Judge Clyde W. Waite, these circumstances justified eight consecutive one- to two-year state prison sentences, one for each household. He also ordered New to pay a total of $163,291.92 to his victims, none of which New has raised.

    “This should send any message that needs to be sent as to what will be tolerated,” Waite said.

    New’s punishment was the latest in a series of lengthy sentences imposed recently on fraudulent contractors by Bucks County judges.

    Last year, John and Ryan Thayer, a father-son team from Levittown, received state prison sentences of seven to 20 years and six to 20 years, respectively. The Thayers admitted fleecing 10 victims out of more than $675,000.

    The longest sentence given a contractor in Bucks County was imposed on John Succi of Yardley in February 2015. Succi was sent to state prison for 15 to 30 years for stealing $2.5 million from a dozen victims in one of Pennsylvania’s largest contractor-fraud cases.

    New pleaded guilty on June 13 to eight felony counts of receiving advance payment for services and failing to perform them.

    He also pleaded guilty to one count each of theft by deception and defrauding his insurance provider by obtaining coverage with false information. Waite imposed concurrent one- to two-year sentences for those crimes.

    Bucks County Detective Eric Landamia began investigating New in August 2015. The investigation found that New had incorporated three different businesses for home improvement work. Only one ever was registered with the Pennsylvania Attorney General’s Office.

    Pennsylvania’s Home Improvement Consumer Protection Act, which took effect July 1, 2009, requires all contractors performing more than $5,000 per year of home improvement business to register with the Attorney General. The registration application requires disclosure of prior home improvement-related criminal convictions, bankruptcies, civil judgments and other information.

    Landamia found that New had lied to register one of his businesses, NUHL Construction & Management Group, in December 2012. New failed to disclose multiple lawsuits that had been filed against him and/or his business. New also operated his business without a state registration after it expired in December 2014.

    In addition, New used false information to obtain an insurance policy for his business. Not only did he submit the faulty state registration information to his insurer, he falsely told the insurer that he used no subcontractors.

    After his policy expired in October 2013, New continued without insurance.

    New typically stole from customers by signing a contract, collecting substantial down payments and failing to complete the work promised.

    Victims were forced to hire new contractors to finish the work at added cost. Some contractors had to re-do work that New had botched or performed contrary to engineering plans.

    “John New has stolen $17,000 from my family, destroyed our back yard, ruined our trust in people, and put us in (a) bad financial position that will impact my family for years into the future,” one victim, who hired New to install a new patio and deck, wrote in a letter to Waite.

    New stole seven years of home-improvement savings, the victim wrote, and left his property unsafe and looking “like a bomb exploded in our back yard.”

    An older couple wrote of how they had wanted to renovate their bathroom to include a walk-in tub for their adult daughter, who has cerebral palsy. Instead, New “left us stranded with no tub, no toilet, and no sink,” just a shower that was not working.

    The couple wound up paying $19,295 for a project that was expected to cost less than $9,000. “That someone would take advantage of a project that was essentially going to make life better for a disabled woman and her caregiver parents still leaves our nerves frayed and stomachs cold,” the couple wrote to the judge.

    “The damage to these victims was in many ways irreparable,” said Deputy District Attorney Marc J. Furber, who prosecuted New.

    Yet New has paid “not one penny” to make his victims whole, Furber said. “It doesn’t take much to see what the defendant’s purpose was here, and that was to defraud them.”

    Waite looked askance when New asked for a sentence of probation to allow him to work for the money he owes the victims. “I just want to make this right by everyone,” New said.

    Furber replied that the victims already understand, based on “a lot of empty promises” from New, the slim chances of recovering their money. He said a substantial prison sentence would send a stronger message of accountability to others.

    “Generally, contractors must know that this is wrong,” Furber said.

Complaints Continue Against Iowa Home Improvement Contractor With Dubious History Of Allegedly Stiffing Homeowners After Pocketing Their Money; Local Cops Allow Him To Get Away With It, Saying That Where There's A Contract, It's A Civil Matter!

In Windsor Heights, Iowa, The Des Moines Register reports in columnist Lee Rood's Reader's Watchdog column:
  • Here’s what we know about Timothy Lee Peek:

    He has a habit of walking away with other people’s money.

    He doesn’t pay debts.

    He shies away from courthouses.

    Which is why Pam Said wonders why law enforcement hasn’t done more about the fact that Peek, owner of T and J Home Improvement in Greenfield, cashed a $16,000 down-payment check last spring for a big job at her Windsor Heights home and disappeared without lifting a finger.

    “You can’t tell me he’s not breaking the law when he’s taking that kind of money,” she said. “It seems he just gets away with it and gets away with it and no one cares.’

    Said, 65, says she and her 72-year-old husband found Peek on and hired him to redo their driveway and sidewalk, add some siding to the front of their house and build a dining room addition. She hadn’t even picked out what color siding she wanted when Peek took her check in March and never came back.

    A month later, a Polk County judge issued a warrant for Peek’s arrest for failing to appear in court after not paying a $6,712 judgment left over from 2007, court records show. The court ordered Peek's wages be garnished, but those payments stopped after Peek paid $1,200, according to Curt McCormick, the lawyer trying to collect.

    A year ago, Peek cashed a $7,900 down payment check for a deck job around a pool in Waukee and didn’t hammer a nail.

    Tim and Marcia Tope told the Iowa Attorney General’s Office in a complaint that Peek was supposed to begin the job in October 2015. From then until July this year, he blamed other jobs, weather and sickness for failing to get the work started.

    Then, he claimed in June a refund check was in the mail. It wasn’t, according to the complaint.

    In Decatur County, Peek’s got another judgment against him for $6,000. He’s also got convictions for theft in Decatur and Clarke counties, assault in Wayne County, and he’s been sued for back rent and unpaid building supplies.

    Talk to him on the phone, though, and he’s got an answer for most everything.
    Windsor Heights police told me they looked into Pam Said’s complaint for three months but weren’t able to come up with probable cause for his arrest.

    Sgt. Derek Meyer contended the case was a civil matter because the two had a contract,(1) and Said is contending Peek broke that contract.

    I told Meyer I have written about similar cases in which contractors were charged criminally for taking large sums of money and failing to deliver work.

    He said each case is different.
For more, see Contractor who takes $16,000 has a history of not doing work.

(1) The idea that a scammer can immunize himself from criminal liability merely by incorporating the use of a written contract in his scheme to defraud is an idiotic notion. For the cop to dismiss this case as a civil matter simply because of the existence of a written contract is a reflection that this particular police department (and possibly the local prosecutor's office) may not have the resources (and/or possibly the expertise) necessary to adequately prosecute this type of fraud.

Courts have long ago addressed the authority criminal prosecutors have to "pierce through" attempts to disguise a blatant criminal ripoff as a common, legitimate business deal through the use of a business contract, thereby allowing them to overcome the scammer's common defense that the arrangement was just a civil transaction that should be handled as a civil lawsuit, not a criminal prosecution. See, for example:

People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:
  • The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)
People v. Jones, (1943) 61 Cal.App.2d 608, 620 [143 P.2d 726]:
  • Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.


    Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.

    The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)

Convicted Felon With Long History Of Fleecing Off Homeowners In Home Improvement Ripoffs Finds Himself In More Hot Water; New Criminal Charges Trigger Probation Revocation Hearing In Earlier Case

In Park County, Colorado, KDVR-TV Channel 31 reports:
  • A Park County contractor was awarded a license despite a history of convictions and lawsuits involving theft from clients. Now, more residents are crying foul.

    Donavon Johnson’s criminal history in Colorado dates to the 1990s. He is on probation related to a case of theft from El Paso County clients. Two Park County residents claim Donavon allegedly took their money without completing work.

    Betty Cain owns and operates the Freshwater Bar and Grill in Guffey, and hired Johnson for a major expansion.

    "The problem for most homeowners who hire a contractor that takes the money and runs, is that law enforcement usually calls it a civil matter and refuses to get involved," Cain said. "But Johnson actually has a felony conviction where his probation demands he do no more contracting work so 16-years later, why's he still doing it?”
    Park County resident Dena Vucetich also said Johnson did not do the work he was hired to do. Vucetich is an Army veteran who served in Afghanistan. She never thought adding a new roof plus front and back porches would be so stressful.

    "He ran pretty quickly with my money," Vucetich said. "You can't even begin to imagine how mad it makes me."

    Vucetich said she gave Johnson nearly $10,000 to do the work, but ended up paying someone else to finish the job.

    "You can imagine my shock when I found out the contractor license he had in El Paso County was revoked because he was convicted of a felony," Vucetich said.

    Sixteen years ago in Colorado Springs, there was a similar story.

    "He was supposed to put a new addition onto top of our house," Nancy Weddle said.

    Johnson pleaded guilty to theft of $15,000 in the Weddle case. But the justice system sentenced him to restitution of $10 month. At that rate, it won’t be paid back for 125 years. "Well, after we are dead and gone. We won`t get paid back," Weddle said.

    Johnson's probation paperwork from El Paso County said he is not supposed to do any contracting work and is not supposed to take any money up front from anyone.

    Despite those stipulations, he filed for a license in Park County. The county application is a self-reporting document and asks the potential contractor: “Have you ever had a contractor license denied, suspended or revoked by any jurisdiction?”

    Johnson left the box blank. Park County admits it failed to notice the omission, but did not revoke his license until the FOX31 Problem Solvers started asking questions.

    "Our frustration is, we would not have gotten duped if he didn't have a license. You have to have a license to do our job. He should not have been licensed and he was," Cain said.

    Johnson’s contracting insurance dropped him for nonpayment in June, before any work was to begin.
    As for leaving the self-reporting box blank on his license application, Johnson said, “I probably missed it, consciously or subconsciously, to be honest, OK?

    Taking money up front from customers violates his court orders.
    The Problem Solvers have learned Johnson's legal history includes six felonies and two dozen lawsuits. [...] Johnson returns to court on Oct. 4 in El Paso County for a probation revocation and a week later, he has a court appearance in Park County. Prosecutors there have charged him with two counts of obtaining signatures by deception.

Thursday, September 22, 2016

Illinois Title Insurer: Real Estate Agents Are Squeezing Bribe$ Out Of Closing Attorneys In Exchange For Referral Business; State Realtors' Association Left Highly Offended

In Chicago, Illinois, the Illinois News Network reports:
  • A law firm president said Realtors across Illinois are involved in kickback schemes with the lawyers they use to write title insurance policies, contributing to closing costs more than doubling in the past decade.

    Title insurance is essentially homeowners insurance against loss to past issues, such as boundary disputes and unknown liens on the property. Realtors typically guide the buyer to a law firm to facilitate that. A State Senate Licensed Activities and Pensions Committee hearing in Chicago last week examined whether there is a need for such transactions to be better regulated. Attorneys’ Title Guaranty Fund President Peter Birnbaum said the need is dire because Realtors across Illinois are receiving bribes for that business.

    “Kickbacks and other forms of illegal competition are growing, and the costs of these arrangements are being borne by the consumer in the form of higher prices,” Birnbaum said.

    Birnbaum and others at the hearing alleged that this practice is why the average cost of closing on a home has more than doubled in the last 10 years.

    “That’s an increase of 105 percent in the last 10 years, and it comes at a time when many home sellers are underwater, and the last thing they need is another $2,000 in fees,” Birnbaum said.

    Birnbaum said his company is one that he says would be approached to provide bribes to ensure they are referred title insurance policy customers. Birnbaum said he wanted to bring the issue to light because it’s hurting homebuyers and sellers. Birnbaum said you rarely hear complaints about the system of kickbacks because the lawyers who would complain would surely lose that business.

    The Illinois Department of Financial and Professional Regulation, which regulates the industry, said there are 19 licensed underwriter agencies and approximately 20,000 title agents in Illinois.

    Illinois Association of Realtors President Greg St. Aubin told the committee that he and his members take great offense to Birnbaum’s accusation and that if Birnbaum knew of any kickbacks, he should report them.

    “To make this broad-brush accusation that Realtors are involved in illegal kickback schemes, we find very offensive,” St. Aubin said.

City Housing Authority, HUD Begin To Kick In Ca$h To Give Rent, Security Deposit Assistance To Over 1,000 Poor East Chicago Residents Forced To Permanently Relocate From Public Housing Complex That Sits On Soil Loaded With Lead, Arsenic

In East Chicago, Indiana, The Times of Northwest Indiana reports:
  • The East Chicago Housing Authority board approved two resolutions [] intending to help residents of a public housing complex where alarmingly high levels of lead and arsenic were found in the soil.

    The resolutions authorized the use of the authority’s capital funds to help relocating West Calumet Housing Complex residents with security deposits at new homes and waived criminal background check requirements as part of the voucher process.

    More than 1,000 residents, including nearly 700 children, have been given until Nov. 30 to move out after learning the full magnitude and extent of lead and arsenic contamination in the soil around their homes. The complex sits in the footprint of the long-ago-demolished Eagle Picher lead smelter and just north of USS Lead, a second factory.

    The public housing complex is in the west end of the city’s Calumet neighborhood, which is part of an EPA Superfund site established in 2009.

    It’s long been known the soil within the entire Calumet neighborhood is contaminated,(1) but public housing residents were not expecting to have to permanently leave their homes as the city applies to HUD for the site’s demolition.

    The EPA in 2012 selected a cleanup plan and reached an agreement in fall 2014 with Atlantic Richfield and DuPont for a $26 million cleanup in part of the USS Lead Superfund site. However, last month, the federal agency said cleanup of the property could be renegotiated depending on the city’s long-term plans for the area.

    The U.S. Department of Housing and Urban Development last month released $1.9 million to ECHA to provide vouchers so West Calumet Complex residents can permanently relocate.

    A HUD spokesperson said [...] it was seeking approximately $1.2 million in additional federal, state and local funds in hope of reimbursing the East Chicago Housing Authority for the agency’s use of its capital dollars.
For more, see Resolutions aimed at helping West Calumet residents OK'd.
(1) See Lead in East Chicago: Old lead smelter site went unaddressed for years:
  • Nearly 20 years after an EPA project manager told state and federal health officials about a long-demolished lead smelter that once operated on the site of a public housing complex and elementary school in East Chicago, residents are just learning the full extent and magnitude of the contamination in the land some of them have lived on for generations. epa environmental protection agency

Wednesday, September 21, 2016

Florida Trial Judge Gives Notorious Zombie Debt Buyer The Boot In Attempt To Collect From Consumer Without First Providing Evidence That It Independently Verified Accuracy Of Original Creditor's Billing Statements

From The Consumer Financial Services Blog:
  • The County Court of the Twelfth Judicial Circuit Court of Florida [ie. Sarasota, Manatee, & DeSoto Counties] recently held that a debt buyer could not use the original creditor’s credit card statements to try to collect on the underlying debts, as the debt buyer failed to present evidence that it independently verified the accuracy of the credit card statements.
For more, see Fla. Court Holds Original Creditor Records Inadmissible in Debt Buyer’s Collection Action.

For the court ruling, see Midland Funding LLC v. Nole, Case No. 2016-SC-319 (Cty. Ct., 12th Jud. Cir., Manatee County, May 26, 2016).

Representing the consumer was Arthur Rubin, We Protect Consumers, P.A., Tampa, Florida.

Another Loan Servicer Screw-Up: 71-Year Old Homeowner With Perfect Record For Making House Payments Almost Loses Home To Foreclosure Anyway; Calls Local Media Troubleshooter To Intervene, Straighten Out Problem

In East Palo Alto, California, KGO-TV Channel 7 reports:
  • Making timely house payments should protect you against foreclosure. However, a South Bay woman with a perfect payment record still got the scare of her life.

    Carolyn White, 71, paid her mortgage on time every month, but when her mortgage company was bought out she was threatened with the loss of her East Palo Alto home due to a computer glitch.

Tuesday, September 20, 2016

Ten Real Estate Operators Get Sentenced In Northern California Foreclosure Sale Bid Rigging Racket; Defendants Get Off Light On Prison Time, But Get Belted With Fines, Restitution

From the U.S. Department of Justice (Washington, D.C.):
  • Ten Eastern California real estate investors were sentenced [] for their participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Eastern California, the Department of Justice announced.

    The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties.
    The following individuals were sentenced in the U.S. District Court for the Eastern District of California in Sacramento:
  • Anthony B. Ghio of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $1 million criminal fine and $214,544 in restitution to the victims of the crime.
  • John R. Vanzetti of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $1 million criminal fine and $271,454 in restitution to the victims of the crime.
  • Theodore B. Hutz of Stockton, California, was sentenced to serve five months in prison and ordered to pay a $250,000 criminal fine and $76,670 in restitution to the victims of the crime.
  • Richard Northcutt of Stockton, California, was sentenced to serve seven months in prison and ordered to pay a $1 million criminal fine and $614,982 in restitution to the victims of the crime.
  • Kennen A. Swanger of Alta, California, was sentenced to serve five months in prison and ordered to pay a $5,000 criminal fine.
  • Wiley C. Chandler of Stockton, California, was sentenced to serve seven months in prison and ordered to pay a $500,000 criminal fine and $614,982 in restitution to the victims of the crime.
  • Walter Daniel Olmstead of San Francisco, California, was sentenced to serve eight months in prison and ordered to pay a $29,687 in restitution to the victims of the crime.
  • Gregory L. Jackson of Lodi, California, was sentenced to pay a $150,000 criminal fine and $20,900 in restitution to the victims of the crime.
  • Robert Rose of Danville, California, was sentenced to pay a $100,000 criminal fine and $24,128 in restitution to the victims of the crime.
  • Anthony B. Joachim of Stockton, California, was sentenced to pay a $175,000 criminal fine and $94,154 in restitution to the victims of the crime.
  • Two other real estate investors, Andrew B. Katakis and Donald M. Parker, were convicted at trial of bid rigging in March 2014.

    A total of thirteen individuals pleaded guilty or were convicted in the U.S. District Court for the Eastern District of California in connection with this investigation. The sentences announced yesterday resulted from an ongoing investigation being conducted by the Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, the FBI’s Sacramento Division and the San Joaquin County District Attorney’s Office.

    Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-934-5300, visit, contact the U.S. Attorney’s Office for the Eastern District of California at 916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

More On The Legalized Pillaging Of Assets From Senior Citizens: The Court-Appointed Guardianship Racket

From a recent column in The Huffington Post:
  • It’s legal, but is it right?

    Imagine you’ve worked hard all of your life and suddenly you are deemed incapacitated and are stripped of your dignity and basic individual rights. You have been abducted from your home, isolated from your family, and “placed” somewhere to be medicated while your assets are being pillaged. The authorities that should be protecting you are the ones committing these heinous acts. It sounds like Nazi Germany, but this is happening in the United States today.

    The victims are seniors. The partners in crime are financial predators and agents of the Elder Guardianship system — attorneys, professional guardians, medical experts, and others who are paid out of the senior’s assets.

    There are some good judges but many are overworked and some are actively aiding the exploitation. Anyone can file to deem you incapacitated. The entire process from filing an incapacity petition to plenary guardianship where all rights are removed can happen within days. Yet, once you’re caught in the web, it’s almost impossible to break free... AND you are forced to pay your abusers in the process.

Monday, September 19, 2016

Judge Uses Civil Contempt Charge (Arising Out Of Civil Lawsuit) To Jail Loan Modification Scammer For Over Six Years (& Counting) Without Criminal Charges Ever Having Been Filed

In Orange County, California, The Orange County Register reports:
  • The judge simply does not believe that the black duffel bag, the one stuffed with $360,540 cash from Zulmai Nazarzai’s closet, mysteriously disappeared on that summer day six years ago. And, really, it’s hard to blame him.

    “The most incredulous story I’ve ever heard, and I’ve heard some whoppers,” Orange County Superior Court Judge Andrew Banks said in 2010, when he ordered Nazarzai to go to jail on contempt of court charges for failing to turn over the money as ordered.

    Nazarzai was never charged with, or convicted of, a crime. But he has been in solitary confinement in the Orange County jail ever since.

    Last week, however, a crack appeared in the prison wall: For the first time, a state appeals court asked Orange County Superior Court to hold a hearing to decide whether Nazarzai lacks “the present ability” to comply with the court’s turnover order; whether there’s a “substantial likelihood that continued confinement will accomplish the purpose”; and whether Nazarzai’s continued confinement has, in fact, become punitive.

    If the county does not hold that hearing, it must explain why. The Court of Appeal gave Orange County until Sept. 19 to comply.
    The California attorney general accused Nazarzai of doing very bad things in the civil suit that started this chain of events. He and his then-girlfriend were the masterminds behind a “boiler-room telemarketing operation” that lied to distressed and elderly people on the verge of losing their homes back in 2008 and 2009, prosecutors said in court documents. More than 1,000 people paid $2 million to keep their homes from foreclosure, most often unsuccessfully.

    The state attorney general prevailed in this civil – not criminal – action, and the couple were ordered to pay more than $4 million in penalties and restitution. Nazarzai pulled some $370,000 of company funds from the bank and stashed it at his home; the judge ordered him to hand it over to a court receiver.

    Nazarzai said he gave the cash to then-girlfriend Fasela Sheren, who said that she stuffed it in the duffel bag and was driving it to the receiver’s office in Los Angeles when she blacked out. She awoke at a hospital; the car had been towed; and when she reclaimed it, the bag with the money was gone, she said in a deposition.

    “I think he’s got the money in his possession, custody or control,” Judge Banks said of Nazarzai at the time. “And he holds the keys to getting out of jail.”

    Contempt is a tool judges use to compel reluctant witnesses to testify, deadbeat parents to pay child support or recalcitrant journalists to reveal sources.

    The law gives judges sweeping authority to use this tool: One can be held in civil contempt as long as a judge thinks it’s possible for you to comply and there’s a chance of compliance, [...]. Former lawyer H. Beatty Chadwick set the American record for time in jail on a contempt charge, spending 14 years behind bars under circumstances similar to Nazarzai’s.

    In 1995, a Pennsylvania judge ordered Chadwick to place $2.5 million into a court-controlled account during divorce proceedings. Chadwick said he couldn’t, as he had lost the money in bad investments. His wife’s lawyer charged that he actually hid it offshore. The judge believed the wife: Chadwick went to jail for failing to produce the money. He stayed there until 2009, when the court finally agreed that his incarceration had morphed from something coercive into something punitive. Continued jail time wouldn’t result in him producing the money, the court concluded, and he was set free. Chadwick noted that if he had been convicted of third-degree murder, he would have been out in half the time.

    Had the attorney general filed criminal charges against Nazarzai and prevailed, law professor Campbell doubts Nazarzai would have been sentenced to five years. If he had, and if his behavior in prison had been good, he’d be out by now, Campbell said.

Senior Member Of Boiler Room Telemarketing Sales Team Gets 52 Months for Role In Loan Modification Scam

From the Office of the U.S. Attorney (Bridgeport, Connecticut):
  • Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MEHDI MOAREFIAN, also known as “Michael Miller,” 37, of Irvine, California, was sentenced [...] to 52 months of imprisonment, followed by three years of supervised release, for participating in an extensive mortgage loan modification scheme. MOAREFIAN also was ordered to pay restitution in the amount of $2,390,496.59.
    [M]OAREFIAN was a senior member of the sales team. Acting as representatives of [a slew of controlled] entities, MOAREFIAN and other 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. To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.
    Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.

    Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

    As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

    The investigation revealed that the top tier of salesmen, including MOAREFIAN, were paid based on commission and typically earned 45 percent to 50 percent of the final fee, after $750 to $1,000 was taken [] for administrative costs.

Another Loan Modification Scammer With Dubious Past Dodges Heavy Time, Gets 9 Months For Ripping Off Thousand$ In Upfront Fees, Mortgage Payments From Unwitting Homeowners; Faces Additional 7+ Years Prison Time If She Violates Probation

In Hartford, Connecticut, the Journal Inquirer,com reports
  • An East Hartford woman who was charged in what state authorities have called a scheme that cost homeowners thousands of dollars as they were seeking to modify their mortgages was convicted of a reduced charge [] and sentenced to nine months in prison.

    Sabah Kennawi, 53, [...], was convicted of second-degree larceny and criminal impersonation in a Hartford Superior Court plea bargain, online court records show.

    She had originally been charged with first-degree larceny and two impersonation counts in her operation of a business called Mortgage Professional Services LLC.

    After the Correction Department releases Kennawi, the sentence calls for her to spend five years on probation, with the possibility of 7¼ more years behind bars if she violates release conditions.

    Kennawi collected thousands of dollars in fees and supposed mortgage payments from homeowners who had gone to Mortgage Professional Services seeking assistance in modifying their home loans, authorities alleged.

    Prosecutors in the chief state’s attorney’s office in Rocky Hill said she wasn’t legally permitted to collect the fees because she didn’t have a required state license. Moreover, authorities charged, she didn’t make the mortgage payments for which money had been turned over to her, keeping the money for her own use.

    Kennawi has a long history of brushes with state authorities over her business, which includes allegations that she engaged in debt negotiations on behalf of others without a license required by state law and that she practiced law without a license.

Sunday, September 18, 2016

Los Angeles Agrees To Spend $200+ Million Over 10 Years To Settle Fair Housing Suit Involving Lack Of Accessibility For Disabled Tenants In Publicly Funded Apartment Complexes; Settlement Comes On Heels Of Deal To Shell Out $1.3 Billion Over Three Decades In Separate ADA Lawsuit That Argued That City's Crappy Sidewalks Were A Nightmare For Wheelchair Users

In Los Angeles, California, the Los Angeles Times reports:
  • Los Angeles will spend more than $200 million over the next decade to settle a federal lawsuit alleging that the city failed to provide enough apartments for people with disabilities in its publicly funded housing developments.

    Under a deal approved Tuesday by the City Council, city officials will be required to ensure that 4,000 units are accessible to people who use wheelchairs, have hearing impairments or live with other disabilities. The city could reach that goal by building additional apartments, redesigning existing ones or demonstrating that units already built are, in fact, accessible.

    Michael Allen, a lawyer for three nonprofit groups that sued the city, called the agreement “the largest accessibility settlement ever reached involving affordable housing.”

    “It will send a strong, positive message to cities all over the country that their housing programs must be accessible,” he said.

    Los Angeles Mayor Eric Garcetti endorsed the settlement, saying in a statement that the city “stands for inclusiveness and access for all.”

    "If we have fallen short of that commitment, we need to fix it as quickly as possible,” he said. “This settlement allows us to resolve a long-standing legal issue with a predictable level of investment. More importantly, we are working to meet the needs of our disabled community now and for decades to come.”

    The settlement puts Los Angeles on the hook for another costly, multi-year legal payout centering on facilities for the disabled. Last year, city lawmakers agreed to spend $1.3 billion over 30 years on sidewalk repairs — ending a lawsuit that argued broken walkways were a nightmare for wheelchair users.(1)

    Tuesday’s vote will end a legal challenge filed in 2012 by Independent Living Center of Southern California, Fair Housing Council of San Fernando Valley, and Communities Actively Living Independent and Free. The dispute focused on apartments that were supposed to be built for the disabled in more than 700 affordable housing projects — buildings with nearly 47,000 units — approved over nearly three decades, city officials said.

    The three nonprofits argued that the city and its redevelopment agency had flouted state and federal anti-discrimination laws as they provided public money to affordable housing developments. Such buildings were typically constructed by private developers or nonprofit groups and financed or otherwise assisted by the city and its redevelopment agency.

    Disabled residents reported going to apartment buildings that were advertised as accessible, only to find they weren’t. In some locations, apartments had doorways that were too narrow to accommodate wheelchairs, the lawsuit states. Bathrooms and kitchens lacked the room to accommodate wheelchair users.

    Allen said that many apartments did not meet the higher accessibility standards established for housing built with government assistance, which require additional features such as lower countertops and grab bars in bathrooms.

    “They were not merely technical violations,” Allen said. “They were, in every instance that we studied, significant barriers to people with disabilities using those units, and in some cases the common areas leading to them.”
    The city must spend an average of $20 million annually on the program and ensure that at least 2,655 of the 4,000 units are designed for wheelchair users. The settlement will also require new affordable housing supported by the city to include a larger percentage of units for people with disabilities than is currently required.

    In addition to the $200 million, L.A. will also pay $4.5 million to the nonprofits that sued the city, plus up to $1 million in court costs and up to $20 million in attorneys’ fees.
For the story, see L.A. to spend more than $200 million to settle suit on housing for disabled.
(1) See L.A. agrees to spend $1.3 billion to fix sidewalks in ADA case:
  • [T]he [] agreement would resolve a lawsuit filed by attorneys for the disabled, who argued that crumbling, impassable sidewalks and other barriers prevented people in wheelchairs or others with mobility impairments from accessing public pathways in violation of the Americans With Disabilities Act.
    Councilman Paul Krekorian said it was a historic victory not only for people with disabilities, but also for the elderly and “anyone who is ever a pedestrian.”

Another Landlord Settles Fair Housing Lawsuit; Pays $25K To Settle Allegations That It Refused To Rent 1-Bedroom Apartments To Single-Parent Households With One Child, But Would Rent Same Units To Two-Adult Households

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department and the U.S. Attorneys’ Offices of the Eastern and Western Districts of Michigan [] announced an agreement with the owners and operators of seven Michigan apartment complexes to resolve allegations that they discriminated against families with children in violation of the Fair Housing Act.

    The lawsuit was filed on Nov. 19, 2015, in the U.S. District Court for the Eastern District of Michigan. The lawsuit alleged that the defendants, including the rental manager Sudi Hopper, as well as the corporate entities that own the complexes, Parkside East Inc., Holt Manor Inc. and Kelly Manor Inc., discriminated against families with children by prohibiting them from renting one-bedroom units in the defendants’ apartment complexes.

    The allegations were based on evidence generated by the Fair Housing Center of Southeastern Michigan, which had testers posing as prospective residents contact the defendants and ask to rent one-bedroom apartments. Testers who said that they wanted to rent an apartment with their child were told that children were not allowed in one-bedroom units.(1)  The Fair Housing Center filed a lawsuit, which was resolved separately.

    Under the terms of the consent decree, which still must be approved by the court, the defendants will establish a settlement fund of $20,000 to compensate victims of their discriminatory practices. The defendants will also pay $5,000 in civil penalties to the United States. In addition, the defendants will eliminate the restrictions on children that they previously imposed at the seven complexes that they own and operate.
For more, see Justice Department Settles Housing Discrimination Lawsuit Involving Seven Michigan Apartment Complexes.

For the lawsuit, see United States v. Parkside East, Inc.
(1) See Justice Department Sues Three Michigan Apartment Complexes For Discriminating Against Families With Children:
  • [T]he testing revealed that Hopper did not allow single parent households with a minor child to live in a one-bedroom apartment, but did allow households with two adults to rent such an apartment.

Civil Rights Feds' Fair Housing Suit: Creepy Landlord Subjected Female Tenants To Sexual Harassment, Retaliation

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department filed a lawsuit [] against two St. Louis landlords, Hezekiah and Jameseva Webb, alleging that they violated the Fair Housing Act by subjecting female tenants in their rental properties to sexual harassment and retaliation.

    The lawsuit, which arose from a U.S. Department of Housing and Urban Development (HUD) complaint, was filed in the U.S. District Court for the Eastern District of Missouri. It alleges that Hezekiah Webb, who served as property manager for the Webbs’ rental properties, sexually harassed female tenants at their properties.

    The complaint alleges that such harassment included:
  • conditioning housing or housing benefits on female tenants’ agreement to engage in sexual acts;
  • coercing female tenants to engage in unwelcome sexual acts;
  • subjecting female tenants to unwanted sexual touching and other unwanted sexual acts;
  • making unwelcome sexual comments and advances to female tenants and taking adverse actions against female residents when they refused the sexual advances.
  • “No woman should ever suffer from threats, violence or harassment in her home,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department works vigorously to enforce the Fair Housing Act by vindicating the civil rights of tenants so that all people can live in their homes and feel safe, protected and free.”

    “Unwanted sexual advances or harassment make it impossible for a woman to feel safe in her home,” said Gustavo F. Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Department of Justice to protect women from this type of unlawful treatment.”

    The suit seeks monetary damages to compensate the victims, civil penalties and a court order barring future discrimination.

Fair Housing Lawsuit: City Is Using Imposition Of Inflated Annual Fire Fees As A "Financial Stranglehold" To $queeze South Florida Assisted Living Facility Serving Mentally Ill & Elderly Out Of Business

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • An assisted-living facility has sued the city in federal court for charging what it claims was a too-steep fire fee and for discriminating against its mentally ill and senior residents.

    Neville and Pat Buchanan, a minister and a registered nurse who used their retirement savings to open Potter's House 13 years ago, say the city's actions have hurt the value of their Cannon Point property.

    "At some point, they'd like to retire, but at this point they can't because they can't sell the business for what it's worth because of the over-regulation and taxation," said their attorney, Aram Bloom.

    The city settled a suit in February brought by another Cannon Point facility, agreeing to pay Spaw Family Holdings just $60,000 to put its claims to rest. The company's six properties were foreclosed upon and the city ended up buying them from the bank for $855,992.

    The Cannon Point neighborhood is off Northwest 56th Avenue, a few blocks south of Oakland Park Boulevard.

    In the Potter's House suit, the facility claims it was forced to pay exorbitant fire fees — the suit called them a "financial stranglehold" — that jumped from under $15,000 to almost $50,000 over the course of three years.

    The suit charges the city "set out to systematically deprive Plaintiff's residents, who are handicapped (mentally disabled) and elderly individuals" of a place to live.

    "Moreover, because of limited bedspace in Broward County, Plaintiff's residents have nowhere else to go and will likely become homeless if Plaintiff is not able to keep its doors open to them as common residents." the suit said.

Mobile Home Park Operator Who Allegedly Failed To Enforce Parking Rules Against Residents Who Blocked Sidewalks With Parked Vehicles Agrees To Settle Blind, Wheelchair-Bound Man's Fair Housing Lawsuit

In Hartland Township, Michigan, WHMI Radio 93.5 FM reports:
  • A settlement has been reached in a lawsuit filed by a blind and disabled Hartland Township man. 66-year-old Philip Cusumano filed a federal discrimination lawsuit in U.S District Court in Detroit in August of 2014 against the Hartland Meadows manufactured housing community, claiming he was being denied the ability to use his wheelchair on sidewalks.

    Court records indicate that a settlement between the parties was reached last [month], although details were not released.

    In the complaint, Cusumano alleged Hartland Meadows engaged in handicap discrimination in violation of the Fair Housing Amendments Act. He has been confined to a wheelchair since 2012 and suffers from numerous health issues. Cusumano said he relies on clear sidewalks to get around in his wheelchair, including to his mailbox, but that the already-narrow paths were often blocked by residents parking on the street and sidewalks.

    The complaint, which requested Hartland Meadows enforce its own policies prohibiting parking on sidewalks, asked for damages based on Cusumano’s emotional distress and pain and suffering because of the defendant’s failure and refusals to grant reasonable accommodations.

    Cusumano said all he really wanted was the parking rules enforced and some sort of economic recovery. While he couldn’t disclose details, he said he was in agreement with the terms of the settlement. Lawyers for Hartland Meadows previously denied the allegations and said they acted within the bounds of good faith for legitimate and non-discriminatory reasons.
Source: Hartland Man's Lawsuit Against Mobile Home Community Settled.

See also, Wheelchair User Demands Sidewalk Access.

For the lawsuit, see Cusumano v. Hartland Meadows.

Initiating the process on behalf of the Mr. Cusumano was the Fair Housing Center of Southeast & Mid Michigan, a private non-profit organization that provides fair housing investigations, advocacy, education, conciliation, and attorney referrals to those who believe they have been the victims of illegal housing discrimination. The Fair Housing Center has an eight-county service area: Clinton, Eaton, Ingham, Jackson, Lenawee, Monroe, Livingston and Washtenaw counties.