Saturday, December 03, 2016

Technologically Illiterate Lawyer Allowed To Voluntarily Surrender License In Lieu Of Boot For Failing To Supervise Office Manager/Wife, Leading To Over $300K In Misappropriated Client Trust Account Funds

From The Law for Lawyers Today blog:
  • Technophobia isn’t confined to U.S. lawyers. No surprise, it affects Canadian members of the bar, too, with the same potentially disastrous results. A cautionary tale: a lawyer who was technologically illiterate failed to supervise his wife, who ran his office and used his bar credentials to misappropriate more than $300,000 without his knowledge. Canadian disciplinary authorities last month permitted him to surrender his license voluntarily, instead of revoking it.(1)

    “Complete care and control”

    First reported under the apt headline “Dinosaur in the Dark” over at Legal Profession Blog, the opinion describes how from 1996-2013 the lawyer totally abdicated administrative responsibility for his corporate and real estate practice to his non-lawyer wife, who served as his “law clerk.”
    The lawyer continued to be ignorant of all things technological — he did not even use a cell phone. He remained unaware of Ontario’s mandatory Teranet system, the electronic registration facility implemented in the late 1990’s, in which client financial transfers and charges are required to be registered electronically using a computer key unique to the lawyer to whom it is issued. The wife obtained the key on the lawyer’s behalf and used it without his knowledge, authorization or supervision.

    Recipe for disaster

    You can see where this sad story is headed. When the income from the law practice failed to meet the couple’s modest expenses, the wife started robbing Peter to pay Paul out of the client trust accounts. She testified “I always thought it would be a temporary thing. I always thought things would get better and we’d … have more work or come into money, or something and I’d pay it all back.”

    The wife’s delusional scheme continued based on the lawyer’s ignorance; he never saw e-mails that came from the bank or, eventually, from disciplinary authorities, and his wife intercepted postal mail and even phone calls that would have alerted him to the problems. She admitted that she kept the lawyer totally in the dark about her increasingly desperate misappropriations. Eventually, $373,000 in client funds had been misappropriated and more than $530,000 had been “misapplied.”

    Keeping your eye on the ball

    The house of cards finally fell after disciplinary authorities carried out a random “spot audit” of the firm. (The 30-year marriage apparently ended, too.) The lawyer was allowed to surrender his license by agreement, rather than having it revoked, partly because of his remorse, admitted misconduct and the wife’s admitted deception.

    The lawyer’s counsel described him as a “dinosaur,” and the disciplinary opinion said he “refused or could not be bothered to become computer-literate, during a time when the practice of law and business in general was evolving rapidly and becoming much more dependent on electronic media and devices.”

    Here in the States, of course, Model Rule 1.1 cmt. [8] says that the duty of competence means that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” Here, the lawyer was found to lack “the technological knowledge necessary to conduct a successful legal practice in the twenty-first century.”

    Although the lawyer had every reason to trust his wife, being so ignorant that he could not “actively review and supervise” her actions was misconduct, as it would also likely have been under our Model Rule 5.3.

    These circumstances make for sad reading, to be sure, but as we’ve pointed out a couple times before, you have to keep up with the times.(2)

Ohio Crooked Lawyers' Client Relief Fund Shells Out $782K+ For Fiscal Year 2016; Payments Reimbursed Victimized Clients For Attorneys' Failure To Return Unearned Fees, Thefts By Fiduciaries, Filching Of Settlement Proceeds

In Columbus, Ohio, Court News Ohio reports:
  • One hundred and fifty clients who sustained financial losses resulting from the dishonest conduct of their Ohio attorney were reimbursed more than $782,000 in Fiscal Year 2016, according to a report released [] by the Lawyers’ Fund for Client Protection [of the Ohio Supreme Court].

    The fund seeks to promote public confidence in the legal profession by reimbursing law clients.(1) The claims eligible for reimbursement resulted from the dishonest conduct of 48 attorneys. Of the claims approved, 125 were for unearned fees, 19 were for thefts by fiduciaries, and four involved theft-of-settlement proceeds.

    Also in the report:
  • 97 claimants received 100 percent reimbursement.
  • 40 claims were ruled ineligible.
  • One claimant received the maximum ($75,000) award amount.
  • The fund was created in 1985 by court rule and is primarily supported by attorney registration fees. A seven-member board of commissioners appointed by the Ohio Supreme Court determines claim eligibility and manages assets.

    Since its inception, the fund has allocated more than $20 million for 2,830 former law clients.
Source: Lawyers’ Fund for Client Protection Releases Fiscal Year Report.

Go here for the Lawyers' Fund For Client Protection 2016 Annual Report.
(1) For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Another Aging Lawyer Forced Into 'Involuntary' Retirement Gets 17 Years For Role In Racket That Used Falsified Legal Descriptions, Phony Lien Releases In Real Estate Development Scam; Victims Include Private Investors, Title Insurers, Bank Lenders

From the Office of the U.S. Attorney (Raleigh, North Carolina):
  • The United States Attorney’s Office announced that [...] JOSEPH HAL KINLAW, JR., 64, of Bald Head Island, North Carolina, was sentenced to 17 years in prison for Bank Fraud. KINLAW was also ordered to serve 3 years of supervised release following imprisonment, and to pay $23,796,372 in restitution to the victims of his offense.

    Based upon the Criminal Information and evidence offered at the time of KINLAW’s sentencing, KINLAW was a licensed North Carolina attorney who operated various alleged real estate investment and development entities on behalf of investors in the Hubert area of Onslow County. KINLAW used the entities to obtain real estate development loans from Branch Banking and Trust (BB&T), and First Citizens Bank. BB&T and First Citizens Bank extended loans to these entities under the auspices that the entities would be engaged in the development of residential real estate in various subdivisions in the area of Camp Lejeune in Onslow County.

    Between 2004 and April of 2013, KINLAW used the real estate development entities to defraud BB&T and First Citizens Bank by falsifying the legal descriptions of the loan collateral, and by falsifying releases of the collateral.

    By drafting a false legal description of the property, KINLAW was able to use the collateral for other real estate investment activities and loans. By fraudulently releasing the banks’ collateral before the banks’ loans had been satisfied, KINLAW was able, in several instances, to convey the collateral to third parties for value and continue the scheme.
    Because KINLAW had substituted false legal descriptions of bank collateral, and fraudulently conveyed bank collateral, BB&T and First Citizens Bank were unable to capture their loan losses in foreclosure.

    Various title insurance companies and investors also lost substantial funds to due to the scheme. While the exact amount of the loss remains the subject of investigation, losses are presently anticipated to exceed $18 Million.

Long Island Lawyer Gets 28 Months For Screwing Trust Beneficiaries Out Of $1.3+ Million He Filched While Acting As Trustee

From the Office of the U.S. Attorney (Central Islip, New York):
  • David Bodian, a Long Island attorney, was sentenced at the federal courthouse in Central Islip, New York, to 28 months in prison following his March 2016 guilty plea to wire fraud for stealing more than $1.3 million from a trust fund for which he was the trustee. [...] As part of the sentence, Bodian was ordered to pay restitution in the amount of $1.3 million to the Lou Bacon Trust.(1)

    According to court filings and facts presented at the guilty plea and sentencing proceedings, in approximately 2000, Bodian was appointed trustee of the Lou Bacon Trust, a trust fund that benefitted a number of individuals and charities. At the time of his appointment, the trust held over $1 million in total assets.

    In approximately 2005, Bodian began looting the fund of its assets to pay for his personal expenses, including a car, high-end audio equipment, home renovations, and international vacations.

    From approximately 2005 to 2015, he stole almost the entirety of the trust’s funds, leaving the trust with only $10,000 in cash. To perpetuate the scheme, Bodian lied to the beneficiaries about the amount of money in the trust bank accounts. For example, when a beneficiary asked for a copy of a trust bank statement, Bodian borrowed $150,000 from a friend to deposit in the trust’s account to inflate the trust’s assets. After providing a bank statement to the beneficiary that reflected the $150,000 Bodian had borrowed, he transferred the money back to his friend.

    The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Tyler Smith is in charge of the prosecution.
Source: Long Island Attorney Is Sentenced To 28 Months In Prison For Stealing $1.3 Million From Trust Fund Clients (Trust Funds Diverted to Pay for Car, High-End Stereo Equipment, Home Renovations and International Vacations).
(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.

Another Aging Lawyer Finds Himself In Hot Water; Faces Charges In One Alleged Client Theft, Investigators Suspect There Are Numerous Other Victims Who May Not Yet Realize They've Been Fleeced; Cops: Total Ripoff Could Top $1 Million

In Hardin County, Kentucky, WDRB-TV Channel 41 reports:
  • Police believe a Kentucky attorney was gambling away hundreds of thousands of dollars of his clients' money, and it may top a million dollars. And the FBI and police fear there may be more victims who do not know they've been duped.

    Attorney Danny Butler's office is in Greensburg, Ky. Police say he has a lot of local clients in Adair, Taylor, Green, Russell and LaRue Counties, but believe he may have scammed people in Jefferson and Hardin Counties and beyond.

    With Greensburg being a small town, Det. B.J. Burton says the options for an attorney are limited. "If you ask people who would you get for an attorney, I'm sure prior to this, his name would've come up very near the top of the list," said Burton, the Kentucky State Police detective working on the case.

    Danny Butler, 70, was arrested [] and taken to the Hardin County jail, charged with the theft of a client in Hardin County.

    Police and the FBI served search warrants at his home and law office [], confiscating financial records. KSP in Columbia are investigating several more cases.

    "Probably four or five that we have records we can prove and show, and a multitude that we're trying to sort through," said Det. Burton, who added they believe there are more victims who have no idea.

    "In some instances, it appears at least from looking at the financial records ... maybe he didn't pay any money to the clients when there's a settlement. In some cases he's paid them some money," Det. Burton said. "There's instances where, kind of like a ponzi scheme, as he had new clients come in, in some instances he would take money from new clients to pay older clients."

    Det. Burton says the stolen money could end up totaling more than a $1 million. "Safe to say it's probably more than a 1/2 million, but I don't know how much it'll be in the end."(1)

    He says Butler would take the money from estate and settlement cases he would handle. Police say the scheme unraveled when a pair of brothers waiting on estate money contacted authorities.

    "There was like a host of excuses as to why there was delay on the money coming from Mr. Butler," Det. Burton said.

    Police say they also think they know what he was doing with the cash.

    "There's some indication from financial records that there was some gambling going on," said Det. Burton, who added that police aren't sure how long he has been stealing from clients. "As of right now, I mean we're back at least eight years, but I don't know that that's the end of it."

    If you feel you may be a victim, or have any information, authorities ask that you call Kentucky State Police, post 15 in Columbia at 1-800-222-5555 or call the FBI at 502-263-6122.
Source: Attorney accused of swindling clients may have many victims in Kentucky.
(1) The Kentucky Supreme Court established a Clients' Security Fund "to promote public confidence in the administration of justice and the integrity of the legal profession” by providing some measure of restitution to clients who have lost money because of the dishonest, fraudulent acts, or other unethical conduct of a member of the Kentucky Bar Association. At present there are caps on recovery. There is a cap of $50,000 per claim, with a total cap per attorney of $150,000. If there are so many claims against an attorney that the cap is reached, awards may be reduced on a pro rata basis..

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, December 02, 2016

Duping 83-Year Old Dementia-Stricken Widower Into Signing Away 6-Acre Property For $4K (Town-Assessed For $77K) Among Bad Acts Listed In Indictment Charging Caregiving Pair With Theft Charges; Victim's Relative Estimates Total Alleged Ripoff Could Exceed $200K

In Ellsworth, Maine, the Mount Desert Islander reports:
  • The two women accused of bilking an elderly Trenton man out of thousands of dollars entered not guilty pleas at their Nov. 8 arraignment in Hancock County Unified Criminal Court.

    Lisa Harriman, 54, of Mariaville and Kathleen Prunier, 58, of Trenton were indicted by a grand jury Oct. 6 following an investigation by the Maine Attorney General’s Office. Harriman was indicted on charges of theft by unauthorized taking and misuse of entrusted property. Prunier was indicted on a theft by deception charge.

    According to the indictments, Harriman committed theft by obtaining or exercising unauthorized control over cash with an aggregate value in excess of $10,000 between November 2012 and July 2015. The misuse of entrusted property charge alleges that Harriman violated her duty as a fiduciary in managing money belonging to the victim.

    Prunier, her indictment states, committed theft by deceiving the victim by creating the impression that real estate she purchased from him was valued at considerably less than the town’s assessment of the property. Prunier allegedly befriended the victim and convinced him to sell her a 6-acre property with a right-of-way to the shore for $4,000, though it is valued by the town at $77,000.

    A member of the victim’s family, Bob Byron of North Yarmouth, has said the 83-year-old Trenton resident suffers from dementia. The total loss, he estimated, could exceed $200,000.(1) Both women posted $1,000 cash bail the day of their arraignment.
Source: Not guilty pleas in elder theft case.

See also, Two charged in elder theft:
  • A relative of the victim did provide details regarding the allegations against the two women.

    Bob Byron of North Yarmouth, a former Maine State Police trooper, said his wife, Jamilyn, is the niece of the 83-year-old victim. The family has been following the case since they first reported their concerns to state police after Harriman attempted to cash in a $150,000 life insurance policy in the victim’s name to pay expenses after “she ran out of cash,” Byron said.

    Cashing in that policy prematurely resulted in the victim paying $37,000 in penalties, Byron said. That raised red flags with the family.

    What they discovered, Byron said, is that Harriman, who also is a niece of the victim, moved into the victim’s home shortly after his wife died in October 2012.

Live-In Caregiver Hired To Attend To Ailing, Recently-Widowed Senior Promptly Marries Him, Drains Equity Out Of His Home & Cash Out Of His Bank Account; Victim Left Broke & Living Alone In Nursing Home While Perpetrator Cops Guilty Plea After Sitting In Jail For A Few Months, Gets Probation In Lieu Of Active Prison Time

In Wilmington, North Carolina, WECT-TV Channel 6 reports:
  • A Wilmington woman pleaded guilty recently to elder abuse, in a crime that came as a shock even to prosecutors who routinely try these kinds of cases.

    “It was something stunning, how much money that she spent in three months time,” New Hanover County Prosecutor Janet Coleman said.

    The Alleged Crime

    Coleman says 40-year-old Christy Paffenroth Ferguson met 80-year-old Tony Ferguson while she was working at a local adult day care facility. After Ferguson’s wife of 40 years died of cancer, their daughter hired Paffenroth to serve as his caregiver.

    Paffenroth was paid $1,100 a month for her services, plus room and board in Ferguson’s home for her and her teenage son. Coleman says Paffenroth moved in as hired help in May of 2012, married Ferguson in December, and by January she’d taken over as his power of attorney.

    In May of 2013, prosecutors say Paffenroth took $120,000 out of Ferguson’s credit union and transferred it to a joint checking account. She then took out an $80,000 equity line on his house that was bought and paid for.

    Then, prosecutors say the spending started in earnest.

    “She had plastic surgery…. She got breast augmentation. She got braces. Her son got braces. She paid for private school tuition for a local private school, Christian school, for her son and his friend. Multiple thousands of dollars,” Coleman said of some of the bigger ticket items that drained Ferguson’s life savings.

    After his bank account was empty, prosecutors say Ferguson began cashing in his savings bonds.

    “At that point….he was virtually broke,” Coleman continued. “In March of 2014, she sold the house for $90,000.” The house had previously been valued at nearly twice that amount.

    Prior to his marriage to Paffenroth, Ferguson, a retired federal employee, had no debt whatsoever. With no home left, he now lives alone in a nursing home.

    “All he wanted to do was go home. He doesn’t understand he doesn’t have a home,” Coleman said. “It literally broke my heart. And everyone else who was involved in this case.”
    Authorities Called In

    Paffenroth says Ferguson’s daughter wasn’t happy about the marriage and called the Department of Social Services and the bank to complain. That’s when authorities got involved, eventually charging Paffenroth with Felony Exploitation of an Elder Person.

    Her Public Defender, Emily Zvejnieks, thought Paffenroth was innocent, but says Paffenroth decided to plead guilty to avoid the risk of 2.5 years in prison if convicted.
    Paffenroth was given credit for a few months she’d already spent in jail, and she was placed on probation rather than given active prison time. The fact that she did not have a significant criminal history and the fact that Ferguson did not want her to go to jail were also taken into consideration at sentencing.
    Legally Incompetent

    At the time the two were first married, Ferguson was considered legally competent. The prosecutor said his physician had previously noticed early signs of dementia, but no legal action had been taken to address that.

    “People are competent until they are declared incompetent,” Coleman explained.

    That involves court proceedings, and it wasn’t until after Ferguson’s money was gone and his house sold that the courts declared him legally incompetent.

Administrators At Senior Citizens' Home Call In Cops After Elderly Resident's Rent Goes Into Default, Leads To Arrest Of Family Member For Abusing POA & Raiding Bank Accounts For Over $200K; 86-Year Old Victim Forced To Leave Facility That Provided Meals, Programming For Socializing, Now Lives Alone In Apartment Paid Thru Public Assistance

In Libertyville, Illinois, the Libertyville Review reports:
  • A woman charged with stealing over $200,000 from an elderly family member [wa]s scheduled to appear in court Nov. 29.

    An 86-year-old woman was living in a facility for senior citizens in Libertyville when in January 2015 administrators said her rent was not being paid, according to Sgt. Chad Roszkowiak of the Libertyville police department.

    Jacqueline M. Henry, 53, [...], had power of attorney over the elderly woman and joint access to bank accounts, Roszkowiak said.

    "This relative oversaw the finances, and part of that was to make sure the lease payments were being made," Roszkowiak said. "When that stopped happening, the victim went to the bank to find out what was happening and discovered that her money was pretty much gone."

    Over nearly two years, Roszkowiak said he and others have subpoenaed financial documents and found unjust financial activity dating as far back as 2010 that totaled over $200,000.

    After showing evidence to a judge, police say they were granted a warrant and Henry was taken into custody at her home on Oct. 21. Documents show Henry was charged with financial exploitation of an elderly person, money laundering, and theft.

    Attempts to reach Henry for comment were unsuccessful.

    Roszkowiak said officers were not able to recover any money. He said a judge could order restitution if Henry is found guilty.

    The 86-year-old woman was in a facility with provided meals and programming for socializing, but Roszkowiak said she's now alone in an apartment that she is paying for through public assistance.

Thursday, December 01, 2016

Convicted Loan Modification Scam Artist Already Serving Time For Ripping Off 75 South Jersey Homeowners In One County Gets Hit Again On Theft By Deception Charges In Neighboring County For Similar Racket

In Camden County, New Jersey, the Burlington County Times reports:
  • A Mount Laurel man already in prison for a fake financial services scheme has been charged with a similar crime in Camden County. Authorities are now wondering if even more victims were scammed.

    Scott Feltman, 42, of Star Board Way, was charged with third-degree theft by deception in connection with the latest alleged scheme.

    Feltman signed a contract with a Collingswood resident to act as the victim's mortgage broker concerning a loan modification, according to the Camden County Prosecutor's Office.

    Operating under a firm named Baymar Capital Funding LLC, he took money from the resident for two years without applying any of it to the mortgage, authorities said. The victim was eventually evicted from the home for which the payments were supposed to be applied.

    Authorities did not say when the fraud allegedly occurred.

    Feltman is already serving a sentence at the Central Reception and Assignment Facility in Ewing, Mercer County, for stealing money from 75 people for whom he was supposed to provide financial services, also under Baymar Capital.

    He pleaded guilty earlier this year to second-degree theft by deception in that case. On Sept. 27, Feltman was sentenced to three years in prison with the possibility of entering an intensive supervision program that could have seen him released after serving several months behind bars.

    It was not clear [] whether a conviction on the latest charge would disqualify him from the supervision program.

    Investigators said there may more victims who have not come forward. Anyone who has dealt with Feltman or Baymar Capital in Camden County, or who has information about potential fraud, is asked to call Camden County Prosecutor's Office Sgt. Michael Molle at 856-225-8674.

    Information can also be emailed to

    Anyone who may have been defrauded outside of Camden County should contact the police in the towns in which those incidents occurred.

Foreclosure Rescue Operator Belted With $1.36 Million In Bail On Arrest For Allegedly Filing Fraudulent Land Documents In Connection With Racket To Improperly Stall Foreclosures

In Huntington Beach, California, The Orange County Register reports:
  • A Huntington Beach woman was arrested [] in connection with a scheme where money was taken to fraudulently halt home foreclosures.

    Police said that 55-year-old Brandy Taylor was arrested at her Huntington Beach home after a months-long investigation, according to a statement[].

    In January, Santa Barbara County District Attorney’s officials contacted Huntington Beach police investigators regarding a “Foreclosure Rescue” scam that had victims in Santa Barbara County, Alameda County and Orange County.

    “For a monthly fee, the company was suspected of offering to stop the foreclosure process through the use of fraudulent deeds of trust,” according to the statement. The company suspected in the deceptive activity was known as Carrington Investments/The Wellington Group operating out of Huntington Beach.

    The counties issued arrest warrants in Huntington Beach for Taylor on suspicion of filing forged or false documents, said Huntington Beach police Officer Jennifer Marlatt. [... T]he Huntington Beach Police Department Crime Task Force Unit conducted surveillance at Taylor’s home. Once detectives confirmed she was in the home, they arrested her.

    She was booked into jail and was being held in lieu of $1.36 million bail.

Wednesday, November 30, 2016

HOA Residents Threaten Lawsuit Against Developer For Allegedly Hoarding Control Of Association, Doubling Maintenance Fees & Using Proceeds For Matters Unrelated To Community Upkeep

In Schertz, Texas, the San Antonio Express-News reports:
  • Residents of a neighborhood in Schertz are threatening to sue local developer Chris Price, who they say has hoarded control of their homeowners association, hiked their annual fees and used the proceeds to build another master-planned community.

    In the past two years, annual homeowners fees have almost doubled, to $540 from $275, at Sedona, a modest neighborhood of 169 homes that’s mostly quiet except for the occasional roar of a jet from nearby Joint Base San Antonio-Randolph. Residents don’t see where the money has gone — their drainage ditches are inadequate, causing streets and backyards to flood during storms, they say. A small park is poorly maintained, with rocks tumbling off a water fountain that hasn’t worked for years.

    The residents, many of whom are elderly or ex-military, say the higher fees have hurt their property values and caused them to cut back on groceries and visits to their grandchildren.
    Texas RioGrande Legal Aid, a nonprofit that offers legal services to homeowners, has accused Price and his partners of breaking state HOA laws. The nonprofit sent a letter to Price’s attorney this week offering to open negotiations for a settlement, according to Legal Aid attorney Molly Rogers.

    The residents want control of the HOA, a reduction in their fees, a limit on future increases and the return of some of their previous payments. If the negotiations fail, Legal Aid plans to help the residents take Price to court.

Winning Bidder At Tax Foreclosure Sale Walks Away With Egg On His Face; Bids $19K For Home, Instead Winds Up With Vacant 30' Wide Lot Next Door

In West Seneca, New York, WIVB-TV Channel 4 reports:
  • Jaclyn Cooper got a knock on the door earlier this month, a stranger with papers showing he had just bought the family’s home in a tax foreclosure auction. The Coopers were stunned and bewildered because they had just paid their back taxes, and had the receipt to prove it.

    “He said, ‘well I just bought this house in auction, and I am going to take over ownership on Wednesday,’” Jaclyn recalled.

    Jaclyn and her husband James would learn, when Erie County held its annual tax foreclosure sale October 13, their address was on the auction block, and sold for $19,000 to cover the back property taxes. What’s worse, it was no mistake.

    The future was looking dim for the couple and their two small children, facing the prospect of vacating their home, and moving all of their belongings.

    “I cried, and because it was Veterans Day and we could not get ahold of anybody, I did not sleep the whole weekend,” the West Seneca mom said. “I was having panic attacks. It was terrible.”

    When Jackie and James did make it to the tax office in the Rath Building, county officials confirmed they still owned their house. They would eventually learn the buyer who thought he got their home for $19,000–a steal–actually bought a 30’ wide vacant lot with the same address, not such a good deal.

    The lot? A driveway separating the Cooper’s house from the property next door. Somehow, a 30’ section of property abutting the Cooper’s home was carved out into a separate parcel, but with the same address on Clinton Street.

    Joseph Maciejewski, Erie County’s Director of Real Property Tax Services, confirmed the address aberration, “I am aware that both the 30’ vacant lot, which is separately described, and the home, share the same address.”

    Maciejewski said the address was assigned by the Town of West Seneca, not Erie County, and now the buyer who thought he got a house for $19,000 has a tough decision. He paid a non-refundable deposit of $3,800 dollars for the driveway, and can own it by paying off the balance, or walk away.

    “You are dealing with foreclosure, and it is buyer beware–you assume whatever you bid on, you know what you are bidding on,” said a sympathetic Maciejewski.

    The driveway is hardly worth $19,000 but Maciejewski insists, the $3,800 deposit the buyer put down now belongs to Erie County—an expensive lesson that every deal at a tax foreclosure sale is not a bargain.

Two More Real Estate Investors Agree To Plead Guilty In Ongoing Antitrust Probe Into Northern California Foreclosure Sale Bid-Rigging Rackets; Count Now Up To 59 Guilty Pleas, With Indictments Pending On Another 16

From the U.S. Department of Justice (Washington, D.C.):
  • Two Northern California real estate investors have agreed to plead guilty [] for their role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

    California real estate investors John Michael Galloway and Nicholas Diaz each pleaded guilty to one count of bid rigging in U.S. District Court for the Northern District of California in Oakland [].
    According to court documents, between June 2008 and January 2011, John Michael Galloway and Nicholas Diaz conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County. The selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.

    The department said that the primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Contra Costa County public foreclosure auctions at noncompetitive 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.

    The guilty pleas entered [] were the result of the department in its ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, California. To date, 59 individuals have agreed to plead or have pleaded guilty. In addition, indictments are pending against 16 real estate investors. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office, 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 Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.

Tuesday, November 29, 2016

'Involuntary' Probate Scheme That Exploits Obscure Michigan Law To Target Homes Owned By Recently-Deceased Homeowners Uncovered In Southeastern Michigan; Broker Known For Peddling Books On Real Estate Investment Linked To Operation, Says He'll Take His System Across The Country

In Macomb County, Michigan, WXYZ-TV Channel 7 reports:
  • When you lose a loved one, often the last thing on your mind is what to do with the home they once lived in. But several local families say before they could do anything with their relatives’ estates, some realtors and attorneys are swooping in to cash in.

    “It’s really shady,” said Kristin Bobier Rekowski. Rekowski tells the 7 Investigators that her late father would be furious if he knew what had happened with his home.

    When Richard Bobier died last year, Kristin says she had been told his Warren house was worth far less than what he owed on it. “I was just working on getting his belongings out of the house and just trying to salvage what could be salvaged,” said Rekowski.

    After the foreclosure process started, Rekowski and her siblings talked about trying to redeem the house and put it up for sale. But before they could do that, somebody else stepped in.

    “We were summoned to the court. Someone opened a probate case in his name,” said Rekowski.

    That someone is attorney Cecil St. Pierre. St. Pierre is also the Warren City Council President, and he’s a state-appointed Public Administrator who’s authorized to open estates, like Richard Bobier’s, in Probate Court.

    An estate is everything you own, such as your house, and your bank account, which are known as your assets. An estate is also everything you owe, including things like your mortgage, or credit card debts.

    And when someone dies, even if you have a will, in Michigan the probate courts are in charge of making sure your heirs get what they’re due from your estate.

    But if the heirs don’t take certain steps when a loved one dies – after 42 days a Public Administrator attorney can put themselves in charge of the estate.

    And that’s what several lawyers and heirs say Cecil St. Pierre has been doing in Macomb County at a rate they’ve never seen before. And he’s not doing it alone. A company called Probate Asset Recovery, or PAR, is often paying the $150 filing fee so St. Pierre can open the estates – a practice other Public Administrators and lawyers call unusual.

    When Rekowski received notice from the court announcing that St. Pierre was becoming the Personal Representative of her dad’s estate, she says she had no idea what to do – so she did not fight St. Pierre taking over the estate. She says that meant St. Pierre could dictate which realtor would sell the home. Rekowski says she told him Ralph Roberts Realty would be handling the sale.

    Roberts is a Macomb County realtor who literally wrote the book on flipping houses in foreclosure, “Flipping Houses for Dummies.” Roberts sold the Bobier house for a $31,729.52 profit.

    Now court records show, one of Roberts’ companies is set to get $3,390 from the estate. But here’s what Kristin wasn’t told about until recently: another company, Probate Asset Recovery, is getting the biggest cut of $10,576.53.

    So who owns PAR? That’s exactly what the judge wanted to know at Kristin’s last hearing.

    “Is there an owner,” asked Macomb County Circuit Court Judge Kathryn George. “Yes. Ralph Roberts is the owner,” answered PAR Manger Steve Mogdis during that hearing.

    That means, between Robert’s other company and PAR, nearly $14,000 will ultimately end up in Ralph Robert’s pocket. Kristin Rekowski and her brothers (after she’s reimbursed for funeral expenses she already paid) will only net $3158.71 each.

    “It’s really not fair,” said Rekowski.

    Moments after Rekowski’s court hearing last week, I asked Cecil St. Pierre why he’s using a private company’s money to open so many estates.

    “I deal with Probate Asset Recovery because they work with Ralph Roberts Realty in order to sell the house on the multi-list and get the top dollar for the asset. We don’t deal with any investors, or do anything other than what’s on the multi-list,” said St. Pierre.

    “Well of course they work with Ralph Roberts Realty – they’re owned by the same person,” said 7 Investigator Heather Catallo. “I don’t know – I don’t know who owns PAR,” said St. Pierre.

    But the PAR manager had just admitted that Roberts is the owner in court, with St. Pierre present. In fact, St. Pierre and Ralph Roberts go way back – all the way to middle school – and they even once owned property together.

    “I’m very fortunate to have Cecil as one of my best friends,” said Ralph Roberts. “Is he your attorney,” asked Catallo. “He’s represented us in the past,” said Roberts.

    Roberts says he’s helping people in southeast Michigan, by finding assets they didn’t know about. He says he’s brought $4.5 million dollars into probate estates since 2013.

    “You get 1/3 correct,” asked Catallo. “25[%] to a third, depending on what the case is,” said Roberts. “I used to buy these houses and I would get 100% of the profit. And I don’t need to make money anymore, I want to do good for the community.”

    It needs to be stopped,” said attorney Gary Allen. Allen says Robert’s company paid for Cecil St. Pierre to petition to open an estate without contacting his clients (the heirs) first, even though his clients don’t want to sell their late mother’s condo.

    Allen says one of the heirs had already been named personal representative in the will.

    I called the public admin almost every day from July 27th through August the 3rd, sometimes twice a day. And he never returned my calls,” said Allen “Not once. Never spoke with him. And so then I was forced to go to court, and my client who lives in Brooklyn, she came in from Brooklyn so that she could appear at the hearing. When we got to the hearing, the Public Admin did not show up for an hour.”

    Allen says all that extra time and expense was unnecessary for his client. He said St. Pierre did let his client take over the estate, but then he sent them a bill for $892 to come from the estate, including $187 in filing fees – even though Ralph Roberts company had already paid those costs.

    “I think it’s a huge problem,” said Allen.

    St. Pierre is also asking the court to grant him $4196.25 in fiduciary and attorney fees on the Bobier estate.

    “We follow the law to the T. Dot the I’s and cross the T’s. There’s nothing being done wrong,” said Roberts.

    “I haven’t said it was illegal – I asked you if it was the right thing to do,” asked Catallo. “It’s absolutely the right thing. I’m doing great things for thousands of people. I’m getting them money. I’m going to take this across the country. And I’m going to make probate great again,” said Roberts.

    Since the 7 Action News started investigating this back in August, the State Attorney General has stepped in to issue new guidelines for Public Administrators. “The allegations and associated case will be reviewed in a thorough and exacting fashion,” said spokeswoman Andrea Bitely.

    Both Roberts and St. Pierre insist they’re helping these estates, by turning around the properties to make money for the estate. Roberts also says by selling empty homes, he’s getting the properties back on the tax rolls and fighting blight.

    St. Pierre says if an heir wants to take over the estate they can. But estate lawyers tell 7 Action News if the estate is opened formally like this without an heir realizing it, heirs could end up with a bunch of legal fees.

    The Attorney General regulates Public Administrators in Michigan (for complaints).

Egyptian Woman Sues To Reestablish Her Ownership In $930K NYC Triplex After Putting Dad's Name On Deed (In Keeping With Egyptian Custom), Then Finding Herself Locked Out Of Her Home After His Alleged Physical Abuse

In Bay Ridge, Brooklyn, the New York Daily News reports:
  • An Egyptian woman used part of a $2.3 million settlement with the city to buy a house and put her dad on the deed — a move in keeping with the country’s customs — only to find herself locked out after repeated abuse, a new lawsuit alleges.

    Walla Mohamed in 2011 bought a $930,000 triplex in Bay Ridge, Brooklyn, shortly after receiving the payout. She was unmarried and without kids at the time.

    “Egyptian custom dictates that (Walla Mohamed) as an Egyptian woman is strongly encouraged to designate a male to represent or stand in for her in legal contracts in proceedings,” according to filings in Manhattan Supreme Court.

    When Walla Mohamed bought the house, her dad Abdallah Mohamed decided it was “in her best interest for her to include his name on the deed,” the suit says.

    Her dad — who’s lived there rent free since December 2011 — has not contributed a “single dollar” to the house’s purchase or upkeep, she claims.

    Walla Mohamed, 30, who is currently married with three kids, alleges her dad physically abused her “on more than one occasion.”

    In September, Abdallah Mohamed “maliciously beat (his daughter), striking her,” the suit also says.

    A man reached on a phone line listed to Abdallah Mohamed hung up on a Daily News reporter [].

Two NYC Real Estate Brokers Who Have Held Seminars Warning Homeowners About Rampant Title Hijacking Rackets Now Count Themselves As Victims; Say No One Is Safe Until City Does More To Protect Property Owners

In Bedford-Stuyvesant, Brooklyn, DNAInfo (New York) reports:
  • Local real estate brokers who've hosted a series of panel discussions warning residents of property fraud happening in their neighborhood have themselves become victims to the crime, they say.

    Brokers Richard Flateau, founder of Flateau Realty Corp., and Gloria Sandiford say they received a notification from the city last week alerting them that the empty mixed-use building at 1424 Fulton St. they own had a new power of attorney, but the signature on the document authorizing the change wasn't theirs, they said.

    The document filed on Nov. 8 lists Elganto Management Inc., an entity with a similar name to their Elganto LLC that owns the building but is unknown to both owners, as the power of attorney over the property, alongside a forged signature of Flateau's, they said. The authorization would allow the entity to act as owners of the property.

    Then when they went to the building on Nov. 12, they discovered the locks had been changed.

    "It was forged and it all happened very rapidly," Flateau said. "I've done a bunch of seminars and public meetings about property fraud, so it's kind of's surreal. It's hard to fathom, but it's very real. I'm a victim of it."

    Last year, both Flateau and Sandiford participated in an educational panel raising awareness about the issue as residents complained of rampant occurrences in the area. But now that they've become victims themselves, they said that no one was safe until the city did more to protect owners.

    "The system is so broken that people without the wherewithal to follow up and do the necessary follow through are being taken advantage of," said Sandiford, who also serves as president for the Bedford-Stuyvesant Real Estate Board.

    "This is an atrocity that is happening. I've heard people telling me that their building was stolen and they just had to walk away because it bankrupted them."

    Flateau and Sandiford own the Fulton Street building under Elganto LLC, according to city documents. The brokers had planned to renovate the building to turn it into offices on the ground floor and apartments on the upper levels, when they recently started seeing strange things happening, they said.

    "It's been a build up of things because two weeks ago, we noticed the company's label was ripped off the mailbox," Sandiford said, adding that the mailbox lock had also been changed.

    According to Department of State records, the fraudsters under the Elganto Management Inc. name had registered the business corporation on Nov. 7, just a day before filing the change in attorney of power at the Fulton Street property.

    Then over the weekend, they noticed the padlocks to the building had been changed, a skylight inside had been broken into, and their belongings were rifled through, Sandiford said.

    Flateau immediately reached out to the city's Sheriff's office, which deals with property actions, as well as local elected officials and a lawyer for the next steps in getting the power of attorney revoked. They're still waiting to hear back from the Sheriff's office, they said.

    "We need to appeal to our city to create a better system, this is the bottom line," Sandiford said. "What happens to someone who isn't connected, that falls through the cracks?"

    Sandiford and Flateau recommended that all property owners register with the Automated City Register Information System, or ACRIS, which will alert them to any new documents filed on their properties.

Monday, November 28, 2016

More On Title Hijacking Epidemic Affecting One NYC Neighborhood; Forged Signatures, Fraudulent Deeds Used To Outright Steal Homes Out From Under Long-Time Homeowners; Residents Urged To Register Their Property Addresses With City Automated Alert System

In Bedford-Stuyvesant, Brooklyn, DNAInfo (New York) reports:
  • A "scourge" of property fraud which is conning Bed-Stuy owners out of their homes has community leaders working to stamp out the crime.

    “We know that we have some of the most valuable real estate in the city and the state of New York,” central Brooklyn Councilman Robert Cornegy said. He called the problem a "growing scourge" that often targets the elderly.

    “It started by little, subtle ways that people would offer you money, and now they’ve gotten so aggressive that they’re literally defrauding deeds and forging people’s signatures and literally outright stealing people’s properties. And we can’t stand for that.”

    Elected officials, real estate brokers and representatives of the Brooklyn District Attorney’s office, the Brooklyn NAACP and other community stakeholders came together in front of 1424 Fulton St., near Brooklyn Avenue, Thursday [Nov. 17] to tell locals about resources available to victims.
    [Brokers Richard Flateau and Gloria Sandiford] encouraged owners to register with the Automated City Register Information System, or ACRIS, which will alert them to any new documents filed on their properties.

    Residents can contact real estate organizations in the neighborhood for advice, Sandiford said.

    “I know of people that I literally cry with, that they’ve walked away from their home of 70 years because they do not know who to turn to,” she said.

    “We are here for you working every day, professional real estate brokers see this kind of behavior every day and I can tell you that it’s very serious and you are not alone.”
    The Department of Finance implemented steps to curb property fraud, such as training staff to review suspicious documents and installing cameras in offices where deeds are recorded.

    In 2015, the agency oversaw 511 investigations of deed and property fraud citywide, 117 of which turned into criminal cases with the city’s district attorney’s offices, a DOF spokeswoman said. A total of 14 arrests were made, according to the agency.

    Still, more needs to be done to combat the crime, community leaders said, with Cornegy adding that he is working on legislation to protect the privacy of deed holders.

Massachusetts Appeals Court Affirms Ruling Restoring Nursing Home-Bound 83-Year Old Widow's Ownership Of Over $2.5 Million In Real Estate, Other Assets Pilfered By Sleazy Son, Daughter-In-Law; Fiduciary Relationship Among Parties Shifted Burden Onto Defendants To Prove Transactions Were Free From Fraud, Undue Influence

From a recent story in
  • The near epidemic of financial exploitation of the elderly and infirm came into sharp focus in the Massachusetts Appeals Court’s decision on Nov. 2, 2016 involving the guardianship of Alice Migell, a nursing home-bound 83-year-old widow. (Guardian v. Migell, 2016 Mass. App. Unpub. LEXIS 1056 (Nov. 2, 2016)) On behalf of Alice, a complaint in equity was filed against her son and daughter-in-law to recover over $2.5 million in assets after an investigation by the local protective services agency revealed that Alice was the victim of a scheme to strip her of everything.

    Alice’s son, Andrew, and his wife, Kai, failed to win reversal of judgments holding them guilty of criminal contempt of court and recovering real estate and money that they’d taken from her. A key aspect of the case was the fiduciary relationship that Andrew and Kai had created toward Alice. Andrew was a trustee and acted under a power of attorney for Alice. Both Andrew and Kai boasted about how they did everything for Alice because she couldn’t take care of herself. They tried to use that relationship as a justification for, if not entitlement to, keeping proceeds from selling property held in trust and receiving outright conveyances of other valuable real estate. As discussed below, this proved to be their undoing under the Massachusetts rule for burden shifting in transactions that benefit a fiduciary.

    Disturbing Basic Facts

    Alice’s husband Bruce died in 2006, while she was hospitalized. They’d been married for over 40 years and had amassed a sizeable estate. Alice is the primary beneficiary of Bruce’s estate. The Appeals Court agreed with the trial judge that Andrew “had a plan to obtain transfers of property Alice owned or reasonably expected to inherit.” Several valuable real estate properties were owned in a nominee realty trust with Bruce as sole beneficiary. Andrew was a trustee but obtained a transfer of beneficial interest from Bruce shortly before his death. Investment properties in New Hampshire and Florida had also been held in the nominee trust, but Andrew sold them and kept the money. Alice held title to a vacation home in her name. Two other properties that Alice owned when Bruce died were deeded over to Andrew shortly after Bruce’s death, which the guardian was able to recover outside of the lawsuit.

    Appeals Court Ruling

    The Appeals Court upheld the trial court’s decision to restore title to the real estate and order Andrew to turn over the sale proceeds. The court also agreed that the trial judge properly found Andrew’s wife, Kai, to be liable since she received some of the property or use of the sale proceeds. Indeed, Andrew had reconveyed one property to himself and Kai. As a result, transfers of title that rendered Alice essentially destitute were reversed, so that she’ll benefit from Bruce’s estate as he’d intended.

    Alice’s Standing

    Andrew and Kai’ argued on appeal that Alice had no standing because she didn’t own the properties at issue in the trial. The Appeals Court held otherwise, concluding that under Bruce’s estate plan, his widow was intended to be its primary beneficiary. The facts clearly established that Andrew worked continuously on his plan to deprive Alice of her expected inheritance, giving her standing to recover it. Accordingly, the equitable relief to restore these assets was proper. It should also be noted that courts of equity have extraordinary latitude to grant relief for protected persons, such as those under guardianship and conservatorship like Alice.

    Fiduciary Relationship Shifted Burden of Proof

    On appeal, just like they did at trial, Andrew and Kai argued that there was insufficient evidence against them for Alice to gain back the property and money. The Appeals Court, however, agreed with the trial judge’s determination that both Andrew and Kai stood in a relationship of trust and confidence toward Alice. Although they were defendants in this action, and so wouldn’t ordinarily bear the burden of proof, the finding of a fiduciary relationship shifted the burden of proof so that Andrew and Kai were required to prove that challenged transactions weren’t the burden of fraud or undue influence.

    Andrew and Kai didn’t appear at trial or offer any testimony concerning the challenged transactions so the record was barren of any evidence that could show these challenged transactions were proper. It was incumbent on the defendants, as a result of burden shifting, to demonstrate the circumstances of the transactions and their intended benefit to Bruce. As a matter of common sense, although the Appeals Court decision is silent on this point, one is left to wonder where such evidence could have been obtained.

    Criminal Contempt

    The judgment to recover the assets followed an earlier decision, also affirmed by the Appeals Court, sanctioning Andrew and Kai for more than $550,000 in expenses that Alice incurred to defend against the “plan” to divert to Andrew and Kai all that Alice had, and so render her destitute. That judgment included an injunction freezing Andrew and Kai’s assets until Alice has been made whole.

    Andrew filed for bankruptcy shortly after the Appeals Court upheld that judgment in 2014. During the bankruptcy case, which was ultimately dismissed, it became apparent that Andrew transferred ownership in a real estate investment property to Kai and their daughter and that both defendants put a homestead declaration on a second property. The obvious intent was to shield these valuable assets from being reached to satisfy the judgment.

    Both Andrew and Kai were found guilty of criminal contempt, with Andrew receiving a 45-day jail sentence and Kai receiving 250 hours of community service. They appealed, essentially arguing that what they did wasn’t so bad, didn’t harm Alice and wasn’t willful. If anything, the argument went, a finding of civil contempt was the most that should have entered against them.

    The Appeals Court rejected all of these arguments. Clearly, each transaction violated an injunction that forbade any transfer of assets, and the violations were willful because the defendants volitionally committed the acts on which the convictions were grounded. Indeed, both Andrew and Kai showed contempt for the court’s authority, such as by Andrew’s “flippant statements” about the transfer of the investment property to Kai and their daughter and the timing of the homestead declaration that occurred just days after their appeal failed.
For the story, see Estate Plan Protects Widow From Son's Breach of Fiduciary Duty (In Migell, a Massachusetts Appeals Court ordered that real estate and other assets be returned to elderly, infirm woman).

For the court ruling, see O'Regan v. Migell, No. 16-P-348 (Mass. App. Novenber 2, 2016).

Lawsuit: Property Owner Seeks Over $400K In Damages After Allegedly Being Duped Into Signing Over Deed To Mineral & Gas Rights When She Lacked The Mental Capacity To Do So

In Marshall County, West Virginia, the West Virginia Record reports:
  • A Belmont County, Ohio, woman alleges she was persuaded to sign a deed for mineral and gas rights in Marshall County when she did not have the mental capacity to do so.

    Patricia Lee Ward, by her power of attorney Deborah Salem, filed a complaint on Oct. 21 in Marshall Circuit Court against Mountaineer Center LLC, James F. Tekely Jr., Vickie L. Markey, Gerald S. Mendleson and Louis Gay Lucci alleging fraud and breach of contract.

    According to the complaint, the plaintiff alleges that she suffered loss of income in upfront money and oil and gas royalties in an amount exceeding $400,000. The plaintiff holds Mountaineer Center LLC, Tekely Jr., Markey, Mendleson and Lucci responsible because the defendants allegedly made plaintiff to sign documents which she didn't understand and without her power of attorney and failed to pay proper considerations.

    The plaintiff requests a trial by jury and seeks judgment against defendants for compensatory damages, pre- and post-judgment interest, attorney's fees and cost and such other relief as the court deems just and proper.

Sunday, November 27, 2016

Illinois Appeals Court Sticks Discriminating HOA With $68K Tab For Victim's Legal Fees, Despite That It Was Only Liable For $3,300 In Damages & Fines For Illegal Treatment Of Lesbian Couple In Violation Of Chicago Fair Housing Ordinance

In Chicago, Illinois, the Chicago Tribune reports:
  • A lesbian couple who claimed 15 years ago they were discriminated against by a South Side condominium association are entitled to have their legal costs paid, an appeals court has ruled.

    In 2001, Pat Gilbert and Vernita Gray filed a complaint against 7355 South Shore Drive Condominium Association with Chicago's Commission on Human Relations. Gilbert alleged she was prevented from buying a unit in the building because she was white and a lesbian. Gray, who was Gilbert's then-girlfriend and lived in another unit in the building, said she was harassed because she was a lesbian.

    Gray, a gay rights activist, alleged that she was, among other things, subjected to derogatory comments, and evicted when she got behind on her assessments while heterosexual unit owners who were delinquent in their payments were allowed to stay, according to commission records.

    The commission issued a final ruling in 2011 in favor of Gilbert and Gray, finding the condo association violated Chicago's Fair Housing Ordinance. The association, including its president, was ordered to pay a total of $3,300 for emotional distress, compensatory damages and fines to the couple and to the city of Chicago, as well as to cover attorney fees, which amounted to $68,109.05. The commission said, however, there wasn't enough evidence to support claims of racial discrimination.

    In 2012, the condo association filed a petition in Cook County Circuit Court, arguing that its right to due process was violated because "the final recommended decision was issued by a hearing officer who didn't preside over the administrative hearing." It also said that, given the small award for damages, Gilbert and Gray shouldn't have been entitled to attorney fees.

    The circuit court affirmed the commission's decision in 2014, and the condo association appealed.

    On Friday [October 28], the Appellate Court of Illinois upheld the lower court's decision.

    Gilbert and Gray "were entitled to attorney fees, and the commission didn't abuse its discretion in awarding the fees," the 13-page order of the 1st Judicial District said.

    The women "prevailed on a significant legal issue, and the litigation served an important public purpose," the appellate court order said. "The record shows that considerable work was performed in pursuing this case over a course of at least five years."

    The women's law firm was Foley & Lardner, which said it represented Gilbert and Gray pro bono. Its co-counsel was the Chicago Lawyers' Committee for Civil Rights Under Law. Gray died in 2014 at age 65.

    The condo association's lawyer couldn't be reached for comment.

Complaint By Rejected Rental Applicant To Denver Fair Housing Group Leads To Reeling In Another Landlord In Housing Discrimination Suit; Defendant Agrees To Cough Up $70K To Resolve Allegations It Discriminated Against Families w/ Young Kids, Those Needing Assistance Animals; Charges Based On Evidence Gathered By Testers Posing As Tenants

In Littleton, Colorado, The Denver Post reports:
  • A fair housing agency investigating complaints found that an employee of a Littleton apartment complex illegally refused to accept renters who had children or those who depended on service animals.

    The Denver Metro Fair Housing Center(1) investigated the Langford Apartments after DeWayne Curtis responded to a Craigslist listing and a management company employee told him the apartment didn’t accept families with children.

    “They were willing to show us the apartment but as soon as I told they had kids, they told me a child had hurt himself on the property and now they don’t allow them,” Curtis said on Thursday.

    During the investigation an employee of Katchen & Co., the management company, was recorded telling investigators “we don’t accept children,” according to a fair housing center news release. He also told a deaf investigator that the Langford didn’t allow service animals, and said, “if you’re deaf, I don’t think this is the place for you.”

    No one from Katchen & Company was immediately available to respond.

    Under the Fair Housing Act, owners managers and other housing providers must make reasonable accommodations in rules, policies and practices to ensure the disabled can get housing, even if they have service animals. The act also prohibits discrimination against those with children under 18.

    Under terms of the settlement, Katchen & Company employees will receive fair housing training, the company will adopt a company-wide anti-discrimination policy and future advertisements will encourage families with children and people with disabilities to apply, according to the release.

    The settlement also provided for $70,000 in relief to the complainants.

    “I’m happy with the outcome,” Curtis said. “When I put in the complaint, I didn’t even think it would get this far. It keeps others from having the same experience.”
Source: Littleton apartment management company settles fair housing complaints involving children, service animals.
(1) Denver Metro Fair Housing Center is a private, non-profit organization dedicated to eliminating housing discrimination through comprehensive education, advocacy, and enforcement [ie. filing pro bono lawsuits] of the Fair Housing Act.

Indiana Non-Profit Fair Housing Group Uses Testers Posing As Prospective Tenants To Tag Midwest Landlord With Housing Discrimination Suit Alleging Refusal To Rent 2-Bedroom Apartment To Single Mom w/ 3 Kids Age 3 Or Younger

In Jeffersonville, Indiana, The Indiana Lawyer reports:
  • A federal lawsuit filed [] claims a Jeffersonville landlord discriminated against families with young children and denied them the opportunity to rent apartments in violation of the Fair Housing Act.

    The Fair Housing Center of Central Indiana Inc.,(1) announced the suit it filed on behalf of Meredith Fortner against Pinnacle Properties Development Group LLC, which owns and operates more than 400 rental dwellings in 13 properties around the Ohio River community.

    The suit claims Foster, 24, who is a mother of three children age 3 or younger, tried to rent a two-bedroom apartment at Pinnacle’s Alyson Circle Apartment complex but was asked how the children would be arranged. When she told the rental agent the two older children would sleep in one bedroom and she would share her bedroom with her youngest, who was 9 months old, the agent said her supervisor wouldn’t allow it. No larger apartments were available.

    After hearing of Foster’s experience, the Fair Housing Center used three testers who sought to rent units and also represented they had three young children, including an infant who the testers wished to sleep with the parent in the parent’s bedroom. All were denied, with one agent telling a tester, “Adults can’t share bedrooms with children because of fair housing law.”

    The suit seeks compensatory and punitive damages for Fortner and for the center to compensate for its investigation, plus legal fees and costs. “There now exists an actual controversy between the parties regarding Pinnacle’s duties under the Fair Housing Act. Accordingly, Fortner and the Fair Housing Center seek declaratory relief” as well as injunctive relief.
Source: Suit claims Jeffersonville landlord discriminated against kids.
(1) The Fair Housing Center of Central Indiana is a private, non-profit fair housing organization that works to seek out and eliminate housing discrimination through advocacy, enforcement [ie. pro bono lawsuits], education and outreach.

Another Landlord Gets Clipped By Fair Housing Cops; Admits No Wrongdoing, But Coughs Up $7K To Settle Allegations That Disabled Tenant With Medically Documented Need for Companion Animal Was Illegally Charged $200 Pet Deposit Fee & $25 Monthly Surcharge To Have The Animal

In Jackson Township, Ohio, The Canton Repository reports;
  • The Stark County Fair Housing Department announced a $7,000 settlement agreement with an apartment owner over a tenant's disability discrimination complaint.

    According to a news release, the agency had filed a complaint with the Ohio Civil Rights Commission in November 2015, alleging discrimination by operators of Foxhaven Apartments.

    The Fair Housing Department said a disabled tenant -- who provided medical documentation of a need for a companion animal -- was illegally charged a $200 pet deposit fee and a monthly $25 surcharge to have the animal. In addition, it was alleged to have taken four months for a disability parking sign to be relocated after he'd moved into a larger unit in the complex.

    In June, the Civil Rights Commission found Foxhaven had likely violated fair housing laws that deal with discrimination, according to the release. Last month, the parties entered into a conciliation agreement, which includes a $7,000 payment; for Foxhaven staff attend fair housing training; and to prominently display the phrase "equal housing provider" in its ads.

    Foxhaven admitted no wrongdoing.
Source: Jackson apartment complex settles discrimination complaint (A disabled tenant, who required a companion animal, was unfairly charged an extra deposit and monthly fee by his landlord).

Local Housing Authority Faces Fair Housing Feds' Allegations That It Denied 4-Member Section 8 Family's Request (Voucher Ultimately Revoked) To Allow Move From 2-Bedroom Unit Into 4-Bedroom Apartment More Appropriate For Their Disability Needs (Dad's End-Stage Kidney Disease; Grade School Daughter w/ Learning Disabilities & Enuresis)

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it is charging the Trumbull Metropolitan Housing Authority in Warren, Ohio with violating the Fair Housing Act by denying the reasonable accommodation requests of a family that includes a father and daughter with severe disabilities. Read HUD’s charge.

    The Fair Housing Act prohibits housing providers from denying or limiting housing to persons with disabilities, or from refusing to make reasonable accommodations in policies or practices for people with disabilities.
    The case came to HUD’s attention when the four-member family participating in the Housing Choice Voucher Program filed a complaint against the Trumbull Metropolitan Housing Authority after it denied their request to move from their two-bedroom apartment into a unit that was appropriate for their disability needs. The family submitted a request to occupy a home that had two additional rooms to separately accommodate the father’s dialysis treatments and a daughter’s disability.

    According to the charge, though the housing authority initially approved the family’s request it ultimately terminated their voucher assistance, and denied their request for new voucher program paperwork. The family then lived in separate locations while the father underwent treatments alone.