Saturday, December 10, 2016

Maine's Lawyer Ripoff Reimbursement Fund Coughs Up Maximum $100K Payout To Two Estates Of Now-Deceased Clients Who Were Fleeced By Now-Disbarred Attorney Out Of Over $480K

In Augusta, Maine, The Republican Journal reports:
  • A fund established to reimburse clients who are the victims of an attorney's dishonest conduct gave $100,000 to the trusts of two women from whom he embezzled hundreds of thousands of dollars.

    The trustees for [Maine] Lawyers' Fund for Client Protection voted Nov. 1 to reimburse a total of $100,000 to the trusts of Veronica Pendleton and Doris Schmidt. The fund is financed through registration fees paid by every licensed attorney in the state. No taxpayer dollars are provided to the fund.

    Schmidt granted William Dawson power of attorney in 2012 and Pendleton retained Dawson in 2005. Both women have since passed away.

    Jacqueline Rodgers, executive director of Lawyers' Fund for Client Protection, said the money given to Dawson's clients represent the maximum amount that can be reimbursed.(1) According to the fund's 2015 annual report, a total of $66,271 was reimbursed to clients last year.

    According to previously published reports, Dawson paid himself $149,275 from Pendleton's accounts for his services for the year ending in April 2013, and $178,500 during a nine-month to one-year period from Schmidt's accounts.

    Dawson pleaded guilty in March to two counts of felony theft and three counts of failing to pay state income taxes. He was sentenced to five years in prison but will serve only 2 ½ years and also be on probation for three years.

    He was also ordered to pay $482,750 in restitution to the estates of Veronica Pendleton and Doris Schmidt.

    “The attorney-client relationship depends upon the trust of clients,” Fund Chairman Stephen Schwartz said in a statement. "It is a shame when an attorney betrays that trust and tarnishes the reputation of the entire profession."

    Dawson was disbarred Aug. 1, according to a Maine Supreme Court ruling.(2) In addition to paying restitution to the estates of Pendleton and Schmidt, Dawson must also pay $10,485.66 for costs related to his disbarment proceeding.

    [Maine] Lawyers Fund for Client Protection was established by a Maine Supreme Judicial Court order in 1997. The fund's purpose is to “promote public confidence in the administration of justice and the integrity of the legal profession by reimbursing clients who suffer losses caused by an attorney's dishonest conduct.”(3)

    Since its creation, the fund has reimbursed $552,138 to claimants.

    Clients who believe they suffered financial losses because of attorney theft, embezzlement or misappropriation can contact the fund at 623-7801.
Source: Fund reimburses $100,000 to embezzlement victims' estates.
(1) According to Rule 13(a) of the Rules for the Maine Lawyers’ Fund for Client Protection, the maximum amount of reimbursement that is payable by the Fund to victimized clients shall be $50,000 per claim and $100,000 per lawyer.

(2) This lowlife also has a prior history of misconduct in dealing with his clients that the state bar was aware of. See Board of Overseers of the Bar v. William L. Dawson, Jr., Esq, (June 27, 2011).

(3) 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.

State Supremes Yank Attorney's Law License Over His Failure To Create An Appropriate Trust Account To Deposit Into & Hold Clients' Advance Fees Until Earned; He Deposited Said Client Cash Into His Personal Checking Account Instead

In Lincoln, Nebraska, the Omaha World-Herald reports:
  • The Nebraska Supreme Court disbarred an Omaha attorney [] after he mishandled a client’s advance fees.

    Douglas R. Lederer voluntarily surrendered his license in early October.

    Lederer, who started practicing law in 2005, admitted that he violated his oath of office by depositing clients’ advance fees into his personal checking account before earning them.
Source: Omaha attorney disbarred for mishandling client's fees.

For the Order of Disbarment, see State ex rel. Counsel for Dis. v. Lederer, 295 Neb. 129 (Neb. November 18, 2016).

Aging Long Island Lawyer Gets Re-Arrested For Allegedly Fleecing Dead Client's Estate Out Of Over $500K; Earlier Arrest Accusations Involved Alleged Pilfering Of $400K+ From Another Dead Client

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced that a disbarred attorney was re-arrested [] for allegedly stealing more than $500,000 from an estate he represented.(1)

    Robert Alan Wagner, 63, of Bellmore, was arraigned [] before Judge Scott Siller and is charged with grand larceny in the second degree (a C felony). The defendant was released on his own recognizance and is due back in court on December 2. Wagner faces up to five to 15 years in prison if convicted.

    “This defendant allegedly abused the trust placed in him as an attorney and stole more than $500,000 from the estate of a deceased man,” said DA Singas. “We will aggressively prosecute this case and seek restitution for the victim.”

    DA Singas said that Wagner was first arrested and charged with grand larceny in the second degree in September 2016 for allegedly stealing more than $400,000 from an estate he represented. At that time, he was released on $200,000 bail with a requirement that he wear a monitor tracking device as well as that he surrender his passport.
    The defendant allegedly used the money for personal purposes, including cash withdrawals in excess of $250,000 and payments to support his law practice.

    The defendant was legally practicing law when he was retained, but was disbarred by the Appellate Division of the New York State Court of Appeals on March 11, 2015, proximate to the time when he was to facilitate the transfer of estate funds. The disbarment was unrelated to this matter.
Source: Disbarred Attorney Re-Arrested For Stealing More than $500,000 from Estate Funds.
(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 Veteran Attorney Gets Bar Boot For "Shamelessly" Mishandling Hundred$ Of Thousand$ In Client Funds, Failing To Keep & Produce Proper Trust Account Records

In Clinton Township. New Jersey, reports:
  • A Hunterdon County attorney who has been practicing law for more than three decades has been disbarred (Disciplinary Review Board decision; disbarment order) by the state Supreme Court.

    Walter N. Wilson, whose law office was in the Annandale section of the township, had his license suspended in January 2015 after he failed to supply the New Jersey Office of Attorney Ethics with requested information on clients and attorney trust accounts.
    The court voted eight in favor, with one abstention, to disbar Wilson based on an eight-count ethics complaint. The effective date of his disbarment was Thursday. Attempts to reach Wilson [] were unsuccessful.

    "The record clearly establishes that respondent systematically helped himself to trust funds either to suit his own personal needs or those of other clients or third parties," the court wrote in its decision. "What is clear is that he did so shamelessly, without authorization, and to the substantial detriment of those clients and third parties. For this, he must be disbarred."
    The complaint detailed seven instances where Wilson mismanaged clients' funds, as well as mishandled their interests, which ranged from property transactions to funding trust accounts. The eighth complaint focused on how he misused his attorney trust account.
For the story, see N.J. attorney disbarred for misusing clients' funds.

For the disbarment decision, see In re Walter N. Wilson.

Disbarred Vegas Attorney Gets Up To Seven Years For Glomming Onto Over $140K Held in Her Client Trust Account; Ex-Law Partner Among Victims, Says Defendant Left Him With Temporarily Destroyed Reputation

In Las Vegas, Nevada, the Las Vegas Review-Journal reports:
  • Disbarred Las Vegas attorney Jeanne Winkler was sentenced [] to up to seven years in prison for stealing more than $140,000 from her former clients.

    Winkler, 48, wept as she pleaded with District Judge Richard Scotti, who said he had “no doubt greed played a significant role” in her crime.

    She must serve at least 2½ years behind bars before she is eligible for parole, the judge said. “There has to be consequences commensurate with the amount of harm you’ve inflicted,” he said, adding that Winkler must pay about $143,000 in restitution.

    The judge allowed Winkler a week to spend time with family in Tonopah before she surrenders. The defendant pleaded guilty in May to theft.

    Chief Deputy District Attorney Jay Raman said Winkler stole from several clients, including Juanita Thompson, who told the judge that she lost roughly $70,000 entrusted with Winkler in a 2008 divorce proceeding. Thompson said she wanted to spit in Winkler’s face and called her “pure evil.”

    One of Winkler’s former law partners, Louis Schneider, wrote in a letter to the judge that Winkler had stolen $10,000 from him, stolen his clients’ money and temporarily destroyed his reputation.

    Last year, a federal judge ordered Winkler to pay a share of $47,000 in restitution and serve 100 hours of community service for her role in a scheme to take over and defraud Las Vegas-area homeowners associations.

    Winkler lost her Nevada law license in November 2011 over allegations she misappropriated about $233,000 from her client trust account. She was arrested in 2011 on state theft and embezzlement charges.
Source: Former Las Vegas lawyer gets prison time for stealing from clients.
(1) The State Bar of Nevada established the Clients’ Security Fund in 1970 to compensate victims of lawyer theft.

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 09, 2016

Cops Working Dawn Patrol Roust Home Improvement Contractor Out Of Bed, Frog-March Bathrobe & Slippers-Clad Suspect To Jail On 143 Criminal Charges For Allegedly Fleecing 20 Homeowners Out Of $250K+ In Home Upgrade & Remodeling Ripoffs; Most Victims Over Age 60, Leads To Enhanced Charges; Probe Into Add'l Complaints Ongoing, Bail Bond Set At $250K

In Erie, Pennsylvania, the Erie Time-News reports:
  • State and local investigators charge that an Erie contractor who promised prompt and professional service for his clients' home-improvement needs bilked 20 customers out of more than $250,000 in deposits for work he never started or completed.

    Lloyd A. Davis, 59, the owner of LD Construction, was charged [] with 143 mostly felony counts on allegations ranging from false and deceptive business practices to receiving stolen property for keeping customer money without performing work as promised.

    Davis, [...], was brought before North East District Judge Scott Hammer for his arraignment [] wearing his plaid bathrobe and moccasin slippers. He was taken into custody from his residence earlier that morning by members of the Pennsylvania State Police Fugitive Task Force and the U.S. Marshals Western Pennsylvania Fugitive Task Force, according to investigators.

    Hammer placed Davis in the Erie County Prison on $250,000 bond following the arraignment, noting the number and the seriousness of the charges Davis faces. His preliminary hearing was tentatively scheduled for Dec. 1.

    Trooper Susan Edelmann, a criminal investigator with state police Troop E in Lawrence Park Township, charged that Davis took $253,600 in deposits from 20 customers who hired him to do home improvement work between November 2013 to the present, but never started or finished the work. The customers Davis is accused of bilking live in Erie, Wesleyville and five townships in Erie County, according to the criminal complaint.

    The work Davis was hired to do was mainly roofing work and basement, bath and kitchen remodels, Edelmann said. Some of the victims were on fixed incomes, some had to take out loans for the work, some used their retirement funds and some used insurance money related to property damage claims, she wrote in the complaint.

    The customers paid deposits ranging from $2,500 to $28,500. Nine of the customers had their projects abandoned with only a small portion of the work completed, while the other 11 customers had no work done and no materials ordered for their projects, according to the complaint.

    Thirteen of the victims were over the age of 60, increasing the grading of some of the criminal charges related to their cases to second-degree felonies. The charges related to the other seven customers, who are under 60, are graded as third-degree felonies.

    Edelmann also charged in the criminal complaint that Davis made false statements to induce agreements for home improvement services by promoting his business as reputable at home shows and on his website; published false or deceptive advertisements on his website, including falsely stating that his business was a member of the Better Business Bureau of Northwestern Pennsylvania and the Builders Association of Northwestern Pennsylvania, when it was removed from both; and committed the crime of criminal use of a communication facility through the use of his business website, social media and a cellphone in doing business.

    Davis is additionally charged in the complaint with three misdemeanor counts of bad checks, after refund checks written to two clients bounced and a third client who was given a refund check learned that Davis stopped payment on it, according to information in the complaint.

    Edelmann said the investigation that led to the charges against Davis began in early October, when the Erie County District Attorney's Office asked state police to look into a complaint originating out of Greene Township. As investigators started looking into it, they unearthed other complaints against Davis that Erie and Millcreek police were investigating, she said. All of the cases were consolidated into the criminal complaint that Edelmann filed [].

    State police have received more complaints concerning Davis and his business, and those are being investigated, Edelmann said after [the] arraignment. Complaints can be reported to Edelmann at 898-4524; to Erie police Detective David Walker at 870-1125; to Millcreek police Detective Ryan Mays at 833-7777; or to the Pennsylvania Office of Attorney General's Bureau of Consumer Protection at (800) 441-2555.
Source: Erie contractor charged in fraud (Police: More than $250,000 in deposits taken, but work not done or finished, state police charge).

See also, Local contractor faces 20 felony counts of fraud.

Serial Home Improvement Scammer With History Of Buying His Way Out Of Jail Time Does It Again; Gets 5 Years Probation On Charge Of 'Theft From Person In Protected Class' After Giving Back $3,500 He Clipped From 97-Year Old Homeowner

In Hamilton, Ohio, WCPO-TV Channel 9 reports:
  • At 97, Mary Jane Davis doesn't have money to throw away. That's why she appreciates getting back the $3,490 she paid for incomplete work on her driveway.

    James Boswell Sr., a man old enough to be Davis' son, had to pay Davis that amount in restitution. The payment was part of the guilty plea he entered in Butler County Criminal Court several weeks ago. Boswell pleaded guilty to stealing from Davis.

    Judge Noah E. Powers II sentenced Boswell [] to five years of probation; one year is community control supervision, four years are basic probation. Boswell must also complete behavioral health corrective thinking classes, and a drug and alcohol assessment. The judge instructed him not to consume drugs or alcohol. The judge said Boswell tested positive for heroin during his sentencing investigation. The judge told Boswell he had to get a legitimate full-time job, and must complete 20 hours of community service per week until he finds a job.

    Boswell told the 9 On Your Side I-Team, “You ruined my life!,” Tuesday after court.

    The I-Team first exposed Boswell’s criminal past in July after getting several tips from viewers. Court records show Boswell went to Davis' Butler County home on March 24, 2016 to seal her concrete driveway. "He says, 'and you really need it.' I says, 'Well, I don't think I need it that bad, I don't even have a car," Davis said.

    Boswell charged Davis $3,490 for work he didn't finish. Davis' niece and power of attorney, Bekki Hull, said that was all the money Davis had. "I saw that there was $141 left in her account, and I was just livid," Hull said. "I was upset for her."

    Davis said she felt intimidated and thought she had to pay Boswell.

    At the Butler County Courthouse in July, Boswell said he had nothing to say about the charge, but told the I-Team he would make things right.

    "Anything I've done, if they're not satisfied, I'll take care of it," he said.

    A criminal background check revealed that Boswell has faced cases in at least five states from New York to Kentucky over the past decade. In Pennsylvania alone, court records show Boswell faced 54 charges including theft by deception and deceptive business practices before paying restitution to have the charges dropped.

    He has repaid victims a total of more than $55,000 during the past decade, avoiding jail in several cases.

    In Kentucky, charges were dropped against Boswell in June of 2016 after he repaid 74-year-old victim Helen Trautwein $4,000 of the $7,500 he was accused of taking from her after doing questionable work on her driveway. "I'm scared he's coming back in the night," Trautwein said.

    Boswell has also spent time behind bars in three states. He was released from post-prison supervision in Kentucky in March, just 19 days before his dealings with Davis.

    "What we have are serial scammers," Gloria Sigman said. "We have prosecuted contractors who have committed the same.”

    Sigman is the assistant prosecutor of white collar crimes and crimes against the elderly in Butler County. She works with the Crimes Against the Elderly Task Force that Butler County Prosecutor Mike Gmoser established in 2011.

    "I'm a voice for all the older people that get hurt," Sigman said.

    Sigman filed charges of theft from a person in a protected class against Bosewell in Davis' case. She said she knew it was a strong case.

    "His lawyer had everything at the first court appearance," Sigman said. "I don't throw crap on the wall to see if it sticks."

    Sigman said Boswell wanted to plea before the case even got to trial. The charge was reduced from a fourth-class felony to a fifth-class felony as part of the deal. That reduced the maximum jail time he faced from 18 months to 12 months.

    "I don't negotiate time for money, but she's going to be 98," Sigman said. "She's on a fixed income. She really wanted her money back."

    Sigman said Boswell had actually forced Davis to make the check out to another man named Richard Corbell. Surveillance video shows that Boswell either drove Corbell to the bank or met him there, according to Sigman.

    Hull said she was grateful for another watchful eye. A neighbor picked Boswell out of a line-up.

    Sigman said the court already has the restitution money Boswell is required to pay Davis, and Davis will get it in 30 to 45 days.

    There is currently no law that gives people like Boswell a greater punishment if he serves his time and gets caught doing the same crime again.

    Sigman said she wants the laws changed. She said anyone’s parents, relatives, or even neighbors could easily end up the victim of theft. She commends Mary Jane Davis for sharing her story to help others.

    For now, the Butler County Prosecutor's Office has made a pamphlet to help older residents protect themselves. There's also more information about the Crimes Against the Elderly Task Force available here.

Local Prosecutor's Office Uses State AG's Civil Lawsuit As Starting Point In Probe That Leads To Criminal Theft By False Pretenses Charges Against Owners Of Home Improvement Outfit For Allegedly Pocketing Upfront Contract Deposits From Homeowners, Then Failing To Complete Promised Services

In Charleston, West Virginia, The West Virginia Record reports:
  • West Virginia Attorney General Patrick Morrisey announced an investigation by his office led to a three-count criminal indictment alleging a Putnam County roofing company and its owners misled consumers in order to receive money for work never completed.

    Morrisey’s office investigated the case, filed a civil action in July and also worked with the Kanawha County Prosecutor’s Office.

    The resulting indictment charged David E. Brinegar and Stacy M. Brinegar, along with their company Great Finishes, with felony obtaining by false pretenses.

    “We enforce the law against all companies large and small,” Morrisey said. “If people want to do business here, they have to play by the rules.”

    Morrisey’s civil complaint, filed in Kanawha Circuit Court, alleged Great Finishes and its owners, all of Scott Depot, accepted substantial down payments to replace and repairs roofs without completing the work.

    The lawsuit alleged Great Finishes never returned to complete five roofing jobs for which it received at least $22,964.80 in down payments.

    Those consumers reside in St. Albans, Oak Hill and Dunbar, in addition to Huntington, where a woman paid $9,550.53 for no work and a refund of just 25 percent as of the July filing.

    Great Finishes still owed approximately $15,000 for incomplete work, according to the July complaint.

    One consumer recouped money by disputing the charge with a credit card company, while another did so by filing a complaint with the Attorney General’s Office.

    The lawsuit charged Great Finishes failed to provide a three-day cancellation notice or its contractor’s license number within contracts, failed to complete work by the date promised and conducted business in a deceptive and fraudulent manner.

    Morrisey asked for an immediate injunction to block Great Finishes from doing business in West Virginia and seeks up to a $5,000 fine for each violation of the state’s Consumer Credit and Protection Act.

Bail Bond Set At $30K For Suspect Pinched On Elderly Financial Exploitation Charge; Accused Of Grossly Overcharging 74-Year Old Homeowner For Subpar Exterior House Work In Alleged Home Improvement Ripoff

In Cape Girardeau, Missouri, the Southeast Missourian reports:
  • A man charged a 74-year-old Cape Girardeau woman more than $12,000 for subpar exterior house work and planned to charge her $10,000 more to spray for termites, according to a Cape Girardeau police statement.

    Cape Girardeau police arrested Lon Raymond Stielow, 59, of Saint Paul, Minnesota, on Thursday. The Cape Girardeau County Prosecuting Attorney’s office charged Stielow with financial exploitation of the elderly.

    Stielow’s bond was set at $30,000 cash.

    Police were contacted by a friend of the victim Nov. 13, according to a probable-cause statement filed in the case by Cape Girardeau Police detective Joe Thomas. The victim told police she went with Stielow to the bank and withdrew $12,291 she gave to him, most likely on Nov. 12, Thomas wrote.

    Thomas observed the work completed by Stielow at the victim’s house [...], which amounted to putting in gutter guards, painting window frames and a door frame and nailing a board in place below one of windows, according to the statement.

    Stielow and his two workers did not scrape off any old paint from the windows and painted on the siding around each window, Thomas wrote. About 34 feet of gutter guards were installed, according to the statement.

    “When I saw the ‘work’ they did compared to what they charged her, it did seem they grossly overcharged her,” Thomas wrote.

    Thomas talked to a professional painter who said the most he would charge for a similar job would be $1,500, Thomas wrote. At their most expensive, gutter guards cost about $135 for a set of 25, according to the statement.

    Thomas checked with a two pest-control companies, and neither said they would charge more than $2,000 for a big job, according to the statement.

Thursday, December 08, 2016

Two Brooklyn Landlords Agree To Cough Up $350K To Buy Out Of Prison Time After Confessing To Using Pitbulls, Bats, & Sledgehammers To Destroy Their Own Buildings & Intimidate Tenants Into Moving Out Of Rent-Controlled Apartments

In Brooklyn, New York, DNAInfo (New York) reports:
  • Two Bushwick slumlords will avoid jail time under a plea deal hammered out [last week], under which they have to pay nearly $350,000 to tenants they harassed and intimidated with pitbulls and sledgehammers.

    Joel and Amrom Israel confessed in Brooklyn Supreme Court to a felony scheme to defraud and three counts of unlawful eviction — a misdemeanor.

    The brothers admitted they used the harsh and unlawful tactics in order to intimidate rent-stabilized tenants to leave their apartments, so they could renovate and charge market rate prices.

    About $250,000 will go directly to 10 tenants as restitution, while the slumlords will have to fork over an additional $100,000 to the state's Tenant Protection Unit which will set up a fund for tenants to claim further money for other expenses they had to pay for during the time they were being harassed.

    Under the deal brokered by prosecutors Gavin Miles and Samantha Magnani, the brothers have six months to pay the tenants back or they could still serve up to four years in jail.

    If they comply, they'll get five years probation and 500 hours of community service.

    The charges stem from a 2015 indictment accusing them of abuses at five of the brothers' North Brooklyn buildings including 98 Linden St., 324 Central Ave. and 386 Woodbine St. in Bushwick, 300 Nassau Ave. in Greenpoint and 15 Humboldt St. in Williamsburg.

    The landlords hired vandals to intimidate tenants with pitbulls, bats and sledgehammers and got others to come in to party and do drugs in the hallways, according to the plea deal.

    And at 98 Linden, residents of two apartments lived for 17 months without bathrooms or kitchens when they were told they were getting repairs and instead they were demolished and left with gaping holes in their apartments.

    "We were living with rats and cats in my kitchen. Street cats would come inside," said Michelle Crespo, 35, who has lived her entire life in the apartment she shares with her two sons, her brother, her mother and step-father.

    Her cousin across the hall also had her kitchen and bathroom ripped out by the landlords, so for that time they all used an aunt's facilities in an upstairs apartment.

    In total, it was 13 people using one bathroom for over a year.

    "Every single person had somewhere to go in the morning, whether it was school or work," she said. "We'd line up starting from 5 in the morning on."

    The brothers have finally repaired the kitchen and bathroom, she said.

    Crespo will get $12,828 under [the] agreement, but when she learned the Israels had pleaded guilty, the money was the last thing on her mind.

    "Just having this day come finally is such an amazing feeling," she said. "It makes us feel that we are human. We are capable of getting justice."

    On their way out of the courtroom [] the brothers declined to comment.

    Their lawyers Kevin Keating and John Carman later released the following statement: "The Israels have chosen to put this matter behind them and are cooperating fully to ensure that the rights of their tenants are protected."

Gentrification-Minded Koreatown Landlord Looking To Boot Rent-Controlled Tenants & Flip Buildings Hit With 92-Page Lawsuit; Action Filed By Pro Bono Lawyers On Behalf Of 15 Residents Looking To Fight Off Allegedly Illegal Eviction Notices & Practices Described As Violating Federal, State Anti-Discrimination Laws

In Los Angeles, California, the Los Angeles Times reports:
  • After a lifetime of riding the trains in the summer and wintering at the missions on L.A.’s skid row, Arthur Rivera ended up in a Santa Monica gutter.

    Then a case manager with Step Up on Second, a mental health services agency, obtained a rental subsidy for him. In 2011 Rivera moved into a single apartment in a four-story, brick-facade building in Koreatown.

    Rivera, 67, said his life has stabilized into a simple routine, riding the bus several times a week to Step Up on Second for group activities and meals. Otherwise, he stays in his sparse apartment where the furnishings consist of a metal fold-up bed and a box for his radio.

    “I stay home and listen to my music,” Rivera said. “I do my exercise. Taking my shower. Inside my room. I get discouraged going outside. Going outside I get angry and nervous. I feel better staying in here. I want to at least have my space.”

    But Rivera’s equilibrium was upended three years later when the building was sold.

    The new manager told him, “’There’s going to be some big changes around here,’” he said.

    According to a lawsuit filed in federal court [], the changes began with a notice from the new owner that it would no longer accept Section 8. Rivera was given 90 days to move.

    Rivera is one of 15 tenants in five Koreatown buildings named as plaintiffs in the lawsuit, filed electronically [] by the pro bono law firm Public Counsel(1) and the nonprofit law firm Public Advocates Inc.(2) It alleges that the Century City investment company Optimus Properties LLC used abusive and discriminatory tactics to displace mentally ill and Latino tenants from the rent-controlled buildings so they could renovate their units and rent them for more money.

    In addition to Optimus, the lawsuit names five affiliated limited liability companies that are the registered owners of the buildings; Roxbury Ventures LLC, described as Optimus’ property management company; and Jerome Mickelson, listed on Optimus’ website as director of construction/multifamily asset manager.
    The lawsuit alleges Optimus violated state and federal anti-discrimination laws to push out “undesirable” tenants so it could “market the units to childless, English-speaking, non-disabled people of means, and increase their profits on the rapid resale of the apartment buildings.”

    The 92-page complaint contains a section on each of the 15 plaintiffs, outlining instances of rent increases and eviction notices that it described as unlawful. Four of the plaintiffs were described as people with mental disabilities. The others were Spanish-speaking tenants, either couples with children, single parents or elderly.
    The lawsuit seeks compensatory and punitive damages and an injunction ordering Optimus to cease the alleged practices.
For more, see Investment firm ousts mentally ill and Latino families to flip Koreatown buildings, lawsuit alleges.
(1) Public Counsel is the non-profit, pro bono public interest law firm of the Los Angeles County and Beverly Hills Bar Associations as well as the Southern California affiliate of the Lawyers' Committee for Civil Rights Under Law. It serves a wide spectrum of people who live at or below the poverty level.

(2) Public Advocates Inc. is a San Francisco-based nonprofit law firm and advocacy organization that works in collaboration with grassroots groups representing low-income communities, people of color and immigrants, combined with strategic policy reform, media advocacy and litigation.

Booming Tech Economy Drives Looming Extinction Of Oakland SRO Hotels, Forcing Low-Income Tenants Facing Boot To Sue In Effort To Hang Onto The Roof Over Their Head

In Oakland, California, the San Francisco Chronicle reports:
  • Orlando Chavez has no intention of leaving the tiny, cluttered room where he has lived for eight years, with its bent window blinds, tattered carpet and leaky bathroom ceiling. Upstairs, construction crews tear through walls inside the six-story building, one of downtown Oakland’s last single-room-occupancy hotels.

    They’re turning this into a tech haven,” Chavez, 65, said about the 113-year-old Hotel Travelers, which is being converted into dorm-style housing for young professionals.

    Chavez and two other tenants refused to move after the landlord, NDO Group, gave them 60-day eviction notices in July. Now five tenants, including Chavez, are suing NDO Group, alleging harassment and violations of Oakland’s tenant protection ordinances.

    The Hotel Travelers is one of many buildings that have historically provided housing for the city’s poor but now face transformation for a wealthier demographic. With rents escalating rapidly and Uber preparing to take over the old Sears building, adding thousands of new employees to the downtown area, two City Council members are pushing for legislation to preserve these old hotels.

    Single-room occupancies have traditionally been a housing of last resort for people with bad credit, people who are sick, who have addictions or mental illness that would otherwise put them on the streets,” said City Council President Lynette Gibson McElhaney, who is leading the effort. She noted that residential hotels do not require credit checks, proof of income, large security deposits or long-term leases, making them more accessible than other forms of housing.

    If they disappear, the consequences could be dire, particularly because the city already has a big homeless population, McElhaney said. The most recent one-night homeless census, taken in January 2015, found 1,400 people sleeping outside.

    “We have a need for these buildings,” she said. “The fact that they’re going away has my stomach in knots.”

    The problem isn’t limited to Oakland, said state Sen.-elect Nancy Skinner, D-Berkeley. Since 1960, she said, the number of single-room-occupancy hotels in Sacramento has dropped dramatically — from 78 to 14. In Los Angeles in 2008, city officials passed a law to protect 336 residential hotels.

    Strong city ordinances have kept the number of SROs relatively stable in San Francisco, but some of those rooms are now going to students, tech workers and tourists.
    In downtown Oakland, where a commercial boom has been under way for years, residential hotels have been replaced with more profitable ventures. A city report written last year by UCLA graduate student Brian Warwick documented some of these transformations. The Alendale Guest House near Lake Merritt became a market-rate apartment building, and the Hotel Westerner on San Pablo Avenue was demolished to make way for the Uptown development. The shuttered Will Rogers Hotel, ravaged by fire in 2002, was reborn in 2009 as the Clarion, a boutique hotel with a fitness center and two restaurants. The former Lake Merritt Lodge reopened in 2014 as a student dorm for the Hult International Business School in San Francisco.

    With 18 SRO hotels left in Oakland’s downtown corridor, public officials are looking at how to help residents like Chavez. But, there’s no legal mechanism to stop the SRO conversions.

    Oakland’s housing laws do not prevent residential hotel owners from turning their buildings into something that generates more income, such as a boutique hotel or condominiums. Building owners can even convert low-income hotel rooms into restaurants or offices, as long as the benefits of the conversion outweigh the loss from the city’s housing supply.

Wednesday, December 07, 2016

Real Estate Broker Charged In $165K Foreclosure Avoidance Swindle; Allegedly Duped Three Financially Distressed Homeowners Into Remitting Monthly House Payments To Him In Exchange For Promise To Resolve Default With Lenders, Then Simply Pocketed The Cash

In Lowell, Massachusetts, reports:
  • A real estate broker has been charged with stealing more than $165,000 through a larceny scheme targeting homeowners in Lynn and Lowell facing foreclosure, according to Attorney General Maura Healey.

    Kevin Taing, 49, of Lowell, was arraigned [] in Middlesex Superior Court and Essex Superior Court on larceny charges. Taing pleaded not guilty to the charges.

    Healey’s office began an investigation in 2014 following a referral from a legal services agency. Taing is a licensed real estate broker and principal of Eastern Funding & Investment Inc. (EFI).

    Taing, who is of Cambodian descent and speaks Khmer, allegedly persuaded three separate homeowners of Cambodian descent, who were facing foreclosure, to make payments to EFI rather than the actual holder of their mortgage loans.

    Taing allegedly led these families to believe that by paying EFI they would reduce their monthly payments, stay in their homes or otherwise resolve their mortgage issues.

    While Taing sent these homeowners mortgage statements, authorities allege that he never forwarded any of the payments to the holders of the mortgage loans. Taing allegedly converted the money paid to EFI to his personal use, using the funds to pay for personal expenses, credit card bills, restaurant and retail expenses, and property in California.
Source: Real estate broker charged in larceny scheme.

For story update, see Lowell fraud case widens:
  • The extent of an alleged mortgage-fraud scheme perpetrated by a Lowell businessman may be more widespread than prosecutors have yet charged, according to a civil lawsuit filed against Kevin Taing. [...] Two of Taing's alleged victims eventually contacted Northeast Legal Aid, a nonprofit organization,(1) and are now suing him.

    In their lawsuit, Samuel and Cynthia Chy of Lynn claim that Taing may have victimized more Cambodian families, and that North Andover attorney Herbert Weinberg assisted him in duping his victims in exchange for legal fees.
(1) Northeast Legal Aid is a non-profit law firm providing free civil legal services to the poor and elderly in Northeastern Massachusetts.

Scammer Gets Four Years For Filing Hundreds Of Phony Bankruptcy Petitions, Using Forged Deeds, Other Fraudulent Documents To Delay Foreclosure & Eviction For Distressed Homeowners, Pocketing Nearly $3 Million In Fees

From the Office of the U.S. Attorney (Los Angeles, California):
  • A Long Beach man was sentenced [] to four years in federal prison in relation to a mortgage rescue scheme that brought in nearly $3 million from fees from distressed homeowners.

    Karl Robinson, 52, was sentenced [] by United States District Judge Manuel L. Real, who also ordered the defendant to pay a $10,000 fine.

    Robinson pleaded guilty in August to one count of bankruptcy fraud in connection with a five-year scheme he operated under his own name and companies with names such as “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation.”

    Robinson solicited clients who were facing foreclosure with false promises that he could save their homes. Instead of providing legitimate services to his clients, Robinson filed hundreds of fraudulent bankruptcy petitions that delayed foreclosure and eviction proceedings.

    As part of the scheme, Robinson filed falsified grant deeds with county recorders and other fake documents in state court eviction proceedings to make it appear that fictional debtors held interests in the distressed properties. In a plea agreement filed in federal court, Robinson admitted that he misused notary stamps of other individuals in order to fake signatures on legal documents and that he charged distressed homeowners additional fees if they wanted to unwind fake filings.

Consumer Feds Tag Financial Firm With Lawsuit For Allegedly Aggressively Targeting, Then Fleecing Lead Paint Poisoning Victims Out Of Their Structured Settlements Under False Pretenses; Accused Of Providing, Paying For Lawyer To Give Victims Sham "Independent Professional Advice"

The Washington Post reports:
  • A controversial Chevy Chase company that reaped immense profits from deals with victims of lead paint poisoning in Baltimore has been accused of deceptive practices and breaking federal law, according to a lawsuit filed in federal court [] by the Consumer Financial Protection Bureau.

    The suit alleges that Access Funding violated the Consumer Protection Act by aggressively pursuing victims of lead paint poisoning, many of whom were mentally impaired, and persuading them to sell large payouts for a fraction of their value under false pretenses. The agency has asked the U.S. District Court in Baltimore to stop what it calls an “illegal scheme,” ban the company from participating in an industry that deals with some of the nation’s most vulnerable residents, and order it to pay damages to former customers.

    “Many of these struggling consumers were victimized first by toxic lead, and second by a company that saw them as little more than income streams to be courted and harvested,” CFPB Director Richard Cordray said in a statement. “The Consumer Bureau is fighting to help vulnerable consumers who were swindled out of their settlements, and to prevent future abuses.”

    Access Funding executives did not respond to requests for comment [].

    The lawsuit marks the second time this year that a government agency has sued Access Funding, its executives and a lawyer that frequently worked with the company. In May, the Maryland Attorney General’s Office accused the firm of committing fraud and deceiving court officials. Maryland’s lawsuit, filed in state court, is still pending.

    The company, which has changed its name to Reliance Funding, did the bulk of its business in Maryland, where between 2013 and 2015 it struck at least 158 deals, predominantly with people who had been poisoned by lead paint as children, the federal suit states. Those deals, approved in Maryland courts, allowed the company to purchase for $7.5 million settlements that would have paid out $32.6 million, according to the Maryland attorney general.

    “If there ever was a case that cried out for this kind of attention, it was this one,” said Rep. Louise M. Slaughter (D-N.Y.), who urged the federal agency last year to investigate the industry after reading news reports in The Washington Post. “Here are people who are egregiously treated in the first place and then along comes these sharkies, and it happens again.”

    “They basically prey on those who are most vulnerable,” said Rep. Elijah E. Cummings (D-Md.), who also called for inquiries last year. “These are folks who are going out there searching for victims.”

    The lawsuit involves a little-known industry that purchases payouts called structured settlements, which lawyers often recommend for clients who either have mental disabilities or are inexperienced at managing money. Unlike traditional lawsuit settlements, which are paid out immediately in a lump sum, structured settlements are dispensed in smaller, incremental payments stretching across decades. Baltimore, with its history of lead paint poisoning, has many recipients of structured settlements. Most are African American.
    On almost every case Access filed, it was the same lawyer, Charles E. Smith, who advised recipients. Court filings allege that Smith had various business and personal ties with Access Funding executives. The federal agency says Smith “was paid directly by Access Funding for his purported . . . services” and deceived recipients into thinking they were getting independent advice when they were not.
For more, see Federal agency accuses settlement-purchasing company of violating Consumer Protection Act.

See also, Consumer Financial Protection Bureau press release: CFPB Sues Access Funding for Scamming Lead-Paint Poisoning Victims Out of Settlement Money (Bureau Alleges Company Took Advantage of Consumers with Cognitive Impairments).

Tuesday, December 06, 2016

Trump Treasury Pick Headed Up Bankster "Foreclosure Machine" Known For Filing Foreclosure On 90-Year Old Homeowner Who Owed 27 Cents

The New York Daily News reports:
  • A bank owned by Steven Mnuchin, Donald Trump's Treasury secretary nominee, foreclosed on a 90-year-old Florida woman who owed 27 cents, reports revealed Thursday.
    The Florida woman, Ossie Lofton, found herself facing a foreclosure by OneWest in 2014 after confusion about payments on her reverse mortgage, according to court papers obtained by Politico. Lofton sent a check for $423 in response to a bill for $423.30, the documents showed.

    The OneWest subsidiary responded by billing the Lakeland resident for $0.30, but Lofton sent a check back for only $0.03. A nonprofit firm called Florida Rural Legal Services(1) challenged the foreclosure in Polk County Circuit Court in October, Lofton’s lawyers told Politico.

    “I don’t know that they’re the worst, but I certainly think it’s criminal the way these servicers are treating elderly homeowners,” attorney Lynn Drysdale said.

    Representatives for Trump’s transition team and the bank that acquired OneWest last year, CIT Bank, didn’t immediately respond to requests for comment Thursday night.
For the story, see Trump treasury secretary pick Steven Mnuchin’s bank foreclosed on 90-year-old woman who owed 27 cents.
(1) Florida Rural Legal Services, Inc. is a private non-profit law firm that provides free legal assistance to indigent families and low-income elderly people in thirteen counties of South Central Florida (Charlotte, Desoto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Martin, Okeechobee, Palm Beach, Polk, and St. Lucie Counties). FRLS also provides legal assistance to migrant workers throughout the state of Florida.

Lawsuit Triggers Tug-Of-War Between Ailing 93-Year Old Media Billionaire & Ex-Girlfriend Over 'Promised Gift' Of $3.75 Million NYC Penthouse Apartment; She Says Her Name's Already On The Deed

In New York City, the New York Post reports:
  • Ailing media titan Sumner Redstone is suing to prevent his ex-girlfriend from inheriting a $3.75 million penthouse apartment at the Hotel Carlyle.

    Redstone bought the East 76th Street pad in March 2015, promising to gift it to then-partner Manuela Herzer when he died, according to the Manhattan Supreme Court lawsuit.

    “Redstone no longer wants to leave the apartment to Herzer upon his death,” the suit says, but “Herzer now refuses to relinquish her claim to [it].”

    Herzer had signed an agreement in 2015 acknowledging that the Viacom founder purchased the penthouse with his own funds and that it “belongs exclusively to Sumner” until his death, the suit says.

    He has paid the $23,900 a month in maintenance fees since the purchase, the suit says.

    In April, Redstone, 93, and Herzer, 52, settled another case in which she agreed to take only a fraction of the $70 million she stood to inherit to drop claims that he wasn’t competent.

    Herzer’s lawyer, Ronald Richards, called the Hotel Carlyle suit “another frivolous filing that it is hard to believe is being orchestrated by Mr. Sumner Redstone and not his daughter Shari.”

    Shari and her father control the family’s $40 billion media empire, which includes Viacom’s MTV, Comedy Central and the Paramount Pictures Hollywood studio — plus CBS and Showtime.

    Richards has claimed that Shari has influenced her father to file the suit over the apartment, plus another pending action over millions in gifts he gave to Herzer.

    “My client was given a notarized recorded grant deed to the property establishing a joint tenancy,” Richards said.

Hijacking Legal Control Of The Elderly & Their Assets Thru Court-Sanctioned Guardianship Rackets Appears Alive & Well In New Mexico

In Albuquerque, New Mexico, the Albuquerque Journal reports:
  • Investigative journalist Diane Dimond, whose weekly syndicated column on crime and justice appears in the Journal, is preparing a book on the nation’s elder guardianship system. It’s a system designed to protect the elderly from the unscrupulous.

    But as Dimond discovered, it can be dominated by a core group of court-appointed, for-profit professionals who are accused of isolating family members and draining the elders’ estates. New Mexico is no exception.
    The legal effect of [Judge Beatrice] Brickhouse’s ruling was to immediately reduce [78-year old] Blair to protected-person status, a “ward of the court,” and strip her of all her civil rights.

    Blair Darnell lost her right to manage her own money, sign a contract, vote, marry, decide where she could travel, who could come into her home and what doctors and medicines she could use. Every aspect of her life was to be decided by court appointees who were strangers.

Monday, December 05, 2016

Consumer Feds Tag Nationwide Real Estate Investor w/ Lawsuit Demanding Documents In Furtherance Of Probe Into Use Of Contract For Deed / Land Contract Arrangements To Unload Dilapidated, Money-Pit Foreclosed Homes Onto Naive Homebuyers

The New York Times reports:
  • A powerful federal consumer agency that could be muzzled under President-elect Donald J. Trump is showing no inclination of backing down yet.

    The Consumer Financial Protection Bureau filed a lawsuit [last] Tuesday in federal court in Michigan to require an investment firm that is a major player in the market for high-interest installment contracts for buying homes — called contracts for deed — to comply with an earlier demand for documents.

    The agency, which some Republicans in Congress have talked about reining in since Mr. Trump’s victory, filed the suit after the investment firm, Harbour Portfolio Advisors of Dallas, refused a request for documents as part of a civil investigation.

    In early November, the bureau confirmed it was investigating Harbour Portfolio after it made a public an order in which it rejected the investment firm’s formal objection to the agency’s document request, known as a civil investigative demand.

    Early this year, The New York Times, in a front-page article, wrote about Harbour Portfolio and potential abuses in the contract for deed market.

    Harbour Portfolio bought more than 6,700 single-family homes after the financial crisis of 2008, most of them from Fannie Mae, a government-controlled mortgage finance firm, in bulk sales. Harbour paid $10,000 or less for most of the homes, which were foreclosed on during the financial crisis, and has sold them “as is” to consumers through long-term, high-interest installment contracts.

    The consumer bureau, according to the lawsuit, is trying to determine whether Harbour Portfolio’s business practices violated the Truth in Lending Act and other federal laws the agency is empowered to enforce.

    The documents in the suit detail the timeline of the investigation, which began in May, a few months after the article appeared in The Times.

After Participating In Good Faith For Over 14 Years In Gov't-Sponsored, 15-Year Rent-To-Own Program, Low-Income Tenants In Toledo Single-Family Home Development Now Face The Boot & Being Stripped Of Their Rights Over Defunct Developer's Failure To Pay Real Estate Taxes

In Toledo, Ohio, The Toledo Blade reports:
  • When Mary Kay Buford rented a newly built home in Toledo’s central city in 2002 she was signing up for a promise made by the developer — that she could buy that house in 15 years and she would earn $1,000 a year toward the price.

    It was a promise that was backed up by the power of federal, state, and local governments.

    “It was exciting,” she said.

    But last year she got a worrisome letter: Her house was being foreclosed for tax delinquency, and she was being stripped of her “rent-to-own” rights — which come due early next year.

    “I was shocked. Now it’s scary. We could end up homeless, with nothing,” Ms. Buford said, standing in front of her two-story Norwood Avenue house with a porch and picket fence.

    Ms. Buford and other women who rent homes in the Oakwood Homes I & II project, including Samonia Smith and Lakesha Williams, aided by Advocates for Basic Legal Equality,(1) have sued to intervene in the tax foreclosure planned for 43 homes left standing and still occupied from the 80-home project.

    They’re hoping to be able to acquire their dwellings for little or nothing because of the promise that was made, the expenses they’ve undertaken, the conditions of the homes, and the failure of a state agency to monitor the project for problems.

    The original developer, the now-defunct nonprofit Toledo Community Development Corp., built the development with mortgage financing of about $9.3 million, according to the two suits filed in Lucas County Common Pleas Court, with federal tax credits to lower the risk.
    Ms. Buford, Ms. Smith, and Ms. Williams are seeking through their intervention in one of the cases to force the project to live up to the promise that was made — that they could get credit to buy their homes after the 15th year.

    Whether their legal intervention will be accepted is up to Lucas County Common Pleas Court.
    Ms. Buford, Ms. Smith, and Ms. Williams are named in the complaint filed by ABLE, a federally funded legal aid agency that provides free representation in civil cases to low-income people. Complaints against the Oakwood Homes I and II foreclosure have also been filed by residents Dawn Autry, Monica Ham, Latoya Pearson, Latoya Broughton, Terri Pope, Darcell Jordan, Ronnita Holyfield, Polly Petoskey, and Charles and Tay Lee.

    Ms. Autry’s pro se complaint accused local officials of conspiring to deprive them of their ownership rights.

    “It reeks of conspiracy and fraud,” said the complaint brought by Ms. Autry.
For more, see Oakwood residents fight to keep homes (Tenants say foreclosure breaks promise).
(1) Advocates for Basic Legal Equality, Inc. (ABLE), along with Legal Aid of Western Ohio, Inc. (LAWO), are non-profit regional law firms that, together, provide legal assistance in civil matters serving eligible low-income individuals and groups in 32 northwest and west central Ohio counties. Their Migrant Farmworker Programs serve all 88 Ohio counties. land contract for deed

Officials In One Minnesota City Suspect Hubby & Wife 'Landlords' Of Using Contract For Deed Arrangements To Disguise Their Lease Agreements With Tenants For Dilapidated, Blighted Homes In Effort To Dodge Local Laws Governing Rental Property, Landlord/Tenant Relationships

In St. Cloud, Minnesota, the Star Tribune reports:
  • As a district judge, Vicki Landwehr spends her days meting out justice. But as the co-owner of nearly 20 residential properties in the St. Cloud area, it’s Landwehr who’s on the receiving end of public scrutiny — and legal action.

    Several of the properties she and her husband, Don, own have been identified by neighbors and St. Cloud city officials as blights on neighborhoods. Earlier this week, police raided one house and found a meth lab — the latest in a series of troubling incidents that have angered residents and prompted city officials to investigate.

    City officials have met twice with residents to discuss the problems. The most recent meeting, held last week, drew about 100 attendees. The city is so concerned about the issue that it is now taking administrative action against the couple for renting the houses without a license.
    Several properties have been the site of many police calls. In some cases, the houses were occupied by people who had appeared as criminal defendants in Landwehr’s courtroom.

    The city’s investigation, meanwhile, has revealed “high levels of criminal activity” at some of the properties, said St. Cloud City Attorney Matt Staehling.

    St. Cloud Mayor Dave Kleis this week called the problem “a legal issue for the city and a public safety issue. No neighbors should have to deal with the tremendous challenges that these neighborhoods have had to put up with.”

    But it will be difficult for the city to clean up the mess, officials said, because the Landwehrs don’t rent the properties — they sell them on contracts for deed.

    Under the terms of those sales, tenants make payments to the Landwehrs while the judge and her husband retain ownership of the property. The buyer assumes ownership only when the house is fully paid off — but many never are. It’s a business model similar to the rent-to-own method of buying furniture or appliances.

    In some cases, contracts for deed can be used to skirt laws and regulations governing rental property. And that is what the city believes is happening with three of the Landwehr properties, Staehling said. Those properties have changed hands repeatedly, with one holder of the contract for deed transferring it to another while the Landwehrs continue to retain ownership.

    “We’re pursuing these as basically illegal rentals — renting without a license,” Staehling said.

    Early-morning raid

    Staehling called the houses “very distressed properties,” adding that they “have caused a great deal of fear and anxiety in the neighborhoods, and I think for good reason.”

    The police raid this week at 934 Longview Drive — where the meth lab was found — was the second at that address in less than five months. In July, the house, now on its fourth contract-for-deed owner since the Landwehrs bought it in 2003, was the site of a full-fledged SWAT action by St. Cloud police and Sherburne County sheriff’s deputies.
For more, see Judge's St. Cloud properties, including one with meth lab, are called a blight ('High levels of criminal activity' cited at some of the rent-to-own houses).

See also, St. Cloud Times: City cites Landwehrs for contract for deed violations:
  • [C]ity officials have said they think the contract-for-deed arrangements act as a way for the Landwehrs to avoid maintaining the properties as a landlord of a rental property would.

    "Under our normal system of rentals, you would have a rental license, and (the city would) have an opportunity to monitor that," Kleis said, "and when things take place, we have a tool in which to remove that rental license."

    But with contracts for deed, Kleis said, the city loses the ability to hold the deed-holders accountable for problems. Rental ordinances have certain safeguards for tenants and neighbors, including required inspections; contracts-for-deed sales do not.

    In some of the Landwehrs' contract-for-deed properties, it seems the contract holders never actually wind up having the deed transferred to them, according to Staehling. At 934 Longview Drive, the property has changed hands at least three times between when Landwehrs purchased the home in 2003 and Brooks moved in in 2013, according to county records.

    "Contract for deed, in this case, I believe is an attempt to do an end-run on our rental code," Staehling said. "And so we've looked at these contract-for-deed contracts, and there are a number of aspects about them that lead us to conclude that they really are rental properties, operating as rental properties, so we're going to treat them as rental properties."

    Staehling said the contracts for deed act like rentals because occupants rotate in and out by simply transferring the deed to someone else.

    "Every contract can have its own unique terms, but these generally don't have a down payment, generally only have interest payments and no balloon payment," he said. "Just the way it's written, the title's never going to transfer. (The occupants are) not chipping away at the principal."

    Kleis said he called the state's attorney general office for advice.

    "They said, well if it seems like a rental, treat it like a rental, and that's why we're pursuing that angle," he said.

    To give the city more authority in enforcing contracts for deed like rentals, Kleis is looking for the Legislature to create new laws. land contract

Sunday, December 04, 2016

Fair Housing Feds Tag HOA, Two Landlords With Housing Discrimination Against Families With Kids In Three Separate Actions

From the U.S. Department of Housing and Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it is charging housing providers in Georgia, Louisiana, and New Hampshire with violating the Fair Housing Act by discriminating against families with children.
Georgia: HOA Accused Of Denying Family's Request To Have Children's Play Equipment In Their Yard For Their Kids

  • HUD is charging Peachtree Court Homeowners Association, Inc., with denying a family’s request to have play equipment for their children in their backyard. The family had requested permission to construct a playset but the request was denied. Subsequently, the family attached a slide to the rear deck of the home. When the Association learned about the slide, they sent the family a letter stating that the slide had to be removed. The Board of Directors also levied fines against the family for unauthorized improvements that totaled $2,300 and prevented the family from using some community amenities, including the community pool. Read the charge.

Louisiana: Landlord Allegedly Tells Fair Housing Tester (Posing As A Tenant) That A Renter With Two Young Babies May Give Rise To Too Many Complaints & Doesn't Want "The Wrong Tenants"

  • HUD is charging the owner of a three-unit rental property in New Orleans with violating the Fair Housing Act by discriminating against families with children. The case came to HUD’s attention when the Greater New Orleans Fair Housing Action Center, a HUD Fair Housing Initiatives Program agency, filed a complaint after seeing a classified ad the owner placed on Craigslist.

    A fair housing tester posing as a married father with eight-month-old twins sent an email to the owner inquiring about the apartment. After a friend of the owner showed the tester the unit, the owner sent the tester an email allegedly stating, “I’m not sure the combo with the two young babies and the vacation rental next door is the best fit…I have only gotten a few complaints from long-term tenants over the years, but I am concerned that with two young kids you could be complaining more than that and I don’t want to get the wrong tenants in the house.” Read the charge.

New Hampshire: Landlord Allegedly Tells Fair Housing Tester (Posing As A Tenant) That Previous Evicted Tenant Had Three "Messy" Children & Wants To Rent To Someone Without Children

  • HUD is charging the owner of an apartment in West Keene, New Hampshire, with housing discrimination for allegedly refusing to rent the unit to families with children. The case came to HUD’s attention when a married couple filed a complaint alleging that the owner denied them the opportunity to rent the apartment. The charge alleges that the couple first learned about the unit when they saw an ad for a “huge” apartment in West Keene. The wife contacted the owner to inquire about the unit, but when she told him that she was looking for an apartment for herself, her husband, and her children, the owner allegedly told her that “he was not interested in renting to anyone with children,” and that he “just evicted a family with children because they were too loud.”

    The charge further alleges that a tester with New Hampshire Legal Assistance, another HUD Fair Housing Initiatives Program agency, also contacted the owner and was told that the previous tenants who were evicted had three “messy” children, and that he would like to rent the apartment to a husband and wife or a single person. The owner ultimately rented the apartment to two women who did not have children. Read the charge.

Source: HUD Charges Housing Providers In Georgia, Louisiana, And New Hampshire With Discriminating Against Families With Children.

Recent HUD Fair Housing Actions Target HOA, Management Agents, Landlord, Housing Authority For Alleged Discrimination Against Persons With Disabilities

From the U.S. Department of Housing & Urban Development:
  • The U.S. Department of Housing and Urban Development (HUD) announced [] that it is charging landlords in South Florida with discrimination against tenants with disabilities. Meanwhile, HUD is announcing separate agreements with landlords in Nevada and Massachusetts resolving similar charges.
HOA, Property Management Company Refused Access To Visitors Needing Emotional Support Animals, Requiring Unnecessary Info To Grant Reasonable Accommodations
  • Florida
    HUD charged the owner of Hillcrest East Building No. 22, a multifamily development in Hollywood, Florida; the property’s management company, Rhodes Management; and a previous president of the homeowners’ association with housing discrimination for failing to make reasonable accommodations, publishing discriminatory notices and statements, and attempting to intimidate and retaliate against two family members who filed a housing discrimination complaint. One individual lives at the subject property, and the other person, who has a disability, was allegedly prevented from visiting her cousin at the subject property because she requires the use of an emotional support animal. HUD’s charge also alleges that the owners and managers discriminated against persons with disabilities by requiring personal and unnecessary medical information in order to grant reasonable accommodations, and by prohibiting emotional support animals and their owners from having access to the development. Read the charge.

Landlord, Management Company To Cough Up $12K+ To Settle HUD Fair Housing Charges That They Denied Disabled Resident's Request For Transfer To Accessible Unit
  • Massachusetts
    HUD has entered into a Voluntary Compliance Agreement with Advanced Realty Management, Advanced Property Management, Howland One Three, and One Three Howland Street, of Quincy, Massachusetts, after HUD found that the property management companies discriminated against a resident with disabilities by denying her reasonable accommodation request to transfer to an accessible unit. Under the agreement, the companies will pay $12,614 to the resident, draft a reasonable accommodation policy that must be approved by HUD, train staff on the new reasonable accommodation policy within 30 days of its approval, and hire a contractor to assess and improve unit accessibility. Read the Voluntary Compliance Agreement.

Housing Authority To Pay Low-Income Tenant $11K, Reinstate Lease To Settle HUD Charges That It Wrongfully Terminated Her Rent Subsidy Because She Had Disability
  • Nevada
    HUD reached a Conciliation/Voluntary Compliance Agreement with the Nevada Rural Housing Authority after a Carson City, Nevada woman with disabilities alleged that the housing authority unlawfully terminated her benefits because she is disabled. The resident had alleged that her tenancy was wrongly terminated because of her disability. Under the agreement, the housing authority will pay the woman $11,000; reinstate her lease and allow her to continue living at the property; grant her reasonable accommodation request to have a staff person designated to act as her contact with the housing authority; and provide fair housing training for its staff. Read the Voluntary Compliance Agreement.

Judge Nixes Mobility-Impaired 94-Year Old Woman's Fair Housing Act "Reasonable Accommodation" Request For Exception To HOA's "List-Before-Lease" Rule To Allow Her To Rent Out Condo While Away On Disability-Related Medical Rehab

In Chicago, Illinois, the Cook County Record reports:
  • A 94-year-old Oak Park woman could not get a federal judge on her side in a dispute with her condo association, who she says owes her the right, under federal law, to rent her condo while she undergoes medical treatments, despite association rules.

    Lillian Vignola owns a unit in the building run by the 151 North Kenilworth Condominium Association, on Kenilworth Avenue, just north of Lake Street in Oak Park. Unable to live in the unit since a 2014 fall at home, Vignola attempted to rent her condo while she lives in a rehabilitation facility. The Association denied the request, saying she failed to follow a rule requiring listing the unit for sale for a full year before moving on to leasing.

    In a lawsuit filed in January against the condo association and their attorneys, with the firm of Kovitz Shifrin Nesbit, of Mundelein, she sought injunctive relief, arguing the [list before lease] rule violates her rights to a “reasonable accommodation” under federal fair housing and disability laws.

    U.S. District Judge Andrea R. Wood issued an opinion Nov. 2 denying Vignola’s motion. Wood said courts should only grant injunctive relief if the moving party can demonstrate a they are likely to succeed on merits of the underlying claim, have no other adequate legal remedy and would suffer irreparable harm if the relief were denied. She then explained Vignola failed by not presenting sufficient evidence to succeed on the Fair Housing Amendments Act claim.

    To prove the accommodation she requested is necessary, Wood said, Vignola had to establish that without it she’d “be denied an equal opportunity to use and enjoy her condo.” Specifically, she cited the 2006 Seventh Circuit Court of Appeals opinion in Wisconsin Community Services v. City of Milwaukee, which charged courts with determining “whether the rule in question, if left unmodified, hurts handicapped people by reason of their handicap, rather than … by virtue of what they have in common with other people, such as a limited amount of money to spend on housing.”

    Wood wrote: “Vignola faces a difficult, if not insurmountable, task in attempting to show that the potential loss of her home is due to her disability as opposed to her lack of financial means to keep her condo while staying at the rehabilitation facility.” She reasoned the association would have just as soon denied a request from someone who had to be away from their condo for reason of a work transfer or to care for a sick relative.

    Wood further rejected Vignola’s argument her rehab stint, caused by a disability, would leave her no place to live if her condo were sold while she was away; she gave no evidence she couldn’t stay with a relative or move to a nursing home. Further, since she could keep her unit empty — provided she could afford payments — or return with in-home care, Vignola did not prove the disability specifically caused her situation, rather than a lack of funds.

    The association proved its bylaws, with the [list before lease] rule, were in effect before Vignola’s fall. While other condo owners leased rooms in their units without first listing for sale, doing so is different from leasing the entire unit to a new tenant without association approval, Wood said. She added Vignola’s request amounts to permission to convert her owner-occupied condo into a rental unit.

    With the first hurdle a failure, Wood said the Seventh Circuit calls for a cursory review of the other considerations. In that regard, Wood wrote, “Vignola has a strong case that the potential loss of her home constitutes irreparable harm for which there is no adequate remedy at law.”

    Further, Wood said the harm the “Association would suffer from granting an exception to the list-before-lease rule and allowing Vignola to rent her unit pales in comparison to the loss of one’s home.”

    But, the judge said, “no matter how heavily the balance of harms may weigh in her favor, Vignola has failed to show a likelihood of success on the merits, and that dooms her preliminary injunction motion.”

Section 8 Tenant Scores $5K & New Apartment In Fair Housing Suit Settlement From City Of Flagstaff, Local Housing Authority For Their Alleged Denial Of Her Request To Be Moved Away From Noisy Neighbors, Whose Disruptive Behavior Agitated Her Medical Disability

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development announced [] an agreement with the City of Flagstaff, Arizona, and the Flagstaff Housing Authority resolving allegations that they denied the reasonable accommodation requests of a resident with disabilities. Read the Voluntary Compliance Agreement.
    The case came to HUD's attention when a female resident filed a complaint alleging that the City of Flagstaff and the Flagstaff Housing Authority refused her request to be moved away from her neighbors, whose disruptive behavior agitated her medical disability. The woman alleged that even after she submitted a doctor's documentation supporting her contention that her medical condition made her highly sensitive to the disruptions, her requests to move were denied.

    Under the agreement, the housing authority will pay the woman $5,000, allow her to transfer to another unit within 90 days, and provide training to staff on the Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act.

    Disability is the most common basis of complaint filed with HUD and its partner agencies. Last year alone, HUD and its state and local partners investigated more than 4,500 disability-related complaints, or nearly 55 percent of all fair housing complaints.

Another Developer Gets Roped Into Fair Housing Lawsuit Alleging Recently-Designed & Constructed Multi-Family Housing Complexes Are Not Accessible To People In Wheelchairs (ie. Excessively High Thresholds, Space-Lacking Kitchens & Bathrooms, Doors Too Narrow)

From the Office of the U.S. Attorney (New York City):
  • Preet Bharara, the United States Attorney for the Southern District of New York, announced [] that the United States has filed a federal civil rights lawsuit against against GINSBURG DEVELOPMENT COMPANIES (“GINSBURG DEVELOPMENT”) to require it to remedy conditions at two properties in Rockland County to make them accessible to people with disabilities and to ensure that four properties under construction by GINSBURG DEVELOPMENT in Westchester County will be accessible.

    In connection with that lawsuit, the United States has obtained a court-ordered preliminary injunction, to which GINSBURG DEVELOPMENT consented. The injunction, [...] requires GINSBURG DEVELOPMENT to make four Westchester rental complexes currently under development accessible. The lawsuit will continue with respect to the two remaining Rockland County properties, which have already been fully constructed.

    U.S. Attorney Preet Bharara said: “With today’s lawsuit and injunction, we seek to ensure that properties constructed by Ginsburg Development are accessible to those with disabilities, as the law requires. Developers in this District should know that this Office will use all available tools to enforce the FHA’s basic mandate that developers construct residential buildings accessible to people with disabilities.”

    The Fair Housing Act’s (“FHA”) accessible design and construction provisions require multifamily housing complexes constructed after January 1993 to have basic features accessible to persons with disabilities.

    According to the allegations in the Complaint, GINSBURG DEVELOPMENT recently designed and constructed rental complexes that have a number of inaccessible features, including
  • excessively high thresholds interfering with accessible routes into and within individual units,
  • insufficient spaces in bathrooms and kitchens for people in wheelchairs, and
  • doors in both individual units and common areas that are not wide enough to accommodate people in wheelchairs.
  • The Complaint filed by the United States seeks to require GINSBURG DEVELOPMENT to make retrofits at two completed complexes known as Parkside and Riverside, in Haverstraw, New York, to modify its policies, procedures, and training, and to pay a civil penalty. The lawsuit further seeks compensation for persons who have been victims of the inaccessible conditions at Parkside and Riverside. As explained in a letter filed with the Court on September 26, GINSBURG DEVELOPMENT is in settlement negotiations with the United States to resolve these claims against the two properties that have already been constructed.

    The preliminary injunction, entered on September 28, 2016, requires GINSBURG DEVELOPMENT to retain an experienced accessibility consultant as the FHA Reviewer for the four Westchester developments that are still under construction – Saw Mill Lofts, Harbor Square Crossings, River Tides, and 1177 Warburton Avenue.

    Pursuant to the injunction, GINSBURG DEVELOPMENT
  • must have all its designs analyzed by the FHA Reviewer for accessibility,
  • arrange for the FHA Reviewer to conduct site visits to identify inaccessible conditions resulting from construction decisions, and
  • allow the United States to monitor its development efforts.