Saturday, March 04, 2017

Attorney Earns Add'l Three Years Suspension Time For Improperly Pocketing Nursing Home-Bound, 88-Year Old Client's Money, Failure to Provide Requested Accounting While Acting As Her Court-Appointed Guardian; State Supremes Cite Lawyer's Lack Of Experience, No Prior Disciplinary Actions To Nix Disbarment

In Warrick County, Indiana, The Indiana Lawyer reports:
  • A Warrick County attorney who was already suspended from the practice of law for failure to comply with court orders has been disciplined with an additional three-year suspension after he converted an elderly woman’s guardianship funds to himself.(1)

    As a court-appointed guardian of an incapacitated 88-year-old woman living in a Warrick County nursing home, Gene Emmons, a Booneville attorney, became a signatory on the woman’s PTSB and PNC bank accounts. The PTSB account was an attorney fiduciary account subject to overdraft reporting to the Supreme Court Disciplinary Commission.

    Without authorization, Emmons wrote three checks to himself totaling $20,000 from the PTSB account, noting in the subject line that they checks were for “legal fees.” The court ordered Emmons to prepare a biennial accounting of his guardianship over the woman in 2015, which he failed to do, prompting his removal as her guardian. Emmons was then ordered to file a final accounting, which he also did not complete.

    Emmons then failed to appear at a court-ordered hearing for his failure to comply with the accountings, and he did not respond to an investigation into his actions by the Disciplinary Commission. Subsequent show cause proceedings resulted in Emmons’ indefinite suspension due to his noncooperation in 2016 in Matter of Emmons, 52 N.E.3d 797 (Ind. 2016).

    Emmons was found to have violated Indiana Professional Conduct Rules 1.15(a), 3.4(c), 8.1(b) and 8.4(b), (c) and (d) as well as Rule 4(A)(2) of the Indiana Supreme Court Disciplinary Commission Rules Governing Attorney Trust Account Overdraft Reporting. The commission recommended that Emmons be suspended for at least three years without credit for his previous noncooperation suspension, and the Indiana Supreme Court agreed in the case of In the Matter of: Gene D. Emmons, 87S00-1604-DI-190.

    In a per curiam opinion handed down Tuesday [February 14], the justices wrote that Emmons’ conversion of the guardianship funds and his attempts to conceal his actions were “among the most serious types of misconduct.” While the American Bar Association’s Standards for Imposing Lawyer Sanctions recommend disbarment for such conduct, the court noted that the commission had found Emmons’ inexperience as an attorney and lack of prior disciplinary actions as mitigating factors. Emmons was admitted to practice in 2008.

    The court agreed to the recommendation of a three-year suspension without automatic reinstatement. If Emmons chooses to petition for reinstatement after the three-year period has expired, he will have to “prove his professional rehabilitation by clear and convincing evidence.” The costs of the proceedings were also assessed against him.

    Justice Steven David voted to reject the conditional agreement proposed by the Disciplinary Commission and Emmons.
Source: Justices impose 3-year suspension on lawyer who took guardianship funds.
(1) The Clients’ Financial Assistance Fund of the Indiana State Bar Association provides compensation, as a matter of grace, and not as a right, to qualified applicants who have suffered a monetary loss as a result of dishonest acts of an Indiana lawyer, acting either as a lawyer or as 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 Canadian provinces, and as well as lawyers licensed throughout the United States, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Attorney Gets Bar Boot For Role In Bogus Investment Scheme By Disbursing Over $8 Million Of Investors' Funds Held In Trust In Violation Of Escrow Agreement; Court: "Lawyer Knew, Was Reckless Or Wilfully Blind To The Dishonest Conduct That She Assisted"

In Richmond Hill, Ontario, Law Times reports:
  • The Law Society of Upper Canada has disbarred a Richmond Hill, Ont. lawyer after finding she acted as an escrow agent in an illegitimate investment scheme worth $8-million.

    The law society’s disciplinary tribunal revoked Margaret Anderson-Clarke’s licence, deeming she had engaged in professional misconduct by knowingly assisting in “dishonest conduct.”

    Five investors made complaints to the law society about their dealings with Anderson-Clarke. They individually entered investment agreements with a United States-based company, called A.I. in the decision, which required them to deposit money into a trust account held in escrow by Anderson-Clarke between 2010 and 2011. All together, they entrusted her with more than $8 million.

    Anderson-Clarke then released those funds to A.I. and its representatives under the instruction of the company, but without the consent of the investors, according to the decision.

    “For each of the five particulars relating to each investor, we find that the Lawyer knew, was reckless or wilfully blind to the dishonest conduct that she assisted,” bencher Anne Vespry wrote in the decision, Law Society of Upper Canada v. Anderson-Clarke, on behalf of a panel.

    Those funds were meant to be collateral to let A.I. trade for the investors. At the end of a trading period, the deposit, as well as what was expected to be a high return, would be given back to the investors. But the investors received nothing back despite the fact that the escrow agreements held that the money would be returned to them.

    They had not been able to recover the funds at the time of the law society hearing.(1)
    The tribunal found that Anderson-Clarke did not engage in any investigation concerning the agreements and did not consult more experienced counsel about the obligations in holding an escrow account.

    When she received requests from investors asking for information of the funds, Anderson-Clarke forwarded the requests to A.I. and then used responses written by the company, which did not disclose the investors’ money was no longer in escrow, the decision said.

    Anderson-Clarke also continued to accept money from other investors even after the first investor complained about the unauthorized disbursal of his funds.

    The tribunal inferred that it is more than likely than not that Anderson-Clarke acted with knowledge of A.I.’s dishonest conduct when she accepted money from some of the latter investors into escrow accounts.
For more, see Lawyer disbarred for role in investment scheme.
(1) The Law Society of Upper Canada has established a Compensation Fund that helps clients who have lost money because of the dishonesty of a lawyer or paralegal. It is paid for exclusively by the lawyers and paralegals of Ontario, Canada, out of their own pockets. If you've lost money due to a lawyer or paralegal's dishonesty, the fund can reimburse you for all or part of your loss. Typically, the fund will pay for losses involving money from estates, from trust funds held for real estate closings and from settlements in legal actions. The fund doesn't reimburse in cases dealing with negligence. A ripoff victim must notify the Law Society in writing about the loss within six months from the time he/she first learns of the loss. In some cases, the Law Society may decide to extend this six-month period to two years, but the granting of an extension is not guaranteed and should not be relied upon.

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

Ohio Supremes Hit Lawyer w/ Interim License Suspension Pending Further Proceedings For Failing To Respond To Bar Inquiries Regarding Clients' Accusations Of Misappropriated Funds

In Columbus, Ohio, the Cincinnati Enquirer reports:
  • An Independence-based lawyer was suspended from practicing law by the Supreme Court of Ohio Friday [February 10] after failing to respond to accusations made by clients that he failed to pay portions of their settlements or otherwise misappropriated funds.

    Daniel Alan Niehaus, who has been licensed to practice law in Ohio since 2005, received several complaints against him from clients he represented in 2014 and 2015, according to the records from the Supreme Court of Ohio.

    A client he represented in a divorce proceeding claimed he gave Niehaus $1,800 to hold in trust and that lawyer never distributed the funds where they were supposed to go and never refunded his money. This client also claims he paid Niehaus $1,000 to file a motion regarding custody, but the motion was never filed.

    The Ohio Supreme Court also claims that there were six more clients who weren't paid their portions of funds awarded in settlements. The court was able to view the balances of Niehaus' trust account and saw that he had written checks from that account in the name of his wife and checks to himself they believe were inappropriate.

    The court states Niehaus failed to respond to a number of phone calls, letters and emails concerning the complaints.

    On Aug. 24, a subpoena was hand-delivered to his home ordering him to appear before the Cincinnati Bar Association for a deposition. The court said the paperwork was left with a family member who said Niehaus was not home.

    Niehaus did not go to the Sept. 22 deposition, an apparent violation of the Ohio Rules of Professional Conduct.

    On Friday, the court issued an order forbidding Niehaus from offering legal advice and appearing before a judge on behalf of others. He also must respond to the court, complete continuing legal education and refund any misappropriated funds.

Attorney Pleads Guilty While Law Partner Gets 12 Months Prison Time For Roles In Looting Client Trust Account Of Over $1.2 Million

From the Office of the U.S. Attorney (Kansas City, Missouri):
  • Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Leawood, Kan., attorney pleaded guilty in federal court today [February 10] to his role in a fraud conspiracy, while his former law partner was sentenced for stealing more than $1.2 million(1) from St. Luke’s Health System, a client of their former law firm.

    Mark J. Schultz, 57, of Leawood, waived his right to a grand jury and pleaded guilty before U.S. District Judge Beth Phillips to a federal information that charges him with participating in a wire fraud and mail fraud conspiracy.

    Alan B. Gallas, 65, of Kansas City, Mo., was sentenced by U.S. District Judge Beth Phillips to one year and one day in federal prison without parole. The court also ordered Gallas to pay $1,224,264 in restitution to St. Luke’s. Gallas must report to the Bureau of Prisons by April 10, 2017, to begin serving his sentence.

    Schultz and Gallas were attorneys and partners in the law firm of Gallas & Shultz in Kansas City, Mo., which specialized in collection work for corporations. Gallas surrendered his license to practice law in Missouri and Kansas in November 2015.
    Gallas admitted that he engaged in a scheme from 2009 through July 2015 to defraud a client, St. Luke’s Health System, of monies collected by his law firm totaling $1,224,264. By pleading guilty [], in a separate but related case, Schultz admitted that he participated in the conspiracy from January 2014 through July 2015.
    Gallas was the attorney responsible for the St. Luke’s account at the law firm. After attempting to collect on patient accounts for a period of time, St. Luke’s would transfer its larger outstanding patient accounts to Gallas & Shultz for collection. As payments on patient accounts were received, the payments were logged into the case management system for the appropriate patient account. The monies were then deposited into the law firm’s trust account. On a periodic basis, often monthly, the firm would remit the patient payments collected to St. Luke’s.

    Gallas admitted that he caused personnel at the law firm to withhold money from payments made to St. Luke’s by placing thousands of payments on “hold” status, then directing those funds be transferred from the trust account to the firm’s operating account.
    Schultz admitted [] that he agreed with Gallas and others to transfer funds from the trust account into the law firm’s operating account. The amount of funds diverted by Schultz, and the amount of restitution Schultz must pay to St. Luke’s for the total amount of its loss, will be determined by the court at Schultz’s sentencing hearing.
Source: Leawood Attorney Pleads Guilty to Fraud Conspiracy (Law Partner Sentenced for $1.2 Million Fraud Scheme).
(1) The Missouri Bar maintains a Client Security Fund to (at least partially) compensate clients harmed by a fraudulent or dishonest act by a Missouri attorneys, including but not limited to a defalcation or embezzlement of money, the wrongful taking of property, or the failure to remit or turn over money or property belonging to the client. Payments are limited to 80% of the amount of the loss over $2,500 and there is a maximum payment of $50,000 per claim.

See, generally, The Missouri Bar: Righting Wrongs (Compensating Clients Financially Harmed By Their Attorneys' Actions).

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

Federal Jury Slams Lawyer With Guilty Verdict For Role As Co-Conspirator In Pilfering Over $1 Million From Escrow Account In Connection w/ Construction Project That Never Got Off The Ground

From the Office of the U.S. Attorney (Frankfort, Kentucky):
  • Daniel R. Goodwin, an attorney from McLean, Virginia, has been convicted of defrauding a Laurel County construction company, in connection with a purported project to build a “green recycling center” in Manchester, Ky. The company, Elza Construction, LLC, lost $1.32 million upfront and incurred several million dollars more in excavation and site preparation costs, but nothing was ever built at the site.

    Late Thursday [February 9], a federal jury in Frankfort delivered a guilty verdict on four counts of wire fraud and one count of conspiracy to commit wire fraud. The verdict came after a week of trial and a day-and-a-half of deliberation.
    Part of this scheme was to require contractors like Elza Construction to send money to an escrow account in lieu of a traditional construction performance bond, with the promise that the money would be used to release financing for the project and that the money would be returned on a set schedule, typically within 3 to 4 months.

    Daniel Goodwin controlled the escrow account that received money from Elza Construction and others. Instead of following the terms of written agreements, he distributed the money among his co-conspirators and kept some of it for himself. The money was never returned to Elza Construction or any of the other contractors.

Friday, March 03, 2017

Lead Paint Problems In Pre-1978-Built Homes May Pale In Comparison To Soil Contamination In Yards Throughout Rust Belt; Long-Forgotten & Years-Ago Demolished Smelters May Be Gone, But Hazards Of Tainted Soil Often Linger

In Cleveland, Ohio, USA Today reports:
  • Ken Shefton is furious about what the government knew eight years ago and never told him — that the neighborhood where his five sons have been playing is contaminated with lead.

    Their Cleveland home is a few blocks from a long-forgotten factory that spewed toxic lead dust for about 30 years.(1)

    The Environmental Protection Agency and state regulators clearly knew of the danger. They tested soil throughout the neighborhood and documented hazardous levels of contamination. They never did a cleanup. They didn't warn people living nearby that the tainted soil endangers their children.

    "I needed to know that," Shefton said. "I've got a couple of kids that don't like to do nothing but roll around in the dirt."

    More than a decade ago, government regulators received specific warnings that the soil in hundreds of U.S. neighborhoods might be contaminated with dangerous levels of lead from factories operating in the 1930s to 1960s, including the smelter near Shefton's house, Tyroler Metals, which closed around 1957.

    Despite warnings, federal and state officials repeatedly failed to find out just how bad the problems were. A 14-month USA TODAY investigation has found that the EPA and state regulators left thousands of families and children in harm's way, doing little to assess the danger around many of the more than 400 potential lead smelter locations on a list compiled by a researcher from old industry directories and given to the EPA in 2001.

    In some cases, government officials failed to order cleanups when inspectors detected hazardous amounts of lead in local neighborhoods. People who live nearby — sometimes directly on top of — old smelters were not warned, left unaware in many cases of the factories' existence and the dangers that remain. Instead, they bought and sold homes and let their children play in contaminated yards.
    In April 2001, environmental scientist William Eckel published a research article in the American Journal of Public Health warning about the dangers of old smelting factories.(2) While working on his Ph.D. dissertation, Eckel had identified a historical smelting site unknown to federal and state regulators and wondered how many other sites had been forgotten over time, their buildings demolished or absorbed by other businesses.

    Eckel used old industry directories, which he cross-referenced with EPA databases, to come up with a list of more than 400 potential lead-smelting sites that appeared to be unknown to federal regulators.

    Eckel confirmed that 20 of the sites' addresses were factories — and not just business offices — using Sanborn fire insurance maps, which detail the historical uses of individual pieces of property. An additional 86 sites were specifically listed in directories as "plant" locations. He paid to have soil samples tested from three sites in Baltimore and five in Philadelphia. All but one of the samples exceeded the EPA's residential hazard level for lead in areas where children play.

    Eckel's article warned that the findings "should create some sense of urgency for the investigation of the other sites identified here because they may represent a significant source of exposure to lead in their local environments." The research indicates "a significant fraction" of the forgotten sites will require cleanups — likely at state and federal expense — because most of the companies went out of business long ago.
For more, see Ghost Factories-Poison In The Ground: Long-gone lead factories leave poisons in nearby yards.
(1) According to the story:
  • Most of the nation's lead factories — some huge manufacturing complexes and others tiny storefront melting shops — had been largely shuttered by the 1970s and 1980s. Often known as smelters, they emitted thousands of pounds of lead and other toxic metal particles into the air as they melted down batteries and other products containing lead.

    The particles would land on nearby properties, potentially mixing with lead dust from automobile exhaust or paint chips — significant sources, says the government — to create a hazard. Children who play in lead-contaminated soil, sticking dust-covered hands or toys in their mouths, over time can suffer lost intelligence and other irreversible health problems.

Federal Lead Paint Police Continue Its Public 'Outreach' Activities, Putting The Arm On Two Contractors For At Least $18K Each For Alleged Violations Of Rules Regulating Renovations, Exterior Paint Removal Involving Pre-1978-Built Homes

From the U.S. Environmental Protection Agency (EPA Region 8 - Denver, Colorado):
  • The U.S. Environmental Protection Agency (EPA) today [February 14] announced settlements with two Denver-area contractors as part of an ongoing initiative to protect residents of northeast Denver communities from toxic lead paint hazards during home renovations.

    According to the first settlement, Solid Ground Homes, LLC has agreed to pay a penalty of $18,000 to resolve allegations the firm performed a renovation on a pre-1978 home in northeast Denver without being EPA lead-safe certified and without performing several lead-safe work practices required by the Renovation, Repair and Painting Rule (RRP Rule). These requirements prevent and minimize the release of lead-contaminated dust and debris.

    The second settlement alleges that Lime Painting, LLC performed exterior paint removal on a pre-1978 home in northeast Denver using prohibited power sanding and grinding operations without being an EPA lead-safe certified firm and without following lead-safe work practices. The firm has agreed to a penalty of $19,950 to settle the alleged violations. Both Solid Ground Homes and Lime Painting have since secured lead-safe firm certification.

    Despite its ban from use in 1978, EPA estimates that lead-based paint is still present in more than 30 million homes in the U.S. When lead paint is disturbed during home renovations, proper work practices prevent toxic lead exposure to the home’s occupants. Infants, children, and pregnant women are especially vulnerable to lead paint exposure, which can, even at low levels, cause lifelong impacts such as developmental impairment, learning disabilities, impaired hearing, reduced attention span, hyperactivity and behavioral problems.

    The RRP Rule protects the public from toxic lead hazards created by renovation activities involving lead-based paint and requires the certification of individuals and firms involved in these activities. Contractors working on homes built prior to 1978 must test for lead in paint, or presume lead is present, and apply applicable lead-safe work practices to minimize the risk of exposure to lead.

    EPA’s public outreach, compliance assistance, and enforcement activity is intended to increase awareness of RRP rule requirements among both contractors and residents and create a strong deterrent for violators of the rule. Since the launch of the northeast Denver initiative in 2015, EPA has conducted outreach activities and inspected dozens of jobsites in the Five Points, Cole, Clayton, Whittier, Skyland and Park Hill neighborhoods. In addition to the settlements announced today, EPA has also issued more than 15 Notices of Noncompliance to contractors based on inspections of individual jobsites. The agency will continue to evaluate compliance associated with these inspections and pursue enforcement action when appropriate.

    For more information on lead or the RRP Rule requirements.

    Violations of the RRP Rule can be reported online ... 
Source: Northeast Denver initiative resolves alleged violations of lead-safe home renovation requirements (Solid Ground Homes, LLC and Lime Painting, LLC settle alleged violations of EPA's Renovation, Repair, and Painting Rule).

NYC Health Department Temporarily Shuts Down Landlord's Renovation Project For Allegedly Exposing Tenants To Lead-Contaminated Dust

In New York City, DNAinfo (NYC) reports:
  • A landlord failed to protect tenants from hazardous, lead-contaminated dust kicked up from renovation work inside two First Avenue buildings and was ordered by the city's health department to stop all construction, according to officials.(1)

    Slate Property Group — the same landlord behind the controversial purchase of the Lower East Side's Rivington House nursing center — is under fire again for exposing tenants at two other buildings it owns to hazardous amounts of dust containing lead, according to the city DOH spokeswoman Carolina Rodriguez.

    The health department ordered for all work to stop at 1288 and 1290 First Ave. on Jan. 31 for the dangerous conditions stemming from ongoing renovations inside the buildings where residents, including seniors, continue to live, according to the agency.

    "We recently identified lead dust hazards in these buildings and ordered the owner to cease work and address these conditions," Rodriguez said.

    "The agency will perform follow up inspections to confirm that construction dust has been appropriately cleaned up at the properties."

    A spokesman for Slate, who asked not to be named, said [] that Slate was unaware of any lead in the building but stopped work immediately in compliance with the health department's order.

    Slate has submitted new dust samples to the health department, which is required to lift the stop work order, but Rodriguez said it was too early to tell if they came back clean.

    Slate purchased the two properties in April 2016, and at the time bought out some tenants in the building and started doing renovation work in the units, which involved removing paint containing lead from walls in the hallways, according to tenants.

    In the process the landlord failed to contain the toxic dust from spreading in the air, and are forcing residents to live with paint-stripped walls and unfettered wires dangling from the ceilings, the tenants said.

    "They're breaking holes all over the hallways, releasing lead, asbestos and other substances in and outside of the building," said resident Julio Castro, a 58-year-old licensed Environmental Protection Agency risk assessor and asbestos investigator.

    Castro, who's lived at 1290 First Ave. since he was three years old, was among a dozen other residents who joined Assemblywoman Rebecca Seawright at a press conference last week to denounce Slate's negligence.

    In addition to the dust, the renovation work has caused electricity and water to go out frequently with no notice, according to Castro, who lives in a third-floor apartment with his wife and his 10-year-old daughter.

    Since Slate took over their buildings last spring, families have had to live without heat every night from 10 p.m. to 7 a.m., he said.

    "There's a lack of heat, interruptions in our water, electricity, and janitorial services," Castro said. "We've had a great decrease in essential services and space."

    Resident Thomas Leonard said he's complained to the landlord about water chronically leaking into his apartment due to a plumbing issue upstairs, but has so far been ignored.

    "I'm living in unlivable circumstances, what I would call squalor, and they don't give a darn," he said.

    The two buildings at 1288 and 1290 First Ave. share a lot with 403 E. 69th St. and are all owned by Slate. The Department of Buildings separately issued the third address with a stop work order for doing renovation work without proper permits and for "failing to safeguard the site," according to Andrew Rudansky, a spokesman for the Department of Buildings.
For more, see UES Buildings Spew Toxic Lead Putting Tenants at Risk, Health Dept. Says.
(1) Maybe someone should contact the U.S. Environmental Protection Agency, which requires that firms performing renovation, repair, and painting projects that disturb lead-based paint in residential real estate (as well as child care facilities and pre-schools) built before 1978 have their firm certified by EPA (or an EPA authorized state), use certified renovators who are trained by EPA-approved training providers and follow lead-safe work practices.

Go here for links to examples of landlords getting hammered by the EPA for tripping over the federal lead paint rules, and here to file a complaint reporting violations with EPA. lead paint

Landlord Improperly Water-Blasts Rental Home's Exterior With Power Washer, Sending Lead Paint Chips Flying All Over Neighbors' Yards; One Homeowner Estimates $20K Tab To Remediate Toxic Damage To Her Property

In Durham, North Carolina, WNCN-TV reports:
  • It’s a mess that could be hazardous to kids’ health, but no one is cleaning it up.

    Homeowners recently reached out to CBS North Carolina because lead-based paint chips from their neighbors’ house have been scattered all over their yard — and have stayed there for months.

    Lead’s health risks are well-known, but it’s still difficult to force someone to clean it up. The chips have been falling from a nearby home for more than six months.

    “At the end of the day, when I was looking on my front porch, I noticed there was something white that caught my eye,” said Holly Dwan. A closer look showed paint chips from the house next door, scattered across her lawn.

    Two doors down, Tiffany Graves was finding the same thing on the other side of the flaking house. “Visible gray lead paint chips and they’re all over,” she said.

    A crew had been power washing the house, which sent the paint chips flying.

    “We took appropriate steps to avoid lead exposure, and then all of a sudden it was thrust in our laps,” Dwan said.

    Dwan has four children. Graves has three. They knew the risks old paint can cause and were immediately concerned. “It was terrifying,” Dwan said.

    Working with an organization called Peach Durham, they got tests done.

    Lenora Smith found elevated lead levels — higher than what the Environmental Protection Agency allows. At Graves’ house, those levels even continued inside her front door.

    You can see the pieces moving in the wind. They just fall off,” Smith said. “How do we protect the children from accessing that lead dust?”

    The two women found that doing that would be much more difficult than they ever expected.

    Dwan took her children to the doctor for blood work. Her youngest child, Lucy, tested positive for lead. Even though there’s no safe level for lead, the Centers for Disease Control and Prevention considers the level of concern to be 5 micrograms per deciliter of blood.

    Lucy tested at 2.1 micrograms per deciliter.

    “Everyone would be jumping up and down saying this needs to be fixed immediately,” Graves said. “There would be all kinds of ramifications. But, until our children get sick, no one will do anything.”

    The Mayo Clinic has found kids under 6 years old are especially vulnerable to lead paint poisoning. It “can severely affect mental and physical development” and “at very high levels, lead poisoning can be fatal,” the clinic says.

    Dwan put up a sign on her fence. It reads “Caution. Lead paint. Do not walk in driveway.”

    Dwan and Graves have contacted local, state and federal regulators, but six months later, the paint is still sitting there. “Every day that this sits, there’s the potential for someone to get exposed,” Dwan said.

    City officials are tying to force the owners of the home that’s losing the paint to clean up that property. But, the city housing code doesn’t allow the city to force them to clean up Dwan’s and Graves’ properties.

    The state has the power to cite the contractor that did the water blasting. But it can’t mandate cleanup unless a child living in the home tests positive for elevated lead levels.

    The state handles lead-based paint hazard management in lieu of the EPA.

    “Since July, the condition of the house has only deteriorated,” Dwan said.

    CBS North Carolina was on hand in December, when Graves and Dwan took the homeowners to court.

    Roderick Barbee and Carl Richardson had previously been renting the home out, but are now trying to sell it. “We are in the process of getting everything rectified,” Richardson said.

    “We’re not delaying the process. The painters cannot move forward until they get approval from the EPA,” Barbee said.

    The state keeps a list of companies certified to do lead abatement on its website, but the homeowners said any painter would have to wait for EPA approval.

    For now, a judge has ordered them to find someone to do the work and to hold off on selling the house.

    Dwan and Graves don’t want to move forward with cleaning the paint out of their yards until the paint is off of their neighbors’ home. “That amount of peeling paint releases chips and dust daily,” Dwan said.

    Ultimately, they want regulations to change so that other people don’t have to experience what they have. They worry that if it takes a lawsuit to force any action on such problems, homeowners who can’t afford legal action would be stuck in such a situtation. For now, they just want to get their lives back to normal.

    Dwan looks forward to pulling the caution sign down and getting back to playing in the front yard with her kids again.

    “They understand that it’s very dangerous,” Dwan said. “They don’t understand why the situation still exists.”

    Dwan expects it to cost about $20,000 to tear out the grass and soil and clean up every part of her property that’s been affected by the lead paint.

Thursday, March 02, 2017

FTC Temporarily Slams Brakes On Online Racket That Allegedly Used Phony Landlord Ads On Craigslist, Coupled With Bogus Offer Of 'Free' Credit Reports To Dupe Unwitting Prospective Renters Into Enrolling In Credit Monitoring Service, Getting Clipped For $29.94/Month

From the Federal Trade Commission, Division of Consumer & Business Education (Washington, D.C.):
  • Renting an apartment online? First, let me tell you about the FTC’s case against Credit Bureau Center, LLC – a company that posted fake online rentals to lure people to their credit monitoring sites.

    How does this scam work? You’re looking at photos of rentals, on a site like Craigslist. You email the owner who says the apartment is still available but you need a credit check before seeing it. They direct you to their own websites, which say you’ll get a free credit report.

    But what you don’t know is: The ads are fake and the credit report isn’t free. The properties don’t exist or belong to other people who haven’t authorized them being advertised. When you go to get your “free” credit report, you’re enrolled in a credit monitoring service (based on hidden small print) and charged $29.94 per month, unless you cancel within seven days.

    The FTC got a court order against Credit Bureau Center LLC, halting their scam. Why? The company lied by saying properties were available when they were not. Also, Credit Bureau Center didn’t clearly tell people they were being enrolled in a credit monitoring service with a monthly fee.

Manhattan Feds Pinch Website Operator For Allegedly Clipping Over 2,000 Prospective Tenants Seeking NYC Apartments With Fees For Viewing Bogus Rental Listings; Prosecutor: Suspect Pocketed Over $100K

From the Office of the U.S. Attorney (New York City):
  • Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced [] the filing of a criminal complaint charging ROBERT GUZMAN with mail fraud in connection with a fraudulent apartment rental scheme that claimed more than 2,000 victims.

    As alleged, GUZMAN posted apartments supposedly available for rent in New York City on websites he operated, and (the “Websites”), that charged a fee to view the apartments on the Website.

    Between 2013 and 2016, victims paid GUZMAN (who has no real estate licenses) more than $100,000, but were never able to view the apartments purportedly available for rent on the Websites, some of which were not, in fact, in New York City, and others of which were not, in fact, available for rent.

NYC Landlords, HOAs Begin Grappling To Avoid Choking On Deluge Of Package Deliveries Due To Residents' Online Shopping Addiction

In New York City, The Real Deal (NYC) reports:
  • Online shopping is designed to make life easier — except for landlords.

    Call it a game of logistics. Property owners are grappling to adapt to a deluge of tenant packages from the likes of Amazon, Etsy, Blue Apron and Zappos, which have rendered traditional apartment building package rooms desperately inadequate.

    In some instances, that simply means renovating or expanding package to support a bigger haul. In others, where expansion is not a possibility, it means finding smart ways to quickly turn over packages and avoid backlogs. Both options come at an expense.

    And, when it comes to new development, real estate companies are getting serious about strategizing their package storage approach very early in the pre-development planning process.

    “Lessons have certainly been learned from the previous cycle of luxury development,” said Elisa Orlanski Ours, a senior vice president of planning and design at new development marketing firm Corcoran Sunshine. “As buildings moved from presales to immediate occupancy and American retail culture shifted, we learned that some buildings simply didn’t allocate enough space for package storage or consider how to inform residents of a delivery.”

    Online sales in the U.S. are slated to grow to $370 billion this year, up from just $231 billion in 2012, according to Forrester Research. Amazon’s North American sales increased 25.2 percent in 2016.

    And landlords are struggling to keep up.

    At 298 Mulberry Street, a 96-unit rental building in Noho, landlord Broad Street Development recently expanded its package room by 30 percent and added layers of shelving going up 11 feet high in order to accommodate a massive increase in package volume, said property manager Gayle Kennedy.

    “We would probably would have built even larger if we could have, just knowing that this online shopping trend is going to continue and get greater,” Kennedy said.

    But even that wasn’t enough to ease the package pressure. Rather, in a bid to get things moving, Broad Street has introduced a monthly fee of $25 for residents to have boxes delivered directly to their apartment doors, alleviating space issues downstairs. The fee component has helped Broad Street to hire a dedicated new staff member to make the deliveries, Kennedy said.
For more, see Boxed in: NYC landlords struggling to deal with residents’ online shopping addiction (Online sales continue to grow, forcing owners to redesign package rooms or charge fees).

Wednesday, March 01, 2017

Contractor Faces False Pretenses Charges For Allegedly Pocketing Over $50K From Homeowner For Home Improvements, Then Blowing The Cash On Expenses Unrelated To Job, Leaving Premises In "Borderline Uninhabitable" Condition

In Webster, Massachusetts, the Worcester Telegram & Gazette reports:
  • A Leicester home improvement contractor is scheduled to return to court [] charges he collected seven weeks of payments totaling $55,000 from a local resident but came nowhere close to finishing the project.

    The contractor, Robert D. Smith, 42, [...], is scheduled to be in Dudley District Court on charges of larceny valued at more than $250 by false pretenses, and two counts of a home improvement contractor violation.

    Police Detective Sgt. James T. Hoover first met with the homeowner, Kimberly Platek, and Webster Building Inspector Theodore Tetreault III in June to report that Ms. Platek was the victim of a home improvement contractor who took more than $50,000 from her, and left her home in bad condition. The town was considering condemning the home, which is located on Tanner Road, because of its condition, the police report said.

    During the meeting, Ms. Platek provided a copy of a written contract dated Feb. 28, 2016. Mr. Smith, the owner of Good Ol' Boys Property Services, had agreed to remodel Ms. Platek's home.

    The three-page contract spelled out what work Mr. Smith and his company would perform for $30,000. The contract called for Mr. Smith to receive three payments of $10,000, each due at signing of the contract, another when demolition was completed and the third and final payment upon completion of the project.

    Mr. Smith took out a building permit for the project on March 14.

    Ms. Platek's canceled checks to the contractor were $10,000 each on Feb. 25, March 3, and March 16. She also paid $10,000 each on March 24 and April 1. She made payments of $2,500 each on April 6 and April 19, police said.

    The Aug. 5 police report said the work was not close to being finished and it described the status of the home as "borderline uninhabitable."

    Ms. Platek told police she continued to pay Mr. Smith whenever he asked for more money because she wanted her home finished, and Mr. Smith kept telling her he needed more money to cover unexpected costs.

    After Ms. Platek stopped giving Mr. Smith money in April, [she] alleged to police, Mr. Smith came around only occasionally to work on the home. Then he stopped coming altogether, and so she contacted the building inspector, who tried to help Ms. Platek by contacting Mr. Smith directly.

    During the next few weeks, Mr. Tetreault met with Mr. Smith at Ms. Platek's home and deadlines for work were agreed upon. When deadlines were not met, Mr. Tetreault contacted the office of the state Board of Building Regulations and Standards.

    Police said Mr. Smith again agreed to complete the project but never did.

    After meeting with Ms. Platek and Mr. Tetreault on June 28, police called Mr. Smith and left a voicemail. Mr. Smith called back the following day, and admitted he received $55,000 from Ms. Platek. He agreed that the project had not been completed.

    Mr. Smith told investigators he spent Ms. Platek's money on other things, and no longer had the money to complete her project.

    Mr. Smith told police if he was given a couple of weeks, he might be able to complete some of the project. The detective said he told Mr. Smith that he would file criminal charges if he did not follow through. Mr. Smith said he would contact Ms. Platek to make arrangement to finish the project.

    After the agreed upon time had elapsed, Ms. Platek told police that Mr. Smith had contacted her, but after several calls and him coming to her home, he hadn't completed any additional work. Police contacted Mr. Smith again on July 19, but he "had nothing but excuses" and stated that although he had taken Mrs. Platek's money, he just does not have the funds needed to finish her home. He asked for another week, to which the detective agreed.

    Mr. Smith was a licensed contractor at the time he entered into the contract with Mrs. Platek. A spokeswoman with the state Board of Building Regulations and Standards said the contractor's state license expired on April 30.

Four Face False Pretenses Charges For Allegedly Running Home Contracting Scam That Fleeced 89-Year Old Homeowner Out Of Over $70K

From the Office of the Commonwealth's Attorney, City of Alexandria, Virginia:
  • On February 13, 2017, the Grand Jury for the City of Alexandria returned indictments against four co-conspirators relating to a scheme to defraud an 89-year old Alexandria citizen out of substantial amounts of money.

    Each of the four co-conspirators was charged with one felony count of Conspiracy to Obtain Money by False Pretenses. The maximum penalty for this charge is 10 years to serve in the penitentiary. Under Virginia law, a criminal conspiracy is defined as an agreement between two or more people to commit a criminal offense through concerted action.

    The following co-conspirators have been charged:
  • Robert R. McCloud, Jr., a 37-year old resident of Culpeper, Virginia
  • Pamela Ann McCloud, a 32-year old resident of Reva, Virginia
  • Krystal Marie Mullins, a 28-year old resident of Culpeper, Virginia
  • Gerald Scott Canard, a 25-year old resident of Culpeper, Virginia
  • The indictments relate to an alleged scheme that operated in the City of Alexandria between February 2015 and January 2016. Over that time frame, the co-conspirators purported to operate a contracting business that was called "Trees Unlimited" a/k/a "Unlimited Property Enhancements."

    During the alleged conspiracy, the victim, who resided in the Taylor Run neighborhood, paid approximately $71,000 to the co-conspirators. The payments were ostensibly for landscaping and pest removal work; however, the work included items such as "putting mothballs in the attic" and the installation of a "squirrel alert system." The purported work also included more regular items such as roof repair.

    Once the alleged conspiracy was uncovered, Alexandria Police detectives and Alexandria Code Enforcement inspectors investigated. An inspection of the victim's home revealed no evidence of the repairs allegedly completed by the co-conspirators.

Duo Rips Off 90-Year Old, Dementia-Suffering Homeowner For Landscaping Work; Cops: Since Victim Agreed To Pay, No Crime Was Committed, Say It Could Be A Civil Matter

In North Platte, Nebraska, The North Platte Telegraph reports:
  • Vulnerable senior citizens face a plethora of scams that try to take advantage of them. It can be difficult to discern who is offering honest services and who is not.

    On Feb. 10, a local man was approached by two men offering to do some landscaping work for him.

    “They went to my dad’s house — he’s almost 91 and has dementia and Alzheimer’s — and they asked if they could do some lawn work and clean up the gutters,” said Cindy Hall, of North Platte. “They quoted him $550.”

    Hall and her husband were out of the state at the time.

    “They wanted the money up front, and my dad got in the car with the two men and they took him to the bank,” Hall said. “They waited in the parking lot while my dad went in and withdrew the money.”

    Hall said she has her dad’s account flagged, but apparently the bank overlooked the flag and gave the money to Hall’s father.

    “However, the bank was suspicious and wrote the license plate number down and gave me that information,” Hall said.

    Hall called one of the men and asked for at least half the money back. He refused, saying they had done the work. Hall then called the police.

    The police investigated but said that because Hall’s father had agreed to pay the men for the work, it was not a criminal matter. It could be a civil matter, police said.(1)

    “Two men requested to trim an elderly man’s tree and do some other work like cleaning the gutters,” Investigator John Deal wrote in an email. “The man agreed, and once the work was completed he paid the men $400. The officer that took the report indicated that there wasn’t likely $400 of work done.”

    The $400 was for work done the first day; the men were to return to do more the next day for an additional $150.

    No contracts were signed, Deal wrote in an email.

    It did appear to be ‘shady’ business practices by the two men, but it would be in the gray area between criminal activity or something that would need to be settled in small claims court,”(2) Deal said. “We haven’t had any other reports in the past several weeks of similar instances occurring.”

    The police instructed the two men not to return to the property.

    Friends and family of vulnerable adults need to be vigilant, said Steve Chatelain, co-owner of Home Instead in North Platte, which cares for Hall’s father.
    Despite the fact Hall had arranged for someone to watch over her father while she was gone, he was taken advantage of by someone who apparently knew when to approach him at a most vulnerable time.

    “This is someone who is only on Social Security,” Hall said. “The scary thing is he got into the vehicle with these men.”
For the story, see Men’s ‘shady’ landscaping not criminal (Family of vulnerable adults need to be vigilant, says co-owner of Home Instead).
(1) With all due respect to the cops, washing their hands of this incident by claiming it was a civil matter is ridiculous. Inasmuch as financial scams tend to be difficult to prosecute, one wonders whether the cops have been instructed by their supervisors (or the local prosecutor's office) to take this stance because they (and/or the prosecutor's office) don't have the necessary resources to devote to investigating & prosecuting it. One thing is for sure - the mere fact that a ripoff victim 'agreed' to pay the scam artist doesn't automatically 'immunize' the scam artist from criminal liability (ie. theft by deception, theft by false pretenses, etc.).

(2) Ibid.

Tuesday, February 28, 2017

Interracial Couple Decides To Leave Anti-Black Slur On Their Vandalized Home, Despite City's $100/Day Fine, Until Cops Bag Suspect; Civil Rights Group Says Offensive Message Could Have Constitutional Protection

In Stamford, Connecticut, The New York Times reports:
  • When Lexene Charles got into his car here on the Saturday before Martin Luther King’s Birthday, he was stunned by what he saw outside his home. He called for his longtime partner, Heather Lindsay, to come outside.

    Someone had spray-painted an anti-black slur across it, Mr. Charles, who is black, said. But instead of scrubbing it off, he and Ms. Lindsay, who is white, decided to leave it up to make a very public point about intolerance.

    Six weeks later, the graffiti, which faces High Clear Drive, remains. Residents have started to complain, and officials in Stamford, a diverse coastal city about 30 miles northeast of New York City, recently directed the couple to remove it. Leaving it up only brings satisfaction to the vandal, the city said.

    On Feb. 7, after the slur had been up three weeks, the city issued the couple a citation for blight and a warning: Remove it, or face a $100-a-day fine. The police chief visited the home and offered to clean the garage door. The mayor said he would help. The couple refused their offers and ignored the citation.

    It is not the first showdown between Stamford and the couple over the property, which was first cited for blight in 2012 for debris. The city sued Ms. Lindsay the following year for disregarding that citation, and the fees, which continue to accumulate, exceed $130,000. The city is now trying to acquire the property in a foreclosure lawsuit scheduled to go to trial on March 7.

    The couple said the graffiti was the latest in a string of racially motivated insults directed at them, especially Mr. Charles, a Haitian immigrant. Ms. Lindsay said that since the couple had moved into the house in 1999, several people in the area had repeatedly yelled racial obscenities at him and told them they hurt property values.

    I don’t sleep good,” Mr. Charles, 57, a school bus driver in Greenwich, Conn., said in an interview [], adding that he now slept near the front door with a hammer. “I’m always looking out the window. I’ve never done that before.”

    The couple, along with supporters and members of the local and state N.A.A.C.P., held a news conference [recently] in their driveway, the slur behind them, and demanded that the police solve the crime. The Stamford Police Department said it had been investigating the episode but had been hindered by a lack of witnesses and evidence. Officers have interviewed neighbors and searched the area. The police said that security cameras revealed nothing and that they had no leads.

    “We are doing everything we can because obviously it’s very offensive,” said Ted Jankowski, the director of public safety, who oversees the Police Department. “We offered to remedy the situation, to take care of removing the graffiti.”

    Andre Cayo, a lawyer representing Ms. Lindsay, 59, a former respiratory therapist now on disability, said he had advised her to keep the racial slur on the garage door as a way to keep pressure on the Police Department. He said that news media attention to the case had helped him and Ms. Lindsay arrange a meeting with Stamford detectives []. There, Ms. Lindsay said, she provided the police with names of several people she suspected might have written the slur. Mr. Jankowski said officers had then talked with those people, who had also been interviewed last month, but gained no new leads.

    The vandalism came at a time when federal authorities have recorded an uptick in hate crimes across the country. [... R]ecently, President Trump denounced a wave of anti-Semitism, including threats made against dozens of Jewish community centers.
For the story, see An Anti-Black Slur on an Interracial Couple’s Garage Stirs Tension in Connecticut.

See also, ACLU: Racial slur on Stamford couple’s home could have constitutional protection.

For a story update, see Stamford officials: Woman won't be fined for slur on home (Stamford officials decided Monday that a local woman will no longer be facing fines after refusing to remove a racial slur painted on her home).

Tough Sledding For Knoxville Section 8 Tenants As More Landlords Nix Gov't Rent Subsidies; Local Program Administrator: We Have Plenty Of Vouchers For Those Who Apply, But They Can't Find Anywhere To Use Them

In Knox County, Tennessee, the Knoxville News Sentinel reports:
  • Between 8 a.m. and 3 p.m. on the second Wednesday of every month, Debbie Taylor-Allen takes applications for Section 8 housing vouchers.
    In times past, there have been more applicants than vouchers available. That’s not the case now, said Taylor-Allen, who is Section 8 Housing Director for the Knoxville Community Development Corporation. She has “plenty of vouchers” for people who apply.

    The problem now, she said, is that they can’t find anywhere to use them.

    In the past year, Knox County has lost more than 400 Section 8 apartments. Residents who get the vouchers have 60 days initially to use them and can apply for up to two 30-day extensions.

    Nearly all are applying for the full 120 days, Taylor-Allen said – and even then, she estimates only 40 percent are finding a Section 8 unit to move into.

    “It’s even harder if you’re single,” she said. “One-bedrooms and efficiencies (taking Section 8), you cannot find in Knoxville.”

    Section 8 shortage

    The Section 8 shortage Knox County is seeing is happening all over the country. A study last year out of New York University’s Furman Center indicated the U.S. is losing around 125,000 affordable housing units a year. Landlords either don’t renew their contracts, or the units are demolished and replaced with something other than Section 8 housing.

    Knoxville has seen both happen. More than a third of the total renter-occupied units in Knoxville were built before 1980. And since March 2016, the city lost more than 400 units because a 15-year Section 8 contract many landlords had is expiring, and they’re choosing not to renew, Taylor-Allen said. The old contract came with a substantial tax credit as incentive; new tax credits aren’t as lucrative, she said.

    “Once those contracts have expired, those owners are not required to rent to low-income families anymore,” she said. Those contracts affected many complexes that had a mix of Section 8 and open-market housing.
For more, see Affordable rental housing hit hard in Knox, elsewhere. Section 8 worthless

Attorney Cops Guilty Plea In Conspiracy To Dupe Financially Distressed Homeowners Out Of Their Homes With False Mortgage Payoff Promises, Then Use Properties In Rent Skimming Racket While Allowing Loans To Go Into Foreclosure

In Hartford, Connecticut, the Hartford Courant reports:
  • A Connecticut attorney has admitted he scammed multiple homeowners who were in, or facing, foreclosure by making false promises to buy their homes and pay off their mortgages, according to the U.S. attorney's office.

    After gaining control of the homes, Bradford Barneys would rent them out to tenants who believed he owned the properties, the office said in a news release. Meanwhile, homeowners would continue to receive notices regarding foreclosure because Barney was not, as he'd promised, making any mortgage or tax payments.

    Barneys, 51, of Odenton, Md., pleaded guilty in Hartford federal court Tuesday to conspiring in the long-running fraud scheme targeting distressed homeowners throughout Connecticut. Barneys, who has a law office in the Bridgeport area, conspired with former Easton resident Timothy Burke.

    Between 2011 and at least 2014, Barneys participated in dozens of meetings with Burke and homeowners at his law office.

    Barneys pleaded guilty to one count of conspiracy to commit mail and wire fraud, which carries a maximum sentence of 20 years in prison. Sentencing is scheduled for June 13.

    Burke pleaded guilty on Jan. 24 to one count of mail fraud and one count of tax evasion. He awaits sentencing.

Monday, February 27, 2017

Disbarred For Role In Ripping Off Financially Strapped Homeowners In $44 Million Loan Modification Racket, Ex-Attorney Cops Plea, Gets Seven Years In State Pen

From the Office of the San Bernardino County, California District Attorney:
  • A former attorney in Westminster has pleaded guilty to grand theft and money laundering for his role in a $44 million loan modification scam.

    Stephen Lyster Siringoringo, 35, of Westminster, pleaded no contest Wednesday [February 22] to 3 counts of Grand Theft and Money Laundering, and admitted an aggravated White Collar enhancement for taking over $100,000.00 by fraud or deceit which requires a commitment to the California state prison.

    The court ordered Siringoringo to pay $108,000 in restitution, which is the total amount connected to victims residing in San Bernardino County. Siringoringo was also sentenced to 7 years in state prison. In Jan. 2017, the Federal Consumer Financial Protection Bureau obtained a judgment of restitution for victims outside of the county in the amount of $20,825,000.(1)

    The conviction was the culmination of a lengthy investigation by members of the San Bernardino County District Attorney’s Office—Bureau of Investigation’s Real Estate Fraud Unit.

    Siringoringo advertised loan modification services across Southern California via radio and television advertisements and targeted lower income and/or Spanish-speaking people within San Bernardino County.

    According DDA Welch, the victims reached out to Siringoringo’s law office because they were led to believe he would help them to lower their house payments, thereby preventing foreclosure.

    Siringoringo, along with co-defendants Joshua Cobb and Alfred Clausen, collected millions of dollars from hundreds of victims while rarely delivering on their promises.

    Siringoringo, in particular, preyed on the victims by using his position as an attorney to gain their trust and charge large unlawful upfront fees and monthly payments. Most of the victims never received any loan modification, and many who had lost their money with Siringoringo, Cobb and Clausen sought assistance through other means.

    Siringoringo was disbarred by the California State Bar as a result of hundreds of complaints. Disbarment occurred prior to the involvement of the San Bernardino District Attorney’s Office.

    Cobb pled guilty to similar charges last year. He was ordered to pay restitution and is serving a 5-year sentence.

    Alfred Orn Clausen (pictured here) remains a fugitive at large and is believed to have fled to Iceland. Any information regarding his current whereabouts can be forwarded to Sr. Inv. John Vega at 909-382-7750 or via email at
Source: Former attorney pleads no contest in multi-million-dollar loan modification scheme.
(1) The California State Bar's Client Security Fund is a public service of the California legal profession, intended to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

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

Connecticut Woman Feels Pinch For Allegedly Conspiring To Peddle Phony Debt Elimination Program To Vulnerable Homeowners, Others Looking For Financial Help; Prosecutor: Bogus Promissory Notes, Other Frivolous Paperwork Were Provided To Victims That Could Purportedly Be Used In Paying Off Mortgages, Other Loans

From the Office of the U.S. Attorney (New Haven, Connecticut):
  • Deirdre M. Daly, United States Attorney for the District of Connecticut, today [February 17] announced that a federal grand jury sitting in New Haven has returned a nine-count indictment charging URMILA SRI THAKUR, also known as Urmila Buddhu-Thakur and Indro Buddhu-Thakur, 72, of Wethersfield, with conspiracy, mail fraud and money laundering offenses related to a fraudulent debt elimination scheme.
    According to court documents, from 2009 to June 2012, THAKUR, her former husband, Deowraj “Deo” Buddhu and their daughter, Sunita Buddhu, sold a debt elimination “program” to vulnerable individuals through various businesses, including Paradise Consulting Service, Hema, Inc., and Secured Redemption.

    In exchange for substantial fees, Deo Buddhu told victims about a little-known government fund that could be used to pay off their mortgages and other debts. In fact, no such fund exists. Buddhu instructed his victims to stop making payments on their mortgages, credit cards and other debts, and to stop paying their property taxes. He also provided his victims with fictitious promissory notes, which he called “bonds,” as well as other frivolous documentation, and advised his victims to use them to pay their debts.

    The indictment alleges that THAKUR participated in the scheme by signing documents provided to victims as a witness, taking money from victims in exchange for their participation in the purported program, and managing payroll operations for the various businesses used for the purpose of selling and attempting to sell the program to the victims.

    The indictment further alleges that, on June 12, 2012, the day after Deo Buddhu’s arrest, THAKUR withdrew $75,000 from a certificate of deposit account that contained funds from the scheme.
    Deo Buddhu and Sunita Buddhu were previously convicted in Hartford federal court.

NM AG Belts Three Out-Of-State Lawyers With Civil Suit For Allegedly Targeting Financially Strapped Homeowners, Clipping Them Out Of Upfront Fees, Monthly Payments In Mass Joinder Lawsuit Scam

From the Office of the New Mexico Attorney General:
  • Attorney General Hector Balderas announced that he filed a lawsuit last night [February 22] against a group of California lawyers who are scamming New Mexico homeowners out of tens of thousands of dollars in a mass joinder lawsuit scheme.

    The out of state attorneys file sham mass joinder lawsuits in other states for upfront fees of $5,000 or more plus a monthly payment from each New Mexico homeowner. The lawsuit alleges that these lawsuits are merely a front for charging upfront fees for mortgage modification services, a practice prohibited by federal law and by the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act.
    The defendants have filed dozens of mass joinder lawsuits in California courts and none of them have been successful. Most are dismissed by the courts as frivolous and lacking any merit, but yet this scam takes thousands of dollars in upfront fees from New Mexico homeowners, which is illegal. Despite knowing that these lawsuits are worthless, after the case is dismissed as lacking merit, the defendants sometimes try to get homeowners to pay even more money for appealing the cases.

    While marketing these sham mass joinder lawsuits to unsuspecting homeowners, the defendants are trying to get around a federal law, the Mortgage Assistance Relief Services Rule, Regulation O, 16 CFR Part 1015, that prohibits upfront fees for mortgage modification services. New Mexico has a similar law, the Mortgage Foreclosure Consultant Fraud Prevention Act, NMSA §§47-15-1 to 8, that also makes upfront fees illegal for mortgage modification services.

    Attorney General Balderas is seeking restitution, fines and an injunction to stop the defendants’ illegal behavior.

    The defendants in Attorney General Balderas’ lawsuit include two California law firms and three California Attorneys, two of whom are the subject of disciplinary action by the California Bar.(1)
For the press release and the lawsuit, see AG Balderas Sues California Lawyers for Scamming New Mexico Homeowners Out of Tens of Thousands of Dollars (At least 23 New Mexico families victimized by the California scam ring).
(1) The California State Bar's Client Security Fund is a public service of the California legal profession, intended to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

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

Sunday, February 26, 2017

Court: D.C. Nursing Home Residents Not Entitled To Landlord Buy-Out Rights Granted To Conventional Tenants Under Local Law

From a recent post from the law firm Miles & Stockbridge:
  • The D.C. Superior Court recently denied residents of a nursing facility protections under the Tenant Opportunity to Purchase Act ("TOPA") (D.C. Code § 42-3401 to -3405) when the residents sought an injunction to temporarily halt the sale of the facility. Mason v. The Washington Home, Civil No. 4813 B (D.C. Sup. Ct. Oct. 24, 2016). The court reasoned that because existing statutory protections governing the closure of nursing facilities create unique safeguards for facility residents and that conflicts exist between nursing facility statutory protections and TOPA, TOPA cannot be applied to nursing facility residents.

    Generally, TOPA requires an owner of a "housing accommodation," prior to selling such housing accommodation, to provide to its tenants an opportunity to purchase at a price and on such terms that represent a bona fide offer of sale. D.C. Code § 42-3404.02 (2016).

    The plaintiffs, composed of residents in a nursing facility, alleged, among other things, that their TOPA rights were violated because they were not provided the opportunity to purchase the facility after the owner of the facility contracted to sell to an adjacent property owner. The court denied the plaintiffs' motion for preliminary injunction and stated that applying TOPA rights to residents of a nursing facility would ignore distinct differences between TOPA and the protections afforded to nursing facility residents under other D.C. laws.

    The court examined differences between the terms "tenant" and "owner" as used in TOPA versus the terms "administrator" and "resident" as used in Title 44, Chapter 10 of the D.C. Code (which establishes certain protections specific to nursing facility residents). The distinctions are significant as the treatment of "tenants" under TOPA varies greatly with the treatment of "residents" under Title 44, Chapter 10 of the D.C. Code.

    For example, a nursing facility administrator must give residents 90 days advanced written notice prior to the voluntary closure of a facility, and the administrator must offer to assist the residents in securing placement in an alternate facility. D.C. Code § 44-1003.11 (2016). No such protections are provided to tenants under TOPA. To apply TOPA to the sale (and ultimate voluntary closure of a nursing facility) would render certain other protections under Title 44, Chapter 10 moot and would discount the other safeguards for nursing facility residents already in place under D.C. laws.

    Thus, because certain laws that apply to the closure of nursing facilities were specifically enacted to protect the residents living in such facilities directly conflict with certain TOPA requirements, TOPA rights are not provided to residents of the facilities when the facilities are to be sold or closed. While the court has determined that TOPA rights are not extended to nursing facility residents, one needs to take note of other, arguably more restrictive, requirements prior to acquiring and closing an existing nursing facility in the District.

Financial Instability Claims Another Assisted Living Facility; Shutdown To Force More Senior Citizens Out Of Their Residences While Employees Lose Jobs

In Penobscot, Maine, the Castine Patriot reports:
  • Northern Bay Residential Living Center will close in several weeks, but not until all residents have found another home, administrator Marjorie Love said.

    “It’s the lemonade we can make out of these lemons, that they have the option to move to the right home.”

    Ordered closed after more than eight years in the financial receivership of the Department of Health and Human Services, the result will be employees losing their jobs, families of residents traveling further for visits, volunteers staying home, and a community losing one of its linchpins.

    Like the elementary school and Northern Bay Market, the nursing home at Penobscot’s main intersection has been part of the town’s fabric for decades.

    “I think it’s hard on everyone,” Love said.

    While Penobscot students, who spend time with residents weekly, know that the center will close this spring, “when it’s really going to hit the kids is next Halloween,” Penobscot Community School Principal Allen Cole said.

    The Halloween practice of grade school students, and some parents, parading to the center in full costume to meet with residents is a decades-long tradition.

    In recent years, residents came and shared a Thanksgiving meal with students at the school.

    The interaction between students and residents is good for everyone, Cole said.

    “It turns out no matter what the kids do, the residents love having them,” he said. “And it’s the one thing where our kids, some of them, get to interact with elderly people….They are forced to get out of their own comfort zone. We have no one-to-one parallel thing to replace that.

    “There’s nothing that will or can take that spot,” he said.

    A January 15 deadline to find a purchaser set by Judge Michaela Murphy in Maine Business and Consumer Court early in December was not met, and therefore DHHS was granted legal rights to sell the nursing home and assisted-living bed rights to other elder-care companies.

    The nursing home section was closed in 2014, upon a legal petition to the court by DHHS, based on alleged violations.

    However, the assisted living center “is being closed as not financially viable,” Love said. “It’s not a quality issue, it’s an expense [issue].”

Low Government Reimbursement Rates, Regulatory & Public Policy Pressures, Competition From Newer Facilities Lead To More Closings For Aging Nursing Homes, Triggering Patient Relocations; One Wisconsin Owner Estimates $53/Day In Losses For Every Resident Funded By State Medicaid

In Fall Creek, Wisconsin, the Eau Claire Leader-Telegram reports:
  • Low government reimbursement rates, increased competition and changing patterns of where seniors elect to receive care combined to bring about the demise of Fall Creek’s only nursing home, the owner said [earlier this month].

    Fall Creek Valley Care Center, [], will close by mid-March, forcing its last nine residents to find alternative places to live and putting its roughly 35 employees out of work, said Jack Halbleib, administrator and owner of the facility.

    The 50-bed nursing home, built in 1968 on the west end of town along the south end of the Fall Creek millpond, was operated by the village of Fall Creek until its sale in 2002 to Convenant Care, an operating company owned by Halbleib.

    “It’s been kind of a landmark here in Fall Creek, and it’s sad knowing it won’t be here any longer,” said Halbleib, who called the closing an economic decision driven by chronic state underfunding.

    In recent years, regulatory and public policy pressures have added unreimbursed expenses and additional data and reporting requirements that made it more difficult for nursing homes to survive, he said.

    While state policies have benefited larger long-term care facilities offering assisted living, memory care, rehabilitation and other services, the changes have been “starving off” traditional community nursing homes, he said.

    “The options are a good thing, but the impact on traditional nursing homes has been brutal,” Halbleib said, noting that regional nursing homes that used to maintain occupancy rates over 90 percent now typically are only 60 to 80 percent full. “There is definitely an excess of nursing home capacity in the area.”

    What Halbleib called “deliberate underfunding” by the state means the average nursing home in Wisconsin loses about $53 a day for every resident whose care is funded by Medicaid, he said.

    Halbleib said he previously believed the sheer number of baby boomers approaching the typical age of nursing home occupancy would ensure enough business to keep the Fall Creek facility afloat, but it now appears that far fewer people will spend any time in nursing homes.

    Both Halbleib and Fall Creek village President Chester Goodman cited competition from much newer facilities in Augusta and Eau Claire — about a 10-minute drive in each direction from Fall Creek — as a factor contributing to the shutdown decision.

    “It’s disappointing,” Goodman said. “But it’s a private business, and the owner of the business needs to do what’s best for him.”

    A relocation plan has been filed with the state Department of Health Services, and the facility will be working with area agencies to ensure smooth and suitable placement of its nine remaining residents.

    The nursing home, which reduced its licensing from 60 to 50 beds about three years ago, already has been downsizing in recent months, as it averaged just over 30 residents for much of 2016 and had about 75 employees a year ago, Halbleib said.

    Despite offering a quality facility with a strong reputation, “it became clear to me that this was going to be a continuing decline,” said Halbleib, who thanked families, clergy, volunteers and schoolchildren in the community for their strong support of the facility over the years.

    At this time, Halbleib said he has no alternative plans for the Fall Creek Valley Care Center building, but he plans to work with the Eau Claire Area Economic Development Corp. to market it.

    The closing is the second announced for a longtime local care facility in recent weeks. The owners of Mt. Washington Residence said last month they intended to close the 60-bed assisted-living facility at 1930 Cleveland St. in Eau Claire as soon as the remaining 32 residents were relocated.
For the story, see Fall Creek nursing home to close (Owner cites low government reimbursement rates, increased competition among reasons).

See also, That Empty Feeling: Local nursing homes close (Recent closings of two area nursing homes highlight a trend that could spell trouble as baby boomers age into the need for skilled long-term care centers).

Five Connected, Industrial-Style Trailers Used As Church-Operated Homeless Shelter For 20 Years Declared Unsafe, Suffer City Shutdown; Nearly Two Dozen Occupants Get The Boot As Stricter Municipal Code Enforcement Triggered By Deadly Oakland Warehouse Fire Continues

In Buena Park, California, The Orange County Register reports:
  • About a dozen homeless people living in a shelter at First Southern Baptist Church vacated the building Thursday morning [February 9] after city officials declared it unsafe to occupy.

    Police officers, city code-enforcement officers and representatives from City Net, a city consultant for homeless outreach, were at the church at 8 a.m. Thursday taping red tags onto the temporary structure that has been a shelter for about 20 years.

    Wiley Drake, the church’s longtime pastor, stood by, streaming video with his cellphone. He said the city was invading his church’s property and the privacy rights of the homeless.

    At 9 a.m., some men moved their clothes, books and blankets into a hall on the lot. About two hours later, a crew began boarding up the shelter’s doors and windows.

    The city last year found several health, fire and occupancy violations at the building, which is five industrial-style trailers connected.
    City Net case managers in recent months have worked with the church’s homeless. Nearly a dozen chose to relocate after Buena Park officials on Jan. 30 revoked the shelter’s temporary occupancy permit. A dozen others remained. The city provided men and women storage bins for their things, locked in a trailer on the street, accessible by appointment or by contacting an official.

    Drake, 73, said those who slept in the shelter overnight were “devastated” by the building’s shuttering.

    “They’re in shock,” he said.

    Councilwoman Virginia Vaughn said the Oakland warehouse fire that killed 36 in December “shed a lot of light on sometimes looking the other way isn’t the best thing to do for everybody.

    “Our first and foremost responsibility is the safety of the residents,” the councilwoman said. “It really has been a group effort to go in there as calmly and as professionally and as caring as possible. Really, that’s what it’s all about.”

End Near For 17 Lot-Leasing Homeowners After Long-Time Mobile Home Park Landlord Announces Retirement Plans, Intending To Sell Premises To Developer Or Convert Property For More Profitable Tourism-Driven Use

In View Royal, British Columbia, the Goldstream News Gazette reports:
  • Lothar Netzel and Jacquelynn Starck aren’t sure where they will be living next summer, but it won’t be at Thetis Lake Campground, a place they’ve called home for most of the last two decades.

    A Jan. 12 letter from property owner Eric Gieringer broke that news to the couple and the rest of the park’s 17 mobile homeowners.

    The letter detailed Gieringer’s desire to retire and sell the property that he and his family have owned for 41 years. It stated that he has entered into a property sales agreement with a developer who plans to submit a rezoning application to the Town of View Royal in the near future.

    Should the rezoning application fail, Gieringer wrote, the tenancy for the mobile home owners in the park will still end and the campground will evolve to fall in line with its current zoning, which is for temporary use and tourism, not permanent residency.

    In the event the property is successfully rezoned, he has offered $10,000 to any tenant that agrees to completely vacate the property by the end of September. Otherwise, residents will receive the minimum according to the B.C. Tenancy Act – which is 12 months of the current monthly rent or $4,884 in this case – and be given an extra year to leave.

    Netzel and Starck admitted the news wasn’t surprising. “Rumours have been going around for years,” Netzel said.

    In fact, since 2000, any new tenant arriving on the property has signed a letter indicating that the tenancy might end due to rezoning or a transition into a more traditional campground.

    “I’m not happy about it. It’s not the way I thought this would all end, but we’ve been very frank with all of our tenants that we really saw no future the way this business model is,” Gieringer told the Gazette.

    Still, residents are fearful of the prospect of entering a housing and rental market that is among the most competitive and unaffordable in Canada.

    This news has stressed people out … They are getting rid of the last affordable housing in Victoria,” said Karen Hayes, another resident.

    “It’s impossible … The rents are up to $900 to $1,200,” Starck said, adding that they may find help through the Victoria Kiwanis Club. The $10,000 offer is of little consolation, she and Netzel said, as they don’t believe their home can be moved due to its age and current state.

    They estimate that demolishing and removing the structure will cost more than that and said they should be offered something closer to $28,508, the most recent assessed value of their home.

    According to Gieringer, one tenant has offered to demolish the homes for $1,000 apiece, a cost Gieringer said he would cover to allow his tenants to keep the full $10,000. He said 13 of the 17 mobile homeowners have already accepted the offer.

    The application to have the property rezoned remains in its early stages and hasn’t been officially received by the Town of View Royal. Mayor David Screech said council will have to weigh its options with regards to potential development of the property and that its close proximity to a nature park will mean they’ll be looking for dedicated park land and proper buffers as part of any proposal.

    While Screech sympathizes with the residents, and has sat down with them to help get them on affordable housing lists, he also doesn’t blame the park’s owners for the route they’ve chosen.

    “I respect the owners’ right that they have decided that they just don’t want to run the park anymore. So unfortunately what’s happening with the tenants is a by-product of that,” he said.

    As for why the Town has allowed the campground to go against bylaws and allow permanent residency, Screech said the property has simply evolved that way and has filled a much needed gap in housing in the region. “It makes it a very difficult situation to handle.”

    Beyond finances and having to search for a new home, residents say they’ll miss living in a beautiful part of the region.

    “(I’ll miss) the park next door … Just to go in the summer time, to be able to go swimming over there,” Hayes said.

    “It’s five minutes to walk to the lake. Of course you don’t want to go swimming now, but in the summer it’s nice,” Netzel added.