Saturday, April 15, 2017

Skyrocketing Real Estate Values Claim Another Aging, Deteriorating Mobile Home Park, Leaving Dozens Of Lot-Leasing Homeowners Facing The Boot; Long-Time Landlord-Family Says Unaffordable Required Upgrades Needed To Continue Operating Motivates Sale To Developer

In the Little Saigon section of Orange County, California, the Los Angeles Times reports:
  • Mai Luu left the tenant meeting in tears, a neighbor holding her hand.

    At 80, the Westminster resident said, “I thought I would stay the rest of my years in one last place. Now I start over…. To even think of a place to move to … how do you begin?"

    A short drive from Little Saigon’s bustling shopping district lies a haven for many veterans of the Vietnam War — Green Lantern Village & Mobile Homes.

    Residents of the park said the property owner, Walsh Properties LLC, informed them a week ago of plans to apply to the city for a different land-use permit that would allow for development.

    Walsh officials invited residents to a meeting Saturday [April 1] to hear more about plans for the property.

    On Saturday morning, nearly 100 people filled the park’s clubhouse, where residents were stunned to learn that the Beach Boulevard property was already in escrow in preparation for its sale. Tenants may be forced to move out by early 2018 once the owner complies with local and state regulations that require that it hold a public hearing and provide relocation services to residents.

    Staff from Overland, Pacific & Cutler Inc., an Irvine relocation specialist, will interview each family to document their moving needs before submitting a report to the city.

    “I feel frozen. I can’t think,” said Luu, a former lieutenant colonel in the South Vietnamese Army whose mobile home is filled with old photographs, coupons and Costco brochures. She moved to Green Lantern in 1989, when rent was $400 a month, compared with her current bill of $900.

    It’s the only home she has known since immigrating to the U.S., after suffering for more than 10 years in a Communist reeducation camp, she said.

    We were refugees,” she said. “We will be adrift again.”

    Vietnamese Americans now occupy about 80% of the park’s 130 units. Residents said they would be priced out of Orange County’s exploding housing market if they had to look elsewhere.

    During Saturday’s meeting, a Vietnamese interpreter helped explain the views of Ross Bartlett, a member of the park owner’s family. Bartlett said his family has been considering selling the property for the past decade.

    He said his grandfather bought the property at the end of World War II. In order to continue to operate, he said, they would have to rip up roads inside the park and lay new electrical, water and sewer lines on the property at an estimated cost of $3 million, which the family cannot afford.

    He declined to disclose any details about the sale of the property for confidentiality reasons. But he said selling to another mobile home park operator wouldn’t have made sense.

    “They would also require repairs before purchase,” he said.

    Resident David Griffin 51, a six-year resident of the park, said the tenants should have been given notice sooner of the family’s plans.

    “I feel betrayed,” he said. “They intended to sell the whole time — so why bother to have us together today? If they don’t give me fair market value for what I have, I don’t know what I will do.”

    Nghia Bui, 79, a retired army captain, said he plans to stage a protest as the permit process winds it way though City Hall. Before Sunday, he circulated a flier advising immigrants what to say — “We are old; we are poor,” and, “Changing the land is changing my living. Please don’t.”

    “No one wants to leave here,” said Son Do, 66, a former second lieutenant in the South Vietnamese Army. “New people moved in just months ago, others just a few years ago. What choices do they have? How does anyone find a safe and affordable place in Orange County?”

    Bertha Day, 93, lived at Green Lantern for 35 years until dementia led her to transfer to a nursing home in 2016. Her son, Richard Day, now takes care of his mother’s property. He just spent $1,300 on patio and exterior repairs, in hopes of selling. “Now what?” he asked. “So many questions, so much confusion.”

    Luu, still reeling, faces more sleepless nights.

    “It’s not only her who cannot sleep. We can’t sleep, either,” said Nhi Tran, 29, who lives near Luu. She said either she or her husband visits Luu daily, helping her with errands. The couple and their daughter moved to the mobile home park from Las Vegas two years earlier.

    “In my mind, I’m thinking: ‘What about my job? What about finding a new school?’ ” said the nurse. “But we are young — we worry for the older people. They have no place to go, no one to turn to.”

City Code Enforcers: Mobile Home Park Not Zoned For RV Owners Basing Their Vehicles On Premises, Giving Dozens 24-Hour Heads Up To Leave

In Austin, Texas, KXAN-TV reports:
  • Tenants in a North Austin RV park reached out to KXAN saying the community of dozens was given just 24 hours to get out.

    “I don’t really know what any of these people are going to do. They’re already one step away from being homeless as it is,” tenant Scott Taylor said, who was homeless himself for 10 years and now mows lawns. “I came here because Texas has the best job market in the entire country and I’m trying to get off the streets and do something with my life.”

    Taylor says he found out Wednesday [March 22] that he, and everyone else living at “Rubio’s” RV park, had 24 hours to leave.

    Property manager Jaime Paxton told KXAN they did not know RVs were not allowed on the property. She and partner Kenneth Rubio, who also lives on site, were just trying to help people out, including veterans and struggling musicians.

    “Originally he had it for venues and for flea markets and stuff like that, and then he decided he was going to try to help some people that were coming to Austin that couldn’t get into apartments, that were having financial issues,” Paxton said. “Everything’s just too expensive. So we’ve tried to give them a place to go where they can get their feet on the ground and get going.”

    Austin Code says it sent a notice of violation for the RV use to the property owner back on February 13. The department reports there have been previous complaints for dumping and “unsightly” material.

    Renters are forced to move regularly in Austin, mainly because of growth and redevelopment. In September, the city council took steps to make sure tenants had more notice if they were being forced to move for redevelopment. The new rules require owners to give renters four months notice. Before, owners only had to have a month’s heads up if an apartment was being torn down. Those living in mobile homes are supposed to be notified nine months before having to move out.

    The Austin Tenants’ Council explained to KXAN that the state recently limited the property code to people living in mobile homes. Meaning those who live in an RV are no longer defined as tenants, so they don’t have the same rights.

    “We’re saying the lowest income bracket areas, the people who can’t afford anything better than somewhere to park an RV, are basically being told that they don’t have any rights,” Taylor said.

    Paxton says the city told her, “Because it is an RV, it can be hooked up and taken off of the property. All of the hookups are on the outside as far as the water and the electricity and all that. In a trailer park, where you have hookups inside the building, you have to give 30 days.” The RVs are not hooked up to sewer lines and the tenants rely on porta-potties.

    Taylor says the answer, sounds more simple than it is. “You can’t just go park an RV on the side of the street. There’s laws against that.”

City Authorities Patiently Wait After Giving The Boot To Those Living Out Of Travel Trailers & RVs While Parking Them On Mobile Home-Zoned Premises

In Grants Pass, Oregon, KTVL-TV Channel 10 reports:
  • At the Sinclair-Highland Mobile Home Park, about half the homes are mobile homes while the others are travel trailers.

    The park is not zoned to have RV's/travel trailers and those families were supposed to leave or buy a mobile home by February 1st. "They said this is a mobile home park, not for travel trailers and all the travel trailers had to go," Maria Herrera, one of the residents living in a travel trailer, said.

    On December 7th, the city of Grants Pass received complaints about the park. When a Grants Pass Police officer arrived, he cited the landowner for multiple code violations.

    "The issue is that it's not permitted use in that area," Lt. Joe Moran said. "It's residential and industrial and neither one are zoned for a mobile home park or an RV park."

    Moran said it's been a long-standing issue having done the citations himself the first time in 2010. The park cleared out after that, but over the past seven years, residents have started to move in there.

    About five different families live in the RV's parked in the mobile home park. None of the families News 10 talked to could find other solutions. "We've been looking but because of the year of the trailer and everything it's hard to get into trailer places," Herrera said.

    In Grants Pass city limits, there are at least three other trailer parks, but the families News 10 spoke with said the parks are full or cannot take them - especially not for an extended period of time.

    "There's only a certain amount of hours that an RV can actually be lived in whenever it's on a private property within the city," Moran said. "Those folks have been up there much longer than hours. We're talking months, if not years."

    News 10 spoke with one family at the park who lived there for 10 years and if they're forced to move, they say they'll have nowhere to go. Their only option is to buy a mobile home that they say they cannot afford.

    Despite the Feb. 1st deadline, GPDPS has not enforced the eviction yet because they understand the gravity of the situation these families are in and how disruptive the move could be.

    If the residents don't end up complying though, and law enforcement does enforce the zoning soon, each trailer could face a $295 fine per day for the violations.

Pro Bono Lawyers Step In To Assist Eight Low-Income Families To Fight Back Against Landlord Accused Of Disregarding Local Rent Ordinances & Seeking To Illegally Give Them All The Boot

In Los Angeles, California, Curbed (Los Angeles) reports:
  • Eight families who live in an eight-unit apartment building in Historic Filipinotown are suing the building's owner, alleging that it is harassing tenants to get them to leave so that it can renovate the building for sale, in violation of city ordinances.

    The civil suit was filed March 22 in Los Angeles County Superior Court against BRE Investment LLC; its owner, David Bramante; and several other related defendants by the Inner City Law Center(1) and attorneys representing the families who rent in the building. The tenants are characterized as long-term or low-income tenants, many of whom are retired, elderly, disabled or monolingual Spanish speakers.

    The building at 240 North Robinson Street sits just a couple of blocks east of where Temple Street and Silver Lake Boulevard meet.

    The suit argues that Bramante and his company have ignored requirements under LA's rent stabilization ordinance and other laws to relocate the building’s tenants under a tenant habitability plan, which was implemented in March 2016 under the building's previous owner to relocate tenants during temporary construction work that year.
    The suit seeks to stop any evictions or forced relocation of tenants, asks that Bramante and his company follow the law and correct any uninhabitable conditions, and seeks damages and compensation for tenants, among other things.

    For now, the tenants remain in the building, though there are multiple evictions pending, Inner City Law Center lawyer David Aigboboh told Curbed.

    Bramante acknowledged showing up on March 23 with moving trucks to assist tenants in two of the units to relocate to alternative housing temporarily under the tenant habitability plan (at Bramante's expense), so that his company could renovate the units, but said the tenants (assisted by the Inner City Law Center and LA Tenants Union) declined to leave.

    Aigboboh characterized the attempted move as a "forcible eviction," which Bramante denied.
For more, see Tenants sue Historic Filipinotown apartment building owner for harassment (The long-term, low-income residents say they're being forced out).
(1) Based on Skid Row in downtown Los Angeles, Inner City Law Center is a non-profit law firm providing legal representation to the poor in connection with housing issues, veterans’ benefits, homelessness prevention, disabilities, and legal challenges faced by people with HIV/AIDS.

Landlord Threats To Call Authorities On Undocumented Immigrant Renters Who Invoke Their Tenant Rights On The Upswing, Say Legal Aid Lawyers

In Sacramento, California, reports:
  • Daniel Saver entered the state Capitol last week on a mission to speak for a woman who could not speak for herself.

    An attorney from Palo Alto, Saver had been in the middle of a drama worthy of Dickens’ pen, one that involved a landlord threatening an undocumented mother with the promise of calling immigration authorities if she invoked her rights as a tenant a day before Christmas Eve.

    Saver intervened on behalf of Community Legal Services, which counts itself among the small number of legal-aid groups pushing back against a new trend in immigrant exploitation: property owners leveraging fear for profit.

    It’s a tactic Saver and his colleagues are seeing more and more, one they think highlights an intersection between California’s skyrocketing rents and an anti-Hispanic tide from the White House.

    Saver’s client couldn’t take the chance of being separated from her young children. He says she yielded to the landlord’s intimidation, forgoing legal protections that documented Californians wouldn’t feel the need to surrender.
    But without a painful price tag, landlords who engage in immigrant bullying can still make a profit. That point was driven home by Jith Meganathan of the Western Center on Law and Poverty.

    “In areas where rents are rapidly rising, there are financial incentives to threaten tenants and intimidate them to vacate the premises, so that you don’t have to go through the process of a statutory eviction and can rent the unit out at a high price, much faster,” Meganathan testified. “We need to make a light go on in that landlord’s head—change that financial calculation” by making it illegal and costly for landlords to report tenants.

    Meganathan added that, by his count, there are fewer than 200 legal service groups in California helping low-income renters and fewer than 20 private attorneys involved in fair-housing litigation. The small group of attorneys handling those problems are reporting a large volume of incidents, especially cases of undocumented renters being harassed and wrongfully evicted.

Friday, April 14, 2017

Buyers Of Newly-Constructed But Unfinished Custom Homes Face Possible Foreclosure As Dallas Homebuilder Files Bankruptcy; Homeowners Left Holding The Bag On Ten$ Of Thousand$ In Mechanics Liens As Stiffed Subs Seek Payment Of Unpaid Bills

In Dallas, Texas, KTVT-TV Channel 11 reports:
  • A Dallas home builder’s bankruptcy has left homeowners on the hook for hundreds of thousands of dollars in unpaid labor costs.

    Adam and Gabriela Norton say they hired Bella Vita Custom Homes to build their dream home. “We’ve been planning to build this house for 13 years, and we finally did it,” he said.

    When the time came to move in, the house, though, was far from finished. “It was unpainted, there were holes in the walls, there were all kinds of problems,” said Adam. “There’s no money to finish your house,” he recalls a project manager telling him.

    Subcontractors soon appeared demanding payment for the work they’d completed.

    “This is hundreds of thousands of dollars that people are asking for that we already paid Bella Vita. Where’s that money at?”

    On top of the $750,000 loan the Nortons used to pay Bella Vita, they say they’ve now spent $80,000 out of pocket. And yet subcontractors have placed $50,000 in liens on the property, putting the Nortons at risk of foreclosure.

    “This is our dream home that we spent all of our life savings on. And we might not even get to keep it,” said Norton.

    “It sucks for a homeowner. But it also really stinks for a subcontractor, too,” said attorney Jeremy Fielding who added there’s little homeowners can do.

    The builder has declared bankruptcy and the law offers little protection.

    “They’d rather put the onus on the homeowner to have to bear the costs, as opposed to the subcontractor,” said Fielding.

    Until they can settle the liens, the Nortons have stopped putting money into a house they fear they will lose. “Our dreams have been shattered. It’s been extremely hard to deal with this.”

    Andy Clem, Bella Vita’s CEO told CBS11 he can’t comment due to the bankruptcy proceedings.

    The Nortons said they’ve found dozens of home buyers like them, wondering what Bella Vita did with their money.

    They’ve created a blog to discuss the issues they’re having.(1)

Judge: Colorado's Now-Defunct Foreclosure King Did Nothing Wrong When Allegedly Pocketing Million$ By Padding Bills, Saying Scheme Reflected An Entrepreneurial Spirit That Capitalized On A Process That Didn't Prohibit It

In Denver, Colorado, The Denver Post reports:
  • Colorado’s largest foreclosure law firm has landed a major victory in its five-year legal battle against state investigators who tried to prove attorney Larry Castle and his law-partner wife, Caren, headed a money-hungry outfit that for years preyed on a foreclosure system gone wild.

    In a 92-page opinion issued Tuesday [April 4], Denver District Judge Morris Hoffman ruled mostly in favor of the Castles, their now-closed firm, The Castle Law Group, and other foreclosure-related companies with whom they did business. Hoffman ruled that the Castles and other defendants did not, as the state claimed, conspire to pad billings and reap millions in illegitimate profits on the backs of the banks they represented, the affected homeowners and real estate investors who later bought the houses at auction.

    Hoffman did determine, however, that the Castles failed to tell federal mortgage insurers Fannie Mae and Freddie Mac — two of their biggest clients — about their indirect financial interest in a summons-posting company and for that must pay a civil penalty of $119,500.

    The state had sought $16 million to $26 million from the Castles and other defendants in the case. The trial lasted three weeks.

    In essence, Hoffman determined the state tried to prove a conspiracy where one did not exist, and that the fees charged by Castle and the other companies with which they did business were merely an entrepreneurial spirit that capitalized on a foreclosure process that didn’t prohibit it. Although the Castles had an obligation to report their profit-sharing to federal mortgage authorities, the larger costs were what the market would actually allow.

    “We received the decision yesterday. We are looking it over and evaluating our options,” said Annie Skinner, communications director for Attorney General Cynthia Coffman.

    Castle’s lead defense attorney, Larry Pozner, did not immediately respond to a request for comment.

    The civil penalty dwarfs a $10 million settlement state prosecutors made in July 2014 with Castle’s biggest competitor, Aronowitz & Mecklenburg, who they sued at the same time for much of the same alleged infractions. The Aronowitz firm closed and later agreed to pay about $2.5 million more to affected homeowners who sued in a separate class-action case.

    It also runs against several other settlements the AG’s office made with six other foreclosure law firms, though not as pricey, with each accused of padding billings and profiteering from a foreclosure system that logged unprecedented volume from about 2005 to about 2014.
For more, see Judge: Castle and his law firm did not defraud consumers during the foreclosure crisis (But must pay $119K penalty for not reporting financial interest in posting company).

NYC To Local Landlords: Police Your Tenants Against Using Airbnb To Peddle Short Stay Rates Behind Your Back Or We'll Stick You With The Tab For Fines, Lawsuits

In New York City, Kings County Politics reports:
  • Recently, the City has been ramping up enforcement of its illegal transient occupancy laws in efforts to curb illegal occupancies stemming from websites such as Airbnb.

    Curiously, the City is not going after the illegal shortterm occupant or the individual illegally renting out his or her apartment. Rather, the City is ticketing—and sometimes even suing—the landlord of the building in which the illegal transient occupancy is occurring. Illegal transient occupancies present an extraordinary legal and financial risk to landlords, especially out-of-possession landlords. Enforcement in this area has been especially arbitrary and burdensome against out-of-possession landlords, who realistically cannot stop their tenants from using services such as Airbnb.
    What if Tenant A’s landlord is not aware of Tenant A’s activities?

    Section 28-210.3 of the New York City Administrative Code (“Admin. Code”) makes it unlawful “for any person or entity who owns or occupies a multiple dwelling or dwelling unit classified for permanent residence purposes to use or occupy, offer or permit the use or occupancy or to convert for use or occupancy such multiple dwelling or dwelling unit for other than permanent residence purposes” (emphasis added). The City is using the word “permit” to levy fines and commence litigation against out of possession landlords who had no knowledge of their tenants’ activities.

    For example, in The City of New York v. NYC Midtown LLC, et al. the City fined the owner of a three floor walk-up building for a three-day Airbnb occupancy occurring in one of the units behind the landlord’s back.

Thursday, April 13, 2017

Jury Slams Hubby & Wife Scam Team In Short Sale Flipping Scheme, Finding Them Guilty Of Duping Lender Into Taking 'Haircut' On Purportedly Underwater Mortgage w/out Disclosing They Were Using 3rd Party Straw Buyer To Quick Flip Property For $400K+ Profit

From the Office of the U.S. Attorney (Central Islip, New York):
  • [On March 30, 2017], defendants Joseph Atias and Sofia Atias were convicted of bank fraud, conspiracy to commit bank fraud and Medicaid fraud by a jury in federal court in Central Islip. The fraud was designed to, and did, defraud Bank of America of over half a million dollars.
    The defendants were convicted of bank fraud and conspiracy to commit bank fraud in connection with the sale of property adjacent to Sacred Heart Academy for $925,000, after the defendants had sold the property in a short sale for $480,000 to discharge their mortgage debt. In the short sale process, the defendants and a co-conspirator, an attorney who pleaded guilty and testified against the defendants at trial, concealed the offer from Sacred Heart Academy from the Bank of America.

    In the short sale process, the defendants submitted a fraudulent contract of sale and other documents with false statements to Bank of America, and obtained approval of a short sale, wherein the proceeds from the sale of the property were less than the total amount of the mortgages on the property.

    The defendants submitted these documents to Bank of America, falsely representing that there were no funds to pay the mortgages when, in fact, the defendants knew that Sacred Heart Academy, a high school in Hempstead, New York, had offered to buy the property for an amount sufficient to cover the mortgages on the property.

    To accomplish the fraudulent short sale scheme, the defendants used a relative as a straw buyer of the property to create the appearance of an arms-length sale. Shortly after that sale, the defendant’s straw buyer sold the property to Sacred Heart Academy for approximately half a million dollars in profit.

For more, see Husband And Wife Defendants Convicted Of Mortgage Fraud And Medicaid Fraud (Defendants Conspired to Engage in Fraudulent Short Sale of Real Property to Sacred Heart Academy in Hempstead, New York, For New Athletic Fields).

South Florida Man Gets 11 Years For Hijacking Possession Of Dozens Of Vacant Homes & Leasing Them Out To Unwitting Tenants, Pocketing Over $380K In Rent; Prison Time Includes 2 Years For Unrelated I.D. Theft Scam

In West Palm Beach, Florida, the Daily Business Review reports:
  • Wellington resident Kesner Joaseus appeared to do brisk business, leasing single-family houses across Broward and Palm Beach counties—except for one hitch: The properties weren't his to rent.

    Joaseus collected more than $380,000 in rental income from vacant houses he entered and leased without the owner's permission over about a two-year period beginning in November 2014, according to the U.S. Department of Justice.(1)

    The property belonged to Georgia-based RHA 2 LLC, a real estate investment trust that operates as HavenBrook Homes and has holdings in Minnesota, Florida, Alabama and its home state. But Joaseus and accomplices created a company with a similar name, RHA Two LLC, assumed the Georgia firm's identity, posted rental signs on its houses, cut lockboxes and entered contracts with tenants who thought they were doing business with the real owner. They used a fake HavenBrook Homes logo and collected hundreds of thousands of dollars in rent and security deposits.

    Joaseus was one of three Palm Beach County residents, including Wadno Dorneau and Miguel Tilus, arrested and charged with mail fraud and conspiracy to commit mail fraud.

    He pleaded guilty in July to charges in two consolidated fraud cases, but federal prosecutors say he also had a second income stream: pilfering identities to obtain credit cards for cash advances, two Mercedes-Benz vehicles and other purchases totaling $260,000.

    U.S. District Judge Robin L. Rosenberg Wednesday [March 29] sentenced Joaseus, 47, to 11 years in prison for the two scams, including two 108-month sentences to be served concurrently for the real estate fraud and a consecutive two-year sentence for aggravated identity theft.
Source: South Florida Man Sentenced in Real Estate ID Theft Fraud (may require subscription; if no subscription, TRY HERE, then click appropriate link for the story).
(1) A related story reports that Joaseus, and two other men, seized control of about 80 homes in Broward and Palm Beach counties, changed the locks and then rented them out in 2014 and 2015, according to court records. See Fraudster who snitched on Palm Beach sheriff's deputy sentenced to prison.

Michigan AG Tags Foreclosure Rescue Operator With Two Felony False Pretenses Charges, 16 Misdemeanors For Allegedly Ripping Off Financially Strapped Homeowners Seeking To Save Their Homes From Forced Sale

In Oakland County, Michigan, WJBK-TV Channel 2 reports:
  • Businessman Robert Shumake was in Oakland County court Wednesday [March 29], charged with two felonies and 16 misdemeanors.

    Shumake made a grand entrance into the courtroom as the defendant came in like a rock star. He was surrounded by a group of men determined to keep FOX 2 away from the big shot businessman.

    Robert Shumake was escorted by his entourage to the courtroom of Judge James Alexander. Attorney General Bill Schuette says Shumake was behind a scheme to cheat people who were trying to save their homes from foreclosure.(1)

    In 2010, Rob Wolchek investigated Shumake and confronted him. After his story, the attorney general's office investigated. They issued a warrant for his arrest in 2015 but Shumake was in Africa now claiming to be a railroad magnate.

    Shumake was arrested a few months ago and has been charged with two felony counts of false pretenses over $1,000 and 16 misdemeanor counts of credit services act violations.
Source: Businessman Robert Shumake charged with 2 felonies.
(1) In a related story, it is reported that homeowners had hired a company called Mortgage Auditors of America for help, and paid close to $2,000 each. But when they went back to the business, they found out its doors were closed. See Businessman Robert Shumake comes to court - but not alone.

Wednesday, April 12, 2017

South Florida Mystery Man Exploits Loophole On Gov't-Run Website To Hijack Title To LLC-Owned Vacant Land, Pocket Refinancing Proceeds, Then Take Off For Parts Unknown; Hard-Money Lenders Fleeced Out Of $550K, Leaving Them & Title Insurer Holding The Bag (& Defending Against Quiet Title Suit Filed By True Owner)

In Miami Beach, Florida, the Daily Business Review reports:
  • A con man is exploiting a loophole in public records access to target South Florida real estate lenders and landowners.

    Based on little more than his charm, a fake driver's license and forged corporate documents altered on a government-run website for $50, he posed as a Boca Raton doctor and walked away with $550,000 from hard-money lenders in Fort Lauderdale.

    People involved in the transaction say he spoke at length about his real estate holdings, didn't flinch when questioned, and was so convincing that when a private detective later inquired about the deal, lenders were suspicious of the investigator, not the fraudster.

    "Next thing we know, we found out this person isn't who they said they were," said Alain Villar, the independent mortgage broker who originated the deal. "The person who went to the closing was not really the owner."

    It was too late.

    What remained was a smattering of clues—all eventual dead ends—and a real-life whodunit, complete with finger-pointing, misdirection, burner phones, cold trails, a mystery woman and plenty of unanswered questions about the high-stakes shakedown.

    "Who was this guy?" asked Yves Naman, a landowner who filed suit March 16 against lenders seemingly duped into placing a six-figure lien on his vacant 9,750-square-foot residential lot along a Miami Beach golf course. "To be honest with you, I thought he had sold my property."

    But the man hadn't sold the parcel at 2850 Prairie Ave. Instead, he'd used it as collateral in an informal market where private lenders use fewer controls than traditional banks and offer expensive capital to borrowers who can show proof of equity.

    By the end of his first deal, the mystery man was hundreds of thousands of dollars richer and already eyeing his next mark: another $1 million fraud secured by property belonging to a second target.

    He has since vanished. But those left in his wake are now gearing for a legal battle—with each other—to avoid responsibility for the six-figure debt.

    Naman's company, Namron Miami LLC, filed a quiet-title suit in Miami-Dade Circuit Court seeking injunctive and declaratory relief against lenders Edward J. Bohne III and Roman J. Szymansky, and a third defendant—John Doe, the mystery man behind the heist.

    "We want the mortgage off our property," plaintiffs lawyer David Haber said. "Bohne and Szymansky can go and fight with their title insurance carrier, and the title insurance company can go and chase down John Doe."
    Namron's lawsuit suggests the property owners were victims of identity thieves exploiting a vulnerability in the Florida State Department Division of Corporation's website.

    It claims fraudsters accessed the site to take control of Namron's corporate identity by altering public records, then used those counterfeit documents to secure the loan.
    Florida Department of State spokesman Mark Ard did not comment on Naman's allegations, but suggests the onus is on users to ensure accuracy. "The Division of Corporations serves as a ministerial filing agency and accepts documents at face value," he said. "False information submitted on a document constitutes a third-degree felony. … The department encourages business owners and managers to monitor their business entity filings and paperwork on to ensure our records reflect their intended filings."

    Naman said the ploy started to unravel in January when he attempted to pay his company's property taxes and discovered someone had already covered the nearly $22,300 debt. "I called my accountant and we saw that something was crooked," he said.

    Beyond crooked. His attorneys suspect scammers paid the taxes to smooth the way for a loan worth more than 20 times as much. "But that's not my client's problem," Haber said. "My client has a fake mortgage on his property and he wants the mortgage rescinded."
For more, see How a New Kind of Fraud Puts South Florida Real Estate Owners, Lenders at Risk (A loophole on the Sunbiz website is allowing scammers to steal corporate identities for real estate fraud) (may require subscription; if no subscription, GO HERE, then click appropriate link for the story).

Bail Set At $2 Million For Woman Accused Of Manufacturing Forged Deed, Other Paperwork, Then Submitting Them In Divorce Court In Failed Attempt To Snatch Estranged Hubby's Share Of Family Home; Sharp-Eyed Judge Seizes Dirty Documents, Refers Matter To DA

In San Mateo, California, The Mercury News reports:
  • A former Foster City council candidate who prefers to be called Princess Leia Lucas is facing criminal charges of real estate fraud and perjury stemming from an accusation that she forged and presented false documents during a divorce trial in family court.

    Linda Haskin-Gologorsky, 62, has been charged with 34 felony counts, including multiple counts of submission of a false document to the court, submission of a manufactured document to the court and creation of false evidence, according to San Mateo County District Attorney Steve Wagstaffe. If convicted as charged, Haskin-Gologorsky could be sentenced to a range of nine to 10 years in prison.

    Judge Gerald Buchwald set Haskin-Gologorsky’s bail at $2 million. Wagstaffe described the bail amount as “really high for this type of offense, for a woman without a record.”

    Haskin-Gologorsky’s attorney, Ronald Rayes, could not immediately be reached for comment.

    A preliminary hearing has been scheduled for April 10.

    In October, Haskin-Gologorsky and her estranged husband began a court trial in a divorce proceeding before San Mateo County Superior Court Judge Raymond Swope. Under oath, Haskin-Gologorsky testified to “the authenticity of eight clearly forged documents,” according to prosecutors.

    One of the documents was a forged deed to the couple’s Foster City home which showed a purchase date by Haskin-Gologorsky prior to their marriage. Prosecutors said the fraudulent deed, if believed, would have entitled Haskin-Gologorsky to the home as her separate property.

    The judge determined that the documents submitted to the court were forged and referred the case to the district attorney’s office for a perjury investigation, Wagstaffe said. Investigators discovered the home was purchased by the couple two years after their marriage. Prosecutors said a computer seized from Haskin-Gologorsky’s home showed that in the months leading up to the divorce trial she “manufactured the real estate documents, including the court seal on her home computer.”

    “This was more egregious than a person hiding assets,” Wagstaffe said. “This was far more serious; she manufactured documents and then submitted them to the court.”

    On March 23, Judge Buchwald signed an arrest warrant in the amount of $1 million for Haskin-Gologorsky, who was taken into custody the same day.
Source: Woman who goes by ‘Princess Leia Lucas’ accused of falsifying documents in divorce court (Onetime Foster City council candidate held on $2 million bail).

Woman Dodges Hard State Prison Time, Gets 1 Year In County Jail For Using False Promises To Dupe Elderly Man Into Refinancing His Home, Then Stealing Over $100K In Loan Proceeds

In San Luis Obispo, California, KEYT-TV Channel 3 reports:
  • A Nipomo woman who scammed an elderly man out of over $100,000 will serve a year in prison.

    San Luis Obispo District Attorney Dan Dow announced that Araceli Cortes, 38, was sentenced to serve one year in the San Luis Obispo County Jail and four years of probation for defrauding a 74-year-old victim out of $117,000 as part of a reverse mortgage scam.

    The 74-year-old man was a backer of Cortes Multi-Services run by Araceli Cortes in Nipomo.

    In August 2012, Cortes encouraged the victim to take out a reverse mortgage on his residence. The victim then gave a $117,000 loan to Cortes on the condition that she use the funds for business development.

    Cortes used the funds for personal expenditures and never made a payment on the loan.

    The fraud was not discovered until 2016.

    Cortes pled no-contest to the charges and was convicted of one count of felony grand theft and a corresponding enhancement for stealing an amount more than $100,000.

    Cortes is required to pay full restitution to the victim for the money lost.

Tuesday, April 11, 2017

Another Disbarred Attorney Fails To Escape Criminal Prosecution; Booted In November, Lawyer Now Gets Pinched For Pilfering Funds From Client/Seller In Real Property Deal, Stealing From Dead Client In Estate Matter; Losses To Victims Estimated Between $250K-$500K

From the Office of the Passaic County, New Jersey Prosecutor:
  • Passaic County Prosecutor Camelia M. Valdes announces the arrest on March 30, 2017 of Lawrence G. Tosi, age 58, of Woodland Park, New Jersey by members of the Passaic County Prosecutor’s Office Financial Crimes Unit.

    Tosi, formerly an Attorney-At-Law, licensed in the State of New Jersey, is charged with two counts of Theft by Deception (Second Degree) (NJSA 2C: 20-4); two counts of Misapplication of Entrusted Property (Second Degree) (NJSA 2C:21-15) ; one count of Forgery (Fourth Degree) (NJSA 2C:21- 1(a)); one count of Bad Checks (Second Degree) (NJSA 2C:21-5(b)) and one count of Tampering with Records (Fourth Degree) (NJSA 2C: 21-4(a)).

    The charges arise out of Tosi’s law practice, where Tosi is alleged to have stolen client funds.

    In one case, Tosi is alleged to have failed to turn over funds to a client he represented as a seller in a real estate transaction. In another case, Tosi is alleged to have failed to turn over client funds in an estate matter. In both cases, Tosi converted the misapplied funds to his own use. At this time the approximate total amount of theft is in the range of two hundred fifty thousand dollars to five hundred thousand dollars.

    Tosi maintained a law office at various times in Little Falls, Wayne and most recently in Woodland Park, New Jersey. Tosi was admitted to practice law in 1990. By order dated November 1, 2016, the New Jersey Supreme Court disbarred Tosi and ordered his name stricken from the role of Attorneys.

    Clients who have suffered financial loss as a result of attorney dishonesty can file a claim for reimbursement with the NJ Lawyer’s Fund for Client Protection(1) in Trenton, New Jersey.
Source: Former Attorney Arrested For Theft Of Client Funds.
(1) The New Jersey Lawyers' Fund for Client Protection was established to reimburse clients who have suffered a loss due to dishonest conduct of a member of the New Jersey Bar.

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..

Cleveland Feds: Sticky-Fingered Title Agent Glommed Real Estate Escrow Proceeds Intended To Pay Off Homesellers' Existing Mortgages In At Least 19 Transactions; Title Underwriter Left Holding The Bag For Over $2 Million In Losses

From the Office of the U.S. Attorney (Cleveland, Ohio):
  • A Massillon woman was charged with defrauding financial institutions out of more than $2 million by having escrow funds on home purchases deposited into her personal account, Acting U.S. Attorney David A. Sierleja said.

    Kimberlee E. Himmell, 62, was charged with 18 counts of bank fraud and one count of theft of government funds.

    Himmell owned and operated Netwide Title Agency, Inc., located at 3711 Lincoln Way East in Massillon. General Title Insurance Company, located in Cleveland, was Netwide’s underwriter and responsible for auditing Netwide, according to the information.

    Netwide, at the direction of Himmell, began in 2007 instructing all lenders doing business with Netwide as a title agency and utilizing its escrow services to wire all incoming lending proceeds to Himmell’s personal account, instead of Netwide’s corporate account, according to the criminal information filed in the case.

    Himmell then used the deposited funds for her own personal use and for Netwide’s operational expenses without disclosing to lenders that she was not holding the funds in escrow, as she represented she would, according to the information.

    Himmell closed at least 19 real estate transactions in 2013 and 2014 wherein Netwide received escrow funds and failed to pay or release the funds to the prior owner’s pre-existing mortgage. This causes financial losses to lenders and/or sellers of homes in Richmond Heights, North Canton, Willowick, Concord, Strongsville, Newbury, Brunswick, Wadsworth, Medina, Painesville, Parma, Akron, Twinsburg, Brecksville and Millersburg, according to the information.

    Netwide’s underwriter, General Title, was contractually obligated to make lenders whole. The loss to General Title as a result of Himmell’s conduct was at least $2,111,014, according to the information.

Email Hacking Scam Targeting Real Estate Industry Threatens To Hijack Homebuyers' Closing Cash In Property Transactions

In King County, Washington, reports:
  • A scam that targets the real estate industry is stealing thousands of dollars from unsuspecting home buyers. In some cases, hundreds of thousands.

    Since [...] last spring, real estate and cyber security experts says it's become a growing, nationwide threat to consumers.

    The escrow wire transfer scam was the topic at a recent continuing education class at the Seattle King County Realtors office in Bellevue.

    "These scammers get into your email account," said the organization's president, Sam DeBord. "They find your consumers' information. They know about their transactions and they know when that closing date is."

    DeBord said scammers gain access to client information by creating fake email accounts using the names of legitimate agents, like him, to contact people in the real estate industry.

    DeBord recently discovered his name was being used by scammers trying to get agents to respond.

    "In my case, they just set up a bogus email account! I wasn't hacked," DeBord said, adding that the names and contact information of people in the real estate industry are easily accessible to everyone online.

    Real estate agents who respond, by opening a link, downloading a file or even replying can open the door to a gold mine of names, closing dates and money.

    "As soon as the scammer has access to your email," DeBord explained. "They can not only read the emails that you're getting today, but they can read those in the future, by setting up a forwarding setting."

    By tracking email exchanges they know who's buying, for how much, what the pay-off amount will be, and the timing of closing.

    That's likely how Paul Strohmeier and his wife nearly lost their waterfront dream home last year. As closing day approached they got last-minute closing instructions by email from the title company.

    The names and information were all correct. But, the email was not from anyone at the title company at all.

    A title company impostor who had all the right information was trying to get them to wire their closing money to a new account in Texas. Had Strohmeier not called his title officer to ask questions, he would have lost everything, including all his money.

    "Unfortunately, I've heard of a situation where a buyer lost the entire purchase price in a cash transaction," DeBord told Realtors.

    Reports of huge home buyer losses are putting the entire real estate industry on notice.

    "I don't expect this scam will go away anytime soon," said cyber security expert Kip Boyle by email.

    As founder and CEO of Cyber Risk Opportunities, which advises businesses on reducing their cyber risks, Boyle urges title companies to make their staff aware of the scam and strengthen their processes to block the hackers.

    Boyle's advice to home buyers: Never send financial information, including account numbers, over email. And always verify updated closing instructions in person or with a phone call, never by email or fax.

    Boyer adds that since hackers typically use a phishing attack to gain full access to your email account, everyone should be very cautious about opening file attachments and clicking on unexpected web links.

    Real estate professionals should also be aware of their potential exposure to legal claims if clients lose their money to the scam. Attorneys say last year, a California real estate broker was sued for $513,000. The suit alleges the broker's failure to secure his email account led to a fraudulent wire transfer.

Monday, April 10, 2017

Bankster, Three Insurers Deny Screwing Over Homeowners In Foreclosure With Force Placed Insurance, But Agree To $20+ Million Settlement To Resolve Allegations Of Wrongdoing Claimed In Class Action Lawsuit

In Camden, New Jersey, the Courier Post reports:
  • PHH Mortgage Corp. and three insurers would pay more than $20 million under a proposed settlement of a class-action lawsuit brought by customers of the home-loan firm.

    The payment, which has received preliminary approval from a federal judge in Camden, would resolve claims that some PHH borrowers were required to pay excessive costs for "lender-placed insurance" on their homes.

    According to the proposed settlement, an alleged kickback scheme between PHH and its insurers targeted "some of the most vulnerable members of the housing market," including people "struggling to protect their homes from foreclosure."

    PHH denies any wrongdoing and asserted its "lender-placed insurance practices are proper and structured in compliance with all applicable laws."

    The company said it agreed to the proposed settlement "in order to avoid the distraction and expense of litigation.”

    The pending agreement notes the dispute "has been vigorously contested for several years." The agreement would resolve three class-action lawsuits that have been filed since 2012 in federal court, Camden.

    The suits also name three insurance firms as defendants – American Security Insurance, Standard Guaranty Insurance and Voyager Indemnity Insurance.

    Under the settlement, PHH and the insurers would provide more than $18 million in "monetary relief" for PHH customers, as well as up to $4.2 million for the plaintiffs' legal costs. The settlement also calls for "meaningful injunctive relief" that would bar the practices alleged in the lawsuits.

    The settlement covers an unspecified number of PHH borrowers who were charged between Jan. 1, 2006, and July 31, 2015 for "a hazard, flood, flood gap or wind-only (lender-placed insurance) policy."

    Customers would get from 6 percent to 11.5 percent of the net premium on the disputed policies.

    Among other points, the pending agreement notes PHH denies overcharging customers and contends it was entitled to obtain the insurance "on behalf of borrowers who refuse to maintain the coverages required under the mortgage."

    U.S. District Judge Noel Hillman granted preliminary approval at a Feb. 28 hearing. He is to hold a hearing on final settlement approval on July 27.

Pre-Probe Political Buy Off Or Mere Coincidence? Efforts To Subpoena Notorious Bankster's "Foreclosure Machine" Once-Headed By U.S. Treasury Secretary Called Off After Outfit 'Donated' Over $60K To California Democrats

Bloomberg BNA reports:
  • A potential investigation of foreclosure abuse by OneWest Bank, which was owned at the time by Treasury Secretary Steven Mnuchin, was abandoned after OneWest donated to the political campaigns of then-California Attorney General Jerry Brown (2006-2010) and then-incoming California Attorney General Kamala Harris (2011-2016).

    The donations occurred in 2010, shortly after an attempt to subpoena the bank and while the bank was in negotiations with the attorney general’s office, but before any formal investigation was opened.

    According to a memorandum from the California attorney general’s office, no court action was filed “despite strong recommendations.”

    Donations by a business being investigated might be perceived as a conflict of interest, but campaign finance reform advocates Kathay Feng from Common Cause and Brendan Fischer from the Campaign Legal Center indicated that the situation is just a subset of the larger concerns about money in politics.

    Homeowner advocacy groups regularly accused Mnuchin of running OneWest as a “foreclosure machine” for its actions during the housing crisis, an allegation Mnuchin denied in his January 2017 Treasury secretary confirmation hearings in Washington.

    Even though OneWest was targeted by homeowner advocacy groups, the bank escaped some of the penalties that other banks faced during the period, a Bloomberg BNA analysis of records has shown.

    Foreclosure Crisis Investigation

    Attorney General Brown in 2009 publicly asked mortgage servicers, including OneWest, to try and stop the wave of foreclosures enveloping California. A subpoena was issued by the California attorney general’s office to OneWest’s subsidiary, Financial Freedom Acquisition LLC, later that year, according to a memo recently leaked to The Intercept, an online publication. The memo is available on the Intercept website.

    In 2010, OneWest contributed close to the state maximum amount for individuals to the 2010 Democratic gubernatorial campaign for Brown ($25,000), the attorney general campaign for Harris ($6,500), also a Democrat, and to the California Democratic Party ($32,400), according to numbers compiled from the National Institute on Money in State Politics. Otherwise, OneWest made no other political contributions.

Expiration Of NYS Statute Of Limitations Sinks Foreclosing Bankster; Couple Score Win In Battle To Wipe Out Their Home Mortgage

In New York City, Reuters reports:
  • A federal judge has granted two New Rochelle, New York homeowners' request to have their mortgage canceled, ending their nearly 10-year battle to keep their house after defaulting on a $544,000 mortgage loan they took out in 2006.

    The decision on Thursday [March 30] by U.S. District Judge Katherine Polk Failla in Manhattan was a defeat for Deutsche Bank National Trust Co, trustee for a trust that owned the mortgage loan, which had argued that the couple was getting a free house on a technicality. Under New York state law, Vito and Marion Costa have a right to the property mortgage-free because a six-year statute of limitations on foreclosing on it had passed, Failla said.
Source: Homeowners mortgage-free after judge finds foreclosure time-barred.

For the court ruling, see Costa v. Deutsche Bank National Trust Co., 15 Civ. 2674 (KPF) (S.D.N.Y. March 30, 2017).

Sunday, April 09, 2017

Punishing Ground Lease Terms, Long-Overdue Capital Improvements Kill NYC Co-Op; Oncoming Financial Peril Forces Unit Owners To Dissolve HOA, Unload Apartments Soon After Investor Buys Land Out From Under Them

In New York City, Habitat Magazine reports:
  • A Chelsea co-op dissolves after the land is sold out from under it.

    A land-lease – also known as a lease-hold or a ground-lease – is an unusual arrangement in which a cooperative or condominium owns its building but pays rent on the land it sits on. These rental agreements are usually for long terms, and when the term expires, the co-op or condo is in a ticklish position. Sometimes, the city’s 100 land-lease co-ops live happily ever after – after negotiating a favorable new lease or arranging to purchase the land beneath their building. And sometimes, the land-lease leads to disaster.

    Meet Melissa Green, a former board member at the land-lease co-op at 101 West 23rd Street. When she moved into the six-story, 80-unit building in Chelsea in 1987, Green, a commercial real estate banker, thought she knew what she was getting into.

    “I was aware of the risks of ground-leases,” she says, “but since they are often renewed, I wasn’t worried about that, especially since the offering plan said that the co-op’s underlying mortgage was set to mature in 1999 with zero balance. But that turned out not to be true. There was a flurry of lawsuits, and the original co-op was replaced with a new co-op (with all the same shareholders) in 2000 that negotiated a new 40-year ground lease.”(1)

    The problem was that the new lease was onerous from the start. Maintenance fees rose by 30 percent that year, and jumped significantly again in 2008. “You could see the direction this was going, and it wasn’t good,” says Green. “It was a nightmare, and I lost sleep over this for years.”

    Then, in 2014, residents got another nasty surprise: after trying for decades to buy the land beneath their building – only to be rejected every time – the board learned that the land had been sold to the Brooklyn-based investment firm E&M Associates for the astronomical sum of $95 million.

    The next scheduled rent hike was going to be especially punishing. “Land values had gone up so dramatically that maintenance charges could have doubled or even tripled,” says Green. In addition, long-overdue capital improvements would have required additional maintenance increases or assessments. “The residents here are middle-class. They could never have afforded that.”

    When the board members crunched the numbers, the picture wasn’t pretty. “Because there was a real possibility of bankruptcy and foreclosure, we concluded it was in the shareholders’ best interest to find a financial solution that would benefit as many of them as possible,” she says. “We interviewed numerous developers, trying to find one who was interested in a partnership with us, maybe buying us out at a reasonable price or coming up with some creative solution. But ultimately everyone dropped out. It was profoundly disappointing.”

    The only logical partner left was E&M Associates. The board reached a deal with E&M where the shareholders were given the opportunity to sell at a fixed price per share; in order for the deal to go through, at least 81 percent of shareholders had to agree to sell.

    A meeting was held to inform shareholders of the terms. “We made it clear every unit was getting an individual contract and that the decision to sell was entirely their own,” says Doug Heller, an attorney at Herrick, Feinstein, who represented the board. In the end, 87 percent of the shares were sold. But some owners refused and filed a lawsuit in state Supreme Court, claiming the board undersold the property and asking for $25 million in damages. The board denies the allegations, and the suit is pending.(2)

    “The board was vilified as the devil incarnate by non-selling shareholders,” Green says. “I’m a good person, not a criminal, embezzler, thief, or anything we’ve been accused of. None of us were happy about this outcome.”

    Green and her husband have since downsized to a small one-bedroom apartment on the Upper East Side. “We miss Chelsea, our old apartment, and our old neighbors,” she says. “My experience has taught me that I would walk clear across the continent to avoid purchasing a land-lease again.”
For the story, see A Land-Lease Can Kill a Co-op.
(1) Periodic escalations in ground lease payments (and renewals of expiring ground leases under onerous terms) for co-ops & condominiums that don't own the land their buildings are situated on appears to be a big problem for unit owners in those buildings. See, for example:
(2) See Galil, Chelsea co-op board conspired on building sale, residents claim (A lawsuit alleges that bribery may have taken place at 101 West 23rd Street).

    Elevated Ground Level For Recently-Constructed Residential Development Believed To Be Cause Of Poor Drainage, Sewage Stench, Possible Drinking Water Problems For Adjacent 44-Unit Mobile Home Park That Threatens To Make It Uninhabitable

    In Puyallup, Washington, The News Tribune reports:
    • Who knew that living next to a new upscale neighborhood could be so dreadful?

      Certainly not the residents of Puyallup’s Elmwood Mobile Manor. When the fields next to this modest 44-unit mobile home park began their transformation into a pleasant new neighborhood with neatly paved and landscaped streets lined by stately homes, the change appeared to be positive.

      That neighborhood, dubbed “Stewart Crossing” after the arterial that bordered it to the south, was indeed popular with potential buyers and residents. The first two phases sold out quickly.

      But living next to Steward Crossing has proved to be a nightmare for residents of the co-op mobile home park. So much so, that when the developer asked the city to approve the next two phases, Elmwood residents went to the council to oppose it.

      It all has to do with water. Too much of it and in all the wrong places, the trailer park residents say.

      Several mobile homes’ septic systems have failed. Others are becoming balky. During rain storms, water fills yards and pools in driveways. And drinking water systems may be tainted.

      Jesus Arvilla’s family has been forced to use a portable outhouse because their septic tank failed.

      “Every time they pumped it, it would fill with water five minutes later,” he said. “When we want to take a shower, we have to go to my auntie’s house.” His aunt lives in Buckley. That’s a 30-minute, 16-mile drive.

      Neighbor Susana Fregoso said that when the family comes home, the house smells of sewage. When they use water, the waste emerges in their yard.

      Residents blame these woes, which threaten to make their homes uninhabitable, on the surrounding development. Because of federal flood-prevention requirements, the developer raised the ground level between three and four feet. Now Elmwood Mobile Manor is the lowest spot in the immediate neighborhood.

      Which means that water that falls on the mobile home park, blocked by the dam of fill dirt, now ponds in Elmwood instead of flowing into Clark’s Creek and the Puyallup River. And some of the water that soaks Stewart Crossing flows downhill to Elmwood.

      That water has saturated the trailer park’s septic system drain fields and filled some septic tanks. The sewage has no place to go, residents say.

      They elevated the land all around us,” said Elmwood resident Eli Berniker. “Because they elevated it, the water in our park is raised. And its causing a problem with our septic tanks because they can’t drain properly.”

      The trailer park residents have spent more than $80,000 to create a new drainage mound on what was formerly the park’s guest parking lot. That system handles the sewage from two homes and possibly has capacity for a third. But the community has no money and no land to expand the new system.

      Other Stewart Crossing neighbors not in Elmwood have also complained the development has altered drainage.

      David Toomey, owner of Toomey Auto Electric on 70th Avenue west of Stewart Crossing, had questions for the council at last week’s meeting.

      “We all know we have a problem,” he said. “I have two questions: What the hell are you going to do about it? And how soon are you going to do it?”

      The council removed the approval of the Stewart Crossing plats from the agenda and asked the city’s engineers to come up with a solution.

      Puyallup City Engineer Mark Palmer said city officials were studying the issue.

      Stewart Crossing’s owner Kurt Wilson said he’s sympathetic with the Elmwood residents. He pledged to work with them to solve the problem.

      He noted that the issues may in part be the result of exceptionally heavy rains this year.

      “Twelve months’ worth of rain in four months,” he said. Likewise, he noted that the park’s septic systems are old and don’t meet modern codes.

      Stewart Crossing has followed city rules to the letter, he said.

      Residents acknowledge the systems are old, but that they all were functioning properly when they were inspected two years ago before the residents formed a co-op to buy the park.

      Puyallup Mayor John Hopkins said he believes the city, the residents and the developer all are working diligently to find a solution.

      The city plans on hiring a hydrologist to study water-flow patterns in the area and to recommend a solution to Elmwood’s woes.

      “Our engineers aren’t groundwater experts, so we’re asking an expert to tell us what’s wrong,” he said.

      To buy time, the city and the developer last weekend pumped out residents’ septic tanks. Unfortunately, one of those septic systems, which serves two mobile homes, failed during the pumping.

      Hopkins, Pierce County Councilwoman Pam Roach and Puyallup Councilwoman Robin Farris met with residents last weekend to update them on how the city plans to proceed.

      James Ott, an Elmwood resident who helped organize residents to speak at the council last week, said the solution needs to come soon.

      We’re being run out of town without a gun,” he said. “We need to put our thinking caps on now how to fix this solution.”

    Jury Recommends 89-Year Prison Sentence For Owner Of Residential Care Facility For Abusing Fiduciary Duty To Fleece Rent-Paying, Mentally Disabled Resident Out Of $115K (& Then Failing To Pay Income Tax On Pilfered Loot)

    From the Office of the Missouri Attorney General:
    • On March 23, 2017, a St. Francois County jury found Christina Halter, 52, guilty of one count of Medicaid Fraud, two counts of financial exploitation, one count of obstructing a Medicaid Fraud investigation, one count of failing to file an income tax return, one count of failing to pay income tax, and one count of attempting to evade income tax liability. The jury recommended a sentence for Christina Halter of 89 years in the Missouri Department of Corrections. Following Christina Halter’s conviction, on March 28, 2017, Donald Halter, 56, pled guilty in St. Francois County Circuit Court to the same seven counts.
      Christina Halter and Donald Halter, husband and wife, co-owned a residential care facility in Park Hills, Missouri, and were the fiduciaries for a mentally disabled veteran who resided at their facility.

      As the veteran’s fiduciary, the Halters were supposed to deposit into a resident trust account a $209,000 disability payment the veteran resident received from the United States Department of Veterans Affairs. Instead, the Halters deposited the check into their own business account. In less than sixty days, the Halters spent all of the veteran’s money by, among other purchases, buying three cars for themselves and their family.

      In total, the Halters financially exploited the veteran out of $115,000. In addition, the Halters submitted to Medicaid over 1,000 false claims for nursing services that were not provided to the residents of their facility, amounting to over $28,000.00. Finally, the Halters failed to file an income tax return, failed to pay their income tax liability, and attempted to evade income tax liability for tax year 2012.

      “Criminal actions like those of the Halters will not be tolerated in Missouri,” said [Missouri Attorney General Joshua] Hawley. “Furthermore, let this verdict signify to anyone trying to take advantage of our most vulnerable citizens that this behavior will not stand. Our office is firm in its commitment to protect all Missourians, and through the collaborative efforts of our attorneys with local law enforcement in St. Francois County, that is exactly what happened.”

      The investigation into the Halters’ conduct was a joint investigation led by the Missouri Attorney General’s Medicaid Fraud Control Unit in cooperation with the Missouri Department of Health and Senior Services, the Missouri Medicaid Audit and Compliance Unit, the Missouri Department of Revenue, and the United States Department Veteran Affairs.

    Cops: Dirt Thief Dug Up, Snatched & Flipped Over 3,000 Tons Of Soil From Unwitting 80+ Year Old Widow's Land

    In Senoia, Georgia, WAGA-TV Channel 5 reports:
    • A Fayetteville man was arrested for stealing and selling more than 3,000 tons of dirt from a woman’s property in Senoia.

      Dennis Smith, 65, of Fayetteville, was arrested after Senoia police said more than 183 dump truck loads of dirt were excavated and stolen from the property without the owner’s knowledge.

      Investigators describe Smith as a dirt broker, someone who finds dirt for contractors working in the area. Police said Smith told a contractor he had permission from the land owner to remove dirt from the property. Police said not only was that a lie, but the property owner he identified as giving him permission had been dead since 2015. The property was now owned by the owner’s widow, a woman in her 80s who knew of no dirt deal.

      A truckload of dirt holds about 18 tons; multiply that by 183 and that’s enough dirt to cover an entire football field, a foot and a half deep.

      Police said the contractor who removed the dirt is also an innocent victim in the case. They said he repaired the property to make it look better.

      Smith was charged with theft by deception and forgery in the first degree. He has since bonded out of the Coweta County Jail.

    Lot-Leasing Mobile Homeowners Petition Gov't To Halt Landlords' Onerous 10% Commission Clip Every Time A Home Is Sold; Charge Is A "Theft Of Equity" That Leaves Some Owners Trapped In Their Homes, Say Advocates

    In London, England, BBC News reports:
    • Thousands of mobile home owners have called on the government to end the "theft" of part of the value of their homes when they are sold.

      Currently a commission charge of up to 10% is paid to site owners. A petition signed by 40,000 park home owners was delivered to Downing Street by campaigners, who said site operators were "making fortunes". The government has said the commission is "legitimate income" and "does not result in profiteering".

      'Making fortunes'

      Park home owners said most operators were charging the maximum commission, which was set at 10% when it was last amended in 1983. A parliamentary debate in 2014 heard that homes could be worth between £150,000 and £200,000.

      The Park Home Owners Justice Campaign said the charge was a "theft of equity", leaving some owners unable to move. Founder Sonia McColl, from Wareham, Dorset, said:

      "Thousands of people all over the country are literally trapped in their homes by this charge. "If they want to move on it's got to be inferior because they don't have the money after parting with 10% of their equity."

      The government has previously said the commission was an "important income strand" for site owners, which could not be reduced without increasing annual rents by between 20% and 32%. It has pledged to carry out a review of the park homes industry this year.

      A government-commissioned study in 2002 said that commission payments created a "financial incentive for unscrupulous operators to 'churn' their residents." It found that at least 7% of park home owners had experienced pressure to leave.