Saturday, May 13, 2017

Code Violations, Failed Housing Authority Inspection Spell The End Of Section 8 Rent Subsidies For Landlord Of Cincinnati Apartment Complex; 59 Low Income Families Get Weeks To Pack Their Bags & Vacate Premises

In Cincinnati, Ohio, WCPO-TV Channel 9 reports:
  • In just a few weeks, Kimberly Griffith will have to put her life into boxes and start over again.

    Griffith has lived at Eagle Watch, a large apartment complex off Sunset Avenue, since 2013. She receives Section 8 housing assistance to stay there; dozens of her neighbors do, too.

    All 59 families just found out the complex failed to meet the Cincinnati Metropolitan Housing Authority's housing standards.

    Lesley Wardlow, a CMHA spokesperson, said the city reported several building code violations. Problems included issues with the roof and plumbing lines, according to online inspection records.

    Also, an entry driveway is collapsing. Griffith said it's been sliding down a hill "for a long time, and the problem is just getting worse and worse."

    The city ordered the property owner, Zingenuity Eagles Watch LLC, to fix those issues. Some of that work is already underway, online records indicate.

    But Griffith and others are running out of time: They learned they have to be out by the end of June. It takes four to six months to find quality, affordable housing in Cincinnati, Griffith said.

    "I never expected to have to just pick everything and just leave all of a sudden," she said.

    While Griffith has lived at the complex for four years, Kenneth Smith hasn't even been there four months.

    "I just moved here -- I just got here in January," he said. "I spent a lot of money moving here and I hadn't expected to move, so there's not a whole lot of money saved up for another move like that."

    Smith said he tried to talk to the property's owner, but the company is holding his deposit for 30 days after he moves out. The situation leaves him feeling homeless, he said. He fears he might end up on the street.

    "It makes me really angry to know that you can be living somewhere, then wake up one morning and you have nowhere to live," he said.

    Both Smith and Griffith said they'd like to see the property owner help with relocation costs, given the short timeline. Griffith said she worries for her neighbors who also have to move.

    "It's hard for them to just pick everything up and just move -- nobody has the funding for that," she said. "So I think somebody should be held responsible to make sure that everyone that has to leave this property has the proper funding to find somewhere to live."

    WCPO attempted to reach the property owner, Zingenuity Eagles Watch, for comment.

Fire, Health, Zoning Violations, Electricity Shutoff Lead To Immediate Code Enforcement Boot For 20 Surprised Tenants In Now-Condemned Extended Stay Motel; Red Cross Steps In To Ease Transition For Angry Displaced Residents

In Tucson, Arizona, Tucson News Now reports:
  • Tenants staying at a Tucson extended stay motel are out on the streets after they discovered their building was condemned on Monday, April 24.

    Tenants living in the South Building of the Fortuna Inn and Suites just north of downtown at 333 W. Drachman Street, said they were shocked to come back here and see code violation signs.

    “I’m angry, very angry. Opened up the doorway and all the hallways were black,” tenant Helina said. She did not want to give her last name.

    All 20 tenants living in the South Building of the Fortuna Inn and Suites woke up Monday to find their electricity had been shut off and Tucson police officers at their door.

    “What were you told to do?” Tucson News Now asked. “Get out,” Helina said.

    Helina and another tenant, Joleen Ramos, said they have lived in the building since last year and said they pay their rent on time each month, including April. But because of multiple code violations the city of Tucson has condemned the property.

    “Frustrating. We either deserve our money back from this month’s rent or a place to go,” Ramos said.

    Cristina Palsgrove with the city of Tucson’s Code Violation division said the property manager was served a notification five days ago that code enforcement would take action Monday.

    “Management was notified on Thursday,” Palsgrove said. But apparently there was no warning for tenants.

    “I’d like to know the reason behind that. Why we weren’t told,” tenant Fran Banks said.

    Tucson News Now went inside the motel to get answers. But no one would come to the front desk.

    The city of Tucson said the violations include improper zoning. “It’s a motel and they’re not zoned for long-term occupancy or equipped for that,” Palsgrove said.

    Palsgrove said there was also a fire code violation with exposed wiring and a number of health code issues. All of this has left tenants scrambling to find another place to live.

    Tucson News Now: Where does this leave you? “Out in the heat basically,” Ramos said.

    The Red Cross was working with tenants to place them in shelters and help find them alternative places to live. If you would like to get in contact with them call, 520-318-6740.

    As far as the owner of the property. An employee of Fortuna Inn and Suites provided Tucson News Now with the man’s name and email. He’s associated with a jewelry company that manufactures and imports jewelry out of Hong Kong. Tucson News Now has reached out to him through email for a comment but we have not received a response.

Prohibitive Cost To Upgrade Century-Old Apartment House To Current Code Leads City To Boot Over Two Dozen Tenants, Leaving Long-Time Landlord With Vacant Building

In Claremont, New Hampshire, Valley News reports:
  • When city officials met earlier this year with the owner of a Pleasant Street apartment building that had multiple serious life-safety code violations, City Manager Ryan McNutt made sure all those involved were on hand to discuss the problem.

    That way, there was no miscommunication, McNutt said. He stressed that all the city departments responsible for code enforcement, along with police and the city attorney, were present when the building owner was given a complete record of any and all efforts to rectify the violations.

    The violations were so severe that McNutt ordered the tenants to vacate their apartments, just a block south of Opera House Square, in early March.

    “There was no working fire alarm panel, no smoke detectors, wiring violations,” McNutt said. “There was no ability to warn residents if there was a fire.”

    But the owner, Walter Fawcett, of Wolfeboro, N.H., said the city refused to work with him to bring the Goddard Block at 54-62 Pleasant St. up to code at a reasonable cost and now the city has another vacant building in need of repair that he doubts anyone would be willing to invest in.

    According to Fawcett, code improvements would cost about $700,000 based on an architect’s code analysis he had done several years ago.

    The city’s action, which forced out the tenants of 26 units on the top two floors of the three-story building, was the result of a new program instituted by McNutt almost as soon as he arrived in February.
    In Fawcett’s view, the city would not work with him so he could meet code requirements at a lower cost. Fawcett said when he bought the Goddard Block in 1990 it was a “derelict, vacant” building that he spent about a year and a half renovating to bring up to existing code.

    By 1992, the apartments were filled and he had commercial tenants on the ground floor. But when the recession hit toward the end of 2008 and Fawcett began seeing commercial vacancies, problems started to mount and got worse after the city updated its building and life safety codes for older buildings a few years ago. According to the city’s assessing records, the building was constructed in 1900.

    They wanted us to upgrade to the current code,” which was prohibitively expensive Fawcett said in a Wednesday [April 19] phone interview.

Looking To Boot Tenants While Avoiding Court & Eviction Process, Sneaky Landlord Stands Accused Of Instigating Coordinated Effort To Shut Off Water Service, Then Have Code Enforcement Condemn Premises & Give Residents Immediate Heave-Ho

In Niagara Falls, New York, WIVB-TV Channel 4 reports:
  • Dallas Mort pays his bills, works hard, and tries to be a good citizen, but on March 17, the Niagara Falls Water Board shut off his water. As a result, Mort had no running water, so a Niagara Falls code enforcement officer condemned the property as unsuitable to live in.

    The Niagara Falls grandfather was surprised and angry, “I had a knock on the door and it was the Water Board, there to turn off my water. When I went outside to argue with them the city inspector came around the corner, they turned off my water and condemned my house all at the same time.”

    The Water Board disconnected Mort’s water service because his landlord, Ralph Pescrillo, asked for the shut off, a tactic whose sole purpose it seemed, was to force Dallas and his fiancée to vacate the property—a tactic that Pescrillo is accused of using on other tenants.

    Dallas used to work for Pescrillo, but when he filed a complaint with the State Labor Department, and won a judgment, it all seemed to go downhill, “He is supposed to be paying me a lump sum of money for damages for firing me.” How much is he supposed to be paying Mort? $30,000.

    In what seemed to be an act of retaliation, Mort said, Pescrillo tried to evict him from the house on Grand Avenue, but a judge ruled in Dallas’ favor, saying he could stay in the house until his landlord worked out the settlement with the Labor Department. The settlement is still pending.

    Instead, Mort said Pescrillo sidestepped court and had the water turned off, yielding the same effect, and cheaper–forcing Dallas to leave, but without going to court. The Water Board charges a $75 disconnection fee, “He went ahead and got my water turned off, got my house condemned, so I had to move.”

    With his house condemned, Mort said he was actually homeless for a couple of weeks, forcing him to stay with family and friends as best he could, until a good friend allowed him to stay in the house where he is living now.

    News 4 has learned at least 3 other people have been forced out of their homes, using this tactic, including a pregnant mother who has been without running water for more than three weeks, and there are likely more.

    Officials for the Niagara Falls Water Board told News 4 they are taking another look at their shutoff policies, and may be making changes. When contacted by phone, Ralph Pescrillo was asked for an explanation of the water shutoff tactic, but he refused comment.

Operator Of Assisted Living Home Serving Dozens Of Low-Income People w/ Chronic Mental Health Issues Blames Poor Medicaid Reimbursement Rates For Having To 'Transition' Into Providing Less Costly Services, Gently Giving Current Residents The Boot w/ 6-Month Relocation Effort

In Spokane, Washington, the Inlander reports:
  • By the end of October, the 127-bed Carlyle Care Center will stop providing round-the-clock care to people with chronic mental illness, nonprofit Pioneer Human Services announced to staff and residents on Wednesday, April 26.

    The Carlyle, at Post Street and Second Avenue in downtown Spokane, often serves people who would otherwise be homeless, are transitioning out of Eastern State Hospital or Sacred Heart's Adult Psychiatric Unit, are in hospice care, or have a court order to be in a residential care facility, according to Pioneer.

    The people who live there, long-term or short-term, are referred in, and often on Medicaid. They receive meals, medications, nursing care, room cleaning, activities and other care.

    Because Medicaid rates haven't kept pace with the cost of providing that intensive care, the facility will have to transition and provide a different type of service, says Hilary Young, a Pioneer spokeswoman.

    "Like a lot of publicly funded services, rates have not kept pace with the costs," Young says. "It's really expensive."

    Some of the residents at the Carlyle already transition in and out in a manner of weeks or months, so some of them would already be on their way to lower-level service facilities, she says. About half the residents stay for more than a year, and the other half stay for less time.

    "Over the next six months we'll be working with partners in the community and other assisted living providers to secure housing for everybody who lives at the Carlyle today," Young says. "Words like 'closure' tend to cause panic, I would say this is a transition. There are still going to be housing resources for high-needs people, and Pioneer still expects to be in that role, just not in assisted living."

    When residents were told about the change on Wednesday, Frontier Behavioral Health, which provides mental health services to many of the people who live at the Carlyle, had staff on site to make sure they knew that a team of people would help them transition through this, says Jeff Thomas, Frontier's CEO.

    "The fact there’s that amount of time is really fortunate," Thomas says. "It's really a testament to Pioneer’s commitment to helping people transition out."

    While the news could be unsettling or concerning for the residents and community, Thomas says both agencies will work with the Spokane County Regional Behavioral Health Organization and other care facilities over "the gift of time we do have" to find people stable housing, and patients will continue to receive mental health care from Frontier.

    "We were there, so they had a sense there’s a community team approach working to assist them, so they aren’t going to be kicked to the curb or put out in the cold," Thomas says.

    It's still not clear what the Carlyle will transition into, though it may look more like supportive affordable housing, where residents are typically much more independent, and don't need meals or nursing services, but still have access to on-site case managers or treatment groups, Young says.

Friday, May 12, 2017

Out-Of-Control Landlord's "Unrelenting Campaign Of Harassment, Reductions In Services, & Unlawful & Fraudulent Evictions" Targeting Rent-Controlled Tenants To Cost Her Nearly $2.4 Million, Judge Rules; Special Place Reserved For Her In "Abusive Landlord Hall Of Fame": DA

In San Francisco, California, the San Francisco Chronicle reports:
  • Citing a pattern of “bad-faith harassment, retaliation and fraud” against rent-controlled tenants, a San Francisco Superior Court Judge has ordered a landlord to pay the city nearly $2.4 million in penalties for violations of state housing law.

    In a tentative ruling, Judge Angela Bradstreet said landlord Anne Kihagi and her associates had “purposefully destroyed their tenants’ quiet enjoyment and any sense of sanctuary through their long, continued and unrelenting campaign of harassment, reductions in services, and unlawful and fraudulent evictions.”

    “Their reprehensible conduct had a terrible effect on the lives of multiple San Francisco citizens,” Bradstreet stated.

    The judge’s tentative decision also voids pending evictions, including at 1135-1139 Guerrero St., where Kihagi is in the process of evicting several elderly tenants. The ruling bars the landlord from having contact with past, present or future tenants. Instead, she must hire an independent property manager, who must be approved by the city. Kihagi must also reimburse the city for all legal and investigation fees related to the case, which will top $2 million.

    “I’ve gone after a lot of lawless landlords in my time, but Anne Kihagi has a special place reserved for her in San Francisco’s abusive landlord hall of fame,” said City Attorney Dennis Herrera, whose office sued Kihagi in June 2015. “You can’t come to this city and lie, cheat and steal your way to massive wealth on the backs of residents. We’re not going to allow it.”

    Kihagi, a native of Kenya and a former investment banker, started buying properties in June 2013 in Noe Valley, the Castro, the Mission and North Beach. She had previously invested in multifamily properties in West Hollywood, where she was also sued by the city for violating rent-control regulations. In April, a judge in West Hollywood ordered her jailed for five days for violating state housing law, a decision Kihagi is appealing.

    Defense lawyer Karen Uchiyama did not return phone messages Tuesday. In court she said the case against her client was manufactured by “a tenant-activist group that influenced the city to (make) a scapegoat of Anne Kihagi.”

    Kihagi’s business model consisted of buying buildings with longtime, rent-controlled tenants paying below-market rents and then using a wide range of methods, both legal and illegal, to get rid of them, according to the city’s lawsuit. Typically she offers to buy out tenants, and if that doesn’t work, the city’s lawsuit alleged, she threatens an “owner move-in” or a “relative move-in” eviction, both of which are allowed under state rent-control laws. If that doesn’t work, she has resorted to threats and harassment, the city’s suit contended.

    In total, Kihagi and family members invested $24 million in San Francisco real estate, assembling a residential portfolio with 50 units. An expert witness for the city stated that by evicting rent-controlled tenants and replacing them with tenants paying much higher rents, Kihagi was able to add $8.8 million in value to the properties.

    The Department of Building Inspection documented widespread violations at Kihagi’s properties, and the court found another 1,251 violations of the state’s unfair competition law.

    “It’s been a long journey,” said Dale Duncan, who moved his family out of a Mission District apartment building that Kihagi owned after months of fighting eviction. “I really appreciate how much work the city attorney put into this, and I hope that it sends a powerful message. We live in a society of laws, and it’s nice to see it functioning.”

Slick Landlord's Attempt To Boot Long-Time, Rent-Controlled Tenant By First Tricking Her Into Not Paying Rent Soon After Buying Premises, Then Immediately Filing For Eviction Over Non-Payment To Cost Him $30K In Settlement Of City Harassment Lawsuit

From the Office of the Santa Monica, California City Attorney:
  • The Santa Monica City Attorney’s Office has reached a settlement with former local landlord Sean Gharib. Under the terms of the deal, Gharib will pay the City $30,000 to settle the City’s pending harassment lawsuit against him.

    Gharib previously owned a single condominium unit in a complex on Ocean Avenue in Santa Monica. The condo was being rented out, for more than 30 years, to a longtime tenant named Nina Edwards.

    The City sued Gharib in Santa Monica Superior Court in 2015, alleging violations of the local Tenant Harassment Law. The City claimed that, shortly after he bought the property in 2014, Gharib tricked Edwards into not paying rent for the first month after the purchase; and then immediately filed eviction papers in court to get her out – for non-payment of rent.

    At the time, Edwards’s controlled rent was $850. Had she vacated the condo, its market rent value was at least $2,000 per month.

    The City alleged that just after Gharib bought the condo, Edwards asked him to whom she should pay her rent; and that he led her to believe she could hold off on paying until he got back to her later. The very next day, Gharib filed an Unlawful Detainer lawsuit in court, seeking to evict Edwards and her son.

    Santa Monica’s Tenant Harassment Law prohibits landlords from pursuing evictions based on knowingly false facts; and from inducing tenants to vacate their homes through “fraud, intimidation or coercion.”

    After the City filed the lawsuit, the parties engaged in civil discovery, depositions, and contested motions in Superior Court. This included a legal challenge to the city’s harassment law, which the City successfully defended.

    The case was finally resolved at a settlement conference before a Superior Court judge. The proceeds of the settlement will go to reimburse Edwards’s damages and the City’s attorneys’ fees.

    The case was scheduled to go to trial in August 2017.

    Gharib had since sold the property and no longer owns rental property in Santa Monica.

    “This is a cautionary tale for those landlords who would consider using deception or intimidation to get their tenants to leave,” said Deputy City Attorney Eda Suh. “Tenants like Ms. Edwards pay their rent on time, comply with their leases, and just want enjoy living in their homes. We will use all the legal tools available to vigorously protect tenants from being illegally forced out of Santa Monica.”

Bankster's Failure To Address Chicago Tenant's Claim That She Was Entitled To $10,600 Relocation Fee As Required By Local Ordinance Sinks Foreclosure Eviction Attempt

From a recent post in The Consumer Financial Services Blog:
  • The Appellate Court of Illinois, First District, recently reversed a summary judgment ruling in favor of a mortgagee on its post-foreclosure forcible entry and detainer claim, finding genuine disputes as to material facts where the tenant presented evidence that she was a qualified tenant under the Chicago Protecting Tenants in Foreclosed Rental Property Ordinance, and that the mortgagee did not pay her the $10,600 relocation assistance fee required by the ordinance.
    Initially, the Appellate Court considered the mortgagee’s argument that compliance with the ordinance’s relocation provision is not a condition precedent to a forcible entry and detainer action.

    The mortgagee argued that failure to comply with the ordinance could not bar this action because the ordinance states: “The owner shall pay the relocation fee to the qualified tenant no later than seven days after the day of complete vacation of the rental unit by the qualified tenant.” Chicago Municipal Code § 5-14050(b) (added June 5, 2013). Thus, the mortgagee claimed that any obligation to pay the relocation fee is only triggered when a qualified tenant vacates the property.

    The Appellate Court disagreed, concluding that the mortgagee’s alleged failure to comply with the ordinance’s relocation provision is an affirmative defense to a forcible entry and detainer action.
    The Appellate Court next analyzed if a genuine issue of material fact existed regarding whether the tenant “was a qualified tenant pursuant to a bona fide rental agreement under the Ordinance.” Specifically, the Appellate Court examined whether the initial pre-foreclosure lease constituted a bona fide rental agreement.

    The Appellate Court observed that the original pre-foreclosure lease contained a valid month-to-month tenancy provision. In addition, the tenant’s affidavit averred that she had resided in the property since before the foreclosure pursuant to a rental agreement that required her to pay $950 a month to the property owner.

    Although the tenant’s affidavit did not also state that she paid the rent each month, the Court held she did not have to prove her case to withstand summary judgment. In the Court’s view, the evidence that the tenant had a rental agreement that required her to pay rent every month on the day the mortgagee became the owner of the foreclosed property was sufficient to defeat summary judgment. Chicago Municipal Code § 5-14-020.

Federal Appeals Court OKs $47.5K Award To Bankrupt Tenant For Emotional Distress, Punitive Damages Against Out-Of-Control Landlord For Harassment That Violated Automatic Stay

From a recent post on the New England Bankruptcy Law Blog:
  • Landlords should use caution in attempts to take possession of leased space once a tenant files bankruptcy. Recently, in Lansaw v. Zokaites, the Third Circuit Court of Appeals upheld an order of the Bankruptcy Court for the Western District of Pennsylvania awarding of emotional distress damages and punitive damages against a landlord who violated the automatic stay.

    Under section 362(a) of the Bankruptcy Code, the filing of a bankruptcy petition operates as a stay against debt collection activities by creditors. For violations of the stay, individual debtors can recover actual damages, including costs and attorneys’ fees, and punitive damages.

    In Lansaw v. Zokaites, the debtors operated a daycare in leased space. The court found that the landlord violated the automatic stay on three separate occasions.

    The first violation consisted of the landlord and his attorney visiting the daycare during business hours to take photographs of the debtors’ personal property. During that visit, the landlord intimidated one of the debtors and backed her against a wall.

    For the second violation, the landlord visited the daycare after business hours using his own key to enter and padlocked and chained the doors. The landlord left an “interim standstill agreement” on the door, which provided that the landlord would remove the chains if the debtors agreed to certain conditions, including reaffirming the lease with the landlord.

    For the third violation, the debtors had found a new property to lease but still had property in the old leasehold. The landlord directed his attorney to send a letter to the debtors’ new landlord, demanding that the new landlord terminate a lease with the debtors, and stated that, if the new lease was not terminated, the landlord would file a complaint against the new landlord. The landlord’s attorney also called the new landlord multiple times in an attempt to have the new lease terminated.

    For these violations of the automatic stay, the debtors were awarded $7,500 for emotional distress, $2,600 in legal fees, and $40,000 in punitive damages from the landlord.

    In the opinion, the Third Circuit Court of Appeals found that the bankruptcy code authorizes the award of emotional distress damages as a form of “actual damages,” and that the debtors presented sufficient evidence to support such a claim. Additionally, the Court found that the debtors were properly awarded punitive damages.

    When a tenant files bankruptcy, a landlord should be extremely cautious in attempts to collect back rent, take possession of the property, or evict a tenant. Lansaw v. Zokaites was an extreme case; however, violations of the automatic stay may arise from typical landlord activities, such as sending certain notices and applying a setoff against a security deposit.

Mississippi Supremes Belt Empty-Headed Judge w/ $5,400 In Sanctions For Improperly Putting Thumb On Scales Of Justice In Favor Of Property Owner In Landlord-Tenant Dispute; Screwed-Over Renter: My Paycheck Was Garnished, I Lost My Car & Had To File Bankruptcy Due To Judge's Actions

In Jackson, Mississippi, The Associated Press reports:
  • A Mississippi judge must pay $5,400 for improperly intervening in a landlord-tenant dispute by encouraging the property owner to seek the maximum penalty and evict a woman whose rent check bounced.

    The Mississippi Supreme Court publicly reprimanded Montgomery County Justice Court Judge Keith Stokes Roberts and ordered him to pay a $3,000 fine and $2,400 in court costs. The justices said he effectively lawyered from the bench and didn't give the tenant a chance to fight his decision.

    They said Roberts improperly intervened in landlord Rebecca Herring's lawsuit, which accused Marci Gastineau of bouncing a $450 rent check, by advising her to increase the amount she sought from $546.50 to $3,564. Roberts then granted that larger judgment, and after suggesting that Herring seek an eviction order, granted that as well.

    Gastineau said her paycheck was garnished, she lost her car and had to file for bankruptcy because of the judge's actions.

    The case reached the state's highest court after an investigation by the Commission on Judicial Performance, which received an anonymous tip.

    The justices' 5-4 decision last week does not indicate that Gastineau will get any of the money.

    "Clear and convincing evidence exists that Judge Roberts gave Herring legal advice," Associate Justice Leslie King wrote. "Several witnesses, including Judge Roberts himself, indicated that he strongly and inappropriately suggested that Herring amend her complaint up to the jurisdictional monetary limit, although the record indicates that no proof of damages in that amount was presented."
Source: Judge Must Pay $5,400 for Helping Owner Evict Tenant (A north Mississippi judge must pay $5,400 in fines and court costs for improperly intervening in a landlord-tenant dispute).

For the court ruling, see Mississippi Commission on Judicial Performance v. Roberts, No. 2016-JP-00927-SCT (Miss. April 20, 2017).

Thursday, May 11, 2017

Among Those Scammed By Recently-Sentenced Ripoff Artist Were Victims Who Lost Their Home Equity By Borrowing Against It To Invest In Phony Venture

From the Office of the U.S. Attorney (Honolulu, Hawaii):
  • Turk K. Cazimero, 57, a resident of Waimanalo, Oahu, was sentenced today [May 2] to serve eight years in federal prison, and ordered to pay restitution of $857,760 for committing fraud offenses over a period of twelve years.

    Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that according to court documents, Cazimero operated Hawaiian Hurricane Productions, a company that promoted concerts and special events, including surfing competitions.
    In December 2016, Cazimero pled guilty, admitting that he had promoted fake concerts, and intended to use, and did use, money from investors to pay his own living expenses, or to pay back earlier investors who were owed money. Cazimero agreed that he obtained $901,000 from his victims, and agreed to the entry of an order directing him to pay restitution to eleven victims.

    Cazimero was previously convicted in 2003 of Hawaii state securities fraud violations. Cazimero received probation on that charge, and began his federal violations shortly thereafter.

    At today’s sentencing before United States District Judge Derrick K. Watson, the government presented information that some of Cazimero’s victims took out home equity loans to generate money for him, lost their life savings and retirement accounts, and suffered emotional distress leading to depression and divorce.

    In imposing a 96 month sentence, Judge Watson noted that Cazimero has been committing ongoing fraud offenses for nearly two decades, and used the proceeds to support himself. Judge Watson ordered Cazimero into federal custody immediately to begin service of his sentence.

Another Gov't Housing Program Gone Haywire? NYC's Biggest Slumlord (Itself) Faces Intense Heat For Both Alleged Corruption & General Goofing-Off By Employees Surrounding Program Designed To Allow Poor Tenants To Buy Their Apartments In City-Owned Buildings For $250; A "Freaking Disaster Zone" Says Ex-Employee Of Those Running Outfit

In New York City, DNA Info (NYC) reports:
  • A city-backed housing program that advocates say has not delivered on its promise of offering tenants apartments for next to nothing is coming under intense scrutiny from investigators and the city's public advocate.

    The Tenant Interim Lease program (TIL), which was meant to be a pathway for renters in city-owned buildings to purchase their units for just $250, is currently being probed by the Department of Investigation for issues ranging from stolen money to city employees slacking off, sources and reports said.

    Now, Public Advocate Letitia James is calling for an independent review of the program, which she said has been inadequately funded and poorly managed by the city’s Department of Housing Preservation and Development.

    “As our city faces a crisis in affordable housing, it is shocking that a city-run program is allowing hundreds of affordable units to remain vacant,” James said, noting that roughly 40 percent of the more than 2,300 units in TIL buildings are empty.

    Tenants and advocates have labeled the program a “failure,” noting that many buildings have fallen into disrepair while residents have waited years to buy them.

    The public advocate's criticism of the program has been laid out in a policy brief expected to be released Thursday, as the City Council's Committee on Housing and Buildings conducts an oversight hearing on the program.

    The brief states that the program is “rife with corruption” and that HPD “has not adequately performed their jobs, because they were frequently unavailable or unreliable, inadequately trained or inexperienced, or failed to follow-up on critical matters.”

    It also comes amid the DOI investigation, which has been ongoing for more than a year, the New York Post reported.

    The probe reportedly includes investigating money stolen from a tenant association by residents, tenants allowing squatters to live rent-free and HPD employees slacking off.

    The DOI would not confirm the investigation and declined to comment further, a spokeswoman said.

    A former HPD employee, who spoke to DNAinfo New York on the condition of anonymity, characterized the agency as incompetent and called the unit overseeing the TIL program a “freaking disaster zone.”

    “The biggest and only reason why the unit is a failure is the staff. The whole unit in itself needs a complete overhaul… everyone needs to go,” the former employee said.

    “You wonder why HPD is considered the slumlord of the city because tenants don’t want to deal with them."

Wednesday, May 10, 2017

Closing Attorney Gets 1 1/3 To 4 Years For Role In Racket That Failed To Pay Off Existing Loans In Real Estate Deals, Leaving Homebuyers w/ Two Mortgages; Financially Strapped Homesellers Were Duped Into Scam w/ False 'Short Sale' Promises To Avoid Foreclosure

From the Office of the Queens County, New York District Attorney:
  • Queens District Attorney Richard A. Brown today [May 3] announced that a Long Island attorney who admitted to defrauding Queens homeowners, financial institutions and real estate buyers out of more than $2.3 million in mortgage loan proceeds through a “short sale”mortgage fraud scheme has been sentenced to 1 1/3 to 4 years in prison. A second attorney previously pleaded guilty in the scheme.

    District Attorney Brown said, “The two defendants created a financial nightmare for the buyers and the sellers of nearly half a dozen Queens properties. The victims in this case only discovered that something was amiss when foreclosure notices for the pre-existing mortgages were served several months after the supposed ‘short sale’ closings.

    Homeowners were deceived into selling their property, believing that the underlying mortgages would be satisfied, and buyers and new mortgage lenders were deceived into believing that the purchased properties were free and clear of prior encumbrances when, in fact, the mortgages were still outstanding.”

    The District Attorney identified the defendant as Helene Stetch, 53, of Lindenhurst, New York. Stetch worked with attorney Kenneth Schwartz at the law firm of Kenneth B. Schwartz, Esq., located at 555 Westbury Avenue in Carle Place, New York, until her termination in mid-2010.

    Schwartz, 67, of Huntington, New York, took a conditional guilty plea to fourth-degree criminal facilitation and disorderly conduct on January 13, 2017. He also executed confessions of judgment in favor of two homeowners totaling $129,061 and will be making $12,050 in restitution to a third homeowner. Additionally, Schwartz is required to obtain a compliance and auditing monitor, also known as an IPSIG (Independent Private Sector Inspector General), for two years and pay for the monitor at his own expense. The monitor will verify that Schwartz is in compliance with ethical rules and legal business practices. The monitor will provide periodic reports to the Queens District Attorney’s Office every few months. Sentencing will occur following the first year of monitoring.

    Stetch, who pleaded guilty to one count of first-degree criminal possession of stolen property and six counts of second-degree grand larceny on January 9, 2017, appeared yesterday before Queens Supreme Court Evelyn L. Braun, who sentenced her to seven concurrent terms of 1 1/3 to 4 years in prison. In addition, Stetch executed eight confessions of judgment totaling approximately$2,325,043.00.(1)

    District Attorney Brown said that, according to the charges, the law firm of Kenneth Schwartz represented sellers and lenders, and sometimes buyers, in the sale of several houses in Queens County, in which the closings were held at the defendants’ Carle Place law offices and occurred between October 2008 and May 2010. In each transaction, the seller was delinquent on the mortgages and sought to sell the property in a short sale in order to avoid foreclosure.

    A short sale occurs when a homeowner gets their mortgage lenders (lien holders) to agree to release their lien on the real estate and accept less than the amount owed on the mortgage. In this particular case, the mortgages on the houses involved typically had a first and second lien holder, both of whom had to approve of the sale. Although a first lien holder may approve a short sale, a second lien holder may disapprove of the sale because it would receive a paltry sum or nothing at all.

    According to the charges, Stetch represented the property sellers and engaged in short sale negotiations with the goal of persuading the underlying lien holders to accept less than the outstanding mortgage to discharge the debt and the lien. In all instances, Stetch proceeded to closing without the short sale approval from both lien holders of the property, and although having proceeded with a sale, Stetch failed to pay off the underlying mortgages. In fact, she continued short sale negotiations – ranging from a few months to more than a year – with the lien holders as if no sale had yet occurred.

    Since the law firm of Kenneth Schwartz was the lender’s settlement agent, mortgage loan funds were wired into an attorney trust account in Kenneth Schwartz’s name and for which Schwartz and Stetch were the only authorized signatories on the account. Disbursement of the funds was conditioned upon certain things taking place – including, paying off the underlying mortgages and recording the new mortgages so that the lender would be in position of first lien holder; preparing HUD settlement statements that correctly listed how the mortgage proceeds would be disbursed; and obtaining title insurance on behalf of the lender.

    In fact, the underlying mortgages were not being paid off, the HUD settlement statements falsely indicated that there were no underlying mortgages to be paid off, and no title insurance was purchased.

    Instead, unauthorized and excessive disbursements were made from the attorney trust account where more than $1 million in mortgage loan funds were wired – with Stetch writing the majority of the disbursement checks and Schwartz writing all checks that were payable to himself and a few other checks.
Source: Attorney Sentenced To Up To Four Years In Prison For "Short Sale Mortgage Fraud Scheme (Defendant Signs Confessions Of Judgment Totaling More Than $2.3 Million).
(1) In New York, the Lawyers' Fund for Client Protection was created to provide a source of, at least partial, reimbursement to clients who have suffered monetary losses at the hands of dishonest lawyers licensed and practicing in the state.

According to their website, typical losses reimbursed by the Lawyers' Fund include the theft of estate and trust assets, escrow deposits in real property transactions, settlements in personal injury litigation, debt collection receipts, money embezzled in investment transactions with law clients, and unearned fees paid in advance to lawyers who falsely promise their legal services.

Perhaps the best of all the attorney ripoff reimbursement funds in the U.S. in terms of its payout limits, the Fund places a $400,000 maximum limit, per law client loss, on awards from the Fund, fixed by regulation of the Fund's Trustees. There is no aggregate maximum on awards involving one lawyer.

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.

NY AG, Brooklyn DA Bag Nine In Alleged Short Sale Ripoffs; One Duped Lender Unwittingly Agreed To Take $400K 'Haircut' In Related Party Sale Where Borrower's Sister-In-Law Ended Up Holding Title To Home

In Brooklyn, New York, the New York Daily News reports:
  • A city investigator and eight others were indicted on Monday [April 24] for orchestrating an elaborate $1 million mortgage fraud scheme from four properties in Brooklyn and Queens, prosecutors said.

    "These defendants — among them a disbarred attorney, a tax preparer, a loan originator, and a New York City investigator — allegedly engaged in an elaborate scheme to manipulate the mortgage process by using lies, sham companies and fake documents to steal millions of dollars from lending institutions," said Acting Brooklyn District Attorney Eric Gonzalez.

    Brooklyn prosecutors along with investigators with the attorney general's office busted Janelle Defreitas, 37; Raymond McKayle, 53; Lester Wayne Mackey, 63; Darren Downes, 36; Jaipaul Persaud, 54; Roxanne Harmon, 51; June Whyte, 54; Rickley Gregoire, 33; and Paula Blackwood-Sambury, 50, for money laundering and other charges.

    Prosecutors said the defendants are alleged to have concealed the fact that the buyers could not afford the homes by submitting fraudulent mortgage applications showing grossly inflated incomes from fake jobs, bank accounts with fabricated balances and other false information.

    According to the investigation, which began in 2014 from a separate automobile insurance fraud case, in one of the schemes, Harmon, an investigator for the city's Department of Investigation, owed over $500,000 on her Queens home allegedly solicited Defreitas to apply for a short-sale from the mortgage company.

    The mortgage company unknowingly agreed to a $100,000 short sale to West North Capital — a sham corporation allegedly owned by Defreitas.

    Harmon's debt was reduced and Whyte, her sister-in-law, bought the property from the corporation using phony information, prosecutors said.

    Once the application went through to West North Capital, Defreitas collected almost $400,000 in the mortgage loan proceeds, prosecutors said.

    Defreitas acquired the title to properties located on Chauncy St. in Ocean Hill, Tompkins Ave. in Bushwick, Sutter Ave. in Queens and 223rd St. in Cambria Heights, Queens.
Source: NYC investigator, eight others accused in elaborate $1 million mortgage scam.

For the New York Attorney General press release, see A.G. Schneiderman, DA Gonzalez Announce The Indictments Of Nine Defendants For Stealing Over $1 Million In Mortgage Fraud Scheme (Defendants Are Alleged To Have Fraudulently Obtained Short-Sale Discounts And Loans By Submitting False Information To Mortgage Companies; Defendants Include Disbarred Attorney, Tax Preparer, New York City Department Of Investigation Investigator, And Loan Originator).

Tuesday, May 09, 2017

Efforts Continue In California To Finance Crackdown On Deed Thefts, Forged Document Ripoffs, Home Equity Swindles; Prosecutor: Matters That Often End Up w/ Victims Filing Civil Lawsuits Can Now Be More Readily Prosecutable As Crimes

In San Mateo County, California, The Daily Journal reports:
  • Impostors attempting to take out liens on a property, people trying to swindle the elderly out of their homes or anyone falsifying real estate documents are going to be in San Mateo County prosecutors’ scope as they look to crack down on fraud.

    The District Attorney’s Office is ramping up its efforts to investigate and prosecute real estate fraud with the help of a $3 document fee the county Board of Supervisors approved last week.

    With property values at a premium and forgery an ongoing threat, the county set up a Real Estate Fraud Prosecution Trust Fund that will be used to investigate criminals and hold them accountable. Often, these types of crimes end up in civil court where victims don’t always have the resources needed to secure justice. Now, these cases can more readily be treated as a criminal matter, said District Attorney Steve Wagstaffe.

    Some people think “if it’s just a theft or property crime, it’s not that serious. [But] it can devastate people, their life savings can be thrown out the window, the home their mother lives in can be stolen, those are real victims,” Wagstaffe said. “And we don’t want them to be ignored.”

    With rising property values and the average single-family home going for nearly $1.25 million, Wagstaffe noted some criminals may think the risk is worth the reward.

    Establishing this type of fund was first codified by the Legislature, following the Great Recession. It was inspired by the countless people who found themselves underwater in their mortgages and susceptible to predatory foreclosure rescue scams or other real estate schemes. Initially, these types of crimes didn’t appear to be significantly widespread in San Mateo County but, after receiving a state grant, Wagstaffe said they decided to further study the issue.

    Since 2014, the District Attorney’s Office found nearly 300 complaints of real estate fraud. Currently, prosecutors are working on three cases that Wagstaffe said highlight the range of crimes affecting victims.

    One alleged crime currently being investigated involves a group that allegedly attempted to swindle an apartment building owner out of his property. The building with an estimated two dozen units had been put up for sale and a purported buyer was in escrow when it was discovered they’d been engaged in fraudulent activity, Wagstaffe said.

    The alleged criminals even tried to record with the county forged documents, such as deeds naming them as the owner and attempted to put liens on the property. When that didn’t work, they began directly contacting the tenants in an attempt to divert the rent checks to themselves instead of the rightful owner, Wagstaffe said.

    Another case currently being prosecuted is against a woman who while in the midst of a divorce allegedly submitted forged documents in court. Linda Haskin-Golorsky, a Foster City woman who calls herself “Princess Leia Lucas,” is now facing multiple felonies after a family court judge recognized she provided false documentation in divorce proceedings, Wagstaffe said. Haskin-Golorsky allegedly forged a deed to the home she and her husband owned in an attempt to make it appear as though she had purchased it before their marriage, according to prosecutors.

    That case was referred to prosecutors by the Family Court judge overseeing the case and has the woman facing time behind bars if convicted, Wagstaffe said.

    Another type of case that is unfortunately all too prevalent crosses into the elder abuse category. A jury is currently reviewing a case against an East Palo Alto woman who allegedly took advantage of her 96-year-old aunt who was cognitively impaired. Shirley Remmert is accused of convincing her elderly relative to sign over a deed to her home, according to prosecutors.

    Wagstaffe noted real estate fraud investigators will be working hand in hand with the elder abuse unit and the county Health System’s Adult Protective Services to identify potential victims.

    He’s also hoping that people will start to realize that such fraud isn’t always just a civil matter or simply writing off a business loss, but that it can be a prosecutable crime.

    In developing the idea, Wagstaffe said they worked with the San Mateo County Association of Realtors, which was supportive of weeding out fraud that may be occurring in the field.

    Of California’s 58 counties, 31 have implemented these types of fees to aid in prosecution of fraud. Recently, the state increased the allowable amount up to $10, but Wagstaffe said they’re going to start at the low $3 end to see how it goes first. The fee will apply to those looking to record “real estate instruments” such as deeds of trusts, an abstract of judgment, an affidavit, assignment of rents or a lease, covenants, easements, a lease, a lien, a notice of default and more. The fee is expected to generate $325,000 a year and support one full-time investigator and a prosecutor to dedicate about a third of their time, according to a staff report.

    Furthermore, in highlighting the county’s commitment to curbing fraud, Wagstaffe said hopefully criminals will be deterred from looking to victimize local property owners.

    “Criminal law gives it some teeth,” Wagstaffe said. “For anybody thinking there’s an easy way to get some easy money by cheating, hopefully they’ll be discouraged if [they know] we will arrest and prosecute them.”

L.A. County Cops: Rent Scam "Mastermind" Ripped Off Over $200K From "Possibly Over A Thousand Victims" By Peddling Bogus Rental Listings To People Desperate To Find Affordable Homes, Apartments

In Los Angeles, California, KNBC-TV Channel 4 reports:
  • Los Angeles County Sheriff's Deputies have arrested the man state authorities call the "mastermind" of rental scams.

    Richard Rodriguez was taken into custody without incident at his Alhambra home early Thursday [April 27] on felony conspiracy to defraud charges.

    "We believe we have possibly over a thousand victims," said Lieutenant Phillip Marquez of the Los Angeles County Sheriff's Department.

    Investigators believe that Rodriguez improperly took over $200,000 last year from customers at Superior Consulting Services in Rowland Heights, a rental listing agency, Marquez said.

    For years, the NBC4 I-Team has been investigating Rodriguez's rental agencies. Authorities said he preyed on people desperate to find affordable apartments and homes to rent, by offering them bogus rental listings in exchange for cash.

    "He had no intentions to find anybody any type of rental properties," said Marquez.

    The I-Team has identified at least six rental agency locations over a nearly two decade period where Rodriguez and his associates conducted business. Local and state officials said Rodriguez may have victimized thousands of people during that time. Many of them have been calling for his arrest for years.

    "I hope he does go to jail," said Juan Arteaga.

    Arteaga said he was a recent client of Rodriguez. The San Bernardino man was so desperate to find an affordable rental house for his wife and five children that when he saw something he could afford on Craigslist, he immediately jumped at the chance to grab it.

    "We contacted them and then he told us, come in, bring 200 dollars," explained Arteaga.

    Arteaga said he was instructed to come to Sunset Home Rentals in Ontario which he said is run by Rodriguez. He said he gave a Sunset employee $200 in cash, some work paystubs and his Social Security card. What he got was a list of addresses that the employee said were inexpensive rental listings.

    "One of them was an empty lot and the other one was a boarded up home," said Arteaga.

    Arteaga returned to Sunset Home Rentals to try and get his money and personal information back. "The store was closed, lights were off, door was locked, and phones were disconnected," said Arteaga. "It is a scam," he said.

    That's the pattern that the NBC4 I-Team has exposed over the years.

    The California Bureau of Real Estate said Rodriquez lures customers to his rental listing offices by placing ads on craigslist for cheap apartments and homes. When a customer calls the phone number on the ad, they are told to come to an office, pay around $200 and that they will get a list of available rentals.

    But the NBC4 I-Team spoke to dozens of people who said those listings didn't exist.

    "They gave me fake listings," said Reyna Gonzales, a customer of Superior Consulting Services in Rowland Heights last fall, another business that authorities suspect was run by Rodriguez.

    "They gave us the runaround, put us on hold, 30 minutes later, let me call you back in an hour. Call again, call again. Runaround. Runaround."

    And the I-Team discovered evidence that Rodriguez has been doing this since 1996, when the state ordered his first agency to stop doing business. But the I-Team caught Rodriguez opening other rental listing businesses under the names Global Rentals, International Home Rentals and Hacienda Home Rentals, among others.

    Each of these businesses was operated in a similar way, according to Dolores Ramos at the California Bureau of Real Estate.

    "He's there to take their money and run," said Ramos.
For more, see Alleged Rental Scam Mastermind Busted by Police After Decades on the Run (The arrest comes after years of investigations by the NBC4 I-Team).

Real Estate Property Manager Gets 18 Months For Feeding Her "Crippling Gambling Habit" By Fleecing Five Landlords Out Of $386K In Tenants' Rent Collections & Failing To Pay Income Tax On Purloined Loot

In Oklahoma City, Oklahoma, The Oklahoman reports:
  • A former Edmond property manager has been ordered to pay nearly $400,000 in restitution to clients she defrauded to support her "crippling gambling habit."

    Angela Renee Reneau, 53, of Cashion, also was sentenced Wednesday [April 26] to 18 months in federal prison. She previously pleaded guilty in Oklahoma City federal court to wire fraud and failure to file an income tax return.

    "In many ways, gambling ruined Ms. Reneau's life. In the same way, when Ms. Reneau's crimes were exposed, she started on the road to recovery and redemption," defense attorney Robert Wyatt wrote in a court document.

    U.S. District Judge Vicki Miles-LaGrange chose the punishment.

    The defense attorney noted that Reneau developed a gambling habit in her late 40s and "became hopelessly addicted." When the addiction was in "full swing," Reneau began taking money from her clients' accounts, "always with the intention of paying the money back," the defense attorney wrote.

    But Reneau dug herself in a hole and "she could not dig herself out," the defense attorney wrote. "She lost her home, her family, her job and her dignity."

    Between 2010 and 2014, Reneau provided real estate management services to owners of commercial office buildings in the Edmond area through her business, Reneau Properties, prosecutors said. In that time, she made unauthorized transfers of her clients' rental income into her business' bank account.

    Reneau was ordered to pay restitution totaling $386,236 to five former clients. She also was ordered to pay $137,352 in restitution to the IRS for failing to file a federal income tax return for the 2014 tax year.

    "In this case, Ms. Reneau has shown genuine remorse for her conduct, abandoned her crippling gambling habit and poses no continuing risk to the community," her defense attorney wrote.

    Reneau has been attending gambling treatment and desires to pay back her former clients, according to her attorney.

Monday, May 08, 2017

Statute Of Limitations Defense In Florida Foreclosures Not Quite Dead Yet? Trial Court Rules In Favor Of Deceased Borrower's Daughter Against Bankster As Trial Court Notes Distinction Between Reverse Mortgage & Traditional Mortgage

From a blog post from The Consumer Financial Services Blog:
  • The Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida recently dismissed a second foreclosure complaint, filed more than five years after the initial complaint and alleging the same incident of default, as barred by the statute of limitations.

    In so ruling, the Court also held that the borrower’s daughter and sole beneficiary to the property encumbered by a reverse mortgage had standing to assert the statute of limitations defense.

    In October 2007, a borrower entered into a “home equity conversion mortgage,” commonly known as a “reverse mortgage.” After the borrower died in May 2008, 100 percent of her homestead property was devised to her daughter. The then-mortgagee sued to foreclose in July 2009, alleging that the borrower’s 2008 death triggered the acceleration clause in the mortgage. The 2009 foreclosure complaint was dismissed in 2013.

    In September 2014, a new holder of the note (“mortgagee”) filed a foreclosure complaint that alleged the same date of default — the May 2008 death of the borrower — and cited the acceleration provision of the reverse mortgage as grounds for accelerating the debt.

    After the borrower’s daughter was granted homestead status of the property by the Probate Circuit Court of Miami-Dade County as heir to the borrower in May 2016, she moved to dismiss the foreclosure complaint on the grounds that the suit is barred by Florida’s five-year statute of limitations. A nonjury trial followed.

    At trial, the mortgagee argued that the borrower’s daughter lacked standing to assert the statute of limitations defense, as such defense is personal in nature, and she lacked privity with the note and reverse mortgage.

    Under Florida law, a “defendant may not assert a statute of limitations defense if the defendant has no relation of privity with the party who has the defense. … However, ‘when there is privity between a person who could, if sued, plead the statute [of limitations] and the party offering to plead it,'” the party offering to plead the defense may raise it to save his or her property.

    Here, the Court concluded that as the sole legal titleholder of the encumbered, homestead-protected property, the borrower’s daughter had standing to plead a statute of limitations defense.

    Next, the Court examined whether or not Florida’s five-year statute of limitations applied. As you may recall, under Florida Law, “[w]hen a mortgage declares the entire indebtedness due upon default of certain of its provisions or within a reasonable time thereafter, the statute of limitations to a foreclosure claim begins to run immediately when the default takes place.” § 95.11(2)(c), Fla. Stat. (2016). To determine whether a second foreclosure claim amounts to a statute of limitations violation, Florida courts examine the duration between the foreclosure actions and the types of default that triggered those actions. See Singleton v. Greymar Assocs., 882 So. 2d 1004 (Fla. 2004) [29 Fla. L. Weekly S481a]; Deutsche Bank Tr. Co. Ams. v. Beauvais, 188 So. 3d 938 (Fla. 3d DCA 2016) [41 Fla. L. Weekly D933b].

    Here, the Court noted that the reverse mortgage at issue permits acceleration of the debt upon the death of the borrower. Moreover, the Court added, “a reverse mortgage, unlike a traditional, installment loan mortgage with a monthly payment obligation, does not have successive events of default where the basis for acceleration is death of the borrower. Accordingly, the loan cannot be decelerated.”

    Because both foreclosure complaints alleged the same dates of default, the Court concluded that it was “unlikely that the actions allege subsequent and different defaults as laid out in Singleton,” and that the statute of limitations applied to any subsequent foreclosure action. Thus, because the instant, second foreclosure action was filed more than five years after the borrower’s 2008 death and date of alleged default, and the defaults in both foreclosure actions were the same, the Court held that the statute of limitations applied.

    Accordingly, final judgment was entered in favor of the borrower’s daughter and against the mortgagee.

Media Consumer Troubleshooter Continues Shining Light On Racket Used By Real Estate Broker, Some Public Officials To Hijack Control Of Dead People's Homes; County Treasurer: Process Uses Probate System "To Bilk Lawful Heirs Out Of Their Property!"

In Oakland County, Michigan, WXYX-TV Channel 7 reports:
  • The 7 Investigators first exposed how some public officials and real estate brokers are cashing in by selling homes after someone dies, often leaving the rightful heirs with very little in the estate.

    Now 7 Investigator Heather Catallo has found out that this is happening even when an heir is making tax payments in the hopes of keeping the property.

    The Probate Court is responsible for making sure all the assets someone had before they died are given to the rightful heirs. Those assets become part of your estate.

    If you don’t have any heirs, or if your heirs don’t want to get involved, a state-appointed lawyer called a Public Administrator can take over that estate. But many legal experts say some of those Public Administrators are taking this way too far.

    Joanne Small Zaremba has been fixing up her childhood home. “The house was so tiny, but it was so much love in the house, it didn’t matter to us,” said Joanne.

    Joanne’s parents bought this Oakland County home in the early 1960s, and raised their four daughters there.

    “I have a lot of great memories,” said Joanne.

    When Joanne was seriously injured in a car accident, she moved back in with her widowed mother until June Small died suddenly in 2009. “We were very close and I miss her,” said Joanne.

    The home has been paid off. But after June Small’s death, Joanne discovered that her mom had fallen behind on the property taxes.

    To prevent a foreclosure, Oakland County Treasurer Andy Meisner got Joanne on a monthly payment plan for those past-due taxes. Meisner says Joanne has been 100% compliant.

    “Property rights are very important to us, they’re constitutional. We go to great lengths to help prevent foreclosure,” Meisner told 7 Investigator Heather Catallo.

    Joanne thought all was well, until a man appeared at her door last spring wanting to post a notice from Ralph Roberts Realty that said “Ralph Roberts Realty LLC has been hired to secure and market the property for sale.”

    He said we’d like to buy your home and we’ve paid some back taxes for you,” said Joanne. “Red flags were going off, and I said I’m not signing anything. No! I said I don’t know who you people are, but why would I sign this when I have an agreement with the county?”

    Joanne may not have known who he was, but the Treasurer and the Oakland County Clerk do know.

    These are predators,” said Clerk Lisa Brown. “Your home is usually your biggest financial investment and that someone is just going to sweep in and take it from under you is awful!!”

    So why would Ralph Roberts’ employees pay $6,720.87 of Joanne’s property taxes? Because they want to sell her mother’s house, so they got Kemp Klein lawyer Barbara Andruccioli to open a Probate estate in Joanne’s mother’s name.

    Andruccioli was appointed by the Attorney General in 2013 to be a Public Administrator in Oakland County. Court records show that Andruccioli regularly uses Ralph Roberts and his myriad companies, including one called Probate Asset Recovery (PAR), to open estates, sell the homes and cash in.

    Roberts would not talk to us on camera for this story, but he did tell us last fall that he’s brought more than $4.5 million into estates since 2013. The heirs get some of that. But Roberts often takes 1/3 of the estate-- and that’s not all.

    “I find properties. I believe there’s a benefit, so I then tell a public administrator, here’s the benefit there.”

    “So you’re getting the real estate fees, and you’re getting the Probate Asset Recovery fees,” asked Catallo in November.

    “If we’re successful, yes,” said Roberts.

    “We determined that this process was concocted by these folks of essentially using the probate system to bilk lawful heirs out of their property,” said Meisner.
    “If an heir is living in the very property that becomes a subject matter in the sale, then you’re certainly not exercising any diligence, let alone due diligence in not going to the occupant of the house in question and determining whether there is an heir residing therein,” said University of Detroit Mercy Law Professor Larry Dubin.

    Even after Joanne told the folks from Ralph Roberts’ company that she was on a tax payment plan with the Treasurer, Roberts’ team still filed a Claim of Interest that says the “Property did not have a payment arrangement in place and would be lost for unpaid 2013 taxes.”

    Treasurer Meisner says that’s false. He also says his office made it clear to Andruccioli that there had been a payment plan in place since 2010.

    “This one administrator said 'well, now that I know that, I won’t proceed in setting up the probate.' But that’s exactly what she did,” said Meisner. “This should not be some sort of money making conspiracy.”

    Public Administrator Barbara Andruccioli declined to talk to us on camera about this. In an e-mail, she did tell us she’s no longer pursuing the sale of the home.

Sunday, May 07, 2017

Fleeced Out Of $2.3 Million From Dead Mother's Estate By Thieving Attorney, Victims Take Case Against NH Lawyer Ripoff Reimbursement Fund To State High Court To Seek Maximum Recovery Of Stolen Loot

In Concord, New Hampshire, the New Hampshire Union Leader reports:
  • The state Supreme Court on Wednesday [April 19] heard arguments in a 16-year-old case involving a blind man and his brother who were bilked out of $2.3 million by a Manchester lawyer with help from his police captain brother.

    At issue is whether the New Hampshire Public Protection Fund, maintained by the New Hampshire Bar Association to compensate the victims of dishonest attorneys,(1) should be on the hook for the maximum allowed payout of $150,000, as the family maintains, or only $14,000, as lawyers for the fund maintain.

    Thomas Tessier, a once-prominent Manchester lawyer, was sentenced to six years in prison for stealing $2.3 million from Thaddeus Jakobiec and his brother, Dr. Frederic Jakobiec, in the years following the death of their mother in 2001.

    Tessier’s brother, retired Manchester Police Capt. Michael E. Tessier, was sentenced to one year in jail for theft of $75,000 from the Jakobiec’s trust.

    Money from the estate of the Jakobiecs’ mother, Beatrice Jakobiec, was intended in part to provide for Thaddeus Jakobiec, who had been blind since birth, was developmentally disabled and lived with his mother in their home in Manchester.

    Over the years since Beatrice Jakobiec died, the case has resulted in 10 different lawsuits against various parties, including the Merrill Lynch Insurance Company as the Jakobiecs and their attorney, Steven Latici of Gilmanton, tried to recover some of the losses through probate bonds, restitution and court settlements.

    “I guarantee you, this is the last Jakobiec case you will hear,” said Latici as he began his argument on Wednesday.

    “We’ve heard that before,” responded Chief Justice Linda Dalianis.

    He argued that legal fees and other factors should be considered in the amount still owed the Jakobiecs as they appeal to “the fund of last resort,” the Public Protection Fund, having exhausted all other sources.

    Latici said an analysis of what was stolen versus what was recovered would support a $150,000 payment, and urged the justices to remand the case to Probate Court.

    “This whole argument that Thaddeus has been made whole is premised on some pretty extraordinary conclusions,” he said.

    Attorney Keith Diaz, representing the fund, said that Thaddeus Jakobiec had been “made whole” by various payments made over the years, except for the $14,000 that the fund agrees should be paid.

    He cited the rules governing the fund, which state that its payouts “shall not include interest on money lost or money spent on attorney’s fees.”

    “It’s a fund of last resort, and you have to recover everything you can from third parties before we make any payments,” Diaz said.

    He argued the justices should give “deference” to those rules in its consideration.

    Justice James Bassett sounded unconvinced.

    “Whether you should net out attorney fees depends on our interpretation of the regulation,” he said. “So we don’t owe deference to the (fund) committee on that.”

    The high court could send the case back to Probate Court or rule in favor of either side.
Source: Family bilked out of millions appeals to 'Public Protection Fund'.
(1) The New Hampshire Public Protection Fund has been established by the New Hampshire Supreme Court "to provide a public service and to promote confidence in the administration of justice and the integrity of the legal profession by providing some measure of reimbursement to victims who have lost money or property. . ." because of theft or misappropriation by a New Hampshire attorney, and occurring in New Hampshire during the course of a client-attorney or fiduciary relationship between the attorney and the ripped-off client.

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.

Aging & Broke, Disbarred Lawyer Coughs Up $2K To Cure Probation Violation, Dodge Prison Time In Connection w/ Client Embezzlement; Will Probably Leave State's Attorney Ripoff Fund Holding The Bag On Remaining $500K+ Owed For Stolen Funds It Reimbursed To Victimized Client

In Stamford, Connecticut, the Stamford Advocate reports:
  • A disgraced former attorney avoided jail this week by paying $2,000 in restitution for money he stole from a client. But he may never have to pay back the more than $500,000 he still owes.

    Benson Snaider, 79, made a brief court appearance Thursday [April 20] before Judge Gary White, who two weeks ago threatened to jail the disbarred attorney if he did not come up with the money.

    Snaider, a former top flight eminent domain lawyer, pleaded guilty five years ago to first-degree larceny for misappropriating an $800,000 check from the city of Stamford to Minchin Buick as a partial payment for the eminent domain of its property to construct the Stamford Urban Transitway.

    Snaider was given a five-year suspended sentence, five years probation and ordered to make restitution.

    His probation was violated in January after he made only $180 in restitution. He then made a $200 payment earlier this month.

    White made a civil judgment Thursday against Snaider for $536,000, payable to the Client Security Fund, which reimburses victims whose money has been stolen by crooked attorneys.(1)

    However, Snaider’s probation term has ended and is beyond the realm of the law.

    I don’t think they will ever see another nickel,” said Mark Katz, who represented Minchin Buick against Snaider.

    Senior Assistant State’s Attorney Maureen Ornousky said there is only so far the court can go to collect a restitution.

    Ornousky said signing the civil judgment was about the last measure White could take to ensure Snaider turns over any money he gets to the Client Security Fund. “I understand why the court did what it did,” Ornousky said.

    Snaider wrote a letter to the court after his probation was violated earlier this year, arguing his only income is $2,100 a month from Social Security. He said he barely has enough money for living expenses.

    "The amount imposed was on its face impossible to obtain," he wrote.

    Snaider also called his parole violation "unjust," because the fund had already reimbursed Minchin and he did not have the assets to pay the restitution.
Source: Disgraced Stamford attorney still owes client more than $500K.
(1) In Connecticut, the Client Security Fund is a fund established by the rules of the Connecticut Superior Court to provide reimbursement to individuals who have lost money or property as a result of the dishonest conduct of an attorney practicing law in the State of Connecticut, in the course of the attorney-client relationship. The fund provides a remedy for clients who are unable to obtain reimbursement for their loss from any other source.

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.

Long Island Prosecutor: Guilty Lawyer Used Client Trust Account As "Personal Piggy Bank", Siphoning Off $785K+ Held For 22 Unwitting Clients; Sentencing, Automatic Disbarment Remain Pending

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced that an attorney whose office is in Garden City and stole hundreds of thousands of dollars from 22 clients’ settlement funds pleaded guilty today [April 17] to grand larceny charges.

    Steven Morelli, 60, pleaded guilty in front of Acting Supreme Court Justice Helene Gugerty to three counts of Grand Larceny in the Second Degree (a C felony) and five counts of Grand Larceny in the Third Degree (a D felony). The defendant is due back on June 9 for sentencing and faces 2-1/2 years to 7-1/2 years in prison. The defendant agreed to the Court’s issuance of restitution orders of approximately $615,000.00. Additionally, prior to plea, the defendant paid restitution of approximately $170,000.00.(1)

    “Attorneys are entrusted with a special responsibility to act in their clients’ best interests, but instead this defendant treated his clients’ settlement funds as his personal piggy bank,” DA Singas said. “I am grateful to the NCPD and our prosecutors for bringing this defendant to justice and ensuring that he will never practice law again.”

    DA Singas said that from February 2015 through August 2015, the defendant retained and misused settlement checks from four clients totaling $150,000.00. After a joint investigation was conducted by the NCDA and the NCPD Crimes Against Property Squad he was arrested by Nassau County Police detectives for that crime in February 2016.

    The investigation continued after the initial arrest and uncovered 13 more victims, who had approximately $573,000.00 in stolen funds. The defendant was then re-arrested in May 2016 for these crimes. The joint investigation continued after the second arrest and revealed five additional victims and client thefts of approximately $64,000.00. In total, Morelli stole more than $785,000.00 from his clients.

    The defendant used the money for personal purposes and to carry on his law practice. Because of the defendant’s plea to a felony charge he will be automatically disbarred.
Source: Attorney Pleads Guilty to Grand Larceny Charges for Stealing More than $785,000 from Clients (Steven Morelli stole from 22 clients and will be disbarred).
(1) In New York, the Lawyers' Fund for Client Protection was created to provide a source of, at least partial, reimbursement to clients who have suffered monetary losses at the hands of dishonest lawyers licensed and practicing in the state.

According to their website, typical losses reimbursed by the Lawyers' Fund include the theft of estate and trust assets, escrow deposits in real property transactions, settlements in personal injury litigation, debt collection receipts, money embezzled in investment transactions with law clients, and unearned fees paid in advance to lawyers who falsely promise their legal services.

Perhaps the best of all the attorney ripoff reimbursement funds in the U.S. in terms of its payout limits, the Fund places a $400,000 maximum limit, per law client loss, on awards from the Fund, fixed by regulation of the Fund's Trustees. There is no aggregate maximum on awards involving one lawyer.

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.

Another California Attorney Loses Law License For Fleecing Two Clients Out Of $425K+ As State Bar Stays Busy Booting Sleazy Lawyers

In Los Angeles, California, the Northern California Record reports:
  • James Lyston Evertts, a Campbell attorney, was recently disbarred by the State Bar Court of California for multiple acts of misconduct in two client matters.

    The court issued its ruling on February 10.

    In the first client matter, the attorney was charged with nine counts of misconduct beginning with the collection of $8,900 in “illegal and advanced fees.” Evertts also allegedly failed to preform legal services for the client before the legal matter was settled. Evertts was charged with improperly withdrawing from representation, failing to adequately respond to client requests for case status and failing to take reasonable steps to prevent prejudice.

    Evertts did not return unearned fees, failed to keep his client trust balance and misappropriated client funds. He was also charged with not responding to the state bar’s notice of disciplinary charges (NDC) and not updating his mailing address with the state bar.

    The second matter originated in 2012 when Evertts was hired to represent a client in a trust matter. Evertts improperly withdrew from the case, failed to take reasonable actions to prevent prejudice against his client and did not respond in a timely manner to client requests for updates on the case's status. Additionally, the attorney failed to maintain his client trust account at $530,034.97 and misappropriated $425,000. He was also charged with not responding to the NDC and for not updating his address in this matter.

    Evertts was disbarred and ordered to pay $434,238.88 plus interest in restitution.(1)
Source: Campbell attorney disbarred for misappropriating $425,000 in client funds.
(1) The California State Bar's Client Security Fund is a discretionary fund that can reimburse clients who have lost money or property due to theft or dishonesty by a California lawyer. It is a State Bar program funded entirely by California lawyers. 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.

Ex-Lawyer Gets Off Easy After Pleading Guilty To Pilfering Nearly $150K From 3 Former Clients; Gets Six Months Jail Time After Paying Back Most Of The Swindled Loot w/ Remaining Balance to Be Paid In Restitution Payments; Thefts From Unrelated Unprosecuted Incidents Resulted In Earlier Disbarment

In Santa Ana, California, reports:
  • A disbarred attorney pleaded guilty and was immediately sentenced to six months in jail and three years of probation Friday [April 14] for taking nearly $150,000 from three people and using it to pay personal debts.

    Fred Raymond Hunter Jr., 50, of Riverside, who was disbarred Oct. 16, 2014, pleaded guilty to three felony counts of embezzlement by a fiduciary of trust, with sentencing enhancement allegations for theft exceeding $100,000 and aggravated white collar crime exceeding $100,000.

    Hunter has repaid most of the money he took from the victims, but a determination still needs to be made about how much more restitution he must pay, according to Deputy District Attorney Gautam Sood.

    Hunter accepted the plea deal from Orange County Superior Court Judge Robert Fitzgerald. Hunter was ordered to begin serving his jail term July 7, Sood said.

    Between June and November 2013, Hunter used about $4,600 in funds from legal settlements that were owed to a client to pay a debt to another client, Sood said.

    During the same period, he embezzled about $52,200 from another client’s settlement for the same reasons, Sood said.

    Between April and July of 2014, he appropriated about $88,800 from a third victim’s settlement in a fraudulent way, according to the prosecutor.

    Hunter’s disbarment stemmed from a dispute he had with a client, Mario Pineda, according to the state Bar of California. The criminal complaint did not include claims from that case. Pineda hired Hunter to pursue a personal injury and property damage claim stemming from a vehicle accident on Nov. 20, 2009, according to the state Bar.

    Hunter took two checks from the client’s insurance company amounting to $3,609 for medical bills and forged Pineda’s signature on them, then deposited them into a trust account for the client in April of 2010. Hunter did not use the money to pay the medical bills, the Bar reported.

    Hunter received a $15,000 settlement from an insurance company in March 2011, but did not give it to his client, instead keeping the money “for his own use and purposes,” according to the Bar.