Saturday, May 27, 2017

After Being Found Liable For Denying Request For Reasonable Accommodation, HOA Dodges Trial To Determine Fair Housing Damage$; Coughs Up $300K Instead To Settle Claim That It Refused To Allow Parents Of Severely Disabled Daughter To Park 25' Motor Home Needed As Medical Transport In Their Driveway

In Keizer, Oregon, The Oregonian reports:
  • The parents of a disabled woman who say they were forced to move from their Marion County neighborhood after the homeowners association barred them from parking an RV in their driveway have settled their lawsuit for $300,000.

    The parents of Khrizma Kuhn had argued that their disabled 34-year-old daughter needed the RV to travel to medical appointments and other places. She suffered from a condition that caused frequent bouts of diarrhea and had to be near a toilet and a shower, they said.

    Gary and Renee Kuhn bought their Keizer home in 2005 and got the RV in 2015 after their daughter's incontinence worsened. She has Down syndrome, autism and an IQ of 36.

    But the McNary Estates homeowners association wouldn’t budge, saying the 25-foot RV was too big to park at their home and violated the neighborhood’s covenants.

    Seeing no other choice, the Kuhns sold their home in August 2015 and moved to Woodburn, where the homeowners association immediately approved the parking of their RV.

    The Kuhns filed suit in U.S. District Court in January 2016, alleging that McNary Estates and a sub-homeowners association violated their daughter’s civil rights under federal and Oregon fair housing acts by failing to make a “reasonable accommodation” of her request, as required by law.

    In January, federal Judge Ann Aiken ruled that the Kuhns were right that their daughter had faced discrimination. All that was left to decide, Aiken said, was how much the homeowners association had to pay as compensation.

    On Thursday, attorneys for the case announced the $300,000 settlement, which is being paid by the McNary Estates' insurer.

    The settlement will cover the Kuhns’ economic losses -- including $2,400 for lodging for the month they had to stay at a motel during their move and the $76,000 difference between the selling price of their old home and the money they paid for their new house. The Kuhns will pay their attorneys fees from the $300,000.

    Greg Lusby, an attorney for McNary Estates, couldn’t be reached for comment Thursday.

    In Aiken’s written ruling, she noted that a next-door neighbor was upset that the RV blocked her line of sight as she left her driveway. The Kuhns offered her a parabolic mirror to help with that, but she rejected it, writing in an email to the Kuhns that “I have left your parabolic mirror on our porch. Please pick it up today as we do not wish to use it.”

    The judge wrote that it appears the parabolic mirror would reduce or eliminate the neighbor’s problem with sight lines.

    Dennis Steinman, the Portland attorney who represented the Kuhn family, described the judge’s January ruling as “powerful” and said it could be used as precedent for other cases in which disabled people are fighting for “reasonable accommodation” in their housing.

    “I think it’s a terrific vindication for disability rights,” Steinman said. “I think this opinion will go a long way in helping other disabled people in the future.”

    The Kuhns wanted only to meet their daughter’s “need to be out in public so she could engage with the world and not be isolated in her room,” he said. But “they found extreme resistance from neighbors and the (homeowners) board for really no legitimate reason.”

    Steinman said he hopes this sends a message to McNary Estates, as well as other homeowners associations with steadfast rules.

    “Many people who live in HOAs are often frustrated with the amount of power HOAs have over the way they live in their community,” Steinman said. “This is an instance where the HOA perhaps took their power too far.”
Source: Homeowners association settles RV dispute for $300k.

See also, Keizer HOA's dispute with family settled for $300k.

For the court ruling, see Kuhn v. McNary Estates Homeowners Association, Inc., Case No. 6:16-cv-00042-AA (D. Or. January 12, 2017).

Orlando Housing Authority Coughs Up $400K To Settle Allegations That It Denied Request To Provide Severely Disabled Tenant (Who Subsequently Died From Fall) Ground-Floor Apartment w/ Spare Room For Health Aide; Attorneys: Case Follows Defendant's Pattern Of Screwing Disabled Renters Out Of Their Rights To Reasonable Accommodation Pursuant To Fair Housing Act

In Orlando, Florida, the Orlando Sentinel reports:
  • The Orlando Housing Authority has agreed to pay a $400,000 settlement for placing a disabled and now-deceased man in a third-floor walkup unit with no room for a live-in health aide.

    [In March], the federal government found the Orlando Housing Authority failed to comply with fair housing rules regarding the way it treated Sanford resident Samuel Rosario, who died at the age of 54. Attorneys say the case follows a pattern of the authority denying disabled residents their rights to accommodations, including ground-floor units, better lighting, shower grab bars, and closer parking spaces. The authority has had multiple compliance issues with HUD in recent years, records show.

    Orlando attorney Belvin Perry, part of the team that represented Rosario’s family in winning the settlement, said the former resident of Logan Heights Apartments “could be living comfortably in a ground floor, two-bedroom unit with a live-in aide” if not for the failures of the Orlando Housing Authority.

    Rosario suffered legal blindness, seizures and memory loss when the housing group moved his belongings from a second-floor apartment in Sanford public housing to a third-floor unit in a nearby complex in 2011, records show. His daughter said he often needed help to climb the three flights of stairs. Family members pushed the housing authority to get Rosario into a ground-floor apartment with a spare room for a health aide.

    The housing authority never moved him.

    In May, 2014, he fell in his apartment and died.

    Vivian Bryant, who oversees the authority, said Rosario’s family members were inconsistent in requesting a first-floor rental for him and that he was an alcoholic. But in hopes of preventing similar problems, the agency has hired a staff disability specialist and is converting more units to accommodate disabled residents, she added.

    “Yes, there have been positive changes to OHA’s policies and procedures to ensure reasonable accommodation for our disabled residents,” she said. “We believe these improvements will help us ensure that we do not face this situation again.”

    Rosario’s case was complicated with conflicting findings regarding his disabilities. The authority turned down his request for “reasonable accommodations” following an initial denial of Social Security disability benefits, which was later reversed. Family members and lawyers said his disabilities were apparent and confirmed in a doctor’s note.

    Safer accommodations for disabled residents cost little or nothing and yet allow residents to live independently “or as in this case, [is] the difference between life and death,” according to a statement from Perry’s law firm, Morgan & Morgan.

    Matthew Dietz, an attorney for the nonprofit group Disability Independence Group Inc.,(1) worked on the case with Perry and said the Orlando Housing Authority should inform its disabled tenants about their right to live safely rather than oppose their requests.

    “For years prior to Mr. Rosario’s death, Orlando Housing Authority, and their management, have unlawfully created high barriers for persons with disabilities to obtain reasonable accommodations by applying a stringent definition of disability, requiring excessive documentation, and delaying processing of accommodation requests,” he stated.

    The case follows a string of similar complaints against the authority that were outlined in court records.
  • In April 2012, the authority entered into a consent agreement after it denied resident Ralph Fidelman’s request for a two-bedroom unit following a doctor’s recommendation.
  • A March 2011 request for a live-in aide to assist Lou Ann Lukasiewcz was delayed because correspondence was not on letterhead stationary.
  • Orlando Housing Authority paid damages based on an October 2009 complaint from resident Joseph Checklowski, who got the settlement and a housing voucher. The authority had denied his request for a three-bedroom apartment to provide space for medical equipment and a live-in aide.
  • Resident Mary Bernadin’s May 2011 request for a raised toilet and grab bars was approved on the condition that she sign a personal-injury release form.
  • Stephanie Fernandez, Rosario’s daughter, said she feels her father died in vain. She said she talked or visited with him daily and made sure someone checked on him every day. Just before he died, she invited him to a family dinner, but he declined.

    Then he fell for the last time.
Source: Orlando Housing settles disability case.
(1) Disability Independence Group, Inc. (DIG) is a Miami, Florida-based 501(c)(3) non-profit organization that promotes recruitment, education and employment of persons with disabilities, and is a resource center for persons with disabilities, their families, lawyers, and other professionals regarding an individual’s rights in the legal system, the education system, and employment.

Long Island Enclave Established By Nazi Sympathizers Decades Ago & Limits Membership To Those Of German Extraction Agrees To Fair Housing Settlement With New York AG

In Yaphank, New York, the Gothamist reports:
  • A Long Island enclave established by Nazi sympathizers has to dramatically change the way it operates to end decades of discrimination against nonwhite people, according to a settlement announced today [May 17] by the Attorney General's Office.

    The German-American League was founded in 1937 as an offshoot of the Nazi-promoting German-American Bund, and bought up tract homes in the Suffolk County hamlet of Yaphank. At first, the group operated its property as Camp Siegfried, a Nazi summer camp that for a time had its own train from Penn Station. In the late 1930s, Camp Siegfried officials were indicted on charges of violating the New York State Civil Rights Act, according to the New York Times.

    Subsequently, as the camp transitioned into a 40-acre residential community, the League toned down the overt Nazi stuff, ending the parades and sieg heiling and coming up with new names for the streets originally named after Hitler, Goering, and Goebbels. Still, for decades, the organization has exercised strict control over who can live there. It owns the land beneath the houses, and long restricted leases to members and people sponsored by members. Membership, by the way, was limited to people "primarily of German extraction and of good character and reputation."

    A federal lawsuit, by residents who argued that the racist covenant and other restrictions were making it hard for them to sell their house, ended in 2016 with the League agreeing to change its bylaws and end the German requirement.(1) Nevertheless, according to Attorney General Eric Schneiderman, the group's application process and leasing structure made membership and home sales "unreasonably difficult," and disproportionately impacted nonwhite people.

    Under the latest settlement, the group must allow owners to publicly list properties for sale, extend its land leases from 1 year to 30 years to make outside financing more feasible, place ads stating its commitment to nondiscrimination, and include a fair housing statement on its membership application.

    The settlement also forces the removal of League president Robert Kessler and the group's treasurer. "GASL's present leadership has consistently failed to meet its obligations of care and loyalty in the oversight of GASL finances and membership practices," the settlement says, noting that Kessler missed seven of nine board meetings held after the June 2016 settlement of the civil rights lawsuit.

    The settlement is binding for three years, and requires that the organization report regularly on membership, sales, and its finances.

    "The GASL’s discriminatory practices were a remnant of a disgraceful past that has no place in New York or anywhere," Schneiderman said in a statement. "This agreement will once and for all put an end to the GASL’s discrimination, ensuring that all New Yorkers are afforded equal access to housing opportunities—regardless of their race or national origin."

    The Fair Housing Act, part of the Civil Rights Act of 1968, prohibits discrimination in housing on the basis of race and national origin, among other factors.

    Kessler and the League did not answer at numbers listed for them.

    A fair housing group's lawsuit against Edgewater Park, a cooperatively owned, historically Irish enclave in the Bronx, alleged that the owners association used similar rules to keep out black home-buyers, telling them that they needed referrals while instructing white buyers how to get around the requirement. The suit concluded in 2013 with a settlement mandating that the owners train all their staff and board members about anti-discrimination laws, publicly affirm their commitment to fair housing in a variety of ways, and keep extensive records on their inner workings.
Source: Long Island Community Founded By Nazis Must End Racist Home-Buying Policies Under State Settlement.

See also, The Washington Post: ‘Hitler Street’ and swastika landscaping: A New York enclave’s hidden Nazi past.

For the New York Attorney General press release, see A.G. Schneiderman Announces Settlement With Long Island Non-Profit To End Race-Based Housing Discrimination (Attorney General’s Investigation Found That German American Settlement League Historically Excluded Individuals Of Non-White And Non-German Heritage – Violating Federal, State, And Local Laws) (click here for the Spanish version of the press release).
(1) See Long Island Landowner To Scrap Rule Allowing Only Those Of German Ancestry To Buy Homes In Community & Agrees To Cough Up $175K To Settle Fair Housing Lawsuit.

Another Service Pooch Takes Bite Out Of Discriminating Landlord's Wallet; Civil Rights Feds Score $37K+ Jury Verdict Against Landlord Who Insisted On Charging Disabled Tenant A $1,000 Pet Deposit For Her Assistance Animal

From the U.S. Department of Justice (Washington, D.C.):
  • A federal jury in Butte, Montana today [May 17] returned a $37,343 verdict against a Bozeman, Montana landlord for charging a tenant with physical and psychiatric disabilities $1,000 to have a service animal, the Justice Department announced today.

    The lawsuit, filed in U.S. District Court in Butte, alleged that Jaclyn Katz, the owner and manager of rental properties in Bozeman, discriminated against Kristen Newman, a tenant with physical and psychiatric disabilities, by charging her a $1,000 deposit as a condition for allowing her to keep her service dog, Riley.

    At trial, Newman, her treating therapist and an independent expert testified that Riley assisted Newman in living with the symptoms of her disabilities, including providing emotional support, helping to predict migraines, and reducing suicidal thoughts. Newman also testified that she repeatedly informed Katz that charging a deposit for a service animal was illegal and that Newman understood that she would have to pay for any actual damage caused by her service dog. Nevertheless, Katz continued to levy this charge and, at one point, even threatened to terminate Newman’s tenancy. The case arose out of a complaint filed by Newman with the U.S. Department of Housing and Urban Development.

    The verdict includes $11,043 in compensatory damages for Newman, $20,000 in punitive damages for Newman, and $6,300 for Montana Fair Housing, Inc.,(1) which assisted Newman with her fair housing complaint.

    “Persons with disabilities have the right to live in and enjoy their communities, just as all families do throughout our nation,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “We commend the jury for recognizing that the Fair Housing Act prohibits landlords from discriminating against persons with disabilities, and we will continue to work to eliminate discriminatory barriers in housing for persons with disabilities.”
    The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at Persons who believe that they have experienced unlawful housing discrimination may contact the Justice Department at 1-800-896-7743, or by e-mail at
Source: Justice Department Obtains $37,000 Verdict in Disability Discrimination Case Against Montana Landlord.

For the lawsuit, see U.S.A. v. Katz, et ano.
(1) Montana Fair Housing is a Butte-based, private, full service, non-profit organization dedicated to the elimination of housing discrimination, and the advancement of civil rights in the state of Montana. It investigates allegations of discrimination in housing, counsels victims of discrimination, and facilitates both the state and federal complaint process. It also assist victims of housing discrimination, under specific circumstances, in securing the representation of counsel when the filing of a complaint in court is deemed the best option.

Fair Housing Feds Squeeze Another Mortgage Lender For Allegedly Refusing To Grant Couple's Home Loan Refinance Application Because Wife Was On Maternity Leave; HUD: Over $8 Million In Compensation Obtained For Victims Of Maternity Leave Discrimination Since 2010

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced today [May 10] an agreement between Wescom Central Credit Union, based in Pasadena, California, and a married couple, resolving allegations the company denied the couple’s mortgage loan application because the wife was on maternity leave. Read the conciliation agreement.

    Refusing to provide a mortgage loan or mortgage insurance because a woman is pregnant or on family leave violates the Fair Housing Act’s prohibition against sex and familial status discrimination, which includes discrimination against individuals who have or are expecting a child. Since 2010, HUD received nearly 150 complaints alleging maternity leave discrimination and has obtained more than $8 million in compensation for victims.

    “An otherwise qualified borrower should not have their mortgage loan denied or delayed just because they’re having a baby,” said Bryan Greene, HUD's General Deputy Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to protect the rights of families by enforcing the Fair Housing Act and educating the housing industry about their responsibilities under the law.”

    The agreement announced today stems from a complaint that a married couple from Santa Ana, California filed with HUD. The couple alleged that Wescom Credit Union unfairly denied their mortgage loan and that the lender requested the woman return to work and provide a current pay stub before they would approve the loan application.

    Under the terms of the agreement Wescom will:
  • Refinance the couple’s existing mortgage at a lower rate;
  • Create a $50,000 compensation fund for applicants who were similarly denied loans or withdrew mortgage applications from Wescom during calendar year 2015;
  • Ensure its lending policies regarding parental leave comply with the Fair Housing Act;
  • Provide fair lending training to its employees; and
  • Send a notice to its employees regarding its parental leave lending policies.
  • People who believe they have experienced discrimination may file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY). Housing discrimination complaints may also be filed by going to, or by downloading HUD’s free housing discrimination mobile application, which can be accessed through Apple and Android devices.

Friday, May 26, 2017

Brooklyn Landlord Gets 3 To 6 Years Prison Time After Conviction As "Serial Briber" In Racket To Illegally Clear Code Violations; Defendant Is One Of 34 Alleged Scofflaws Accused Of Spreading Palm Grease On Various Building & Housing Inspectors To Erase Building Infractions

In New York City, DNAinfo (NYC) reports:
  • A Brooklyn landlord and "serial briber," who once threatened to blackmail a tenant with a phony incest claim if she didn't move out of his building, was sentenced to up to six years in prison Monday morning [May 8], according to the Manhattan District Attorney's office and court records.

    Herman Epstein, 37, who made the Public Advocate's worst landlord list in 2015 and had amassed $512,550 in civil penalties, was one of 34 property managers accused of paying nearly a half million in bribes to a dozen Department of Buildings employees and five Housing Preservation and Development inspectors to erase building code violations for 100 properties in Manhattan, Brooklyn and Queens, according to officials.

    “Herman Epstein is a serial briber who has shown time and again that nothing—including criminal convictions—will stop him from cutting corners to make a profit,” Manhattan DA Cyrus Vance said in a statement.

    “In this case and previous ones, he did not hesitate to pay for favors, ignore safety regulations, flout the law with seeming impunity, and even use aliases in an attempt to disguise his dishonest conduct."

    The DA added that the city's real estate boom can lead to a climate of corruption.

    "The construction industry in New York City is experiencing a historic boom, with construction spending projected to top $42 billion this year. This unprecedented demand comes with enormous economic incentives to build quickly, which unfortunately, can invite corruption," Vance said.

    "‘Pay-to-play’ culture within government agencies not only compromises the integrity of these important institutions, but endangers our entire city by allowing potentially unsafe buildings to secure rubber-stamp inspections.”

    The probe started in 2013 when the DA’s office and the city’s Department of Investigation looked into a $600 bribe paid by Epstein to a DOB inspector after he had already been charged with bribing another HPD investigator, according to prosecutors.

    In another instance, Epstein left money in a brown paper bag in a Chinese restaurant and called DOB inspector Russell McCory, telling him about the money and asking that he clear violations at about 10 buildings.

    Epstein had also tried to illegally evict tenants in 2008 from a building he owned at 848 Hart St. in Bushwick, prosecutors said.

    "Move out or I will start a rumor that you slept with your daughter," he threatened one tenant in recorded call, according to court papers. "I will report you to the credit bureau and tell your job. I am gonna screw you."

    The 2-year inquiry — which used wiretaps, inspection of financial and phone records and physical surveillance — eventually uncovered widespread corruption, including multiple DOB employees who were bribed with about $200,000 in mortgage payments, a Nissan Rogue SUV and Royal Caribbean Cruise, according to prosecutors.

    In one case, Brooklyn property manager Robert Cadoch gave $6,000 in bribes to have 96 violations, including a rotted door frame, lack of electricity in hallway light fixtures and blocked fire escapes, removed from three Bed-Stuy properties, according to prosecutors.

    A New York State Supreme Court jury found Epstein guilty of one count of bribery on Feb. 7.

    He was sentenced to three to six years in prison.

    More than 40 people have pleaded guilty in the probe and six former inspectors have been convicted.

NYC Belts Landlord With $1.2 Million Lawsuit Alleging Violations Of Local Ordinance Prohibiting Short Term Rentals Without Being Properly Licensed

In New York City, the New York Post reports:
  • The city just unleashed its biggest ever crackdown on a landlord illegally using Airbnb.

    Lower East Side building owner Rose King has been slammed with a $1.2 million lawsuit by city lawyers alleging she illegally rented a slew of units in three buildings through the short-term rental service.

    King has been hiding behind a middle man and at least nine aliases to create a network of transient hotels at 536 E. 14th St., 123 Ludlow St., and 127 Rivington St., according to the Manhattan Supreme Court suit.

    And one of the building’s permanent residents told city officials that King is trying to evict rent-stabilized tenants from her properties to convert even more units into cash-cow ­Airbnbs, sources said.

    The city will ask a judge in an emergency hearing [] to shut down King’s alleged operation.

    “It’s outrageous, it’s illegal, and we will stop bad actors from hurting our neighborhoods,” Mayor de Blasio said. “New Yorkers can’t afford to see affordable homes turned into hotels.”

    King’s operation is run “with coordinated efficiency to maximize profits” through cohort Bryan Chan, documents say.

    Chan “is openly and deceptively using at least nine different identities and 33 distinct Airbnb accounts” to advertise 12 units in the three buildings, according to court papers.

    Chan goes by different first names on Airbnb but uses the same photo for at least two of his host profiles under the names “Ryan” and “Sam,” the suit says.

    The rentals are described as “cozy studios” and “comfy and cozy apartment in LES” and go for around $85 a night.

    The multiple aliases violate Airbnb’s “one host, one home” policy for the Big Apple, the suit notes.

    It also is illegal in the city to rent out a place for fewer than 30 days without being properly licensed as a hotel or bed and breakfast or another similar business.

    At 123 Ludlow Sunday, two tourists from California told The Post they had reservations for a one-bedroom there through Wednesday. They lamented they had been waiting outside for two hours with their luggage to meet up with the person renting the pad.

    King and Chan did not return messages for comment.

    Airbnb said in a statement, “We have zero tolerance for illegal hotels on our platform in New York and have removed these listings while we investigate this situation.”

Probe Reveals Landlord Allegedly Pocketed Section 8 Rent Subsidies From Two Housing Authorities For Same Unit For Extended Time Periods; HUD To End $120K Month Payments, Forcing Low-Income Tenants To Find New Apartments

In Miami, Florida, WTVJ-TV Channel 6 reports:
  • A landlord who owns 11 buildings will no longer be able to do business with Miami-Dade Public Housing after an investigation concluded that he had been violating HUD regulations.

    Edward Daniel receives about $120,000 a month in Section 8 vouchers from the Department of Housing and Urban Development, according to his attorney. 120 tenants live in the 11 buildings he owns throughout Miami-Dade, Miami Beach and Hialeah.

    “The most egregious or most disturbing was the fact that he accepted payments from two housing authorities for the same unit for extended periods of time,” said Michael Liu, Miami-Dade Public Housing Director.

    For almost two years, HUD investigators have been looking at Daniel’s business practices after the NBC 6 Investigators inquired about a tip with allegations of serious irregularities going on at a building in Miami that had been approved to receive Section 8 vouchers.
    He had [also] been charging some Section 8 tenants for reserved parking – something that’s not allowed by the HUD. His attorney told NBC 6 that Daniel has agreed to return that money, which amounts to less than $7,000. It’s part of a settlement with the U.S. Attorney’s office.

    As for the HUD’s investigation, Director Liu says he has seen enough.

    We will no longer approve of any leases with this landlord,” Liu said.
    As for the Section 8 tenants, they will be allowed to stay in Daniel's units until their leases expire. After that, they may be required to find other units that accept their vouchers because HUD will no longer be approving new leases with Daniel.

Landlord Admits To Submitting Falsified Documents In Effort To Pocket Section 8 Rent From Multi-Unit Property He Didn't Own

In Genesee County, New York, the Batavia News reports:
  • A Stafford businessman and former supervisor candidate pleaded guilty [] in Genesee County Court to faking housing program documents in an attempt to bilk the state.

    James D. Pontillo, 49, pleaded guilty to second-degree falsifying business records, a misdemeanor. The plea is in satisfaction of an indictment filed against Pontillo in November charging him with four counts of offering a false instrument for filing and fourth-degree grand larceny.

    Pontillo, who owns multiple properties in Stafford and Batavia, was charged with forging documents at PathStone Section 8 Housing in City Centre in February 2016.

    The indictment said Pontillo lied on a PathStone information sheet, a request for tenancy approval, an ownership responsibility form and a lead-based paint disclosure form.

    Pontillo allegedly was filling out forms in an effort to get state funds for a multi-dwelling property in the city that he does not own.

    Pontillo once ran for Stafford town supervisor after a dispute with town officials over zoning for a fence. He lost the election.

    The plea deal has no agreements as to sentencing and Pontillo could face up to a year in jail. He also agreed to pay restitution of $2,550.
Source: Businessman admits falsifying documents.

For story update, see Local businessman given conditional discharge in case stemming from dispute over sister's estate:
  • A local businessman who said he hasn't even had time to grieve his sister's death because of five years of litigation around her estate was given a conditional discharge in County Court today [May 30]  on his prior guilty plea to a misdemeanor of falsifying business records.

    James Pontillo's attorney, Fred Rarick, reminded Judge Michael Mohun, who is handling this case, that his client accepted a plea deal, not because he had done anything wrong, but because he wanted to get this part of the legal issues surrounding his sister's estate behind him.

Thursday, May 25, 2017

Litigious Couple Gets Belted For $17K+ In Court Sanctions For Bringing Improper Lawsuit Against Foreclosing Bankster; Homeowners Failed In Five Earlier Lawsuits, Receiving Judicial Warning To Refrain From Further Filings Based On Same Occurrences

In San Francisco, California, the Northern California Record reports:
  • The California First District Court of Appeal recently upheld a superior court's decision to award $17,685 to defendants Deutsche Bank National Trust Company and OneWest Bank N.A., ruling that the plaintiffs sought "to delay the foreclosure... of their former home, harass the defendants and frustrate the legal system."

    The plaintiffs, Morris and Shawn Maxwell, had alleged that the financial institutions "illegally foreclosed" on their rental property in San Mateo before selling it to a third party. The defendants argued that the plaintiffs did not pay mortgage for five years.

    In its April 26 decision, the appeals court decided that the plaintiffs didn't have a strong enough argument against the San Mateo County Superior Court's decision that they pay the defendants $17,685 to cover attorney fees, which the superior court decided was appropriate to punish the plaintiffs for not having a "proper purpose" for suing the defendants.(1)

    The appeals court explained in its decision that the Maxwells brought the lawsuit against Deutsche Bank National Trust Company and OneWest Bank N.A. in February 2014 because the defendants foreclosed on the Maxwells' San Mateo County home.

    The appeals court said in its decision that the Maxwells believed the superior court had erred "in ordering them to pay monetary sanctions of $17,685" and considered the amount to be excessive.

    The appeals court said in its decision that "the trial court made clear in its ruling that it was ordering plaintiffs to pay monetary sanctions for litigating for an improper purpose."
Source: Appeals court orders plaintiffs to pay $17,000 for suit with 'improper purpose' against Deutsche Bank.

For the court ruling, see Maxwell v. Deutsche Bank National Trust Company, A142562 (Cal. App. 1st. Dist, April 26, 2017).
(1) From the court ruling:
  • Defendants contended plaintiffs had filed five previous lawsuits based on allegations identical to those in the present suit, all as part of an “unsuccessful harassment of [defendants] with this repeated groundless action.” The first four of these suits were dismissed with prejudice and the fifth was voluntarily dismissed by plaintiffs just before the court issued a tentative ruling sustaining defendants’ demurrer with prejudice as barred by the doctrine of res judicata.

    In the most recently dismissed suit, a federal judge warned plaintiffs that they should not file any further suit based on the same occurrences because it would be barred by the doctrine of res judicata and expose plaintiffs to sanctions.

Facing Foreclosure, Landlord Gets Pinched For Alleged Attempt To Torch Now-Vacant Building By Booby-Trapping It With Improvised Bomb, Pales Of Gasoline

In Rochester, New York, WHEC-TV Channel 10 reports:
  • A Webster man has been charged with trying to burn down an apartment building he owns in Rochester.

    Investigators says Eric Reynolds rigged the building on Ridgeway Avenue, which is empty and under foreclosure, with explosive devices. Someone walking by smelled gasoline and alerted the fire department.

    Fire officials say one of the devices that was in the building actually detonated, but it failed to light the fire. Investigators believe Reynolds planted devices in the apartment building hooked to gasoline and rigged with timers in an effort to burn the place down.

    Investigators tell us Reynolds came to the scene on Ridgeway Avenue the night it was discovered and was acting odd, so Wednesday [May 17] night, police and fire investigators issued a search warrant at his home in Webster. We saw them removing evidence bags early Wednesday morning, that they now say tie him to the crime on Ridgeway.

    Reynolds will be arraigned Thursday morning on the felony charges of arson and criminal possession of a weapon. The investigation into his intent is still ongoing.

    Greg Johnson lived in the building on Ridgeway for five years. He says he worked for Eric Reynolds. "I rented from him for about a year or better before he asked me to start helping him rent the apartments and stuff like that."

    He says Reynolds would come and go to collect rent. "He'd come with a big black German Shepard, smoking a big cigar and walking through the building with a gun on his waist."

    But then the tenants learned the building was in foreclosure and moved out. A few days ago, someone passing by it smelled gasoline and called the fire department. When firefighters got inside, they say it was booby-trapped with explosive devices and pales of gasoline.

    "The level of sophistication is definitely higher than something we normally encounter fortunately but it makes it that much more dangerous because it's not something we're trained for, we're not bomb technicians," says Deputy Chief James Hartman, RFD.

    "We do not know right now what the motivation was of the individual who set this system up, whether it was just to damage property or whether it was to harm people," says Hartman.

    Johnson says, at this point, intent doesn't matter. "There are human lives around there. There are kids around all that type of stuff. Who knows what time that could've went off -- as school is letting out. There's a bus stop right next to the building... All those things got to be taken into consideration."

City Moves To Shut Down Eviction Loophole; Sneaky Landlords Now Prohibited From Coordinating Water Shutoffs, Code Enforcement Condemnations To Have Tenants Immediately Booted While Avoiding Formal Court Proceedings

In Niagara Falls, New York, WIVB-TV Channel 4 reports:
  • Last week the Niagara Falls Water Board amended its shutoff policy, after a pregnant woman was left virtually homeless when her landlord ordered the board to turn her water off, and the city’s Department of Code Enforcement condemned the property.

    Colleen Atwood, who was 9 months pregnant, contacted Call 4 Action, the Water Board eventually restored service, and when the board changed its policy, the biggest change was nicknamed the “Atwood Clause”.

    The change requires property owners to acknowledge shutting off water to an occupied property is against the Niagara County Sanitary Code, but the Niagara Falls Water Board has no authority to enforce the law. The Niagara County Health Department can enforce it.

    When it comes to running water at rental properties, Paul Dicky of the Niagara Health Department said, the Health, Hygiene, and Occupancy Code tops even unpaid water bills, “Which requires all rental properties be supplied with a safe and sanitary supply of water.”

    Dicky is the Health Dept.’s Director of Environmental Health and he said, by law, a landlord cannot have the water shut off as long as the property is occupied. If it is shut off, health officials will notify the owner to turn the water back on, “We hold the landlords accountable.”

    If a landlord is successful in getting the water disconnected for an occupied property, while tenants still live there, Dicky said that success could be short lived.

    “If our inspection finds that the water has not been restored, they could be liable up to a $250 fine, and we would still require immediate correction of the violation,” meaning after paying $75 to get the water turned off, the landlord would have to pay another fee to turn the water back on.

    But there is a catch. Dicky said if the tenants’ water is shut off and they move out, the building is no longer occupied, and there is no violation of the health code.

    His advice, if you are a tenant and get a shutoff notice, you should notify the water board immediately that you are still living there, which should put the brakes on turning off the water.

Wednesday, May 24, 2017

Sentenced To 4 To 12 Years For Using Forged Deeds To Hijack Homes In One County, Title Snatcher Dodges Add'l Prison Time After Pleading Guilty To 12 More Thefts In Neighboring County; Judge: 3 To 9 Year Jail Stay To Run Concurrently With Earlier Sentence

In Troy, New York, The Troy Record reports:
  • A Rensselaer man who has admitted to bilking people in several counties out of thousands of dollars by selling or renting homes he did not own was sentenced Monday [May 15] for crimes involving 12 Rensselaer County properties.

    Zarak O. Ali, 43, was sentenced Monday in Rensselaer County Court to three to nine years in prison after pleading guilty to felony counts of second-degree forgery and first-degree falsifying business records. However, that sentence will run concurrent with a four- to 12-year prison term he was sentenced to May 5 on similar charges in Albany County,(1) meaning he will serve no time beyond that initial sentence.

    Ali admitted in February to forging deeds for foreclosed properties in the town of Brunswick and the cities of Rensselaer and Troy between January and March 2016, filing them with the Rensselaer County Clerk’s Office and renting or selling the properties. He has also pleaded guilty to similar charges in Columbia, Schenectady and Saratoga counties.

Another Attorney Gets Law License Yanked For Rules Violations In Connection With Loan Modification Matters, Screwing Financially Strapped Homeowners Out Of Illegal Upfront Fees

In Los Angeles, California, the Northern California Record reports:
  • The State Bar Court of California recently disbarred Bruce Anthony Thomason, a Laguna Hills attorney, for allegedly accepting advanced fees in loan modification matters.

    The March 12 order found that Thomason was guilty of multiple acts of misconduct in three separate client matters. In the first matter, the attorney charged nearly $4,000 in advanced fees for loan modification services, which was made illegal in the state several years prior. In addition, Thomas also allegedly failed to release client paperwork in a timely manner.

    In the second client matter, Thomason was charged with failing to perform legal services with competence for his client. The attorney also violated the California Rules of Professional Conduct for not only accepting over $2,000 in advanced fees, but also for representing a client in a loan modification matter in Florida, where the attorney was not licensed.

    The final matter included charges against Thomason for accepting $2,700 in advanced loan modification fees and for appearing on behalf of his client without authority. For this matter he was also charged with not updating the address on file with the California State Bar's Membership Records. In all three matters, Thomason was charged with failing to respond to the state bar after a Notice of Disciplinary Charges (NDC) was sent to him.

    Thomason failed to participate or provide a response to the state bar during the investigation. A default response was entered on his behalf, and the State Bar Court of California recommended disbarment.

Tuesday, May 23, 2017

Elderly Man Accuses Local Pastor Of Duping Him Into Signing Over Title To Home For A Loan, Then Selling Property Out From Under Him; Complaint To Cops Goes Nowhere, Told "It's A Civil Matter!"

In Miami Gardens, Florida, WPLG-TV Channel 10 reports:
  • Edward Fuller is one of several people who contacted Local 10 News after an investigation aired about the business practices of Miami Gardens pastor Eric Readon.

    He claims the pastor has taken him for over $500,000 and tricked him into signing over his dream house.

    Victims claim they loaned Readon money, handed over cash to rent homes and gave him a deposit to buy his car. All claimed they were not repaid.

    Fuller said he took his case to Miami-Dade police but was told that, because he willfully signed papers and was not forced to, it was a civil matter.(1)

    He has yet to find an attorney to take his case.

    Fuller, 70, has plans, the permits and the pictures from the home. "I can walk through this house blindfolded and tell you exactly where everything is," he said.

    Fuller doesn't have his dream house and claims he was blindsided by Readon. "He sold my house," Fuller said. "He sold the house Feb.13. He sold that house for $380,000."

    How much did Fuller get from that? "I got not one red cent," he said.

    The home is located in the 10900 block of Northwest 19th Avenue.

    Fuller bought the property more than 30 years ago and had a plan. After a 35-year career with the U.S. Postal Service, his retirement project was to build a dream house for his family. "This was like my gift to my daughters once I was gone," Fuller said. "It's just that simple."

    After retirement, the walls and the roof went up.

    Fuller admits he ran out of money to finish. Then, he claims, one day Readon appeared. The pair had never met before.

    "Somehow, he got the information that I was having a problem getting it completed," Fuller said.

    Fuller claims Readon took him to a hard money lender for a loan.

    Project Youth Outreach Unlimited, a nonprofit corporation, was made the contractor on the $125,000 construction loan.

    Readon is the president of that nonprofit.

    But there was a catch. To get the loan, Fuller had to sign 50 percent of his property over to Readon. Since conventional lenders had turned him down, Fuller agreed and work on the house began again.

    Fuller let Readon have full control over the $125,000 loan. When the money ran out, the house was still not finished.

    Fuller claims in order to get more funds using his good credit, the pastor persuaded him to sign over the other 50 percent of the house, so Fuller's credit would be free and clear.

    That meant Project Youth Outreach Unlimited and Readon now owned the entire house.

    "'I promise you, man, you're going to get your house back,' This is what he told me," Fuller said. '"You're going to get your house back.'" But it never happened.

    Fuller only learned Readon sold the house for $380,000 when he did a property records search.

    "I said, 'Eric, you sold my house,'" Fuller said. "He said, 'I got my own personal money tied up in this house,' and he said, 'I can't lose my money.'"

    Readon canceled plans to speak to Local 10 News.

    As Local 10 reported last month, others have said they gave Readon cash deposits to rent homes and buy cars and loaned him cash. Some did get money back, but only after Local 10 began to ask questions.
For more, see Man, 70, accuses Miami Gardens pastor of taking his dream home (Edward Fuller searched for attorney to fight pastor Eric Readon in court).
(1) The fact that this 70-year old man willingly signed over the home and was not forced to doesn't automatically make this a civil matter. A basis for a theft or larceny (ie. theft by deception or false pretenses) from an elderly person, obtaining property by deception or false pretenses (or similar crime) may exist if an investigation would reveal that false or deceptive promises were made to dupe the elderly homeowner into signing over the home, or that the elderly homeowner was otherwise taken advantage of. See, for example, Ex-Lowell building inspector guilty of bilking dying woman of her home.
If the police summarily dismissed this case as a civil matter without first conducting an investigation, chances are that the police (and/or the local prosecutor's office) either:
  • don't have the resources needed to handle this case, or
  • lack the expertise necessary to be alert to the possibility of a theft crime occurring in the context of a business contract, or
  • are just clueless and are using it as an excuse to get rid of the person making the complaint.

Michigan AG Temporarily Slams Brakes On 'Involuntary' Probate Scheme Used By Real Estate Broker, Some Public Officials To Hijack Control Of Dead People's Homes

In southeastern Michigan, WXYZ-TV Channel 7 reports:
  • The Michigan Attorney General is suspending a controversial probate practice that 7 Investigator Heather Catallo recently exposed.

    She’s been showing you how several local families are losing large parts of their inheritance to certain public officials who have teamed up with real estate brokers.

    Now Attorney General Bill Schuette wants this practice to stop while his office takes a very close look at what’s been happening with these cases.

    “It’s sad to me that people are out there doing that,” Joanne Zaremba told Catallo last month.

    Joanne is one of several rightful heirs who say they were blindsided when someone else opened a probate estate in a deceased relatives name. That meant Joanne could have lost her late mother’s home to a complete stranger. And she’s not alone.

    “We were summoned to court, someone opened a probate estate in his name,” said Kristin Rekowski about her late father.

    Real Estate Broker Ralph Roberts has teamed up with some Attorney General-appointed lawyers called Public Administrators. The Public Administrators and Roberts’ company, Probate Asset Recovery, bill the estates for thousands of dollars, plus Roberts gets real estate commissions when they sell the homes.

    “I find properties. I believe there’s a benefit, so I then tell a public administrator, here’s the benefit there,” said Roberts in November 2016.

    “So you’re getting the real estate fees, and you’re getting the Probate Asset Recovery fees,” asked Catallo. “If we’re successful, yes,” said Roberts. Roberts admitted he often take 1/3 of the total estate assets.

    In many of the cases, the houses at stake are in foreclosure or the owners were behind on their taxes. Now that we’ve exposed this practice, the Attorney General is suspending all Public Administrators from opening any new estates with homes that are in foreclosure or those that owe taxes.

    During the suspension, Attorney General Schuette’s will be reviewing whether they need to come up with additional rules for how to handle these estates.

    Schuette also indefinitely suspended Public Administrator Cecil St. Pierre from Warren as part of this probe into the probate practice.

    If this has happened to you, click HERE to file a complaint with the Michigan Attorney General, who appoints Public Administrators.

    Click HERE to file a complaint with the Attorney Grievance Commission.

    Click HERE to file a complaint with the State of Michigan against a real estate agent/broker.

Monday, May 22, 2017

Welcomed Two Years Ago By Trusting Residents In Troubled Condo To Straighten Out HOA's Operation, Court-Appointed Receiver Now Faces The Boot After Belting Unwitting Owners With Over $2 Million In Legal & Administrative Fees

In Miami, Florida, the Miami Herald reports:
  • They welcomed him with open arms, because they thought he was their salvation.

    In March of 2015, a judge assigned a professional to rescue a 310-unit condominium in Miami Gardens, at the request of lawyers for Miami-Dade County. The “receiver” was to collect payments in arrears, correct dangerous code violations, carry out repairs and settle county fines running in the millions.

    Eleventh District Circuit Court Judge Eric Hendon named former judge Jorge J. Pérez as the receiver.

    Owners at the Mirassou condos — mostly working class people like teachers, mechanics and nurses — said they did not know how much the receiver was going to cost them. The judge's order said only that the costs should be “reasonable.”

    But two years later, the owners are now asking Hendon to remove Pérez, who along with his team is charging more than $2 million. The condo collected only about $900,000 in the past two years, and still owes millions of dollars in fines to the county.

    “We are poor families. We live on a salary. We're not millionaires, and now we have to pay that man nearly $2 million,” said owner and school counselor Tania Portela. “Where are we going to get that money?”

    Pérez is now seeking a loan from TotalBank so that he can be paid money owed to him and his team, according to a letter submitted as part of the court case.

    Mirassou owners would pay off the loan over seven years in a special assessment that would add nearly $100 to their monthly maintenance bills, which range from $220 to $375.

    Judge Hendon was scheduled to rule on the loan during a hearing Friday [May 19], but he recused himself from the case on Thursday morning. According to court documents, the judge wanted to “avoid the appearance of impropriety” after receiving an “exparte communication” from Pérez at 12:21 a.m. Thursday. In an email, Pérez asks Hendon “as a friend, an officer of the court and your receiver and friend” to “impose full control of the courtroom Friday” by not allowing cameras in the hearing.

    Pérez’s request came following a report aired on Wednesday by Univisión 23 of an investigation with el Nuevo Herald on the Mirassou receivership case. In his letter, Pérez called the news report “lies” and said his mother was “in a fragile state” as a result of seeing him “being slandered” on TV.
    Several owners said they did not know that they had the right to object, or that they had to do it in writing. They also did not know that information about Pérez’s fees are available on the court's Web page.

    We were blind, in part because of our ignorance and in part because we trusted [the system],” said María Roque, a teacher and board member of the Mirassou association.

    “He was the law, picked by a judge to save us,” added Portela.
    Overall, the records showed Pérez and his team billed about $2.6 million. The owners' association has only collected $970,000 in the past two years, according to a March 10 report in the court files.

    Your honor, it's like we needed to paint a wall ...and you forced us to hire Michelangelo,” Pedro Ortega, who owns several apartments in Mirassou, told the judge during a court hearing in February.
    Pérez faced similar complaints in a 2013 case still pending in federal bankruptcy court in South Florida.

    In that case, Pérez angered owners of the luxury One Bal Harbor Resort and Spa when he billed $2.4 million for 18 months of work as receiver.

    “The receiver and his law firm systematically exploited their appointment as a fiduciaries by the state court as a bottomless trough to enable a feeding frenzy to line the pockets of those involved,” wrote Charles Tatelbaum, the attorney who represented some owners in that case.

    A negotiated agreement reduced Pérez's fees by 50 percent, to $1.4 million, but some of the owners are still contesting the fees in court.

Activists In Southeast Michigan Begin Efforts To Battle Land Contract, Contract For Deed Rackets That Lure Unsophisticated Homeseekers With Little Cash & Crappy Credit Into Predatory Homebuying Agreements

In Detroit, Michigan, Bridge Magazine reports:
  • Denise Pope put a down payment on hope as much as a house.

    Sure, the home wasn’t much: An 800-square-foot wood bungalow, barely big enough to contain her four children and husband. There were holes in the walls, probably from thieves getting to copper pipes. Like most empty Detroit homes, it lacked a furnace and water heater.

    But it was in a good neighborhood, Rosedale Park, near a big playground. And the house came with a promise: Put $3,500 down, pay $500 per month plus $82 in taxes, and it would be hers in a little over two years.

    “I thought this could be our way up,” said Pope, 35, a custodian and longtime renter. “We could fix it up, put in some value, build some equity and maybe one day rent it out or have an asset to pass onto my kids.”

    It didn’t work out that way. Within months after moving in last year, Pope received two legal notices. One informed her the house was in tax foreclosure over a $4,900 debt that predated her even setting foot in the home. A few months later, she was served with eviction papers due to a rent squabble that is still playing out in the courts.

    It’s a familiar story with land contracts, a form of seller financing with a deep, unsavory history in cities nationwide. They’re flourishing again as an alternative to mortgages in Rust Belt cities since lending regulations tightened after the housing collapse.

    This is becoming a big problem all over besides just Detroit ‒ like Flint, Battle Creek and other urban areas,” said Lorray Brown, co-director of the Michigan Law Poverty Program, which is helping draft legislation to regulate land contracts.

    The business model for many land contracts: Buy cheap homes at tax auctions. Do no repairs. Sell for as much as 10 times the purchase price to desperate or naive buyers at high interest rates. Make the owner assume all back debt and upkeep. Evict the buyer if payments are late.

    Predatory land contracts are blamed for costing generations of African-Americans their homes – and family wealth – in Detroit and Chicago from the 1940s to early 1970s. And activists fear history is repeating, so they’re drafting reforms in Lansing and hoping to organize buyers.

    These have been around for such a long time. We were foolish to think the practice had ended,” said Mike Gallagher, a retiree who was part of a well-known Chicago activist group that fought against contract buying in the 1960s.

    He’s leading a group of activists who plan to travel to southeast Michigan this week to knock on doors of contract buyers.
    “These (land contracts) are sold as a way to achieve the American dream and accumulate wealth, but you’re not buying the title to the house,” said Gallagher, the land contract activist.

    Basically, you are fixing up someone’s house for years. You can make it all the way through to the end of the contract and, if one thing goes wrong, one late payment, you end up with nothing. By and large, these deals are structured to fail.”

    Pope’s contract stipulated the home was sold “as-is” and that she assumed all debts. But after the foreclosure notice, she stopped including the $82 for taxes in her monthly payment because she said it was clear the seller wasn’t paying taxes to the county, Pope said.

    This February, there was a rap on the front door. It was court officers serving her with eviction. Her total delinquency: $164, according to court papers reviewed by Bridge.

    “That’s when I decided to fight,” Pope said. “I’m not giving up.”

    Activists were ‘ahead of their time’

    Neither are Gallagher or Jack Macnamara, although both thought they’d won this battle nearly 50 years ago.

    As a young man, Jack Macnamara helped organize land contract buyers in Chicago. He thought the battle was won. Now, he’s preparing to fight it again in Detroit.

    Macnamara helped form the Chicago Buyers League in the 1960s when he moved to the Lawndale neighborhood as a young Jesuit. He met family after family in contracts that forced them to pay tens of thousands of dollars more than their homes were worth. They couldn’t get mortgages because Federal Housing Administration guidelines made them practically impossible to obtain in urban neighborhoods.

    The Buyers League grew to 500 residents who picketed landowners’ homes, lobbied City Hall and went on strike, withholding monthly payments in hopes of renegotiating land contracts.

    The Chicago Tribune wrote that the strike “convulsed the city,” leading to mass evictions and showdowns with police who would drag out people’s furnishings onto the street and activists who would put them back in as soon as the authorities left.

    Eventually, more than 400 contracts were renegotiated, saving an average of $13,500 per family. Data on land contracts collected by the league helped Congress pass the 1977 Community Reinvestment Act that ended federally backed redlining.

    And then, the episode largely faded to history until the story was recounted in “Family Properties,” a 2009 book by Rutgers University Professor Beryl Satter (who has relocated to Detroit), and “The Case for Reparations,” a famed essay in The Atlantic in 2014 by Ta-Nehisi Coates.

    “I guess we were a little ahead of our time. Detroit is similar or even worse than Illinois,” Macnamara told Bridge.

    He and his group collected reams of data, which later were used by federal officials, that estimate failed land contracts cost black Chicago residents $500 million between 1940s and 1970s, about $3 billion in today’s money. Nationwide, disparities in homeownership are cited as prime factor in the wealth gap between whites and blacks. In 2013, the median wealth for white families was $141,000, compared to $11,000 for blacks and $13,700 for Hispanics.

    The contracts have become popular again after the subprime mortgage crisis, which led to the foreclosure of more than 65,000 Detroit homes. Reforms passed after the housing crash make it more difficult for the poor to get mortgages, so private lending is flourishing, Macnamara said.

    All these things – subprime loans, land contracts – they’re all just another way of screwing the underclass,” he said.

    Gallagher and other volunteers plan to spend several days in Detroit, knocking on doors of land contract buyers. Their goal initially is to collect data and information and lay the groundwork for buyers to organize, he said.

    They’ve made similar trips in recent months to Pittsburgh and two Ohio cities, Akron and Youngstown.

    Legislative remedy

    Efforts are underway, meanwhile, in Lansing to craft legislation to add protections to contract buyers.

    The Michigan Poverty Law Program is working with Sen. Steve Bieda, D-Warren, on the legislation. Among other things, it would require the filing of land contracts with county registers of deeds (it’s now optional) and inspections before sales.

    Other possible proposals include requiring third-party appraisals and forbidding sellers from passing on taxes or liens to home buyers.

    Bieda told Bridge he expects to introduce legislation in the next few months. He said he hasn’t yet approached Republicans about the bills, which is typically required for passage in the GOP-dominated Legislature.

    One concern is that legislative remedies could discourage legitimate land contracts and encourage “scammers to get creative and find another way around it,” said Ted Phillips, executive director of the United Community Housing Coalition.

    The Detroit nonprofit assists buyers stuck in “egregious, horrible, predatory” land contracts by buying out their contracts, Phillips said. The homeowners repay the loan through a zero percent land contract to United Community Housing Coalition.

    “We are using the same tool but in the right way,” said Phillips, whose group is assisting the Chicago activists but focused now on helping homeowners facing tax foreclosure.

    The Genesee County Land Bank employs a similar strategy, selling 330 tax-foreclosed homes to occupants last year to occupants through land contracts, said its executive director, Michele Wildman. The agency is amid a review of the program, though, to ensure that houses remain in good condition and buyers comply with terms of the contracts.

    Another possible concern? Just about every solution to predatory lending in the past 50 years has led to more predatory lending, said Lindsay Helfman, a lecturer at the University of Michigan who is writing her dissertation at Temple University on lending in Detroit in the 1970s.

    Many homes that are now being sold on land contracts, for instance, had been foreclosed on after subprime loans failed.

    “The real estate market in Detroit is just broken,” Helfman said. “There’s basically a dual housing market of (mortgages and private sales). So it’s profitable to exploit people who have limited options in housing.

    “This problem has always been so big that (officials) just throw their hands up and create Band-Aid programs that end up creating even more predatory lending.”

    A fighter

    Sitting on her couch, which doubles as her bed, Pope still allows herself to dream.

    One day, she and her family will have a big backyard. Bedrooms for everyone. A spacious dining room.

    Until then, she’s tethered by her land contract. Pope’s eviction case was dismissed after she produced receipts showing she made her monthly payments (minus the taxes). The foreclosure is on hold while Pope sues the contract seller in an attempt to make the company pay the back taxes, said her attorney, Joe McGuire.

    Pope had hoped to pay off the home by next year, keep it as a rental property or sell it for profit and move into a bigger house. That may not happen now.

    The easiest thing in the world would be to walk away. But she won’t.

    “This has opened my eyes to land contracts but I’m a fighter,” Pope said.

Sunday, May 21, 2017

Arizona Bar Gives Attorney The Boot For Playing Fast & Loose With Client's Lawsuit Settlement Funds; Ordered To Pay $45K+ In Restitution

The State Bar of Arizona recently announced:
  • Attorney Robert L. Earle of Sedona was disbarred from the State Bar of Arizona after receiving clients' settlement checks and keeping unwarranted sums.

    On March 1, 2017, an aggravation/mitigation hearing was held before the Presiding Disciplinary Judge of the Arizona Supreme Court and a hearing panel, where Earle argued he had no time to prepare for the matter because his files had been stolen by the State Bar of Arizona.

    The hearing panel found clear and convincing evidence that Earle violated ethical rules after listening to witness testimony and reviewing 29 exhibits that were admitted to support the allegations.

    In Count One, approximately $47,449.84 in client and/or third-party funds were missing or unaccounted for from his firm’s trust account. He made unauthorized cash withdrawals, and as of June 28, 2016, money owed to several clients, third parties, and lien holders was unpaid.

    In Count Two, Earle obtained a jury verdict and award of $106,000 in favor of his client. A portion of the settlement in the amount of $33,800 was paid by one defendant to his client, which he mismanaged by making an unauthorized cash withdrawal of the full amount and disbursed it to himself and his firm.

    In Count Three, Earle frequently failed to communicate with, and overbill, his client in a Yavapai County Superior Court case. The assigned judge issued an order on March 22, 2016 for settlement conference to be held on April 19, 2016. Met with disappointment, Earle notified his client on April 13, 2016 about the meeting that would be held a few days later, after knowing about it for several weeks. At the hearing, Earle lied to the court by stating that his client was not able to attend the hearing due to the risk of losing his job—even after his client said he wouldn't. His client was held in contempt and was fined $1,211.

    The court ordered Earle to appear at an "Order to Show Cause" hearing on Aug. 31, 2016 to show cause as to why he should not be held in contempt for failing to comply with the court’s June 20, 2016 order to return his client’s file. He failed to appear.

    In Count Four, a settlement totaling $40,000 was awarded to Earle's client for a personal injury case resulting from a car accident. He claimed delays in paying his client any of the settlement funds and claimed he had paid all medical providers in the case. To date, he has only paid his client $12,000; has not paid medical providers; and has not provided accounting to the State Bar for the $40,000 sum.

    In Count Five, Earle was admonished and ordered to pay restitution to his client and the State Bar within 30 days of the March 17, 2015 order. More than a year later, the Bar received a letter from him seeking assistance regarding payment to the complainant, as he claimed the address was not valid. The Bar advised him that it would facilitate the payment process and that it would accept the full amount of the client's restitution by money order or certified funds. Neither the State Bar nor the client received full restitution as ordered.

    Earle failed to comply with the State Bar's screening requests and failed to file an answer, or otherwise defend, against the allegations in the counts listed.

    Leading up to his disbarment, Earle was serving an interim suspension that was ordered on Dec. 5, 2016.

    Robert L. Earle's disbarment was effective March 23, 2017. He was ordered to pay a sum of $45,171.65 to three clients and must pay for the costs and expenses associated with his disciplinary proceedings to the State Bar of Arizona.(1)

    Consumers may report attorney misconduct by calling the State Bar of Arizona Attorney/Consumer Assistance Program (A/CAP) hotline at 602.340.7280.
Source: Attorney Robert L. Earle of Sedona Disbarred for Embezzling Client Settlements.
(1) The Arizona Supreme Court established the Client Protection Fund ("CPF" or "the Fund") in Client Protection Fund Button1961 to promote public confidence in the administration of justice and to preserve the legal profession's integrity by reimbursing people who have lost money because of dishonest conduct of lawyers admitted and licensed to practice in this state. The Fund may not award more than $100,000 to any one claimant and not more than $250,000 in the aggregate regarding claims against any one lawyer. Claims must be filed within five years from the time the claimant knew or should have known of the dishonest conduct causing the loss. This limitation period can be waived at the discretion of the Fund's Trustees. Go here for the Supreme Court of Arizona Client Protection Fund 2016 Annual Report.

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.

California State Bar Continues Weeding Out Sticky-Fingered Lawyers For Ripping Off Client Settlement Funds

In Los Angeles, California, the Northern California Record reports:
  • Pasadena attorney Mary Derparseghian was disbarred by the State Bar Court of California on Jan. 19.

    The decision came after both the attorney and the Office of the Chief Trial Counsel appealed the original disciplinary ruling suspending the attorney for two years for misconduct a client matter.

    In the first matter, Derparseghian was hired by two clients in February 2010 to represent them in a complaint against their homeowner’s association. The clients paid the attorney $5,000 in advance fees that Derparseghian failed to deposit into her client trust account. The attorney earned her clients $111,500, of which $65,799.76 was to be allotted to them. Derparseghian failed to maintain that balance in her trust account and withdrew nearly $90,000 for herself. The clients contacted the attorney for their settlement, but Derparseghian allegedly misaddressed a letter to the clients that explained the settlement process and requested signatures for the funds to be released.

    The clients did not receive the letters and filed complaints with the State Bar of California.

    In another matter, the lawyer was accused of not properly representing a client, including not telling him about a necessary court appearance and not getting in a continuance request.

    The original decision to suspend Derparseghian was overturned upon appeal when it was determined that the attorney’s actions were intentional and additional aggravating factors were discovered than mitigating.
Source: Pasadena attorney disbarred for misappropriating 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.

Attorney Accepts Public Admonition From Virginia Bar, Coughs Up $227K+ To Cover Losses Caused By Sticky-Fingered Employee's Heist From Law Firm's Client Trust Account

In Fredericksburg, Virginia, the Virginia Lawyers Weekly reports:
  • A Fredericksburg lawyer has accepted a public admonition for lapses that allowed a trusted office staffer allegedly to make off with more than $200,000 from the lawyer’s trust account. H. Glenn Goodpasture deposited more than $227,000 of his personal money into the account to cover the loss, according to a report from [the] Virginia State Bar ...

Employee-Wife Gets 3 Years For Glomming $2.3 Million In Real Estate Closing Proceeds From Law Firm Trust Account While Employer-Hubby Avoids Criminal Prosecution, Keeps Law License After Bar's Public Reprimand (ie. Hand-Slap)

In Columbus, Georgia, the Ledger-Enquirer reports:
  • Sonya Eddings was sentenced to three years in federal prison Monday [April 10] afternoon, more than five years after her family and world crumbled under the weight of a scheme to steal $2.3 million from the law firm trust account of her then-husband, Michael Eddings.

    She told U.S. District Court Judge Clay Land that she took responsibility for her role in the scam that involved millions of dollars passing through the real estate closing trust account of Michael Eddings’ law firm over a four-year period from 2007 to October 2011. But she also said that he knew of the indescrepancies in the trust account.

    Sonya Eddings and their daughter, Candace Eddings, who was 16 when the scam was discovered, told the court they wanted to save their family and they were manipulated by Michael Eddings in an effort to preserve his law license.

    “His whole point was to protect his law license — no matter what,” Sonya Eddings told the court of her motivation for taking the blame for the scheme.
    Michael Eddings, now remarried and a criminal defense attorney working primarily in Atlanta and Columbus, was never charged with any crime. Since October 2011, he has maintained his innocence, saying he had no knowledge of the scheme and that his then-wife was solely responsible for the missing money.

    In December 2016, the Georgia Supreme Court handed Michael Eddings the lightest possible professional punishment for the funds missing from the firm’s trust account. He was ordered to receive a public reprimand and was allowed to continue to practice law without suspension or disbarment.
    Sonya Eddings, who has been living with an aunt in Philadelphia, was her husband’s office manager and was transferring money related to real estate closings from the trust account, then moving it to separate accounts for two failing food-service businesses the couple owned.
For the story, see In emotional sentencing hearing, Sonya Eddings explains role in $2.3M scheme.
(1) The Clients' Security Fund of the State Bar of Georgia was created for the purpose of maintaining the integrity and protecting the good name of the legal profession by reimbursing to the extent deemed proper and feasible by the Board losses caused by the dishonest conduct of members of the State Bar of Georgia. Go here for eligible claims. See generally, Part X of the State Bar Rules. Attorneys from the State Bar of Georgia Office of the General Counsel act as staff for the Clients' Security Fund. For more information regarding the Clients' Security Fund, please call 404-527-8720.

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.

Employee-Wife Gets 55 To 78 Months For Purloining Over $140K From Law Firm's Client Trust Account While Employer-Hubby Gets 90 Days For Unrelated Misdemeanor Charges, Law License Suspended For At Least 2 Years

In North Wilkesboro, North Carolina, the Wilkes Journal-Patriot reports:
  • The N.C. Bar Association has suspended the license of attorney R. Tyson “Ty” Ferrell, who has practiced law in Wilkes County for many years.

    Ferrell, 52, pleaded guilty in Wilkes Superior Court earlier [in April] to 15 misdemeanor counts of failure to withhold state tax. He was sentenced to a total of 90 days in jail, suspended 60 months with two years of supervised probation and three years of unsupervised probation.
    Ferrell’s license was suspended for five years as part of a consent decree between the attorney and the N.C. State Bar. The decree was heard and signed in Wilkes Superior Court by Judge Patrice Hinnant of Guilford County.

    As part of the decree, Ferrell will be unable to practice law for two years, with the last three years of the judgment suspended. Should he complete a number of requirements placed upon him by the state bar, Ferrell could apply to have his license reinstated after two years.

    Ferrell’s estranged wife, Kristy Cass Ferrell, 40, of 4941 Old Salisbury Road, Union Grove, was sentenced in Wilkes Superior Court by Hinnant in February to not less than 55 nor more than 78 months in prison after she pleaded guilty to numerous felony offenses occurring while she was employed as an assistant in Ferrell’s office.

    Kristy Ferrell pleaded guilty to multiple counts of embezzlement and obtaining property by false pretense, forgery of a certificate of title, insurance fraud and conspiracy, all felony offenses.

    She was also ordered to pay certain amounts in restitution, including $93,000 to the N.C. Bar Association and $48,500 to Jay Mathis.

    A co-defendant in the case, Graham Randell Waddell, 46, of 1011 Austin-Little Mountain Road, Ronda, was ordered jointly responsible for compensating Mathis.

    Waddell pleaded guilty in October to similar offenses, including multiple counts of obtaining property by false pretense, and received a suspended sentence in Wilkes Superior Court.

    He was also ordered to pay $52,000 in restitution.

    Waddell, who is Kristy Ferrell’s ex-husband, was also employed by Ty Ferrell as an assistant at his office.

    All charges were filed after an investigation by the Wilkes Sheriff’s Office.

    The bar association, according to the decree, maintained that Kristy Ferrell and Randell Waddell, between February 2012 and July 2015, misappropriated over $100,000 from Ty Ferrell’s clients. The money was in the law firm’s trust account at Yadkin Valley Bank.

    Ty Ferrell’s failure to supervise the work of his wife and her ex-husband “enabled… the theft of client funds,” according to the consent decree. This was found to be a violation of the bar association’s rules of professional conduct.

    Kristy Ferrell’s parents, Josephine and Stanley Cass, have also been charged in connection with this investigation. Their cases have not yet been heard.
Source: License of attorney Ty Ferrell is suspended.
(1) In North Carolina, the Client Security Fund was established by the state's Supreme Court in 1984 to reimburse clients who have suffered financial loss as the result of dishonest conduct of lawyers engaged in the private practice of law in North Carolina. There is a $100,000 dollar limit on reimbursements for an applicant who suffered a reimbursable loss (or losses) as the result of the dishonest conduct of 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.