Saturday, July 22, 2017

City's Change In Building Designation To "Residential Hotel" Puts Kibosh On Gentrifying Landlord's Plan To Boot Nearly 50 Seniors From Retirement Home; Advocate Hopes Dozens More Whose Premature Move-Out Was Triggered By Illegal Eviction Notice Return, Move Back In

In Los Angeles, California, KABC-TV Channel 7 reports:
  • There has been a big victory for a group of seniors fighting eviction from their Westwood retirement home.

    Nearly 50 elderly residents -- many of them disabled and approaching 100 years of age -- were served notices last December and told they had only a matter of months to get out.

    "Who the heck wants to be evicted at age 100?" said Los Angeles City Councilman Paul Koretz, who met with residents of the Vintage Westwood Apartments shortly after the notices were served in December.

    "It couldn't be more outrageous. (It's) probably the largest senior citizen mass eviction in the country's history. I've never heard of anything like this."

    The owner of the building wanted to renovate and turn the residence into a luxury assisted living community, but the city has now designated the building a "residential hotel," which prevents the residents from being moved out of the building.

    Watermark Retirement Communities, the company that manages the building, claims the residential hotel designation will do nothing but prevent residents from receiving a "generous settlement package" that guaranteed they could return to the building after the planned renovations were completed.

    "We still believe that Westwood Horizons is not a residential hotel, and we will appeal the determination," the company's president, David Barnes, said in a statement.

    Despite the new designation, renovations to the building must still take place. "The building is in a serious state of disrepair and basic life safety systems must be immediately addressed," said Barnes.

    The company maintains that residents need to temporarily be relocated so that the necessary renovations can be completed.

    One resident who will soon be 102 years old said she's glad she won't have to move.

    "This is a wonderful place," said resident Ruth Frank. "It's a place for living, not leaving and we're all very, very happy here."
Source: Elderly residents won't be evicted from Westwood apartment building.

See also, Westwood seniors get reprieve from orders of eviction:
  • In December, the new owners of the Vintage Westwood Horizons moved to evict the 117 seniors living there, most of them Jewish, intending to conduct extensive renovations. While the city decision stays the evictions, many onetime residents already have moved out, leaving fewer than 50 still in residence.
    [Jessie Kornberg, president and CEO of Bet Tzedek Legal Services, a legal aid clinic that represented a group of tenants fighting eviction] said under the building’s new status, Watermark would be required to pay the cost of temporary relocation should it become necessary during renovations.

    She sees the city’s move as a victory that will lead to a restoration of the building’s former vibrancy.

    “I would love to see people who relocated based on those invalid eviction notices be able to return to the building and be able to rebuild the community that was there before,” she said. “I’m hopeful that it’s possible.”

    Jeannine Frank, who advocated against the evictions and whose mother is a resident, said she shares that hope.

    Frank said she disapproves of the way the eviction was handled and that damage was done when Watermark posted eviction notices in December, saying the residents had 120 days to vacate their units.

    The community was really torn apart by fear and uncertainty,” Frank said.

    The 120-day deadline turned out to be misleading, failing to account for exemptions that give seniors and those with disabilities more time to comply with an eviction order.

    The notices nonetheless sparked an exodus of dozens of tenants.

    “They kind of jumped the gun, and they left early when they didn’t have to,” said resident Flossy Liebman, 96.

    She said those who left are having trouble finding a place on par with the Westwood location.

    “It’s a delightful, wonderful place,” she said of her current home. “It’s friendly, and that’s the one complaint that we’re hearing from people who leave: It’s not friendly anyplace.”

    [Resident Emiel] Meisel said he is not planning to move unless absolutely necessary. “They’re going to have to blast me out of here,” he said.

130 Low-Income Tenants Dodge Mass Eviction As Landlord Opts To Sell Aging Homes To Them On Easy Terms

In Dallas, Texas, the Dallas Observer reports:
  • In a startling turnabout in the deadlocked West Dallas war over low-income housing and gentrification, Khraish Khraish, a landlord locked in a battle with the mayor over hundreds of low-rent houses, turned the tables [] by announcing he will sell 130 of his properties to the current tenants.

    Mayor Mike Rawlings had pushed Khraish to sell his West Dallas holdings to corporate buyers whom the mayor recommended. Khraish brushed off those offers.

    [The] announcement means he is selling the properties instead to buyers of his choice — the current tenants. If that plan holds, it will create a wall of low-income neighborhoods for at least 20 years around the aggressively expanding gentrification area at the foot of the new Margaret Hunt Hill bridge.

    The deal [] means the current tenants, mostly poor and working African-American and Hispanic families, will remain in their homes in an area where land values are soaring and gentrification is rampant. If the solution sticks and the families can buy, the irony will be that a resolution came not from City Hall, whose actions so far have tended toward displacement, but from a private sector landlord whom the mayor had labeled a slumlord.

    At a press conference in front of the first house to sell, Khraish credited City Council candidate Omar Narvaez and community leaders Hilda Duarte and Ronnie Mestas with leading him to a change of heart.

    “I have been moved and transformed by the relationship of Omar, Hilda and Ronnie,” he told a large gathering of media and tenants. “Their concern for these families gave me a change of heart. I realized what needed to be done for these families and this community.

    “I cannot take any credit for this decision,” he said. “All the credit must go to Omar, Hilda and Ronnie.”

    Khraish and his father, partners in HMK Ltd., vowed last year to evict several hundred families and bulldoze their houses after the city passed tougher building code requirements. Instead, they now intend to sell the 130 houses where tenants remain to the occupants at a fixed price of $65,000 apiece.

    HMK will finance all sales at a fixed rate of 4.7 percent over 20 years. Families will pay no money down and no penalty for prepayment, but if a family decides to sell, HMK will retain first right of refusal to buy the property back. Khraish said the right of refusal is designed to prevent speculators from talking families into flipping their land.

    Many of the properties Khraish wants to sell to his tenants for $65,000 are on county tax appraisal roles for less than $20,000. But the opening of the new bridge to West Dallas has ignited a firestorm of gentrification, and actual sale prices for some lots are now in the seven figures.

Add One More Mobile Home Park Lost To Developer's Wrecking Ball; Soaring Land Value, Aging Infrastructure Leads To Redevelopment Plans That Now Leaves Nearly 100 Lot-Leasing Homeowners Dealing With Displacement

In Hennepin County, Minnesota, the Star-Tribune reports:
  • In the end, nothing saved St. Anthony’s only mobile home park from closing.

    Not an eleventh-hour attempt by a nonprofit. Not a lawsuit. Not manifold pleas at City Hall.

    Instead, neighbors watched as Lowry Grove became another bygone community in a county that has lost half its mobile home parks since 1991.

    Mobile home communities are disappearing in pockets across the metro — and at a much higher rate in Hennepin County, where only six parks remain.

    On a recent evening, Natividad Seefeld stood among mourners at a vigil in Lowry Grove, where neighbors grieved the breakup of their community as well as the loss of a neighbor who took his own life days before the June 30 eviction deadline.

    Seefeld thought about Park Plaza Cooperative, her own mobile home community in Fridley that once shared an owner with Lowry Grove. Why was one rescued and not the other?

    “It’s just not fair,” Seefeld said at the vigil. “Their owner was my owner.”

    Phil Johnson at one time was an owner of both parks. He says he tried to keep Lowry Grove open, seeking out affordable housing groups that may have wanted to take it over. In the end, he and his partners sold Lowry Grove to a developer; Park Plaza to its residents. And that has made all the difference.

    Lowry Grove and Park Plaza weave a tale of two parks with intertwining histories but dramatically different fates. The communities are similar in size and located about 8 miles apart, each providing low-income families with access to good schools, suburban amenities and a shot at affordable homeownership.

    Lowry Grove now awaits redevelopment, its nearly 100 households displaced after last year’s court-contested sale. Meanwhile, Park Plaza has become a stable cooperative community.

    Nearly 37,000 people across the metro lived in manufactured housing in 2016, according to Metropolitan Council estimates. Since 1991, no new parks have been built in the region while 12 have closed, with Lowry Grove and another in Bloomington among the most recent. Redevelopment pressures, road projects and aging infrastructure represent common threats.

    Groups including the Met Council have identified mobile home parks as an important but often overlooked form of affordable housing, costing families about $560 less per month in recent years than traditional homes.

    The issue has captured the attention of low-income housing advocates as well as legislators, who this year formed a bipartisan task force to examine ways to preserve mobile home parks. The task force is studying cooperative communities, which have seen steady growth in Minnesota and now account for about 1,000 parks across the country, according to some estimates.

    Park Plaza is one of seven co-ops in the state, with an eighth expected to convert in Rochester later this year.

    “If this can be a workable model, I would love to do anything to support it,” said Sen. Carolyn Laine, a member of the task force.

    Why not Lowry Grove?

    In his 40 years in the mobile home industry, Phil Johnson has watched the co-op movement gain steam — and done his bit to help it along.

    The state’s co-op conversions are spearheaded by Northcountry Cooperative Foundation, a nonprofit that helps residents secure financing and shepherds them through the process. It’s a group that Johnson has worked with multiple times.

    Johnson reached out both to Northcountry and to Aeon, an affordable housing nonprofit, seeking a buyer for Lowry Grove years before striking a deal with a developer. But the 70-year-old park’s soaring land value, poor infrastructure and the relatively large number of RVs — seen as less reliable income — made a co-op unfeasible.

    “At the end of the day, it just didn’t work,” Johnson said.

    Nothing came of his initial conversations with Aeon about Lowry Grove, either.

    “At the time it didn’t fill our pipeline,” said Aeon President Alan Arthur, who added that the nonprofit’s focus wasn’t on mobile homes at the time.

    Last year, Aeon stepped up with a purchase agreement to match the planned $6 million sale of the park to The Village, an affiliate of Wayzata-based Continental Property Group. Johnson and his partners rejected Aeon’s offer.

    The sale to The Village prompted a fierce legal battle that survives the park.

    Former residents say it’s been tough to find a place nearby for comparable rent or parks that would accept their aging homes, many too old to move. Johnson said he charged about $410 a month in rent before the sale, about $500 less than the city’s median rent.

    As the move-out deadline loomed, grief sunk deep, especially following the death of Frank Adelmann, a 59-year-old Lowry Grove resident who neighbors and family say did not want to leave the place he called home for more than a decade. He died, his sister said, with 10 cents, a few prayer cards and a bus pass in his wallet.

    Some others had yet to find permanent shelter in the park’s final hours.

    “I want affordable housing for these people,” Lowry Grove organizer Antonia Alvarez said the day before the park closed, as families hastened to move their belongings. “These children are going to end up on the street.”

    Owned by the residents

    Eight miles from Lowry Grove is Park Plaza, a mobile home park with about 80 pads. Residents say before they took over ownership, it suffered from similar structural neglect.

    “The roads were horrible. Underground was horrible. Sewer and water breaks [happened] all the time in the winter,” recalled Seefeld, who has lived in the park since 1998. “It was just horrific.”

    That changed in 2011, when park residents banded together and bought the land for close to $4 million.

    “I reached out to Northcountry right away, and we struck a deal,” Johnson said. The organization’s parent group, ROC USA, provided Park Plaza residents with the loan needed to buy their park.

    “People would rather live, believe it or not, in a place where they have security of tenure,” said Kevin Walker, the director of business development for Northcountry. “They like the fact that it’s democratically governed and they get to play a role in shaping what the lot rent will be for the community.”

    As a cooperative, Park Plaza’s operations and long-term success rely heavily on the residents. They have to pay a one-time membership fee and an initial spike in their lot rent to join.

    A community board, which Seefeld chairs, manages the park budget and its day-to-day operations.

    “It is a lot of work no matter what you do, because you’re taking over someone’s property that’s already at its life end,” Seefeld said. “And now you’re gonna take over and figure out how to make it a better place to live.”

    Not all Park Plaza residents are sold on the changes, including Barbara Yurich, who decided not to join the co-op. Her home was new and easy enough to move, lessening her fear of displacement and the appeal of resident ownership.

    “There were no benefits to joining,” said Yurich, 78.

    Not all parks can make the transition to a cooperative or sustain it. Residents in a Lexington park that converted to a co-op in 2005 have since opted for investor ownership. Others, like Lowry Grove, would require millions of dollars in renovation and are difficult to salvage, Walker said.

    ‘We always say yes’

    At least two former Lowry Grove homeowners have moved to Park Plaza, which Seefeld showed off to lawmakers during a tour Friday.

    They stopped by Cesar Herrera’s tidy home, where he greeted visitors from a spacious deck he built himself. “I like people to see how we can live,” said Herrera, a carpenter. “I’m proud.”

    Park Plaza spent $1.3 million in 2015 to renovate its roads, sewers and water system. Soon, board members hope to break ground on a playground, upgrade their storm shelter and partner with a solar array in St. Cloud.

    “Ask us to take on a project and we’ll always say yes,” Seefeld said.

    Residents notice these investments.

    Jorge Muñoz and his wife moved to Park Plaza a year ago after having previously lived in a larger mobile home community in Minneapolis. The differences are clear, he said: Park Plaza is cleaner, safer and calmer.

    That sense of pride and security is reflected in the interactions between neighbors. “And we greet each other,” Muñoz said, speaking in Spanish. “Good morning, good afternoon, good night.”
Source: As mobile home parks close, attention turns to how to protect them (Half of Hennepin County's mobile home parks have closed since 1991).

City Forecloses Land Out From Under Mobile Home Park, Then Gives 62 Long-Time, Lot-Leasing Homeowners 60 Days To Pack Their Bags & Take A Hike

In Lake City, South Carolina, WBTW-TV Channel 13 reports:
  • A group created by the Lake City Council plans to force more than 50 families out of their homes. People in the Wedgefield Mobile Home Park received a letter telling them they have 60 days to move.

    News13’s Kiahnna Patterson found out there’s nothing planned for the property.

    Lake City Police Chief Kipp Coker confirms this is the same area that had problems with gangs just about four months ago, but could not say if this is the reason people are being forced to leave the property.

    Casandra Gilliard said if she had enough money to move, she would have moved two years ago when a bullet hit her home. "This hole right there is where the bullet entered,” said Gilliard. “The people that live over here never have any problems.”

    “It’s the outsiders that don’t live in the trailer park that bring the problems,” added her neighbor, Ronda McDowell.

    Gillard and her neighborhood received a letter on June 27, saying they have 60 days to move.

    Everybody over here is basically on a fixed income,” said Gillard. “For us to find land and move a mobile home within 60 days, it’s impossible. Also, there is not a lot of land in the area.”

    “It’s just too much. It will take at least $3,000 or $4,000 to get it straightened out,” said McDowell. “It’s very stressful and I don’t need this stress at my age.”

    “We’re trying to build a better community, but how do you just buy someone out and kick the people out. This is a community where people have lived for decades… their whole life. There’s no understanding to it,” said Dwayne Brown.

    A report of sale document obtained by News13 says last month the Greater Lake City Community Development office purchased the foreclosed land for $75,000.

    The organization’s spokesperson, Shane Prince, said there are no plans for the property right now. He said they’ll decide after they clear the land and cut the grass. “We’re doing projects all through town,” said Prince.

    Prince did not say if the change is related to crime. “Everything we do is for the betterment of Lake City,” he explained.

    As for the 62 families in the mobile park, they hope the office allows them to stay or gives them an extension. “We’ll just keep on searching and praying that God will answer our prayer over here. I know he will,” said Sandra Hannah.

    Prince said the office will help families move on by creating a list of rental and properties for sale in the area. That list should be available next week.
Source: More than 50 Lake City families forced to move from homes.

See also: Lake City mobile home residents forced to leave after land purchase:
  • The organization won the land in an auction for $75,000 after an unexpected foreclosure. Residents are scared because they don't know what they're going to do or where they're going to go.

Landlord's 30-Day Eviction Notice Blindsides Residents In Idaho RV & Trailer Park; Neighboring Parks Reportedly Full, Leaving Dozens Scrambling To Find Another Place To Live

In Caldwell, Idaho, KTVB-TV Channel 7 reports:
  • About 50 people in a Caldwell RV and trailer park say they’re facing a housing crisis with word that they have to move out. The news has left them scrambling to find a new place to live. Over the course of the last year, residents of the Towns Village RV and Trailer park have seen disaster after disaster, including seven arsons, flooding, and now an eviction notice.

    It’s a decision recently handed down by the owner of the Towns Village RV and Trailer park.

    “Kind of a stressful situation,” Rickie Parker, a resident of the park said.

    One the property owner confirmed with KTVB by phone on Monday, saying they’re not closing, but are asking people to leave. He declined to elaborate any further.

    “This whole thing has just gotten my health going crazy right now,” Parker said.

    The 30-day notice now leaving Parker trying to figure out what’s next. “Probably stay in a motel,” she said.

    Parker has looked around, but says she’s on a limited income and so far everything has been out of her price range. “I'm like, 'Oh great, now what do we do?' ” Parker said.

    She’s not the only one grappling with that question, Bonnie Massey has lived in the park for more than five years.

    The other parks are completely full. There's waiting lists for some people, but they've told us they won't have anything until late October or early November, but then there's snow on the ground. Meanwhile, where are we supposed to go?” Massey said.

    The notice states RV’s must be out by the middle of July. Trailers have until the middle of August to be out.

    “We had a little more time to prepare to get things ready, to know where we were going to go, and what we're going to do,” Richard, a resident in the park told KTVB.

    According to Idaho Code, a landlord is required to give a 30-day notice to their tenant, but many in the park say they still feel they were caught off guard.

    “We don't have any place to go, and we have no idea where we're going to stay or what we're going to do,” Richard said.

Friday, July 21, 2017

Las Vegas Man Cops Guilty Plea To Fraudulently Obtaining Over $85K In HUD Section 8 Housing Subsidies While Making Approx. $1.7 Million In Bank Deposits From Several Businesses He Owned, Operated

From the Office of the U.S. Attorney (Las Vegas, Nevada):
  • A Las Vegas man pleaded guilty [] for stealing more than $85,000 in public housing benefits over a six-year period and for providing false statements to a government agency, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.

    Abdallah D. Hamey, 57, pleaded guilty before U.S. District Chief Judge Gloria M. Navarro to one count of theft of government property and five counts of false statement to a government agency.

    According to the plea agreement, from August 2009 to April 2015, Hamey stole more than $85,000 in Section 8 public housing benefits. On at least seven applications for public housing assistance, Hamey falsely claimed that he held no bank accounts and possessed minimal assets.

    In fact, he owned and operated several businesses registered in his children’s names and controlled several business and personal bank accounts that together received approximately $1.7 million in deposits during the time he applied for public housing assistance. Based on the fraudulent applications, Hamey received Section 8 housing assistance to rent a house. During the same time he received housing assistance benefits, Hamey paid rent on four other houses in the Las Vegas area. In addition, he admitted to making five false statements to HUD officials.
    To report suspected fraud in a HUD program, call the HUD-OIG Hotline at 1-800-347-3735 (Toll-Free) or e-mail

Tenant Gets Year In Jail After Jury Conviction For Fraudulently Obtaining $23K+ In HUD Section 8 Housing Benefits, Failing To Disclose She Was Living With Her Landlord In Home She Was Purportedly Renting

In Canandaigua, New York, the Finger Lakes Times reports:
  • A Bloomfield woman who fraudulently obtained nearly $24,000 in benefits from the Geneva Housing Authority was sentenced to jail [].

    Ontario County Judge William Kocher sentenced Laura Hurlburt to a year in jail after she was convicted on felony charges of third-degree welfare fraud, third-degree grand larceny and first-degree offering a false instrument for filing. Hurlburt was found guilty of those charges May 4 following a jury trial in county court.

    Assistant District Attorney Melanie Bailey said the charges stemmed from personal declarations filed by Hurlburt with the Geneva Housing Authority from 2010 to 2015 to obtain rental assistance under the U.S. Department of Housing and Urban Development’s Section 8 housing choice voucher program, which is administered by the authority.

    Hurlburt provided inaccurate household composition in the paperwork, failing to disclose she was living with the landlord and owner of the property. As a result, she was indicted by a grand jury and convicted of getting $23,912 in benefits she was not entitled to.

    The investigation leading to her arrest was done by Geneva Housing Authority staff, the Ontario County Sheriff’s Office and District Attorney’s Office.

    In addition to the jail time, Kocher entered a civil judgment in favor of the authority for the full amount of illegal benefits. Restitution payments through the county probation department are to begin within 90 days of Hurlburt’s release from jail.

Ex-Property Manager At Public Housing Complex Pleads Guilty To Pilfering HUD Utility Allowance Checks From 9 Low-Income Tenants

In Atlantic City, New Jersey, the Press of Atlantic City reports:
  • A former property manager of an Atlantic City public-housing complex pleaded guilty [] to charges she stole money from tenants, authorities said.

    Cheryl Bradshaw, 60, of Atlantic City, pleaded guilty [] before Atlantic County Superior Court Judge Patricia Wild to a charge of theft by failure to make required disposition, Atlantic County Prosecutor Damon G. Tyner said in a statement.

    Bradshaw, the former property manager of the Barlinvis Apartments in Atlantic City, was arrested April 19 after the prosecutor’s detectives found she stole a toilet seat and $826 from tenants, he said.

    She was charged with official misconduct and theft by failure to make required disposition of property received after cashing 13 checks that were supposed to go to nine tenants at the Barlinvis Apartments, Tyner said.

    The money was from the U.S. Department of Housing and Urban Development to help offset the residents’ utility bills, authorities said.

    Bradshaw toilet seat taken from the Atlantic County Improvement Authority is valued at $9.39. She had the seat installed in her own residence, authorities said.

    The plea agreement calls for probation, restitution to all victims and a lifetime ban from public employment, authorities said. Her sentencing is scheduled for Sept. 8.

    Pleasantville Housing Authority fired Bradshaw Feb. 2, authorities said.

Housing Authority Executive Director With Sticky-Fingered Past Admits To Embezzling HUD Housing Funds, Using Employer-Provided Credit Cards For Personal Expenses

In Ocean City, New Jersey, reports:
  • The executive director of the Ocean City, New Jersey, Housing Authority (OCHA) admitted embezzling funds received from the federal Department of Housing and Urban Development (HUD), marking the fourth time the highly paid government official was convicted for stealing money.

    Alesia Watson, 54, of Galloway Township, pleaded guilty before U.S. Magistrate Judge Karen M. Williams in Camden federal court to one count of embezzling federal funds received from HUD and administered by OCHA to which she was not entitled.

    According to public records, Watson earned a base salary of $100,000 plus $30,000 worth of health, pension and other benefits.

    According to U.S. Attorney William E. Fitzpatrick and documents filed in the case and statements made in court, Watson had access to two credit cards maintained by OCHA.

    From December 2013 through March 2015, Watson used the two credit cards to purchase 69 MasterCard gift cards, which she used for personal expenses not associated with OCHA or provided them to friends and family members.

    Watson then used federal funds received from HUD and administered by OCHA to pay the credit card bills associated with the purchase of the gift cards.

    According to the plea agreement, the loss associated with the embezzlement was more than $6,500 but less than $15,000.

    The embezzlement charge carries a maximum penalty of one year in prison and a $100,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Aug. 15, 2017.

    Watson, who was also part time executive director of the Brick Township Housing Authority, had to step down from a similar position in Atlantic City after a newspaper revealed criminal convictions in her past.

    Watson was known as Alesia Humphrey in 2006, when she was subject of a front-page story in the Press of Atlantic City that detailed criminal convictions dating back to 1992 for theft and credit card fraud, which led to her resignation as executive director of the Atlantic City Housing Authority.

    According to the original Press of Atlantic City report, she was charged with two counts of credit card theft, three counts of unlawful use, and theft by deception in 1992. She was indicted by a Somerset County grand jury and pleaded guilty to a single count of theft by deception, for which she received a sentence of probation.

    She was charged with forgery, theft by deception and credit card theft in 1994, then in 2000 faced charges of credit card theft, fraudulent use of credit cards and forgery.

    All of the charges culminated in plea deals; Watson served a total of 31 days in jail and served probation. Her legal troubles ended in 2003, with a probation violation, for which she was sentenced to 131 days in jail, but given credit for time served, according to the 2006 newspaper report.

Thursday, July 20, 2017

30 Low-Income Families To Split $300K+ Settlement Plus Moving Expenses From Lawsuit Accusing Housing Authority-Landlord Of Failing To Maintain Safe, Sanitary Housing Units; Crappy Conditions Allegedly Caused Or Exacerbated Health Conditions They, &/Or Their Kids Suffered

In Cairo, Illinois, The Southern Illinoisan reports:
  • Thirty residents of Elmwood and McBride public housing complexes in Cairo and their lawyers are to receive a combined $350,000 under the terms of a settlement agreement between the tenants and their landlord, the Alexander County Housing Authority.

    The settlement agreement stems from a lawsuit filed just more than a year ago in which the tenants accused the local housing authority of breaching its lease agreements with residents by failing to maintain housing units in safe and sanitary conditions.

    The residents alleged the failure of the ACHA and its senior staff to maintain basic living conditions either caused or exacerbated health conditions that they and/or their children suffered. The development or worsening of asthma directly related to their housing conditions was cited as a top health-related complaint in the lawsuit.

    Collectively, the 30 plaintiffs alleged that 13 of their young children are suffering severe breathing problems as a result of ACHA’s failures as a landlord and stewards of a housing program for low-income people living in one of the poorest cities in America.

    The plaintiffs are to receive either $10,000 or $10,500 each under the terms of the settlement agreement, splitting a combined $306,000, according to a resolution to ratify the agreement that the Alexander County Housing Authority’s board of commissioners approved by a 2-0 vote on Wednesday afternoon.

    The ACHA’s two board members who ratified the deal, Lindsey Reames and Kimberly Wize, are members of Housing and Urban Development’s recovery team assigned to the ACHA. Federal employees have been charged with daily operations of the ACHA since Feb. 22, 2016.

    On that day, which followed months of back-and-forth seeking corrective action, HUD officials removed the local governing board and assumed control of the agency, citing years of poor, inappropriate and potentially illegal management practices that were harming the residents for whom the ACHA managers were entrusted to provide adequate shelter. Questions have been raised about how the millions of federal taxpayer dollars they were allocated to carry out that mission in recent years were spent, given that it appears so little of it went to maintaining developments.

    During the board meeting, Towanda Macon, a HUD administrator from Chicago who is serving as executive director of the ACHA while it is in federal receivership, said that the settlement agreement will be paid by the housing authority’s insurance provider.

    The resolution states that the executive director signed the agreement on June 16.

    In addition to money for the tenants, the settlement agreement provides for the Chicago-based entities that provided legal representation to the tenants in to receive a combined $44,000. They were represented by Christopher Wilmes, of the law firm Hughes, Socol, Piers, Resnick & Dym, Ltd and Kate Walz, director of housing justice for The Sargent Shriver National Center on Poverty Law.

    The law firm of which Wilmes is a partner is to receive $15,138.02 under the terms of the agreement and $28,861.98 is to go to The Shriver Center, a nonprofit whose mission is to provide national leadership in advancing laws and policies that secure justice to improve the lives and opportunities of people living in poverty, according to the organization’s website.
    On April 10, federal officials announced that they would begin relocating everyone from Elmwood and McBride this summer by helping them find another public housing unit within the ACHA or another housing authority, or providing them with a Tenant Protection Voucher that can be used to subsidize rent paid to a private landlord, similar to the Housing Choice Voucher program commonly referred to as Section 8.

    The settlement agreement includes these requirements of the ACHA, as well as that the local agency must help with moving expense and start-up costs such as rent and utility deposits and relocation counseling services, which HUD has promised to provide to all residents of Elmwood and McBride, not just those plaintiffs included in the settlement.

Feds Bag Suspect In $20 Million Real Estate Ponzi Scheme Who Allegedly Used Forged Deeds To Sell Apartment Complexes That He Didn't Own To Unwitting Investors

In Fresno, California, The Business Journal reports:
  • A Clovis resident was arrested Thursday [July 6] on charges of running a $20 million Ponzi scheme.

    Seth Adam Depiano, 36, was arrested in Las Vegas, and faces criminal charges of mail fraud, wire fraud and money laundering.

    According to court document, Deplane is accused of operating a Ponzi scheme that lured real estate investors into investing more than $20 million into businesses he controlled, operating under names including The Rental Group, U.S. Funding and Home Services LLC and Draymond Homes.

    Depiano is suspected of fraudulently promising investors he would use their money to purchase residential properties and either manage them for rental income or arrange for them to be renovated and resold.

    Depiano is accused of presenting investors with document that falsely represented high occupancy rates at the properties, but according to court document, he often had no authority to purchase or sell the properties, and misled investors with fraudulent documents misrepresenting the properties’ ownership.

    Several of the properties in question are located in Fresno.

    One of the properties is the 16-unit North Roosevelt Apartment Complex in Fresno, according to court documents. Depiano is accused of selling the property to investors for $795,000, though he did not own it or have the authority to sell it.

    Another property named in court documents was the 96-unit “Winery Complex” at 1190 S. Winery Ave. in Fresno, which was marketed and allegedly “sold” for $1.7 million as an apartment complex, though it is actually a collection of individually owned condos.

    The FBI investigation was initiated in September 2015, stemming from a report to the Los Gatos Police Department from a notary who said her signature had been forged on a grant deed document for the North Roosevelt complex.

    He is also suspected of paying investors rental income that, in fact, was money other investors had given him for investment purposes.

    Some of the properties he marketed did not actually exist, alleges the U.S. Attorney for the District of Nevada, who investigated the case along with the Federal Bureau of Investigation.

Wednesday, July 19, 2017

Attorney Gets Bar Boot For Allegedly Ripping Off 44 Clients By Improperly Pocketing Over $300K In Upfront Fees For Loan Modifications, Not Providing Promised Services

In Costa Mesa, California, the Northern California Record reports:
  • Costa Mesa attorney Robyn Lynnette Pool has been disbarred by the California State Bar over allegations she engaged in more than 15 instances of loan modification misconduct, according to a recent decision.

    The disbarment proceeding against Pool included nine separate notices of disciplinary charges that were consolidated, according to the May 5 decision. The state bar charged Pool with 127 counts of misconduct in 50 separate client matters.

    The state bar also recommended Pool be ordered to pay more than $300,000 plus interest in restitution to 44 former clients.(1)

    Pool failed to participate in person or via counsel and the state bar's decision and order for disbarment was entered by default.
    Allegations against Pool include multiple counts of collecting advanced fees prior to completing all loan modification services, not promptly refunding unearned advance fees, dropping clients without performing any legal services and allowing one of her employees to provide client legal advice.

    Pool also was charged with multiple counts of entering into loan modification fee agreements without first providing clients with required separate written statements that it is not necessary to pay a third party to arrange loan modification or other form of loan forbearance, that clients may deal directly with their lender.
Source: Costa Mesa attorney disbarred, ordered to pay more than $300,000 restitution.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Pair Get 3+ Years Each For Roles In $3+ Million Loan Modification Ripoff That Disguised Boiler Room Telemarketing Operation As Law Firm, With Attorney-Defendant 'Renting Out' His Law License To Lend Legitimacy To Racket

From the Office of the U.S. Attorney (Los Angeles, California):
  • Two Orange County, California men were sentenced yesterday [July 12] in U.S. District Court in Santa Ana, California to serve 41 and 47 months in prison, respectively, for their roles in a multi-million dollar fraudulent mortgage modification scheme posing as a successful law firm, the Justice Department announced.

    Ronald Rodis, 52, of Long Beach, California, and Charles Wayne Farris, 56, of Aliso Viejo, California, each previously pleaded guilty to one count of conspiracy to commit mail and wire fraud. In addition to the terms of prison imposed by U.S. District Judge David O. Carter, Judge Carter ordered Farris to pay $3,534,927.43 in restitution and ordered Rodis to pay $3,826,947.95 in restitution.(1)

    Both defendants previously admitted that, between October 2008 and June 2009, they participated in a scheme to induce homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group. These defendants and their co-conspirators made numerous misrepresentations regarding RLG’s ability to negotiate loan modifications from the homeowners’ mortgage lenders. They hid the involvement of Bryan D’Antonio, the true owner of the scheme. D’Antonio was a convicted felon and subject to a permanent injunction prohibiting him from having any involvement with any business that engaged in telemarketing or misrepresented the services it would provide.

    “These defendants played key roles in a scheme that victimized homeowners facing foreclosure during the mortgage crisis,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The defendants promised homeowners assistance saving their homes and modifying their mortgages, yet took their money knowing the promised benefits would never be realized.”

    “These two defendants used their legal knowledge and expertise to coerce and victimize vulnerable homeowners,” said Acting U.S. Attorney Sandra R. Brown of the Central District of California. “Rather than help these individuals as promised, their fraudulent scheme cost the victims millions of dollars.”

    Rodis was a licensed California attorney who allowed his name to be used to lend legitimacy to the scheme. He recorded radio advertisements encouraging struggling homeowners to call RLG. In the ads, Rodis falsely claimed that RLG consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.”

    In fact, RLG was a telemarketing operation that never had a team of experienced attorneys and rarely achieved any of the promised results for homeowners. During much of the scheme, Rodis was the only attorney at RLG. After his involvement with the RLG scheme, Rodis surrendered his law license.
Source: Two California Men Sentenced to Prison for Their Roles in Fake Law Firms That Promised to Help Struggling Homeowners.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Attorney Gets 30 Months For Role In Rent Skimming Racket Targeting Financially Strapped Homeowners; Victims Were Duped Into Signing Over Control Of Their Homes, Which Were Then Rented Out With Scammer Pocketing Money, Stiffing Bank Out Of House Payments

From the Office of the U.S. Attorney (Hartford, Connecticut):
  • Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BRADFORD BARNEYS, 51, of Odenton, Maryland, was sentenced today [July 13] by U.S. District Judge Michael P. Shea in Hartford to 30 months of imprisonment, followed by three years of supervise release, for conspiring with Timothy W. Burke in a long-running fraud scheme that targeted distressed homeowners throughout Connecticut. BARNEYS was an attorney licensed to practice in Connecticut and has an office in Bridgeport.

    According to court documents and statements made in court, between approximately 2010 and November 2015, Timothy W. Burke, formerly of Easton, engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development (HUD) by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages.

    The distressed homeowners agreed to sign various documents that Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership. Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on and other means and falsely representing to tenants that Burke owned the property.

    Burke or one of his agents then collected rent from tenants, and Burke used the funds for his own benefit. He also failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowner’s mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.

    Burke undertook extensive efforts to disguise his true identity, and hide his criminal past, from his victims through the use of multiple aliases and business entities, and to conceal the sources of and expenditures from his criminal proceeds.

    Between approximately 2011 to at least 2014, BARNEYS participated in dozens of meetings with Burke and with homeowners at BARNEYS’ law offices in Bridgeport. At the meetings, Burke represented to homeowners that he would purchase their properties and presented to the homeowners quitclaim deeds, management agreements, indemnification agreements, and third party authorizations.

    BARNEYS was paid more than $72,000 in fees and other monies for his participation in the fraud.

    At some point after BARNEYS began representing Burke in these meetings with homeowners, BARNEYS knew that Burke had no intention of buying the properties and paying the outstanding mortgages on the properties. Nevertheless, BARNEYS continued to participate in these meetings and represented that these transactions were legitimate. When questioned by homeowners about the status of their sales, BARNEYS would assure them that their sales to Burke or one of his companies were progressing as Burke promised. BARNEYS also knew that, once Burke obtained the properties from the homeowners, he would rent them out to tenants.

    BARNEYS also represented Burke and his companies in eviction proceedings against tenants.

    The investigation further revealed that BARNEYS engaged in separate fraud scheme similar to the scheme that Burke engineered. BARNEYS assisted two Maryland residents in purchasing a commercial property located on Boston Avenue in Bridgeport. BARNEYS then acted as a purported landlord for the property, executed long-term lease agreements with at least two tenants, and collected tens of thousands of dollars of rent without the actual owners’ knowledge or authorization and kept the funds for his own use.

    On February 21, 2017, BARNEYS pleaded guilty to one count of conspiracy to commit mail and wire a fraud.

    BARNEYS’ law license was temporarily suspended by state authorities after he pleaded guilty, with additional proceedings scheduled to determine whether further discipline is warranted. Judge Shea ordered BARNEYS not to apply for reinstatement of his law license, and not to engage in any business related to real estate, while he is on supervised release.

Tuesday, July 18, 2017

Lawsuit: Attorney Scores $120 Million Damages Settlement For Homeowners Unwittingly Living Atop Tons Of Toxic Oil Waste Secretly Buried By Developer Decades Earlier, Then Stiffs Them Out Of Million$, Refusing To Give Them Thorough Accounting Of Loot Required To Be Held In Lawyer's Trust Account

In Carson, California, the Daily Breeze reports:
  • Carson residents living for years atop an old oil-waste dump are suing the famed personal injury attorney who negotiated their $120 million legal settlement, claiming his firm is hoarding millions it should have disbursed long ago.

    Thomas Girardi, who has won more than $1 billion for victims of severe pollution, prescription-drug side effects and other hazards during a storied career, and his powerhouse Los Angeles law firm, Girardi-Keese, are named in the suit filed last month by residents of the polluted Carousel tract neighborhood.

    Some residents have been paid in full since the July 2016 settlement with those responsible for the toxic soup that lies beneath their homes, while others have received only a fraction of the proceeds. For months the Carousel residents have been waging a war of words with Girardi-Keese, claiming the delays in getting the funds to everyone are inexcusable.

    Almost a year later we received a piddly amount to placate us and a bunch of unfounded excuses why they continue to hold onto our money,” said Barbara Post, president of the Carousel Tract Homeowners Association. “We just want what is ours and to get Girardi-Keese out of our lives forever.”

    No one in the Carousel tract neighborhood knows how much of the total settlement has been paid out yet. Or, for that matter, what the balance is in the trust account where Girardi is legally required to hold their funds.

    The 50-acre Carousel tract, in south Carson along the Wilmington border, was built on land formerly occupied by a Shell Oil Co. tank farm that was dismantled in the late 1960s. Tons of waste oil and tank pieces were secretly buried by the property developer, Barclay Hollander Corp., which has since dissolved into Dole Food Co.

    The oil, left just a few feet beneath the ground on a parcel where 285 homes would later be built, exposed residents to cancer-causing benzene and other toxic chemicals for decades.

    A few years after the pollution was discovered during routine testing in 2008, Girardi was hired by 1,491 current and former Carousel tract residents. Eight years of legal wrangling later, his firm negotiated a $90 million settlement with Shell Oil for health and property damage in the neighborhood. A second $30 million settlement with Dole Food Co., which owns the property developer, is pending.

    Girardi-Keese also negotiated more than $100 million in environmental cleanup of yards across the neighborhood.

    Dole and Shell are battling in court over who will ultimately have to pay all the bills.

    Girardi-Keese’s share of the $90 million settlement will be at least $36 million, and the firm will get another $12 million from the Dole proceeds.

    The suit against Girardi-Keese argues the firm refuses to give Carousel residents a thorough accounting of the money. It also demands that residents receive interest accrued on the large sum sitting in the bank, but the law firm insists that money must be turned over to the State Bar.


Sleazy Developer Who Illegally Subdivided 330-Acre Parcel, Then Used Seller-Financed Contracts For Deed To Peddle Non-Buildable, Unmarketable Lots In "Off-The-Books" Development To Residents Seeking Homeownership Agrees To Cough Up Nearly $1 Million In Refunds To Reimburse Unwitting Victims

In Caldwell County, Texas, the Austin American-Statesman reports:
  • The owner of an illegal subdivision that was allowed to operate in an isolated corner of Caldwell County for more than a decade despite being known to local regulators is finally being forced to pay for his years of failing to abide by state and county land-use rules.

    Richard Burns, whose Century Oak Estates was created and sustained with what officials described as a disregard for numerous real-estate development requirements, has agreed to pay nearly $1 million to buy out approximately 30 residents and help them move out of his off-the-books development in the rural county that borders Travis County’s southern tip.

    The announcement comes a year after an American-Statesman investigation profiled Burns and Century Oak, highlighting the predicament of those who purchased land in the subdivision only to learn they could not then build on or sell it because Caldwell County considered their property illegal. Several residents, meanwhile, said that Burns had raised the specter of eviction to intimidate them and threatened to turn off the subdivision’s single water well to punish them for late payments.

    Burns maintained that he was providing the opportunity for homeownership to less-affluent residents and never intended to break any laws. He blamed his attorneys for giving him bad advice as he started selling lots in 2004, many of them off a dirt road called Buffalo Run, on the 330-acre property situated on a former wild game park.

    And not all Century Oak residents were dissatisfied.

    But at a legislative hearing days after the article was published, several testified they had been afraid to speak out about problems for years because their owner-financed purchase agreements made them vulnerable to retaliation. Also known as poor man’s mortgages, seller-financed “contracts for deed” grant a buyer title to the property only after paying the seller in full, typically over many years with high interest rates — 10 percent at Century Oak. Buyers don’t build up equity and can be evicted rather than foreclosed on.
    Although Burns faced misdemeanor criminal charges for illegally subdividing his land, Caldwell County District Attorney Fred Weber said he decided the civil settlement offered a better resolution. Finalized last week, it calls for Burns to deposit $850,000 in a trust account administered by a retired state district judge. The money will be used to buy out those who want to move by refunding all payments made to date as well as compensating residents for improvements they made to their properties. It also provides $5,000 per household to cover relocation.

    The deal, negotiated by Weber and the state attorney general’s office, also assesses a $450,000 civil penalty against Burns. According to the terms, however, the fine will not be collected if Burns complies with the trust fund arrangement.
    “We’re all over a barrel,” said Juan Alvarado, who three years ago moved to Texas from Fresno, California, after signing a $98,000 owner-financed contract for nine acres of pasture and a pond. He noted that a refund would not compensate him for the rise in the land’s value in recent years.

    Fredie McKinney said he moved out of Century Oak a year ago, two years into a contract for deed requiring him to pay $1,031 a month for 25 years before he received title. “I just walked away from it, because I knew I couldn’t sell it,” he said.

    Weber said that under the agreement, which calls for anyone who lived in the subdivision since May 2016 to be eligible for the repayments, McKinney would get his money back. The district attorney acknowledged that those who left earlier, however, would have to petition the trustee for compensation.
For the story, see Settlement gives residents a way out of illegal Caldwell development.

For the Texas Attorney General news release, see AG Paxton Obtains $900,000 Judgment against Developer of Illegal Subdivision. land contract for deed rent-to-own

Homeowner Group Accuses Developer Of Using Condo Termination Agreement To Squeeze Them Out Of Their Apartments For "Pennies On The Dollar"

In Key Largo, Florida, The Real Deal (South Florida) reports:
  • A plan to tear down and rebuild a 1970s condo building at the exclusive Ocean Reef Club in Key Largo is being met with stiff opposition from eight current owners who accuse the developers of trying to muscle them out through a condo termination agreement.

    Martin Levine, principal of New York City-based Redwood Real Estate Group, has teamed up with John Grunow, president of leasing company Reef Rentals, who owns dozens of properties in the community, to redevelop the 48-unit Golf Village Condominium Apartments into The Residences at Ocean Reef. The new proposed development would still have the same number of units, but the building’s footprint would be much larger and offer luxury amenities, according to the developers.

    However, owners Brian Castle, Karyn Thiele, Debora Overholt, Peter and Claudette Lingley, Thomas and Maria Tyghem and a holding company called Unit 22A Golf Village are objecting to the termination plan presented by Levine and Grunow, who is also president of the Golf Village condo association.

    Overholt, one of two owners who spoke to The Real Deal, said Levine and Grunow want to take over their properties for “pennies on the dollar.”

    “I never imagined that in a place like Ocean Reef, greedy developers would be enabled to force me and my neighbors to sell our homes, in many cases for less than our mortgages,” Overholt said. “In my case, for less than I paid for the home in 2007. The condo I acquired to enjoy time off with my family has evolved into the worst possible real estate investment and a source of great stress and financial loss.”

    The eight objectors constitute roughly 14.6 percent of Golf Condo unit owners, according to letters from their lawyers to the condo association, obtained by TRD. Prior to July 1, state law barred condo terminations from moving forward if 10 percent or more of unit owners did not want to sell. The threshold has now been lowered to 5 percent under amendments to Florida’s condo laws approved by Gov. Rick Scott and the state legislature during the most recent legislative session.

Monday, July 17, 2017

Non-Profit Law Firm's Supreme Court Petition Asserts 5th Amendment Takings Clause Challenge Against Michigan County's Right To Snatch Away Surplus Proceeds From Property Owners In Connection With Foreclosure Sales Due To Unpaid Real Estate Taxes

From a recent post on the Pacific Legal Foundation's(1) Liberty Blog:
  • When Wayside Church fell behind on its 2011 property taxes on a parcel that the church had used as a youth camp, Van Buren County[, Michigan] took the youth camp property and sold it for $206,000 to pay the church’s $16,750 in taxes, penalties, interest, and fees. The County kept the surplus proceeds—$189,250 more than the debt—as a windfall.

    Similarly, the County sold Myron Stahl’s property, where he was building his retirement home, for $68,750 to pay a $25,000 debt. It also sold Henderson Hodgens’s farm and home for $47,750 to pay a $5,900 debt.

    The County kept the surplus from these each of these sales.

    Today [July 13], PLF petitioned the United States Supreme Court on behalf of Wayside Church, Myron Stahl, and Henderson Hodgens, asking the Court to review their case and hold that local governments violate the Takings Clause of the Constitution when they keep the surplus proceeds from tax sales.

    Because there is no clear remedy under Michigan law, Wayside Church, Stahl, and Hodgens filed a lawsuit in federal court, alleging that the County violated the Takings Clause of the Fifth Amendment when it kept the surplus proceeds from the sales of their foreclosed properties. The district court dismissed the suit, holding the Takings Clause does not protect delinquent taxpayers’ right to the surplus proceeds from tax sales, because Michigan’s tax law does not recognize that right.

    On appeal, a divided panel in the Sixth Circuit Court of Appeals dismissed the case for lack of jurisdiction. It held that the requirement that takings plaintiffs first seek relief in state court, created in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985) barred federal jurisdiction. Regular Liberty Blog readers know how much we at PLF hate Williamson County, because it so frequently robs property owners of any relief. It encourages gamesmanship by clever government attorneys and too long prolongs litigation until the property owner cannot afford to proceed.

    Judge Kethledge (who, incidentally, was on President Trump’s potential Supreme Court list) dissented from the Sixth Circuit opinion, explaining that “Congress has granted us jurisdiction over th[e takings] claim. We have a strict duty to exercise that jurisdiction. Meanwhile, the state jurisdictional statute . . . expresses an affirmative preference that we adjudicate the claim.” He also likened the County’s confiscation of tax sale profits to theft.

    In the petition filed today, we asked the Supreme Court to protect property owners’ rights by recognizing federal jurisdiction and holding that Van Buren County violated the Takings Clause. We also asked the Court to fix the problems caused by Williamson County‘s problematic and pointless state litigation rule.

    Last year, in a dissent to the Court denying a petition in a different PLF case, Justices Thomas and Kennedy said that the Supreme Court should reconsider that rule, because it too often leaves takings plaintiffs subject to gamesmanship, procedural tricks, and without any place to vindicate their property rights at all. The federal courthouse doors should be open to anyone who seeks to enforce the Fifth Amendment’s right to just compensation. We hope the Court takes this case and brings justice to our clients and the others like them.
Source: PLF asks Supreme Court to stop Michigan from stealing.
(1) Pacific Legal Foundation (PLF) is a donor-supported national non-profit [(501(c)(3)] public interest law organization that fights for private property rights, individual liberty, free enterprise, limited government, and a balanced approach to environmental protection. PLF is based in Sacramento, California, and has regional offices that litigate cases throughout the United States.

Attorney Facing Criminal Charges For Allegedly Failing To Return $217K To Client After Real Estate Transaction Fell Through Has Law License Suspended Pending Further Probe

In New Britain, Connecticut, The Connecticut Law Tribune reports:
  • A former Hartford attorney who is facing criminal larceny charges for allegedly defrauding several clients—including one for more than $200,000—has been placed on interim suspension from the practice of law until further notice.

    New Britain Superior Court Judge Joan K. Alexander placed Wayne Anthony Francis, 46, on interim suspension May 30. Alexander also set the attorney's bond at $2 million, although Francis could be released by paying 10 percent of that amount, or $200,000 in cash.

    According to the monthly list of disciplined attorneys recently released for May by the Office of Chief Disciplinary Counsel, Francis is believed to have stolen $217,630 from one client and of have taken thousands of dollars from several other clients.

    According to a May 2 application for interim suspension, submitted by the Office of Chief Disciplinary Counsel, client Shaikh Rakaiyabanu filed one of several complaints against Francis, claiming he stole two checks from her totaling $217,630.

    The submitted application says Rakaiyabanu hired Francis to represent her in a real estate purchase of property in Rocky Hill. Rakaiyabanu alleges the closing did not go forward and further alleges she requested the monies be "returned to her on multiple occasions." Francis, though, the application states, never returned the money he was holding for his client.(1)
For more, see Attorney Suspended for Stealing Hundreds of Thousands From Clients.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Sunday, July 16, 2017

State Client Protection Fund Recovers $100K In Restitution From Now-Disbarred, Convicted Attorney For Earlier Payments Made To Victimized Law Firm Clients Who Were Ripped Off To Fund $1,000/Day Crack Habit; Defendant Gets Away w/ 10-Day Jail Sentence In Apparent Prison Buyout Deal

In Winston-Salem, North Carolina, the Winston-Salem Journal reports:
  • A disbarred personal-injury lawyer who had offices in Winston-Salem, Greensboro and Raleigh was convicted Monday [July 3] on charges he embezzled about $100,000 from clients.

    Devin Ferree Thomas, 47, who lists a Charlotte address in court documents, pleaded guilty in Forsyth Superior Court to six counts of embezzlement. Judge David Hall of Forsyth Superior Court gave Thomas five suspended sentences totaling two years and six months to seven years and one month. Hall placed Thomas on five years of supervised probation, with a number of conditions. Those included a 10-day active jail sentence to be served in the first 100 days and 50 hours of community service that must be completed in the first 180 days.

    Thomas is also subject to random drug tests and warrantless searches and seizures. According to Forsyth County District Attorney Jim O’Neill, Thomas embezzled thousands of dollars partly to support an addiction to crack cocaine.

    Thomas also paid $100,000 in restitution to the N.C. State Bar Client Security Fund,(1) which reimbursed the people Thomas embezzled money from. Hall ordered Thomas to pay the remaining balance of $3,338 over the next year.

    O’Neill said in court that he requested an investigation by the State Bureau of Investigation in March 2016 after Thomas was disbarred. Special Agent Andrew Pappas, who specializes in financial crimes, was called in, O’Neill said.

    Pappas did an audit of Thomas’ law firm and found discrepancies with the accounts of four or five of Thomas’ clients. Much of the money came from settlements in civil lawsuits. The law firm, Devin Thomas Law, focused on automobile accidents, personal injury and worker’s compensation cases.

    O’Neill said the SBI investigation found that Thomas embezzled about $103,000 from clients. He said Thomas used some of the money to support a drug addiction. Thomas would spend $1,000 a day on his drug addiction, O’Neill said.

    According to a March 18, 2016 bar filing, Thomas was accused of transferring at least $109,500 from clients that had been placed in attorney trust accounts to two personal accounts from Oct. 28, 2014, through Feb. 20, 2015. Thomas used some of that money for personal expenditures, including making rental payments for his residence at Winston Factory Loft Apartments, the bar said.
Source: Disbarred Winston-Salem attorney convicted of embezzling $100,000 to fund crack cocaine addiction.
(1) In North Carolina, the Client Security Fund was established by the state's Supreme Court 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.

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

Thieving Law Partners Each Get Away With Light Sentences, Each Getting 1 Year, 1 Day In Prison For Roles In Purloining Over $1.2 Million In Trust Account Cash From One Unwitting Client

From the Office of the U.S. Attorney (Kansas City, Missouri):
  • Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Lake Lotawana, Mo., attorney was sentenced in federal court today [July 7] for his role in a fraud conspiracy in which he and his former law partner stole more than $1.2 million from St. Luke’s Health System, a client of their former law firm.(1)

    Mark J. Schultz, 57, of Lake Lotawana, was sentenced by U.S. District Judge Beth Phillips to one year and one day in federal prison without parole. The court also ordered Schultz to pay $400,500 in restitution to St. Luke’s.

    On Feb. 10, 2017, Schultz pleaded guilty to participating in a wire fraud and mail fraud conspiracy. His former law partner, Alan B. Gallas, 65, of Kansas City, Mo., also pleaded guilty in a separate but related case and was sentenced to one year and one day in federal prison without parole. The court also ordered Gallas to pay $1,224,264 in restitution to St. Luke’s.

    Schultz and Gallas were attorneys and partners in the law firm of Gallas & Shultz in Kansas City, Mo., which specialized in collection work for corporations. Schultz and Gallas have each surrendered his license to practice law.

    Gallas admitted that he engaged in a scheme from 2009 through July 2015 to defraud a client, St. Luke’s Health System, of monies collected by his law firm totaling $1,224,264. Schultz admitted that he participated in the conspiracy from January 2014 through July 2015.

    Gallas was the attorney responsible for the St. Luke’s account at the law firm. After attempting to collect on patient accounts for a period of time, St. Luke’s would transfer its larger outstanding patient accounts to Gallas & Shultz for collection. As payments on patient accounts were received, the payments were logged into the case management system for the appropriate patient account. The monies were then deposited into the law firm’s trust account. On a periodic basis, often monthly, the firm would remit the patient payments collected to St. Luke’s.

    Gallas admitted that he caused personnel at the law firm to withhold money from payments made to St. Luke’s by placing thousands of payments on “hold” status, then directing those funds be transferred from the trust account to the firm’s operating account. The pattern of not remitting some payments to St. Luke’s escalated significantly from 2012 to 2015. According to court documents, the firm withheld 601 payments totaling $211,391 in 2012. The firm withheld 699 payments totaling $266,696 in 2013. The firm withheld 625 payments totaling $227,892 in 2014. Through the month of July 2015, the firm withheld 625 payments totaling $216,845.

    Schultz admitted that he agreed with Gallas and others to transfer funds from the trust account into the law firm’s operating account. According to court documents, Schultz was informed by his office manager in January 2014 that she was going to quit because she could no longer agree to move money out of the trust account. Schultz nevertheless continued to profit from the diversion of funds from the trust account until the discovery of the scheme in July 2015.
Source: Attorney Sentenced for Fraud Conspiracy That Stole $1.2 Million from St. Luke's.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Office Manager Feels The Pinch For Allegedly Filching $1.2 Million From Law Firm/Employer; Prosecutor: Missing Loot Includes $243K From Elderly Client's Trust Account, Suspect Allowed To Work Without Proper Supervision

In Toledo, Ohio, The Toledo Blade reports:
  • The former manager of a downtown law firm was indicted Monday [July 10] by a Lucas County grand jury on charges that she embezzled some $1.2 million from her employer.

    Leslie Rombkowski, 55, of the 2800 block of 109th Street was indicted for aggravated theft, theft from a person in a protected class, tampering with records, and two counts of forgery.

    Jeff Lingo, chief of the special units division for the Lucas County Prosecutor’s Office, said Ms. Rombkowski was the office manager for the Charles E. Boyk Law Office from January, 2008 until September, 2015 when she was terminated for an unrelated issue.

    “When they changed software programs, they discovered large amounts of money were missing,” Mr. Lingo said.

    Among the money that was allegedly embezzled, approximately $243,000 was taken from the trust account of an elderly client, he said.(1)

    Mr. Lingo said Ms. Rombkowski had been a trusted employee for many years and was largely unsupervised.

    No one checked her work,” he said.
Source: Former manager of downtown law firm indicted for embezzling $1.2M from employer (Leslie Rombkowski worked for the Charles E. Boyk Law Office from 2008 to 2015).
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

After 2015 Disbarment, Criminal Charges Finally Catch Up To Disgraced Aging Attorney For Allegedly Ripping Off $265K+ From Over Two Dozen Former Clients

In Atlanta, Georgia, WGCL-TV Channel 46 reports:
  • A Fulton County Grand Jury has indicted a former Atlanta attorney who specialized in foreclosure matters after they say he misappropriated nearly $300,000 from dozens of victims.(1)

    Robert Thompson Jr., 65, faces 30 counts of theft by taking by fiduciary and two counts of forgery.

    The indictment states the Atlanta Police Department started receiving complaints from seven of Thompson's clients. Detectives discovered he misappropriated $75,147 clients paid to him in exchange for legal representation.

    When the case was forwarded to the District Attorney’s Office, prosecutors and investigators identified 22 new additional victims. The investigation by the DA’s office revealed Thompson misappropriated $191,105.00 from the 22 new victims.

    The Supreme Court of Georgia disbarred Thompson on February 2, 2015, after nearly 40 years of practicing law in Georgia.
Source: Former Atlanta attorney charged with 32 counts of theft.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Complaint Accuses Canadian Lawyer With Fleecing 10 Clients Out Of Over $700K, Then Abandoning Them; Bar Announces That Every Lawyer Practicing Within Jurisdiction May Have To Fork Over Up To $400 Each To Cover Losses From Their Allegedly Thieving Colleague's Handiwork

In Fredericton, New Brunswick, CBC News reports:
  • Former Deputy Minister of Justice Yassin Choukri "abandoned his clients" and Fredericton law practice last September — two days after bouncing a pair of cheques to people he was representing in a mortgage foreclosure, the Law Society of New Brunswick disclosed Friday [July 7].

    In a six-page "notice of complaint," detailing accusations of theft or "misappropriation" from 10 clients between 2010 and 2016, the society formerly charged Choukri with a number of professional offences involving more than $740,000 in client money.(1)

    The society said Choukri, once one the most senior legal officials in the New Brunswick government, is required to respond to the accusations against him within 20 days.

    "If Yassin Choukri, Q.C. fails to file a reply Yassin Choukri Q.C. shall be deemed to admit all the charges," reads the notice.
    "On or about September 29, 2016, Yassin Choukri, Q.C. abandoned his clients and his practice as he left New Brunswick without advising his law associates, his clients or his family of his departure," said the document.

    Gambling issues

    In total, the accusations list $742,795.88 in payments that are now missing, although Choukri would have been entitled to a small amount of that as his fee for working on the various cases.

    The complaint mentions nothing about accusations Choukri had a gambling problem, but last year in an affidavit filed in court during the fallout from Choukri's abandonment of his practice, law society official Shirley MacLean said William Stephenson, who practised law in the same firm as Choukri, told her that was an issue.

    "Mr. Stephenson also informed me that Yassin Choukri regularly gambles and that Yassin Choukri informed him that he receives complimentary rooms and meals at Casino Moncton," the affidavit said.
    In May, the law society announced that every practising lawyer in New Brunswick may have to pay up to $400 each to reimburse Choukri's clients.
For the story, see Former deputy justice minister accused of stealing over $740,000 from law clients (Yassin Choukri accused of misappropriating money from 10 clients between 2010 and 2016).
(1) As the governing body of lawyers in New Brunswick, Canada, the Law Society has established a Compensation Fund which may reimburse a client for a financial loss when the loss happened due to the fraud or dishonesty of a lawyer during an attorney-client relationship. This fund is provided through a fee paid by practicing lawyers as part of their Law Society dues.

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