Saturday, September 02, 2017

Regional Authority OKs $235K In Free Money To Mobile Home Park Landlord For Infrastructure Upgrades In Exchange For Commitment To Allow Lot-Leasing Homeowners In 189-Pad Park To Remain Without Unreasonable Future Rent Hikes

In Corcoran, Minnesota, the Star Tribune reports:
  • The Metropolitan Council voted Wednesday [August 23] to award nearly $235,000 in a pilot grant to a Corcoran mobile home park as part of a broader effort to protect and preserve affordable housing in the region.

    The first-of-its-kind grant will help Maple Hill Estates connect to the regional wastewater system in place of its aging, on-site septic system. In return, the park owners have committed to continuing to operate the property as a mobile home park without “unreasonable lot rent increases.”

    The grant comes on the heels of a steady string of mobile home park closures across the metro, where no new parks have been built since 1991. The Met Council estimates that nearly 37,000 people in the region lived in manufactured housing in 2016, representing a significant source of affordable housing, especially for low-income households.

    “The region is looking at an affordable housing crisis,” said Met Council Chairwoman Alene Tchourumoff. “This is one way that we can look at trying to be innovative about the crisis.”

    Maple Hill Estates is the second largest mobile home park in Hennepin County, where only six parks remain. Half of the county’s mobile home parks have closed since 1991, with Lowry Grove in St. Anthony among the most recent.

    “At a time when we can’t even produce enough [affordable housing] for current and future demand, losing any of the existing stock only puts us further behind,” said Jonathan Stanley, a Met Council planning analyst.

    Aging infrastructure represents a common challenge for mobile home parks, and connecting to the regional wastewater system can be costly. The pilot grant provides a 50-50 match to help defray the Met Council’s Sewer Availability Charge, a fee that will cost the 189-lot park in Corcoran about $470,000.

    “It’s very difficult financially,” said Brad Martens, Corcoran’s city administrator. “This helps that [connection] be able to happen without passing all those costs onto the residents.”

    Residents of color make up 40 percent of Maple Hill Estates, compared to 12 percent of Corcoran residents overall, according to the Met Council.

    About 500 people live in Maple Hill Estates, which offers families access to good schools and other suburban amenities in the 5,500-population city where the median household income is nearly $100,000. The mobile home park accounts for 78 percent of the city’s affordable housing stock.

    “Maple Hill Estates really is one of those opportunities to live in Corcoran when you maybe couldn’t otherwise,” Martens said. “It’s an integral part of Corcoran.”
For more, see Met Council works to preserve mobile home parks with first-of-its-kind grant (The nearly $235,000 grant will help Maple Hill Estates in Corcoran connect to the regional wastewater system).

44 Lot-Leasing Homeowners To Dodge Boot, Leveraging Professional Assistance From Nonprofit, Free Federal Money For Infrastructure Upgrades To Form Co-Op, Buy Out Retiring Landlord

In Castleton, Vermont, the Rutland Herald reports:
  • Robin Crowningshield said she had to step up to stay put.

    Crowningshield is chairwoman of the Windy Hollow Mobile Home Cooperative, which is preparing to take over the similarly named mobile home park on River Street. The organization is buying the park, with the help of the Cooperative Development Institute, and upgrading its infrastructure with a $362,000 federal grant.

    CDI consultant Sarah Martin said the organization advises cooperatively owned communities around New England through their first decade of existence. She said cooperative ownership of mobile home parks is on the rise and that she believes Vermont has seven such communities.

    “The main function is to keep rents low, keep infrastructure up to date and keep everything safe in the community,” she said. “Generally speaking, nonprofit- owned parks and cooperative parks … they’re not going to charge any more than they actually have to.”

    The drawback, she said, is they require more involvement.

    “You need to make sure you have a board of directors that’s willing to work, willing to volunteer,” she said. “That’s easier in some communities than others. We’ve been pretty lucky in Vermont, but a lot of times you have people who just want to pay their rent and go about their day-to-day.”

    Crowningshield, 56, an administrative assistant at Fair Haven Union High School, has lived with her husband in Windy Hollow for 12 years. She said it is a mix of older people and families.

    “It’s not a trailer park — it’s more of a community,” she said. “We’ve got quite a bit of lawn space. I’d say I’ve got about a quarter of an acre. It’s a nice little neighborhood, quiet.”

    Forty-four families live in Windy Hollow, and Crowningshield said she does not believe it will get any bigger.

    About two years ago, she said, they all received notice that owner Joe Howard was selling the park.

    “It’s kind of worrisome to find out you might have to pick up and move where you live,” Crowningshield said. “Then the state and CDI got ahold of us and gave us some options.”

    Josh Hanford, deputy commissioner of the state Department of Housing and Community Development, said his agency got involved because the park had septic, water and drainage issues that meant it was likely to close if the owner couldn’t find a buyer with the funding to deal with them.

    He said the town applied on the cooperative’s behalf for the community development block grant— federal money administered by the state — to do the repairs.

    “The displacement and trying to find replacement housing probably would have cost the state a lot more than this,” he said.

    Crowningshield was elected to head up the board at a meeting held at the community center.

    “ I spoke too much, I think,” she said.

    The sale has yet to close, but Crowningshield said the sale price will be roughly $1 million. Martin said CDI arranges financing so cooperatives don’t have to put any money down. Currently, the sale is pending an environmental review, required under the grant because the park is in a wetland.

    “ We’re in the home stretch and we’re hoping it’s all going to be over and done with in a couple months time,” Crowningshield said.
Source: Tenants to buy, upgrade mobile home park. aging infrastructure

City Leverages Disaster Relief Funds To Buy Out Mobile Home Park Landlord, Promises Residents Infrastructure Upgrades, No Displacements, Search For Long-Term Owner Such As Co-Op, Nonprofit To Ensure Affordability, Stability

In Boulder, Colorado, the Daily Camera reports:
  • Boulder has purchased the Ponderosa Mobile Home Park, a Boulder County enclave in the northern part of the city, which it hopes will ensure long-term affordability and address conerns regarding the state of the park's infrastructure.

    The city bought the 6.46-acre piece of property from Mantle Ranch Real Estate LP for $4.2 million, and $3.5 million of that came from a federal grant providing for disaster relief stemming from the 2013 floods, according to a news release. The park was impacted by the flooding.

    The remainder came from the city's affordable housing fund, according to a news release.

    The 68-unit trailer park, at 4475 Broadway, is currently located in Boulder County, and has been since the 1950s. Over time, the city limits have changed as such that the property is now surrounded. Providing utilities, health and safety services has been challenging and required coordination between Boulder, Boulder County and the property owner, according to the release.

    The property will eventually be annexed into Boulder with infrastructure upgrades in 2019. The city will work with residents to identify a long-term owner such as a cooperative or nonprofit to ensure long-term affordability.

    The city has promised residents at the park that they will not be displaced because of the sale.

Friday, September 01, 2017

Mobile Home Park Tenants Struggle With Homelessness After Being Rented Condemned Trailers, Then Getting Booted By Local Code Enforcement Without Notice Soon After Moving In

In Tucson, Arizona, the Arizona Daily Star reports:
  • Seeking the desert climate, Donna and Derek Wilson moved their five children from southeast Texas to Tucson this summer.

    The dilapidated mobile home they rented at 110 E. Prince Road needed serious work, the couple admits. But it was walking distance to public schools and it seemed to have the makings of a home.

    “I cringed a little bit, but I was happy we had our own place,” Donna Wilson said. “We were gonna fix it up.”

    They quickly realized the trailer’s problems were more than cosmetic when monsoon rains streamed through leaks in the roof throughout July.

    Now the family is fighting to avoid homelessness, after city code enforcement on July 31 informed them and two other families that their rented trailers had been condemned as uninhabitable — months before they moved in.

    The three families were forced to vacate their homes by the end of the day. Two other tenants whose trailers were condemned during the July 31 code inspection also had to leave immediately.
    Since they were displaced, the Wilsons have stayed in four different hotels as they scramble to find a permanent place to stay. For more than two weeks, the seven-member family, plus a scrawny kitten named Spooky, was crammed into a single room at the Travel Inn motel on South Freeway Road, rotating who had to sleep on the floor.

    “I hate to see anyone else go through this,” Wilson said. “We have no money right now. I’m scared. ”
    Prince Road Park has been on code enforcement’s radar, especially after faulty electrical wiring caused a trailer fire a few years ago, said Martin Romero, supervisor with the city’s code enforcement department. A call from police investigating criminal activity at the property prompted the July 31 code inspection, he said.

    Problems in the condemned trailers included hazardous wiring, broken toilets falling through the floor, roaches, broken cooling systems and roof leaks, Romero said.

    “The property owners should be aware of the type of units they are renting out,” he said. “We expect the property owners to be in compliance with all of our city codes.”
    [The out-of-state landlord] blames one of the park’s tenants for renting out the condemned trailers without his knowledge.

    “Whoever that woman is, she rented those out on her own,” he said. “I don’t even know how she got the keys. She was not the manager.”

    On a recent afternoon at Prince Road Park, that woman, Elizabeth Keith, said she was the latest in a series of tenants who were acting as the park’s property manager, with Kroepel’s consent.

    She maintains that Kroepel asked her to be his “point of contact” and to get more tenants moved into the vacant, money-draining trailers. She said Kroepel refused to pay for any repairs and she did not know which trailers were condemned.

    He “refuses to do anything for his tenants and refuses to do anything for his managers,” Keith said.

    Kroepel said he was unaware so many trailers had been condemned at his property, which was featured in a December Star article on dangerous conditions in Tucson’s trailer parks.

Single Mom Gets Stung In Craigslist Rent Scam, Paying $4K To Move Into Rental Home, $5K In Needed Repairs Only To Find Out Property Was A Bank Foreclosure & Purported Landlord Was A Scammer

In Chicago, Illinois, WBBM-TV Channel 2 reports:
  • A mother in the South suburbs moved into a dream house with her kids, only to learn she had been scammed.

    As she now faces eviction, CBS 2’s Jim Williams reports this incident is a warning for other renters.

    Rhonda Reynolds Ford said she first saw the comfortable Country Club Hills home advertised on Craigslist and met the man she thought was the owner at the residence.

    “He had the keys — we walked right in the front door,” she recalled. “He said this was his house, that he had a couple of other people who were interested in it.”

    Wasting no time, Ford jumped on it, and signed a lease in December of last year. She says she paid the first month’s rent as well as a security deposit, $4,000 altogether, in cash.

    “There were leaks all throughout the house. I had to put plumbing in downstairs and repair the leaks,” Ford said, which cost her an additional $5,000.

    However, a couple of months later, Ford learned the man she paid did not own the house. “I think it’s disgusting to take from people who are trying to live and struggle to make it day by day. How can you do that to somebody?”

    In addition to her own children, Ford’s four young nieces also live with her.

    “I’m feeling — I feel like I’ve got these kids to take care of,” Ford said, choking up. “And I don’t have anywhere for them to go. What am I going to do?”

    Ford is currently on an unpaid medical leave from work, which is adding to her difficulties.

    CBS 2 called the man who posed as the landlord, but there was no answer. It remains unclear how he had the keys to the house.

    The attorney representing Wells Fargo Bank, which is the bank taking Ford to court, said he could not discuss the case.

    Eileen Boyce of the Illinois Attorney General’s said the office has received 50 complaints since 2015 of people posing as landlords to scam renters. Boyce suggests renters check public records to make sure landlords and property management companies are legitimate.

Thursday, August 31, 2017

Anonymous Call To Abuse Hotline Triggers Probe, Subsequent Arrest Of Woman Suspected Of Abusing POA To Steal Money From Elderly Mom; Loot Believed To Include Proceeds From Sale Of Victim's Home

In Yulee, Florida, WJXT-TV Channel 4 reports:
  • A woman was arrested Friday [August 25], accused of exploiting her own mother for financial gain, the Nassau County Sheriff’s Office said.

    Venetia Mitchell, 62, of Yulee, was taken into custody and charged with one count of exploitation of an elderly or disabled person.

    According to an arrest warrant obtained by News4Jax, the criminal investigation into Mitchell began in mid-May when an investigator from the [Florida] Department of Child and Families contacted the Sheriff’s Office about an anonymous call that came to the Abuse Hotline.

    The caller said an 84-year old woman with an undisclosed illness was being exploited by her daughter, Mitchell, who is also the alleged victim’s power of attorney.

    The caller’s concern was that Mitchell had been using proceeds from the sale of her mother’s home, banking accounts and money market accounts for her own benefit.

    According to the caller, Mitchell took money from her mother’s bank account to purchase a vehicle and jewelry. The caller also reported that Mitchell spent $200 at a grocery store but there was no food in the home the next day and that her mother has very little money in her bank account.

    The DCF investigator provided Nassau County detectives with copies of checks Mitchell allegedly wrote and signed using her name or her mother’s name.

    According to the Sheriff’s Office, the case is still under investigation.

    Nassau County jail officials told New4Jax that Mitchell is now out of jail after posting a $5,000 bond.

    Mitchell is no stranger to trouble. A background check revealed she had been previously arrested in Hillsborough County in 2007 and charged with theft and possession of cocaine. In 2005, the Hillsborough County Sheriff’s Office arrested and charged Mitchell with battery. It’s unclear if those prior arrests resulted in convictions.
Source: Woman charged with exploiting her 84-year-old mother (Police say woman stole money from mother's bank account). POA abuse

Cops: Caregiver Emptied Out Vulnerable Man's Bank Account, Stiffing His Landlord, Leaving Him Broke, Causing Victim To Get The Boot

In Ninety Six, South Carolina, the Index-Journal reports:
  • A Ninety Six man ended up homeless after his bank account was emptied by a woman who was caring for him, said Ninety Six Police Sgt. Cerrior Mansel.

    Zaketa Shandrell Peterson, 29, of 401 S. Cambridge St., Ninety Six was arrested Wednesday and charged with obtaining money under false pretenses and breach of trust with fraudulent intent.

    The man's caregiver convinced him to put her on his bank account, and after his account came up empty, he was evicted for unpaid rent, Mansel said. On Aug. 10, officers went to speak with him because a woman had his credit and personal identification cards, according to a report.

    The man told officers he didn't know she had them, and said he was being evicted and the woman was supposed to be paying his bills, the report said. She was his caregiver, and had access to his bank account, the report said.

    Officers found surveillance video showing the caregiver withdrawing money from the man's account at two different ATMs at a bank, Mansel said. When asked, the caregiver told officers the man was waiting in the car for her and the money was taken with his permission — but when pressed on details, she said the man was home sick, Mansel said.

    The woman told officers she was added onto the man's account because she was his caregiver, Mansel said, but records showed she was on his account about a month before she started working for a caregiving agency.

    Mansel said police believe Peterson might have taken money from others.

    "If anyone recognizes her and has been a client of hers, call your respective law enforcement agency," said Ninety Six Police Chief Chris Porter.

    Ninety Six police can be reached at 864-543-3122, and the Greenwood County Sheriff's Office can be reached at 864-942-8600.

Wednesday, August 30, 2017

Special Home Mortgages For Seniors Experience High Default Rates, Despite Terms Requiring No Periodic Loan Repayments

From a recent story in The Washington Post:
  • [A]cross the nation, an increasing number of seniors are facing foreclosure after taking out reverse mortgages, either because they fell behind on property charges or failed to meet other requirements of the complex mortgage loans, according to federal data and interviews with consumer and housing specialists.

    “Folks who had expected to age in place and live for the rest of their lives in their home are now having to scramble to find a new place to live,” said Odette Williamson, a staff attorney with the Boston-based National Consumer Law Center, which advocates for consumer justice for low-income people. “People just don’t know where to turn. It’s heartbreaking.”

    The federal Department of Housing and Urban Development, which insures most reverse mortgages in the country, says it lacks detailed data on how many homeowners have lost their homes or are facing foreclosure in the program, which was launched in 1989 and covers about 636,000 loans. Nationstar declined to comment for this article.

    But a HUD report issued last fall found that nearly 90,000 reverse mortgage loans held by seniors were at least 12 months behind in payment of taxes and insurance and were expected to end in “involuntary termination” in fiscal 2017. That’s more than double the number the year before.

    Losses in the senior mortgage program have been a drain on the Federal Housing Administration’s mortgage insurance fund that supports all single-family loan programs, including traditional forward mortgages and reverse mortgages.

    HUD spokesman Brian Sullivan said the agency has tightened the requirements to reduce defaults for new loans going forward. It’s a necessary measure as its reverse mortgage portfolio — whose value can go down with defaults or home prices and property values if homes fall into disrepair — was valued last fall at negative $7.7 billion.

    Still, he said, reverse mortgages are “a critical resource for seniors who wish to access their accumulated home equity and age in place.”

    Before 2015, the only thing homeowners ages 62 and older needed to qualify for a reverse mortgage was equity in their home; lenders weren’t required to determine whether they could afford to maintain their homes or cover tax and insurance payments in the future. Some homeowners used the funds to pay off the original mortgages or ran out of money after covering living expenses over many years. Now HUD requires all borrowers to undergo a financial assessment to qualify, to make sure they will be able to pay their taxes and insurance.

    But tens of thousands of troubled loans remain. More than 18 percent of reverse mortgage loans taken out from 2009 to June 2016 are expected to go into default because of unpaid taxes and insurance, according to the HUD report. That compares with less than 3 percent of federally insured loans that are considered seriously delinquent in the traditional mortgage market.

    Joanne Savage, an attorney with AARP’s Legal Counsel for the Elderly, said that seniors [] are the victims of a past system. She joins other advocates who argue that HUD and lenders should work harder to help troubled borrowers facing displacement for relatively small debts compared with the value of their homes.

    “There needs to be a little more mercy,’’ Savage said. “We are going to have a steady stream of these clients for five to 10 years.”
    Borrowers can receive 50 percent to 66 percent of the value of their equity, depending on their age and the interest rate, generally set at about 5 percent. For example, a 73-year-old with a home worth $100,000 and no current mortgage could receive a loan in a lump sum or monthly installments, or a line of credit, of up to $57,900, not including closing costs, according to HUD.

    The debt increases each month with interest on the loan, and in many cases fees to the servicer and an insurance payment to HUD, which guarantees to take over the debt from the lender when it grows bigger than the value of the house. The loan comes due when the borrower dies, moves or violates loan requirements. At that point, owners or their heirs who want to keep the home can pay the debt or 95 percent of appraised value of the property — whichever is less. Or they can walk away from the house.


Managing Agent Gets Pinched For Allegedly Forging Condo Board Members' Signatures To Illegally Siphon $100K From HOA's Line Of Credit, Using The Loot As His Personal Spending Cash

In Hackensack, New Jersey, reports:
  • A Hasbrouck Heights man is accused of embezzling $100,000 from the accounts of a Bergen County-based condominium association in a five-year scam, prosecutors said Wednesday.

    Raymond Gonzalez, 62, was charged with theft by deception and forgery after an investigation that stemmed from a March 2016 complaint, according to Bergen County Prosecutor Gurbir S. Grewal.

    As operator of the condo association's management company, Gonzalez had access to a line of credit account used by the organization, authorities said.

    "Gonzalez removed monies from the account, transferred them into accounts held by his management company and used them for his personal benefit," Grewal added in a statement.

    "In an effort to write fraudulent checks from the account, Gonzalez forged the signatures of two of the condominium association's board members," the prosecutor said.

    The alleged scheme continued between 2011 and 2016. Officials said Gonzalez was released ahead of a court appearance set for Sept. 6.

Tuesday, August 29, 2017

More On Private Equity Outfits' Use Of Contract For Deed Scams To Fleece Unsophisticated Buyers With Crappy Credit Aspiring To Own A Home

From a recent opinion commentary in The Guardian:
  • [L]ike a strain of virulent TB that was thought eradicated, this predatory practice has returned. This time, however, the perpetrators are not “mom and pop” landlords, but Wall Street private equity firms.

    In the aftermath of the 2008 mortgage meltdown, millions of people lost their homes to foreclosure, particularly across the midwest rust belt states. Fannie Mae disposed of thousands of these properties in bulk sales to Wall Street private equity firms, some with fingerprints leading back to the original subprime mortgage scandal that fueled the meltdown.

    The Dallas-based Harbour Portfolio Advisors was one of the biggest bulk buyers, acquiring more than 6,700 homes, mostly in Michigan, Ohio, Illinois, Pennsylvania, Georgia and Florida. Other Wall Street firms snapped up thousands of foreclosed units, including the South Carolina-based Vision Property Management, Battery Point Financial and the St Louis-based Apollo Global Capital.

    These Wall Street firms typically don’t invest anything to improve these properties, most of which are in terrible condition. Instead, they transfer them to potential buyers through “contract for deed” transactions – sometimes marketed as “rent to buy”, “seller financing”, or “installment land contracts”.

    These are not inherently predatory, but opportunities for abuse are plentiful. Such contract arrangements are not subject to the Truth in Lending Act or other consumer protections that most traditional mortgage borrowers enjoy.

    These contracts exist in a regulatory ‘no-man’s land’ between tenant protections and homeowner protections,” says Sarah Mancini, an attorney with the National Consumer Law Center. “These aspiring homeowners have neither.”

    Assuming all the risk, if contract buyers miss a payment, they can lose all the previous payments and investments they’ve made in maintaining the house. Because they are technically not owners, buyers may be quickly evicted under forfeiture procedure, without the increased protections of foreclosure law afforded to homeowners. Think “repo” of a car, not a home.

    Deploying contracts for deed, sellers receive income streams from rundown properties that would be unbankable with traditional mortgages and unsuitable for renting because of code violations. In the most predatory scenario, sellers unload dilapidated houses on unsophisticated buyers with a contract for deed, locking them into an inflated purchase price and high interest rate. After paying out tens of thousands for repairs, a defaulting buyer loses all their equity. The contract lender gets back the house in better condition and repeats the cycle.

    “These contracts are the next wave of abuses motivated by corporate profits,” says Mancini. “They are exploiting the same communities of color that were devastated by the subprime crisis. This is just the latest predatory product.”

For more, see Loan sharks were meant to be eradicated. Now they're back. land contract for deed rent to own rackets

New Illinois Law Aims To Provide Some Protection For Aspiring Homebuyers Targeted By Sleazy Real Estate Operators With Rent-To-Own, Contract For Deed Ripoffs

The Pekin Daily Times reports:
  • A measure sponsored by two Peoria lawmakers would offer new protections for people who enter into “rent-to-own” leases.

    Gov. Bruce Rauner signed Senate Bill 885 on Friday. It’s designed to regulate contract-for-deed sales in which individuals gradually build up equity in a home with their monthly rent payments to the owner, eventually becoming the property owner themselves.

    State Sen. Dave Koehler and state Rep. Jehan Gordon-Booth, both Peoria Democrats, said that the aim is to prevent people — particularly in now-income areas where people might have difficulty getting traditional bank financing — from being taken advantage of by unscrupulous sellers.

    “Deceptive lending practices are a recipe for financial disaster,” Koehler said Friday night. ”‘Rent-to-own’ leases are often misleading and will hit consumers with ballooning costs and hidden fees. This new law brings transparency to consumers and guarantees they are armed with enough information to make a well-informed decision.”

    The legislation requires individuals selling three or more homes on a contract-for-deed basis — effectively limiting it to people who are in the business of such sales — provide buyers with an amortization schedule so they know how quickly they are building up equity in the home, and lays out the process for foreclosure more strictly.

    The bill passed both houses of the Legislature unanimously, and was the product of lengthy negotiation with groups representing real estate agents, lending organizations, affordable housing agencies and the state attorney general’s office.

    The bill becomes effective Jan. 1, 2018.

Monday, August 28, 2017

Four Suspects Face Charges For Alleged Roles In Using Forged Deed To Snatch & Flip Unwitting Victim's House For $350K, Pocketing & Splitting Sales Proceeds

In Los Angeles, California, City News Service reports:
  • The last of four people charged with identity fraud in a case involving the sale of a Windsor Hills duplex has been arrested, the sheriff’s department announced Wednesday [August 23].

    Bridgett Dennis, 49, who had been charged along with the other defendants on June 27, was arrested Tuesday by deputies from the sheriff’s South Los Angeles Station, according to Deputy Ryan Rouzan of the Sheriff’s Information Bureau.

    The other charged defendants are Waymon Robertson, 58; Donald Seastrong, 55; and Kimberly Simpson, 43, Rouzan said.

    Authorities allege that in October, the defendants took part “in an elaborate scheme” involving the theft of the victim’s identity.

    False documents were created and the victim’s signature was forged on them, including a grant deed transferring ownership of the victim’s duplex,” Rouzan said.

    The victim’s duplex was sold for $350,000 without the victim’s knowledge or permission, and the defendants allegedly split the sales proceeds.”

    Robertson, who was in custody in connection with another case, was arraigned on July 3, while Seastrong and Simpson surrendered and appeared in court the same day, Rouzan said.

Cops: SW Florida Man Used Forged Deed To Snatch Title To Sister's House, Then Refinance Equity Out From Under Her; Title Insurer Left Holding The Bag On $180K In Losses

In Naples, Florida, the Naples Daily News reports:
  • A Collier County man was arrested last week after he forged signatures to obtain mortgage loans totaling $180,000, state investigators said.

    Ben Handa, 53, faces three felony charges of fraudulently obtaining a mortgage loan, scheming to defraud one or more persons obtaining property of $50,000 or more, and scheming to defraud a financial institution, according to court documents.

    Deputies arrested Handa on a warrant Friday [August 18]. He was booked at the Naples Jail Center and posted the $70,000 bail Sunday [August 20].

    Officials from the Office of Financial Regulation started investigating Handa in October 2015 after they received a complaint filed with the Sheriff's Office by Fraud Review Counsel Jennifer Lee with Fidelity National Title Group, a title insurance company.

    Lee's complaint alleged Handa obtained two mortgages on a property owned by his sister by forging her name on a deed and transferring the title to a company for which he was the sole responsible person.

    The complaint alleged that on July 8, 2014, Taylor Made Lending LLC gave a loan to Green Capital Holdings LLC for $150,000 on a property in the 500 block of 97th Avenue in North Naples.

    Later, on July 25, 2014, Taylor Made Lending made out a second loan to Green Capital Holdings for $30,000 on the same property, according to an affidavit.

    Fidelity National Title Group paid $180,000 to the insured lender, Taylor Made Lending, due to the forged deed from Handa's sister to him, the affidavit states.

    Green Capital Holdings was formed two weeks before the transactions took place by Handa, the affidavit states. He was the sole member of Green Capital Holdings and the cash at closing was disbursed to him, according to the affidavit.

    During a voluntary interview with investigators, Handa admitted signing the loan documents and getting the money. Handa told investigators he is the owner of Green Capital Holdings and "stole the house" from his sister, according to the affidavit.

    The day he signed the first loan for $150,000, he had someone "cash PNC Bank starter checks to purchase emeralds," the affidavit states.

    "He received the money, spent it and his sister did not get a nickel of the money," investigators wrote.

    Handa told investigators that he is aware of his sister's civil lawsuit against him and said she won the judgment and he was evicted from the property, the affidavit states.

    In his deposition, Handa said he planned to use the house as collateral to fund Green Capital Holdings, according to the affidavit.

    When investigators checked the PNC Bank account tied to Green Capital Holdings, they found two wire transfers from Taylor Made Lending in July 2014, one totaling $133,098.87 and another for $24,233.56.

    That account was left with a zero balance as of Aug. 12, 2014, according to the affidavit.

Sunday, August 27, 2017

Lawyer Gets 8 Years After Being Found Guilty Of Fleecing His 89-Year Old Step-Grandmother Out Of $1.3 Million In Trust Funds; Victim Dies 10 Days After Jury Verdict

In Golden, Colorado, The Denver Post reports:
  • A Lakewood lawyer who stole $1.3 million from his 89-year-old step-grandmother was sentenced to eight years in prison last week.

    Glenn Gregory, 55, was the trustee for the Martha Violet Villano Trust Fund, bleeding the account down to $24 between 2006 and 2015, according to the district attorney’s office for Jefferson and Gilpin counties.

    Gregory was found guilty of 13 theft-related counts in June. He was sentenced concurrently on all counts. Villano was deposed prior to trial due to health concerns so provided a testimony over video. She died 10 days after the jury returned the verdict.

    District Attorney Pete Weir noted in a statement that the lawyer was eligible for decades in prison.

    “This defendant deserved a very lengthy prison sentence,” Weir said. “Not only was Gregory the victim’s grandson, he also is a lawyer who violated the basic tenets of the profession. We believe that this is the highest value theft from an at-risk elder in Colorado. A strong message needs to be sent to those who take advantage of this vulnerable population.”
Source: Lawyer who stole $1.3 million from his elderly grandmother sentenced to eight years in prison (His grandmother died 10 days after the jury returned its verdict). ripoff reimbursement

Law Partners Avoid Major Bar Discipline, Get 6-Month License Suspensions After Admitting That Their Failure To Regularly Supervise Firm's Sticky-Fingered Bookkeeper Or Audit Company Bank Records Led To Theft Of Over $2.5 Million In Client Cash; Loot Eventually Paid Back With Victims Made Whole

The New York Law Journal reports:
  • Two veteran lawyers who ran a boutique practice in the Bronx have had their licenses suspended for failing to supervising a bookkeeper—and personal friend of one of the lawyers—who stole more than $2.5 million from firm bank accounts, including escrow accounts.

    The bookkeeper eventually paid back the money, which was siphoned from funds tied to some 200 client matters, and ultimately no clients or third parties lost cash. But lawyers Jay Zucker and Steven Kwestel admitted to several acts of professional misconduct and have stipulated, along with a state attorney grievance committee, that they should receive six-month suspensions because of their wrongdoing, according to the court.

    A unanimous panel of the Appellate Division, First Department, agreed, issuing a decision that granted the lawyers' and the First Department grievance committee's joint motions for discipline by consent.

    Zucker and Kwestel "admit that they failed to regularly supervise" the bookkeeper—referred to only as "MT" in the decision—and they admit that they did not "review or audit the firm's bank account records, and thereby failed to take reasonable steps to safeguard client and/or third-party funds," the panel wrote Aug. 15 in Matter of Zucker, 2017 NY Slip Op 06149.
    MT came to the lawyers' firm, Zucker & Kwestel, with solid professional recommendations, including from Zucker's sister, a retired attorney, the panel noted when listing "mitigating" factors put forward by the lawyers as part of their stipulation submitted with the joint motion for discipline by consent.

    Another mitigating factor was that the lawyers "came to implicitly trust MT over the years," based partially on "his diligence and personal friendship with … Zucker."

    There also were "no early warning signs of MT's defalcations," and "upon learning of MT's thefts respondents took immediate action which included spending hundreds of hours reconstructing and reconciling escrow account records and obtaining reimbursement as a result of which no clients or third parties were harmed." And they, too, were "victims of MT's thefts," the court said.

    But aggravating factors included that Zucker and Kwestel did not report MT's stealing to law enforcement. However, the lawyers noted that MT's restitution of the misappropriated money "was conditioned upon [the lawyers] entering into a nonreporting agreement" with him, one that "did not prohibit [the attorneys] from answering questions from law enforcement if contacted about the thefts."

    MT was hired in 2003 to be the firm's full-time bookkeeper and controller, wrote the panel, consisting of Justices John Sweeny Jr., Dianne Renwick, Richard Andrias, Ellen Gesmer and Marcy Kahn.

    After initial training, during which Zucker and Kwestel reviewed his work, the lawyers began delegating responsibilities to MT, and eventually authorized him to be a signatory on the firm's escrow accounts, out of ignorance of the pertinent disciplinary rules, and to execute online transfers of funds from the firm's escrow accounts provided they approved of it.

    MT frequently worked out of the firm's New Jersey office, where Zucker and Kwestel rarely were, according to the court. Eventually he was fired, and Zucker and Kwestel retained civil counsel to negotiate repayment of the misappropriated funds.

DA Indicts Now-Disbarred Attorney For Allegedly Using Undue Influence To Score Credit Cards Belonging To Unwitting, 71-Year Old Victim & Run Up $87K+ In Unauthorized Charges; Defendant Received Bar Boot In 2016 For Unrelated Escapades

From the Office of the New Hampshire Attorney General:
  • Attorney General Gordon J. MacDonald announces the indictment of Thomas U. Gage, age 57, of Newfields, New Hampshire, for the financial exploitation of a 71-year-old woman.

    Last week, Gage was indicted in Rockingham County Superior Court on 5 counts of financial exploitation of an elderly, disabled or impaired adult. The indictments allege that Gage, through the use of undue influence, acquired possession or control of 5 credit cards belonging to the alleged victim. The total amount of the alleged exploitation is $87,165. The timeframe of the exploitation spanned between January 2015 and January 2016.

    Gage is a former attorney who practiced in Exeter. He was disbarred for unrelated reasons in 2016.

Lawyer Hit With Emergency Suspension After Allegedly Swiping $57K From Dead Man's Estate, Issuing Eight Rubber Checks Written From Attorney's Trust Account, Willfully Failing To Cooperate With Bar Probe

In Goshen, New York, the Times Herald-Record reports:
  • An appellate court has suspended the law license of Goshen lawyer Ed Char, who also serves as a trustee in the Village of Goshen, while disciplinary based proceedings are underway.

    Char was admitted to the New York State Bar in 2003. According to the order filed July 18 by the Appellate Division, First Department of state Supreme Court, the interim suspension was imposed based on complaints from two clients, eight dishonored checks on a lawyer trust account for Char’s firm, and Char’s “failure to cooperate with the Committee’s investigation” of the complaints.

    The interim suspension will remain in effect until the disciplinary investigation concludes. Attorney discipline is a civil process, based on the Rules of Professional Conduct. If serious misconduct is proved, the court may ultimately censure, suspend or disbar the lawyer.
    According to the suspension order, the first complaint against Char was filed in September of 2016 with the Attorney Grievance Committee for the First Judicial Department, saying Char had abandoned a case. The client and her husband had hired Char in 2014, but he eventually stopped communicating with them. It was only after consulting with another lawyer that they learned he had abandoned their case, the woman told the committee.

    A second client, a lawyer’s widow who had hired Char in 2014 to settle her husband’s estate and close out the law practice, filed a complaint in November of 2016. She claimed Char had neglected the matter, failed to communicate with her, misrepresented the status of proceedings and failed to return documents and other property. According to the decision, she alleged that Char “absconded” with estate funds by “completely depleting a bank account of $57,000,” despite the account requiring both Char’s signature and the client’s to release funds.

    The Appellate Division wrote that in November and December 2016, the grievance committee got three notices from the Lawyers’ Fund for Client Protection saying eight checks drawn on Char’s firm’s Interest On Lawyer Account, $56,807.57, had bounced due to insufficient funds.

    Lawyers in New York must maintain an IOLA account, an interest bearing trust account, for client funds. Banks that hold IOLA accounts automatically report dishonored checks to the Lawyers’ Fund.

    The Appellate Division wrote that Char failed to respond to grievance committee requests for his response to the complaints until he was subpoenaed to appear before them in February. The decision noted that he had not yet provided the required written response or the IOLA account records.

    In New York, attorney grievance committees set up by the Appellate Division investigate potential misconduct by lawyers. When the committee finds probable cause of misconduct by a lawyer, it files a petition in the Appellate Division of Supreme Court to start formal disciplinary proceedings. The court can issue an interim suspension while the matter is pending, as it did in Char’s case, based on a finding that the lawyer “engaged in conduct immediately threatening the public interest.”

    The Appellate Division issued the interim suspension after finding that Char engaged in misconduct by willfully failing to cooperate with the investigation and by failing to answer the complaints or to provide requested financial records.

    Char’s partner, Steven Herzberg, was suspended by the Appellate Division on the same day, based on the dishonored checks and his failure to produce the IOLA account records.
For the story, see Goshen trustee’s law license suspended. ripoff reimbursement