Monday, July 9, 2007

Criminal Prosecutions Of Foreclosure Rescue Operators I

(revised 1-14-08; added Case # 27)
Transactions involving foreclosure rescue arrangements have occasionally been the subject of criminal prosecutions. The cases involved (1) those taking upfront fees and/or ongoing periodic fees for services never performed, (2) those who acquired overleveraged homes with no equity who proceeded to pocket the rent from the home without paying on the existing mortgage (ie. equity skimming / rent skimming), and (3) those who engaged in the so-called foreclosure bailout, foreclosure rescue, equity stripping arrangements.

The following are links to stories involving the criminal prosecutions of foreclosure rescue operators:



Case #1 - California Federal Court

Press Release - U.S. Department Of Justice - Three Defendants Added To Federal Indictment In Foreclosure Scam Targeting Homeowners In Default (7-20-06)

Defendants Face Prison Time for Calif. Foreclosure Scam (7-24-06)

Seal Beach escrow operator pleads guilty in fraud case (2-23-07)

Stipulated Statement of Facts (Cynthia Valenzuela) Plea Bargain Agreement

Let The Borrower Beware

Sentencing In S. California Foreclosure Rescue Scam Postponed To December (8-14-07)

Bond Revoked For Los Angeles Area Foreclosure Rescue Operator Facing Criminal Charges; Allegedly Engaged In More Stripping Scams While Awaiting Trial (12-2-07)



Case # 2 - Ohio Federal Court

Press Release - U.S. Department Of Justice - Springboro Man Indicted In "OperationTruth Or Consequences" National Action Against Bankruptcy Fraud (10-18-06)

Foreclosure scam triggers plea, (The Enquirer / Cincinnati.com - 11-8-07)





Case #3 - Illinois Federal Court

Chicago lawyers charged in bankruptcy fraud probe (10-18-06)

Press Release - U.S. Department of Justice - Five Chicago Area Bankruptcy Attorneys Among A Dozen Defendants Charged In Separate Federal Bankruptcy Fraud Cases (10-18-06)

Case #4 - California State Court
(Stanislaus County)
(revised 9-28-07)
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Foreclosure avoidance partners targeted (The Mortgage Fraud Blog - 7-3-05)

Foreclosure case witnesses take fire (adapted from The Modesto Bee, 10-20-06)

California Judge Decides to Proceed to Trial in Matter of Accused "Deed Thieves", (blog post - 11-21-06),

California Prosecutors Add 26 Charges Against Alleged House Swindling Trio (blog post - 12-6-07)

Plea deal for men accused of fraud? (Prosecutor tells judge both sides talking in Ashlock-Buhler case) (The Modesto Bee - 8-3-07)

Plea Deal In The Works For Foreclosure Rescue Operators? (blog post - 8-3-07)

2 plead guilty to swindling homeowners (One year in jail, restitution for 20 families mark deal) (The Modesto Bee - 9-20-07)

Northern California Prosecutors Get "No Contest" Pleas In Foreclosure Rescue Scam (blog post - 9-24-07)


Case # 5 - New Jersey Federal Court

Lyndhurst, N.J., Men Get Sentenced for Defrauding Homeowners in Mortgage Scam (9-10-03)




Case # 6 - Texas Federal Court

Mortgage Scam Puts Dozens of Dallas Homeowners on the Streets (4-10-01)
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Case # 7 - New York State Court

Attorneys Arrested In Real Estate Scheme

Mortgage fraud scheme broken up




Case #8 - Florida Federal Court

Press Release - U.S. Department of Justice - Tampa Federal Jury Convicts Five Persons In Home Equity / Bank Fraud Scheme (3-29-07)

Indictment - U.S. vs. Moumneh, et al.

Five convicted in home equity fraud

Florida Foreclosure Rescue Operators Found Guilty In Federal Fraud Trial





Case #9 - Washington, D.C. Court of Appeals

Sale Leaseback Recharacterization As Loan Results In Criminal Conviction

Browner v. Dist. of Columbia, 549 A.2d 1107 (D.C. 1988)




Case #10 - California State Court

California Foreclosure Rescue, Equity Stripping Warning, Consultant Jailed




Case #11 - Maryland State Court

Foreclosure Rescue Scammer Pleads Guilty To Felony Theft




Case #12 - California Federal Court

Sacramento Feds Get Guilty Pleas From Foreclosure Rescue Operator; Two Straw Borrowers

U.S. Attorney's Press Release

Indictment - U.S.A. vs. Christopher Craig, et al.

Plea Agreement - U.S.A. vs. Craig (see pages 13-14)

'Foreclosure specialist' pleads guilty to fraud




Case #13 - Minnesota Federal Court

U.S. Attorney Press Release (5-10-07) - Local Mortgage Broker and Assistant Indicted for Bilking Homeowners.

Foreclosure Rescue Operators Indicted By Minnesota Feds

Indictment - United States vs. Fiorito & Jerde

Prior Lake man pleads guilty in home equity schemes

Minnesota Foreclosure Rescue Scammer Cops Plea To Mail Fraud





Case #14 - California State Court

California Foreclosure Rescue Operator Faces Felony Charges

Santa Cruz resident says her home was stolen in foreclosure scam




Case #15 - Missouri State Court

Real estate’s market crash ensnares guru (No-money-down leader in legal trouble)

Missouri Foreclosure Rescue Operator Facing Felony Theft Charge; Allegedly Cheated 80 Year Old Woman Out Of Home





Case # 16 - New Jersey State Court

Charge he fleeced friend in $270G real estate scam

NJ Man Facing Felonies In Equity Stripping, Straw Buyer Scam




Case # 17 - Maryland State Court

Foreclosure rescue operator Nicholas D. McLeod, 31, of Gaithersburg, Maryland pleaded guilty to:

  1. felony theft,
  2. embezzlement, and
  3. prohibited activities while acting as a foreclosure consultant.

For more, see:

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Case # 18 - New York State Court
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Nassau County DA Press Release (11-1-05) - DA's press release announcing the arrest of the three participants in foreclosure rescue scheme.
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Case # 19 - Ohio State Court
(Franklin County)
(revised 9-29-07)
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(An alleged title transfer / refinancing scam that did not involve a foreclosure rescue. However, the suspect / defendant allegedly used an approach similar to that of some foreclosure rescue opertaors - (1) a bogus proposal by the suspect / defendant to assist the homeowner in the refinancing of her home, coupled with (2) a scheme to have the title to the property transferred into the name of a third party (straw buyer), which included the unwitting signing of certain legal documents by the homeowner to accomplish that purpose, and (3) ending with the architect of the scam pocketing money from the proceeds of a mortgage loan at the transaction closing / settlement, with the homeowner no longer having title to the home. The suspect here was charged with the felonies of Theft, Securing Writings by Deception, and Money Laundering.)
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Ohio AG Press Release - Attorney General Marc Dann’s Organized Crime Investigations Commission busts Columbus man for mortgage fraud (Man preyed on elderly victim soon after hospital visit) (9-7-07).
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Local man indicted for mortgage fraud (Business First of Columbus) (9-7-07).
.
...
Case # 20 - Florida State Court
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(An alleged real estate title transfer scam that did not involve a foreclosure rescue. However, the suspect/defendant allegedly used an approach that parallels the approach used by some foreclosure rescue opertaors - (1) a bogus proposal by the suspect/defendant to assist the homeowners in the sale of their home, (2) the unwitting signing of legal documents by the homeowners (ie. power of attorney and warranty deed) to facilitate a title transafer and giving the documents to the suspect/defendant, and (3) ending with the suspect/defendant having the title to the home in his name, with he claiming to have purchased the equity in the property from the homeowners "for $10" - and with the homeowners no longer having title to the home. The suspect here was charged with the felony of first-degree grand theft.)
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Case # 21 - Florida State Court
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Case # 22 - New York Federal Court
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Indictment - U.S. vs. McDowell, et al. (U.S. District Court - S.D. N.Y.)
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Case # 23 - Florida Federal Court
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Criminal Complaint (Information) - U.S. v. Kligerman (U.S. District Court - M.D. Fla.),
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Plea Agreement (requires PACER registration; 22 pages - $1.76; the admitted facts of the scheme are found at paragraph B-9, pages 19-21; or drop me a line at HomeEquityTheft@yahoo.com and I'll email it to you - be sure and put "U.S. v. Kligerman Plea Agreement" on the subject line),
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Disbarred lawyer to plead guilty to fraud (Prosecutors say Graham Kligerman misled banks into making millions of dollars in loans) (St. Petersburg Times),
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Case # 24 - Ohio Federal Court
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U.S. Attorney News Release (upfront fee foreclosure rescue; defendant alleged to have misled homeowners into believing he could save their homes and charged upfront fee for "rescue services.").
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Case # 25 - Texas State Court
(added 12-31-07)
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(While this case was not a criminal prosecution, but rather a civil prosecution brought by the Texas Attorney General, it reflects a willingness on the part of the Texas AG to go after those who cause vulnerable homeowners to unwittingly sign away their homes through deception. The lawsuit was brought against a foreclosure rescue operator that the AG accused of fraudulently taking possession of the home of an 85-year-old Houston man under the guise of helping the homeowner prevent foreclosure. The man allegedly was led to believe he was only allowing the operator to consult with his mortgage company, but in fact the transaction allowed her to take ownership of his home.)
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Texas AG press release - Attorney General Abbott Files Emergency Action Halting Bogus Foreclosure Rescue Operation (Asset freeze and restraining order granted by judge severely restricts activities of pair scamming homeowners) (Go here for Spanish version of the press release),
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Temporary Restraining Order issued in this case by the state court.
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Case # 26 - Texas State Court
(added 12-31-07)
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(This case did not involve foreclosure rescue; but rather, a criminal prosecution and conviction by a local District Attorney's office of a scam artist who caused an 80+ year-old man to unwittingly sign away his home to her. The scam artist was sentenced to 10 years in prison and ordered to pay more than $380,000 in restitution after pleading no contest to criminal charges of securing execution of documents by deception.
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Inasmuch as I can't figure out any reason why criminal charges of "securing execution of documents by deception" would not be equally applicable to those foreclosure rescue operators who cause homeowners facing foreclosure to unwittingly sign away their homes, I concluded that this story merited a place on this post. Whether or not such a charge would apply in the context of foreclosure rescue is a question best left for prosecutors to ponder.)
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Woman pleads no contest to fleecing octogenarian (San Antonio Express-News, 9-25-06),
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Woman gets 10 years for home sale scheme (San Antonio Express-News, 10-24-06)
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For the continuation of this regularly updated post, see Criminal Prosecutions Of Foreclosure Rescue Operators, Refinancing Scams II.

Posted by Home Equity Theft Reporter at 1:13 PM 0 comments

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