Monday, December 21, 2009

State Recovery Fund To Cough Up $116K+ To Compensate Elderly Victim Of Bogus Sale Leaseback Equity Stripping Scam Involving Licensed Real Estate Agent

In Hennepin County, Minnesota, the Minneapolis Star Tribune reports:

  • An 87-year-old woman who was cheated out of her home of 50 years will receive $116,972 from the state, the largest pay-out in recent memory from a fund for victims of unscrupulous real estate professionals. Telsche Paulson's compensation from the Real Estate Education, Research and Recovery Fund was approved Wednesday by Hennepin County District Judge Susan Burke after Paulson's lawyers and the state Department of Commerce reached an agreement on her claim. The ruling is a milestone in Paulson's long and frustrating legal journey, at a time of life that she expected to spend in comfortable retirement.

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  • She took [an] offer of a foreclosure "rescue," only to find out three years later that her home actually had been sold twice in a scheme orchestrated by the real estate company's owner, Timothy Lynn Beliveau. Paulson was forced to move out of the duplex in September 2008, despite the efforts of a team of lawyers working pro bono on her behalf. Since then, she has seen the wheels of justice move.

  • In December 2008, a federal judge ruled [in a civil lawsuit](1) that Beliveau's wife at the time, Shelley Lee Milless, used her real estate license to take away Paulson's title to her house, steal $104,872.65 of her equity and another $12,100 in what Paulson thought were mortgage payments, according to court records.(2)

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  • The couple have since divorced and seen their cars and homes repossessed. With little hope of collecting money from them, Paulson turned to the [state's] real estate recovery fund. The fund gets its money from a fee assessed to licensed real estate professionals in Minnesota. It's designed to compensate victims of "fraudulent, deceptive or dishonest practices, or conversion of trust funds" perpetrated by licensed real estate brokers, salespeople or closing agents.(3)

For the story, see Money for her stolen home (An 87-year-old's compensation from the state's real estate recovery fund is the largest payout in 13 years).

(1) See Minneapolis Star Tribune: Bittersweet victory for victim of swindle (A court ruled that Telsche Paulson had indeed been cheated out of her south Minneapolis home, but it's too late to recover it).

(2) According to the story, Beliveau has since been indicted in October on 12 counts, including conspiracy, mail fraud and tax evasion, that federal prosecutors say involved a real estate fraud scheme that swindled 14 investors and their lenders out of more than $2.5 million (for the indictment, see U.S. v. Beliveau). Milless faces up to five years in prison after pleading guilty in federal court last month to scheming with Beliveau to pocket $900,000 from his mortgage brokerage company that should have gone to the IRS.

(3) Those who have been screwed out of money due to the fraudulent, deceptive or dishonest practices, or conversion of trust funds by a Minnesota licensed real estate broker, salesperson, or closing agent can apply to the Minnesota Department of Commerce's Real Estate Education, Research and Recovery Fund to try and recover some or all of their losses. According to their website:

  • The improper action that was committed must be an activity that required a license,
  • Applicants may be awarded any amount from $0 to $150,000, depending on a number of factors.

According to the Fund's website, there is no guarantee that a claim will be paid. Whether an applicant will receive payment from the fund depends on the specific facts of the case. The storystates that the compensation of Telsche Paulson is the largest from the fund in at least 13 years, according to Commerce Department spokeswoman Nicole Garrison-Sprenger. The order requires the Fund to cough up the cash by July 2010. foreclosure rescue

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