Saturday, April 25, 2009

Dementia-Suffering Foreclosure Rescue Scam Victim Now Lives Penniless; Brooklyn DA's Office Slow To Pursue Prosecution

A recent article in The New York Times on foreclosure rescue scams contained this excerpt describing one victim who was swindled out of her home:

  • [T]here is Dr. Janet Mitchell, 58, the daughter of a butler and a maid who became chief of perinatology at Harlem Hospital Center and a national advocate for black pregnant women with H.I.V.

  • In 1992, she purchased a handsome and affordable brownstone in Fort Greene, Brooklyn. Then early-onset dementia struck. Dr. Mitchell stopped paying her bills in 2005, leading lenders to foreclose. Soon afterward, she walked into a mortgage company, according to a lawsuit filed by her niece.

  • A mortgage specialist persuaded her to sign a handwritten transfer with no lawyer present and paid off her $210,000 in loans. Then he refinanced her house, taking $1.7 million in cash. The doctor now lives, penniless, with her sister in Colorado.

  • South Brooklyn Legal Services gave the files to the Brooklyn district attorney’s office. The prosecutors have not yet brought a case.(1)We are constantly trying to get them to pursue this case,” [co-director of the foreclosure prevention project Jessica] Attie said. “These are the most defenseless of all.”

Source: Prosecutions Lag as N.Y. Foreclosure Frauds Surge.

(1) Sol Wachtler, the former Chief Judge of the New York Court of Appeals, once jokingly observed that a prosecutor could persuade a grand jury to "indict a ham sandwich." If this is the case, obtaining an indictment in an egregious case like this should be easier than indicting the defenseless ham sandwich. Possible charges include, but are not limited to:

  • Forgery (“[F]orgery is committed when a defendant, by fraud or trickery, causes another to execute a . . . document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature.” People v. Martinez, (2008) 161 Cal. App. 4th 754; 74 Cal. Rptr. 3d 409, quoting People v. Parker (1967) 255 Cal.App. 2d 664, 672); see also Marden v. Dorthy, 160 N. Y. 39, 54 N.E. 726; (NY 1899),
  • Exploitation of a vulnerable adult,
  • Grand theft,
  • Fraud by deception,
  • Securing writings by deception,
  • Theft by false pretenses.

Tampa Feds Have Mortgage, Loan Modification Fraud In Its Crosshairs; 200+ Indictments For 2009 Possible

In Tampa, Florida, TIME Magazine reports:

  • [T]he U.S. Attorney's office in the Middle District of Florida tells TIME, federal agents and prosecutors have embarked on a "surge" of mortgage and loan-modification fraud investigations that could result in more than 200 indictments this year in the Tampa region alone. "The idea is to do as many cases as we can at once," says Tampa U.S. Attorney Brian Albritton, "to clearly send a message that this is not going to be tolerated."


  • Of the FBI's 56 field offices, more than 40 now have mortgage-fraud task forces. In Florida's Tampa-based Middle District, as many as 50 agents have been incorporated into new task forces that include more than 10 other federal agencies, such as the Secret Service, the U.S. Postal Service, the Department of Housing & Urban Development, the Internal Revenue Service and the Federal Deposit Insurance Corporation.


  • Albritton, who says the task force is also working with industry insiders who can walk agents and prosecutors through the arcane intricacies of mortgage fraud, hopes to clear the decks by making as many plea deals as possible with suspects as early as this spring. Indictments will come later in the year, and will probably be announced all at once, "to make the largest public impact and have the largest deterrent value."

For more, see Mortgage Fraud Crackdown Gathering Steam in Florida.

Judge Halts Foreclosure Action As Lender Lacks Promissory Note, Ditches Court Hearing

In Levy County, Florida, the Chiefland Citizen reports:

  • It’s a story right off the national news: Homeowners fighting to prevent foreclosure on their property ask a lender to produce the original promissory note in legal proceedings. But in Levy County, it is the estate of Kathryn F. Causey, an accountant who died in January 2008, that is trying to stave off foreclosure by having the lender produce the promissory note.


  • The attorneys for Wells Fargo were a no-show for a hearing on their suit to enforce a missing promissory note so the judge dismissed it. For the estate of Kathryn F. Causey, a Cedar Key accountant who died in January 2008, it’s a victory in staving off a foreclosure attempt by the lender who cannot produce the original promissory note.


  • In June 2008, Wells Fargo filed suit asking 8th Judicial Circuit Judge David O. Glant to grant it “an action to enforce a lost, destroyed or stolen promissory note and mortgage.” [...] Glant scheduled a 10-minute telephone hearing in his chambers [last] Monday, but because Wells Fargo’s lawyers did not call in he granted a motion by Hamill’s attorney to dismiss the case.

For more, see:

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here. ThetaMissingDocsMtg

Friday, April 24, 2009

Hawaii Feds Pick Up Guilty Pleas In Equity Stripping Foreclosure Rescue Scam

In Honolulu, Hawaii, the Hawaiian Advertiser reports:

  • [Rick Kealoha Pa Jr.] faces five years in prison, a $250,000 fine and payment of restitution to an evicted homeowner after pleading guilty yesterday to aiding a Honolulu mortgage company accused of orchestrating a foreclosure bailout scheme and stealing hundreds of thousands of dollars from banks and distressed homeowners.


  • Pa was paid $10,000 to submit falsified mortgage loan applications, according to court documents. When the scam fell apart, a Makakilo family was evicted from their home.
    Pa was one of several loan officers employed by John M. Dimitrion,(1) founder and chief executive of Mortgage Alliance LLC, and his wife, Julie A.B. Dimitrion, the firm's chief financial officer.(2)

For more, see Man pleads guilty to fraud (Loan officer helped firm in mortgage scam that led to family's eviction).

For the indictment, see U.S. v. Dimitrion.

(1) Dimitrion and his associates are accused of finding homeowners on the cusp of foreclosure and offering help if the homeowners agreed to a temporary sale of the house to a third-party "investor," according to court documents. They allegedly told the homeowners they could remain in their homes and that their title would be returned to them after a set period of time. But Mortgage Alliance allegedly stole the proceeds by funneling the money into fake escrow accounts, and the new loan would go into default, according to court documents.

(2) Reportedly, one of Dimitrion's former employees, Vance Yukio Inouye, 31, has already pleaded guilty and has promised to cooperate with the government; Dimitrion and his wife, Julie Ann Baldueza Dimitrion, are scheduled to plead guilty later this month; and the final defendant, Benjamin Yoshito Thompson, is scheduled to stand trial in September. See Star-Bulletin: Mortgage fraud case draws new guilty plea.

Florida Bankruptcy Judge Questions Judgment Of Lenders Opposing Proposed Loan Modification Legislation

In Miami, Florida, the Miami Daily Business Review reports:

  • U.S. Bankruptcy Judge A. Jay Cristol said the banking and mortgage lending industry is either greedy, stupid or both when it comes to opposing legislation that would allow mortgage modifications for homeowners who declare Chapter 13 bankruptcy. “Everyone’s best interest would be served by stabilizing the situation and keeping people in their homes,” said Cristol, chief judge emeritus of U.S. Bankruptcy Court in Miami.


  • Unfortunately, because of lack of wisdom or greed, the banks are not acting in their own best interest. It’s in the whole country’s best interest to modify these mortgages,” Cristol said.


  • The new legislation also could take the teeth out of criminal loan-modification businesses preying on homeowners desperate to stay in their homes. Florida Attorney General Bill McCollum issued a consumer advisory last month saying foreclosure rescue services were the most frequent subject of complaints in 2008, defrauding hundreds of homeowners out of millions of dollars.

  • Cristol said it’s unknown what impact the modification measure would have on what he called “the creatures out at the edge of the herd, looking for the wounded and disabled.”

For more, see Loan modifications for homeowners in bankruptcy opposed by lenders.

Low Income L.A. Tenants Score $1M & Strengthened Rights In Discrimination Settlement Against Hotel, City

In Los Angeles, California, Daily Journal reports:

  • A group of current and former low-income tenants of the Alexandria Hotel who claimed they were victims of discrimination, deplorable housing conditions and illegal evictions will receive nearly $1 million under a settlement reached with the building's owners and the city of Los Angeles. The settlement also will require sweeping changes to policies at both the Alexandria and the city's redevelopment agency governing how tenants should be treated when the buildings they live in undergo publicly funded renovations.


  • The lawsuit, filed in December 2007 after local housing advocates noticed an influx of Alexandria tenants at Skid Row housing clinics, alleged widespread disability and race discrimination, illegal evictions and the systematic violation of multiple redevelopment laws at the residential hotel in downtown Los Angeles.(1)

For more, see Low-Income Tenants Win Rights, Money In Housing Case (Lawsuit Alleged Discrimination, Illegal Evictions and Violations Of Redevelopment Laws).

(1) Attorneys at McDermott Will & Emery who handled the case pro bono, and several agencies - the Legal Aid Foundation of Los Angeles, the Disability Rights Legal Center, the Western Center on Law and Poverty and the Los Angeles Community Action Network - filed the suit against the Alexandria Housing Partners, Logan Property Management Inc., the City of Los Angeles and the Community Redevelopment Agency. Woods, et al. v. Alexandria Housing Partners L.P., CV07-08262 (C.D. Cal, filed Dec. 20, 2007).

Orange County Non-Profit Legal Services Report Record Demand

In Orange County, California, the Orange County Register reports:

  • [T]he Legal Aid Society – as well as the Public Law Center – report that more and more individuals [...] have spiraled into poverty and are now coming to their clinics seeking help. Dozens of other legal nonprofits statewide also attest to increased demand. "We have more foreclosures, we have more everything,'' said Bob Cohen, executive director of the Legal Aid Society. "We've never seen this need. Families are falling apart because they have no money." At the center, there has been a 337-percent increase in the number of clients seeking help with their foreclosures, and a 135-percent rise in foreclosure cases from 2006-2008.

For more, see Bankruptcy? Foreclosure? Many asking for free legal aid (Legal nonprofits in Orange County report record number of demand).

Thursday, April 23, 2009

Individuals In Legal Proceedings Unrepresented By Counsel On The Upswing, Say Courthouse Insiders

The New York Times reports:

  • [F]inancially pressed people [...] are representing themselves more and more in court, according to judges, lawyers and courthouse officials across the country, raising questions of how just the outcomes are and clogging courthouses already facing their own budget woes as clerks spend more time helping people unfamiliar with forms, filings and fees.

  • We all know that the numbers are through the roof,” said James K. Borbely, a circuit court judge in Vermilion County, Ill. “You just look at the courtrooms.” Judges complain that people miss deadlines, fail to bring the right documents or evidence and are simply unprepared for legal proceedings. Such mistakes make it more likely they will fare poorly — no matter the merit of their cases.

  • Reliable numbers for people representing themselves in noncriminal cases are hard to come by. Nationally there is no tracking system, and each state’s court system follows its own rules. Many people hire a lawyer for one phase of a proceeding but then drop them later. (In criminal cases, of course, defendants have a right to an appointed lawyer.)

For more, see In a Downturn, More Act as Their Own Lawyers.

Attorney, Justice Of The Peace Held Liable For Damages In Now-Deceased Husband's Forgery Of Wife's Signature To Refinance Home

In New South Wales, Australia, On Line Opinion reports:

  • [W]hen [Kaylene] Hall's husband found himself in financial difficulties, he told a friend he would refinance the family home to pay his debts. His wife was the only obstacle. If she found out how badly he was running his tank manufacturing business, their marriage would be over. However, he confided to his friend, he would solve this problem by forging his wife's signature and not telling her anything. The friend warned him not to do this, or Mr Hall would go to jail. Mr Hall ignored this advice and went not to jail, but to his grave. He died two years after carrying out his wicked plan and obtaining a private mortgage-secured loan [...].


  • Mr Hall had at the time instructed Ben Gelin, a Bathurst-based solicitor, to act for him and Mrs Hall in effecting [the lender's] mortgage and supervising its registration. When the solicitor explained that both Halls would have to sign documents with him, Mr Hall said his wife was dying of cancer and could not go to the solicitor's office. When Mr Hall then offered to take the papers away for her signature, Mr Gelin said he would need to talk to Mrs Hall. Mr Hall replied that his wife would not agree to this because she was still bitter about how he, Mr Gelin, had behaved when he previously acted for a creditor against Mr Hall. Mr Gelin believed Mr Hall's lies, and had no contact with Mrs Hall. She did not have cancer. She knew nothing of her husband's financial difficulties, the mortgage loan or of her husband's visit to Mr Gelin.

In addition to finding Gelin liable to Mrs. Hall for his negligence, a court found that Justice of the Peace David Graham breached the duty of care he owed Mrs. Hall when he purported to witness forgeries of her signature on the mortgage documents without knowing her or seeing her sign. The court ruled that he had to pay 40 per cent of Mrs. Hall’s damages while 60 per cent fell to Mr. Gelin because of his failings.

For the entire story, see Thou shalt not bear false witness. DeedZetaTheft

Indiana AG, Local Officials Warn Against Scammers Using Forged Documents To Steal, Borrow Against, Houses

In Indianapolis, Indiana, The Fort Wayne Journal Gazette reports:

  • The Indiana attorney general cautioned homeowners Thursday against a new mortgage fraud that lets thieves steal homes and walk away with thousands of dollars in fraudulent loans. Attorney General Greg Zoeller joined the Indiana Recorders Association and the Association of Indiana Counties in Indianapolis to publicize the scheme.

  • The Journal Gazette exposed the practice in an April 5 story by “stealing” the Lincoln Tower in downtown Fort Wayne in less than an hour, identifying the new property owner as Johnny Appleseed. The newspaper prepared a fake deed transferring ownership in the iconic building, which Allen County Recorder John McGauley said his office would have no choice but to accept.


  • Thieves are not interested in the property they steal – they’re interested in showing ownership so they can obtain a fraudulent loan and disappear with the money. That can leave the true property owner holding the bag. “The actual homeowners, through no fault of their own, are at risk of losing their home to foreclosure,” Zoeller said. “Correcting the problem and clearing the cloud off the title could cost the homeowners thousands of dollars.”

  • McGauley said the state’s recorders are looking at legislation similar to a law in California that would require a thumbprint along with a notarized signature. A similar requirement takes effect in Illinois this summer.

For the story, see State warns of home-theft threat (County recorders want law tightened on deed filing).

Wednesday, April 22, 2009

"Who Owns the Note" Among Points To Be Covered By North Florida Foreclosure Self-Defense Seminar For Financially Strapped Homeowners

The Pensacola News Journal reports:

  • A seminar on foreclosures is set for 6 p.m. Monday. Legal Services of North Florida will present “Avoiding and Defending Foreclosure - Your Legal Options” at St. Sylvester Church, 6464 Gulf Breeze Pkwy., Gulf Breeze.

  • The presentation will include a discussion of what to do if you start to fall behind, settlement issues, what to do once a foreclosure lawsuit has been filed and who owns the note. For more information, call 432-8222.

Source: Seminar on foreclosures Monday in Gulf Breeze.

No Foreclosure Fraud Problems On Staten Island, Says Prosecutor's Office As DA Donovan Slumbers Cluelessly At The Wheel

In New York City, The New York Times reports:

  • [F]or years many district attorneys viewed mortgage fraud as taking a second seat to traditional show-stoppers: homicides, counterfeiting, burglaries and even gambling. At least one New York district attorney still takes that view. “Our natural inclination is that these are civil cases,” said William Smith, spokesman for the Staten Island district attorney, Daniel M. Donovan.


  • Mr. Donovan, on Staten Island, is the only New York City district attorney who says his county has no mortgage fraud problem, although his county ranks near the top in foreclosures per capita statewide. “We don’t see many complaints,” said Mr. White, his spokesman. But lawyers with Staten Island Legal Services and State Senator Diane J. Savino, who represents parts of Brooklyn and Staten Island, say they get many reports of fraud and have walked some cases over to Mr. Donovan’s office. “We’ve gotten very little response,” Ms. Savino said.

For more, see Prosecutions Lag as N.Y. Foreclosure Frauds Surge.

Hundreds Of Residents In 310-Unit S. Florida Condo Face Water Shutoff As Delinquent Maintenance Fees Result In Unpaid Bills; 100+ Units In Foreclosure

In Hialeah, Florida, the The Miami Herald reports:

  • The cash crisis plaguing South Florida's foreclosure-wracked condominiums reached a apex Wednesday for the Mirassou Condominium in Hialeah after county government shut off the water to residents because the association failed to pay its water bill. Miami-Dade Water and Sewer Department said it turned off the water supply to the 310-unit building after the association failed to abide by three separate repayment plans over the last seven months. The association has an outstanding balance of $124,581.04, the department said.


  • South Florida condos have been particularly battered in the region's foreclosure crisis because they rely on association fees from residents to pay for basic utilities, maintenance and other services. When owners stop paying, often associations are forced to scale back on services or increase fees for residents in good standing. [...] About 104 units, or nearly one-third of the building, are in foreclosure in the Mirassou.

For more, see County shuts off water at foreclosure-ridden Hialeah condominium.

For story update, see Water is back on for Miami condo:

  • Water is flowing again at the 310-unit Miarassou Condos in Miami-Dade County. County officials shut off water to the residents earlier in the week because the condo's association bounced a check and failed to pay a $109,000 past due bill. Condo residents say the problem stems from a large number of foreclosures - roughly a third of the units are bank-owned or in foreclosure. After the county turned off the water, residents allegedly tampered with the meter to keep it running illegally. On Thursday evening, the county and the association agreed on a payment plan, and the water was turned on again.

California Man Charged With Misappropriating Proceeds From Reverse Mortgage Secured By Elderly Woman's Home

From the Office of the San Francisco, California District Attorney:

  • San Francisco District Attorney Kamala D. Harris announced today that John McTaggart, age 45, [...] was arraigned on charges of residential burglary, grand theft and grand theft from an elder for allegedly stealing $140,000 from an 86-year-old San Francisco woman as part of an annuity scam.


  • According to court documents, in February 2008 defendant McTaggart, a former broker, convinced his elderly victim to sign over $140,000 in monies received through a legitimate reverse mortgage he had helped the victim secure. Once the victim received the money from the reverse mortgage, the defendant allegedly convinced her to dedicate a portion of the funds to two separate annuity accounts. Instead of depositing the victim’s money into actual annuity accounts, he deposited the money into his personal account. The defendant then allegedly attempted to mask this fraud, by sending monthly checks to the victim, essentially paying her "dividends" from the money he had stolen directly from her. Defendant McTaggart then fled to Tennessee, where he resided until he was arrested on the DA arrest warrant that was issued on November 24, 2008.

For more, see DA Extradites Man to Face Charges of Elder Abuse and Fraud in Annuity Scam (Prosecution is Part of a DA-led Crackdown on Financial Predators).

Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc.

Go here, here, here, here, here, and here for other posts on elder financial abuse. FinancialAbuseOfElderlyAlpha DeedGammaTheft

Land Registry Fraud A Concern In GB; £36M In Payouts For Errors, Deed Thefts Since '05

In London, England, the BBC reports:

  • A major reform of property registration in England and Wales is needed to prevent "an exponential rise in fraud", a building society boss has said. Nationwide executive director Matthew Wyles said: "The system is too open and needs a root and branch review." Mr Wyles was responding to a BBC investigation which applied to change details of house ownership, without being asked for proof of identity.


  • Last November Land Registry introduced new identity checks to be carried out on everyone involved in buying or selling property, but not for changes of correspondence address on the register. The body has paid out £36m in compensation for mistakes and fraud since 2005.

  • Organised criminals have increasingly used Land Registry to help them transfer the ownership of a house fraudulently, to sell it or take out a huge mortgage on the property. [...] Julie Jenkins, head of fraud at Land Registry, told the BBC: "We need to ensure there's a balance between protecting the individual and protecting the property and that's what we're here to do, protect people's assets - one of the most important assets they've got."

For more, see Land register 'too open to fraud' (A major reform of property registration in England and Wales is needed to prevent "an exponential rise in fraud", a building society boss has said). DeedZetaTheft

Tuesday, April 21, 2009

Final Conspirator Goes Down In "MKL Financial Diet" Equity Stripping Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

  • Earnest Lewis, age 52, of Takoma Park, Maryland, pleaded guilty [Wednesday] to conspiracy to commit wire fraud arising from a scheme in which he and his conspirators offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.


  • Earnest Lewis, Michael Lewis and Winston Thomas specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The co-conspirators fraudulently represented to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes.

  • Michael Lewis and Winston Thomas, a senior loan officer with a mortgage lender, told the homeowners that the “good credit” of Earnest Lewis would be used to temporarily refinance their homes, that they had to sign their homes over to Earnest Lewis and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to Earnest Lewis by having their bank accounts directly debited by an account belonging to co-conspirator Cheryl Brooke’s company “In the House Technologies.”(1)

For the entire press release, see Fourth Conspirator Pleads Guilty and Agrees to Forfeit $2 Million in Mortgage Fraud Scheme Targeting Victims with TV Ads.

(1) Earlier last week, Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland and Michael K. Lewis, age 57, of Takoma Park, Maryland all pleaded guilty in connection with the scheme.

L.A. City Attorney Files Forgery, Grand Theft Charges In Alleged Refinancing Scam That Left One Couple Facing Foreclosure

In Los Angeles, California, The Daily Breeze reports:

  • The Los Angeles City Attorney's Office announced Tuesday it has filed criminal charges against five real estate and loan brokers who allegedly refinanced a Harbor Gateway couple's mortgage with forged documents, ripping them off and putting them in jeopardy of foreclosure.


  • For the Armijos, life changed in January when they received a "cold-call" from John DiBona, 22, a loan consultant for Liberty One Financial Group in Van Nuys. [City Attorney Rocky] Delgadillo said DiBona, working with sales director Layne Nocera, 53, offered the Armijos a refinancing plan that seemed like a good deal.(1)

  • The Armijos, who had no trouble making their $2,600-a-month mortgage, took the bait and applied for a plan that ended up giving them a higher payment, Delgadillo said. Soon, they received a $7,000 property tax bill they never expected, Michael Armijo said. When they looked into it, they learned their signatures had been forged on loan documents and that their income and assets had been changed. By the time they figured out what was up, they were threatened with foreclosure.(2)

For more, see Delgadillo targets housing `cheaters' in Harbor Gateway.

See also, L.A. City Attorney press release.

(1) According to the story, DiBona and Nocera, both of Northridge, have each been charged with 21 criminal counts, including conspiracy, grand theft, forgery and false advertising. If convicted of all counts, they face more than 18 years in jail and $35,000 in fines. Facing the same charges are notary public Vighen Mkrtoumian, 29, of Glendale, who allegedly notarized fake documents; Garnik Poghosyan, 30, of Van Nuys; and Wayne Stimson, 55, a loan broker at Liberty One Financial Group.

(2) The couple also has a civil legal battle ongoing. Reportedly, the couple's attorney, Foley and Lardner in Los Angeles, worked for free to get them a settlement that has helped to put them back on track.

Miami Judge Gives Struggling Condo Associations New Tool In Battle Against Rent-Skimming Unit Owners Delinquent On Maintenance Fees

In Opa Locka, Florida, the Miami Daily Business Review reports:

  • Ebenezer Boakyee’s condo board should be collecting nearly $11,000 in maintenance fees every month. Instead, it barely banks $3,000 because many of the units are owned by investors who have stopped paying their association fees. Because of the short-fall, Opa-locka’s The Oaks at Miami Gardens condo association is struggling to survive even as absentee unit owners collect rent from tenants.


  • Last month, The Oaks board finally got some help when a judge appointed a receiver to collectively go after the rent of tenants whose landlords have stopped paying maintenance fees. The receiver’s job is limited to collecting rent on behalf of the association; he or she can only go after rent on units the condo has begun foreclosure action against over the owner’s failure to pay condo fees. Condo boards have always had the option to ask courts to appoint receivers, but previously, each unit was dealt with as a separate case.

  • For already financially distressed boards, that was a costly and time-consuming option. By combining cases, Miami-Dade Circuit Judge Ellen Leesfield has made the process more cost-effective. So far, court-appointed receiver Seth Heller has nine units for rent collection at The Oaks. That number will grow as the association initiates foreclosure actions on other units, he said.


  • When Judge Leesfield appointed the receiver on March 24 to collect rent from nine tenants in units the board is seeking foreclosure against, she gave boards an important new tool to boost the collection process. “That’s the brilliance and the beauty of this [approach;] it is really, really revolutionary,” said Mitchell Drimmer, whose company, Miami’s Association Financial, handles collections for The Oaks. Drimmer helped the board petition for the receiver. Receiver Heller said he charges $25 a month for each unit, but bills the unit owner, not the association. Lawyers who work with condo associations welcome Leesfield’s ruling.

  • That’s new; that’s something I haven’t heard before,” [one attorney] said. “[The ruling] is a great step in the right direction, and it shows you the amount of creative thinking from the condo associations and their attorneys to try to maximize their cash flows.”

For more, see Judge taps receiver to collect rents on units in foreclosure.

Go here for Judge Leesfield's Order Appointing Receiver.

Son Accused Of Swiping $158K In Cash, Property From Alzheimer's-Suffering Mom

In Pompano Beach, Florida, WTVJ-TV Channel 6 reports:

  • With Mother's Day just around the corner (May 10, kids), Marco Secolo gave his mother perhaps the worst early gift in the history of the mom-worshipping holiday -- he ripped her off. Rose Secolo, 74, is suffering from Alzheimer's, and so her 39-year-old son, taking a page from the Anthony Marshall playbook, schemed her out of about $158,000 in cash and property.

  • Marco is charged with a litany of offenses on poor Rose. After moving in with his elderly mother in 2007 and fraudulently signing a deed claiming half ownership of her Pompano Beach condo, he set to work draining all her assets. He transferred more than $50,000 from her bank account to his, then stole her social security check and transferred the title of her 2002 Mercedes-Benz into his name. The scamming son turned himself in to Broward Police Monday on a charge of exploitation of the elderly. Rose has been transferred to an assisted living facility.

Source: Son Scams Sick, Elderly Mom Takes nearly $158,000 from ailing mother.

Monday, April 20, 2009

NYC Prosecutors Slow To Prosecute Foreclosure Rescue Scams? "We Gift-Wrapped These Cases" Complains Brooklyn Legal Services Attorney

In New York City, The New York Times reports:

  • Many New York City prosecutors reacted slowly and brought few indictments as foreclosure swindles and mortgage fraud swept the city during the past decade, allowing problematic operators to flourish even as the nation’s housing market rose and crashed, according to housing lawyers, prosecutors and federal reports.


  • [T]he lawyers who have pleaded with district attorneys, chased witnesses and pointed out the same suspected law breakers for years say that prosecutors failed to stop fraud when it was most rampant. “We gift-wrapped these cases,” said Jessica Attie, co-director of the foreclosure prevention project at South Brooklyn Legal Services. “These are crimes committed in plain sight.”

For more, see Prosecutions Lag as N.Y. Foreclosure Frauds Surge.

Mortgage Servicing "Scoundrels" Among Six To Receive Up To $9.9B In Incentive Payments To Rework Troubled Home Loans

The Associated Press reports:

  • The Obama administration on Wednesday named the first six companies participating in a $75 billion program designed to help millions of struggling homeowners avoid foreclosure. The administration said the companies - including some of the mortgage industry's biggest players - will receive a maximum of $9.9 billion in incentive payments, which are designed to encourage mortgage companies to lower borrowers' monthly bills. The government expects to finish arrangements with other companies in the coming months.

  • Chase Home Finance, part of JPMorgan Chase & Co., will receive up to $3.6 billion, the largest amount among the six companies. The other recipients are: Wells Fargo & Co., GMAC Mortgage Inc., Citigroup Inc.'s CitiMortgage unit, Select Portfolio Servicing and Saxon Mortgage Services Inc.

For more, see 6 companies to get $9.9B under mortgage program.

Head Of Maryland Equity Stripping Foreclosure Rescue Scam Cops Plea; Bogus Sale Leaseback Deals Used To Rip Off Victims' Home Equity

From the Office of the U.S. Attorney in Maryland:

  • Michael K. Lewis, age 57, of Takoma Park, Maryland pleaded guilty [Tuesday] to conspiracy and bankruptcy fraud arising from a scheme in which he and his conspirators(1) offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

  • Michael Lewis led a group of conspirators who stole the homeowners’ equity by inducing financially vulnerable homeowners to sell their properties and convert the sale proceeds to the use of the conspirators,” said U.S. Attorney Rod J. Rosenstein. “The mortgage fraud conspiracy cases that we are prosecuting in Maryland should serve both to hold criminals accountable and to warn homeowners about the many smooth-talking con artists who take advantage of people who fall behind on their mortgage payments.”


  • According to his plea agreement, from at least 2004 until May 2008, Lewis aired television advertisements that targeted financially vulnerable individuals, representing that he could improve their credit, save their homes from foreclosure and assist them with bankruptcy.


  • Lewis specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments.

For the entire press release, see Leader of Mortgage Fraud Scheme Confesses and Agrees to Forfeit $2 Million for Targeting Victims with TV Ads.

See also, WBAL-TV Channel 11: Michael K. Lewis Pleads Guilty To Fraud Charges.

(1) On April 13, Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty to their participation in the scheme. See Senior Loan Officer and Conspirator Plead Guilty in Mortgage Fraud Scheme That Targeted Victims Through Local TV Ads (Defendants Agree to Forfeit Over $2 Million).

MERS Was Set Up By Lenders To Handle Predatory Loans & Keep Their Hands Clean, Says Reno Attorney

In Reno, Nevada, KOLO-TV Channel 8 reports:

  • A local woman wins an 11th-hour temporary restraining order halting the foreclosure on her home. Her attorney says her case could be the key to keeping thousands more in their homes.


  • [Attorney Bob] Hager says the real significance of this case is that, in addition to Executive Trustee Services and GMAC Mortgage, it exposes and names MERS...the Mortgage Electronic Registration System which he says was set up by mortgage banks and AIG to handle predatory loans while keeping their hands clean. "It was set up to conceal from the public, regulators and the courts the actual owners of these deeds of trust. When they figured out how to make money off of bad loans, they brakes were off and they started writing these bad loans as fast as they could so they could get them into the hands of investors without worrying about the risk associated with these loans going into default. They needed MERS to do that."

  • Now Hager says MERS is the important target. "If these MERS deeds of trust are unlawful as we contend in lawsuits here, and in Arizona and California, we could stop 70 percent of the foreclosures across the country." A hearing on [his client's] suit is set for April 27 in Reno Federal Court. In the meantime, she can breathe a little easier, but relaxing is still a long court fight away.

For more, see Foreclosure Stalled, Attorney Says a Win for Thousands More (read story) (watch video).

Sunday, April 19, 2009

Maryland Feds Bag Two Guilty Pleas In Alleged "MKL Financial Diet" Equity Stripping, Sale Leaseback, Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

  • Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty [Monday] to their participation in a scheme(1) in which they offered to help financially-vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.


  • Thomas, who was then a senior loan officer with a mortgage lender, and Brooke specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The defendants fraudulently represented to the homeowners that their “ lease/buy-back program” would help the homeowners to keep their homes. The homeowners were told that the “good credit” of another co-conspirator would be used to temporarily refinance their homes, that they had to sign their homes over to such co-conspirator and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to the co-conspirator by having their bank accounts directly debited by an account belonging to Brooke’s company “In the House Technologies” (IHT). Brooke allowed the IHT account to be used to deposit the proceeds of the equity-stripping scheme.

For the entire press release, see Senior Loan Officer and Conspirator Plead Guilty in Mortgage Fraud Scheme That Targeted Victims Through Local TV Ads (Defendants Agree to Forfeit Over $2 Million).

For the Statement of Facts contained in the Defendants' guilty pleas, see:

(1) The alleged scheme was referred to as the "MKL financial diet" purportedly headed by Michael K. Lewis, who is also currently under indictment. See Michael K. Lewis and Three Others Indicted in Mortgage Fraud Scheme - Allegedly Targeted Victims Through Local TV Ads.

Caregiver Charged With Manipulating Stroke Victim Into Refinancing Home, Misapplying Proceeds For Personal Expenses

In Stamford, Connecticut, The Advocate reports:

  • A 50-year-old Stamford woman is charged with scamming $66,000 from a former co-worker who was recovering from a stroke, police said, though the victim lost about $100,000 more in the alleged scheme. Bridget Gleason-Paniccia [...] was arrested after an investigation that began in 2007, when Stamford police received a complaint from the victim, now 57, who reported that 13 fraudulent credit card accounts worth $72,273 were opened in her name while she was hospitalized with a severe stroke in 2003, Sgt. Peter diSpagna said.


  • Gleason-Paniccia moved into the victim's home weeks before a stroke put her into a hospital for two months, police said. During the victim's hospital stay, Gleason-Paniccia allegedly racked up thousands in credit card bills and convinced the victim it was her debt, police said. The stroke left the victim with several physical ailments and brain injuries, police said. When the hospital released her, Gleason-Paniccia became her care-giver, police said.


  • Gleason-Paniccia allegedly manipulated the victim into refinancing her mortgage to pay off the credit card bills, police said. The victim got a $163,000 loan and paid off the credit card bills, but Gleason-Paniccia allegedly convinced her to open a joint bank account to keep the remaining $88,000, police said. [...] Gleason-Paniccia withdrew $66,000 from the account in increments, police said.

  • It took four years for the victim to realize the extent of the scam. As she regained her awareness and mental capabilities, the victim turned to police and handed them 82 checks forged in her name, diSpagna said.

For more, see Stamford woman charged with scamming stroke victim. DeedZetaTheft

I.D. Theft Suspect Convicted Of Swiping Property Title From Fellow Inmate To Post Bail, Then Fleeing Country With Girlfriend

In Southern California, The Orange County Register reports:

  • A Tustin man who had tried to flee to Mexico was convicted [last week] of committing a $2.8 million fraud by stealing the identities of more than a dozen people who hoped to invest in real estate. Gene Anthony Franklin Jr., 34, held himself out as a legitimate real estate investor to secure his victims' personal information, then used the data to buy a home, obtain credit cards and pay his bills, said Deputy District Attorney Yvette Patko. He also illegally transferred properties from a fellow jail inmate to post his own criminal bail and flee the country, prosecutors said.


  • While in custody [on identity theft charges], he was rooming in jail with Marvin Vernis Smith, who was convicted of killing his wife. Franklin became friends with Smith, and learned that Smith had transferred one of his properties to his daughter so she could pay for legal fees, prosecutors said. Franklin forged property transfer documents that showed that his ex-girlfriend – Iris Orozco – owned three of Smith's properties, valued at almost $2 million, around October 2007, prosecutors said.

  • Using one of the properties as collateral, Franklin posted his $1 million and fled to Mexico with Orozco, prosecutors said. He was caught in March 2008, and brought back to Orange County.

For more, see Ex-fugitive is convicted in $2.8 million identity theft (Gene Anthony Franklin of Tustin duped convicted murderer so he could post bail, prosecutors said).

Go here, Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedZetaTheft

Foreclosed Texas Homeowner Accuses Loan Modification Firm Of Taking Money, Doing Nothing

In Fort Worth, Texas, the Fort Worth Star Telegram reports:

  • First the mortgage payments went up after he refinanced; then he broke his collarbone and was out of work for months during rehab. When the bills began to mount and Ramiro Diaz found himself behind on the mortgage in August 2006, he contacted Your Mortgage Solutions in North Richland Hills. A representative promised Diaz that the company would intercede to help prevent the lender from foreclosing on the family home, Diaz said.
    "I paid him $1,500," Diaz said. "He said, 'I got you covered.’"

  • Instead, like other homeowners across the country, the North Richland Hills man and his family lost their house to foreclosure in what appears to be a nationwide outbreak of mortgage "rescue" operations that aren’t rescues at all.


  • A Your Mortgage Solutions representative rebuts Diaz’s complaint, saying Diaz did not complete necessary paperwork or submit a separate attorney’s fee on time. "They can’t just send the paperwork back without the attorney’s fee," said Duane Hatchett, YMS’ director of operations.(1) "He [Diaz] knows he didn’t send it back."

For more, see Beware of foreclosure 'rescue' outfits, feds say.

(1) Non-attorneys that solicit, advertise or otherwise offer legal services to homeowners for mortgage foreclosure defense and/or foreclosure-related rescue services, collect legal fees on behalf of an attorney, and/or make a business to solicit or procure legal business for attorneys is generally illegal in other states. I suspect Texas may have a similar law.