Saturday, June 20, 2009

Indictments Handed Down, Arrest Warrants Gone Out In San Diego "Land Patent" Foreclosure Rescue Scam; Add'l 12 Suspects Charged

In San Diego, California, XETV-TV Channel 6 reports:

  • An indictment was unsealed Monday charging 18 people in a scam in which homeowners were falsely told that "land patents" would protect their properties from foreclosure.

    Six of the defendants -- Larry Smith, Maria Candida Capa, Margarita Gaviola, Jessica Refuerzo, Julita Whittingham and Edgardo Orcino -- were already charged in a criminal complaint with conspiracy to commit grand theft, grand theft and conspiracy to do a deceitful practice while acting as a mortgage foreclosure consultant.

    The defendants are also charged with allegation that the amount of money lost in the mortgage foreclosure scam exceeded $200,000. Smith, Capa, Gaviola, Refuerzo, Whittingham and Orcino pleaded not guilty today at their Superior Court arraignment. They will be back in court July 20 for a status conference.

    Arrest warrants have gone out for the remaining 12 defendants named in the indictment, said Deputy District Attorney Marlene Coyne. They face similar charges to the original six defendants, Coyne said.

    More than 20 alleged victims have come forward saying they lost tens of thousands of dollars in the real estate scam in 2007 and 2008. Prosecutors allege the defendants sold the bogus "land patents" to homeowners, claiming the victims could pay only 10 percent of their mortgage payment each month and could force lenders to "re-contract" the loan amounts.

Source: 18 People Charged with Scamming Foreclosure Victims.

Go here for earlier posts on this story.

Detroit Man Accused Of Using Forged Title Documents In Attempt To Steal Church

In Detroit, Michigan, the Detroit Free Press reports:

  • Forget going to jail for deed fraud, what Tracy Carmichael is accused of doing could lead to an unpleasant afterlife. Carmichael, 46, of Detroit was charged Friday with trying to sell a Detroit church building that he never owned.

  • Wayne County Prosecutor Kym Worthy said Carmichael used a scheme to obtain a $120,000 mortgage on the Temple of God Deliverance building in the 11000 block of Mt. Elliott. He tried to sell the property to a woman as an investment property, falsifying documents to obtain a mortgage, Worthy said. The building has been razed. Carmichael did not have authority to sell the property and forged signatures of the owner on fake title documents, Worthy said. [...] The case was investigated by the Wayne County Deed Fraud Task Force, which includes the Sheriff's Department and register of deeds.

Source: Man accused of trying to illegally sell church.

Go here, 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. TheftOfDeedMeta

Homeowners Current On Their Mortgage Payments Now The Target Of Some Loan Modification Peddlers

The competition among the peddlers of loan modification services has apparently become so fierce that some outfits aren't even waiting for the legal notices indicating mortgage loan default to be filed in the public records to identify and contact potential targets - they are simply contacting anybody with a mortgage, as reflected in this Florida story in TC Palm:

  • [S]eacoast National Bank executives became concerned when some of their mortgage customers received a letter from an Ohio attorney a few weeks ago claiming they were more than 90 days behind in their payments. The letter went on to say, “If you do not act immediately Seacoast National Bank may file a lawsuit to take your home.” The borrowers who contacted Seacoast after receiving the letter knew they were not delinquent in their payments.(1)

  • A Seacoast spokeswoman said the attorney and the company that sent the letter offering to help those who got it probably obtained a list of the bank’s borrowers from public records and sent out a mass mailing. They were hoping to ensnare some of the bank’s delinquent borrowers before other competitors, who normally wait for foreclosures to be publicly filed, could reach them.


  • W.D. “Chic” Acosta, executive vice president of Seacoast’s Mortgage Lending Division, said he was concerned by the use of scare tactics to make borrowers believe they may be in jeopardy of losing their home.

The story also reports that one homeowner current on her house payments actually received a phone call with a recorded message from someone saying they had been informed she was more than 90 days behind in her mortgage payments.

For more, see Treasure Coast homeowners warned against home rescue fraud.

(1) Reportedly, the letter goes on to exclaim in bold letters: “Beware of mortgage rescue scams! Only licensed attorneys can represent you!” The Ohio attorney is not licensed to practice in Florida, according to the story, and a Florida Bar spokeswoman reportedly confirmed an investigation of the attorney is ongoing. The Seacoast spokeswoman said the attorney and the company were reported to local, state and federal law enforcement authorities.

Friday, June 19, 2009

Federal Jury Convicts San Antonio Woman Of Bilking Homeowners In Foreclosure Of Upfront Fees In Exchange For Bogus Promises Of Help

In San Antonio, Texas, the San Antonio Express News reports:

  • A San Antonio woman accused of bilking $100,000 from several people who thought she could help stop foreclosure on their homes was convicted Wednesday of all 14 charges she faced. Rosario Castro Divins [aka Rosie Divins], 54, showed little emotion after hearing the guilty verdicts to seven counts of criminal contempt and seven counts of mail fraud. Jurors took an hour and a half to find her guilty.


  • After the verdict, U.S. District Judge Fred Biery ordered Divins jailed, citing her criminal past and her new conviction as reasons for keeping her off the streets pending sentencing in September.

  • Representatives of seven families testified during her trial that, after falling behind on their mortgages, they paid her money after receiving a direct-mailed ad that purported to stop foreclosure. Four of the victims said they ended up losing their home, while three said they wound up saving their houses through other means — such as working with the Veterans Administration, filing for bankruptcy or negotiating with the lender.

  • All said they did not know she had been ordered repeatedly by bankruptcy judges to stop claiming she could stop foreclosures. Had they known that, they said, they would never had paid her money and chosen another course.

For more, see Businesswoman convicted for defrauding homeowners.

For the U.S. Attorney (Western District - Texas) press release, see Federal Jury Convicts San Antonio Woman Of Criminal Contempt And Mail Fraud In Foreclosure Prevention Scheme.

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

Go here for earlier posts on this alleged foreclosure rescue scam. loan modification

Nevada AG Announces Indictment Of Two Charged With Theft In Connection With Alleged Loan Modification Scam

From the Office of the Nevada Attorney General:

  • Nevada Attorney General Catherine Cortez Masto announced [Friday] the indictments of William Vargas and Michael Sinclair, on one (1) felony count of Theft of a Person 60 Years or Older and four (4) felony counts of Theft by Material Misrepresentation, for allegedly operating a foreclosure rescue scam in Las Vegas under the business name of Federal Housing Aid.


  • The indictment alleges that Vargas and Sinclair operated Federal Housing Aid since February 2007 offering loan modification services to assist victims in avoiding foreclosure on their homes. The Defendants allegedly charged the victims between $899 to $1500 in upfront fees and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped. [...] After paying for services, it is alleged that the Defendants failed to provide the services paid for and failed to provide refunds as promised in their advertisements.


  • Collection of fees upfront for services promised for loan modification is in violation of Nevada Revised Statute 645D.400, which makes it unlawful for a mortgage consultant to collect or receive any compensation until after the consultant has fully performed the consulting services that was contracted to perform or represented that would be performed.

For thr entire press release, see Attorney General Announces Indictments In Foreclosure Rescue Scam Case.

Disbarred Rhode Island Attorney Cops Plea To Stealing $2.5M+ In Clients' Sale/Refinancing Proceeds Intended To Satisfy Existing Liens

In Providence, Rhode Island, ABC6 reports:

  • A disbarred Cranston attorney has pleaded guilty to stealing more than $2.5 million from clients who were refinancing or buying new homes. Pasquale Scavitti III, who handled real estate transactions, pleaded guilty Tuesday to wire fraud. He admitted using for personal expenses client money that was supposed to pay off existing mortgage loans. Prosecutors say he committed 13 fraudulent transactions between 2003 and 2008, resulting in total losses of more than $2.5 million. [...] He was disbarred by the Rhode Island Supreme Court in August.

Source: Cranston Man Pleads Guilty for $2.5M Worth of Real Estate Fraud.

For the U.S. Attorney press release, see Defendant pleads guilty to Wire Fraud relating to Mortgage Fraud Scheme.

Go here, Go here, Go here, Go here, and Go here for other stories of alleged trust account / escrow account theft of funds.

(1) If it hasn't already, the Rhode Island Bar Association Lawyer's Fund For Client Reimbursement may be footing the bill for some of the losses in this case. For those clients screwed out of their money and property by reason of the dishonest conduct of their attorneys and seek some reimbursement in other states and Canada, see:

Thursday, June 18, 2009

Five Big City Mayors Urge States To Pass Philadelphia-Based Mediation Model To Stem Foreclosures

Reuters reports:

  • Mayors from five U.S. cities called on Thursday for states to pass laws that would require mortgage lenders to negotiate with borrowers who are threatened with foreclosure. The mayors of New York City, Los Angeles, Miami, St. Louis and Oakland, California, said mandatory mediation offers the best hope of stemming a national foreclosure crisis that led to an 18 percent surge in foreclosure filings in May compared with a year earlier.

  • The mayors aim to follow up on a year-old program in Philadelphia that brings lenders and borrowers together under court supervision, and has allowed more than 70 percent of participating homeowners to remain in their homes.

For more, see US mayors urge states to require mortgage mediation.

In a related story, WNYC 93.9 FM reports that New York City Mayor Mike Bloomberg offered this gem as a way to accelerate the number of successful loan modifications between lenders and homeowners facing foreclosure:

  • "Maybe you lock them in a room with a big pot of coffee and no bathroom and that will get them to pretty quickly come to an agreement. That's the only way you're going to get people to agree."

Source: Mayor Backs Foreclosure Mediation Bill.

County Clerk, Legal Services Firm Join To Provide Worksops To Help Foreclosure Scam Victims

In Atlantic County, New Jersey, WMGM-TV Channel 40 reports:

  • With the current recession climate, as more homeowners fall prey to the foreclosure crisis, scam artists are working even harder to find new victims. But in Atlantic County, the clerk's office is doing its part to fight foreclosure scams and help its victims. Atlantic County Clerk, Ed McGettigan, announced today his office will be teaming up with South Jersey Legal Services Inc. in sponsoring community workshops that will give prospective scam victims direct, personal attention and information.(1) The first workshop is open to the public and is scheduled for June 17th in Mays Landing. For more information and to register, you can contact the Atlantic County Clerk's Office at (609) 625-4011 ext. 5390.

Source: Atl. Co. Clerk's Office Helping foreclosure Scam Victims.

(1) According to McGettigan, his office has already been sending out information to borrowers who are facing possible foreclosure action to protect them from scammers. "As soon as a lender files a lis pendens against a borrower's property indicating loan default we notify the homeowner and send current information about how to get help and what to do."

Arizona Crackdown On Foreclosure Stripping Continues As Homeowner Indicted On Charges Of Defrauding A Secure Creditor, Criminal Damage

In Surprise, Arizona, The Arizona Republic reports:

  • A Surprise resident suspected of stripping his foreclosed home of fixtures and other equipment was arrested Tuesday for a common crime that has been ignored too long, Surprise officials said. In late February, a neighbor called police to report that Roberto Javier Garcia, 34, was removing fixtures from his home [...] said Sgt. Mark Ortega, a Surprise police spokesman. [...] Due to the complicated nature of foreclosure-related crimes, police were unable to [immediately] arrest him, Ortega said.


  • In the months before the arrest, detectives tracked the status of the home in the hopes they could pursue criminal charges against Garcia. Investigators later submitted the case to the Maricopa County Attorney's Office. A grand jury indicted Garcia on charges of criminal damage and defrauding a secure creditor, giving police probable cause to arrest the former Surprise resident [...] on Tuesday.(1)

For the story, see Police: Surprise man stripped his foreclosed home.

Go here for other posts on foreclosure fixture stripping.

(1) According to the story, Surprise city manager Randy Oliver noted that the arrest was an attempt to deter those who believe stripping a foreclosed home is a civil offense. "We made the decision to pursue this because we want people to stop," Surprise Police Chief Dan Hughes said. "Too many people think that this (type of offense) is civil. It's not. It's a crime." foreclosure fixture stripping apple

Wednesday, June 17, 2009

Massachusetts Closing Attorney To Pay $115K In Restitution, Penalties For Participating In Alleged Equity Stripping & Mortgage Fraud Schemes

From the Office of the Massachusetts Attorney General:

  • Attorney General Martha Coakley’s Office has entered into a judgment with Brockton attorney Valerie Hanserd resolving allegations over her role as a closing attorney in two companion lawsuits that both allege unfair practices with respect to mortgage brokering services. [...] Under the terms of the Consent Judgment, [...] Hanserd must refrain from acting as a real estate closing attorney or title agent for seven years retroactive to April 27, 2007. In addition, Hanserd must pay $80,000 in restitution to victims of foreclosure rescue schemes or to address the negative impact of mortgage foreclosures in the Commonwealth, as well as $35,000 in fees and penalties to the Commonwealth.


  • [One lawsuit] alleges that Hanserd and 18 other defendants participated in a foreclosure rescue scheme targeted at distressed homeowners facing foreclosure. Each of the defendants allegedly conspired through their respective roles as mortgage brokers, real estate brokers, closing attorneys and straw buyers to deceive homeowners into selling their homes under the false promise of avoiding foreclosure and maintaining their homes and their homes’ equity.

  • The defendants not only obtained title to the homeowners’ residences but also stripped most of the homes’ equity by distributing sale proceeds to pay for unearned brokers’ fees and other fictitious services, and drafted and submitted to lenders HUD Settlement Statements that did not accurately reflect the disbursements made in the transactions. In certain cases, the defendants resold the homes in multiple transactions amongst themselves, thereby stripping the homes of all their equity.

For the entire press release, see Attorney General Martha Coakley Obtains Judgment Against Brockton Attorney for Her Alleged Role in Mortgage Fraud and a Foreclosure Rescue Scheme.

San Bernardino DA Convicts Two Accused Of Using Stolen IDs To Fraudulently Pocket Loan Proceeds Secured By Unwitting Victims' Real Estate

In San Bernardino, California, the Office of the San Bernardino County District Attorney recently announced that John Foster and Howard Edwards were found guilty after a jury trial of 56 counts ranging from forgery, grand theft, filing of false instruments, identity theft, conspiracy, and money laundering in a scam where they allegedly swiped personal information from unwitting victims and used to obtain loans on luxury cars and real estate in Fontana. The two defendants pocketed the loan proceeds while leaving the victims liable for these loans.

As part of the scam operation, the defendants falsified several real estate deeds and forged the signatures and stamps of several notary publics, and subsequently recorded in the county records office. In one case, the defendants sold a house out from under the rightful owners, pocketing $560,000. The rightful owners had been living at the residence since 1971, free and clear of any liens, and only found out about the scam when a lending institution attempted to foreclose on the property.

For the San Bernardino Conty DA's press release, see Guilty Verdicts in Real Estate Fraud Case.

Go here, 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. TheftOfDeedMeta

Virginia Couple Plead Guilty In Foreclosure Rescue Ponzi Scheme

In Richmond, Virginia, the Richmond Times Dispatch reports:

  • A Chesterfield County couple who defrauded fellow church members and others in a Ponzi scheme pleaded guilty yesterday and agreed to repay victims more than $9.7 million. Darrell Underwood, 42, faces up to 10 years in prison and Cynthia Underwood, 41, five years when sentenced on Sept. 17. Each was found guilty of conspiracy to commit mail fraud. Darrell Underwood also pleaded guilty to engaging in unlawful transactions.

  • The two owned Walkwood Properties in Midlothian, which specialized in helping homeowners about to lose their homes to foreclosure. They attracted many investors from their church, the Mount Gilead Full Gospel International Ministries.


  • The government alleges that of the $18.4 million the Underwoods took in from April 2007 through Dec. 13, 2007, promising to invest in distressed properties, about $13.4 million was used to pay back investors while about $2 million was used in real estate deals. Some of the money was used by the Underwoods to help pay their own mortgage and to make payments on expensive cars.

For more, see Chesterfield couple plead guilty in Ponzi scheme.

Tuesday, June 16, 2009

"Secret Lien" On Farm Purchase Ruins Buyers' Retirement Plans

In Dixie County, Florida, The Gainseville Sun reports the story of how the purchase of a 70-acre farm that, unbeknownst to the buyer, contained a "secret lien"(1) that was owed by the seller and that was missed by the company doing the title search, screwed up the retirement plans of the unwitting purchasers. The secret lien, coupled with the buyers' lack of understanding that their title insurance policy obtained when they bought the property requires the insurance company to defend the title against such a claim, and foot the legal bills associated with the defense, led to a 3-year ordeal that left them with lawyer expenses "way up in the six digits" incurred in defending the title to the land and a missed opportunity to develop the property during the real estate boom of a couple of years ago.(2)

For the story, see Couple's legal battle over farm finally settled (The three-year ordeal has left the Old Town couple saddled with legal fees).

For the associated Florida appellate court ruling referenced in the story, see Orix Fin. Servs. v. MacLeod, 977 So. 2d 658 (1st DCA 2008) (which ruled that the buyers' remedy for the screw up, if any, will lie against the title insurer or abstractor or against the clerk of the circuit court itself).

Go here for other posts involving legal issues related to title insurance.

(1) According to the story, the "secret lien" arose as a result of a judgment creditor’s proper recordation of a lien followed by a screw up in the county recorder's office whereby the clerk failed to properly index (ie. alphabetize) the lien on its records, which explained why the title company missed it when searching the public records for liens and other encumbrances on the property. The Dixie County Clerk of the Court ultimately agreed to pay the judgment creditor $200,000, the state's cap on suits against a government entity, on account of the screw up (although the clerk's attorney was quoted as saying that the settlement was not an admission of liability, but was in the best interests of all parties), the story reports.

(2) Unexplained in this story is why the buyers hired an attorney to defend the title to the property through litigation (and who ran up considerable fees throughout the legal process), and why the attorney failed to inform his clients at the outset that they should simply file a claim with their title insurance company. Under the standard title insurance policy in Florida and other states, the insurance company is required not only to indemnify a property owner for losses resulting from claims against title (up to the dollar amount of the policy), but to supply and pay for the legal defense against adverse title claims when they manifest themselves. title insurance legal issues

California Woman Loses Home To Foreclosure After Miscommunication Involving One Payment On Loan Modification Agreement

In Simi Valley, California, the Ventura County Star reports on a local homeowner who lost her home to foreclosure after a screw-up in the handling of one payment made on a loan modification agreement:

  • [F]or [Josie] Lowe, the [foreclosure] sale came as an unexpected blow after more than a year of trying to work out a loan modification with her bank. At one point, she was given a payment plan to help her catch up with payments she had missed during a tough period while her mother was ill. She made payments regularly, feeling that she was upholding her end of the bargain.


  • In all, she paid the bank, then IndyMac, more than $21,500 from April 2008 to February. She has the MoneyGram receipts to prove it in a packet full of documents from the whole ordeal. But when she called on May 11 about a returned payment, she was told her home was being foreclosed and going up for auction the next day. Lowe couldn’t believe it. “I don’t know what I’m going to do, because I thought I was doing all the right things,” she said.

For more, see Simi Valley woman says she's shocked to learn of foreclosure, auction, buyer (Caught in the cracks).

Bridgeport Resident Faces Loss Of Home Due To Loan Servicer Screw Up In Failing To Remit Real Estate Taxes To City

In Bridgeport, Connecticut, the Connecticut Post reports:

  • Ever since he came to this country from Haiti, Jean Castro just wanted to live the American dream. He worked as a mechanic in Stamford before finally saving enough money to buy a house here for himself, his wife and three children. Now, three years later, the city is foreclosing on the single-family home [...] because Castro owes $51.69 in back taxes.

  • "It's unbelievable," said the 49-year-old Castro as he stood beneath the large grape arbor alongside his home. "I pay my mortgage every month, I do everything I'm supposed to do and now you tell me the city is taking my home. I'm shocked."

  • Last week, a Superior Court judge granted the city's foreclosure action and ordered the home to be sold in December to satisfy the back taxes as well as the $2,705 in attorneys' fees and foreclosure costs. [...] Castro maintains he didn't know his house was in foreclosure. He said he received a letter from the city stating he had back taxes and he turned the letter over to his mortgage company, which pays his taxes. "The bank said it was going to take care of the back taxes and that's the last I knew of it," he said. In fact, court records show that nearly $3,000 in back taxes were paid on the house, leaving a balance of $51.69.

For more, see Family to lose home over $50 tax bill (A Bridgeport homeowner gets served foreclosure papers because he owes).

For story follow-up, see Bridgeport claims man facing foreclosure not innocent victim. ForeclosureLockOuts

Monday, June 15, 2009

California Lawmakers Seek To Crackdown On Foreclosing Banks Forcing Buyers Of Repossessed Homes To Use Title & Escrow Firms Picked By Lender

The underreported (and unprosecuted) scam currently being perpetrated by lenders looking to unload foreclosed homes whereby they force the buyers of those homes to use their (the lender's) title insurance and escrow companies(1) is now drawing attention from the California state legislature, as evidenced by this excerpt in a recent story reported by the Merced Sun Star:

  • A bill to help California's smaller title companies compete in the foreclosure resale market has cleared the Assembly and is now in the Senate. [...] The bill's passage would be a boost to title companies that have been hard-up for business as the market has shifted from real estate agents selling new homes for developers to unloading foreclosed ones for banks. The bill, AB 957 [the Buyer’s Choice Act, go here to check bill status], would establish penalties for banks that force buyers to use a particular title and escrow company.


  • The practice of forcing buyers to use certain title insurance companies is illegal under the federal government's Real Estate Settlement Procedures Act, though there's been little enforcement. State leaders are looking to crack down by allowing buyers to seek a fine against banks that forced them to use a particular title company.


  • Banks would be forced to pay the buyer three times what was spent on the title and escrow services. Locally, title transaction fees can run about $1,000, though agents have seen bills double or triple that from other firms. In such instances, banks could be paying thousands back to the home buyer. [...] So far, there hasn't been any opposition to the bill. It passed the Assembly with a 77-0 vote. No title companies or lobbyists have come out against it.

For the story, see Galgiani's title bill on its way to state Senate.

Go here for other posts involving legal issues related to title insurance.

(1) Lenders holding foreclosed homes with potentially defective titles as a result of errors, irregularities, and other sloppiness in the foreclosure process (ie. lenders lacking standing to foreclose, failure to physically possess the mortgage note when foreclosing, failure to satisfy all "notice" requirements in the legal process, etc.), and who are using "friendly" title & escrow companies over whom they can exert influence in the title-clearing & sale-closing process (for the possible purpose of "slipping something past" an unwitting home buyer), appear to be among those that could be affected by this proposed law. title insurance legal issues

Nevada Lawsuit Alleges Lender Used Deceptive & Unfair Practices, Lacked Good Faith When Making Unsustainable Home Loans; Seeks Class Action Status

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

  • The foreclosure crisis is far from over in southern Nevada. Now a group of homeowners are fighting back against one lender. They've filed a class action lawsuit to stop foreclosures and to get restitution for those who've already lost their homes. They are going after California's Indymac, one of the first banks to fail during the meltdown.

  • The lawsuit claims the lender did not deal in good faith with their borrowers and used deceptive and unfair practices. "They focused in on minority groups and attempted to sell them on loans that they knew that those borrowers could never ever satisfy," said attorney Matthew Callister.(1) Callister is representing the lawsuit against Indymac, who was taken over by OneWest Bank. He says tens of thousands of valley homeowners have loans through the company and he wants to stop more from becoming victims of bad lending practices.

For more, see Las Vegas Attorney Files Class Action Against Home Lender.

For other posts on homeowners using state & federal consumer protection laws to stave off foreclosures, Go Here, Go Here, and Go Here.

(1) Last year, the Massachusetts Supreme Judicial Court ruled that the making of subprime loans that lenders either knew or should have known were unsustainable constituted unfair and deceptive business practices in violation of the applicable state consumer protection statute (M.G.L. c. 93A, § 4). See:

NY Attorney Charged In "Seller Financing" Mortgage Fraud Scam; Accused Of Using Bogus Documents To Cheat Property Sellers, Banks

In New York City, the New York Law Journal & the Office of the Manhattan U.S. Attorney announce:

  • An attorney with the New York City Law Department who had a gambling problem was arrested [last week] for mortgage fraud that involved inventing a lawsuit and forging the signature of a bankruptcy judge. Hugh Zuber, 38, of Monsey, N.Y., allegedly used the Corporation Counsel's office for a meeting with one of his victims in one of two schemes to defraud property sellers in the Bronx and Spring Valley of hundreds of thousands of dollars.

According to the criminal complaint, in one case, Zuber agreed to represent a Bronx property owner in the sale of an 11-unit rental building on Creston Avenue in April 2006. Zuber arranged to sell the building to Alana Property Management LLC for $950,000 in February 2007. What Zuber did not disclose was that he had formed Alana Property himself and that it was controlled by his brother. The terms of sale were $400,000 in cash with the remaining $550,000 to be in the form of seller-financing (ie. a ten year note secured by a first mortgage on the subject property) to the seller. Unbeknownst to the seller, at or around the closing of sale, Alana Property then allegedly used false information to secure a $705,000 first mortgage from a lending institution, using $400,000 to fund the downpayment owed to the seller, with Zuber and his co-conspirator pocketing the difference, and leaving the seller's $550,000 note in second collateral position. Zuber initially made periodic payments to the seller on account of the $550,000 note before ultimately stiffing him.

In the second case, according to the criminal complaint, Zuber represented the seller of a 6-unit rental house in Spring Valley, which sold for $625,000. Zuber did not disclose to the seller that he had a business relationship with the purchaser. Zuber and his co-conspirator arranged to obtain a $500,000 mortgage with an application that failed to disclose some important facts, including that $200,000 of the purchase price was directly financed by the seller. Once this sale closed, Zuber began making payments to the Spring Valley victim on account of the $200,000 in seller financing. The deferred payments to this victim eventually ceased as well, according to the allegations.

For more, see:

(1) If the charges prove true that attorney Zuber screwed his clients out of their money and property, The Lawyers’ Fund For Client Protection Of the State of New York may find itself on the hook for the losses up to a maximum of $300,000 for each client loss, provided the clients apply for reimbursement within two years after they discover their loss.

For those clients screwed out of their money and property by reason of the dishonest conduct of their attorneys in other states and Canada, see:

Lawyers' Client Compensation Fund Left Holding The Bag On $38.4M Bill Due To Closing Attorney's Escrow Funds Theft In Real Estate Deals

In Vancouver, British Columbia, The Vancouver Sun reports:

  • Both the B.C. Crown counsel who is prosecuting former Vancouver lawyer Martin Wirick for perpetrating the biggest fraud in Canadian legal history, and the lawyer who is defending him have recommended a seven-year prison sentence.


  • According to an agreed statement of facts, the total value of the frauds captured by Wirick's guilty plea was $31.2 million, of which $26 million was actually lost. In all cases, victims were reimbursed by the B.C. Law Society's special compensation fund, which protects clients from lawyer fraud.(1)(2)


  • Wirick fooled lenders and purchasers [in real estate sales] into thinking that prior mortgages had been repaid by filing forged discharge documents with the Land Titles Office. He also kept undischarged mortgages current so that the holders of those mortgages wouldn't get suspicious and discover that the property had been re-registered in somebody else's name. When he was pressed to provide evidence that he had discharged mortgages, he would use funds from an unrelated property sale or re-financing to pay them off.

For more, see 7-year term recommended for Wirick.

See also, CBC News: Former Vancouver lawyer pleads guilty to $42M mortgage fraud.

Go here, Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds.

(1) According to the law society, the total payout on account of all Wirick and Gill-related frauds was $38.4 million. To pay the bill, the law society increased the annual assessment for its 10,000 lawyer-members to $600 from $250. It also revamped property transaction procedures to avoid similar frauds, and restructured its insurance coverage to prevent such massive payouts in future.

(2) For those in Canada, if a Canadian attorney, in the course of representing you, screws you out of money or property through dishonest conduct, click on your province on the Canada Client Protection Funds Map to contact the appropriate Law Society Client Compensation Fund about filing a claim to seek some reimbursement for your losses.

For those screwed out of money or property through dishonest conduct by a lawyer in the United States, see:

Sunday, June 14, 2009

Expiring Statute Of Limitations Saves Alleged Scammers From Prosecution; Accused Of Recording "Obviously Phony" Forged Lien Satisfaction

In Stanislaus County, California, The Modesto Bee reports:

  • A judge Friday threw out six felony charges in the 1993 sale of a Modesto home, saying fraud allegations against a doctor, a real estate broker and a notary public are too old to take to trial.

  • As he handed down his ruling, Stanislaus County Superior Court Judge Donald Shaver noted that a document filed with the clerk-recorder's office in 1999, to extinguish a $22,400 loan, is obviously phony, because it purportedly is signed by Jewel Young, who died in 1995.

  • The judge also said the document alone could not support a host of charges filed by the district attorney's office, because Young's nephew, Steven Harris of Atwater, did not bring claims of wrongdoing to the authorities until long after the statute of limitations lapsed.

For more, see Judge dismisses charges of fraud (Says document wiping out home loan fake, but statute of limitations ran out).

Go here, 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. TheftOfDeedMeta

Colorado Mortgage Broker Charged With Using Phony Documents To Obtain Loan In Property Sale, Then Stealing Portion Of Proceeds From Seller, Buyer

In Aurora, Colorado, The Denver Post reports:

  • The owner of an Aurora mortgage service company has been indicted by the state grand jury for fraudulently obtaining a home loan for a client and then stealing some of the proceeds from the subsequent real estate transaction. The indictment alleges that 50-year-old Ernie Colter, owner of PMCS mortgage services company, convinced a woman identified as Joyce Hoffman to buy a $700,000 home as an investment property.

  • As an incentive to buy the home, the grand jury alleged that he promised Hoffman she would receive $60,000 after the closing. In order to qualify Hoffman for the $700,000 home, Colter allegedly submitted fraudulent earnings and asset statements along with other falsified documents to Countrywide Mortgage. As a result, Colter "tricked" Countrywide Mortgage into giving Hoffman a loan of more than $20,000, when she didn't qualify, said the indictment.

  • Then, said the grand jury, Colter stole money from both Hoffman and Phillip Newby, the seller of the home. Colter allegedly diverted approximately $61,000 of Newby's proceeds from the sale into his - Colter's - bank account. In order to pull off the scam, Colter allegedly submitted a fraudulent payoff to a title company that allowed $61,000 to be wired to a bank account of a financial company owned by his cousin, Derrick Washington. The money was then transferred to Colter, said the indictment. In addition, Colter only gave Hoffman $34,000 of the $60,000 he had promised. Colter is charged with three counts of theft including theft from Countrywide Mortgage, theft from Newby and theft from Hoffman. He was also indicted on one count of forgery.

Source: Owner of Aurora mortgage service company indicted.

Go here for the indictment: People v. Colter.

Arizona Loan Modification Scammer Gets 5 Years For Scamming 47 Struggling Homeowners Out Of Upfront Fees In Exchange For Phony Promises Of Help

From the Office of the Arizona Attorney General:

  • Attorney General Terry Goddard [Friday] announced that Bobby John Herrera, 33, of Glendale, has been sentenced to five years in prison as the result of a mortgage loan assistance scam he orchestrated that victimized 47 Valley homeowners. Herrera was also ordered to pay $80,541 in restitution to victims.

  • In December 2008, Herrera was arrested by Surprise and Peoria police in connection with the scheme. He pleaded guilty to one count of fraudulent schemes and artifices, a Class 2 felony, in Maricopa County Superior Court in April.(1)

  • According to investigators, Herrera solicited struggling homeowners with fraudulent claims that he could modify mortgage terms or provide other assistance to help them prevent foreclosure. Herrera allegedly claimed to have "connections" and expertise negotiating with mortgage lenders to reduce consumers’ monthly payments and prevent foreclosure. In exchange for the services he claimed to provide, investigators said Herrera often charged the victims upfront fees of $1,245. Herrera is alleged to have not provided any such mortgage loan modification or foreclosure relief assistance, using the money instead for personal expenses.

For the entire press release, see Fraud Artist who Victimized 47 Homeowners Gets Five-Year Prison Term.

(1) According to the indictment, Herrera originally faced charges of:

  • one count of fraudulent schemes and artifices (ie. knowingly obtaining any benefit by means of false or fraudulent pretenses, representations, promises or material omissions, pursuant to a scheme or artifice to defraud, in violation of § 13-2310 of the Arizona Revised Statutes),
  • one count of money laundering (A.R.S. § 13-2317),
  • one count of illegal control of an enterprise (A.R.S. § 13-2312(A)), and
  • six counts of theft (A.R.S. § 13-1802(A)(1)).