Saturday, October 10, 2009

Landlord To Cough Up $134K To Settle Allegations Of Refusing Rental To Woman w/ "Too Many Children," Charging Other Tenants Extra Fees For Having Kids

From the U.S. Department of Justice:

  • The Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Alabama and the Department of Housing and Urban Development (HUD) [...] jointly announced an agreement with the owners and managers of Pina’s Mobile Home Park in Daphne, Ala., to settle allegations of discrimination against families with children. Under the consent decree, [...] the defendants must pay up to $104,130 to victims of discrimination and an additional $30,000 to the government as a civil penalty.

  • The lawsuit [...] originated from a charge filed by HUD on behalf of a woman who tried to rent at Pina’s Mobile Home Park, but was told she had too many children (three) to live in the park. Numerous other tenants were charged extra monthly fees for having children in their mobile homes. The complaint alleges that Arthur C. Witherington and Pina D. Witherington violated the Fair Housing Act when they discriminated against applicants and tenants with children under 18.(1)

For the entire press release, see Justice Department Obtains $134,000 in Discrimination Settlement with Mobile Home Park in Daphne, Alabama.

(1) "Limiting how many children a tenant can have and charging extra fees for children are discriminatory, and families are protected from this kind of discrimination by the Fair Housing Act," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "People do not lose their rights to fair housing because they have children," said John TrasviƱa, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "HUD and the Department of Justice will defend their rights vigorously."

Landlord, Feds Settle Suit Alleging Violation Of Servicemembers' Right To Terminate Lease Under SCRA

From the U.S. Department of Justice:

  • The Justice Department [...] announced that it had reached a settlement with a Virginia landlord to resolve allegations that she violated the Servicemembers Civil Relief Act (SCRA). The lawsuit alleged that the landlord failed to return prepaid rent and security deposits to a tenant who had terminated her lease early in order to comply with military orders to relocate to Georgia.(1) [...] The complaint, which was filed with the settlement, represents the first lawsuit involving a landlord-tenant matter brought by the Justice Department under the SCRA.(2) Under the terms of the settlement, which must be approved in federal court in Virginia, the landlord must pay her former tenant a total of $5,600 in damages and is enjoined from engaging in future violations of the SCRA.


  • The tenant in this lawsuit, Colonel Debra Bean, is a highly decorated member of the armed forces. Colonel Bean currently serves as Vice Commander for the 78th Air Base Wing at Robins Air Force Base in Georgia.(3)

For the entire press release, see Justice Department Announces Settlement of Its First Landlord-Tenant Case Under the Servicemembers Civil Relief Act.

(1) The SCRA provides certain protections to active duty servicemembers who must terminate residential leases to comply with military orders for a permanent change of station or for deployment.

(2) According to their press release, the Justice Department’s investigation of this matter originated with a referral to the Civil Rights Division from the U.S. Air Force. The Civil Rights Division received enforcement authority under the SCRA in 2006, and has since reviewed numerous allegations of SCRA violations and resolved investigations in the following areas without the need for litigation:

  • the charging of excess interest over the six percent interest rate cap;
  • the repossession of vehicles without court orders; and
  • the foreclosure on home mortgage loans without court orders.

Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Office locations may be found at Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at

(3) The landlord obviously picked the wrong person to mess with.

Friday, October 9, 2009

Communication Problems With Loan Servicer Jeopardize Homeowner's Forbearance Agreement, Resulting In Foreclosure Threats

In Jeffersonville, Indiana, The News and Tribune recently ran a column by a local homeowner who, despite entering into a seemingly valid forbearance agreement with her loan servicer, details the mess she's facing due to the subsequent communication problems she's having with the company's different departments, reflecting their apparent inability to handle her situation:

  • One collections employee actually offered a quote for this column explaining that, though it might seem the right hand doesn’t know what the left hand is doing, they’re operating on the principle of “prevalence.” I never caught on to what prevalence meant. This guy probably wasn’t authorized to talk to the media. He changed his mind about being quoted and didn’t want to identify himself.

Among the alleged screw-ups is the handling of one payment on her forbearance agreement, which the servicer pocketed and placed in “unapplied funds,” which she describes as those funds they already have, but you still owe.

For the story, see House might be lost in translation.

Media Intervention Helps Houston Widow Recover Foreclosed Home After Loan Servicer Screw-Up

In Houston, Texas, KRIV-TV Channel 26 reports on a local homeowner faced with financial trouble after Hurricane Ike hit, which caused significant damage to her home, only to be followed by a home repair scammer who pocketed $4,000 of her money without doing any repairs on her home:

  • Desperate to get her house back to normal, she asked her mortgage company, Merrill Lynch for an extension of her mortgage payments. The company agreed. And once the insurance money arrived, she was able to catch up on her payments. She also paid an additional $31,000 to her principal.

  • Days later she got a letter saying her home was being foreclosed. But things got worse. She then got a second letter stating her home was going to be auctioned off. She says she immediately called Merrill Lynch. '(I) finally got somebody and they said, 'OK, we're taking you off the foreclosure list. You should never have been on there.'"

  • Amanda thought her emergency as over; it wasn't. When she got home from shopping one day she discovered a 'notice of sale' posted on her front door. Her home had been sold and she had to move out.

Armed with documents showing that the homeowner had paid all her bills and that someone with the mortgage servicer had made a big mistake, Channel 26 intervened on Amanda's behalf. Neither her mortgage company or the attorneys involved in the foreclosure would discuss the issue; however, the homeowner ultimately received papers stating that the foreclosure was canceled and the sale rescinded.

For the story, see Error Lands Lady's House in Foreclosure.

Thursday, October 8, 2009

Complaints Begin Rolling In Against Florida Attorneys Offering Loan Modifications; Lack Of Legal Representation, Fee Structure Among Concerns

In South Florida, the Miami Daily Business Review reports:

  • Gladis Heras [...] thought she was in good hands. Heras said she paid [attorney Daniel] Fox $3,500 in January 2009 to modify her mortgage. Yet months later, the bank told the New York resident it had never been contacted by Fox about the modification. Her story is familiar, according to the attorney general’s office and [Florida] Bar officials. The officials say homeowners most frequently report that lawyers charged them from $1,500 to $5,000 to negotiate lower monthly mortgage payments. And that once paid, the attorneys either stopped answering calls or made no effort to contact the lender.

  • On top of lack of representation cases before the AG’s office and the Florida Bar, there also are ethical questions about how lawyers handle foreclosure defense and loan modifications, especially the way homeowners are billed. Some lawyers are being criticized for aggressive fee structures that are tied to the amount owed on the mortgage rather than the scope of work involved. Some lawyers charge homeowners monthly fees until the case is resolved or flat fees billed in monthly installments.(1)


  • Another issue: Some homeowners believe that as soon as they start making monthly payments to an attorney they have legal representation. That is not always the case, [local foreclosure defense attorney George] Castrataro said. Although the payments are in installments, legal representation may not begin until a minimum amount is deposited into a lawyer’s trust account. That could take two to six months.


  • Another pitfall for homeowners who don’t want to do [their loan modification] themselves: Castrataro said some lawyers take on modification cases where they know — or should know — the homeowner doesn’t qualify for a loan modification. After taking a fee and overseeing a needless process, they tell the homeowner the modification was denied. Castrataro says inexperience or taking too many cases is as much to blame as greed for that situation.

For the story, see Record number of complaints target modification lawyers.

For a related story on similar problems faced in California, see Calif. Bar Official: "The Number Of Attorneys Using Their Law Licenses To Essentially Take Money From Unwary But Trusting Consumers Is Astounding!"

For State Bar advisories addressing lawyer conduct in loan modifications, see:

(1) Both fee structures are problematic, said George Castrataro, a former lawyer with Legal Aid Service of Broward County who now has his own firm and does foreclosure defense work. “The fees should be directly related to a reasonable number of hours an attorney spends working on the case,” he said. “The amount often taken is very similar to client mortgage obligation. If it takes two hours to resolve it, that is what it should cost, and not how much they pay in mortgage. That [practice] is in direct violation of our obligations.” UnauthPractOfLawTheta

UM School of Law Announces Foreclosure Defense Fellowships; Nationally Recognized Legal Aid Attorney To Train Newly Minted Lawyers

In Coral Gables, Florida, the University of Miami announces:

  • The South Florida community is ground zero for the national foreclosure crisis. In response, the University of Miami School of Law has created Foreclosure Defense Fellowships that will enable newly minted lawyers to give free help to local residents caught in the foreclosure crisis. The School of Law is one of the first schools in the nation to create a program of this kind in response to the crisis that is sweeping the country. Recent UM graduates will acquire real-world work experience and address a serious need in the community at the same time.


  • Eight UM Law graduates were the winners of these fellowships. Six fellows [...] will work for the Legal Services of Greater Miami, Inc. (LSGMI). Two additional fellows [...] will work at the Legal Aid Service of Broward County, Inc. They will receive a limited grant totaling $10,000 in exchange for working at least three days a week for 27 weeks, commencing in early October. The fellows will receive intensive training [...] at a foreclosure workshop hosted by the UM School of Law, featuring April Charney, JD ’80, a consumer lawyer and nationally recognized foreclosure defense expert.

  • In addition, three students from the School of Law’s LL.M. in Real Property Development [...] will inaugurate a clinical track in that program by providing 15 hours per week of free foreclosure defense representation. The LL.M students will work under the supervision of local lawyers who also will be working without pay. These fellows will be placed at “The Foreclosure Project,” created by Richard Burton, JD ’74, which provides free legal representation to homeowners facing foreclosure in Dade and Broward counties.

For the entire press release, see School of Law Announces Foreclosure Defense Fellowships.

NJ Attorney Dodges Serious Sanctions In Improper Fee-Splitting Deal w/ Foreclosure Surplus "Scavenger"; Lawyer "Not Venal" - Just Clueless, Says DRB

In Trenton, New Jersey, the New Jersey Law Journal reports:

  • The New Jersey Supreme Court has censured a Point Pleasant, N.J., solo for splitting fees with a company that helped him find clients entitled to surplus funds from sheriff's foreclosure sales.(1) The court adopted the Disciplinary Review Board's finding that Garrett Lardiere's business relationship with Vermont-based Equinox Research and Recovery Co. constituted impermissible sharing of legal fees with non-lawyers.

  • According to the DRB, Lardiere's relationship with Equinox dates to 2003. The company researches foreclosure records to find surplus funds from sheriff's sales on deposit in New Jersey Superior Court. Equinox sent letters printed on Lardiere's letterhead to individuals it believed were entitled to such funds. The letters were signed by an Equinox employee and listed the company's toll-free phone number.


  • The DRB, in a July 23 opinion, said the record included letters from Equinox to Lardiere that "call into question respondents' professional independence" in the matters in question. In one, Lardiere was urged to refer inquiries from would-be clients to Equinox, because "we know what is going on in the case and stand a better chance in getting them to sign at a higher rate," a company representative wrote.(2)

  • Lardiere "relinquished control of his cases to an organization of non-lawyers who were acting under color of his name in dealing with his clients," the DRB found. In addition, he failed to ensure that his clients' interests would be protected.(3)


  • The DRB said either a censure or a three-month suspension could be supported for the fee-sharing offense, combined with the record-keeping and failure to cooperate offenses. It imposed censure based on Lardiere's 35-year unblemished record. "Respondent is not venal. Rather, he has a distinct lack of knowledge or a lack of understanding about his responsibilities as a member of the bar," the DRB said.

For more, see Attorney Censured for Splitting Fees With Foreclosure-Research Company.

For information on how foreclosed New Jersey homeowners can claim any surplus funds on their own, see:

Go here for other stories on "foreclosure surplus" scams.

(1) When the sales price of a home sold at a foreclosure or sheriff's sale exceeds what is owed to the mortgage holder, the excess is generally referred to as the "foreclosure surplus," "surplus funds," or "the overage."

(2) Reportedly, people who responded to the solicitations were asked to sign a contingency agreement with Lardiere, which came attached to the letter. But the letters contained none of the language required in attorney-solicitation letters under New Jersey Rule of Professional Conduct 7.3, such as a prominent heading with the word "Advertisement" or a notice that the recipient may contact the Committee on Attorney Advertising if the content is misleading or inaccurate, the DRB said.

With respect to the compensation scheme. Equinox received a percentage of the funds recovered, and Lardiere received a cut of Equinox's share, along with a flat fee of $750 per case. When Lardiere received a recovery, he deposited it in his trust account and disbursed the proceeds to the client, to Equinox and to himself.

(3) The DRB also found Lardiere's violated record-keeping strictures by keeping unreconciled trust accounts, and further that he was reluctant to give ethics investigators unfettered access to his files, constituting a failure to cooperate with disciplinary authorities. lawyer renting UnauthPractOfLawTheta

Ohio Lawmaker Calls For GAO Probe Of Lender Practice Of Initiating, Then Abandoning, Foreclosure Actions, Leaving Vacant Homes In Legal Limbo

From the Office of U.S. Senator Sherrod Brown (D-Ohio):

  • A growing number of lenders are refusing to take possession of homes after they have been foreclosed, leading to vandalism and neighborhood decline in Cleveland and cities across Ohio. In response to this alarming trend, U.S. Sen. Sherrod Brown (D-OH) called for a federal investigation of so-called “bank walkaways.”(1)


  • In a typical foreclosure, the lender assumes responsibility for the property once the foreclosure proceedings have been completed. The property is then put up for auction, [...]. In the event that no one meets the opening bid, the lender takes over the title of the home and tries to resell it. Because the lender owns the property, it has an interest in maintaining the home’s condition and dealing with tax liens.

  • In a rising number of cases across Ohio, however, lenders are refusing to take possession of foreclosed homes – leading to properties that are neither being sold at auction nor maintained by the lender. The result is an increase in vandalism and a decline in property values in the area surrounding the abandoned home. And foreclosed homeowners – who have been forced to leave their homes – are left with back taxes and housing code violations for homes at which they no longer live.

For Senator Brown's entire press release, see Brown Points to Rising Occurrence in Ohio of Lenders Refusing to Take Possession of Foreclosed Homes, Leading to Vandalism, Neighborhood Decline.

(1)I am concerned that bank walkaways are exacerbating the problems that homeowners are already facing as a result of the foreclosure crisis,” Brown wrote in a letter to the Government Accountability Office (GAO) requesting an investigation of the practice. “I am also concerned that bank walkaways could complicate government efforts to help stabilize distressed neighborhoods through the acquisition, rehabilitation, and resale of foreclosed properties.”

Wednesday, October 7, 2009

Jury Says St. Pete-Area Foreclosure Rescue Operator Liable For Duping Financially Strapped Homeowner Into Signing Over Home Under Guise Of Help

In Sarasota, Florida, the St. Petersburg Times reports:

  • In a "groundbreaking'' case that could be the first of its kind in the nation, a jury this week found that the owner of a St. Petersburg foreclosure rescue company scammed a 60-year-old Port Charlotte woman out of her home. The Sarasota County jury awarded $93,467 to Wanda Costa, who unwittingly sold the house to Gideon Rechnitz for nothing in 2006 even though she had substantial equity at the time. Under the guise of helping her, Costa's lawyers said, Rechnitz and associate Thomas Cook duped her into signing over the deed without making it clear she would still be responsible for the mortgage and thousands of dollars in "commissions.''(1)

  • "What the jury did in this case was say 'No' to that kind of behavior,'' said attorney Elizabeth Boyle of Gulfcoast Legal Services, which represented Costa for free. "I hope other people will come forward because they may get some relief, too.''


  • As fraud proliferates, there has been a growing number of cases nationwide in which judges ruled in favor of homeowners who claimed they were cheated out of their property.(2) Boyle said her research indicated that Costa's case may the first in which a verdict was rendered by a jury. The nonprofit National Consumer Law Center said it did not know if there have been jury verdicts elsewhere.

For more, see Jury finds Rechnitz defrauded widow of her home in a foreclosure scam.

(1) According to the story, Rechnitz, the subject of several St. Petersburg Times articles, is among scores of individuals and foreclosure prevention companies under investigation by Florida Attorney General Bill McCollum.

(2) After a six day bench trial, the Office of the Washington State Attorney General similarly secured a significant award (nearly $4.2 million) from a foreclosure rescue operator peddling sale leaseback deals to, and running "foreclosure surplus" scams on, financially strapped homeowners. The operator entered into transactions with more than 300 property owners, and no one ever successfully regained their home from him, according to the state AG's office [see Pay time for notorious foreclosure rescue scammer (Attorney General announces major victory in state’s case with Washington man who promised help but took homes)].

  • Kaiser’s victims were elderly, disabled or low-income individuals – people who trusted him to solve their foreclosure problems and were betrayed,” [Prosecuting attorney James] Sugarman said. “Kaiser portrayed himself to these people as an expert in saving homes facing foreclosure, when he is actually an expert in taking homes facing foreclosure.”

For more, see Washington AG Scores Big Win In Bogus Equity Stripping, Land Trust/Sale Leasebacks & Surplus Ripoffs; Foreclosure Rescue Operator Tagged For $4.2M.

Cops: Land Grabber Hijacked Vacant Homes, Rented Them To Unwitting Tenants; Used Bogus Adverse Possession Claims, Quiet Title Suits To Swipe Deeds: AG

In North Las Vegas, Nevada, the Las Vegas Review Journal reports:

  • Former real estate agent Eric Alpert, whose nefarious business practices were brought to light by the Las Vegas Review-Journal in 2003, has been arrested by North Las Vegas police for renting homes he did not own or have permission from the owner to rent. [...] Alpert, 54, has been charged with four counts of burglary; four counts of theft; four counts of obtaining money under false pretenses; and seven counts of forgery. The district attorney's office said it also plans charges on three counts of offering a false instrument.

  • Alpert identified properties that appeared to be abandoned or in foreclosure, cleaned them up and changed the locks, then rented them cheaply to people who had no suspicion of his wrongdoings. He had about 20 homes in Las Vegas, some of them titled to living trusts and under the name of his former business, Sherlock Homes, according to Clark County Assessor records.


  • Court filings reveal that Alpert apparently continued to engage in real estate activity that's at least similar to what he was doing a few years ago, attorney Mark Connot of Hutchison & Steffen law firm said. Alpert appears to file an action to quiet title on properties, and if the owner does not appear to contest the action, he receives title to the property, the lawyer said. He claimed at that time to be legally taking homes by "adverse possession" under Nevada law, but the attorney general's affidavit notes that NRS 11.150 specifically states that "requirements for adverse possession is occupation continuously for five years" and payment of taxes, which Alpert did not do.

For the story, see: Ex-agent arrested for renting homes he didn't own (Victims lured by cheap rent soon evicted).

For a follow-up story, see Victims of rental scam speak out. KappaPhonyLandlordScam

Minn. Man Charged With Leaving 95-Year Old, Dementia-Suffering Mom Behind In Rent; Accused Of Looting Bank Accounts, Persuading Her To Buy Him House

In Ramsey County, Minnesota, the Pioneer Press reports:

  • A 95-year-old Roseville woman, who suffers from dementia, had her bank account frozen and fell behind on rent after her son cashed thousands of dollars in checks from her account, a criminal complaint stated. Joel Allen Berntsen, 58, of Minneapolis, was charged with financial exploitation of a vulnerable adult.

According to the criminal complaint:

  • Berntsen told police he borrowed $290,000 from his mother in 2006 to buy a house in North Oaks. She also gave him $2,000 a month for house payments. But in 2008, the home — which was in his mother's name — went into foreclosure. The IRS later notified his mother that she owed $12,928 in back taxes on the home.


  • In March, Ramsey County Adult Protection said the woman qualified as a vulnerable adult, after a health care worker who took care of her called police because the woman's bank accounts were overdrawn because of the large amount of checks Berntsen cashed. In June 2006, the community organization Lifetrack Resources found the woman to be a vulnerable adult at risk of mental or financial exploitation.


  • Roseville police discovered that the woman was behind on her rent and that several of her checks had bounced because of insufficient funds. A review of her checking account at North Star Bank disclosed that between April 1, 2008, and March 1, 2009, Berntsen cashed 26 checks — 25 of them payable to himself.

For more, see Man charged with financially exploiting 95-year-old mother (Son, 58, charged with exploiting vulnerable adult).

See also, the Star Tribune: Son accused of duping his mom, 95, out of thousands (The charges say he wrote checks on her account and persuaded her to buy him a $290,000 house in North Oaks). FinancialAbuseOfElderlyAlpha

Stranger Pays Back Taxes On Nursing Home-Bound 92-Year Old Alzheimers Patient's Vacant House, Then Rents It Out In Attempt To Lay Claim To Property

In Boise, Idaho, the Idaho Statesman reports:

  • On May 16, 2007, David Foldesi walked into the Ada County Courthouse and paid $8,875.62 in delinquent property taxes on [92-year old Marcella] Boylan's house. Both Boylan and her husband, Dudley, who died in 2005, had faced serious health problems - and the costs added up. When the taxes weren't paid on the house, the county started the steps toward putting it up for public auction - a process called a tax deed sale. The online auction was scheduled for May 19-21, 2007.

  • Once the county starts the tax-deed process, the county takes ownership of the property until it is sold or the delinquent taxes are paid, whichever comes first. In Boylan's case, the delinquent taxes were paid, by Foldesi, just three days before the auction. Once the delinquent taxes were paid, the county canceled the auction and granted a "redemption deed" to Boylan. Foldesi is named in the redemption deed as the person who paid the delinquent taxes.

  • But a redemption deed does not convey ownership of, or access to, a property - and neither does paying somebody's property taxes, county officials say. When Foldesi paid the taxes, that did "nothing more in this case than cancel the tax deed and all related proceedings," Ada County Treasurer Cecil Ingram said.

  • Foldesi thinks differently. When asked who gave him permission to rent out Boylan's house, he said: "The owners. Who are the owners? The tax deed holder." But neither Foldesi nor anyone else can hold a tax deed to the house, because there is no tax deed for this property, according to the county.(1) Only if the house had gone to auction could someone have bought the tax deed, which would have given that person ownership over the home. Some states do sell tax deeds or tax liens without an auction giving ownership to the person who pays off the tax bills. That may be part of the confusion.

For more, see Stranger rents out Boise woman's home without her permission (A Boise house belongs to a nursing-home resident, officials say, but a man profits from renting it out).

(1) Not surprisingly, Foldesi reportedly spoke only briefly to the Statesman before hanging up. He has not returned subsequent calls, including requests to see a tax deed for the house or a certificate of sale from the county, according to the story. DeedContraTheft hijack

Cops: Wife Used Improperly Notarized POA In Sale Leaseback Of Home Without Hubby's Consent; Subsequent Use Of "Rubber" Rent Checks Gets Them The Boot

In Bantam, Connecticut, The Register News reports:

  • A Bethlehem woman is facing criminal charges for allegedly selling her marital home without her husband’s knowledge. Shelley Ciriello, 55, [...] is scheduled to appear in Bantam Superior Court Oct. 5.


  • Ciriello reportedly sold the house to Lurlyn Seigler of Boston, Mass. and agreed to rent it from the woman for $3,767 per month. But when the rent checks started to bounce, the woman filed a complaint at the Bethlehem Resident Trooper’s office in July. The couple was evicted in June, according to court records.

  • But even though his wife had been to court and making deals with Seigler, the eviction came as a surprise to James Ciriello. The husband didn’t know he was renting the house he purchased with his wife in 1974. Shelley Ciriello maintained the family finances and books for his business. “I never knew what she was doing with the accounts and the money,” James Ciriello told police in his statement. Ciriello reportedly used a power of attorney to negotiate the sale of the house and subsequent court actions.

  • A woman Ciriello worked with at a physician’s office in Waterbury notarized the power of attorney on Ciriello’s word that it was for her disabled brother-in-law. When police talked to the notary, she admitted she executed the document and added Ciriello was fired from the job for stealing co-payments from the office, according to the warrant. Ciriello admitted her husband was not involved in the sale of the house.

  • The couple owned the house free-and-clear after purchasing it from her husband’s parents. But Ciriello reportedly abused a line of credit, using the three-bedroom Cape as collateral.

For more, see Wife sold house, husband clueless.

Tuesday, October 6, 2009

Pressure On State Bar To Implement Special Review Process To Discipline Florida Attorneys That Play Fast & Loose When Representing Foreclosing Lenders

In Sarasota, Florida, Sarasota Herald Tribune columnist Tom Lyons comments on the recent news from The Florida Bar, which will reportedly look into implementing a special review process to specifically discipline attorneys for foreclosing mortgage lenders guilty of playing fast and loose with their court filings in, and representations to judges presiding over, foreclosure actions:

  • Lawyer jokes aside, the legal system only functions as well as it does because most lawyers are honest. That is, most don't make flat-out lies and forgeries a routine part of their work. They spin the facts, yes, and they are adept at dodging and weaving around troublesome features of reality while presenting a case.

  • But filing fake documents to establish the right to take possession of someone's home? That's not something a lawyer should do. So what if that were suddenly happening in cases all over the nation? What if some law firms that specialize in bulk handling of mortgage foreclosures for the lending industry were having so much trouble finding original loan documents, and documents showing the ownership trail as debts were packaged and resold, that many started filing forged documents in their place?

  • That seems to be the fact, according to a study by a Florida Bar group. And Harley Herman, a lawyer who is part of a Florida Bar group pushing for a special review of ethics violations in foreclosure cases, says this is a serious problem.

For the story, see Foreclosure chicanery not a funny lawyer joke.

MD AG Wins "Rescue" Scam Civil Suit; Settles w/ Lenders Who Financed Bogus Sale Leasebacks, Saves Homes For Some, Clips Closing Agent For $100K

In Baltimore, Maryland, The Real Estate Wonk Blog in The Baltimore Sun reports:

  • Stop me if you've heard this one before: Borrower needs help. Borrower goes to foreclosure-rescue business to get help. Borrower signs documents to get or start the process of getting the mortgage refinanced, only to discover later that the foreclosure-rescue specialists were really getting the home signed over to them. Such fraud has happened across the country, both before and after the housing market went downhill.

  • The Baltimore civil case, brought by the Consumer Protection Division of the Maryland Attorney General's Office, covered 13 properties, most in the Baltimore area. Once the homeowners unwittingly signed over their properties, Earnest Lewis pulled all their equity out with a new loan and split the money with the defendants, said Bill Gruhn, chief of the Consumer Protection Division. "Some of the homeowners have moved," he said. "Other homeowners are in their homes and we were able to facilitate settlements" with the lenders.(1)

For more, see Homeowner beware.

See also, Maryland Attorney General press release: Attorney General Gansler Announces Judgment of More Than One Million Dollars in Restitution and Penalties in Foreclosure Rescue Scam:

  • The [Consumer Protection] Division also entered into a consent order with Cornerstone Title & Escrow, Inc., a real estate settlement company, that the Division sued for participating in the scheme and for using practices that violated the Consumer Protection Act. Cornerstone denied the Division’s allegations and has not admitted any wrongdoing. [...] The consent order entered with Cornerstone requires the company to pay $100,100, [among other things].

(1) Last year, Massachusetts Attorney General Martha Coakley similarly reached a settlement with ten lenders and loan servicers who financed equity stripping ripoffs for a foreclosure rescue group who peddled bogus sale leasebacks to financially strapped Massachusetts homeowners facing foreclosure. The settlement impacted 26 residential properties, was designed to return homeowners to their financial position before they were screwed over in transactions that stripped their home equity, and provided an opportunity for the victims to reacquire the legal title to their homes. The victims' mortgage liens were to be reduced to the lower of the actual amount paid for prior mortgage loans on the property, subtracting any beneficial payments to the homeowners; or 80% of the then-current value of the properties, resulting in approximately $1.8 million in reduced mortgage obligations. See Court Approves Massachusetts Settlement With Lenders In Bogus Foreclosure Rescue; Case Involved AG Claims Of Equitable Mortgage, Usury, Etc.

Include Arkansas Supreme Court On List Of Legal Authorities Having A Problem With MERS' Business Model

Attorney Kathleen E. Kraft, with the Washington, D.C. law firm Thompson Coburn LLP, writes:

  • On March 19, 2009, the Supreme Court of Arkansas determined that Mortgage Electronic Registration Systems, Inc. (“MERS”) was not a necessary party to a foreclosure action involving the foreclosure of a junior mortgage, where MERS was not the true beneficiary of the senior deed of trust nor was specifically authorized by the lender to act on the lender’s behalf in the foreclosure proceedings. Mortgage Electronic Registration Systems, Inc. v. Southwest Homes of Arkansas, -- S.W.3d --, 2009 Ark. 152, 2009 WL 723182 (Mar. 19, 2009). Coming in on the heels of Landmark National Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177 (2008)(1) (also finding that MERS was not a necessary party to a foreclosure action), Mortgage Electronic Registration Systems, Inc. v. Southwest Homes of Arkansas places MERS on unstable ground in mortgage foreclosure actions.(2)

For more, see Another Nail in the MERS Coffin: Arkansas Court Rules That MERS Was Not A Necessary Party To A Foreclosure Action In Which MERS Served As Lender’s Nominee On The Senior Deed Of Trust.

(1) This 2008 ruling of the Kansas Court of Appeals was recently affirmed by the Kansas Supreme Court. See Landmark Nat'l Bank v. Kesler, No. 98,489, 2009 Kan. LEXIS 834 (August 28, 2009).

(2) In a separate, unrelated lawsuit, the following all star lineup of mortgage lenders have been named and identified as allegedly the controlling shareholders of MERS:

  • Citigroup, Inc., the now-deceased Countrywide Financial Corporation (now owned by Bank of America), Fannie Mae & Freddie Mac (both of which are sucking wind financially, and are currently operating under the control of the Federal government), GMAC-RFC Holding Company, LLC, (doing business as GMAC Residential Funding Corporation), HSBC Finance Corporation, JP Morgan Chase & Co., the late Washington Mutual Bank (now owned by JP Morgan Chase & Co.), and alleged "ghetto loans" peddler, Wells Fargo & Company.

See Homeowners In Foreclosure Being Clipped For Illegally Inflated Legal & Appraisal Fees, Says Lawsuit. EpsilonMissingDocsMtg

FBI Probe Forces Shutdown Of Loan Modification Racket?

ProPublica earlier this week published a follow-up to a story (see Why Authorities Haven’t Stopped the Foreclosure ‘Rescue’ Boom) which focused on the antics of one loan modification outfit, Southern California-based 21st Century Legal Services (also known as Fidelity National Legal Services):

  • As we reported, four states obtained court injunctions barring the company from operating there, but those actions did little to slow the company down. Since then, however, we’ve learned that the company is under investigation by the FBI.

  • Last Wednesday, the FBI executed search warrants at eight locations in the Rancho Cucamonga area, said Laura Eimiller, spokeswoman for the FBI’s Los Angeles office. Both business and residential addresses were searched, she said, but she would provide no other details about the continuing investigation. Kathleen Moreno, the lawyer for 21st Century president Andrea Ramirez, confirmed that Ramirez’s residence was among those searched.

  • The FBI searches seem to have finally stopped the company from operating. Its Web site is down, and no one answers the phone. But as for whether its unhappy customers can hope to recoup their money, it’s far too early to tell.

For the story, see The Foreclosure ‘Rescue’ Boom on Marketplace.

Monday, October 5, 2009

Mass AG Obtains Indictments Against Foreclosure Rescue Operators Alleging Equity Stripping Ripoffs That Defrauded Homeowners, Banks, Investors

From the Office of the Massachusetts Attorney General:

  • Attorney General Martha Coakley’s Office announces that a Worcester County Grand Jury returned indictments [...] against an Oxford man, a real estate lawyer, a real estate paralegal and a notary public for their roles in a complex scheme in which fraudulent documents were used to defraud homeowners and mortgage lenders in numerous real estate transactions involving distressed properties in the Worcester County area. Allen Seymour, age 41, of Oxford, Raymond A. Desautels III, age 43, also of Oxford, Jason Passell, age 51, of Worcester, and Judith Piette, age 44, of Worcester, are charged [...].


  • According to authorities, Seymour targeted properties in danger of foreclosure. He personally approached the owners of these properties and presented a variety of rescue options. [...] Simultaneously, Seymour found individuals with good credit who were looking to begin investing in real estate. Many of these “investors” were told they would be helping homeowners in danger of foreclosure. [...] None of the proposals made to these “investors” matched the transactions presented to the homeowner.

According to the Massachusetts AG, Raymond Desautels, III, conducted all of the real estate closings and allegedly prepared fraudulent closing statements. Notary public Judith Piette allegedly notarized closing documents stating the homeowner had personally appeared before her and acknowledged they had signed the document voluntarily and for its intended purpose when, in fact, she never actually saw the homeowner. Jason Passell's involvement allegedly centered around the use of bogus powers of attorney to facillitate the scams.

For the entire Massachusetts AG press release, see AG Coakley’s Office Announces Indictments Against Four People in Complex Mortgage Rescue Scheme.

Lender Knowingly Wrote Millions Of Dollars In Crappy Loans, Abandoning Prudent Underwriting Standards, Says Mortgage Insurer In Lawsuit

In Los Angeles, California, Courthouse News Service reports:

  • MBIA Insurance Corp. says IndyMac Bank knowingly loaned millions of dollars to borrowers who could not afford to repay the loans, leaving the stock insurance company to pay out more than $487 million on its guarantees with an expected $566 million more to come, MBIA claims in Superior Court.(1)

  • MBIA says IndyMac "abandoned any reasonable and prudent underwriting standards" in an "effort to expand its market share during the mortgage lending boom," according to the complaint. MBIA also says IndyMac encouraged its workers to inflate borrowers' incomes on loan applications to get them loans for which they wouldn't have qualified. MBIA says the thousands of mortgage loans in default or foreclosure "would not have occurred if IndyMac had followed the loan-origination practices that it represented to investors it was following."


  • In May, 20 banks and financial services companies sued MBIA with allegations that it fraudulently restructured itself to strip it of $5 billion in cash and securities and to start a new insurance business to duck its obligations to the banks.

For the story, see MBIA Insurance Sues IndyMac.

(1) MBIA provided financial guaranty insurance in the form of guarantees of the trust obligations to make principal and interest payments on the loans.

Kansas Supreme Court Ruling Unfavorable To MERS Getting National Attention?

In Topeka, Kansas, The Lawrence Journal World reports:

  • Some are touting a recent Kansas Supreme Court decision as a major development in the protection of people facing foreclosures. In Landmark National Bank v. Kesler, the court ruled unanimously that Mortgage Electronic Registration Systems had no standing to bring action in a foreclosure case.(1) According to some reports MERS holds some 60 million mortgages, over half of all new U.S. mortgages. While the case applies only to Kansas, folks who defend homeowners are saying courts in other states could take note of the ruling.

For more, see Kansas court ruling in foreclosure case getting national attention.

(1) While some (see, for example, Waking up to discover the mortgage market was a giant criminal enterprise) have apparently interpreted this case as holding that MERS had no standing to bring action in a foreclosure case, this is simply an incorrect interpretation. Nowhere in the court's ruling did it "hold" or "find" that MERS lacked standing in the case. It simply ruled that the lower court did not abuse its discretion in denying the motions to vacate a default judgment entered in the case and for joinder in a foreclosure action brought by a prior mortgage holder, and in holding that MERS (putatively representing, and asserting the legal rights of, the 2nd mortgage holder) was not denied due process when a foreclosing 1st mortgage holder failed to serve it with notice of the foreclosure action.

In order for MERS to vacate the default judgment entered in this case, it would have to demonstrate to the court that it had a tangible interest in the mortgage, and demonstrate any injury it suffered because it did not receive service of the foreclosure action from the first mortgage holder. In this regard, the court observed:

  • Counsel for MERS explicitly declined to demonstrate to the trial court a tangible interest in the mortgage. Parties are bound by the formal admissions of their counsel in an action. Dick v. Drainage District No. 2, 187 Kan. 520, 525, 358 P.2d 744 (1961). Counsel for MERS made no attempt to show any injury to MERS resulting from the lack of service; in fact, counsel insisted that it did not have to show a financial or property interest.

Given that the attorney for MERS made no attempt to either establish a tangible interest in the second mortgage, or show any injury suffered due to the lack of service, there was no need for the court to make any finding that MERS, generally, lacks standing, is a real party in interest, or (in cases like this one where it is a defendant as a putative second mortgage holder in a foreclosure action brought by the first mortgagee) is a necessary party in foreclosure actions. The court simply made the following finding, explicitly leaving unanswered the question of whether or not MERS was entitled to notice of the foreclosure action from the 1st mortgage holder:

  • Even if MERS was technically entitled to notice and service in the initial foreclosure action--an issue that we do not decide at this time--we are not compelled to conclude that the trial court abused its discretion in denying the motions to vacate default judgment and require joinder of MERS and Sovereign. The record lacks evidence supporting a claim that MERS suffered prejudice and would have had a meritorious defense had it been joined as a defendant to the foreclosure action. We find that the trial court did not abuse its discretion and did not commit reversible error in ruling on the postdefault motions.


  • We find that the district court did not abuse its discretion in denying the motions to vacate and for joinder and in holding that MERS was not denied due process.

Presumably, the next time MERS finds itself in a foreclosure action like this one in Kansas in which it seeks to vacate a default judgment, its legal counsel won't fail to make a vigorous attempt to demonstrate that MERS has a tangible interest in the second mortgage, and attempt to establish the injury it suffered by failing to receive service of a first mortgagee's foreclosure action. Only at that point will a Kansas court have the opportunity to consider whether or not MERS, generally, has a sufficient interest in the mortgages it attempts to foreclose so as to make it a real party in interest in the litigation, and whether it has legal standing to be heard in said litigation.

NY Times On MERS' Ruling From The Kansas Supreme Court

The New York Times reports:

  • WITH the mortgage bust approaching Year Three, it is increasingly up to the nation’s courts to examine the dubious practices that guided the mania. A ruling that the Kansas Supreme Court issued last month(1) has done precisely that, and it has significant implications for both the mortgage industry and troubled borrowers.

  • The opinion spotlights a crucial but obscure cog in the nation’s lending machinery: a privately owned loan tracking service known as the Mortgage Electronic Registration System. This registry, created in 1997 to improve profits and efficiency among lenders, eliminates the need to record changes in property ownership in local land records.
    Dotting i’s and crossing t’s can be a costly bore, of course. And eliminating the need to record mortgage assignments helped keep the lending machine humming during the boom.

  • Now, however, this clever setup is coming under fire. Legal experts say the fact that the most recent assault comes out of Kansas, a state not known for radical jurists, makes the ruling even more meaningful.

For more, see The Mortgage Machine Backfires.

(1) Landmark Nat'l Bank v. Kesler, No. 98,489, 2009 Kan. LEXIS 834 (August 28, 2009), affirming Kansas Court of Appeals in Landmark Nat'l Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177, 2008 Kan. App. LEXIS 138 (2008).

Sunday, October 4, 2009

Scammer Stripped Of House & Vehicle, Gets 36 Months; Abused POA In $250K+ Ripoff Of Dementia-Suffering Senior

From the Office of the U.S. Attorney (Covington, Kentucky):

  • The United States Attorney’s Office and the Postal Inspection Service jointly announced [...] that a Ludlow, Ky. man was sentenced yesterday to 36 months in prison for financially exploiting a wealthy elderly woman out of more than $250,000. United States District Court Judge Danny C. Reeves also ordered 45-year-old Gordon Powell to forfeit a house [...] in Fort Wright, Ky. and a Cadillac Escalade both of which Powell purchased with a portion of the proceeds from his fraud.

  • Powell pleaded guilty to one count of wire fraud in May of 2009 and admitted that in 2006 he befriended an elderly Kenton County woman in her eighties who had no apparent family and suffered from dementia like symptoms. After learning she was wealthy, Powell persuaded the woman to make him her power-of-attorney which gave him the authority to make decisions on her behalf. After obtaining this authority, he liquidated hundreds of thousands of dollars of assets and transferred over $250,000 of the proceeds of the liquidation to his personal accounts. Powell then used money from these accounts to purchase the house and the car.

For the U.S. Attorney press release, see Ludlow Resident Sentenced 3 Years for Financially Exploiting a Wealthy Elderly Woman.

Indiana Cop Cops Plea To Ripping Off Now-Deceased 89-Year Old Alzheimer's Victim Of Home, Cash

In Gary, Indiana, the Post Tribune reports:

  • Gary police Sgt. Joshua Wiley admitted he stole money and a home from his former neighbor who suffered from Alzheimer's disease and dementia and has agreed to repay $116,765 to the woman's estate. On the day his jury trial was scheduled to begin, Wiley pleaded guilty [...] to two felony charges -- theft and exploitation of an endangered adult.(1)


  • In court, Wiley admitted he knew that his former neighbor, Helen Chentnik, who died Dec. 22, 2006, at age 89, was an endangered adult who was not competent to make financial decisions on her own behalf. [...] Wiley obtained a fraudulent quit claim deed to Chentnik's home at 3630 E. 12th Ave., Gary and recorded the deed, knowing that it was signed by him while claiming to have Chentnik's power of attorney.(2)

For the story, see Gary police officer says he stole home, money of Helen Chentnik who suffered from Alzheimer's.

(1) Reportedly, under terms of the plea agreement, which Lake Superior Court Judge Diane Ross Boswell took under advisement, Wiley will be sentenced to eight years -- three years in the Lake County Community Correction Kimbrough Work Program and five years suspended and served on probation. The plea agreement calls for Wiley to serve his probation and Kimbrough Center sentence simultaneously. Wiley, 51, also must pay $53,255 within 30 days and the remaining $62,765 in monthly installments of $1,000, also starting within 30 days.

(2) According to the story, Wiley also looted Chentnik's credit union account "by using his influence on the victim or by using an ATM-debit card issued to the victim" to withdraw cash or buy items and services for his personal use without Chentnik's consent, according to the plea agreement. Wiley then reportedly opened a joint checking account for Chentnik and himself at Mercantile National Bank, deposited the woman's monthly Social Security and pension checks and funds from her credit union account, and then made withdrawals in cash and wrote checks for goods and services, the majority of which were for his personal use. FinancialAbuseOfElderlyAlpha DeedContraTheft

Minnesota AG Targets Three Outfits In Civil Suits Alleging Upfront Fee Rackets Promising Help With Credit Card Debt

From the Office of the Minnesota Attorney General:

  • Minnesota Attorney General Lori Swanson [...] filed three lawsuits against separate companies that promised consumers they would lower the interest rates on their credit cards in exchange for payments of up to $1,995 but then failed to provide the promised services.(1)


  • [The] lawsuits were filed against Priority Direct Marketing, a Washington corporation charging consumers fees of up to $1,590, Clear Financial Solutions, a Florida corporation that charged consumers fees of up to $999, and Moneyworks LLC, based in Georgia, which charged consumers fees of up to $1,995.

For the entire Minnesota AG press release, see AG Swanson Files Three Lawsuits Against Companies Claiming To Help Consumers Lower Their Credit Card Interest Rates (Swanson Warns Minnesotans To Be On Guard Against “Here Today, Gone Tomorrow” Companies That Charge High Fees for Supposed Debt Assistance Services During These Tough Economic Times Then Disappear).

(1) Swanson warned the public to be on guard against fly-by-night companies seeking high payments from consumers in exchange for supposed financial help. She said that many companies are aggressively seeking out struggling citizens to exploit during these tough economic times--in which people face record high levels of credit card debt and high credit card interest rates. After the citizen pays the money, however, the companies often disappear, fail to return phone calls, file bankruptcy, or go out of business, driving consumers even deeper into debt.

Owner In Foreclosure Loses Personal Possessions; Contents Seized & Auctioned Off As Alleged Drug Dealer Holding 3rd Mortgage Moves Into $2M+ Home

In Vancouver, British Columbia, The Vancouver Sun reports:

  • The owner of a Shaughnessy heritage home was in tears after learning that all her worldly possessions had been seized by a bailiff and sold at auction. Gail Hewitt is also angry that the man who has taken possession of her $2-million-plus home is an accused drug dealer, Robert Luigi Poloni. Poloni holds a $600,000 third mortgage on Hewitt's house, [...] which is in the midst of foreclosure proceedings. Hewitt, who is living in California, said her neighbours called her about three weeks ago and told her someone had moved into her house.(1)


  • Hewitt said the contents of her home were worth about $400,000. "I had about $100,000 worth of clothes, fur coats, at least $50,000 worth of jewelry, furniture, a $40,000 grand piano and five oriental rugs, some worth $15,000," she said in an interview. [...] "I can't believe it's all gone and it's all sold," Hewitt said, crying. "There's nothing I can do. Everything I own has been taken away from me."

For more, see Shaughnessy homeowner stunned by sale of possessions (Says she did not know she was dealing with an accused drug trafficker).

For story update, see Judge rules against Shaughnessy homeowner who sought more time to sell home.

(1) According to the story, Hewitt's neighbors took photos of two men on the property and she recognized them as Poloni and Robbie Della Penna, who were jointly charged with cocaine trafficking offences but were acquitted by B.C. Supreme Court Justice Peter Leask. The Crown has filed a notice to appeal those acquittals. Neighbours called Hewitt again Sept. 10 to tell her that trucks had arrived on her property and were taking out her furniture and personal property.

Mortgage Servicer Sued For Wrongful Death For Allegedly Making Caustic Collection Calls That Lead To Delinquent Homeowner's Fatal Heart Attack

In Tampa, Florida, The Associated Press reports:

  • A widow claims that debt collectors hounded her husband to death with as many as nine caustic calls per day, causing stress that contributed to his fatal heart attack. She's suing the Florida couple's mortgage company in a unique wrongful death case.

  • Dianne McLeod wants Green Tree Servicing to pay damages for what she said are illegal collection practices that led to her husband's heart failure on Dec. 4, 2005. Her 57-year-old husband, Stanley, was already in poor health from a heart attack years earlier that also had left him on disability. An executive at Green Tree Servicing called the claim "outrageous and meritless."

  • Lawsuits against debt collectors alleging illegal practices are common. But McLeod's Tampa attorney, William Howard, believes it's the first time one has ever been sued for wrongful death. [...] Some of the calls were recorded on the family's answering machine, and Howard said he is eager to play them for a jury.


  • Howard sued Green Tree on the family's behalf in 2005, then added the wrongful death count in 2006 after Stanley McLeod died. The case has been winding its way through courts since. Earlier this month, the 2nd District Court of Appeal in Florida again ruled against Green Tree in the company's efforts to force the case into arbitration. Howard said he will ask a judge to set the case for trial soon. He hasn't decided yet how much he will seek.

  • "What happened to Stanley McLeod happened to a lot of people," said Howard, who has about 500 pending cases that claim undue harassment by debt collectors. "To be held hostage in your own home is a terrible thing. It's a helpless feeling." Howard works for the law firm of Morgan & Morgan, which has offices around the state, heading a division that sues debt collectors for unfair collection practices.

For the story, see Widow: Debt collectors hounded husband to death.

Justice Department Obtains Guilty Pleas In Cross Burning Incidents; Race-Based Harassment, Intimidation Used To Drive Families From Homes, Say Feds

In two separate incidents, the U.S. Department of Justice recently announced:
#1: Two Indiana Men Plead Guilty to Cross Burning:

  • Richard LaShure, 41, and Aaron Latham, 20, both of Muncie, Ind., pleaded guilty to conspiring to violate the civil rights of an African American family and to interfering with their housing rights by burning a cross in the family’s yard. According to the charging document, on July 25, 2008, the two men, acting with the assistance of a third participant, built a cross and poured gasoline on it, then set it on fire in the yard of an African-American family who lived in the neighborhood. They will be sentenced on Nov. 5, 2009.

  • This is the second case in two years in which the Civil Rights Division has brought charges for a cross burning that occurred in Muncie, Ind. Two men were convicted in 2008 for burning a cross at the home of a woman who had biracial children. "These two men used a despicable and unmistakable symbol of hatred, the burning cross, to intimidate a family because they are African American," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to prosecute this type of illegal, hateful behavior to the fullest extent of the law."


#2: Four Arkansas Men Convicted of Civil Rights Charges in Cross Burning Conspiracy:

  • The Justice Department announced that Jacob A. Wingo, Richard W. Robbins, Clayton D. Morrison and Darren E. McKim pleaded guilty [...] to conspiring to drive a woman and her children from their home in Donaldson, Ark., because they associated with African Americans. A fifth defendant, Dustin Nix, 21, pleaded guilty to similar charges in July 2009.

  • All defendants pleaded guilty in federal court in Hot Springs, Ark., to civil rights charges and charges of making a false statement to a federal law enforcement officer. Each admitted and pleaded guilty to a felony civil rights charge for conspiring with each other to force a woman and her young children from their home by threats and intimidation because she associated with African Americans. Wingo and Morrison also pleaded guilty to an additional civil rights charge related to their direct involvement in an attempt to burn a cross at the victims’ home to intimidate the victims into leaving. All four defendants also pleaded guilty to a related charge of lying to agents of the FBI in an attempt to cover their conduct.(1)


(1) In other related press releases from the U.S. Justice Department in connection with those charged with the use of fire to interfere with housing rights of others, a felony:

  • (4-27-2009) Anderson County Man Indicted for Cross-Burning: Steven D. Archer, 49, Heiskell, Tennessee, has been indicted by a federal grand jury on charges of willfully interfering with a couple's federal housing rights because of their race by burning a wooden cross, in violation of Title 42, U.S. Code § 3631(a), outside the residence in Anderson County that the victims were occupying.

  • (11-21-2008) Rutherford County Man Sentenced In U.S. District Court In Asheville In Connection With Cross Burning Incident (Defendant to Serve More Than Two Years in Federal Prison): Curtis Gene Worley, 51, of Spindale, North Carolina, was sentenced Wednesday to serve 28 months in federal prison, followed by two years of supervised release. Worley was indicted in October 2007 on one count alleging use of fire to injure, intimidate, and interfere with rights to occupy a dwelling because of race or color. According to information presented in open court during the hearings, Worley built and burned a cross on or near the property occupied by his neighbor, an adult African American female. See also: (10-25-2007) North Carolina Man Indicted In Cross-Burning Case: The indictment charged that Worley used a burning cross to intimidate and interfere with an African-American family because of race and because the family was occupying a dwelling. The indictment charges that Worley violated Title 42, U.S. Code § 3631(a), which provides criminal penalties for interference with the rights of citizens under the Fair Housing Act. Since 2001 and up through and including this prosecution, the Civil Rights Division brought 41 cross-burning prosecutions and convicted 60 defendants for these crimes.

    (6-6-2008) Muncie, Indiana, Man Sentenced to 121 Months in Cross Burning Case: Kyle Milbourn of Muncie, Ind., was sentenced by a federal judge [...] for a hate crime stemming from a cross burning last year that was directed at a woman and her three biracial children. Milbourn was convicted by a jury of one count of interfering with the housing rights of another person; one count of conspiring to interfere with civil rights; one count of using fire during the commission of a felony; and one count of tampering with a witness.

  • (4-23-2007) Two Men Plead Guilty In Lassen County Cross Burning: Kevin William Ridenour, 21, and Nicholas Edward Craig, 18, both of Westwood, California, each pleaded guilty in Sacramento to interference with housing rights, a felony. The crime relates to the burning of a cross outside the rectory of a Catholic church in Westport, California. The Priest who resides in the rectory is from Rwanda, central Africa, and was assigned to Westport by the Catholic Archdiocese of Sacramento in October, 2006. The defendants admitted that they did so in order to threaten and intimidate the Priest because of his race, and the fact that he was occupying the rectory building. They also admitted that, while building the cross, they discussed the fact that the "KKK" had used burning crosses to intimidate black persons.

  • (1-31-2007) Florida Man Sentenced in Cross Burning: Neal Chapman Coombs, a 50-year-old resident of Hastings, Fla., was sentenced to 14 months in prison, to be followed by three years of supervised release. Coombs pleaded guilty to a racially-motivated civil rights crime involving a cross burning. Coombs was charged with knowingly and willfully intimidating an African-American family that was negotiating for the purchase of a house in Hastings, Fla., by threat of force and the use of fire. Specifically, it was alleged that Coombs’ actions were motivated by the family’s race and that he burned a cross on property adjacent to the house. According to the press release, the plea agreement indicatedt that Coombs, who is Caucasian, made a remark about having a “house-warming,” and also made derogatory remarks about the visiting family.

  • (9-26-2006): Federal Jury Convicts Two for Cross Burning: A federal jury convicted Christopher Mitchell and James Bradley Weems of burning a cross in front of the home of an African-American man in Fouke, Ark. The jury convicted each defendant of one count of conspiracy to violate the victim’s civil rights. The evidence at trial established that Mitchell and Weems, attended a party where they discussed an African-American man who lived nearby, using racial slurs to describe him. The defendants, along with a third man, Christopher Baird, who had pleaded guilty to his role in the offense, used wooden boards to erect a cross. The defendants then planted the cross near the home of the African-American man and lit it on fire. Witnesses testified that as a result of the cross burning, the African-American victim and the family he lived with all moved from their home because they were too frightened to remain in the town.

  • (9-2-2004) Two Men Plead Guilty In Kentucky Cross Burning Case: Matthew Scudder, of Florence, Kentucky, who was 18 at the time the crime was committed, and James Foster, of Independence, Kentucky, who was 19, admitted to conspiring to threaten and intimidate an African-American couple and their two children in order to drive them from their Burlington home. Scudder admitted that on July 2, 2004 he burned a wooden cross on the family's lawn. Foster admitted that he helped carry out the plan.

  • (6-15-2004) Indianapolis Man Sentenced For Cross Burning: The Justice Department announced the sentencing of Jerry Dean Landis, of Indianapolis, Indiana, to 18 months in prison for his role in a July 2000 cross burning. Landis participated in the building and burning of a cross in the front yard of an African-American family in Indianapolis. Landis admitted that he and his associates took part in the cross burning in order to “send a message” to the family. Since 2001 and up through and including this 2004 prosecution, the Department prosecuted 29 cross burning cases, filing criminal civil rights charges against 46 defendants.

  • (2-9-2004) Macomb, Illinois Man Sentenced For Cross Burning Targeting Interracial Couple: Charles Lambert was sentenced to thirty-seven months in prison for his role in a July 2001 cross burning targeting an interracial couple. Forest Hatley, a co-defendant in this case, was previously sentenced to forty-one months imprisonment and three years of supervised release. Lambert and Hatley each admitted that they agreed to burn a cross at a home in Macomb, Illinois where an interracial couple lived. The defendants constructed a cross and doused it with gasoline. The two men then transported the cross to the victims’ yard, planted it in front of the home and ignited it. Lambert and Hatley also admitted this action was taken to intimidate the couple because of the male’s race and because he was living with a person of another race.

  • (1-29-2004) Georgia Man Sentenced For Cross Burning In Moultrie: The Justice Department announced the sentencing of Moultrie, Georgia resident Michael Craig Jordan for his role in an April 2002 cross-burning. Jordan pled guilty to criminal civil rights violations in November 2003. He admitted to participating in the April 2002 burning of a wooden cross with the purpose of preventing a biracial African-American and Hispanic couple - as well as their two young children - from moving into the house next door.