Would-Be Tenant Gets Taken For $1,200 Deposit As Rent Scams Targeting Unwitting Victims Continue

In Portsmouth, Virginia, WVEC-TV Channel 13 reports:

• [Paula] Jones was ripped off in a rental house scheme. She responded to a "for rent" sign at a home at 1500 Effingham Street in Portsmouth. When she met the landlord, who identified herself as Sharon Wilson, she wasn't allowed to go inside because Wilson told her the house was being renovated.



• Jones paid a $1,200 deposit anyway, on what appeared to be just the house she was looking to rent. When she got the keys weeks later, the house was completely trashed with no signs of any rehab work being done. Profanity covered the walls, holes were in the ceilings, junk and dirt were everywhere.



• Later, Jones discovered the lease was fake and the inspection report on the home had been fabricated. As it turns out, the house was condemned by the city of Portsmouth last Spring, after it was listed with numerous code violations.

For more, see 13News viewer helps rental scheme victim.

BofA At Center Of Another Public Nuisance; Burned Out, Dilapidated Pre-F'closure Brownstone Sinks Quality Of Life On One Harlem Block

In New York City, WNBC-TV Channel 4 reports:

• Neighbors who live on one Harlem block are growing angrier each day they are forced to look at a burned out, dilapidated building on their block. Residents are upset, they say, because Bank of America took over the premises at 465 W. 147th St. in foreclosure proceedings started in March 2008, and despite promises to maintain the property, it has been left to rot.



• “I’ve been here since 2000 and in the last two or three years it’s just really spiraled downhill,” said Devaughn Johnson, who lives in the neighborhood. The bank says it hasn't had the legal ability to take full ownership of the property to fix the eyesore.



• “The building remains in pre-foreclosure status,” said Rick Simon, spokesman for Bank of America. He explained that the foreclosure has not been completed and, until recently, the bank had no legal right to enter the property and remove squatters.



• NBC New York has learned that police have been called to the address 19 times in the last year. The police calls come after the city had two of the units in the building sealed off and listed as “public nuisance” in September 2010.

For more, see Harlem Neighbors Claim Foreclosed Building Left to Rot (Residents are angry at an eyesore controlled by a bank).

For story update, see Signs of Progress at Blighted Harlem Brownstone (Less than a day after NBC New York's report on the dilapidated building, city workers and bank representatives are responding).

Fire, Vandalism To Attached Neighboring Property In Foreclosure Destroys Dreams For Young NJ Family

In Trenton, New Jersey, The Times of Trenton reports:

• Remy Joseph says his American dream has been torn apart. Three years ago, he moved into 262 Home Ave. with his wife and three young children, thinking he had it made. His boss at the construction company where he works owned the building, and offered to rent it at a reasonable price. With three bedrooms, two baths, a backyard and a basement, it looked like the perfect place to raise a growing family. “The kitchen, the bedroom, everything was new,” Joseph said.



• But adjacent to him was a gathering storm. The neighboring house, which shares a common wall with his, went into foreclosure. Last October the neighbors were kicked out and the home went to a sheriff’s sale. Neighborhood teenagers began using the vacant home as their clubhouse, and Joseph said they began harassing him and his family.



• Finally, in June, the neighboring house went up in flames, which also caused heavy damage to Joseph’s home, and was followed by a rash of vandalism and looting that has left his place in tatters and barely worth repairing. The fire that drove Joseph from his residence struck June 30.



• His children and his neighbor’s kids were on the second floor watching TV when the abandoned house went up in flames. The blaze got into the walls and made its way into Joseph’s house. Everyone escaped unharmed, but his home suffered heavy fire, smoke and water damage to the second floor and was left uninhabitable, according to the fire chief’s report.



• The police said the youths had set the fire and arrested three of them. When they were released from custody they came back for their revenge, breaking into Joseph’s house, which had been boarded up for repairs, and completely trashing the inside, he said. “That’s like a slap in the face,” he said. “It’s not right. It’s not right at all. From where I come from, you don’t disrespect people.”



• After the break-ins, more vandals and thieves followed. Less than five months later, the house is a husk, stripped of almost anything of value. Paint is strewn over the furniture and the dining room mirror. All the copper piping was ripped out of the basement and the walls; even the shower was torn apart to get to the metal.

***

• Joseph’s daughter’s bed lies on its side in a destroyed room where the Latin Kings gang symbol has been marked on the pink walls. His children, a 7-year-old boy and 11- and 12-year-old daughters, are with his wife in New York while he stays in Trenton so he can keep working.



• “I’m at a point right now, I’m at a boiling point, where I’m like, ‘Forget it,’” he said. “It’s like telling those kids, ‘Do what you want to do. You’ll get a slap on the wrist.’” His boss has told him to simply let the home go into foreclosure, because repairs will now be too expensive, he said.

***

• He estimates his side of the house needs $60,000 in repairs. He doesn’t have the money to fix the place up and his boss can’t get a loan for the work. The two homes’ problems are literally connected. The ceiling of Joseph’s home has been torn apart, so that thieves can move easily through the rafters from one house to another.

For more, see Dream of life in Trenton home fades after foreclosure, vandalism and fire.

Lawyer Who Copped Plea To Ripping Off $730K From 11 Clients Gets Extension On Prison Deferral Deal; Judge Says He'll Serve His 1-3 Yrs No Matter What

In Westchester County, New York, The Journal News reports:

• A disbarred real estate lawyer who was supposed to go to prison Friday for stealing hundreds of thousands of dollars from wealthy clients got a brief reprieve in the hope he can pay more money back to his victims.



• Bruce Mogavero, an Eastchester resident who operated out of Yonkers, was set to receive a 1- to 3-year sentence after pleading guilty to grand larceny and fraud in Westchester County Court. He now will remain free until at least Jan. 24, when he must come to court with $50,000.



• His attorney, Andrew Rubin, promised Mogavero would pay $25,000 a month in restitution if the sentencing was delayed until April. Mogavero turned over a check for $169,350 today, which was a condition of his plea and sentencing promise.



• Assistant District Attorney Berit Hayes-Huseby argued against the delay, saying there was no proof Mogavero could pay that monthly sum. She said Mogavero, whose original sentencing date was Oct. 25, betrayed the trust of his clients and kept them in the dark for years about where their money had gone.



• Acting state Supreme Court Justice Richard Molea gave Mogavero about seven weeks to keep his promise and remain free through April. If he doesn't come up with the money, he'll go to prison Jan. 24.



• Mogavero pleaded guilty to stealing from 11 clients, including a Tuckahoe homeowner and a Yonkers apartment seller, between 2008 and Jan. 1, 2011 by taking money that was supposed to stay in their escrow accounts. More victims were found this year, prosecutors said.



• He was ordered to pay a total of $731,710, but his lawyer said about a third of that sum was a personal loan that got rolled into the restitution order. He still owes more than $550,000 to his victims.



• In an interview with The Journal News last year, Mogavero, 55, said he borrowed the money so he could keep his business afloat to help struggling homeowners fight foreclosure.He said he helped more than 200 people stay in their homes, and had already repaid some money.



• The judge said he was moved by the number of letters he received urging a more lenient sentence. Mogavero's family and friends packed an entire side of the courtroom during the court proceeding.However, Molea also said several of Mogavero's victims wrote letters as well, urging a harsher sentence.



• The judge said Mogavero would serve the 1-to-3-year prison sentence, no matter what.

Source: Judge gives real estate Robin Hood more time to pay back victims.

Convicted NY Attorney Gets License Yanked For Role In Sale Leaseback, Equity Stripping Ripoff

In New York City, Reuters reports:

• A New York attorney convicted in connection with a mortgage-fraud scheme that bilked $1.4 million from four families and two mortgage lenders was ordered disbarred this week by an appellate court.



• Eileen Potash, 54, was found guilty by a Westchester County jury in November 2010 of conspiracy in the fourth degree. In an order published Thursday, the Appellate Division, Second Department, relied on that conviction to ban Potash from practicing law in New York.



• Potash, who faced up to 3 years in prison, was ultimately sentenced to 5 years' probation and 180 days of community service, according to the Westchester County District Attorney's office. She was one of eight individuals charged following a nine-month mortgage-fraud investigation by the Westchester County DA and the New York State Banking Department's Criminal Investigations Bureau.



• Five of the defendants pleaded guilty, while three, including Potash, went to trial, according to the DA's office. One of the other two defendants was acquitted, prosecutors said, and the third defendant's trial ended in a mistrial.



• According to prosecutors, Potash and her co-defendants -- including lawyers, mortgage brokers and a husband-and-wife team posing as foreclosure-rescue specialists -- preyed on desperate property owners, convincing them to deed their homes to "investors" who would sell the homes back to them in one to two years.



• Instead, the defendants used the homes to obtain inflated mortgage loans from two lenders, Fremont Investment and Loan and Argent Mortgage Company, by misleading the lenders about the homes' actual purchase prices, prosecutors said.



• Potash, who did not oppose or respond to the appeals court proceeding, could not immediately be reached for comment on Friday.

Source: Appeals court disbars lawyer in $1.4 mln mortgage-fraud scheme.

For the court ruling, see Matter of Potash, 2011 NY Slip Op 08759 (App. Div. 2nd Dept. November 29, 2011) (per curiam).

Purported Renter w/ Dubious History Hijacks Possession Of Vacant Home; DA's Response To Victimized Homeowners: Don't Bother Us - It's A Civil Matter!

In Philadelphia, Pennsylvania, Philadelphia Citypaper reports:

• [Gerald] Sterrett agreed to help [Dwayne] Stewart try to negotiate a lease-to-own arrangement with his daughter and her husband, Heidi and Dave Conner, who had moved to Chicago and had been trying hard to sell their old house before resorting to renting.



• One day, while Stewart and the Conners were still negotiating a possible lease arrangement, Stewart asked Sterrett to borrow the keys — just, as Sterrett tells it, to show his future home to his mother.



• But — according to Sterrett and his family — Dwayne Stewart instead simply moved himself in at lightning speed, changed the locks and installed security cameras around the perimeter.



• Now, almost a year later, they still can't get him out.

***

• [A]fter several visits to the District Attorney and after doing what they asked — sending a certified notice to leave, obtaining legal authority to represent his daughter and son-in-law in matters relating to the house — Sterrett was informed in a letter from Assistant District Attorney Michelle Comia-Wolfe that his case "lacks prosecutorial merit," and was being rejected for reasons of "judicial economy," "prosecutorial discretion" and because a "civil remedy" existed.



• In other words, Sterrett and the Conners would have to pursue the case on their own, in civil court.

***

• Still, Stewart — as Sterrett himself explained to the District Attorney's office in a long letter — has a history that bears looking into. Stewart has been sued over a dozen times in Philadelphia alone.



• In 2010, he was sued for alleged deed theft of a property on the 900 block of West Huntingdon Street and sued again by one Delia Boykin, a woman claiming Stewart had tried to rent the same place to her and bilked her out of her $800 security deposit.



• A remarkably similar claim was made the same year by one Nicholas Jacquez, who also sued Stewart in landlord/tenant court, claiming the latter had stolen a $2,250 security deposit for the lease of another property.



• Another lawsuit, filed by Bucks County couple John and Robyn Catagnus, alleged Stewart had bilked them out of more than $40,000 when, they say, he failed to deliver on a construction project.



• In March, Stewart was charged criminally in Northumberland County for forging a $14,000 check to his own construction company. According to court records, that case is still open.

For more, see Home Wrecker (He says a scammer stole his family's house. Legal loopholes have stopped them from getting it back).

Thanks to Deontos for the heads-up on the story.

Feds Tag Municipality, HOA With Housing Discrimination Against Families With Children Over Purported 55+ Age-Restricted Condo Complex

From the U.S. Department of Justice:

• The Justice Department filed a lawsuit yesterday against a California municipality and a homeowners’ association for discriminating against families with children in violation of the Fair Housing Act.



• The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that the city of Santa Rosa, a California municipality, and La Esplanada Unit 1 Owners’ Association, a homeowners’ association, sought to restrict residency at a condominium complex to seniors aged 55 and older.



• While the law allows such an exemption, the suit alleges that neither the city nor the homeowners’ association took the necessary steps, such as routine age-verification procedures, to qualify for the exemption in a way that was consistent with the Fair Housing Act.



• Consequently, their actions unlawfully denied and made housing unavailable to families with children. The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.



• “It is critical that families with children have opportunities to find housing. A housing developer or a municipality cannot deny housing to families with children and restrict its housing to seniors 55 years and older unless they comply with the requirements set forth in the Fair Housing Act,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “The Justice Department will continue to vigorously enforce fair housing laws that protect the rights of families with children.”



• This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by the owner and representative of a portion of the condominium development that was the subject of the defendants’ enforcement actions. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.

For the U.S. Justice Department press release, see Fair Housing Lawsuit Filed Against California Municipality for Discriminating Against Families with Children.

Suspected Home Title Scammer Now Faces Lawsuit Involving Allegations Of $320K Church Ripoff In Allegedly Fraudulent Loan Transaction

In Boynton Beach, Florida, The Palm Beach Post reports:

• The Haitian Bethel Baptist Church had a growing base of parishioners in the fall of 2009 when Pastor Jean Bilbalo Joint decided to expand his humble Boynton Beach facility - no more than a house, really - to accommodate the flock. He entered an agreement with Boca Raton-based Nationwide Mortgage Bankers Corp., writing checks totaling $321,222 to Interstate Title Services and Escrow for what he says he thought was a deposit to secure a $1 million loan.



• But according to a lawsuit filed in March, no loan was ever secured nor was the $321,222 returned.



• The church contacted The Palm Beach Post this week after reading its coverage Sunday about other real estate-related lawsuits involving Nationwide-associated companies and Guilfort Dieuvil - president of several of the firms.



• The complaint filed by the church says Nationwide and Dieuvil never intended to secure a loan and instead defrauded the church in a "civil conspiracy" that involved the title agency and Nationwide Financial Consultants - a company Dieuvil also led, state records show.



• Dieuvil says the church's money was to pay consultation fees to Nationwide Financial Consultants, and not for a deposit to secure a loan, according to the lawsuit. The suit further states that Dieuvil testified there is a written agreement between the church and Nationwide Consultants.



• The church knows of no such agreement, and neither Dieuvil nor any representative of Nationwide has provided a copy of the agreement, according to the lawsuit. "They're very distraught," said Boca Raton­-based attorney Jeffrey Galvan, who is representing the church. "It took them years and years and years to save up this money, and now it's gone."



• Specific charges in the 46-page lawsuit include fraudulent misrepresentation, breach of contract and civil conspiracy. The church's allegations of real estate wrongdoing by Dieuvil and associated companies - the title firm's registered agent is listed in state records as vice president for Nationwide Mortgage Bankers Corp. - add to at least five lawsuits filed by ­homeowners who say they were wronged by another of Dieuvil's enterprises, Nationwide Investment Firm.



• Those lawsuits describe variations of short sale abuses, but mostly revolve around a business model that includes having the homeowner quitclaim-deed his or her home to the firm.

For more, see Firm bilked Boynton church, lawsuit alleges.

Nephew Scams Elderly Uncle Suffering From Chronic Dementia Out Of His Home; Buys His Way Out Of Prison Time By Giving Back Ripped Off Funds

In Saskatoon, British Columbia, The StarPhoenix reports:

• A man who took advantage of his elderly uncle’s chronic dementia in order to steal his life savings avoided a jail term Friday when a Saskatoon judge handed him an 18-month conditional sentence in provincial court.



• Judge Robert Jackson ordered Terence Richard Webb, 43, to serve the first three months of his sentence confined to his home in Mission, B.C., followed by 15 months with a daily curfew of 11 p.m. to 7 a.m. He also ordered Webb to perform 100 hours of community service with an emphasis on working with seniors, as long as he doesn’t have access to their money.



• Jackson said Webb only avoided incarceration because he repaid $65,000 to the victim — the amount the Crown was able to prove was stolen.

***

• Webb obtained power of attorney over his uncle [George Swan] in February, 2009, and a month later obtained joint tenancy for the Idylwyld Drive house where Swan had lived for many years.



• After a doctor diagnosed Swan with a severe form of chronic dementia, likely due to Alzheimer’s, in May 2009, Webb quickly placed his uncle in a private nursing home, signing a contract for a monthly rate of $1,750. The care home operator received only two payments, in July and September.



• Webb then sold Swan’s house for $125,000. “As per his ‘lawful’ entitlement (he) took one-half of the sale proceeds and then, by virtue of the power of attorney, took control for himself of the other half of the sale proceeds as well,” Jackson noted. “He then relieved (Webb’s) bank accounts of all remaining funds and relocated to Mission, B.C. The total amount of funds from the house sale and the bank accounts the Crown estimated to be $150,000.”



• Webb also helped himself to his uncle’s Old Age Pension and Canada Pension Plan benefits, which were mailed to him in B.C.

For the story, see Man gets house arrest for ripping off elderly uncle.

Lawsuit: Lawyer Pocketed 50% Of Client's Home Sale Proceeds; Refuses Requests To Fork Over The Cash; Won't Talk To Now-Former Client

In Galveston, Texas, The Southeast Texas Record reports:

• Frederick W. Fournier seeks to have a local state district judge compel a Friendswood attorney to release funds he accumulated during previous divorce proceedings, recent court documents say.



• Fournier's lawsuit requests Galveston County 10th District Court Judge David Garner grant a temporary restraining order barring defendant Kevin M. Prendergast from withholding $70,250.



• Court papers, which were filed Nov. 16, state the plaintiff hired Prendergast to represent him in his divorce from his wife, Michele, in the Harris County 309th District Court. It was during the pendency of the divorce when Fournier sold and closed on a home he owned in the same county.



• The proceeds from the transaction were sent to his spouse, who then delivered the entire amount to her attorney for safekeeping awaiting the disposition of the case.



• The original petition shows the litigants obtained a court order calling for one-half of the funds that lawyer Anson Phipps was holding to be allocated to Prendergast.



• The divorce suit was dismissed for want of prosecution and has been reinstated though the complainant and his wife are trying to reconcile, however, the defendant failed and refused to pay Fournier the money in dispute, the suit says.



• Fournier adds "the respondent has now blocked the plaintiff's calls and has refused to talk with the plaintiff, and has been and continues to be evasive."



• In addition to the amount in question, he seeks the defendant's disbarment.

Source: Man sues attorney to recover funds from divorce.

Scammers Exploit Close Ties To The Elderly To Carry Out Their Handiwork

A column in Canada.com reports on the ripoffs targeting the elderly by family members and others with close personal contact to the victims. An excerpt:

• [T]here was the lonely, elderly man looking for a housekeeper. The middle-aged woman who replied to the ad cleaned at first but soon became more than an employee - within a week she had moved into the home and soon convinced him to get married.



• With a marriage certificate, the new wife arranged a trip to a notary's office to have property transferred into joint tenancy - the notary's interview with the husband revealed he did not even know his new wife's name, and the notary refused to prepare the transfer as he was clearly incapacitated.



• But a trip to a lawyer who did not know the elderly male gave the new wife all she wanted - her name added to the title, and using that to establish a $150,000 line of credit which she used to buy another home in her name.



• With her husband's children growing suspicious, she convinced him to move to that new house and within six months they had plowed through all of his assets, and he died penniless and estranged from his children.



• There is also the story of an elderly woman, housebound for medical reasons, who asked a notary for help changing her will to ensure one of her sons, who was disabled, would be cared for from the proceeds from her only asset, a waterfront home.



• The notary advised her she should have an independent executor and power of attorney. However, the woman believed her other son, a successful lawyer who did not get along with his brother, would object if he was not given power of attorney.



• When the mother's health deteriorated, the lawyer son moved her to a care facility and used the power of attorney to transfer the family home into his name, all but disinheriting his brother.

For the column, see Elders vulnerable to financial abuse (As our population of seniors grows, so does the incidence of fraud and it's often by family members).

'My Grandson & His No-Good Wife Used Phony Promises To Squeeze Me Into Signing Over Deed To My Home,' Says Elderly Texas Woman In Lawsuit

In Galveston County, Texas, The Southeast Texas Record reports:

• A Santa Fe woman and her grandchildren are embroiled in a legal dispute over local real property. June R. Curry claims Joshua and Maranda Curry fraudulently obtained the deed to 4917 Ave. H in Santa Fe, a lawsuit filed Nov. 17 in Galveston County District Court says.



• According to the original petition, the defendants expressed their desire of becoming homeowners to the plaintiff, suggesting she should give them the title to her homestead in exchange for around the clock care and comfort for the rest of her life.



• The couple, who reportedly lacked an education and a well-paying job, lived with the complainant for a year, all the while continuously asking her to turn the home over to them. "Their insistence and her need for care brought on by a mild stroke and her temporary loss of her son's care created a stressful and emotional need to have someone to help her," the suit says.



• Court papers further explain the respondents acted upon their grandmother's wish to go on a sentimental journey to New Orleans in October 2010. They say "more emotional pressure was applied," and after the trip, June R. Curry was successfully talked into signing the deed over to her grandson and granddaughter-in-law.



• The plaintiff alleges the grandchildren refused to allow her son to live in the home as well as informed her that she would have to pay for her own food and expenses, which apparently was contradictory to the respondents' promises.



• "After heated discussions, they announced that they were leaving and she would have to pay her bills anyway she could," the suit says. It adds the complainant received financial help from her other children and other grandchildren and insists Joshua Curry is asking for $5,000 to have him and his wife live with her again.

Source: Woman, grandchildren in legal dispute over property.

Maryland AG Issues Cease & Desist Order Against Alleged Loan Modification Racket

In Baltimore, Maryland, Legal Newsline reports:

• Maryland Attorney General Douglas Gansler announced on Thursday that he has issued a cease and desist order against an allegedly unlicensed lawyer and his business for illegally providing professional services.



• Corey W. Hankerson and his business, The Equity Law Group LLC, allegedly preyed on consumers by offering legal assistance and credit services when Hankerson was not licensed as a lawyer or as a credit services professional.



• "Offering legal assistance or credit services without a license exploits those consumers who find themselves in trouble and desperate for help," Gansler said. "The licensing and registration requirements are there to ensure consumers spend their hard-earned money on getting the help they need from legitimate professionals."



• Hankerson allegedly charged consumers who were facing severe financial problems and foreclosures for supposedly providing loan modifications and legal representation in bankruptcy proceedings. He allegedly charged consumers thousands of dollars but provided them little or no services.

For more, see Gansler says lawyer not licensed.

Hawaii Regulator Files Suit Claiming Unfair & Deceptive Trade Practices In Alleged Loan Modification Ripoff

In Honolulu, Hawaii, HawaiiNewsNow reports:

• State consumer protection officials are going after a Village Park woman whom they say preyed upon a struggling homeowner. They say it's the first time they have filed a lawsuit in Honolulu Circuit Court under a Hawaii law designed to protect people who are facing foreclosure.



• Consumer protection officials previously filed a similar suit on Maui. They're hoping the legal actions send a strong message to others serving as mortgage rescue consultants.



• According to the state Office of Consumer Protection, Lucy Cablay committed mortgage rescue fraud by falsely promising relief to a distressed homeowner on Oahu.

***

• The state accuses Cablay of engaging in unfair and deceptive trade practices while working as a Hawaii runner for a company operating out of Texas. The state's attorney says Cablay convinced the woman to pay an up-front fee of $3,450 to Caughern & Associates which, in turn, delivered a $600 kick-back for Cablay.



• "The ultimate end of that was that there were no mortgage rescue services, so she was out the money that she paid her," Kim said.

For more, see State files suit against woman accused of preying upon distressed homeowner.

Mortgage Broker Cops Extortion Plea In Conspiracy To Squeeze Cash, Real Estate From Four Victims

From the Office of the U.S. Attorney (Trenton, New Jersey):

• A New Jersey mortgage broker [] admitted in federal court that he conspired with a New Jersey attorney and others to extort victims out of money and property by falsely stating they were the subjects of criminal investigations, U.S. Attorney Paul J. Fishman announced.



• Robert G. Cusic Jr., of Millstone, N.J., pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an Information charging him with conspiracy to commit extortion under fear of economic harm.

***

• Cusic admitted the goal of the conspiracy was to obtain approximately $80,000 in fees for Frey and to cause the victims to sell certain of the properties to Frey and others. Cusic stood to receive a portion of any fees paid by the victims, a percentage of the sale price of each of the investment properties sold to Frey and others, and property management fees on any of the properties sold.

For the U.S. Attorney press release, see Millstone, N.J., mortgage broker pleads guilty to extortion conspiracy.

For the charging document setting forth the formal allegations, see U.S. v. Cusic.

Banksters Abusing FDIC Loss-Share Agreements?

The South Florida Sun Sentinel reports:

• In the wake of the recent real-estate meltdown, the borrower of a nonperforming loan called his lender with promising news: "I have a buyer looking to make an all-cash offer for my Florida property. Will you meet with us tomorrow?" The lender's answer: "No."



• Disturbingly, this implausible response is not uncharacteristic of lenders who exploit FDIC loss-share agreements by seeking to foreclose on nonperforming loans, even when prudent business judgment calls for short sale or loan modification solutions.



• By perverting the terms and spirit of loss-share agreements, these lenders are reaping windfalls while prolonging the foreclosure crisis, depressing real-estate values and sticking taxpayers with the bill.

For more, see Are loss-share lenders gouging us?

Another Investor Falls In Ongoing Mobile Federal Probe Into Foreclosure Sale Bid Rigging

From the U.S. Department of Justice:

• A Mobile, Ala., real estate investor has agreed to plead guilty [] for his role in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.



• Charges were filed [] in U.S. District Court for the Southern District of Alabama in Mobile against Bobby Threlkeld Jr. Threlkeld was charged with one count of bid rigging to obtain selected real estate at foreclosure auctions and one count of conspiracy to commit mail fraud.



• The department said that Threlkeld participated in a conspiracy to rig bids by agreeing to refrain from bidding against other investors at public real estate foreclosure auctions in Mobile County and its surrounding areas.



• The department said that the primary purpose of the conspiracy was to suppress and restrain competition and to make and receive payoffs in order to obtain selected real estate offered at public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

***

• [These] charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in southern Alabama. In addition to [these] charges, on Sept. 15, 2011, Allen K. French, Harold H. Buchman and Buchman’s company, M & B Builders LLC, were each charged in U.S. District Court for the Southern District of Alabama with one count of bid rigging to obtain selected real estate in southern Alabama at foreclosure auctions.



• On the same day, M & B Builders was also charged with one count of conspiracy to commit mail fraud. On Oct. 14, 2011, French, Buchman and M & B Builders pleaded guilty to the charges.



• The Antitrust Division and the FBI have identified a pattern of collusive schemes among real estate investors aimed at eliminating competition at real estate foreclosure auctions, and today’s charges are part of the department’s ongoing effort to combat this conduct and restore competition to public auctions.(1)

For the U.S. Justice Department press release, see Alabama Real Estate Investor Agrees to Plead Guilty to Conspiracy to Rig Bids for the Purchase of Real Estate at Public Foreclosure Auctions.

(1) The investigation into fraud and bid rigging at certain real estate foreclosure auctions in Southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

California AG Pinches Trio In Alleged Loan Modification Racket That Clipped Homeowners For Up To $5K In Upfront Fees For Bogus Mortgage Help

From the Office of the California Attorney General:

• Attorney General Kamala D. Harris [] announced the arrests of three top officers of a Stockton real estate company who took thousands of dollars in up-front loan modification fees and made false promises to lower the mortgage payments of struggling Central Valley homeowners.



• Magdalena Salas, 42, Angelina Mireles, 42, and Julissa Garcia, 36, of Stockton, were arrested today on 13 felony and two misdemeanor counts, including conspiracy, grand theft and false advertising. They are being held at the San Joaquin County Jail on $100,000 bail.

***

• Salas, owner of Legacy Home Loans and Real Estate, Mireles, her twin sister, and Garcia took up-front fees of up to $5,000 from dozens of Central Valley homeowners for loan modification services that were never performed.



• From November 2009 to August 2011, Salas and her employees circulated flyers throughout Stockton that read, in both English and Spanish: "We will save your home! Guaranteed!" and "Guaranteed new lower mortgage payments!" Along with the flyers, Legacy Home Loans ran television and radio advertisements in English and Spanish and broadcast its services on a billboard.



• Clients of Legacy Home Loans and its related businesses - including Salas Properties, Salas Estates, Peace and Freedom Legal Services and Divinity Legal Services - were promised a full refund if they did not receive a loan modification. Many clients ended up losing their homes.

For the California AG press release, see Attorney General Kamala D. Harris Announces Arrests in Stockton Foreclosure Scam.

For the criminal complaint, see People v. Salas, et al.

Mobile Home Dealer Charged w/ Theft Now Faces Civil Suit Alleging She Never Delivered Clear Title To Would-Be Homebuyers Now Facing Foreclosure

In Rio Grande Valley, Texas, KGBT-TV Channel 4 reports:

• Some 43 customers of La Feria’s Park Girl Mobile Homes are asking a local court to step in and protect them from foreclosure.



• Texas RioGrande Legal Aid (TRLA)(1) filed a lawsuit on behalf of the the customers, who are concerned about their mobile home purchases. The Park Girl owner Jo Leigh Ares remains in custody in the Cameron County Jail under $1.2 million dollars for multiple theft charges.



• Many of the clients claim that they never received their home, were never given the title to the property or even provided with property that carried previous debts, including taxes and mortgage liens.



• The customers are asking the court to prevent the collection of future payments, foreclosure, and the shutting off of utilities until their legal concerns are addressed. “These families came to us unclear and afraid of how this controversy would affect them,” said TRLA attorney Raul Noriega. “The legal issues go beyond holding people accountable for their actions. There are legal protections available for the victims too.”

Source: 'Park Girl' customers file lawsuit to protect against foreclosure.

For the lawsuit, see Reyes, et al. v. Ares, et al.

(1) Texas RioGrande Legal Aid (TRLA) is a non-profit organization that provides free legal services to low-income residents in sixty-eight counties of Southwest Texas, and represents migrant and seasonal farm workers throughout the state of Texas and six southern states: Kentucky, Tennessee, Alabama, Mississippi, Louisiana and Arkansas. In addition, TRLA operates public defender programs in several Southwest Texas counties, representing the poor who are accused of felonies, misdemeanors and juvenile crimes.

Banksters' Ripoffs Now Extend To Homestead Exemption Fraud; Retain Tax Benefits On Foreclosed Homes Originally Claimed By Former Owners

In Providence, Rhode Island, GoLocalProv reports:

• Banks and other lenders have saved hundreds of thousands of dollars on foreclosed homes in Providence, thanks to tax breaks that were intended to help homeowners, according to data obtained by GoLocalProv.



• This year, 44 banks and other companies have foreclosed on just over 341 properties in Providence, as of September. But those banks retained owner-occupied homestead exemptions on about 200 of those properties.



• In all, the exemptions—some as high as 50 percent—saved those banks about $422,615 on their 2011 tax bills, a GoLocalProv review of city data found.



• To Brenda Clement, executive director of the Housing Action Coalition of Rhode Island, the exemptions were blatantly unfair: “You shouldn’t be getting an exemption if you’re not a homeowner,” she told GoLocalProv.



• Six figure savings for big banks Those banks that racked up the most savings in exemptions are some of the biggest names in the mortgage industry. Topping the list were Fannie Mae and Freddie Mac, two mortgage giants that are government-sponsored companies.



• Fannie Mae got a $121,722 in tax breaks on 61 properties it had foreclosed as of this month. Had it been billed at the full 2011 tax rate of $30.38 per $1,000 in value, the company would have owed an additional $121,000 in taxes.



• Freddie Mac saw its total tax bill sawed nearly in half, owing $53,124, instead of the $101,582 it would have had to pay without the homestead exemption.

For more, see Banks Cash in on Foreclosures in Providence.

Real vs. Personal Property: Lender Screw-Up Leaves It Holding The Bag On Voided Mortgage Purportedly Secured By Manufactured Home

Lexology reports:

• The case of In re Dickson, 655 F.3d 585 (6th Cir. 2011) centered on the status of the debtor’s manufactured home under Kentucky law. In Kentucky, a manufactured home is considered personal property. As such, in order for a lien to be effective, it must be noted on the certificate of title.



• A manufactured home may be converted to real property, however, if the owner files an affidavit that states it is permanently affixed to real estate and then surrenders title.



• In In re Dickson, the debtor purchased a manufactured home with the proceeds from a bank loan. From the loan transaction, the bank took a lien on all of the debtor’s real property, including any current and future improvements. Although the clause did not expressly refer to the debtor’s personal property, the debtor admitted in her deposition that she assumed the lien would apply to her newly purchased home when she was granted the mortgage. The bank promptly recorded its lien.



• On June 15, 2006, the debtor defaulted and the bank initiated foreclosure proceedings. In these proceedings, the bank requested an order stating that the manufactured home had been converted to real property; a request that was unopposed. Even though the bank had neither a lien on the manufactured home’s certificate of title nor an affidavit converting it to real property, the court declared the home to be converted to real property on June 7, 2007.



• A month later, the debtor filed a petition for relief under Chapter 13 of the Bankruptcy Code. The bank sought relief from the automatic stay to foreclose on the manufactured home. But the debtor opposed this motion, arguing that the bank’s lien on the home was avoidable as a preferential transfer. Both the district court and the Bankruptcy Appellate Panel found for the debtor and avoided the bank’s lien interest in the manufactured home.(1)



• On appeal, the Sixth Circuit affirmed. The court noted that, under Sections 522(g)(1) and 547of the Bankruptcy Code, a Chapter 13 debtor may avoid a lien if, among other things, it resulted from an “involuntary” transfer that occurred within the ninety-day period that precedes the filing of a bankruptcy petition.



• Here, the Sixth Circuit found that the transfer was involuntary because it occurred by operation of law. Although the mortgage on real property was granted by a voluntary agreement between the bank and the debtor, the bank’s actual interest in the home did not arise until the state court judgment. As such, the transfer occurred by operation of law.



• Next, the court found that the language of the mortgage agreement included only real property. Accordingly, under Kentucky law, it did not encompass the debtor’s manufactured home.



• Thus, the court determined that the mortgage agreement did not create a lien on the home in favor of the bank. Having found that the bank’s lien was created by an involuntary transfer within ninety days of the petition date, the Sixth Circuit held that the debtor could avoid the bank’s lien on her manufactured home.

Source: Sixth Circuit avoids bank's lien interest in manufactured home (may require subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link).

For the 6th Circuit Court of Appeals court ruling, see In re Dickson, 655 F.3d 585 (6th Cir. 2011).

(1) Countrywide Home Loans v. Dickson (In re Dickson), 427 B.R. 399 (6th Cir. BAP 2010).

Massachusetts AG Lawsuit Accuses Banksters Of Improper Foreclosures Based On Bogus Docs, MERS Of Corrupting Public Land Recording System

The New York Times reports:

• Citing extensive abuses of troubled borrowers across Massachusetts, the state’s attorney general sued the nation’s five largest mortgage lenders on Thursday, seeking relief for consumers hurt by what she called unfair and deceptive business practices.



• In addition to creating a new and significant legal headache for the banks named in the suit — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC Mortgage — the Massachusetts action diminishes the likelihood of a comprehensive settlement between the banks and federal and state officials to resolve foreclosure improprieties. Also named as a defendant in the Massachusetts suit was the electronic mortgage registry known as MERS, an entity set up by lenders to speed property transfers by circumventing local land recording officials.



• The attorney general, Martha Coakley, and her investigators contend that the banks improperly foreclosed on troubled borrowers by relying on fraudulent legal documentation or by failing to modify loans for homeowners after promising to do so. The suit also contends that the banks’ use of MERS “corrupted” the state’s public land recording system by not registering legal transfers properly.



• “There is no question that the deceptive and unlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitization of those loans,” Ms. Coakley said at a news conference announcing the lawsuit. “The banks may think they are too big to fail or too big to care about the impact of their actions, but we believe they are not too big to have to obey the law.”



• Ms. Coakley has been among the most aggressive state regulators in her pursuit of financial institutions involved in the credit crisis. In addition to her inquiry into foreclosure improprieties in Massachusetts, she has also conducted far-reaching investigations into predatory lending and securitization abuses.

For more, see Massachusetts Sues 5 Major Banks Over Foreclosure Practices.

See also: The Boston Globe: State sues five big US lenders (AG alleges banks skirted rules, sped foreclosures).

For the Massachusetts AG press release, see Five National Banks Sued by AG Coakley in Connection with Illegal Foreclosures and Loan Servicing (First Comprehensive Lawsuit to Address Foreclosure Crisis Seeks to Hold Banks Accountable For Illegal and Deceptive Conduct).

For the lawsuit, see Commonwealth of Massachusetts v. Bank of America, N.A., et al.

590 Employees With Document Processing Outfit Tied To NYS Foreclosure Mill Face The Axe

In Buffalo, New York, The Buffalo News reports:

• Pillar Processing, a back-office and document-processing firm with close ties to the Steven J. Baum PC foreclosure law firm, will lay off 590 full- and part-time employees at its offices in Amherst.



• The company told state and local officials that the layoffs are expected to take effect Feb. 27. Pillar is also laying off about 20 employees in Westbury, on Long Island.

***

• The majority of the layoffs -- 435 -- involve processors. A total of 117 paralegals, team leaders, supervisors and legal secretaries will also be affected, according to a document filed along with a notice of the layoffs.

For more, see 590 face layoff as Baum woes spread to Pillar.

Colorado Ethics Watchdog Files Complaint Alleging Receipt Of Secret Benefits By Public Trustees Indirectly Funded By Major Foreclosure Lawyer

In Denver, Colorado, The Denver Post reports:

• An ethics-watchdog group filed a complaint Wednesday charging the Pubic Trustee Association of Colorado with wrongly accepting contributions from companies and individuals it did business with, then using the funds to pay convention expenses at a Black Hawk casino.



• The Colorado Ethics Watch complaint was filed with the Colorado Independent Ethics Commission over allegedly improper payments the association accepted from the state's most prolific foreclosure lawyer and a company in which he holds an interest.



• The group alleges the payments violate state restrictions on public officials' accepting gifts and demands that either the trustees or their trade group pay it back.



• "Public officials can't set up a nonprofit to give themselves illegal gifts," Ethics Watch director Luis Toro said. "It is especially egregious when public trustees, who are responsible for fair operation of the foreclosure process, use a nonprofit to give themselves gifts that are ultimately paid for by a law firm and software business interested in the foreclosure industry."



• The association is a nonprofit group representing the state's public trustees, who are charged with impartially overseeing the foreclosure process.

For more, see Ethics group files complaint over contributions to Colorado public trustees.

Notary Who Copped Plea In Massive Fraudulent F'closure Robosigning Case Found Dead In Home After Failure To Appear For Sentencing; Homicide Ruled Out

In Las Vegas, Nevada, KSNV MyNews Channel 3 reports:

• The notary who signed tens of thousands of false documents in a massive robo-signing scandal case was found dead in her home on Monday.



• The notary, 43-year-old Tracy Lawrence, was supposed to be in court at 8:30 Monday morning for her sentencing hearing. When her attorney did not hear from her for more than an hour, Sr. Deputy Attorney General Robert Giunta asked for a bench warrant to be issued for Lawrence. The judge denied the request.



• Police were sent to Lawrence's house to check on her after her lawyer expressed concern for her client's well-being. They found her body inside her home. Metro Homicide Detectives are working currently the case. It is unclear if her death was due to natural causes, or if it was a suicide. Detectives said this afternoon that they have ruled out homicide as a cause of death.



• Last Monday, Lawrence pled guilty to only one criminal charge of notary fraud. Lawrence came forward earlier this month and admitted that she had notarized around 25,000 fraudulent documents as part of a foreclosure fraud scheme.



• Title officers Gary Trafford and Geraldine Sheppard of California are allegedly behind the fraud that involved forging signatures on tens of thousands of notices of default between 2005 and 2008. The two were indicted on more than 600 charges in a 439-page indictment filed on November 16.



• The Nevada Attorney General is negotiating the terms of surrender for the pair. Both are expected to surrender sometime in December.

Source: Notary who blew whistle on foreclosure fraud found dead.

Thanks to Mike Dillon at GetDShirtz.com for the heads-up on the story.

IG Report Slams Fannie, Freddie Over Improper Foreclosures, Refusal To Force Banksters To Buy Back Crappy Home Loans; Cost To Taxpayers: Billion$

The Associated Press reports:

• A government watchdog said Fannie Mae and Freddie Mac improperly foreclosed on homeowners and cost the government billions of dollars by not holding major banks to strict underwriting requirements.



• The report released Tuesday also said the Federal Housing Finance Agency gave “undue deference” to Fannie and Freddie officials and didn’t scrutinize more than $35 million in bonuses and compensation to Fannie and Freddie executives.



• FHFA’s inspector general had previously released each of the findings on an individual basis. But the semi-annual report to Congress sketched a portrait of abuse at the two mortgage giants that the government failed to stop.

***

• The inspector general report found that Fannie and Freddie did not force banks to repurchase mortgages when they failed to meet strict underwriting requirements. That decision cost the government billions of dollars.



• When a senior examiner at FHFA raised “serious concerns” about Freddie’ process for reviewing Bank of America’s mortgages, senior Freddie managers disagreed, according to the report. The managers also said they feared losing business from Bank of America if the government became more aggressive in getting money back for bad mortgages, the report said.



• The report also found:
  
  — Fannie knew about allegations of improper foreclosure practices by law firms as far back as 2003 but did not act to stop them.
  — Fannie failed to establish an “acceptable and effective” way to monitor foreclosure proceedings between 2006 and early 2011.
  — FHFA failed to oversee the government’s signature foreclosure-prevention program, the Home Affordable Modification Program. As a result, it cost the government extra time and resources to fix it.

For the story, see Inspector general says housing regulator failed to stop Fannie, Freddie mortgage issues.

State AG Invokes NYS Martin Act To Acquire Jurisdiction In Probe Into Violations Of Federal Servicemembers Civil Relief Act In Home Foreclosures

In New York City, Financial Times reports:

• Eric Schneiderman, New York attorney-general, has launched an investigation into possibly unlawful foreclosures on the mortgages of active-duty members of the US military.



• Data released last week by a federal banking regulator suggested that 10 leading lenders may have seized the homes of about 5,000 service members in violation of the Servicemembers Civil Relief Act. The nearly-decade old law restricts foreclosures on the homes of members of the US armed forces while they are on active duty.



• Mr Schneiderman’s probe is part of a larger investigation into banks’ mortgage practices, a person familiar with the matter said. Armed with the Martin Act, a powerful state law that gives prosecutors broad powers to investigate fraud, New York state’s top lawyer has contacted about a dozen banks and insurers as part of an investigation into the securitisation and marketing of mortgage securities, according to people familiar with the matter. A spokesman for Mr Schneiderman declined to comment.

For more, see New York probes military foreclosures.

Massachusetts AG Scores $52M Lawsuit Settlement Alleging Securitized Subprime Home Loans Were 'Presumptively Unfair'

In Boston, Massachusetts, The Boston Globe reports:

• A Royal Bank of Scotland subsidiary will pay $52 million to settle claims related to its role in the state’s “subprime mortgage meltdown,’’ Attorney General Martha Coakley said yesterday, an agreement that will benefit more than 700 borrowers in Massachusetts.



• RBS Financial Products Inc. agreed to the payment after the state determined that the company financed, bought, and bundled residential mortgage loans into securities that were “presumptively unfair,’’ Coakley’s office said.



• Such subprime loans proved costly for consumers and were often approved for people who were not qualified borrowers, the state said. The RBS deal marks Coakley’s third major settlement with investment firms over how they packaged and sold home loans. Morgan Stanley and Goldman Sachs Group also agreed to settlements that totaled $162 million over the past two years.



• “The securitization of subprime loans by investment banks is a major cause of the economic crisis,’’ Coakley said in a statement. “The only way we are going to return to a healthy economy is to hold these banks accountable in order to achieve real relief for homeowners.’’

For more, see Bank settles subprime loans case for $52m (Deal will aid 700-plus struggling homeowners).

$285M SEC/Citi Settlement Over Mtg Derivatives Kiboshed; Judge: Policy Of Allowing Targets Off Hook w/out Admissions, Denials Not In Public Interest

In New York City, The New York Times reports:

• A federal judge in New York on Monday threw out a settlement between the Securities and Exchange Commission and Citigroup over a 2007 mortgage derivatives deal, saying that the S.E.C.’s policy of settling cases by allowing a company to neither admit nor deny the agency’s allegations did not satisfy the law.



• The judge, Jed S. Rakoff of United States District Court in Manhattan, ruled that the S.E.C.’s $285 million settlement, announced last month, is “neither fair, nor reasonable, nor adequate, nor in the public interest”(1) because it does not provide the court with evidence on which to judge the settlement.



• The ruling could throw the S.E.C.’s enforcement efforts into chaos, because a majority of the fraud cases and other actions that the agency brings against Wall Street firms are settled out of court, most often with a condition that the defendant does not admit that it violated the law while also promising not to deny it.

For more, see Judge Blocks Citigroup Settlement With S.E.C.

For the ruling, see SEC v. Citgroup Global Markets, Inc.

(1) With regard to the settlement falling short in meeting the public interest, Judge Rakoff stated (SEC v. Citgroup Global Markets, Inc., at page 15):

• Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth.
  
  In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the S.E.C., of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances.
  
  Accordingly, the Court refuses to approve the proposed Consent Judgment. Instead, the Court hereby consolidates this case with the Stoker action, adopts the Case Management Order in that action as equally applicable to the instant case, and directs the parties to be ready to try this case on July 16, 2012.
  
  SO ORDERED.

NY Foreclosure Process Could Grind To A Halt Due To Imminent Closure Of Upstate Sweatshop

The New York Post reports:

• The implosion of the foreclosure-mill law firm of Steven J. Baum has thrown close to 10,000 New York families into legal limbo. Baum announced last week that he was closing the firm after Fannie Mae and Freddie Mac, the government-run mortgage organizations, said the law firm was no longer eligible to handle foreclosures.



• The Baum firm, which is located in Buffalo, with a second office in Westbury, Long Island, notified the New York Department of Labor that all 67 employees would be laid off in mid-February. (By law, any firm has to give employees 60 days notice when issuing mass layoffs.)



• Last week, along with the Baum firm announcing its closure notice, Fannie Mae sent a directive that mortgage servicers are authorized to transfer Fannie Mae foreclosure or bankruptcy matters from Baum to any other retained attorney network firm in New York.



• Baum’s folding is the second default-services firm to cease foreclosure operations in the wake of last fall’s robo-signing scandal and the investigations it spawned. In March, the David J. Stern law firm in Plantation, Fla., one of the largest foreclosure mills in the nation, ceased foreclosure work.



• While some court observers speculate that, with the Baum firm’s closure, thousands of court cases will proceed with new counsel, that was not the case with the Stern shutdown. Many smaller firms picking up the Stern foreclosure cases could not get the needed paperwork to proceed because Stern placed liens on the paperwork in order to be paid for services it has already rendered.



• Sources familiar with the Florida backlog say that delays in foreclosure cases are still occurring due to the ongoing paper chase. One attorney, who wishes not to be quoted directly due to having matters against these firms, suggested that other large foreclosure firms — which are the only ones to take on this size caseload — would be leery to step into the void left by Baum’s closure.



• Another defense attorney said there has been radio silence from the Baum firm since the beginning of this month, despite numerous calls and e-mails sent to find out about pending foreclosure cases against their clients.



• Many of the Baum lawyers were tied up with non-compete clauses in their contracts, so it’s unclear whether they can move to other firms now or have to wait until the planned shutdown next year.



• In May, New York Attorney General Eric Schneiderman launched an investigation into the Baum firm; the AG’s office issued subpoenas, and at the time it was reported that the firm said it was fully cooperating. It is unclear whether criminal charges will result from the AG’s probe.

Source: Baum fall throws NY foreclosures a curve.