Saturday, December 24, 2011

Arkansas Man Pleads Guilty To Interference w/ Housing Rights Due To Race, Conspiracy For Role In Firebombing Interracial Couple's Home

From the U.S. Department of Justice:

  • Gary Dodson, 32, of Waldron, Ark., pleaded guilty [] in U.S. District Court in Little Rock, Ark., to one count of civil rights conspiracy, one count of interference with housing rights due to race and one count of possession of an unregistered firearm/destructive device for his involvement in the Jan. 14, 2011, racially motivated firebombing of the home of an interracial couple in Hardy, Ark.

  • Dodson, along with Jason Barnwell, 37, of Evening Shade, Ark.; Jake Murphy, 19, of Waldron; Dustin Hammond, 20, of Hardy, Ark.; and Wendy Treybig, 31, of Evening Shade, were indicted in April by a federal grand jury on civil rights charges and other federal charges stemming from their participation in the racially motivated firebombing and their attempts to obstruct a federal investigation.

  • During the plea proceedings, Dodson admitted that on the night of Jan. 14, 2011, while at a party at Barnwell’s house in Evening Shade, he, Murphy, Hammond and Barnwell devised a plan to firebomb the victims’ house.

  • Dodson then drove all four men from Barnwell’s residence to the victims’ house in Hardy. When they arrived, Barnwell, Murphy and Hammond constructed three Molotov cocktails and threw them at the house. They damaged the victims’ house, however, the victims were not injured.

  • The victims’ home was attacked and their safety threatened because of their race. Such violence and intimidation has no place in our society,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute individuals who commit such atrocious acts of hate.”


  • Dodson faces a maximum penalty of 30 years in prison. Sentencing has been set for April 6, 2012. Barnwell, Murphy, Hammond and Treybig have already pleaded guilty for their involvement in this matter.

For the U.S. Justice Department press release, see Arkansas Man Pleads Guilty to Civil Rights Offenses for Involvement in the Firebombing of Interracial Couple's Home.

90-Year Old Homeowner Facing Foreclosure On Reverse Mortgage Over Code Violation Gets Help From Local Junk Removal Service In Effort To Save Home

In SouthwestMiami-Dade, Florida, WSVN-TV Channel 7 reports:

  • A 90-year-old South Florida woman facing foreclosure received much needed help cleaning up her yard. Jack's Junk Removal stepped forward to assist Rosalee Green, Tuesday, in helping remove the mess from her front yard.

  • "Basically what we are going to do, we are going to focus on getting the yard cleaned up like they requested," said Jack Vallagi. "In this case, we saw it on the news, Channel 7," said Juan Gallo.

  • After seeing Green's story on 7 News, Jack's Junk Removal offered to clean the yard for free. "We are gonna focus on getting everything up, we are gonna have a full crew, with two trucks on site," said Vallagi.

  • A lending company began foreclosing on the home Green has lived in for more than 50 years saying she hasn't maintained the yard of her home. "What I am in now? A mess," said Green.

  • The company also wanted more than $100,000 back from Green because of the mess. Green hopes that once the clean-up is complete, the company will pull the foreclosure paperwork.

  • "I have been here for this long, where am I gonna go," she said.

Source: Elderly woman facing foreclosure receives help.

For earlier post, see 90-Year Old Woman Faces F'closure On Loan Requiring No Payments; Bankster Says Debris Near Home Is Code Violation, Constitutes Default On Reverse Mtg.

Courthouse Facing Foreclosure? Option Being Considered As Judicial Building Loan In CNMI Falls Into Default

From somewhere way out in the western Pacific Ocean (I think?), in the village of Capital Hill, on the island of Saipan in the United States Commonwealth of the Northern Mariana Islands (CNMI), the Saipan Tribune reports:

  • The board of trustees of the NMI Retirement Fund directed on Friday its administrator, Richard Villagomez, to discuss and clarify once and for all issues about the judicial building loan with the Fitial administration before the board starts deliberating on the foreclosure option, which will be the board's last resort to collect its investment.

  • Fund chair Sixto Igisomar made this clear during the board meeting Friday after learning that the government/judiciary has not been remitting payment pursuant to the loan agreement for 10 months now. Villagomez reported that the outstanding arrears from the agency is approximately $1.2 million as of Nov. 30 this year, or an expected monthly remittance of $120,000.


  • The foreclosure option came into the discussion when the board attorney, Carolyn Kern, said that in usual cases of delinquent loans, the board's ultimate step to collect is through their collaterals or through foreclosure.

  • It was the Judicial Building Financing Act of 1994 that allowed the CNMI government to secure a loan from the NMI Retirement Fund in order to build the Guma Hustisia, which has a maturity date of Aug. 14, 2015.

  • The construction of the Judicial Complex began in 1995. It was completed in May 1998. The revenues generated by the Judiciary was the primary source of repayment of the loan.

For more, see Fund: Judicial building loan arrears at $1.2M.

Friday, December 23, 2011

Dozen Businesses Face The Boot Despite Never Having Missed Lease Payments As Landlord Stiffed Lender, Allowing Mall To Fall To Foreclosure

In St. Peters, Missouri, KMOV-TV Channel 4 reports:

  • Several St. Charles County business owners are feeling the wrath of foreclosure despite never falling behind on their payments.

  • Twelve businesses, located in the Golden Triangle Centre mall in St. Peters, received a letter on November 28 stating they have to be out of their store lots by the end of this year. If the businesses fail to comply, a lawsuit will be filed against the store owners.

  • The businesses are being forced out because the previous owner was foreclosed on by Providence Bank. “We were devastated,” Dawn Libbert, business owner, said. “We thought that this might happen. All summer long there was a suspicion this could be, but when you officially find out…it’s devastating.”

  • Some of the business owners were interested in purchasing the shopping plaza, but claim no one at the bank would listen to their plan. Some believe the reason might be because a CVS Pharmacy will be coming to the plaza.

  • A City of St. Peters official told News 4’s Brian Feldman that it cannot do anything because it is a private transaction and the president of Providence Bank was out of the office and unable to comment.

Source: St. Charles County businesses foreclosed because of previous owner.

Indiana Homeowners Victimized By Loan Modification Ripoffs To Begin Receiving Partial Recoveries Of Upfront Fees From New State Fund

From the Office of the Indiana Attorney General:

  • More than 70 victims of foreclosure-rescue fraud will receive payments totaling $60,000 from Indiana's newly created Consumer Protection Assistance Fund (CPAF), according to Indiana Attorney General Greg Zoeller.

  • "This important fund provides some relief for consumers who assist my office to bring legal actions against businesses that prey on consumers' who are financially vulnerable as well as helping warn others to avoid these scams," Zoeller said. "Our office is appreciative of our state lawmakers' efforts to create the Consumer Protection Assistance Fund to give victims who are facing difficult times the means to recover some or all of their losses."


  • During the foreclosure crisis, many homeowners were victimized by foreclosure-rescue fraud, deceptive credit-services or home-loan practices. Many consumers then filed complaints with the Attorney General's Office.

  • Default judgments against companies do not often result in the victims receiving any payments for their financial losses. In order to help those who reported these types of violators to the state, the 2011 Indiana General Assembly passed legislation creating the CPAF.

  • To save taxpayer dollars, legislators allowed the monies to originate from funds recovered from companies sued by the attorney general for violating consumer protection laws. Zoeller said the CPAF was modeled after a restitution fund that paid more than $125,000 to Indiana victims of American Escrow, a Chicago-based company that failed to pay more than $1 million in property taxes collected from homeowners.

For the Indiana AG press release, see Indiana fraud victims to receive compensation from new fund (Fund reimburses consumers who assist AG with enforcement of consumer protection laws).

NJ Man Cops Conspiracy Plea In Straw Buyer Scam Targeting Homeowners In F'closure, Financially Strapped Developers Looking To Unload Unsold Inventory

From the Office of the U.S. Attorney (Camden, New Jersey):
  • A New Jersey man admitted [] to conspiring to participate in a mortgage fraud scheme that caused lenders to release approximately $3 million based on fraudulent loan applications and conspiring to launder the proceeds of the fraud, U.S. Attorney Paul J. Fishman announced.

  • Jerry Smith, 45, of Scotch Plains, N.J., pleaded guilty to an Information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.


  • According to documents filed in this case and statements in court:

    Smith’s co-conspirators located oceanfront condominiums built by financially distressed developers in Wildwood Crest and North Wildwood, N.J., as well as other properties in New Jersey owned by financially distressed homeowners facing foreclosure.

    Smith and his co-conspirators recruited “straw buyers” to purchase those properties. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans.

    Smith’s co-conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements, retirement account statements, and cancelled rent checks, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.

For the U.S. Attorney press release, see Scotch Plains, N.J., Man Admits $3 Million Mortgage Fraud Scheme.

Thursday, December 22, 2011

NC Man Barred From Loan Mod Business For Doing No Work After Pocketing Upfront Fees Now Targeted For Taking Cash & Peddling Phony Roofing Services

From the Office of the North Carolina Attorney General:

  • A Charlotte area roofer who took money for jobs he never started has been ordered to stop, Attorney General Roy Cooper announced []. “Shady roofers who take money and don’t perform must be stopped,” said Cooper. “Consumers should always be skeptical when someone shows up at their home offering repairs at a deep discount.”

  • Last week, Wake County Superior Court Judge William R. Pittman agreed with Cooper’s request to temporarily bar Reginald Keith Turner, who did business as Triple R Restoration and Pinnacle Restoration, from offering to perform or taking any money for roofing services. Cooper is seeking to shut down Turner’s roofing businesses permanently and win consumer refunds and civil penalties.

  • This isn’t the first time Cooper’s office has had taken Turner to court. In June, 2010, Cooper filed suit against Turner for operating a foreclosure assistance scheme and collecting money upfront for help he never provided.

  • In January, 2011, a Wake County judge permanently banned Turner from foreclosure or debt assistance work in North Carolina. The Attorney General’s Office first learned about Turner’s roofing tactics when a woman from Matthews complained about his failure to fix hail damage to her roof.

  • According to the consumer’s complaint, Turner knocked on her door and offered to repair her roof. She paid him a $3,000 deposit, money she had received from her insurance company. Turner promised to replace her roof within four weeks but failed to perform any work, claiming that he was delayed by weather.

  • After two more missed appointments, the homeowner asked for a refund. Turner dodged her phone calls which led her to write two letters demanding a refund. Finally, Turner responded that he would refund her money when he collected money from other customers. She has yet to receive any money back and can’t afford to pay someone else to fix her leaky roof.

  • The Matthews homeowner is one of 12 consumers who have filed complaints about Turner’s roofing companies with the Attorney General’s Office

For the North Carolina AG press release, see AG Cooper shuts down shady roofer (Charlotte roofer made off with homeowners’ deposits, failed to do work or provide refunds).

Efforts Targeting Homeowners Stiffing Counties On Real Estate Taxes Through Use Of Improper Homestead Exemption Claims Continue

In Greenwood, Indiana, WISH-TV Channel 8 reports:

  • A central Indiana county is hiring an outside company to ensure that local residents aren't claiming homestead exemptions on property in more than one state. Johnson County Auditor Jan Richhart tells the Daily Journal the effort will ensure everyone who receives the property tax deduction is entitled to it.

  • County commissioners have hired SRI to search databases for fraudulent claims for tax credits. The company will contact the taxpayers and collect the money. SRI will receive 20 percent of the money collected. Most of the remainder will go back to the county auditor's office.

  • Richhart says violators will be required to pay the taxes they would have owed without the credit plus a 10 percent fine. Those who don't pay could see their property auctioned at a tax sale.

Source: Johnson Co. cracks down on tax exemptions.

90-Year Old Woman Faces F'closure On Loan Requiring No Payments; Bankster Says Debris Near Home Is Code Violation, Constitutes Default On Reverse Mtg.

In Southwest Miami-Dade, Florida, WSVN-TV Channel 7 reports:

  • An elderly woman is facing foreclosure in the place she has called home for most of her life. Ninety-year-old Rosalee Green has lived in her Southwest Miami-Dade residence about 57 years, the majority of her life.

  • However, the nonagenarian may be evicted from her home due to a code violation. "I've been here this long. Where am I going to go? I'm 90 years old," said Rosalee Green. "I want to stay in my house."

  • Green was recently served with papers that said she defaulted on a reverse mortgage, which allowed her to take a lump-sum payment against her home's equity without having to pay back the money.

  • "They said that I didn't have to pay anything until, if I die, whoever lives here would take over, and so, I figured that was it," she said. According to Green's son, Dale Green, his mother needed the money from the reverse mortgage because she does not have steady income. "We've been doing whatever we can to keep up with things going on around here," he said, "but income is low, and we're just trying to stay above water."

  • Now,the lending company that loaned the money to Rosalee wants the money back, and the 90-year-old may soon face eviction.

  • The company claimed that debris near Rosalee's home is a code violation, which nullifies the reverse mortgage. Rosalee's attorney, Eric Stine, said, "For them to find a little technical flaw, which is what they're trying to hang their hat on, and displace a 90-year-old lady from her home, we just feel is bad faith."

  • Stine said that the lending company did not give his client a chance to fix the violation, so she could remain in the home where she raised her 11 children. "It's a mess," Rosalee said. "I don't think it's fair. If I would have known [this would happen], I would have never, never [got the mortgage]."

  • The out-of-state lending company told 7News by phone that if Rosalee can prove she has cleaned up some of the debris near her home, and she has kept her home's taxes current, she may be able to avoid foreclosure.

Source: 90-year-old woman facing foreclosure.

Wednesday, December 21, 2011

Lawsuit: Real Agent Agent 'Misdirected' $1M In Downpayment Deposits Held In Escrow Belonging To At Least 15 Homebuyers

In Boca Raton, Florida, the South Florida Sun Sentinel reports:

  • Mizner Grande Realty of Boca Raton has filed a lawsuit against one of its former real estate agents for fraud and breach of contract, alleging he misdirected $1 million held in escrow for clients.

  • Delray Beach Police are investigating the allegations, said Sgt. Nicole Guerriero, a department spokeswoman. The agency has not made any arrests, and “we’re not releasing any information at this point,” she said.

  • In the lawsuit filed Dec. 2 in Palm Beach County Circuit Court, Mizner Grande said former agent Jon Rashotsky had clients put money in escrow accounts. Then Rashotsky instructed Boca Raton lawyer Edgar Benes to disburse the money to “third-party-held banks,” the lawsuit says.

  • Benes, the escrow agent, is not a defendant in the lawsuit.The suit says Rashotsky broke his agreement with Mizner by instructing the agent to disburse the money so he “could retain the escrowed funds to his own use.”

  • The payments were made without the knowledge of Rashotsky’s clients or other interested parties in the real estate transactions, the suit said. Benes distributed at least $1 million belonging to at least 15 clients, the suit said. The clients have made claims for return of the money, according to the suit. “We’re taking every legal recourse to obtain the money back for the victims,” said Ari Albinder, founding broker of Mizner Grande.

  • To cover up the missing money, “Rashotsky would make false representations to the clients regarding the status of their pending real estate transactions, which would often include complete fabrications of the existence of a negotiated agreement for the purchase of real estate,” the suit said.

For more, see Real estate firm: $1 million in homebuyer escrow payments missing.

See also, Boca News Now:

Man Linked To Metro Atlanta Sovereign Citizen Home-Snatching Racket Cops Racketeering Plea, Agrees To Testify Against Others

In Sandy Springs, Georgia, WSB-TV Channel 2 reports:

  • One of the men linked to a real estate scheme exposed by a Channel 2 Action News investigation, pleaded guilty to racketeering Tuesday. Kenith Beniaih Rey admitted trying to steal a $2 million home in Sandy Springs. It was still under construction when he filed a quit claim deed in his name, turned on the power and alarm system, and moved in an armchair and suitcases.

  • "He was also involved with a co-defendant who was deeply engrained in the organization, a man by the name of Richard Terrance Jenkins," prosecutor John Melvin told the judge. Jenkins sat watching in the courtroom. He and Rey were indicted in March along with 10 others. Jenkins is accused of trying to steal six houses.

  • Rey said he was just interested in acquiring foreclosed houses and that Jenkins roped him into the scheme. "They began to show me some of the properties that they had. I decided to acquire his services," Rey said.

  • But the homeowner was able to escape foreclosure, found Rey's belongings and called Sandy Springs Police. "It was one home that was an abandoned foreclosure that I was trying to acquire. He was like 'let me show you how to acquire it,' and we went down to the courthouse and filed documents which he had provided," Rey said.

  • Rey will serve five years on probation, minus the nearly one year he's already been in jail. Deputies re-arrested Rey after the Channel 2 investigation linked him to a group of sovereign citizens who used bogus paperwork to take over vacant and foreclosed homes across the metro-Atlanta area.

  • Rey said he is not sovereign. "Mr. Rey wanted to make it clear that is not him. He did this because he thought he was entering a business opportunity, recognizes that it was too good to be true and should have had more sense. But he is not part of this enclave of persons who are out there committing these acts," Karlyn Skall, Rey's attorney, said.

  • As part of the guilty plea, Rey agreed to testify against his co-defendants.(1) "Do you want to explain how all this happened?" Channel 2 investigative reporter Jodie Fleischer asked Jenkins outside the courtroom. "Nope," he replied, walking away with co-defendants Jermaine Gibson and Gregory Ross.

  • One held a copy of Black's Law Dictionary, popular with Sovereign Citizens, who claim they are immune to our laws. Two of the defendants are still in custody, unable to afford their bond.


  • Fleischer's investigation helped law enforcement link nearly a dozen people to the real estate scheme. She uncovered at least 18 stolen properties in eight metro area counties. The remaining defendants will likely go to trial early next year. The prosecutor told the judge he intends to ask for much tougher sentences for several of the other defendants, but agreed to probation for Rey because he was not a central figure in the case.(2)

Source: Man takes guilty plea in real estate scheme.

(1) The only question remaining is how many bodies this guy succeeds in 'throwing under the bus' as part of earning his light, no-jail-time sentence:

  • "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed." United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) (referring to the not-uncommon 'race to the courthouse' that breaks out among participants in an uncovered criminal conspiracy).

(2) Ibid.

Sovereign Citizen Gets Five Years For Paper Terrorism Extortion Racket; Filed Liens Totaling In The Trillion$ Against Cops, Judges, Credit Union CEO

In Albany, New York, the Times Herald Record reports:

  • An anti-government bully was sentenced Monday to five years in federal prison for using fake bills, bogus property liens and bizarre court filings to attack Ulster County bankers and government officials.
  • Richard Ulloa, 52, was sentenced on seven counts of mail fraud for using the U.S. Postal Service to deliver phony bills and liens that threatened to harm the credit of bankers and public officials.

  • The tactic is known as "paper terrorism." Ulloa remained defiant till the end. Even though he filed roughly $4 trillion in liens and bills against police, judges and county employees, Ulloa told a judge in Albany that it was he who lost more than anyone. "I lost a job, I lost a business and I lost property," said Ulloa, who once earned more than $180,000 a year as an IBM engineer. "I have lost more than anybody else."

  • Ulloa, of Stone Ridge, is a member of the sovereign citizens, a national movement of radicals who do not believe the government has the right to create or enforce laws. His anti-government scheme took many turns.

  • It started in 2008, when the Mid-Hudson Valley Federal Credit Union began foreclosure proceedings on his Ridge Mountain Road home. Ulloa responded by sending a "criminal complaint" to the bank, demanding $46 million from its officers. When the bank didn't pay, he filed a $2.8 billion lien against bank CEO Bill Spearman.

  • The pattern repeated itself twice more, when Ulloa was issued traffic tickets in Rosendale and the Town of Ulster. He filed bills and liens against police officers and judges in both municipalities. He also filed bogus papers against Ulster County officials.

  • Soon after federal authorities charged Ulloa and two co-conspirators in 2010, the sovereigns took even stranger actions. Court papers show they convened a kangaroo court in Highland, issued fake indictments against their victims and threatened to have sovereign "rangers" arrest them.

  • Despite being cleared by a mental-health evaluator, Ulloa's lawyer argued Monday that his client had become mentally ill sometime over the past six years.U.S. District Judge Thomas McAvoy didn't buy the argument. "Somewhere along the way, you decided to follow the voice of the sovereign citizens," McAvoy told Ulloa. "You did that with reckless disregard and evil intention." Ulloa must pay $63,401 in restitution to Ulster County and MHVFCU.

  • His scheme instilled fear in its victims, because sovereign citizens in other parts of the country have turned violent, even killing cops in two cases. MHVFCU and Ulster County handed out photos of Ulloa to some employees, urging them to call security if he showed up.

  • "There was a lot of anxiety about this guy coming into our offices," said Spearman, the bank CEO. "There were some concerns that he might act out."

For more, see Ulster 'paper terrorist' gets 5 years (Stone Ridge man, 52, sued, schemed against officials).

Go here for earlier posts on this crackpot.

Trial Set For Suspect Accused In Home Title-Snatching Scam; Allegedly Filed Phony Deeds On Vacant F'closures, Then Sold Or Rented To Unwitting Victims

In Denver, Colorado, the Denver Business Journal reports:

  • A man accused of duping people into buying or renting homes he didn’t own will stand trial on felony theft and forgery charges, a judge decided Monday, according to the Denver District Attorney’s Office. Alfonso Carrillo, 50, faces multiple counts of theft, forgery and offering a false instrument for recording in connection with the alleged scam.

  • Prosecutors say Carrillo used his business, America’s Home Retention Services, to file phony deeds on houses vacated through foreclosure to get access to the property and pose as the owner.

  • The charges allege he took thousands of dollars in payments from unsuspecting potential home buyers and then gave them fraudulent deeds to properties,” according to the DA’s news release. “The actual property owners were unaware the property had been ‘sold.’”

  • Carrillo targeted undocumented, Spanish-speaking buyers who would be reluctant to go to police.

For the story, see Trial set for alleged fraudulent homeowner.

Tuesday, December 20, 2011

Adverse Possession Rackets Keep Grand County Cops Busy With Probes Into Alleged Home-Snatching Scams Involving Foreclosed Homes

In Grand County, Colorado., the Sky-Hi Daily News reports:

  • A man arrested in Denver for rental and real-estate fraud has been under investigation here in Grand County. Alfonso Carrillo, 50, who in October was charged with filing phony deeds on houses vacated through foreclosure and posing as the owner, is suspected of having at least three similar dealings in the Winter Park area.


  • Carrillo has been released from custody on a $10,000 bond and is scheduled to reappear in court on Jan. 6. Another man, Rudy Breda, 53, is also wanted in connection with the alleged scam, according to the Denver District Attonrey's office. He is accused of recording phony deeds with the Denver Clerk and Recorder's Office.

  • In Grand County, both the Fraser-Winter Park Police Department and the Grand County Sheriff's Office have been involved in three separate investigations concerning individuals illegally living in homes, all in connection with Carrillo's dealings.

  • This summer, the Sheriff's Office was called out to a home in Meadow Ridge in the Fraser Valley by neighbors who noticed people occupying a bank-owned home believed to be in foreclosure. The woman living in the bank-owned home presented the Sheriff with a paper-labeled deed, but through further investigation, it was determined the deed — with the name “Rudy Breda” on it — was “false and forged,” according to Grand County Sheriff Rod Johnson.


  • In another case, Winter Park Police arrested two individuals in late November who since late July had been sporadically living in a home pending foreclosure in the Rendezvous subdivision. German Jasso, 42, and his wife Laura Guitierrez, 41, of Fraser, moved belongings into the home and conducted renovation work.

  • According to assessor and trustee documents at the time, the home still belonged to someone else. The home, the finished construction of which had not been completed, was in pending foreclosure with Bank of America, according to the initial police report in court documents.

  • In the course of a few months, Jasso conducted work on the home to try and obtain a certificate of occupancy, including installing a propane tank and changing locks on doors. He told police that he believed he had legal access to the home through a legal instrument called “adverse possession,” and said his real estate “consultant” was Carrillo.

  • But even after police repeatedly warned him to vacate the property, Jasso and family remained in the home. After police went to the home and changed locks to keep the family out, Jasso filed a civil protection order claiming that he had been wrongfully evicted by police.

  • According to Fraser-Winter Park Police Chief Glen Trainor, “State law is very specific about the time periodof adverse possession, or ownership of property through long-term use of it, which is defined as 18 years.

  • Jasso and Guitierrez were charged with theft, a class three felony, first degree criminal trespassing, a class five felony, and offering a false instrument for recording, a class five felony. Jasso was arrested on Nov. 21 and released on a $10,000 bond. His wife was arrested later and released on Dec. 6 on a $20,000 personal recognizance bond.

  • Most people legitimately don't know it's a scam,” said real estate broker Gary Glenn, who himself is dealing with a similar case in Lakota near Winter Park. Glenn was hired by a national bank to market the bank's-owned home in that subdivision, but cannot start because people have been living in it without any legitimate legal interest since last spring — again, orchestrated through Carrillo, according to police.

  • But banks are more tentative than owners who still have possession of homes to act on such situations for concerns of foreclosure liability. The individual who moved into the Lakota home, described as a restaurateur in the Fraser Valley, gained access by way of a bogus $5,000 deed to a home, according to Glenn, where the next-door property is for sale for $400,000.

  • Through what's alleged to be Carrillo's coaching, the tenant gained access during the bank foreclosure process, which according to new federal laws kicks in a 90-day time period preventing a bank from evicting individuals. An eviction process took more time, and when the eviction notice finally was served to the alleged squatter, a proof of bankruptcy document was presented to the sheriff's deputy, which Carrillo filed on behalf of the tenant, according to Glenn. This caused the bank to slow down its eviction while it now complies with all federal bankruptcy laws.

  • We have to be totally legal while they're being totally illegal,” Glenn said. “People gaming the system are intentionally taking advantage of laws intended to help homeowners.”

For the story, see Banks, police battle foreclosure 'squatters' in Grand County, elsewhere.

California Man Pleads Guilty, To Get 12 Years For Duping Homeowners Into Signing Over Property Titles; Racket Also Involved Forged Deeds, I.D. Theft

In San Diego, California, KGTV-TV Channel 10 reports:

  • A man who participated in a $6 million foreclosure fraud scheme in which he stole the identities of several notaries and forged hundreds of deeds across California pleaded guilty Thursday to multiple felony charges, including rent skimming, forgery, identity theft and conspiracy to commit grand theft.

  • John Zepeda, 60, agreed to pay restitution and will be sentenced to 12 years in prison on February 21. Zepeda's brother, David, also is charged in the case but remains at large, Deputy District Attorney Nida Rice said.

  • The conspiracy, which prosecutors called "huge" and "brazen," involved hundreds of victims in San Diego, Santa Barbara, San Bernardino, Orange, Ventura, Riverside and Los Angeles counties, as well as Clark County in Nevada, prosecutors said.

  • According to prosecutors, the defendants would hold seminars for people hoping to save their homes from foreclosures.

  • Authorities said the Zepeda brothers identified properties in foreclosure and acquired title either by forging a quitclaim dead -- which transfers the property into a trust -- or convincing homeowners to transfer the property to them by promising the homeowner they would help avoid foreclosure.

  • Once they had acquired the title, the Zepedas would rent out the property, prosecutors said. In order to forestall the foreclosure process and to extend the period over which they collected rent, the brothers also filed bankruptcy petitions, authorities said.

  • Money was diverted away from the lenders and owners and into accounts, where the cash was used to support the defendants' lavish lifestyle, including the purchase of exotic, high-end cars, prosecutors said.

For the story, see Man Pleads Guilty To Role In Foreclosure Scam (John Zepeda Agrees To Pay Restitution, To Be Given 12 Year Prison Term).

L.A. Feds Pinch Texas Man In Alleged Fractional Interest Deed Transfer Foreclosure Rescue Scam; Suspect Intends To Cop Guilty Plea

From the Office of the U.S. Attorney (Los Angeles, California):

  • Federal authorities have charged an Austin, Texas man with having operated a foreclosure-rescue scam in Los Angeles and elsewhere that falsely promised the owners of more than a thousand distressed properties that they could indefinitely postpone foreclosure sales.

  • Frederic Alan Gladle, of Austin, Texas, was charged late this morning in United States District Court with one count of bankruptcy fraud and one count of aggravated identity theft. He stated in court in Austin that he intends to plead guilty to the charges, as part of a plea agreement. The defendant used five aliases to avoid detection in the scheme, including stealing the identity of at least one person and setting up a cell phone account in that victim’s name. As a result of the four-year scheme, which continued through Gladle’s arrest in October of 2011, Gladle and his associates collected more than $1.6 million in fees from distressed homeowners.

  • According to the charges, Gladle was involved in a scheme that recruited homeowners whose properties were in danger of imminent foreclosure and falsely promised to delay the foreclosures for homeowners for up to six months.

  • Once a homeowner paid a fee of around $750 per month, Gladle, either directly or through salespersons, had the homeowner sign a deed granting a 1/100th interest in the house to a debtor in a bankruptcy whose name Gladle had found by searching bankruptcy records.

  • The debtors had no idea that their names and bankruptcy cases were being used by Gladle in his scheme. Gladle would print out the unsuspecting debtor’s bankruptcy petition, attach the petition to the 1/100th deed in the debtor’s name, and fax the two documents to a homeowner’s lender to stop foreclosure proceedings.

  • Because the filing of a bankruptcy gives rise to an “automatic stay” that protects a debtor’s property, the receipt of the bankruptcy petitions and 1/100th deeds in the debtor’s name forced lenders to cancel foreclosure sales.

  • The lenders – which included banks who received government funds under the Troubled Asset Relief Program (TARP) – could not move forward to collect money that was owed to them until getting permission from the bankruptcy court, thereby repeatedly delaying the lenders’ recovery of their money.

  • When homeowners wanted to void the 1/100th deeds to the unsuspecting debtors, Gladle would forge the debtors’ signatures on papers voiding the 1/100th deeds.


  • Peter Anderson, United States Trustee for the Central District of California (Region 16), stated: "Criminal bankruptcy fraud and, in particular, foreclosure rescue fraud schemes threaten the integrity of the bankruptcy system, as well as public confidence in that system. We deeply appreciate the strong commitment of U.S. Attorney AndrĂ© Birotte Jr., the Federal Bureau of Investigation and SIGTARP to combating bankruptcy fraud and abuse, as demonstrated by this case."(1)

For the U.S. Attorney press release, see Austin, Texas Man Charged with Fraud and Identity Theft in Nationwide Foreclosure-Rescue Scheme (Defendant Agrees to Plead Guilty; Collected $1.6 million from 1,100 Distressed Homeowners).

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

NC Man Booted From Home Without Receiving Notice Of Foreclosure Recovers Title, Sues Servicers Saying They Knew Of Problems & Sold Home Anyway

In Raleigh, North Carolina, WRAL-TV Channel 5 reports:

  • A Raleigh homeowner is suing two loan companies, claiming they intentionally misled the court in order to kick him out of his home.

  • Christopher Joy said the problem started when his mortgage company merged with another. Shortly after, he got a letter saying his payment was to increase by $1,000 per month. Joy said he tried to resolve the mistake but could not get answers.

  • The two trustee companies eventually took over his mortgage and started foreclosure proceedings. Joy said he was looking forward to his day in court. “Someone would finally get a chance to hear my story,” he said.

  • However, the case was continued, and Joy said he never heard another word about the issue until the sheriff's office sent a letter saying he had to pack up everything and move out. “I discovered that my house was actually sold in January, and I was actually still living in the home,” Joy said.

  • Joy said he missed the hearing to fight for his home because the trustee companies never notified him of the court date, which is required by law. He pulled his file from the Wake County clerk's office and found errors, including a court order that was never signed. “At that point, I knew deep down in my heart that something was wrong,” Joy said.

  • Clerk of Superior Court Lorrin Freeman said that it became clear the companies did not notify Joy and misreported information to the clerk's office, so the court issued an immediate order to give Joy back his home.

  • Joy and his attorneys have filed a federal lawsuit, saying they have proof that employees of Nationwide Trustee Services and Litton Loan Servicing knew about the mistakes early and intentionally pushed forward with foreclosure anyway. “Before I was wrongfully evicted out of my home, someone knew that they did something wrong,” Joy said.

Source: Raleigh homeowner sues mortgage companies over eviction.

Monday, December 19, 2011

LPS, Confederates Next On Nevada AG Hit List As Foreclosure Document Assembly-Line Sweatshop Faces Robosigner Allegations In Civil Suit

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

  • Nevada's Attorney General is going after the nation's largest home default company. Lender Processing Services, or LPS, has its hand in tens of thousands of Nevada home evictions and foreclosures.

  • Initially, the Nevada Attorney General's office went after LPS's middle managers. Now, they're going after the top bosses claiming they lied under oath and created a company filled with fraud.

  • Former title officer Gary Trafford arrived from California to face a Nevada judge for the first time. While working for LPS, he's accused of managing a robo-signing scheme. He's charged with ordering notaries to forge hundreds of signatures a day. Trafford plead not guilty to a 606-count state indictment.

  • Both Trafford and fellow title officer Gerri Sheppard face trial in September. At the same time, Attorney General Catherine Cortez Masto announces she's going after their bosses at LPS. She says she is focusing on LPS because they are a big player in the default servicing component of mortgages and their processes and procedures were violating laws.

  • "So, the civil action is to stop them, prohibit them from continuing to utilize the procedures that they've been using in violation of our law," Cortez Masto said.

  • She says employees were required to notarize and forge up to 4,000 documents a day. One confidential witness told investigators it didn't matter some of his notary co-workers "couldn't read English well because reading documents wasn't part of the job."

For more, see NV Attorney General Sues Company for Robo-Signing.

See also, the The Associated Press: Nev. AG, Fla. firm trade barbs on 'robo-signing':

  • "The robo-signing crisis in Nevada has been fueled by two main problems: chaos and speed," Masto said in a statement announcing the civil case had been filed Thursday in Clark County District Court.

  • "Former employees and industry players describe LPS as an assembly-line sweatshop, churning out documents and foreclosures as fast as new requests came in and punishing network attorneys who failed to keep up the pace," the statement said.

For the Nevada Attorney General lawsuit, see State of Nevada v. Lender Processing Services, Inc., et al.

For the Nevada AG press release, see Nevada Attorney General Sues Lender Processing Services For Consumer Fraud.

Add One More To List Of Florida Appeals Court Reversals Of Trial Judge Screw-Ups In F'closure Litigation; Lender Must Own Note At Time Of Case Filing

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

  • Home­owners in foreclosure may have a better chance of getting a true trial, instead of a quickie judgment, following a 4th District Court of Appeal decision that requires banks to prove ownership of the note at the time they file for repossession.

  • The ruling Wednesday in Palm Beach County was heralded by foreclosure defense attorneys who said it may even force banks to dismiss some cases and start over with new paperwork.

  • Tom Ice, founder of the Royal Palm Beach-based foreclosure defense firm Ice Legal, called the decision a "sea change" in the way courts are looking at foreclosure cases and the importance of assignments of mortgage.

  • "No longer can banks just walk in and have their attorney wave around a piece of paper saying this is the note," Ice said. "The good news for homeowners is now they have an opportunity to prove their case and get a trial on its merits."

  • The 4th DCA ruling follows a rare Florida Supreme Court decision last week to take up an already settled Greenacres foreclosure case that involved an allegedly backdated assignment of mortgage that the bank used to show ownership. The court said it wanted to rule on the case, in which the homeowner was defended by Ice's firm, because its opinion could have an impact on the "mortgage foreclosure crisis throughout the state."

  • Wednesday's ruling was on the case of Robert McLean vs. JPMorgan Chase, and involved a 2009 Broward County foreclosure. According to the decision, which reversed a lower court's verdict in favor of the bank, Chase originally filed the foreclosure claiming the note - basically the IOU from the borrower - was "lost, stolen or destroyed."

  • The claim has been made thousands of times as lenders rushed without the proper documentation to take back homes tangled up in the real estate boom's securitization frenzy.

  • Although most notes are found before a final foreclosure judgment is entered, the 4th DCA said the note also must be correctly dated and endorsed to show ownership before the foreclosure was initially filed - something that Chase didn't have, according to the ruling. The court also questioned a mortgage assignment made to Chase that was dated three days after the foreclosure was initially filed.

  • If there is substantial doubt about the note, the bank should dismiss and refile the case or the home­owner should be entitled to an evidentiary hearing instead of a more hasty "summary judgment," the ruling said. Chase did not respond to a request for comment.

  • Summary judgments, although rare in traditional court cases, have become a norm for foreclosures, Ice said. They are supposed to be used only when there is no genuine argument as to the facts in a case.

  • One leading West Palm Beach attorney downplayed the significance of the 4th DCA decision, calling it a technicality that doesn't impact the legitimacy of the foreclosure. Gerald Richman, who represents the Boca Raton-based foreclosure firm Shapiro & Fishman, also said the ruling could force an unnecessary expense on lenders if they have to refile a complaint. "It doesn't mean there wasn't merit to foreclose," Richman said. "Why should you have to file a whole new complaint?" Richman said he couldn't measure the impact the ruling will have on Florida's already overwhelmed courts because he doesn't know how many similar cases are out there.

  • But Tampa-area foreclosure defense attorney Mark Stopa said the ruling will apply to the majority of his cases. "In my view, this is the biggest foreclosure case in Florida, ever," he said of Wednesday's ruling.

Source: Struggling homeowners gain favor in key ruling.

For the court ruling, see McLean v. JP Morgan Chase Bank National Association, 4D10-3429 (Fla. App. 4th DCA, December 14, 2011)

Feds, Six Defendants Settle Civil Suit Alleging Upfront Fee Loan Modification Ripoffs, Foreclosure Relief Racket

From the Federal Trade Commission:

  • Six defendants have agreed to settle Federal Trade Commission charges that they participated in a fraudulent mortgage modification and foreclosure relief scheme. The settlement orders require five defendants to pay back millions in ill-gotten gains, and permanently ban all six from selling any mortgage assistance or debt relief products. The settlements with the U.S. Homeowners Relief defendants are part of the agency’s ongoing crackdown on frauds targeting consumers in financial distress.

  • Acording to the complaint filed last year by the FTC, the defendants touted a “Government Mortgage Relief Program” that would supposedly reduce mortgage payments as part of the “Obama Act” or the “federal stimulus program,” even though the defendants had no affiliation with the government.

  • Claiming a 90 percent or higher success rate, they charged consumers up to $4,250 and promised to reduce their mortgage payments, their interest rates, and sometimes even their principal loan amounts.

  • The FTC also alleged that although the defendants promised full refunds if they were unsuccessful, once consumers paid the fee, they received nothing, did not get refunds, and the defendants did not respond to their calls or e-mails.

  • According to the complaint, the defendants disconnected their telephones and changed the name of their business while continuing to make promises and take money from other consumers.

For the entire FTC press release, see FTC Settlement Requires "U.S. Homeowners Relief" Defendants to Pay Millions, Bans Them from Debt and Mortgage Relief Business.

Brooklyn Judge Boots Foreclosure With Prejudice Over Lawyer's Falilure To Submit Required Affirmation Verifying Accuracy Of Filings

In Brooklyn, New York, Reuters reports:

  • On Monday, a Brooklyn judge dismissed a mortgage-foreclosure case over a major New York firm's failure to vouch for the veracity of its court filings amid questions over whether it used a "conflicted robosigner" to support its case.

  • On July 28, Justice Arthur Schack gave attorneys from Rosicki Rosicki & Associates 60 days to file documents affirming they had taken "reasonable steps" to verify the accuracy of documents filed in support of a bank's motion to foreclose on a Brooklyn property.

  • The affirmations are required in every foreclosure case brought since October 2010, when New York Chief Judge Jonathan Lippman ordered counsel for foreclosing banks to add an extra layer of review to prevent abuses such as deficient notarization and "robosigning" large numbers of documents without first checking their accuracy.

  • Rosicki attorneys sought to push back that deadline in order to get more time to double-check the paperwork. In a supporting statement filed last September, the firm said it would be "unduly harsh and inappropriate to dismiss this action on the basis of a delay in submitting an affirmation to the court."

  • But 137 days after the July 28 order, Schack ruled that the firm's time had finally run out. The failure to submit the affirmation "demonstrates delinquent conduct by Rosicki Rosicki & Associates," Schack wrote. "This mandates the dismissal with prejudice of the instant action. Failure to comply with court-ordered time frames must be taken seriously."

For more, see 'Conflicted robosigner' equals no foreclosure: NY state judge.

Sunday, December 18, 2011

Antitrust Feds Bag Five More Suspects In Ongoing Probe Throughout Northern California Into Foreclosure Sale Bid Rigging Rackets

In Sacramento, California, the Central Valley Business Times reports:

  • Four real estate investors and one auctioneer or “crier” have been indicted by a federal grand jury in Sacramento for their alleged participation in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County.

  • The indictment, which was returned on Dec. 7 and unsealed Tuesday, charges Wiley Chandler, 47, of Lodi; Andrew Katakis, 47, of Danville; Donald Parker, 48, of Valley Springs; Anthony Joachim, 44, of Stockton; and Theodore Longley, 62, of Roseville, with conspiring with other unnamed co-conspirators to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions. The indictment also charges Mr. Longley, the crier, with aiding and abetting the conspirators.

  • According to the indictment, Messrs. Chandler, Katakis, Parker, Joachim, Longley, and co‑conspirators agreed to suppress and restrain competition by rigging bids to obtain selected properties offered at public auctions in San Joaquin County. The conspirators also devised a scheme to fraudulently acquire title to selected properties sold at the public auctions and to divert money to co-conspirators that would have gone to the beneficiaries, the government says.

For more, see Five indicted for bid rigging and fraud at Central Valley foreclosure auctions (14 now charged in the continuing investigation; ‘The indictment … alleges … conspiracy, deceit, and heavy-handed tactics to take advantage of a depressed housing market’).

Go here for other posts & links on bid rigging at foreclosure and other real estate-related auctions.

Go here for links to more from the U.S. Justice Department on bid-rigging prosecutions.

Ohio AG Announces Toothless Settlement Agreement With Loan Servicer Over Allegedly Inadequate Loan Modification Practices

From the Office of the Ohio Attorney General:

  • Ohio Attorney General Mike DeWine [] announced an agreement with American Home Mortgage Servicing Inc. (AHMSI) to settle a 2009 lawsuit filed in Franklin County Common Pleas Court that alleged AHMSI violated Ohio consumer law by providing inadequate services to consumers seeking loan modifications.

  • "This agreement will help Ohio homeowners receive fair, improved and faster treatment when negotiating a loan modification or trying to avoid foreclosure," Attorney General DeWine said. "We are pleased that American Home Mortgage Servicing has worked with our office to reach this settlement and to help Ohioans."

  • In the settlement, the Attorney General and AHMSI agree to mortgage servicing standards that will apply to all AHMSI-serviced Ohio loans. The servicing standards include:

    1) Borrowers who complete a loan modification application will be assigned a single point of contact with AHMSI.
    2) AHMSI will implement a specific timeline for all loan modification requests.
    3) AHMSI will temporarily suspend foreclosures when a borrower completes a loan modification application and will implement an internal review process for denied loan modifications.
    4) AHMSI will no longer assert in loss mitigation agreements that consumers have no right to claims against lenders or holders of notes.

For the Ohio Attorney General press release, see Attorney General DeWine Announces Settlement with American Home Mortgage Servicing.

Closing Agent Screw-Up Failing To Clear Existing Mortgage Leaves Homebuyers' Equity Tied Up In Escrow Upon Subsequent Sale 12 Years Later

In Avenel, New Jersey, The Star Ledger reports:

  • It’s not uncommon for funds to be held aside in escrow during a home sale. The money is kept on the side as an assurance that a seller will fulfill any outstanding obligations to a sales contract. But that’s not how it happened for Michael Moore, 64, of Avenel, who sold his home in Clark in November 2010.

  • "I gave power of attorney to the lawyer for the closing," said Moore, 64. "He said they were withholding $7,500 and it would take about two weeks until the paperwork was completed."

  • But more than a year later, the escrow funds had not been returned. Here’s what happened.

  • Moore bought the home with his long-time girlfriend in 1998. They decided to sell in November 2010, and the couple had separate attorneys for the transaction.

  • The new buyers’ lawyer said there was an outstanding mortgage on the property. Moore said that couldn’t be. "We put down $200,000 and had a $40,000 mortgage, and that mortgage was paid off," he said. "When we bought the house we got title insurance so everything on the house should have been clear."

  • But apparently, it wasn’t. All mortgage lenders require title insurance, which protects the homeowner and the lender in case there are any unpaid property taxes or other liens on a property. Records showed there was a $133,000 mortgage from First Residential Mortgage dating back to 1993, in the names of the owners who sold the home to Moore and his girlfriend.

  • But Moore’s settlement statement when he bought the home showed that mortgage had been paid off. And even if the loan hadn’t been paid off, the title insurance policy – written by Old Republic Title of Minneapolis – would have covered Moore and his girlfriend.

  • The couple’s attorneys tried to get the escrow funds released, but the new buyers’ attorney, Adolph Sicheri, wouldn’t budge. "There is an open mortgage of record and it’s the seller’s responsibility to clear the home," Sicheri said. "That’s all we’ve been asking."

  • Sicheri recommended that Moore file suit to have the loan discharged, or contact the lender, First Residential Mortgage, for proof that the loan was paid. Moore said he couldn’t afford to go to court, and the evidence of payment was already in the closing paperwork.

  • "I’m not releasing that money until they do the right thing," Sicheri said. "It’s still a cloud on the title."

For more, see Getting escrow funds released no easy deed.