Illinois AG Tags Two With Criminal Charges For Allegedly Promising To Save Homeowners From Foreclosure By Peddling Sale Leaseback Schemes

From the Office of the Illinois Attorney General:

• Attorney General Lisa Madigan announced the arrest of a Chicago man who stole more than $350,000 in a wide-reaching mortgage fraud scheme in which they promised to help desperate homeowners avoid foreclosure.



• Madigan said defendant Warren Jackson, 41, of Chicago, was arrested late Thursday and is being held in Cook County jail. Yolanda King, 46, of Chicago, who was also charged in the scheme, was arrested on Jan. 10. Both were formally indicted earlier this month.



• Jackson was charged with one count of organizing a continuing financial crimes enterprise, four counts of financial institution fraud and three counts of theft by deception, one count of criminal mortgage rescue fraud, one count of forgery by delivery, and one count of false impersonation of an attorney. King was charged with two counts of financial institution fraud and one count of forgery by delivery.

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• Jackson and King are facing six to 30 years and four to 15 years in the Illinois Department of Corrections, respectively.



• Madigan alleges that Jackson orchestrated two mortgage-related schemes involving Chicago homeowners. King was charged for her role in helping Jackson perpetuate these schemes. The first scam targeted homeowners at risk of foreclosure, promising to save their homes by negotiating lower mortgage payments. Madigan alleges that after collecting upfront fees, Jackson failed to negotiate or perform any services on behalf of the homeowners, placing their victims at even greater risk of foreclosure.



• In the second scheme, called a “sale-leaseback” to purportedly save the homeowner’s home,(1) Jackson used straw buyers to purchase homes from distressed homeowners, sometimes falsely promising them that they could pay rent for a year and then could potentially buy back the property. Jackson also tricked homeowners into unknowingly selling their homes to straw buyers by leading them to believe that they were signing paperwork for a new loan to help them avoid foreclosure.



• Madigan alleges that Jackson used the sale-leaseback scheme to transfer title from homeowners to straw buyers for the purpose of stripping the remaining equity from the home. Individual homeowners lost from $70,000 to $150,000 of equity in their homes as a result of the schemes.(2)

For the Illinois AG press release, see Madigan: Two Chicago Con Artists Arrested In Criminal Mortgage Scheme.

(1) For more on this type of foreclosure rescue ripoff, see:

• Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals;
• Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (June 2005).

(2) At one time, many in state and local law enforcement (particularly those with untrained eyes and who were otherwise clueless in handling 'semi-sophisticated' white collar crimes - for some, anything more complex than investigating a 'rubber check' case is 'semi-sophisticated') once passed on prosecuting these sale leaseback equity stripping ripoffs that under the flimsy pretense that these cases were merely 'civil matters.'

Over the last couple of years, it's been primarily the Feds (U.S. Attorneys, FBI, Secret Service, etc.) that have been bringing prosecutions in these equity stripping ripoffs. However, as this story reflects, more and more state court prosecutors now appear to be stepping up to the plate and showing some guts by bringing criminal charges against these scammers. See, for example:

• Sale Leaseback Equity Stripping Peddler 'Scores' Guilty Verdict In Equity Stripping Ripoff; Grand Larceny, Scheme To Defraud, Conspiracy, Says Jury (Prosecuted by the Westchester County, NY District Attorney, a scammer who swindled four local families out of their homes was convicted after a jury trial of four felony counts of second-degree grand larceny and one each of first-degree scheme to defraud and fourth-degree conspiracy),



• Convicted Foreclosure Rescue Scammer Could Face Life Sentence On New Charges In Alleged Sale Leaseback, Equity Stripping Ripoff That Fleeced 5 Victims (Los Angeles District Attorney charged alleged scammer with 23 felonies — including theft from the elderly, identity theft and real estate fraud — for allegedly tricking five people into unknowingly granting him title to their homes, and charged him under California's 'three-strikes' law),



• Foreclosure Rescue Scam Mastermind Found Guilty Of Dozens Of Felonies; Ran Upfront Fee Land Grant Scheme, Sale Leaseback Rent Skimming Racket (After an eight-week trial, and through the efforts of the San Diego District Attorney, a scammer was found guilty of 160 counts of conspiracy to commit grand theft, grand theft, rent skimming and deceitful practices by a foreclosure consultant),



• Delaware AG Levels 21-Count Indictment Against Alleged Foreclosure Rescue Racket Using "Divine" Cover In Sale Leaseback, Equity Stripping Ripoff (The Delaware Attorney General obtained an indictment alleging that the scammer ran a criminal enterprise involving theft, money laundering, and forgery in which he preyed on vulnerable homeowners who faced imminent foreclosure),



• Central Florida Sale Leaseback Peddler Linked To 50 Ripoff Deals Gets 10 Years On Racketeering Charge; Targeted Cash-Strapped, High-Equity Homeowners (A joint prosecution by the Orange County, Florida and the state attorney general (under former AG Bill McCollum) led to the scammer copping a plea to a single count of felony racketeering after initially being charged with 12 first-degree felony counts, including racketeering, conspiracy to commit racketeering and numerous counts of grand theft),



• NY AG Squeezes Guilty Pleas From 4 For Roles In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Racket; 1 Awaits Trial On 23 Felony Counts (After a New York Attorney General prosecution, four employees of a sale leaseback racket pleaded guilty in Albany County to felony charges that included grand larceny, scheme to defraud and falsifying business records, after the Attorney General's Office filed criminal complaints),



• Queens DA Bags Seventeen Suspects In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Racket (Queens County, NY DA (joined in the probe by the office of the New York State Banking Department and the New York State Police) variously charged the defendants with first- and second-degree grand larceny, first degree criminal possession of stolen property, first-degree money laundering, first-degree identity theft, second-degree forgery, second-degree criminal possession of a forged instrument, first-degree falsifying business records, first-degree offering a false instrument for filing, first-degree scheme to defraud and fourth-degree criminal facilitation.).