Monday, August 13, 2012

Foreclosure Rescue Operator Who Used Stolen IDs To File Serial Bankruptcy Filings To Cough Up $5M Fine To Settle Feds' Civil Suit

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

  • A federal judge has ordered a Seal Beach man to pay $5 million in civil penalties in connection with allegations of a massive fraud targeting homeowners, renters and lenders.

    Terrill “Terry” Meisinger agreed to the $5 million penalty as part of a settlement agreement to resolve a lawsuit filed by the United States Attorney’s Office in June 2011. United States District Judge Virginia A. Phillips on Tuesday signed an order concluding the case against Terry Meisinger and prohibiting him from participating in the home finance or real estate industries for a period of 10 years.
  • The complaint alleged that Meisinger contacted individuals who were facing imminent foreclosure and promised that he could help them avoid foreclosure and save their credit.

    Meisinger allegedly told distressed homeowners that if they deeded their houses to him and immediately moved out, they would receive a small cash payment, typically from $500 to $1,000, with the promise that Meisinger would bring their mortgage payments current and pay them an additional $5,000 to $10,000 when he eventually sold their properties.

    According to the lawsuit, instead of taking action to bring the mortgage payments current, Meisinger immediately transferred the properties into the names of unknowing third parties whose identities he had stolen, and then fraudulently filed sequential bankruptcy petitions in these names.(1)

    The court filings triggered successive automatic stays that prevented lenders from foreclosing. As alleged in the complaint, these fraudulent tactics in Bankruptcy Court allowed Meisinger to rent the properties for extended periods – up to three years on some properties – by repeating this fraudulent transfer and bankruptcy scheme with scores of stolen identities.

    Authorities believe that between 2000 and 2004, Meisinger collected more than $1.5 million in illicit rents from renters in more than 100 properties, most of which were in the Inland Empire, and never made any payments on the mortgages.

    During this five-year period, authorities estimate that Meisinger caused more than 300 bogus bankruptcy petitions to be filed in the names of numerous individuals who had no knowledge their identity was being used.

    When lenders were finally able to secure dismissal of these fraudulent bankruptcy petitions and complete foreclosure, the renters lost their deposits and rent payments and, in some cases, were evicted and left homeless.

(1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of the various foreclosure rescue scams involving the fraudulent use of the Federal bankruptcy process.

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