Saturday, May 26, 2012

Mystery Surrounds Disappearance Of County Real Estate Tax Payments As 77 Fort Lauderdale- Area Property Owners Get Hit With Delinquency Notices

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

  • Seventy-seven Broward property owners paid their taxes last November but got a piece of mail no taxpayer wants to receive — a delinquent tax notice. They say they were among the victims of a mysterious disappearance of property tax payments mailed by diligent property owners last fall. The checks just vanished.

  • Broward officials say the tally of missing checks is at 1,075 now — the last 77 of which were discovered after the delinquent tax notices went out. Taxpayers who hadn’t noticed until now that their checks never were deposited by the county face a steeper climb to clear up the problem, and the stakes are higher.

  • If the taxes aren’t paid by May 22, the delinquent tax bill can carry an interest rate up to 18 percent, or, the notice warns ominously, “your property may be sold at a later date.’’ [...] “There are legitimate people who are just now finding this out, for whatever reason,’’ said Claudio Manicone, operations manager in the county’s tax and deeds department.
  • Broward officials determined earlier this year that hundreds of checks mailed in November never made it to their destination.

Cop Booted From Force Over Fraudulently-Obtained Mortgage; Dodges Criminal Charges As Bank Fails To Follow Up On Cooperation With Prosecutors

In Naples, Florida, the Naples Daily News reports:

  • Cpl. Michael Kovar, a detective in the North Naples district who had been with the Sheriff's Office since 2000, was dismissed for inflating his salary on paperwork that allowed him to fraudulently receive a $2.2 million loan in 2007, reports show.

  • On a loan application, Kovar said he made $510,000 a year at his second job as owner of Marbella Fabrics in Bonita Springs, a figure that was not supported by information on his tax returns. The actual income from the business was about $88,000 a year, reports said.

  • Kovar later told internal investigators the application was completed by a law firm and said he signed the document without proofreading it. The Sheriff's Office economics crime unit began investigating in October 2010 after receiving a report created by JPMorgan Chase. Kovar told investigators he felt his actual income would qualify for the high mortgage. "We applied and they gave it to us, so I assumed that yes," he told investigators.

  • The investigation also revealed that Kovar, who was hoping to buy a $2.2 million home, received $300,000 in two equity loans from the home's seller based on two other properties Kovar owned. Kovar then used the $300,000 as a down payment on a $1.7 million loan. "We purchased the property with the intent on flipping it and we were hoping for the best," he told investigators.

  • Instead, he later defaulted on the loan with a loss of more than $500,000, according to the report given to the Sheriff's Office. All of his mortgages ended in foreclosure, he said.

  • Documents indicate the bank, JPMorgan Chase, did not wish to press charges or provide pertinent paperwork. The State Attorney's Office said it would not issue an arrest warrant without the bank's cooperation.

  • Kovar was fired from the Sheriff's Office in mid-March for unlawful or improper conduct on- or off-duty, and for failing to pay just debts and liabilities. His appeal was later denied, said agency spokeswoman Michelle Batten.

HOA Property Manager Gets 21 Months For Grand Theft In $400K+ Condo Cash Ripoff

In Miami, Florida, the South Florida Sun Sentinel reports:

  • Steal from a condominium association, go to prison: That's the message sent by a judge who sentenced a former South Florida property manager to nearly two years in prison for theft of about $500,000 from bank accounts of the community she was supposed to be protecting.

  • On Friday, 49-year-old Lourdes Rodriguez of Pembroke Pines was sentenced in Miami-Dade Circuit Court to 21 months in the state penitentiary for one count of first degree grand theft. Rodriguez pled guilty to the charge on May 10, according to a press release from Miami-Dade State Attorney Katherine Fernandez Rundle.

Friday, May 25, 2012

Miami Woman Loses Home Of 40+ Years After Being Scammed In Home Improvement Ripoff

In Miami, Florida, WPLG-TV Channel 10 reports:

  • From the driver's seat of her large forest green sedan, Angela Samuels looked on her parents' modest pink-hued Liberty City home with a glazed expression Wednesday. Fellow community activists picked from the pile of belongings scattered across the front lawn and placed them in the car for her. There were buckets stuffed with clothes wedged into the trunk and back seat.

  • After years of fighting her eviction, Samuels seemed a bit stunned that this is how it would end. Maybe her optimism kept her from ever processing this possibility, that she would be kicked out of the home she's lived in for more than 40 years.

  • Samuels' problems started after her parents died. According to Occupy Miami community organizer Kevin Young, her parents didn't leave a will, and so the home ended up in probate.

  • At the time, he said, there was a mortgage of $7,000, and while Samuels was trying to work out a loan to pay off the debt, she said someone duped her.

  • A man promising to help her fix up the home conned her, she said, into taking equity out of the home, and then he vanished with the cash without making any improvements. Now faced with a loan bigger than she could afford, Samuels was stuck and her family home was in jeopardy.
  • Samuels said her father was a pastor, and her mother a missionary. That home was the community's home. Those in pain, those who were homeless, those who needed a meal, she said, all knew they could come to 1740 NW 46th St. That's why her favorite room was the "great room," the big room in the front where everyone would come and hang out, in some cases crash for the night.

Another Real Estate Investor Goes Down In Ongoing Federal Probe Into Foreclosure Auction Bid Rigging Racket

In Mobile, Alabama, the Press Register reports:

  • A local real estate investor last week became the latest businessman to acknowledge guilt in a years-long conspiracy to rig foreclosure auctions to artificially depress prices by limiting competition. Steven J. Cox, 58, pleaded guilty to conspiracy to violate the Sherman Antitrust Act and conspiracy to commit mail fraud from 2004 to at least 2010.

  • If Chief U.S. District Judge William Steele accepts the plea agreement, Cox will be sentenced to a year in prison at a minimum-security camp. He also would pay a $10,000 fine and make restitution in the amount of $82,101 to lien-holders who were cheated by the rigged auctions.

  • Cox also has agreed to cooperate with the U.S. Department of Justice’s ongoing investigation. Four other Mobile-area investors have pleaded guilty so far.

  • Cox and other members of the conspiracy would agree to designate one person to bid on properties at foreclosure auctions at the county courthouse, according to court records. After one investor would acquire property cheaply, according to court records, participants in the scheme would hold a secret second auction among themselves.

Multiple New Jersey Tax Lien Auction Bid Rigging Class Action Suits Face Consolidation In Federal Court

In Lebanon Township, New Jersey, the Hunterdon County Democrat reports:

  • A class action lawsuit initiated by a township woman facing foreclosure could be consolidated with two other similar lawsuits.

  • Jeanne Boyer who has been fighting to save her own home from foreclosure, filed the suit in March on behalf of herself and potentially thousands of other homeowners in similar situations. Boyer alleges that she is one of many victims of an illegal scheme that allowed tax lien investors to charge the highest amount of interest allowed by law by eliminating the competitive bidding process.

  • The suit was filed in Hunterdon County Superior Court on March 13 and removed to federal court on March 28. Since then two other similar suits have been filed in Federal District Court.

  • One of the suits was filed by Raymond Contarino, of Newfield. A New York company, M.A. Sass, bought the lien on his home at the March 2007 auction for $5,224. That company has not been charged by the Department of Justice but so far there have been nine other guilty pleas in connection with the scheme. The investigation is still open.

  • According Contarino’s suit, “as a direct result of defendants’ unlawful combination, collusion, conspiracy and agreement,” all 59 tax liens auctioned at the March 2007 tax lien sale in Newfield, were purchased “by defendants and/or unnamed co-conspirators, at the artificially elevated, maximum bid rate of 18%.”

  • Another suit was filed by MSC, LLC, of Cherry Hill. The three suits name many of the same people or companies as defendants. A motion to consolidate is now pending in federal court.

  • All three suits ask the court to stop the people who have pleaded guilty from enforcing any tax liens they currently hold, return title to properties already foreclosed upon and turning over proceeds from sales of properties they received because of the bid-rigging scheme. Such proceeds are the “fruits of the illegal conduct” of the people now awaiting sentencing.

Thursday, May 24, 2012

Homeowner Forced Into Hospital, Returns Home To Find Adverse Possession-Claiming Family On Premises; Judge Orders Suspect To Go To Trial

In Castle Rock, Colorado, CBS 4 reports:

  • A Douglas County judge has ordered a man who had been living in a million dollar home to stand trial on charges including trespassing and perjury. CBS4’s On Your Side Investigator Rick Sallinger has linked this case to at least a dozen other “stolen homes” across the area. The homes involved were under foreclosure and taken over by people who claim they have a legal right to do so under a law called “Adverse Possession.”

  • Sergio Hernandez was in court for a preliminary hearing after he was evicted from a million dollar mansion in the Bell Mountain Ranch subdivision near Castle Rock on March 22nd. Hernandez is charged with trespassing, perjury, offering false instrument and violation of a bail bond.

  • In March, Hernandez and his family members were forced to leave the four bedroom, five bathroom home at 1252 Rosewind Circle. All their possessions were hauled to the curb by bank hired movers. The true owner of the furniture inside the home remains the subject of debate.

  • The home was originally owned by Joyce Carroll, who tells us her furniture was still inside when Hernandez moved in. She went into the hospital, was unable to make payments, and Bank of America started foreclosure proceedings. When she was able to leave the hospital, she found strangers living inside a home she never fully moved out of.

  • That’s when Sergio Hernandez provided a document of “Adverse Possession”, which he claims gives him a legal right to live in the house.
  • Last Friday, Hernandez arrived in a U-Haul van to help move a family out of a $750,000 home in Larkspur. The home was occupied by a man named Gonzolo Perez, who is believed to be related to Hernandez.

  • In a similar fashion, Douglas County deputies were accompanied by a locksmith, who picked the lock to the home [...]. The bank-hired real estate agent helped haul Mr. Perez’s possessions to the curb. Hernandez refused to talk with us about his connection to this home.

  • But back in court, Detective Trindle made the link. He said he learned about Hernandez and the home in Castle Rock after investigating the house in Larkspur. Sergio Hernandez is due back in court on August 13th. Gonzolo Perez also has future court appearances scheduled.

Homeowner Facing Foreclosure Takes Two Month Trip, Returns Home To Find Premises Ransacked

In Palmdale, California, KABC-TV Channel 7 reports:

  • Shock and frustration for Palmdale homeowner Leroy McComb: He's speaking out about the distress of finding his home burglarized and trashed after a two-month trip. Leroy McComb certainly knows bad times. He lost his job in September. His house is in foreclosure. And he's going through a divorce. But none of that prepared him for a rude homecoming.

  • "The beds are all tore up, they stole the door off my daughter's bedroom," said McComb. "They stole the wiring off the side of the house to the junction box."

  • McComb says he went to visit his brother in Texas in February and when he returned two and a half months later he found his house ransacked, computer equipment stolen, furniture destroyed and trash scattered through every room.

  • "They took my pictures of my kids, they tore up memories," said McComb. "I don't have the nicest stuff in the world, but it was all I had in the world was in here. Now there's nothing left but trash and overturned furniture."

Jury Convicts Suspect On 34 Counts In Home-Hijacking Racket That Commandeered Possession Of Vacant Homes, Then Rented Them To Tenants

In Cobb County, Georgia, WSB-TV Channel 2 reports:

  • A Cobb County jury convicted a man accused of taking over homes on the verge of foreclosure and renting them to unsuspecting tenants. Jurors found John Harris, the CEO of New Life Granted, guilty of 34 counts, including racketeering, burglary, theft, forgery and criminal trespass. It’s believed there were more than 20 victims in the case.

  • Harris testified on his own behalf [], stating that his company would find homes that looked abandoned take them over and then move in their own tenants. His company promised to help people facing foreclosure by restoring their credit and finding them a place to live – the abandoned homes.
  • Police discovered what Harris was doing when the real homeowners showed up. Harris said that’s when he’d remove his signs and move tenants out of the home.

  • Harris told jurors that he started to have second thoughts about his business model, but prosecutors said that only came after he placed tenants and collected rent. “I no longer felt comfortable taking over the houses as I was, so I was making a more concerted effort to get quit-claim deeds or leases,” Harris said. Four other people were charged in the case.

Six Would-Be Renters Get Taken For $10K By Swindler Showing Vacant Apartments, Then Taking Off After Pocketing Security Deposits

In Corona, Queens, the New York Post reports:

  • A con artist [] tricked six people into giving him nearly $10,000 by posing as a realtor and showing vacant apartments in Corona, police said. One victim was smart enough to catch him in the act on video, sources said.

  • After the swindler took security deposits ranging from $1,400 to $2,300 from apartment seekers between Oct. 21 and Nov. 25, one victim had a friend call the fraudster for another showing. The friend videotaped the suspect inside 100-22 40th Rd., where he had lured three victims, then left without turning over any cash, sources said.

  • Police are asking for the public’s help finding the con man, who also allegedly showed homes and ripped people off on 42nd Avenue and Denman Street.
Source: NYPD Daily Blotter (1st story).

Wednesday, May 23, 2012

NYS Hearings On Banksters' Force-Placed Insurance Racket Begin; Homeowners Give Testimony Describing Alleged Abuses

In Albany, New York, The Associated Press reports:

  • Premiums for so-called force-placed insurance have more than tripled since 2004, producing enormous profits for insurers and the banks that take out policies when a homeowner fails to maintain coverage required by the mortgage, according to New York regulators.

  • In some cases, the premiums are "exponentially higher" than regular homeowners insurance and can push homeowners into foreclosure, Department of Financial Services Superintendent Benjamin Lawsky said Thursday at the start of public hearings on insurance rates. Such premiums rose from $1.5 billion in 2004 to $5.5 billion in 2010 during the U.S. housing crisis and have probably risen since, he said.

  • A handful of homeowners told regulators about insurance rates they were forced to pay that were up to three times higher than their original policies, making it harder to keep their homes. Some said they didn't get notices about the changes until they got higher bills for their escrow accounts.

  • Consumer advocates said similar stories were widespread, and that homeowners also end up with policies that don't cover their personal injury liability or their house contents.
See also, New York Daily News: 'Forced place insurance' gouging threatens to kick homeowners to the curb (State hears claims that banks are jacking up mortgage payments with possibly unwarranted insurance payments).

Arizona AG: Loan Modification Racket Used Multiple Ruses To Pocket Upfront Cash From Homeowners; Claimed Fees Were 'Church Donations'

From the Office of the Arizona Attorney General:

  • Attorney General Tom Horne announced [] that a complaint has been filed in Maricopa County Superior Court against Rosa Galope, of Surprise and Avondale, Arizona, alleging that she defrauded homeowners looking for help in obtaining mortgage modifications and saving their homes from foreclosure.
  • The lawsuit alleges that Galope charged thousands of dollars in advance fees for mortgage loan modification and foreclosure rescue services that she later falsely claimed were donations to her church, Nation to Nation Ministries.

  • The lawsuit also alleges that Galope prohibited her clients from communicating with their lenders and told them to send her any payments that they intended to go to their lenders, and that Galope would forward the payments to the lender.

  • The lawsuit alleges that rather than forwarding homeowners' payments to their lenders, Galope kept the funds for her own use, even endorsing checks made payable to lenders and cashing them at a local check cashing store.

  • The lawsuit further alleges that when Galope was unsuccessful in helping homeowners get a modification. She convinced them to give her thousands of dollars more, money that Galope said would be used as a down payment for the homeowners to repurchase their homes from an investor. [...] The lawsuit alleges that Galope kept the down payment money for herself and failed to refund it to homeowners when no investor deal occurred.
For the Arizona AG press release, see Horne Files Complaint In Mortgage Fraud Scam.

Ohio AG Continues Attack On Loan Mod Scams w/ Civil Suit; Alleges Outfit Clipped Homeowners For Upfront Fees, Stiffed Them On Providing Meaningful Aid

From the Office of the Ohio Attorney General:

  • Attorney General Mike DeWine [] announced a lawsuit against K&R Marketing, LLC, doing business as Fix My Mortgage Problem. The lawsuit charges the business and its owner with multiple violations of Ohio’s consumer laws, including failure to deliver.

  • This company was misleading consumers,” Attorney General DeWine said. “Consumers said they paid fees for loan modification help, but never received assistance. Homeowners who are trying to prevent foreclosure on their homes should avoid businesses that charge up-front fees for their services.” [...] All of the complaints the Ohio Attorney General’s Office has received are from out-of-state consumers.
  • Christopher Bray, the owner of K&R Marketing, told consumers that he would work with their mortgage companies to modify their loans for up-front fees between $500 and $1,000. After accepting the down payment, Bray did little to aid consumers and did not provide refunds.

Indiana AG Targets Five More Out-Of-State Outfits For Allegedly Running Loan Modification Rackets

From the Office of the Indiana Attorney General:

  • More out-of-state scammers who profited off of Hoosiers desperate to keep their homes now face lawsuits by Indiana Attorney General Greg Zoeller.

  • Five lawsuits were recently filed against Freedom Equity Savings of Ohio, Integrity Mortgage and Credit Solutions of Florida, Provident Law Group, Inc. of California, Nationwide Mediation Services of California and Global Equity Solutions also know as Peachtree Consultants of Georgia.
  • The companies are all accused of violating Indiana's consumer protection laws and taking more than $11,300 total from six customers living in Hamilton, Lake, Marion, Parke and Union counties. In all cases, the businesses promised to reduce homeowners’ interest rates or monthly payments in exchange for an upfront fee.

  • Consumers made payments ranging from $791 to $3,000 before realizing little or no progress had been made on their home loans. The state seeks an injunction, restitution and civil penalties against the companies.
For the Indiana AG press release, see State lawsuits target home loan modification companies.
For the lawsuits, see:

Tuesday, May 22, 2012

Loan Mod Scammer Falls After Forcing Feds Thru 10-Day Jury Trial; Stands To Get Hammered For Screwing 100s Across Country Out Of Hundred$ Of Thousand$

From the Office of the U.S. Attorney (Manhattan):

  • Preet Bharara, the United States Attorney for the Southern District of New York, announced that ISAAK KHAFIZOV, a former owner of American Home Recovery (“AHR”), a mortgage loan modification business, was found guilty [] in Manhattan federal court of conspiracy, mail fraud, and wire fraud, in connection with a scheme to defraud distressed homeowners and lenders.

  • KHAFIZOV was convicted after a ten-day jury trial [...]. He was remanded into the custody of the U.S. Marshals following his conviction.

  • Manhattan U.S. Attorney Preet Bharara said: “Isaak Khafizov dangled false promises of relief to distressed homeowners who were trying to keep their homes, but instead, he repeatedly victimized them by stealing their money and forcing many of them into foreclosure. He will now face justice for the fraud that he committed against vulnerable and needy homeowners all over the country.”
  • After receiving up-front fees from the distressed homeowners, KHAFIZOV and AHR did little or no work to try to renegotiate the homeowners’ mortgages. And on those rare occasions when KHAFIZOV succeeded in getting a homeowner a mortgage modification, he typically did so by coaching the homeowner to lie about his or her income and assets on forms submitted to the mortgage-lender.

  • Because KHAFIZOV and AHR did not do the work they had promised and because KHAFIZOV specifically directed the distressed homeowners to stop paying their mortgages and to pay AHR its fees instead, many of AHR’s clients wound up in foreclosure. All told, KHAFIZOV and AHR defrauded hundreds of customers across the country out of hundreds of thousands of dollars in fees.

Scammer Gets 18 Months For Running Loan Modification Ripoff That Fleeced 80+ Homeowners Out Of $250K

From the Office of the U.S. Attorney (St. Louis, Missouri):

  • Marien Brown was sentenced to 18 months in prison, and ordered to pay approximately $250,000 restitution for falsely representing that she operated a “mortgage rescue” or “foreclosure rescue” service.

  • According to court documents, Brown, 42, Wentzville, Mo., also known as Marien White, owned and operated 1st Financial Resource, LLC, (First Financial) from September 2008 until March 2009, at which time the business became known as 1st Federal Resource, LLC (First Federal).
  • Brown researched and identified groups of vulnerable homeowners in Hawaii that were one or more mortgage payments behind, or were in imminent risk of home foreclosure, and sent out a large number of unsolicited mailings to prospective clients claiming that she operated a “mortgage rescue” or foreclosure rescue” service.

  • More than eighty clients responded to her mailings and wired funds to First Federal. Brown converted these funds to her own use. None of the client funds were ever sent to lenders. [...] Her scheme resulted in losses of approximately $250,000.

Alleged Scam Victims' Attorney: Mortgage Assistance-Peddling 'Guru' May Have Ripped Off $1M+ From Nearly 200 Connecticut Residents; Cops Yet To Act

In Wethersfield, Connecticut, The Hartford Courant reports:

  • An immigrant couple paid a Wethersfield man $18,600 to erase their debts by tapping into a little-known federal fund that they were told has money for anyone who knows the special, complicated way to apply for it, court records state. But no such fund exists, their lawyer Manuel A, Suarez said Monday. The fund is "fictitious," he said.
  • Suarez said his clients were struggling but current on their debts when they went to [Deowraj] Buddhu for advice in 2010, hired him and followed his guidance to stop paying on loans and apply for money to wipe out all their obligations. That advice caused the couple to fall into foreclosure, which they believed until a few months ago would be reversed by the secret fund, Suarez said.

  • In court, Judge Antonio Robaina said he needed time to review the motion and would notify all parties once he made a decision on the motion.

  • Outside court, Suarez said he has six clients who claim they were defrauded by Buddhu, a Wethersfield resident in his 60s who served time in state prison for his misdemeanor role in a counterfeit check case.

  • In court papers, Suarez says he's gotten information that Buddhu may have collected more than $1 million from as many as 200 clients who on his counsel stopped paying mortgages, car loans, credit card debts because the secret fund would pay off those obligations.

  • Buddhu has not been charged.

State AG Charges Michigan Woman With Racketeering, False Pretenses For Allegedly Running Loan Modification Scam That Ripped Off Dozens Out Of $250K

From the Office of the Michigan Attorney General's Office:

  • Attorney General Bill Schuette [] announced charges against a Holly woman for her role in a foreclosure-rescue fraud operation that scammed at least 60 victims across the state out of $250,000. Tashia Winstanley, 38, of Holly, and her company, TLW Mortgage Solutions, face criminal charges for collecting upfront fees and impersonating a mortgage modification company.
  • The criminal charges come as the result of an investigation by the Attorney General after complaints against the company were filed with Attorney General Schuette's Consumer Protection Division. The investigation revealed that from September 2009 through January 2012 Winstanley allegedly operated TLW Mortgage Solutions as a mortgage modification business.

  • It is alleged Winstanley offered prospective clients mortgage loan modifications for a fee. Winstanley allegedly promised victims she would secure a mortgage loan modification for them. Some victims even made their mortgage payments directly to Winstanley instead of their lenders, but instead of remitting those payments to the banks, Winstanley allegedly pocketed the funds for her own personal use. Investigation subsequently revealed that Winstanley allegedly made no efforts to secure loan modifications for any of the victims.

  • Affected victims reside in the following counties: Grand Traverse, Leelanau, Kalkaska, Roscommon, Oakland, Genesee, Benzie and Macomb. Winstanley and her company, TLW Mortgage Solutions are each charged in Grand Traverse County's 86th District Court with the following:

    One count of Conducting Criminal Enterprises (Racketeering), a felony punishable by up to twenty years in prison;

    One count of False Pretenses - More than $20,000, a felony punishable by up to ten years in prison and

    Three counts of False Pretenses - $1,000-$20,000, a felony punishable by up to five years in prison and/or three times the value of money or property involved.

  • Winstanley is currently incarcerated in Huron Valley Women's Correctional Facility serving time for previous convictions for Larceny by Conversion - $1,000-$20,000 charged in Leelanau and Kalkaska counties.

Monday, May 21, 2012

Suit: BofA Charges Homeowner In Foreclosure For Court Costs, Then Fails To Give Refunds Despite Subsequent Receipt Of Reimbursement For Unused Amount

In Hamilton County, Ohio, the Cincinnati Enquirer reports:

  • A Madisonville woman sued Bank of America [...] for pocketing court fees from foreclosure cases that she says belong to homeowners. Kathleen Collins accused the bank of fraud, breach of contract, unjust enrichment and other violations in a class-action lawsuit filed in Hamilton County Common Pleas Court.

  • Collins’ attorney, Robert Newman, said the bank’s practice of keeping the fees could impact thousands of homeowners who should have been reimbursed money when their cases were resolved.
  • The lawsuit’s accusations revolve around court fees, typically about $550, which the bank is required to pay when filing a foreclosure action. Depending on the length and outcome of the litigation, a portion of those fees often is reimbursed to the bank when the case is over. The suit says that’s what happened in Collins’ case when the bank was repaid $29 of its original court costs.

  • The problem, according to the lawsuit, is that the bank added all of the original court costs into Collins’ new loan, so she would pay the costs instead of the bank. And when the court reimbursed the $29 in Collins’ case, the bank collected it and left the full original costs in Collins’ loan.

  • Newman said the bank essentially is double-dipping: Collecting the full amount of the court costs from homeowners and then keeping the reimbursement of unused court costs for itself.

  • The refund goes to the bank and the bank doesn’t fork it over,” Newman said. “There is a substantial amount of money owing to the class.” He said it’s impossible to know how much money is involved at this time, since individual reimbursements are relatively small, usually no more than a few hundred dollars.

  • The lawsuit asks the court to bar Bank of America from such practices and to repay any reimbursed court costs to Collins and, potentially, to thousands of other borrowers. The suit also seeks unspecified damages.

Title Agent Pinched In $500K+ Escrow Ripoff That Left Ref'ncing Out-Of-State Couple In F'closure; Insurance Underwriter Steps Up To Make Victims Whole

From the Florida Keys, The Keys Reporter reports:

  • An owner of a mortgage title company with offices in Homestead and Key Largo is facing up to 90 years in prison for allegedly stealing money from one of her client's escrow accounts. State Division of Insurance Fraud detectives say Marie L. Girard, 52, owner of Girard Title Company, used more than $580,400 from a Minnesota client's mortgage escrow account for her own personal use.

  • The couple, Paul and Peggy Bruci, did not discover what was going on until they received a notice of foreclosure on their home they refinanced through Girard [...] in Key Largo.

  • Detective John Swope wants to know if there are any more victims out there. If you suspect you were victimized by Girard or any other title agent, call (954)-321-2995. Girard could not be reached for comment.

  • According to Girard's arrest warrant, Girard was the closing agent for the refinancing on the Bruci's home in May 2008. The couple was obtaining a loan from Bank United FSB for the house. Girard was acting as an agent for First American Title Insurance Company. That company was responsible for paying the Bruci's first mortgage under the refinancing agreement, according to the arrest warrant submitted by Swope.

  • On May 28, 2008, Girard allegedly filled out forms stating the Bruci's $508,000 mortgage was paid off. But Swope said Girard instead converted the entire $584,000 from the Bank United loan to herself.

  • According to the warrant, Girard changed the Bruci's mailing address for the borrower's monthly mortgage payment information to her Key Largo office at 230 Homestead Avenue. Swope said she then used the Bank United money to pay mortgage payments on that Key Largo office.

  • In February 2009, Girard met with an attorney for First American Title and admitted misappropriating the escrow funds. She worked out an agreement with the company to repay $112,726 up front and to take out mortgages on her two offices to repay the remaining $389,422 balance for the Bruci's mortgage before it was refinanced.

  • Since that money was never actually paid to the original lender, First Magnus Mortgage, First American was on the hook for the funds. Girard allegedly promised to pay First American the balance by Feb. 12, 2009, but instead allowed the mortgages on both her offices to default.

  • She is facing one grand theft charge, one charge of misappropriating funds of more than $100,000 and one charge of misappropriating escrow funds. Each charge carries with it up to 30 years in prison. At press time Tuesday, Girard was being held on $175,000 bond.

90-Year Old Tenant Dodges Foreclosure Boot; Court Holds BofA To Remaining 3.5 Years On Lease, Sinking Bankster's Effort To Disregard Federal Law

In Porterville, California, the Porterville Recorder reports:

  • Eve Ball is going to stay in her home after all. Local attorney Alex Krase said last week that the 90-year-old resident won her case against Bank of the America and got a court order that will allow her to stay in her home until October of 2015.

  • I think it was the right outcome. I’m happy she gets to stay,” said Krase. Judge Glade Roper made his ruling April 25 and Bank of America had five days in which to appeal. It did not. “We know it’s final now,” said the young attorney.

  • Eve Ball has lived in the two-bedroom, one-bathroom home on Road 223 for 11 years. She has three and a half years remaining on her lease, but then got an eviction notice from the large bank. “It’s quite a relief. She’s pretty excited about it,” said her son, Barry Ball.

  • According to records, the bank seized possession of the property late last year after the previous property owner foreclosed. Barry Ball had purchased the property — which includes two other small homes and a total of about one quarter of an acre of land — in 2002 but sold it three years later.

  • In 2005, the son negotiated with the new owner a 10-year lease for his mother to continue living in the home. The lease, which is set to expire in October 2015, has her paying $425 a month in rent.

  • Last October, Eve Ball received a letter from Bank of America informing her that the property owner had foreclosed. She was told to contact the bank immediately if she had a lease. She did, sending a copy of the escrow papers and asking the bank’s attorneys where she could send her payments.

  • According to Barry Ball, his mother did not hear back from the bank until January, when she was served with an eviction notice. Barry Ball said a section in the Protecting Tenants at Foreclosure Act of 2009 should allow his mother to keep her lease because it was agreed upon before foreclosure and she is not related to the previous property owner. Krase said that is true, but what made the case a big sticky is she had a verbal lease.

  • Krase had sought to have Eve Ball stay in her home until the law sunsets on Dec. 31, 2014, but was pleased the judge gave the extra 10 months. “The client is happy. She just wants to stay in her home,” said Krase. “That’s the most important part. She doesn’t have to worry any more,” added her son. He said she is glad to remain with her rose garden she planted.

Bankster Accused Of Theft, Trespassing, Reckless Indifference In 'Illegal Trashout' Civil Suit; Homebuyer: Chase OK'd Short Sale That I Paid Cash For!

In Kansas City, Missouri, KMBC-TV Channel 9 reports:

  • A Kansas City man is taking on banking giant JPMorgan Chase, accusing the company of something that he said would have landed anyone else in handcuffs.

  • Allan Danforth bought a house in a short sale in fall 2010. JPMorgan Chase held the previous owner's mortgage. Danforth said two months later, without notice, the bank changed the locks and hauled away $25,000 worth of furniture, appliances and family heirlooms.

  • "I had to bust in through the basement window here," Danforth said, pointing to the house that he was forced to break into more than 18 months ago. He said JPMorgan Chase's contractor, Safeguard Properties, ignored "No Trespassing" signs on the garage, changed the locks on his home and cleaned it out two months after he paid cash for the property.

  • "It was basically stuff that was 150 years of family history," Danforth said. "I feel violated and I felt like the house wasn't even safe to go into for a while."
  • "We fully intend to go into court and have a Jackson County jury try to decide the eventual outcome of this case in the only language JPMorgan Chase understands," [Danforth's attorney Tony] Stein said. "The language of money." In his lawsuit, Stein accuses JPMorgan Chase of theft, trespassing and reckless indifference.

  • Jackson County court records show that on Sept. 9, the previous homeowners transferred the house to Danforth. The bank signed off 12 days later. "For the very company to release their deed of trust and thereby release all their rights against this property, and then two months later, send in a company to clean this thing out? You'll have to ask them why they'd do something like that," Stein said. "It defies logic."
  • Under law, Stein said members of Danforth's family could be entitled to recover as much as $1.5 million in punitive damages.(1)
For more, see KC Man Sues Bank Over Foreclosure Error (Claim: JPMorgan Chase Changed Locks, Seized New Owner's Property).

(1) For those homeowners who've been screwed over by wrongful lockouts by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:

For examples of filed lawsuits involving illegal bank break-in, "trash-out" & lockout cases, see:

Tennessee Appeals Court Nixes Zombie Debt Buyer's Attempt To Enforce Money Claim Based On Crappy Paperwork

From a recent press release from the law firm Ballard Spahr LLP:

  • A recent decision by the Tennessee Court of Appeals illustrates the documentation-related challenges faced by creditors and debt buyers in credit card collection actions.

  • In its April 30, 2012, opinion in LVNV Funding, LLC v. Mastaw, the appellate court held that the buyer of a credit card account cannot rely on affidavits of an “authorized representative” of the debt buyer and its parent corporation to establish in a collection action that the defendant owed a debt or the amount owed.

  • The buyer had purchased the account from its parent corporation, which, in turn, had purchased the account from a bank that was either the card issuer or had purchased the account from the issuer.

  • With the debt buyer’s trial witness having conceded that she had no personal knowledge of the information in the affidavits, the appellate court found that the affidavits could be properly admitted as evidence only under the business records exception to the hearsay rule. That exception allows the admission of records made and maintained in the regular course of business.

  • As described by the appellate court, the affidavits did not identify or attach any specific records that included the debtor’s identity or his account number but sought to establish that information based on references to unspecified records that were described as maintained by the debt buyer as part of its normal business records.

  • In addition, the affidavits claimed such unspecified records were “represented” to include information provided by the original creditor without identifying who made such representation. They also did not explain the affiant’s relationship to the parent company or the basis for her designation as “authorized representative” of the debt buyer and parent company.
For the Court ruling, see LVNV Funding, LLC v. Mastaw, No. M2011-00990-COA-R3-CV (Tenn. App. April 30, 2012).

Sunday, May 20, 2012

Participant In Racket That Bilked Homeowners In 'Mortgage Elimination" Ponzi Scheme Gets 29 Months

In Baltimore, Maryland, The Washington Examiner reports:

  • A District woman has been sentenced to more than two years in prison for her role in a mortgage fraud scheme that authorities say bilked people in the D.C. region and across the country out of $78 million.

  • U.S. District Judge Roger Titus sentenced 53-year-old Carole Nelson on Monday in federal court in Greenbelt to two years and five months behind bars and ordered her to pay more than $34 million in restitution.

  • Nelson and others ran a fake mortgage-payment program called the "Dream Homes Program" beginning in 2005, according to prosecutors and court documents. They promised homeowners that they would pay off their mortgages in exchange for an initial investment of at least $50,000 and administrative fees. But the Dream Homes Program officials never paid the mortgages, leaving the homeowners to fend for themselves.

  • Prosecutors said more than 1,000 investors lost $78 million through the scheme. The program had offices in Maryland, D.C., Virginia, North Carolina, New York, Delaware, Florida, Georgia and California.
  • Nelson pleaded guilty in April 2009. Other Dream Homes officials were convicted at trials, including founder Andrew Hamilton Williams, of Hollywood, Fla., who is now serving a 150-year prison sentence.
For the U.S. Attorney press release, see Chief Financial Officer Sentenced in $78 Million “Dream Home” Mortgage Fraud Scheme (Received $413,075 in Compensation During Her 20 Months of Employment Despite Knowing That No Revenue Was Being Made to Pay Off Investors’ Mortgages).

NY Foreclosure Mill Attorneys' Failure To Submit Mandatory Paperwork When Filing Foreclosures Clog Courts, Leave Cases Languishing In Limbo

In New York City, the New York Post reports:

  • Foreclosure-mill attorneys are routinely breaking the law and clogging New York courts with unresolved cases, an explosive new study shows.

  • In a report set to be released this week, MFY Legal Services shows that foreclosure-mill law firms are still failing to file required documents in an astonishing 43 percent of foreclosure cases started in November 2010 and March 2011. The percentage was even higher for cases in October 2011. These trends suggest that as many as 5,200 of 12,142 residential foreclosures begun in New York last year are languishing in limbo.

  • It’s a huge problem,” said Jacob Inwald, Director of Foreclosure Prevention Litigation for Legal Services NYC. “Once you are sued in foreclosure, you are frozen and can’t resolve your situation.”

  • At issue is the October 2010 rule requiring foreclosure law firms to verify the accuracy of their filings. Created after the robo-signing scandal, the rule was meant to curtail false filings. But because lawyers can begin a case and file two documents afterwards — the accuracy affirmation and a request for a settlement conference — they have a loophole to exploit.

  • Troubled borrowers pay a steep price. Foreclosure fees and charges rack up, but the borrower cannot attend a settlement conference. As the delays drag on, homeowners become ineligible for certain modification deals, or too deeply in debt to climb out.

More Media Heat On Detroit-Area Real Estate Operator Suspected Of Using Land Contracts To Peddle Illusory Home Ownership Dreams To Wanna-Be Homebuyers

In Wayne County, Michigan, WXYZ-TV Channel 7 reports:

  • 7 Action News Investigator Bill Proctor broke the story about Leonard Bale, a West Bloomfield real estate investor who has been selling homes that buyers later found to be in some stage of foreclosure, according to property records.

  • We’ve now learned from our own news archives that Bale has been in business a long time and that there have been many complaints about the way he conducts business. In a troubling scenario involving your tax dollars, Bale admitted guilt but only received a slap on the wrist. These days his business has grown, but many who have dealt with Bale over the years continue to ask: What can be done about Bale?

  • Bale sells mostly Wayne County houses that are in some state of foreclosure. Local real estate experts reviewed the land contract deals and other records involving Bale’s properties. They say what he has done could result in criminal charges. We know the Wayne County Prosecutor is looking into him.
  • Bale sells houses on land contract. But many buyers, [...] discovered the home they were buying was in foreclosure. They didn’t learn this until it was too late. That means the bank or county owns the house, not Bale. Those buyers were out thousands of dollars in cash they put down, as well as the money each shelled out to fix up the property.

  • But the people we talked to are just a handful of the many who have crossed Bales’ path. Bale has been around a long time—and he has been dodging questions along the way.
  • 7 Action News was there when a half dozen people went to complain to the Wayne County Prosecutor’s office. They say they never heard back. Why no answer, and why hasn’t Bale been considered for charges? “All I can say is it’s under investigation, so I can’t comment on the facts,” said Wayne County Prosecutor Kym Worthy.

  • Why should it take months to determine if a crime has been committed? Worthy said, “Most of our deed-fraud cases, and mortgage fraud cases take a long time…because they’re very paper intensive. So, they generally take quite a while to organize and decide if there are going to be charges issued.”

  • Attorney Mike Jaafar is not waiting. “Shocks the senses. It really shocks the senses,” he said when asked about the land contract deals Bale had provided his customers. Jaafar represents 10 people he says are frustrated with waiting on local government to go after Bale. He filed a lawsuit against Bale, alleging fraud and civil conspiracy to commit fraud. He and his law partner say there is plenty of evidence to support criminal charges.

  • There should be criminal charges pressed because we’ve seen a regular, and ongoing pattern of obtaining money from unsuspecting people by false pretences,” says attorney Kassem Dakhlallah, who says it is laid out thoroughly in their lawsuit against Bale.

  • There’s a road map to those charges in the complaint,” added Dakhalallah. “If somebody should choose to read it.”

  • The same people who took complaints to the Wayne County Prosecutor say they also complained to with the State Attorney General’s office. A spokesman tells 7 Action News the Attorney General is no longer Investigating Bale.(1)

(1) Observers in Michigan and elsewhere may find it interesting that the Michigan Attorney General's office has not been shy about criminally prosecuting loan modification rackets (see, for example, State AG Charges Michigan Woman With Racketeering, False Pretenses For Allegedly Running Loan Modification Scam That Ripped Off Dozens Out Of $250K). Yet, however, the state AG apparently has little interest in using the same legal theories in prosecuting one who, operating in a similar manner but in a slightly different context, reportedly has a long history of talking people out of their cash and failing to give those same people what they thought they were bargaining for.

As a reminder to those who mistakenly believe that these apparent ripoff deals are nothing more than civil cases, it is clear that all the sophisticated paperwork in the world (ie. business/purchase contracts, leases, closing statements, etc.) isn't enough to permit scammers to insulate themselves from criminal prosecution when they target their victims with legitimate-looking business propositions when screwing their victims over. Criminal prosecutors have the authority to "pierce through" such attempts to disguise a blatant criminal real estate ripoff as a common, legitimate business deal.

Clear precedent exists for such a "pierce through" approach to overcome any objections that will certainly arise when the scammers make the argument that the arrangement was just a civil transaction that, if challenged, should be done with a civil lawsuit, not a criminal prosecution. See, for example:

  • People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:

    The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (
    People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)

  • People v. Jones, (1943) 61 Cal.App.2d 608, 620 [143 P.2d 726]:

    Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.


    Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.

    The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)