Saturday, October 6, 2012

Virginia Homeowner Cops Guilty Plea To Using Phony Social Security Number, Bogus Address When Filing Bankruptcy To Stall Foreclosure

From the Office of the U.S. Attorney (Lynchburg, Virginia):

  • A Burkeville, Virginia woman pleaded guilty [...] in the United States District Court for the Western District of Virginia in Lynchburg to charges related to bankruptcy fraud following an investigation by the Bankruptcy Fraud Task Force for the Western District of Virginia.

    Sally Marie Jones, 55, of Burkeville, Virginia, waived her right to be indicted and pleaded guilty [...] to one count of bankruptcy fraud. At sentencing, the maximum possible penalty faced by Jones is up to five years in prison and/or a fine of up to $250,000.
  • According to evidence presented by Assistant United States Attorney Daniel Bubar, Jones filed for bankruptcy in the Eastern District of Virginia twice between June 18, 2008 and June 8, 2009. Both times she filed, the defendant listed a different social security number and address.

    On July 23, 2009, the Bankruptcy Court for the Eastern District of Virginia banned Jones from filing bankruptcy for two years in any United States Bankruptcy Court.

    Despite the two-year ban, Jones filed Chapter 13 bankruptcy in the Lynchburg Division of the Western District of Virginia using a false social security number and the address of 3470 Candlers Mountain Road, Lynchburg. No such address exists.

    According to evidence, when a creditor made a motion to dismiss her bankruptcy claim, Jones admitted that the only reason she filed bankruptcy was to enjoy the protection of the automatic stay to avoid foreclosures.
For the U.S. Attorney press release, see Virginia Woman Pleads Guilty To Bankruptcy Fraud.

Industry-Favoring Florida Law Allows For 'At Will' Evictions For Residents In Assisted Living Facilities

In Broward County, Florida the South Florida Sun Sentinel reports:

  • Assisted living facilities often market themselves as "just like home," cozy places where people will live just like they did in their houses or condos. But many don't realize their new lifestyle has the equivalent of a month-to-month lease.

    Under Florida regulations, assisted living operators need give residents little more than a 45-day written notice in order to evict them. The discharge rules are among the least restrictive in the nation, according to the National Senior Citizens Law Center.

    "Florida is an outlier on the wrong side of the curve. It allows people to be forced out at will," said Eric M. Carlson, the law center's directing attorney and long-term care policy expert.

    Florida advocates' ongoing efforts to change eviction rules failed again this year, with legislators not acting on reforms proposed by an assisted living task force. The group — composed of assisted living administrators, legislators, policy experts and advocates — was convened last year by Gov. Rick Scott to examine care centers' oversight and regulation.

    Florida's Long-term Care Ombudsman Program, which protects the rights of nursing home and assisted living residents, said it will continue to push for discharge policy changes when the group begins meeting again next month.

    An assisted living facility doesn't need to document specific reasons for a discharge and its residents have no right to appeal the decision, unlike in nursing homes. The staff isn't required to help residents find another place to live — even if the evictee is alone, sick or very elderly.

    State Ombudsman Jim Crochet said assisted living discharges should be handled similarly to those in nursing homes. Proposed changes include requiring the ombudsman program be notified when an eviction notice is issued, and that residents be entitled to a state-supervised appeals hearing.

    The ombudsman's office investigated 75 complaints about inappropriate evictions last year, and 72 complaints from residents who said they feared retaliation — including being discharged — for being too demanding or questioning staff decisions.

    One reason that discharge regulations aren't uniform is that nursing homes are governed by federal laws, and assisted living facilities by state regulations. And assisted centers, unlike nursing homes, are not allowed to house people with complicated medical conditions or advanced dementia.

    So discharges often happen when a resident's health deteriorates and the facility can no longer legally or safely care for the person, said Pat Lange, executive director of the Florida Assisted Living Association, an industry group.

    Passing more extensive rules could tie the facilities' hands "if they feel they need to relocate someone in order to meet the resident's needs," Lange said.

    Jean Merget, a family consultant with the Memory Disorder Center at North Broward Medical Center, said most of the discharges she's encountered are sensible and handled properly. "I tell my caregivers not to fight discharge decisions," she said.

    Some geriatric care managers, who coordinate services for elders, say families sometimes hear nothing about discharge policies when they sign their contracts — then suddenly, the resident is asked to leave, said Rona Bartelstone, the senior vice president of care management for SeniorBridge. "The family feels they have been bait-and-switched," said Bartelstone, of Fort Lauderdale.

    Bartelstone said assisted living centers should do a better job telling residents up front about eviction policies and consumers should educate themselves before moving in.

Foreclosed Homeowners Opt Against Pressing Criminal Charges Against Neighbors Who Looted Their Home Under Mistaken Belief It Was Abandoned

In Aurora, Illinois, WBBM-TV Channel 2 reports:

  • There will be no charges filed against the neighbors who picked clean an Aurora home they believed had been abandoned. As WBBM Newsradio’s Pat Cassidy reports, Mike Stapleton and his wife, Susan Kendall, had moved most of their possessions out of their home on Downer Place in Aurora before turning the home over to the bank and moving off to Kansas.

    But when they returned for the rest [o]f their personal belogings, the Aurora Beacon-News reports they discovered that neighbors had cleaned up – and cleaned out – the house.

    The neighbors entered the house without permission, and took about $3,000 worth of property from the house, including Stapleton’s lawnmower, hedge trimmer, and other gardening implements, the Chicago Sun-Times reported last month.

    The neighbors even took personal items of sentimental value such as family photos and heirlooms, the Sun-Times reported.

    Aurora Ald. Rick Lawrence (4th) said he was called by a neighbor about the trash left behind, the Sun-Times reported. The neighbor wanted the house cleaned up.

    Lawrence said he was inside the house shortly after the neighbors had picked over and taken many of the items, the Sun-Times reported.

    But Stapleton tells the newspaper the air conditioning was still on and the utilities were still in the family’s name, and they would never have abandoned the house with everything inside. He told the paper that no one had a right to barge into the house and take anything he or she wanted.

    Still, while police could have filed charges against the neighbors, they did not, because the owners did not want to press charges, the Beacon-News reported.

Homeowner Facing Foreclosure Faces Charges For Pointing Gun At Bank Employee Photographing Home As Part Of Monthly Inspection

In Bloomfield, Indiana, WBIW Radio 1340 AM reports:

  • A March 2013 jury trial date has been set for David Council Jr., of Solsberry,who is accused of pointing a loaded .12 gauge shotgun at a bank employee who was on his property on Washboard Road taking photographs as part of the foreclosure process. Nick Schneider, of the Greene County Daily World reports, Council is charged with pointing a firearm at another person, a Class D felony.
  • Council's wife, Barbara, told police that the U.S. Bank employee Richard Haynes had identified himself as a bank employee and gave her a red card that contained telephone numbers to call to verify his assignment. Haynes was there taking photos as part of a monthly inspection, part of the foreclosure action. [...] Hayes told police that Council had pulled a gun on him before during prior inspections and that is why he had brought a witness.

Friday, October 5, 2012

Banksters' Foreclosure Trash-Out Contractors Claim Another Homeowner/Victim; Break Into Premises When No One Home, Allegedly Took About $10K Of Personal Stuff, Leaving Damage

In Des Moines, Iowa, KCCI-TV Channel 8 reports:

  • A Des Moines woman came home to find her belongings gone. A police report shows that last Thursday a crew that cleans out foreclosed homes arrived at the house on University Avenue and broke the lock off the back door when the homeowner was not home.

    The team entered the home and removed items. The homeowner confronted the supervisor who said there had been a mistake.

    The woman asked if she could get her items back from storage because they were supposed to be held for 30 days, but according to the police report she was told the items had been destroyed.

    On the door of the home Friday was a hand written note that reads "This is private property. No trespassing. If you coming in here, you won't be leaving."

    The police report shows the items had an estimated value of $10,000. There was also damage to a fence, back door and interior doors.(1)
(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:

Civil Rights Feds File Fair Housing Suit Charging Landlord With Discriminatory Practices, Use Of Slurs, Harassment, Retaliation Targeting Black Tenants

From the U.S. Department of Justice (Washington, D.C.):

  • The Justice Department announced [] that it has filed a Fair Housing Act lawsuit against the owners and manager of approximately two dozen rental homes in Washington, N,C., alleging that the manager, William I. Cochran III, discriminated against African-American tenants.

    The complaint, filed in the U.S. District Court for the Eastern District of North Carolina, names Cochran and three related corporate entities – EKP LLC, WRC LLC and Emlan Properties LLC – that own or owned the various properties managed by Cochran.

    The complaint alleges that Cochran delayed or refused to perform maintenance or repairs at properties rented by African-Americans and refused to credit them for repairs they paid for or made themselves; verbally harassed African-American tenants with racial slurs and epithets, having made statements indicating that he disfavored African-American tenants; and threatened, harassed and retaliated against African-American tenants who resisted his discriminatory housing practices.

Tenants To Split $1M In Insurance Company Cash In Suit Settlement Against Former Landlord Who Operated Unsafe, Pest/Mold-Infested 40-Unit Building

In Rancho Cordova, California, The Modesto Bee reports:

  • The conditions were barely tolerable. Tenants living in the 40-unit Cordova Estates apartments in Rancho Cordova had to contend with cockroaches, bedbug infestations and balconies with failing floors. There were roof leaks, mold, damaged carpets, inadequate heat, dangerous gates on unpermitted laundry rooms and more.

    But in recent weeks, 99 people have become the latest tenants to win a legal settlement after being subjected to deplorable rental conditions. Jessica Rubio Munoz, the lead plaintiff in the lawsuit filed on behalf of Cordova Estates' tenants, said she's pleased to receive her share of the money – close to $8,000.

    But she said the money can't fully compensate for the losses she and her family suffered while battling illnesses, infestations and mold. "My son was constantly in the hospital," she said. "He always had rashes." Her daughter developed a staph infection, she said.

    Munoz said she was about to move out last year when she heard about an attorney who would go to bat for besieged residents. Last fall, she contacted the lawyer, Robb Strom of Los Angeles.

    Strom filed suit in December in Sacramento Superior Court on behalf of the tenants. A settlement came last month: $1 million paid for by three insurance companies with policies on behalf of previous owners. Lawyers for the insurance companies did not return calls from The Bee.
  • On Friday, Strom went to the Jalisco Market on Folsom Boulevard, within walking distance of Cordova Estates, and began to distribute settlement checks.

    Adults will each net just under $8,000, Strom said. Children will net about $3,500 each. The rest, about $388,000, will cover court costs and legal fees, Strom said.

    Meanwhile, Strom said he has been contacted by about 20 more former Cordova Estates tenants who have requested that he file a follow-up lawsuit on their behalf. And he's close to filing a suit involving another substandard Rancho Cordova apartment complex.

    In 2010, Strom and another attorney sued owners of another Rancho Cordova complex, Carriage House, and reached a $1 million settlement in that case. The Carriage House has since changed ownership.

Thursday, October 4, 2012

Unrelated Caretaker For Now-Deceased Elderly Sisters Hijacks Their $291/Month 3 Bedroom, NYC Rent-Controlled Apartment; Landlord Expresses Objections With Action To Give Her The Boot

In New York City, the New York Post reports:

  • An East Village woman claims she can take over a $291-per-month rent-controlled three-bedroom apartment because she tended to its two elderly inhabitants for four years — even though she’s not related to them.

    Now the landlord is trying to boot her.

    Margaret Hearn, 48, began living at 345 E. 12th St. in 2008, when she became a full-time caretaker for sisters Margaret and Josephine Ruta, whom she met at church. Josephine died in March. Margaret died last year.

    When Hearn returned from Josephine’s funeral, the apartment was padlocked. Her brother cut the lock, and she has moved in. “I was emotional. I had just been to a funeral, and I felt I was losing it, and this happened,” Hearn said, adding the landlord “wants to remodel the apartment and charge more.”

    Similar pads in the building go for $4,400 in rent.

    Hearn — who also keeps a rent-controlled $747-a-month studio in Gramercy Park — says the landlord, 339-347 East 12th Street Investor LLC, filed to evict her in May 2012. Phillip Wartell, a lawyer for the landlord, did not return calls.

Non-Profit Law Firm Scores Temporary Halt On Home Foreclosure Of Elderly Widow Scammed In Alleged Reverse Mortgage Ripoff

In Louisville, Kentucky, WATE-TV Channel 6 reports:

  • A Blount County judge has stopped the foreclosure of a Louisville woman's home, although it was in the works since March. Joy Joines was caught in the middle a multi-million dollar fraud investment scheme, according to investigators.

    She was about to lose her house because no one would listen to her claims that she was a victim. Then Legal Aid of East Tennessee stepped in and got a judge's attention.
  • Her problems started when accountant Joyce Allen was arrested six months ago, along with an associate, and charged with fraud and conspiracy to commit money laundering. [...] In 2005, Allen helped set up what was believed to be a reverse mortgage on Joy's home. For seven years, it provided her a small steady income, but there was really no reverse mortgage.

    "She thought she was getting a reverse mortgage when in fact she got a new mortgage on the property," explained legal aid attorney Charity Miles Williams.

    She and an associate wrote a persuasive motion for a restraining order, enough to convince a judge that the bank trying to foreclose on Joy's home had violated the Fair Debt Collections Act and had no authority to initiate the foreclosure.

    When asked who owned the note, Williams said, "At this point, Freddie Mac owned the note, not PNC. There have been no documents filed with the Blount County register of deeds."

TV Cop Sues Co-Op; Says Management's Failure To Properly Fix Leaks Turned Her $1.2M Home Into Moldy Death Trap

In New York City, the New York Post reports:

  • Chung-chung. In the civil justice system, there are lawsuits. This is a “Law & Order” star’s lawsuit. S. Epatha Merkerson, who played Lt. Anita Van Buren on the TV series for 16 years, is suing the managers of her Washington Heights co-op, claiming they have turned her $1.2 million apartment into a moldy death trap.

    Soon after she got in The Riviera, at West 157th Street and Riverside Drive, in 2002, the co-op board and managers told the actress her roof was “in peril of collapsing” and had to be fixed, the suit says.

    She had to clear out for almost a year as a result and the repairs didn’t fix the leaks, which had caused mold growth, it alleges. And, in 2008, the building sealed off the ventilation to her stove without telling her, leaving her “in jeopardy of her life,” the suit says.

    The suit seeks an order to force the building to fix the leaks and more than $2 million in damages. Building manager Midboro Management didn’t return a call for comment.

Wednesday, October 3, 2012

Closing Agent, Attorney Each Cop Guilty Pleas In Real Estate Escrow Ripoffs; Existing Mortgages Left Unpaid For Five Victimized Homeowners, Including One Scammer's Own Elderly Dad

From the Office of the Westchester County, New York District Attorney:

  • Westchester County District Attorney Janet DiFiore announced that Loronda Murphy (DOB 07/13/64) of 4 Heather Lane, Greenwich, Connecticut, pled guilty [] to:

    · one count of Residential Mortgage Fraud in the First Degree, a class “B” Felony,
    · one count of Residential Mortgage Fraud in the Second Degree, a class “C” Felony,

    In addition, Scott Forcino (DOB 04/12/66) of 400 Wilmot Road, New Rochelle, New York pled guilty to: one count of Criminal Facilitation in the Fourth Degree, a class “A” Misdemeanor.

    From April 2009 to June 2009, operating under the home mortgage closing company Settle One Corporation, with an office located at 428 Main Street in Armonk, New York, the defendants, Loronda Murphy and real estate attorney Scott Forcino, engaged in what amounted to a home mortgage fraud "Ponzi" scheme.

    The targeted homeowner/victims each took out a new mortgage on their home through Settle One Corporation with the understanding that real estate attorney Scott Forcino would oversee their closing and that money from their new mortgage would pay off their pre-existing mortgage.

    However, Forcino instead allowed Murphy to fraudulently assume the role of attorney for each closing, and, much to the homeowner's surprise, rather than paying off their pre-existing mortgage, Murphy instead stole portions of their new loan money and left their pre-existing mortgage unpaid.

    Murphy's theft then left the homeowner with the unsustainable burden of having multiple mortgages on their family home at one time.

    Over this time period the pair defrauded five victims including Murphy’s father. In addition to skimming money out of the Settle One Corporation bank account for her own personal benefit, Murphy also attempted to conceal her crimes by using money left in the Settle One bank account to make monthly mortgage payments on various unpaid mortgages and, in some cases, Murphy even stole one homeowner's new mortgage loan money and used it to pay off another homeowner's previously unpaid mortgage.

    In the three months, beginning in April of 2009 and ending in June of 2009, Murphy orchestrated the preparation and submission of a series of false mortgage documents in connection with five mortgage loan closings that resulted in her, through the Settle One bank account, receiving over one million dollars from two home mortgage lenders: Wells Fargo Bank and Live Well Financial.

    In turn, Murphy then stole over fifty thousand dollars in loan money from each of five Westchester County homeowners, including her own elderly father, all for her own personal financial gain and to cover up her continuing criminal activity.

    In September 2010, search warrants were executed leading to an eleven month investigation by the District Attorney’s office with the assistance of the Town of North Castle Police Department.
  • Murphy faces a maximum of twenty five years in state prison. As a condition of her plea, Murphy will have to pay $720,288 in restitution. The amount paid before sentencing will determine the length of her prison term.

    Forcino faces a maximum of one year jail. As a condition of his plea, Forcino will resign from the New York State Bar.

    Assistant District Attorney Brian Fitzgerald of the Economic Crimes Bureau – Mortgage Fraud Unit - prosecuted the case.

Texas Trial Judge OKs Foreign Company's Exercise Of Eminent Domain Right To Wrestle Land Away From Lone Star State Farmers To Construct Pipeline

In Beaumont, Texas, The Southeast Texas Record reports:

  • A Beaumont judge [last week] granted a foreign company’s petition to condemn land for the construction of a crude oil pipeline.

    Last June, TransCanada Keystone Pipeline filed the petition for condemnation against Texas Rice Land Partners, James and David Holland and Mike and Walter Latta. TransCanada filed the petition seeking to build a pipeline to carry crude from Alberta to the Gulf Coast.

    On Sept. 24 Judge Tom Rugg, Jefferson County Court at Law No. 1, ruled that the company has the right to sieze land in Jefferson County for the pipeline.

    TransCanada has posted bonds to compensate landowners if a higher court finds that the company ultimately did not have the right to damage the sought after property, court records show.

    During a Sept. 12 hearing, Terry Wood, the attorney for the rice farmers, attempted to link the TransCanda case to a ruling made by the Texas Supreme Court last August denying Denbury Green common carrier status in a pipeline project of its own.

    However, the Denbury pipeline would have carried CO2, not crude oil.

Bed-Stuy 'Holy' War Breaks Out Between Excommunicated Christian Elder, Church Leaders Over Alleged $630K Home Equity Refinance Ripoff That Victimized Hapless Senior

In Bedford Stuyvesant, Brooklyn, New York reports:

  • A retired Brooklyn accountant is suing his former Christian church and its leaders for giving him the holy heave-ho in front of the entire congregation.

    Patson Agard claims in a lawsuit that during a Sunday service on Feb. 12, officials at Good Tidings Gospel Chapel excommunicated him and wrongfully accused him of some serious sinning.

    The lawsuit, filed Sept. 12 in Brooklyn Supreme Court, says church elders Theophilus Cato, Daril Neverson and Lloyd Allwood got up on a dais and told congregants that Agard swindled elderly church-goer Dorothy Jordan out of her home. The elders allegedly claimed he "prepared a deed without [Jordan's] knowledge" and pocketed $630,000 by refinancing her home and forging checks in her name.

    A congregant at the 275-member Bedford-Stuyvesant church since 1960, Agard says he became an elder in 1984 and "has always enjoyed a good reputation for honesty and uprightness of character." But after making their damning statements, the elders "stripped him of his position as elder and his membership in the church, in the presence of the plaintiff, his family and other worshippers in an effort to maximize his humiliation," the lawsuit says.

    Less than a week later, the elders allegedly badmouthed Agard in a letter to a dozen branches of Good Tidings Gospel Chapel with thousands of congregants, telling them he had a "serious breach of conduct," the lawsuit says.

    Agard, a retired MTA accountant from East New York, says Jordan first accused him of being a "crook" on Jan. 28 and then went to the other elders. He denies the allegations in the lawsuit and says his reputation was slandered by Jordan and the other elders who "acted with actual malice."

    There have been no criminal or civil cases filed against Agard, according to court records.

    He is suing Jordan, Cato, Neverson and Allgood for an undisclosed amount of money. Agard's lawyer did not respond to a request for comment. Jordan declined to discuss the lawsuit, but said "I didn't tell no lie on him." "I had him come in here helping me, but he helped himself," she said. "He refused to admit that he was wrong."

Scam Family Gets Off With Hand Slap After Pleading Guilty To Hijacking Home Titles By Filing False Deeds, Burglary, Rent Skimming

In San Diego, California, KSWB-TV Channel 5 reports:

  • A real estate agent who filed a number of false deeds on foreclosed homes that did not belong to her, then rented them out to unwitting victims, was sentenced Monday to 332 days in custody and placed on three years probation.

    With credit for 192 days in jail, Dianne "Harmony'' Brown must serve another 70 days in custody, said Superior Court Judge Leo Valentine Jr. [...] Brown, 46, pleaded guilty to six counts, including burglary, filing a false instrument and rent-skimming.

    Her 48-year-old husband, Dexter Towance Brown, and 29-year-old son, Donavan Robbins, also pleaded guilty to rent-skimming as part of the scam. Dexter Brown, who has a lengthy criminal record, was sentenced [] to a year in jail. Robbins, described as a minor player in the scheme, had his 240-day jail sentence suspended as long as he successfully completes probation. [...] The defendants were ordered to pay more than $176,360 in restitution.

    Prosecutors said Dianne Brown targeted more than 30 South Bay homes in the scheme, claiming to be the owner of Prudent Constituents Association and Peerless Property Management.

    After recording the false deeds, the defendant would cut off Realtor lock boxes, break into the homes and have them re-keyed before renting them to victims, prosecutors said. She listed the homes on Craigslist and collected tens of thousands of dollars in rent.

Tuesday, October 2, 2012

Theft By Deception/Failure To Make Required Disposition Of Property Received Among Charges Facing Pair Pinched By NJ AG In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Peddling Racket

From the Office of the New Jersey Attorney General:

  • Attorney General Jeffrey S. Chiesa announced that a father and son from New Jersey were charged []  in an alleged scheme in which the father promised to rescue homeowners who were facing foreclosure, but instead sold their homes to unwitting investors and conspired with the son to steal $4.5 million from lenders by filing fraudulent mortgage applications in the investors’ names.

    Vito Grippo, 57, of Jackson, and his son, Frederick P. Grippo, 32, of Old Bridge, were each charged by complaint-summons with second-degree offenses of conspiracy and theft by deception. In addition, the father alone was charged with second-degree offenses of money laundering and theft by failure to make required disposition of property received. Each of the second-degree charges carries a sentence of five to 10 years in state prison. The charges are the result of an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau.

    We allege that Vito Grippo preyed on homeowners who were facing foreclosure, cheating 12 victims out of their homes and stealing $1.3 million in equity they had built up,” said Attorney General Chiesa. “He allegedly solicited investors and bought the homes in their names without their knowledge, so that he and his son could fraudulently obtain $4.5 million in loans and divert the proceeds. The end results were lost homes for former homeowners, ruined credit for investors, and major losses for lenders.”
  • Vito Grippo had an office in Holmdel and operated several companies, including Morgan Financial Equity Shares, Inc., Jandevar, LLC, and Vanick Holdings, LLC. He allegedly solicited financially distressed homeowners, saying he could rescue them from foreclosure and fix their credit rating by transferring title to their homes temporarily to a company called Morgan Financial. He allegedly represented that the homeowner would retain an 80 to 90 percent interest in the home, while Morgan Financial and an investor would share the remaining 10 to 20 percent interest. He allegedly told the homeowners to make their monthly mortgage payments to Morgan Financial, and Morgan would pay the lender, reducing their payments over time and giving them back full title to their homes in a year. He later sent letters to the homeowners telling them their mortgage payments had greatly increased.

    Meanwhile, Vito Grippo allegedly solicited investors who were led to believe that they would be investing through Morgan Financial in income generating rental properties. The investors did not know that they were actually buying the homes outright. He allegedly used the identities of the investors to file fraudulent mortgage applications to purchase the homes. His son, Frederick Grippo, who was a loan broker, allegedly conspired with the father to submit fraudulent applications. They allegedly created and submitted false documents for investors, including W-2 forms and bank statements, and asserted that the investors planned to live in the homes as their primary residences. Vito Grippo allegedly had both the original homeowners and the investors sign documents without giving them time to ascertain what they were signing.

    Vito Grippo was charged in connection with 12 homes in Elizabeth, N.J., Brooklyn, N.Y. (3 homes), Jersey City, N.J., Staten Island, N.Y. (2 homes), Rutherford, N.J., Monroe, N.J., Somerville, N.J., Mine Hill, N.J., and Cambria Heights, N.Y. He allegedly submitted fraudulent loan applications to obtain a total of more than $4.5 million to purchase the homes.

    It is alleged that Vito Grippo in turn stole more than $1.3 million in loan proceeds that should have been disbursed to the original homeowners as equity at closing. He allegedly diverted those funds into bank accounts of his companies to launder the money. It is further alleged that he then disbursed the funds to himself and other co-conspirators.

    Frederick Grippo allegedly was involved in seven of the fraudulent loan applications and received checks from Morgan Financial for his participation in the fraud. The defendants allegedly filed false HUD forms to conceal the improper payments. Although Vito Grippo made some mortgage payments on the loans in the names of the investors, he did not continue them and all of the homes fell into foreclosure. The original homeowners lost the properties and the investors’ credit ratings were ruined.

    Another man, John Pereless, 44, of Colts Neck, was involved in this type of mortgage fraud, and he allegedly conspired with Vito Grippo in connection with four of the 12 home sales with which Grippo is charged.

    Pereless pleaded guilty on July 2, 2012, before Superior Court Judge Verna G. Leath in Essex County to an accusation filed by the Division of Criminal Justice charging him with two counts of second-degree theft by deception for filing fraudulent mortgage loan applications and stealing $661,261 in equity due to home sellers in connection with 14 homes, including the four transactions involving Vito Grippo.

    Under his plea agreement, Pereless faces a 10-year prison sentence, which will run concurrently with an eight-year sentence stemming from his conviction at trial in 2010 in another mortgage fraud case prosecuted by the Monmouth County Prosecutor’s Office.
For the New Jersey AG press release, see Father and Son Charged with Conspiring to Defraud Lenders of $4.5 Million and Steal Equity from Struggling Homeowners (Investigation by New Jersey Division of Criminal Justice revealed that the father allegedly promised to rescue homeowners from foreclosure, but instead sold their homes to unwitting investors).

Sacramento Feds, California AG Pinch Suspected Foreclosure Rescue Scammer For Allegedly Peddling Mortgage Debt Reduction Scheme; 1,200+ Victims Fell For Ripoffs: Authorities

In Sacramento, California, The Modesto Bee reports:

  • Authorities on Friday arrested a Bay Area man accused of running a mortgage-relief scam that reached into the Northern San Joaquin Valley and beyond.

    Alan David Tikal, 44, was arrested at his home in Brentwood, in Contra Costa County, on charges that he defrauded more than 1,000 homeowners, U.S. Attorney Benjamin Wagner announced.

    He and state Attorney General Kamala Harris said Tikal persuaded homeowners that he could pay off their mortgage debt and replace it with new debt to his company, KATN Trust, reducing the principal to 25 percent of the original.

    Victims paid thousands of dollars in fees and made regular payments on their new loans, according to an affidavit filed Friday. Tikal's attorney, Fanya Young of San Francisco, said she could not comment because she had not reviewed the charges. Tikal was scheduled to appear in U.S. District Court in Sacramento on Friday afternoon.

    Tikal, who faces numerous counts of mail fraud, could be sentenced to up to 30 years in prison if convicted, Wagner said. Tikal pleaded no contest to fraud charges in a separate Alameda County case last year and was freed to await sentencing.

    The affidavit related to Friday's arrest said it involved "approximately 1,215" victims, 95 percent of them in California. About 185 were in the court's eastern district, which covers inland areas from Bakersfield to the Oregon border. The locations were not listed, but officials at the Stanislaus County district attorney's office estimate there are about 25 victims locally. The Stanislaus County district attorney's office helped state and federal agencies pursue the case, Wagner said. The fraud is said to have occurred from January 2010 to the present.

    As an example of how it worked, the affidavit says Tikal told "Mr. and Mrs. A.L. of Stockton" that he or his investors "could purchase a participant's home and sell it back to them for 25 percent of their current loan amount." The affidavit was written by special agent Joseph Camillucci of the Troubled Asset Relief Program, created in 2008 as part of the federal response to the financial crisis.

    That crisis happened in part because of mortgages on homes that had ballooned in value, then declined, leaving the owners at risk of foreclosure. The north valley was among the hardest-hit areas and still feels the effects in high jobless rates and sluggish home prices.

    Camillucci wrote that victims were "counseled to ignore the demands for payment by the original lenders whose claims are purportedly contrary to law … Tikal and his associates are enriched, and the homeowners fall behind or default on their mortgage loans."

    The state attorney general is joining in the prosecution. "As the foreclosure crisis continues, we are seeing a rise in scams that target struggling homeowners," Harris said in a news release. "These predators rob innocent families of their life savings and their piece of the American dream."

Indiana AG Tags Five More Out-Of-State Outfits For Alleged Loan Modification Ripoffs, Running Up Total To 140 Civil Lawsuits Throughout State Against Suspected Upfront Fee Rackets

From the South Bend (Indiana) Tribune:

  • You want to modify your home loan to stop foreclosure and a company offers to help for an upfront fee. You pay the fee. And your home winds up in foreclosure while the company that took your money disappears.

    On Wednesday, five out-of-state foreclosure consulting companies were sued by the state of Indiana for allegedly ripping off homeowners in St. Joseph, Elkhart, Allen and LaPorte counties.

    Indiana Attorney General Greg Zoeller filed five lawsuits -- three in St. Joseph Circuit Court and two in Elkhart County -- charging four companies and one law firm with violating the Credit Services Organization Act, the Mortgage Rescue Protection Fraud Act, the Home Loan Practices Act and the Deceptive Consumer Sales Act.

    American Home Relief Foundation of Delaware, CC Brown Law of Utah, Legacy Holding Group of Arizona, and Right Away Doc Preparations Inc. and Property Solutions Center, both of California, "... promised to modify customers' home loans in exchange for an upfront fee but didn't complete the job or provide a refund," Zoeller charged in the suit.
  • In South Bend, homeowners can call the Notre Dame Clinical Law Center, said Notre Dame law professor Judy Fox. "We represent you for free," Fox said. Contact the Clinical Law Center at 574-631-7795.

    Since 2006, the attorney general's office has filed 140 lawsuits against foreclosure consultant companies in more than 30 counties across Indiana. Zoeller urged those who may have been victimized by a mortgage relief scam to file a complaint with the Indiana State Attorney General's Office.

Missouri AG Targets Suspected Loan Modification Rackets In Three Unrelated Civil Suits Alleging Collection Of Upfront Fees, Failure To Perform Promised Services, Unauthorized Practice Of Law

From the Office of the Missouri Attorney General:

  • Attorney General Chris Koster [] filed three separate lawsuits against individuals and their companies for misleading Missouri consumers in connection with mortgage-modification services.

    The lawsuits were filed against Colleen Kelly, a Missouri resident operating Heartland Loss Mitigation, LLC,; Eric Mader, a Florida attorney operating Mader Law Group, LLC, a Florida company; and Jim Caplan, a Florida attorney operating CAPLAW, P.A., a Florida company.
  • The lawsuits allege that these companies engaged in multiple deceptive or unfair practices, including:

    Requiring and receiving advance payment for loan-modification services;

    Failing to provide the loan-modification services paid for by consumers in those advance fees;

    Failing to refund consumers for loan-modification services not received;

    Persuading consumers to cease mortgage payments to their lenders by promising successful loan modifications;

    Failing to place legally required notifications of homeowners’ rights in contracts between defendants and those homeowners; and

    Engaging in the unauthorized practice of law in Missouri.

NC AG Targets Three Outfits, Principals In Civil Suits Alleging Loan Modification & Forensic Loan Audit Ripoffs

From the Office of the North Carolina Attorney General:

  • Three North Carolina companies that claim to help people win lower mortgage payments and save their homes from foreclosures are instead ripping off homeowners and must be shut down, Attorney General Roy Cooper said [].
  • As alleged in the complaints filed [last week]:

    Community Mortgage Assistance Program and its principal, Koy Chiu, charge consumers as much as $1,500 in advance and claim to have a 98 percent success rate in saving people’s homes. But consumers who pay the fee get little or no real help working out a loan modification. Chiu falsely promotes the company as a “faith-based organization” on gospel radio and in written materials to target religious homeowners and make the company seem trustworthy.

    Lender Exchange and its principals, Kenneth McCurd and Tanya Wilson, charge consumers one month’s mortgage payment and falsely claim that they’d never had a homeowner lose their home to foreclosure. The company tells prospective customers it will provide a full refund if it isn’t able to obtain a loan modification, but homeowners who’ve paid Lender Exchange and not gotten any meaningful help have had a hard time getting their money back.

    Tidewater Financial and its principal, Elaine Madej, charge homeowners $700 to $1,000 in upfront fees and promise consumers a “legal review” of their loan documents to determine whether lenders have violated state or federal law. However, Madej is not an attorney and the company has no legal expertise on lending laws--nor do its services actually help homeowners. According to one consumer who filed an affidavit in support of Cooper’s lawsuit, Madej kept claiming she was working out a loan modification even as his home was sold at auction and his family was evicted by the Sheriff.

    The Attorney General’s Consumer Protection Division has received eight complaints about Lender Exchange, including some forwarded by the Better Business Bureau and Legal Aid of NC, and four complaints each about the Community Mortgage Assistance Program and Tidewater Financial. [See also: affidavits filed by consumer victims against Community Mortgage Assistance ProgramLender Exchange, and Tidewater Financial.]

    More than 1,000 consumers have complained to Cooper’s office about various foreclosure assistance and loan modification scams over the past five years. To file a consumer complaint, call 1-877-5-NO-SCAM toll-free within North Carolina or fill out a complaint form at
For the North Carolina AG press release, see Cooper Takes Aim At Foreclosure Fraudsters In Charlotte And Wilmington (AG seeks to shut down loan modification scams, win consumer refunds).

Monday, October 1, 2012

Investor Pleads Guilty To Antitrust Charges In Connection With NJ Bid Rigging Racket At Municipal Tax Lien Auctions

From the U.S. Department of Justice (Washington, D.C.):

  • A Pennsylvania corporation pleaded guilty [] to participating in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout New Jersey, the Department of Justice announced.

    A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Crusader Servicing Corp., of Jenkintown, Pa. According to the felony charge, from at least as early as 1998 until September 2006, Crusader participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The department said that Crusader submitted bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
  • Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.

Florida AG Files Civil Suits Tagging So-Called Land Trusts Peddling Schemes Purportedly Designed To Make Underwater Mortgages Disappear

In Fort Lauderdale, Florida, The Palm Beach Post reports:

  • The assets and operations of several South Florida land trust companies, related firms and their owners were frozen by the state attorney general’s office Tuesday in a complaint claiming they made promises to struggling homeowners they can’t fulfill.

    The companies have sold hundreds of homeowners statewide on a complicated legal “scheme” that pledges to make their underwater mortgages disappear.

    About 90 Palm Beach County homeowners have signed their deeds over to one of the land trusts as part of the plan. The homes range from million-dollar waterfront mansions in Boca Raton to $60,000 condominiums west of Florida’s Turnpike.

    A so-called “quiet title” lawsuit is then filed by the trust against the homeowner’s lender to try and cancel the mortgage while also setting the homeowner up with a new lower mortgage or other payment plan to the trust, the complaint says.
  • The civil complaint brought under Florida’s Deceptive and Unfair Trade Practices Act charges that the defendants;

    • Wrongfully guaranteed the land trusts will cancel the homeowner’s mortgage through legal proceedings that will leave the borrower with equity in their home.

    • Misrepresented that an assignment of mortgage is not valid unless it is recorded.

    • Charged an advance fee before completing foreclosure-rescue services.

    • Misrepresented that the homeowner’s mortgage is not enforceable against the land trust as a subsequent buyer even though the trusts paid nothing for the deed.
For more, see Florida attorney general files suit against land trusts, calling business unfair and deceptive (Hundreds of Florida homeowners have signed their deeds over to the trusts).

For the Florida Attorney General press release, see Attorney General Bondi’s Office Protects Distressed Homeowners from Mortgage Relief Scam.

For the lawsuit, see State of Florida v. Cherry, et al.

Use Of Eminent Domain To Condemn Underwater Mortgages: A Pro-Homeowner Viewpoint

Brooklyn Law School Professor David Reiss writes in The National Law Journal:

  • Local governments across the country are considering an innovative use of eminent domain. They propose to condemn underwater mortgages (those that exceed the fair-market value of the home) in their communities and restructure them so that home­owners can afford their payments and so that the new mortgage is for less than the fair market value of the property.

    If this proposal is implemented, the local government will pay the owner of mortgages of "underwater" homes the fair market value for the mortgages. The local government will then restructure each mortgage by reducing the principal amount owed to be in line with a mortgage that would be appropriate for the fair market value of the home. This will result in lower monthly payments. It will also result in a sustainable transaction, one in which homeowners can imagine ultimately paying off their mortgages, the American Dream of owning one's home free and clear.

    The financial industry is alarmed by this proposal, claiming that the sky will fall if it is implemented. But this proposal is constitutional, beneficial and administratively feasible. Local governments should give it a try as they seek to stabilize their communities.

    Eminent domain is an ancient prerogative of sovereign governments. Federal and state governments have limited that power by requiring that a government use eminent domain to achieve a public purpose and pay just compensation upon its exercise. See, e.g., Brown v. Legal Foundation of Washington, 538 U.S. 216, 231-32 (2003).

    The U.S. Supreme Court has taken an expansive view of the "public purpose" requirement, holding that use of eminent domain to achieve as broad a purpose as economic development is a legitimate exercise of government power even when it involves taking land from one private party and giving it to another. Kelo v. City of New London, 545 U.S. 469 (2005).
For more, see Eminently reasonable (Using the power of eminent domain to restructure underwater mortgages is constitutional, beneficial and administratively feasible).

Sunday, September 30, 2012

Self-Proclaimed President Of Sovereign Citizen Group Accused Of Running Seminars Teaching How To File Retaliatory Liens Against Gov't Officials, Creating Fictitious Bonds To Pay Federal Taxes

From the Office of the U.S. Attorney (Montgomery, Alabama):

  • A federal grand jury in Montgomery, Ala., charged James Timothy Turner, also known as Tim Turner, with conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the Internal Revenue Service (IRS), failing to file a 2009 federal income tax return, and falsely testifying under oath in a bankruptcy proceeding, the Justice Department, the IRS, and the Federal Bureau of Investigation (FBI) announced [].

    According to the indictment, Turner, the self-proclaimed “President” of the sovereign citizen group “Republic for the united States of America,” conducted seminars at which he taught attendees how to file retaliatory liens against government officials and to defraud the IRS by preparing and submitting fictitious bonds to the United States government in payment of federal taxes.

    Turner is alleged to have attempted to pay his own taxes with a fictitious $300 million bond and to have assisted others in attempting to pay their taxes with fictitious bonds purporting to be worth amounts ranging from $10 million to $100 billion.

Six Fair Housing Groups Tag BofA In Suit Alleging That They Maintain REO's In White Neighborhoods Better Than REOs In Minority Areas

From a recent news release from the National Fair Housing Alliance:

  • [T]he National Fair Housing Alliance (NFHA) and five of its member organizations around the country announced a federal housing discrimination complaint against Bank of America Corporation, Bank of America, N.A., and BAC Home Loan Servicing, LP.

    This complaint, which was filed earlier [this week] with the U.S. Department of Housing and Urban Development, is the result of an undercover investigation that found that Bank of America maintains and markets foreclosed homes in White neighborhoods in a much better manner than in African-American and Latino neighborhoods.
  • The investigation evaluated Bank of America REO properties in the eight metropolitan areas of Atlanta, GA; Dallas, TX; Dayton, OH; Grand Rapids, MI; Miami/Fort Lauderdale, FL; Oakland/Richmond/Concord, CA; Phoenix, AZ, and metropolitan Washington, DC.

Florida High Court Sanctions Seven Attorneys For Playing Fast, Loose With Clients' Cash

In a recent news release, The Florida Bar recently announced that the state Supreme Court disciplined 24 attorneys, disbarring eight and suspending 13. Some attorneys received more than one form of discipline. One attorney was placed on probation; three attorneys were publicly reprimanded; and four were ordered to pay restitution.

Among those making the hit parade are the following for playing fast and loose with their clients' money:

  1. William A. Abruzzino, 150 Trotter Ridge Drive, Mooresville, N.C., disbarred for 10 years, effective retroactive to June 1, 2011, following a June 29 court order. (Admitted to practice: 1991) Abruzzino was arrested and charged with a first degree felony for exploitation of the elderly. Abruzzino's misappropriation of his Alzheimer's/dementia- afflicted client's funds resulted in a sentence of five years in prison, followed by probation. He was also ordered to pay restitution of $202,020.50 to the client. (Case No. SC11-1308)
  2. Larry Herbert Colleton, P.O. Box 677459, Orlando, suspended for six months, effective 30 days from a June 29 court order. (Admitted to practice: 1989) Colleton engaged in a pattern of misconduct. In several separate instances, Colleton was retained to represent clients and he failed to communicate and failed to provide adequate and timely representation. He also failed to maintain proper trust account records and he failed to follow proper trust accounting procedures. (Case Nos. SC11-1459 and SC12-177)
  3. Karen Sue Keaton, P.O. Box 1139, St. Petersburg, to be publicly reprimanded by the Board of Governors following a June 18 court order. (Admitted to practice: 1984) Keaton had a long-time personal and familial relationship with a client that she agreed to assist in an estate planning matter. In the preparation of the trust, several amendments were made. Keaton violated Bar rules by being named a contingent beneficiary. (Case No. SC10-1144)
  4. Cedric Eugene Lewis, 631 Heather Glen Loop, Winter Haven, disbarred effective retroactive to June 18, 2009, following a June 21 court order. (Admitted to practice: 2000) Lewis was the subject of a Bar disciplinary proceeding stemming in part from an employee's theft of funds from Lewis’ real estate trust account. Lewis failed to produce trust and financial documents pursuant to two Grievance Committee subpoenas. After a 2009 suspension, Lewis was required to provide the Bar with an affidavit verifying that he’d notified his clients, opposing counsel and certain courts of his suspension. Again, he failed to comply. Lewis was also ineligible to practice law due to CLER and other delinquencies. (Case No. SC12-1076)
  5. Mark Vernon Morsch, 5151 Garlanger Trail, Oviedo, disbarred effective immediately, following a June 29 court order. (Admitted to practice: 1985) Morsch was the subject of several Bar disciplinary matters. In one instance he misappropriated more than $28,000 of a client's settlement funds and used the money for his own purposes. He then misrepresented to the client and the Bar that potential claims against the estate were paid. (Case No. SC11-1310 and SC11-2095)
  6. James Thomas Roslund, P.O. Box 36196, Detroit, MI, suspended until further order, following a June 18 court order. (Admitted to practice: 1973) According to a petition for emergency suspension, Roslund appeared to be causing great public harm. Roslund is also licensed to practice in Michigan. After representing a Michigan client in a Chapter 7 bankruptcy case, Roslund authorized the client to make direct monthly payment deductions to cover his fee. The client subsequently requested a receipt and offered to settle the balance in a final lump sum payment. Roslund failed to respond to the client's requests, failed to fully refund the client and failed to respond to Michigan Bar counsel. (Case No. SC12-1158)
  7. Linda Marie Smith, 11900 Biscayne Blvd., Suite 503, Miami, to be publicly reprimanded following a June 21 court order. (Admitted to practice: 1979) Smith used an account number as both a trust account and an operating account, depositing and disbursing client trust funds as well as earned fees and day-to-day operating expenses. Those actions resulted in the commingling of trust and personal funds, although a Bar review did not reveal misuse or misappropriation of client funds. (Case No. SC12-1075)
For The Florida Bar press release, see Supreme Court Disciplines 24 Attorneys.

Novice Foreclosure Auction Investors Bellyache After Discovering 'Great Buys' Are Tainted With 'Poison Pills'

In Central Florida, the Orlando Sentinel reports:

  • Some bidders who have purchased foreclosed houses at public auction are complaining about a "poison pill" embedded in the sale. If the auctioned house was foreclosed on by a homeowners association, some buyers end up paying for the house only to have it later foreclosed on by one or more banks.

    "We're seeing a ton of this in Orange County," said Orlando lawyer Justin Clark, who currently represents several buyers of homeowner-association foreclosures. "The banks can foreclose on these people, and they can foreclose very quickly."

    Of 187 Orange County properties hit with new foreclosure filings during the first week of September, records show that 27 of them, or about 14 percent, were being foreclosed on by homeowner associations owed dues and fees — not by banks or finance companies owed mortgage payments. Clark said HOA foreclosures are a growing part of the house-repossession mix in the courts these days.

    An Orlando woman said she and her husband recently purchased a house for $16,000 in cash, only to learn that they were responsible for the $250,000 mortgage plus overdue homeowner-association fees.

    That buyer, Theresa Edgerton, said government-run foreclosure auctions should separate bank-owned properties from those "owned" by homeowner associations as a way to better protect buyers. Otherwise, people mistakenly think they are buying the property from the principal owner, when the HOA's position is secondary to that of the company that continues to hold the property's mortgage.

    "I don't quite understand how they can sell us nothing," she said recently of the house she and husband thought they had bought at auction, not realizing a bank was still hovering in the background, waiting to foreclose on the same property because of an overdue mortgage. "What's so heartbreaking: We just felt like we won the bid. Several people are bidding on these — we're not the only ones going through this."

    But Leesa Bainbridge, a spokeswoman for the Orange County Clerk of Courts, which hires a company to handle its foreclosure auctions, said it is the bidder's responsibility to make sure the property has no other liens on it, mortgages included.

    "We put something up for sale when a judge tells us to," Bainbridge said. "There are warnings on the site: Do your research."
  • [Edgerton] said she thought she had landed her dream home for a sweet deal. Now she's out $16,000. "The system is very misleading," she said.