Wednesday, August 23, 2017

Southern California Man Faces Felony Charges For Allegedly Using Forged Documents To Illegally Stall Foreclosure For Seven Years While Pocketing $2,500/Month In Tenant's Rent

In Newport Beach, California, The Orange County Register reports:
  • A 65-year-old man faces charges of fraudulently stonewalling a financial institution for years in its efforts to foreclose on his properties in Dana Point and Los Alamitos, a prosecutor said Thursday.

    Reynaldo Francisco Marques is charged with multiple felony charges, including grand theft and attempt to file false/forged instruments with sentencing enhancement allegations of property damage exceeding $200,000 and aggravated white-collar crime exceeding $500,000.

    The properties involved in the alleged fraud are at 33962 Malaga Drive in Dana Point and 11791 Montecito in Los Alamitos, according to Senior Deputy District Attorney George McFetridge.

    According to a motion to increase Marques’ bail, the defendant is accused of attempting to illegally stymie foreclosure of one of his homes by J.P. Morgan Chase beginning in 2011 and continued through October 2016.

    “Despite losing several legal proceedings on mortgage payments,” he would record several fraudulent documents at the Orange County Clerk-Recorder’s Office to keep Chase from foreclosing on the home for seven years, according to the motion.

    In some instances, he allegedly purported to be an agent of Chase, according to the motion.

    Throughout the alleged fraud, he continued charging renters $2,500 a month for the home, according to the motion. When the tenants moved out he moved in, according to prosecutors.

    Marques was also accused of taking down “no trespassing” signs from Chase and he “changed the locks” after the bank took control of the property, according to prosecutors.

    The loss on the property was estimated to be $796,000, according to prosecutors.

Central Florida Judge Voids Foreclosure Sale, Calling Attorney's Masquerade As Foreclosing Lender An Unscrupulous, Conniving Scheme To Trick Bidder Out Of $458K At Foreclosure Auction

In Clearwater, Florida, the Tampa Bay Times reports:
  • Pinellas County Circuit Judge Jack St. Arnold on Monday threw out the $458,100 sale of a gulf-front condo because of what he called an "unscrupulous" and "conniving" scheme to trick bidders at a foreclosure auction.

    His ruling means that the owners of Orlando Realty Group will get back the money they bid on what turned out to be a second mortgage held by a company connected to Clearwater attorney Roy Skelton. Only later did the bidders discover that a different lender had a superior first mortgage and could soon foreclose, leaving them with no condo and out nearly a half million dollars.

    While he rapped Orlando Realty for not doing sufficient due diligence before bidding, St. Arnold had especially harsh words for Skelton.

    "Clearly you set a trap for unwary buyers," the judge said.

    Skelton said after the hearing that he would either sell the unit in the Ram-Sea Condominiums on North Redington Beach or try to pay off the first mortgage.

    "While I respectfully disagreed with the judge's decision, I will respect it and will not file an appeal," Skelton said.

    Two years ago, Skelton's Outbidya, Inc. paid $157,8000 for the condo at a homeowners association foreclosure auction. Last year, shortly after Wells Fargo began foreclosing on the first mortgage, Skelton created Deutsche Residential Mortgage — no relation to the giant German bank — and took back a second mortgage from Outbidya.

    In February, while Wells Fargo's case dragged along, Skelton's Deutsche obtained a final judgement of foreclosure on its second mortgage and set the stage for the contested June auction.

    The sole witness at Monday's hearing — which was held on an emergency motion to set aside the sale — was John Houde, who owns Orlando Realty Group with his wife.

    Houde testified that he thought the auction involved a first mortgage because the only lis pendens — initial notice of foreclosure — he saw was filed by Wells Fargo. Before bidding, he said, he reviewed public records including the docket in the bank's case.

    "I've done quite a number of these," Houde said, referring to online foreclosure auctions. "This (review) is to make sure which mortgage is foreclosing."

    But under questioning from Skelton, Houde acknowledged that he had not read the entire final judgment, which showed that Deutsche Residential held the mortgage being foreclosed. Skelton also accused Houde of committing fraud by indicating in the online auction process that he had thoroughly read all documents in the case even though he had not.

    "He comes with unclean hands," Skelton said.

    Skelton and Matthew Weidner, one of Houde's lawyers, traded sometimes dense legal and technical arguments in the 90-minute hearing — which included a brief recess to watch the eclipse. But another of Houde's attorneys, Jon McGraw, was more straightforward in his remarks.

    "It's a very cunning plan by Mr. Skelton and his group," McGraw said and one in which Orlando Realty "stands to lose a substantial amount of money."

    Before ruling, St. Arnold said Houde's company had failed to do its due diligence "in a competent manner," and added that he had little sympathy for bidders at foreclosure auctions who "pick on the bones" of people who lost their homes.

    But, calling it a case of "complicit versus conniving," the judge said in effect that he found Skelton's actions much more egregious. The mortgage company Skelton set up "was not a legitimate lender," St. Arnold said, and its sole purpose was to further a scheme to reap "an unconscionable profit."

    Skelton, who conceded that his Deutsche Residential never made a single loan, is involved in a similar case in which a person thought he was bidding on a first mortgage on a Largo townhome owned by another of Skelton's companies. That buyer forfeited a $5,000 deposit rather than go through with the $112,000 purchase.

    Despite the judge's criticism of him, Houde was relieved to be getting his money back.

    "You shouldn't be allowed to create a scheme to defraud buyers," he said.

Tuesday, August 22, 2017

Bankster To Avoid Paying Full Amount Of $46 Million Damages Award As Confidential Settlement Reached With Screwed Over Homeowner-Couple In Connection With Loan Modification Jerk-Around That Led To Mistaken Foreclosure

In Sacramento, California, Fox Business reports:
  • Bank of America Corp. has agreed to pay more than $6 million to a California couple whom a federal judge said had been harassed and illegally foreclosed upon by the bank's mortgage unit, ending an eight-year-long dispute.

    The proposed settlement between the bank and Erik and Renee Sundquist would enable them "to end a long personal and legal nightmare that has impacted every facet of their and their sons' lives," according to court papers the couple filed to request that their 2014 lawsuit against the bank be dropped.

    The deal calls for Bank of America to pay a fraction of the fine of more than $46 million ordered by Judge Christopher Klein in March. In his ruling, the judge said the bank's mortgage modification process and mistaken foreclosure on the Sundquists' home in Lincoln, Calif., left them in "a state of battle-fatigued demoralization."

    The exact amount that the bank will pay the Sundquists is confidential, according to documents filed Tuesday [August 15] in U.S. Bankruptcy Court in Sacramento. The earlier order called for the bank to pay the couple nearly $6.1 million in damages.

    The couple had stopped making mortgage payments in March 2009 after Bank of America officials said they wouldn't consider loan modifications for customers who were current on payments. In the following years, their roughly 20 loan-modification requests were "routinely either lost or declared insufficient, or incomplete or stale or in need of resubmission or denied without comprehensible explanation," the judge's ruling said.

    The couple filed for bankruptcy in June 2010. Filings halt foreclosure sales, but the judge said the bank still improperly took over the home and gave them a three-day eviction notice. The couple moved out, and Ms. Sundquist was hospitalized with stress-related symptoms of a heart attack several weeks later.

    Bank of America officials eventually reversed the sale. The couple moved back in several months later and received a $20,000 fine from their homeowner association for dead landscaping, the ruling said.

    The 107-page court opinion included excerpts from Renee Sundquist's journal that documented harassing visits from bank-related officials and Mr. Sundquist's suicide attempt after the couple discussed their frustrations over the house.

    The request this week to drop the lawsuit still needs approval from Judge Klein, who agreed to discuss the settlement at a Sept. 12 hearing.

    "Their physical and emotional health deteriorates each day they are forced to endure the uncertainty of an outcome that will enable them to repair their lives and the lives of their children," their lawyer wrote in the request. "They do not have the ability to participate in further litigation and appeals without grave costs to their health and quality of life."

    The settlement would enable the bank to avoid paying a court-ordered $40 million donation to five law schools associated with the University of California system and two consumer advocacy nonprofits, the National Consumer Law Center and the National Consumer Bankruptcy Rights Center. It's not clear whether the groups will receive any money from the confidential settlement.

    A Bank of America spokesman declined to comment Thursday. Lawyers who represented the law schools and the nonprofits in the case did not respond to requests for comment.

    At the time of the ruling, legal experts praised Judge Klein's mandatory donation, saying it could help other judges who struggle with how to issue a damages award large enough to make a corporate giant stop bad behavior but not to overcompensate plaintiffs. Outsize legal awards can often trigger an appeal for excessive damages.

    In the ruling, Judge Klein said the fine was meant to be large enough that it wouldn't "be laughed off in the boardroom as petty cash or 'chump change.'"

    In Tuesday's request, the Sundquists said they "support the court's message to the bank" but worried about what could happen to the damages amount during the appeals process.

    "They also recognize that the court's intentions could backfire if an appellate court reduced the financial cost of the bank's stay violations, " their lawyer said in court papers.

Cops: Scammer Fleeced $75K+ From NJ Couple With False Home Mortgage Refinancing Promises

In New Brinswick, New Jersey, reports:
  • A Florida man is facing theft by deception and money laundering charges in connection with allegedly stealing more than $75,000 from a Sayreville couple.

    Robert Perniola, 58, a former Manalapan resident who now lives in Pompano Beach, Florida, turned himself in to authorities around 1:30 p.m. Wednesday [August 16] at the Middlesex County Court House, according to Middlesex County Prosecutor Andrew C. Carey.

    Perniola was charged following an investigation by Middlesex County Prosecutor's Office Detective Kevin Schroeck.

    According to officials, between Jan. 13, 2012 and Feb. 28, 2014, Perniola allegedly obtained funds of more than $75,000 from a Sayreville couple by falsely offering to help them refinance their mortgage. Perniola allegedly moved around the money sent to him to different accounts or used it to make personal purchases.

Monday, August 21, 2017

Federal Jury To Snoozing County Public Administrator: Your Negligence In Connection With Auction Of Dead Person's Home Screwed Estate Beneficiary Out Of $114K, So Pay Up!

In Nashville, Tennessee, the Nashville Post reports:
  • A federal jury on Wednesday [August 16] found in favor of the beneficiary of an estate overseen by the Davidson County Public Administrator.

    The beneficiary, Joan Wildasin, argued the public administrator, Peggy Mathes, was negligent in her handling of the auction of the estate’s main asset, a home on Old Charlotte Pike in Pegram, Tennessee. The trial was held in U.S. District Court in Nashville.

    The jury awarded Wildasin $114,167, approximately the amount of damages the plaintiff’s team claimed she had suffered when the administrator failed to correct an inaccurate description of the property prior to its 2014 sale at auction.

    According to the plaintiff, the home was advertised as 2,500 square feet ahead of the auction when it was actually more than 3,500 square feet.

    “Ms. Wildasin is very gratified that the jury sent such a strong message that public officials who owe a fiduciary duty to beneficiaries of estates must exercise diligence and caution discharging their duties, and will be held accountable when they fail to do so,” the plaintiff’s attorney, Gino Bulso, of Leader, Bulso & Nolan, said in a statement. “Mathes, despite having records in her file that accurately showed the square footage of the home, admitted during the trial that she provided no information to the auction company about the home (other than the address), that she never reviewed any of the advertisements for the auction sale of the sale, that she did nothing to ensure that the advertisements were accurate, and that — even after having been advised of the discrepancy prior to commencement of the auction — allowed the home to be sold anyway.”

    The house sold for $315,000 at auction, while the plaintiff cited appraisals putting the value of the home closer to $500,000.

    Mathes’ attorney, John Kitch of Cornelius & Collins, said they were still processing the verdict and declined to comment further.

    The defense had argued that Mathes was immune from the suit because of her role as Davidson County Public Administrator.

    Metro Legal Director Jon Cooper said he was not familiar with the case and could not comment.

    Additionally, Mathes claimed, it was the responsibility of the auction company, not her, to make sure the listing was accurate. Wildasin and the auction company, Colson Auctions, reached a confidential settlement prior to the trial.

    At-large Metro Councilmember Jim Shulman, who chairs the Rules, Confirmations and Public Elections Committee that recommended Mathes for reappointment in 2015, said he hasn’t heard of other issues with the public administrator in the last few years.

    “If there’d been a series of cases, I think we’d immediately call her in and figure out what was going on,” he said. “But if this is the first case like this, if this is the first official judgment on her for an act of negligence, we might want to know about it, but I’m not sure if the council will take a full review fit or not.”
Source: Jury awards $114K in botched estate sale (Davidson County Public Administrator had claimed immunity from suit).

82-Year Old Widow Has Bully Timeshare Developer Over A Barrel; Outfit Needs Her Signature To Obtain Demolition Permit, Certificate Of Occupancy To Begin Operating $24 Million Complex, But She Refuses To Give It

In Orlando, Florida, The Associated Press reports:
  • There's a new twist in a standoff between an 82-year-old widow in Florida who refused to sell her townhome and the giant developer that constructed a timeshare resort around her vacant, two-story building anyway.

    In order to get a county permit for tenants to move into the new timeshare units, the company needs the widow, Julieta Corredor's, signature - and she's not giving it.

    That prompted the parent company of Westgate Resorts to sue Orange County, Florida, this month, demanding that the county issue the occupancy permit anyway.

    The timeshare giant's lawsuit is the latest development in the ongoing fight between Corredor and Westgate Resorts.

    Corredor was the last owner in her condominium development, and refused to sell to Westgate so it could build the new timeshare complex in the heart of Orlando's tourist district.

    The company tweaked its plans, but moved forward, building a seven-story, multimillion-dollar edifice within feet of the Corredor townhome.

    The 82-year-old woman's townhome was damaged when a contractor for the timeshare company was clearing the site for the construction of Westgate's timeshare complex.

    No one now lives in the property, which was used as a vacation home by the South Florida-based Corredor family. The home, which Westgate said the family has not used in more than a decade, has now been deemed uninhabitable because of the damage.

    Orange County officials have told Westgate their contractor needs a demolition permit for the unpermitted work done on Corredor's building before it will grant the occupancy permit for one building and a building permit for the second building in the timeshare complex.

    That requires the signature of Corredor, who has so far steadfastly refused all of the company's offers to buy out her unit.

    'The fact that Westgate apparently undertook demolition without proper permitting from Orange County, substantially damaging Mrs. Corredor's condominium in the process and rendering it uninhabitable, is one of the big reasons that we're in this mess,' said Corredor's attorney, Brent Siegel.

    County spokeswoman Doreen Overstreet said the county wouldn't comment due to the pending litigation. Corredor and her sons weren't named as defendants in the lawsuit, although their fight with Westgate looms large over the complaint.

    In emails filed with the court, a lawyer for Westgate complained that the county's decision not to issue the occupancy permit is costing Westgate 'tens of thousands of dollars every day.'

    The lawsuit said the company has passed all final inspections and that the county has 'a clear legal ministerial duty' to issue the occupancy permit.

    The county also told Westgate it needs to make repairs to the Corredor home in order to get the permit, and that also requires Corredor's signature.

    That's something she is willing to sign off on, provided she gets all the details on the proposed repairs, her attorney said.

    Officials at the timeshare company said they've offered to rebuild the Corredors' unit at the same or a new location and provide $50,000 in furnishings.

    They've presented an offer of a $150,000 cash buy-out, and they've said they're willing to offer a comparable, newly-renovated unit in a different building. The Corredors have repeatedly said 'no.'

    That amount is far more than the $69,000 her neighbors were given for their condos on average, but also a bit less than the $154,000 she paid for the property when she purchased it back in the early 1980s.

    The Corredors have said that their case is a matter of principle on property rights and that they feel bullied by Westgate. The complex being built is a $24 million development.

    Westgate is owned by David Siegel who has been named in the suits as well.

    The Corredors have two lawsuits pending against Westgate. There have been no steps toward settlement talks since the beginning of the year, Siegel said.

Sunday, August 20, 2017

Pennsylvania Supremes OK Record $4.4 Million Payout As Partial Reimbursement For Claimed $11.3 Million Fleeced From Ex-Clients By Thieving Lawyer; Recent 4-Year Fund Payouts Triggered By Sticky-Fingered Attorneys Now Up To $15 Million

In Harrisburg, Pennsylvania, reports:
  • More than four dozen victims of a Ponzi scheme perpetrated by late Hummelstown attorney Jeffrey Mottern will share in what is the largest payout ever made from a fund created by the state Supreme Court to help those cheated by dishonest lawyers.

    The 47 former Mottern clients whose claims were approved by the Pennsylvania Lawyers Fund for Client Security will receive a combined total of $4.4 million in two separate payments, half this December and the other half next December, said the fund's executive director Kathryn Peifer Morgan.(1)

    That represents about 39 percent of the $11.3 million in combined losses that 67 clients, in a pending lawsuit, are claiming that Mottern stole.

    It was the first real bit of good news they have received since they realized, after Mottern's suicide three years ago, that they had been the victims of a scam that cost some their life's savings. It was news that some had begun to doubt they would ever receive.

    "At the rate it was going for a while there, it didn't look good at all," said Cosmo Agostino of Hummelstown, whose claim to the lawyers fund was approved. "I think the clients will be satisfied to a point. At least it's something."

    The letter caught Carol Bingaman of Swatara Township and her husband Stanley by surprise.

    "We were thrilled," she said. "We couldn't believe it. For us and for our brother [who also was a scam victim] it pretty much covers what we lost. It's fantastic."

    But she also feels for victims who lost more money -- in some cases, hundreds of thousands of dollars and, in two cases, more than $1 million.

    The maximum amount that the fund allows any of the victims to receive is $100,000.

    "A $100,000 doesn't do a lot for them," Bingaman said.

    Because of the number of victims and the combined amount of money that Mottern had fraudulently taken from them, the Supreme Court waived its $1 million aggregate cap on what the fund could pay for claims against any single lawyer, said Peifer Morgan.

    "We're just grateful for the court providing us with the financial resources to be able to help these people," she said.

    The Lawyers Fund for Client Security's primary funding source is $45 from the $200 lawyers pay annually to keep their law license active in Pennsylvania.

    Mottern took advantage of the trusted relationships he had developed with clients and family members of clients by encouraging them to allow him to pool their money - oftentimes, inheritances from estates he handled - with that of other clients' money in a certificate of deposit that never existed.

    He bolstered his clients' confidence that the investment was legitimate by sending out monthly financial statements on his law office stationery showing the balance was growing. He allegedly used money from new investors to make monthly payments to clients who requested them.

    Court records show he also spent some on himself and to pay personal bills, gave some to his wife Susan, and used some to play the stock market, losing most of it.

    As others became aware of his scam, Mottern voluntarily surrendered his law license in the fall of 2013 rather than face punishment from the Supreme Court's lawyers disciplinary board. But he didn't tell his clients and continued the pretense of practicing law.

    In March 2014, two of his elderly clients, who had given Mottern control over more than $2.2 million of their money, became aware that Mottern no longer was a practicing attorney. They became nervous and filed a civil action against him demanding their money back. Two days later, the FBI, tipped off by the court's disciplinary board, raided Mottern's law office, removing boxes of files and his computer.

    Three days after that, Mottern admitted his guilt in what several of his former clients later say was a cowardly way by taking his life in his Main Street office. He was 62.

    Scam victims filed a lawsuit in Dauphin County Court against three financial institutions with which Mottern had accounts. A trial date is set to begin on May 21, 2018. They hope to recover more of the money they lost through that effort.

    Most of Mottern's victims were senior citizens, and at least a couple have died since the scheme was discovered. Given the circumstances that cost them their nest eggs or savings they wanted to leave to their children, Peifer Morgan said the Lawyers Fund for Client Security board modified its rules for recovering money it is paying out to the victims.

    Its past practice was to recover every dollar the fund pays out whenever a court ruling or verdict results in a monetary award. Instead, the fund's board decided to use a calculation that takes into account the principal amount the victim lost and the amount of money, less attorney fees, that are awarded through the litigation.

    So, for example, if a victim lost a principal amount of $500,000 and was paid $100,000 from the fund, that represents 20 percent of their loss. So if the litigation results in $300,000 for that victim after attorney and other fees associated with the litigation are deducted, the fund would receive $60,000 of the settlement and the victim would receive the remaining $240,000.

    But the idea that a portion of any money that the lawsuit might recover would be deducted from what victims receive doesn't sit well with Paul Stokes of Middletown. He said some of the other victims he has spoken with also find it hard to swallow.

    "I'll take what I can get. Don't get me wrong," Stokes said. "That being said, I just think it's low of them to want 20 percent back of what you receive on the other end, especially when the fund was set up to take care of clients like me who got screwed. To me, that's low."

    Peifer Morgan admits the Lawyers Fund for Client Security board considered waiving its rights to recover any money paid out to victims in the Mottern case, given the large size of some of the losses. But in the end, it decided it had to strike a balance, particularly given the rash of big-dollar cases that have come before it within the past four years.

    Since 2013, the fund has approved aggregate awards to victims of four different lawyers' criminal conduct that ranged between $3.4 million and Mottern's $4.4 million. Those awards combined add up to $15 million, the most the 35-year-old fund has ever paid out in a four-year span.

    "The board thought long and hard about this," Peifer Morgan said. "We have a duty to victims and that's our primary concern but we also have fiduciary duty to members of the Pennsylvania Bar Association who provide these resources. It's a balancing act."
For the story, see Victims of Pa. lawyer's Ponzi scheme get record payout.
(1) For other "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in other states in the United States and in the Canadian provinces, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Sneaky, Ambulance-Chasing Lawyer Gets Bar Boot For Attempting To Use Rubber Checks When Remitting Client's $2 Million Share Of Personal Injury Settlement, Then Failing To Make Good On The Money Or Account For The Cash

In St. Andrew, Jamaica, the Jamaica Observer reports:
  • The General Legal Council has advised that Attorney-at-law Graceann Cameron has been struck off the Roll of Attorneys entitled to practice in Jamaica due to professional misconduct.

    According to a newspaper advertisement today [August 16], Cameron was found in breach of the legal profession on July 22 after the Disciplinary Committee heard evidence from a client, who filed a complaint against her, that she failed to hand over money from a legal settlement.

    The council outlined that the attorney represented the complainant in seeking compensation for injuries she sustained in a motor vehicle accident. Cameron reportedly received proceeds on behalf of the client after which she sent two cheques totalling $2 million.(1)

    However, according to the complainant, the bank dishonoured the cheques when the client presented it.

    The complainant told the legal council that despite her subsequent efforts, she could not reach Cameron.

    The legal council, in its advertisement, stated that Cameron has not accounted for or paid her client the negotiated settlement.(2)

    Cameron is said to have breached sections of the legal profession rules that speak to discrediting the legal profession and not obligating financial commitments to her client.

    As such, she is not entitled to practice in Jamaica or be employed in that capacity by any member of the public.
Source: Attorney disbarred for failing to handover $2m in settlement funds to client.

Editor's Note: According to the bar complaint, the victim was laid up in the hospital receiving treatment for multiple injuries (including a fractured right hip, a fractured knee and lacerations) when she was approached by a woman who identified herself as working with the ambulance-chasing Cameron, recommending her employer to the victim for legal representation.
(1) At an exchange rate of $127.83 (Jamaican) to $1 (U.S.), the loss to the victim equates to approximately $15,600 (U.S.) in today's money.

(2) In Jamaica, The Compensation Fund was established in 2012 to assist clients who have suffered losses as a result of actions by attorneys. The General Legal Council of Jamaica is to administer the Fund.

For other "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in the United States and in the Canadian provinces, see:
Maps available courtesy of The National Client Protection Organization, Inc.  ripoff reimbursement

Aging Attorney Gets Tripped Up By State Bar's Random Trust Account Audit Revealing Major Irregularities; Despite Lack Of Complaining Clients, Deposit Of $2.1 Million Of His Own Funds To Cover Account Shorfalls & Voluntary Relinquishment Of Law License, Lawyer Now Faces Criminal Larceny Charge For Playing Fast & Loose With Unwitting Clients' Cash

In Stamford, Connecticut, the Stamford Advocate reports:
  • A well-known former real estate lawyer has been accused of misappropriating more than $2 million from his attorney trust account.(1)

    Burt Hoffman, 75, has been charged with first-degree larceny and was released on a promise to appear in court.

    Unlike other attorneys similarly charged, Hoffman was not accused by any of his clients. Hoffman, who was admitted to the bar in 1970 and had law offices with his son on Summer Street, got into trouble following a random audit of his Interest on Lawyers Trust Account.

    The trust accounts are used when client funds are collected for many reasons, including home sales, retainers and personal injury settlements. State law prohibits co-mingling attorneys’ personal funds with their clients. Random audits of trust funds are conducted weekly throughout the state, Assistant Chief Disciplinary Counsel Beth Baldwin said.

    Hoffman’s Attorney Bob Frost did not return a call for comment.

    A February 2016 audit showed Hoffman’s trustee accounts were at a $1.5 million deficit, according to his four-page arrest affidavit prepared by Stamford State’s Attorney inspector John Forlivio.

    The auditors listed five issues Hoffman needed to address, including hiring a bookkeeper, creating a proper ledger and an account for the negative $1.5 million.

    A bookkeeper also found several questionable disbursements from client accounts to companies owned and controlled by Hoffman, the affidavit said.

    Hoffman deposited a total of $2.1 million of his own money into his trustee account to cover the shortfalls that were “due to accounting errors, omissions and improper disbursements,” the affidavit said.

    In November 2016, the Office of the Chief Disciplinary Counsel filed a request to suspend Hoffman’s law license. In April, Hoffman resigned his right to practice law in the state and his resignation was accepted one month later by a Stamford judge who also assigned attorney Mark Henderson as a trustee over the accounts.

    “A lawyer is expected to protect the funds of a client with utmost fiduciary responsibility,” Baldwin said. “Trust between the lawyer and client is paramount to the attorney-client relationship. Breach of that trust violates the core values of attorney ethical obligations.”
Source: Former Stamford attorney accused of misappropriating client funds.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in states throughout the United States and in the Canadian provinces, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Kentucky Lawyer Pleads Guilty To Fleecing Unwitting Clients Out Of At Least $550K In Personal Injury Lawsuit Settlements; Defendant Allegedly Forged Victims' Names On Settlement Checks Received From Insurance Companies, Then Pocketed Loot Without Telling Anyone

From the Office of the U.S. Attorney (Paducah, Kentucky):
  • A licensed Kentucky attorney pleaded guilty in United States District Court today [August 17], before Senior Judge Thomas B. Russell, to various charges including devising a scheme to defraud numerous clients of insurance settlements totaling at least $550,000(1) announced United States Attorney John E. Kuhn, Jr.

    “Clients trust their attorneys to act as fiduciaries, to put the clients’ interests first and to conduct themselves honestly and honorably,” stated U.S. Attorney John Kuhn. “In this case, Mr. King violated that trust and dishonored his profession by stealing from his clients. We will pursue justice for his defrauded clients, seek restitution on their behalf, and seek a sentence for Mr. King commensurate with his crime.”

    From at least March of 2007 through May of 2017, James Grant King, 43, of McCracken County, Kentucky, was an attorney licensed by the Kentucky Bar Association and licensed to practice law in the Commonwealth of Kentucky. In court today, King admitted that during that time period, he committed aggravated identity theft and wire fraud.

    King practiced as a plaintiff’s attorney for numerous clients within the Western District of Kentucky and elsewhere. These clients came to the defendant seeking his services in order to recover monetary damages and other remedies. After learning about his clients’ cases, King would seek to settle their cases with insurance companies. However, after reaching a settlement with the insurance companies, and unbeknownst to his clients, King would then keep most or all of the settlement amounts for himself.

    Specifically, depending on the case, King would either keep the entire settlement amount for himself or tell clients that he was still awaiting resolution and settlement of the case with the insurance company, knowing that the insurance company had already settled the case and sent him the full settlement amount. King’s clients would believe him because they trusted him. The settlements that King received from the insurance companies often came in the form of a check. In order to cash or deposit the check, King would forge the signatures of his clients so that they would not know about the check. King would forge these signatures without any lawful authority.

    King is also charged with obtaining a $97,500 personal loan from a McCracken County individual. As collateral for the loan, King transferred the title of a Phoenix Model 920 Pro XP boat. However, a few months later, King applied for a duplicate title to the boat, and then, unbeknownst to the individual who loaned him the money, King sold the boat, without repaying the $97,500 loan.

    If convicted at trial, King could face a sentence of 42 years in prison, pay a fine of $750,000 and be required to serve a three years period of supervised release.
Source: McCracken County, Kentucky Attorney Guilty Of Defrauding Clients Of Insurance Settlements (Kept at least $550,000 in settlement amounts that should have gone to his clients).

See also, A client speaks out after Grant King enters guilty pleas.
(1) For "attorney ripoff reimbursement funds" that sometimes help cover the losses created by the dishonest conduct of lawyers licensed in states throughout the United States and in the Canadian provinces, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Saturday, August 19, 2017

State Civil Rights Agency Shakes $40K Out Of California Landlord In Settlement Of Fair Housing Lawsuit Alleging Denial Of Tenant's Reasonable Accommodation Requests In Connection With Documented Need For Assistance Animal

The California Department of Fair Employment and Housing (DFEH) recently announced:
  • The owners of an apartment complex in San Jose, California will pay $40,000, develop written anti-discrimination policies, and undergo annual fair housing training for three years to resolve a disability discrimination lawsuit filed by the California Department of Fair Employment and Housing (DFEH), the agency announced today [July 5]. The lawsuit filed in Santa Clara County Superior Court charged the landlord with denying the reasonable accommodation requests of tenants with disabilities who presented medical documentation attesting to their need for an assistance animal, commonly called an emotional support animal.

    The case came to DFEH’s attention when Project Sentinel(1) filed a complaint on behalf of a mother and daughter, both with disabilities, who sought to engage their landlord in a discussion about their need for an assistance animal. After an unsuccessful attempt to mediate the claim, the DFEH filed suit (Case No. 16CV289823) against the apartment complex’s owners Timothy S. Chen and Timothy S. Chen Trust (Defendants) alleging multiple violations of the Fair Employment and Housing Act (FEHA) and the Unruh Civil Rights Act.

    According to the civil complaint, the tenants made written requests for a reasonable accommodation supported by medical documentation, but the landlord refused to consider the requests because their doctor’s note did not state they needed a dog “to survive.” The landlord then subjected the tenants to retaliation by issuing them a notice terminating their tenancy.

    “The law is clear that the use of an assistance animal can be a reasonable accommodation for a disability,” said DFEH Director Kevin Kish. “Landlords have a duty to engage in the interactive process when a tenant requests a reasonable accommodation for a disability, and those who refuse to do so because the requested accommodation involves an animal are in violation of the law.”
Source: Landlord To Pay $40,000 To Settle Fair Housing Case Involving Emotional Support Animal (Tenants faced eviction after landlord told them they didn’t need a dog to survive).
(1) Project Sentinel is a non-profit organization whose primary function is to assist individuals with housing problems such as discrimination, mortgage foreclosure & delinquency, rental issues including repairs, deposits, privacy, dispute resolution, home buyer education, post purchase education and reverse mortgages. Many of Project Sentinel programs are free, however several of our programs charge a nominal fee. Please review the Project Sentinel HUD fee schedule.

Forced To Move After 15+ Years, Ex-Tenant With Disability Scores $31K (With Fair Housing Group Walking Away With Add'l $41K) After Squeezing Landlord With Fair Housing Complaint Over Alleged Harassment In Connection With Service Dog

In Marin, California, the Marin Independent Journal reports:
  • An administrative complaint filed with a federal agency by a disabled Marin woman against managers of a Greenbrae apartment complex was settled in her favor, parties in the matter announced this [month].

    Stacey Kitchin, a former resident of the Bon Air Apartments, was awarded $31,000 last month in the settlement, filed with the Department of Housing and Urban Development’s fair housing office. Also, San Rafael-based Fair Housing Advocates of Northern California was awarded $41,000 in the settlement to offset the organization’s “frustration of mission” due to numerous hours of staff time spent assisting Kitchin in the complaint.

    Kitchin’s complaint of discrimination was filed against Schultz Investment Co., Greenbrae Management Inc., Belardo Co., L.P. and Thomas Allhoff, vice president of Schultz. It alleged that even though she was granted a “reasonable accommodation” in 2010 to have her service dog Zeus stay with her because of her disability, she was harassed by repeated notices of lease violations concerning the dog. That included, she said, false reports that the dog had attacked and bitten maintenance workers.

    “I want everyone to know that people with disabilities deserve the same opportunities to enjoy their living space as others, and that landlords need to consider reasonable accommodation requests,” said Kitchin, who lived at Bon Air for more than 15 years until mid-January, when she was forced to move out. She has since found other housing in Marin, said Caroline Peattie, executive director of Fair Housing Advocates.

    Allhoff, who was specifically mentioned by Kitchin as issuing repeated “threats to my tenancy,” did not return calls for comment on Wednesday.

    As part of the settlement’s “conciliation agreement,” the Greenbrae landlords will have to implement a “reasonable accommodation and reasonable modification policy consistent with the Fair Housing Act,” and revise their leases accordingly. They must also send a letter to tenants notifying them of the new policy and take fair housing training.

    Kitchin contacted Fair Housing Advocates in 2014 after receiving a “three-day notice to cure or quit,” related to removing Zeus. Management rescinded the notice after Fair Housing Advocates staff requested it, but the agency continued to get complaints from people with disabilities at the complex in 2014 and 2015, according to Fair Housing Advocates’ attorney, Casey Epp.

    HUD issued a statement that landlords or other housing providers are prohibited “from denying or limiting housing opportunities to persons with disabilities or imposing different rental terms and conditions. This includes refusing to make reasonable accommodations in policies or practices for people with disabilities.”

    Peattie said the nature of Kitchin’s disability was not available, and that housing providers are not allowed to make specific inquiries to that effect.

    According to the HUD statement, “(Zeus) alerts (Kitchin) when she is experiencing physiological changes and helps to ameliorate many of her disability-related symptoms.”

    HUD investigators “corroborated (Kitchin’s) need for the dog and discovered written discriminatory statements made by the property managers,” the statement added. “HUD found no evidence indicating that the animal was disruptive or had bitten anyone.”

Emotional Support Pooches Take $50K Bite Out Of Brooklyn HOA's Wallet In Settlement Of Fair Housing Suit Accusing Co-Op Of Hassling Unit Owners About Having Assistance Animals

In Coney Island, Brooklyn, the New York Daily News reports:
  • The feds are making sure Trump Village in Coney Island learns some new tricks about allowing emotional support dogs.

    The co-op built by the commander-in-chief's father has settled a case saying it refused to let residents live in peace with their support dogs, the Daily News has learned.

    Trump Village will pay $40,000 to three families and also pay a $10,000 civil penalty, according to Justice Department documents.

    President Trump has no ties to the site. His father, Fred, built the 1,144-unit development in the 1960s.

    Until around June 2015, Trump Village had a policy barring residents from keeping any animals.

    But the government found the co-op “did not have any policies or procedures for its residents to request reasonable accommodations to permit them to keep assistance animals."

    “Because Trump Village no longer prohibits residents from keeping animals, all residents who wish to have emotional support animals may do so,” the settlement stated.

    But if the rules change, and Trump Village once again bans animals, then the pact with the Brooklyn U.S. Attorney's office makes it clear the place has to make an exception for support dogs.

    Brooklyn Federal Judge Nicholas Garaufis signed off on the accord last week.

    The Fair Housing Act case zeroed in on incidents between May 2012 and March 2015. Court papers said the site's management tried evicting three residents who wouldn't capitulate on their canines.

    There were other forms of retaliation too, court papers say. Federal lawyers alleged Trump Village denied preferred parking spots and removed a woman from the board of directors who was married to an Army veteran with a support dog.

    Despite all the fuss, ultimately, no residents were separated from their pooches.

    A lawyer for Trump Village did not have an immediate comment, but the settlement papers said the development denied the allegations. A Brooklyn U.S. Attorney spokesman declined to comment.

California Landlord Coughs Up $4,500 To Settle State Fair Housing Complaint Over Alleged Refusal To Rent To A Couple Because Hubby Was A Marine & Possible Overseas Deployment Might Cause Them To Break Lease

In Orange County, California, The Orange County Register reports:
  • The [California] Department of Fair Employment and Housing has settled a complaint against a landlord who allegedly refused to rent to a couple because the husband was a Marine who might be deployed.

    Viridiana Mendez asked about renting a Dana Point condo in April 2016 to share with her husband Albert Quintanilla and their daughter, according to the DFEH.

    Mendez said the landlord had no issue renting to her until learning that Quintanilla was a Marine and the family might vacate the unit before the end of the lease term if he was deployed overseas. The landlord allegedly would not even give her a rental application because of her husband’s service.

    “The sacrifices made by service members, including their agreement to deploy overseas if duty calls, should not be compounded by refusing to rent to their families,” said DFEH Director Kevin Kish in a statement [go here for Spanish version].

    Under the settlement, the landlord will pay $4,500 and undergo training on fair housing laws.
Source: Dana Point landlord to pay $4,500 for denying Marine’s family a rental application (A landlord will pay $4,500 for denying a woman a rental application because her husband was a Marine).

Friday, August 18, 2017

California Man Gets 15 Months In Prison For Mortgage Fraud In Obtaining Home Loan, Then Subsequently Making False Claims That Proposed Short Sale Was An Arms' Length Transaction, Resulting In $328K Loss For Bank

From the Office of the U.S. Attorney (Fresno, California):
  • Mahendra Prasad, 55, of Fremont, was sentenced today [August 14] by U.S. District Judge Lawrence J. O’Neill to 15 months in prison and ordered to pay $328,000 in restitution for his role in a mortgage fraud scheme, U.S. Attorney Phillip A. Talbert announced.

    On May 22, 2017, Prasad pleaded guilty to one count of mail fraud affecting a financial institution. According to court documents, in 2006, Prasad caused loan application packages that contained false statements to be submitted to a mortgage lender in order to buy a property in Sacramento. The false statements included statements concerning Prasad’s employer, income, and purported intention to occupy the property as his primary residence. Following his fraudulent purchase, Prasad, with the assistance of others, rented the property as Section 8 housing and collected rents. Prasad did not reside in or occupy the property as his primary residence.

    In 2013, Prasad applied to a bank to sell the property to another person at a loss to the bank. He falsely claimed to the bank that the “short” sale was an “arm’s length” transaction, and that neither he nor the buyer were related by commercial enterprise. Prasad’s conduct caused a loss to a financial institution of approximately $328,000.

Billionaire Real Estate Developer Faces Law Enforcement Scrutiny For Allegedly Filing Phony, Post-Breakup 'Revenge' Construction Liens, Then Threatening Foreclosure Against Ranch, Home Belonging To Woman Claiming To Be His Ex-Lover

In West Palm Beach, Florida, the South Florida Sun Sentinel reports:
  • Wellington mega-developer and president of the Palm Beach Polo & Country Club, Glenn Straub, is under criminal investigation, according to the Broward State Attorney’s Office.

    A spokesman for the office declined to comment on the nature of the investigation.

    Palm Beach Circuit Court records filed in March show Straub’s company, Palm Beach Polo, Inc. is suing a woman who claims to be an ex-girlfriend of Straub for failing to pay more than $77,000 for construction and improvements done on two of her properties.

    The company has filed two liens and is threatening foreclosure on Jessica Nicodemo’s Wellington and Loxahatchee residences.

    Nicodemo, 33, claims the liens are fraudulent.

    She also claims that there was never an agreement or expectation of payment for the work.

    “[Nicodemo] was in a romantic relationship with Glenn Straub,” court filings said. “[Nicodemo] was led to believe that there would be no charge for services.”

    “It’s a joke,” Straub, 70, said of the criminal investigation Wednesday night. “Anybody can make a complaint, and the state attorney’s office has to go ahead and pursue it.”

    His attorney, Craig Galle, said by telephone: “It’s improper to institute, or threaten to institute, criminal proceedings to affect a civil matter. Here, no crime occurred, and this is a simple civil dispute over money.”

    Nicodemo’s lawyer, Elizabeth Parker, said: “We look forward to the evidence coming out in court to prove Ms. Nicodemo’s claims.”

    Straub has a litigious reputation with a trail of lawsuits to his name, records show.

    His latest legal skirmish is a suit his company filed Aug. 9 against another woman, Ashley Maguire, a former Mrs. Florida beauty pageant winner.

    The company is suing Maguire for $250,000.

    Maguire, 33, failed to live up to “a working arrangement” as repayment for more than $100,000 the company paid to lease her a home at the polo club and provide her with luxury vehicles, according to the lawsuit filed in Palm Beach County Circuit Court.

    “[Maguire] claimed to have strong ties in Wellington with wealthy equestrians and wealthy business executives with whom she could use her beauty and charms in assisting with selling expensive country club memberships, sponsorships and promotions,” the lawsuit said. “Defendant never commenced a single day of work for, or on behalf of, plaintiff.”

    Maguire, who was in the midst of a divorce, did repay a $6,200 cash advance, as well as $35,000 given to her for clothes and accessories, the suit said.

    “This is a classic example of the powerful abusing the judicial process and wasting judicial resources to attempt to create leverage in a demented love triangle,” Maguire’s attorney, Michael Pike said.

    “What they’re trying to do is put me on the defense rather than paying what we are due,” Straub said. “I’m a guy who doesn’t run scared.”

Thursday, August 17, 2017

Texas Title Agent Cops Plea To Siphoning Over $1.6 Million From Escrow Account For Closings In Real Estate Deals; Authorities Bagged Her In Illinois After She Abandoned Business & Skipped Town With Loot

In Southlake, Texas, KXAS-TV Channel 5 reports:
  • A former wealthy Southlake title agent pleaded guilty Monday [August 14] to stealing more than $1.6 million before she abandoned her business and skipped town last year.

    Nancy Jackson Spinks, also known as Nancy Carroll, was arrested in February 2016 driving a Mercedes Benz near Chicago, where she was renting a 6,000-square-foot estate.

    Carroll’s business, Millennium Title Company, was seized by the Texas Department of Insurance.

    Regulators said $3 million was missing from the company’s escrow accounts and $2 million from separate investor accounts.

    A sentencing date has not been set but her crime carries a range of punishment from five to 99 years in prison. Carroll also is eligible for parole, prosecutors said.

    Carroll pleaded guilty to misappropriation of fiduciary property and theft of $1.6 million.

    Carroll's attorney, Lance Evans, declined to say if she will seek probation.

    "Ms. Carroll admits her responsibility for the conduct alleged in the indictment and is prepared to receive her punishment at the appropriate time," he said.
Source: Former Southlake Title Agent Pleads Guilty to Stealing $1.6 Million (Nancy Jackson Spinks could get 99 years in prison -- or parole). closing agent theft

Another Attorney Gets Pinched For Allegedly Sticking Her Sticky Fingers Into Real Estate Escrow Account & Pilfering $40K Held As Downpayment In Home Sale Transaction

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced that a suspended attorney from Islip has been arrested for allegedly stealing $40,000 from a mortgage escrow account. The money had been earmarked as a down payment for a home.

    Nancy Enoksen, 49, was arraigned today [August 14] [...] and charged with Grand Larceny in the Third Degree (a D felony). [...] If convicted, the defendant faces a maximum of 2-1/3 to seven years in prison.

    “Attorneys who betray their clients’ trust and victimize those whose interests they have an obligation to protect, disgrace their profession and when they steal, we will hold them criminally accountable,” DA Singas said.

    DA Singas said in January of 2015, the complainants had retained Enoksen to represent them in the sale of their home in Broad Channel, Queens. The complainants’ buyers gave a cashier’s check for $40,000 payable to “Nancy Enoksen as Attorney” as a down payment on the house. However, in April of 2015, Enoksen’s law license was suspended due to unrelated professional misconduct. Subsequently, the complainants retained a new attorney but when it was time to close on the home in June of 2016, Enoksen is alleged to have refused to release the $40,000 down payment to the new attorney. Attempts to recover the funds by the complainants have been unsuccessful.

    A review of bank records showed that over the course of several months, Enoksen moved the money from her escrow account, located at a TD Bank in Hicksville, and into her operating account. She is accused of using the money to make payments to several credit card companies and make purchases at Stop and Shop, CVS, restaurants and other retailers.

Wednesday, August 16, 2017

NYS, NYC Pension Funds Find Their Way Into Investments In Private Equity Outfit Accused Of Predatory Lending, Unnecessary Foreclosures; City Advocate: Municipal Workers' Retirement Cash Is Being Used Against Them To Foreclose On Their Homes

In New York City, WNBC-TV Channel 4 reports:
  • Despite a pressing need for more affordable housing in New York, the state's public retirement funds have invested more than $1 billion in Lone Star, a private equity company accused of predatory lending and unnecessary foreclosures, an I-Team investigation has found.

    According to a lawsuit filed by several homeowners in southeast Brooklyn and Queens, Lone Star has purchased large portfolios of distressed mortgages insured by the Federal Housing Administration. But instead of considering typical FHA modifications -- like interest-rate reductions or loan balance reductions -- Lone Star is accused of offering mostly loans with interest-only periods and balloon payments.

    Karen Morrison, a retired NYPD officer, says Lone Star offered her father one of the interest-only modifications when he fell behind on his mortgage payments two years ago. Now she says she's afraid he won't be able to afford the balloon payment when the interest-only period is up.

    "It's like four generations that live in the household and if we cannot afford to pay when the interest-only payment is up, we're all going to be out on the street," said Morrison.

    On top of the stress of potentially losing her family home, Karen Morrison said it was “like a shocker” to hear her own retirement fund, the New York City Police Pension Fund, has invested more than $100 million in Lone Star, the very company that may one day foreclose on her father's house.

    It’s almost like I co-signed it,” she said.

    After the I-Team contacted NYC Comptroller Scott Stringer to ask about the Lone Star investments, Stringer wrote a letter to Lone Star Chairman John Grayken, expressing concern about the interest-only loan modifications.

    “This kind of predatory lending is unacceptable,” Stringer told the I-Team. "When a company acts more like a predator, rather than an investor, we have serious questions of that company and we are now in the process of hunting down those answers."

    Public Advocate Letitia James is another city official who has expressed concern about city retirees investing in Lone Star. Last year, as a Trustee on the Board of the New York City Employees Retirement System, James successfully opposed an opportunity to make further investments in Lone Star. She said it is ironic that a cop or sanitation worker could face foreclosure at the hands of the very company financed by their own retirement savings.

    “Basically, municipal workers in the city of New York – we’re taking their money and using it against them and foreclosing on their property,” James said.

For more, see I-Team: NY and NYC Pension Funds Invest in 'Predatory' Lender (“Basically, municipal workers in the city of New York – we’re taking their money and using it against them and foreclosing on their property,” the city's public advocate said).

Cops: Woman Used Fraudulent Documents To Obtain Job As Home Health Care Worker, Then Began Draining Assets From 83-Year Old Dementia Patient; Attempt To Score Reverse Mortgage On Victim's Home Among Alleged Bad Acts

In Rockland Township, Pennsylvania, WFMZ-TV Channel 69 reports:
  • A home healthcare worker is in trouble with the law, accused of stealing from an elderly client with dementia.

    Grace Deguia-Reed, 46, of Perry Township, has been charged with identity theft, theft by unlawful taking, theft by deception, and related offenses. She is now free on $10,000 unsecured bail.

    The charges stem from an investigation that was launched in May by the Pennsylvania State Police, who said that Deguia-Reed began to drain the assets and savings of an 83-year-old woman she was paid to care for at the woman's home in Rockland Township.

    Investigators said Deguia-Reed took advantage of the woman's disability and either convinced her to cash in three life insurance policies for nearly $181,000, or she did so herself.

    Then, between April 2015 and April 2016, Deguia-Reed deposited $70,849.35 worth of checks from the woman into her own accounts, according to court documents released Thursday [August 10]. She also attempted to cash a $75,000 check, with plans to buy a property with the money, police said.

    Investigators also cited evidence that Deguia-Reed attempted to get the woman to obtain a reverse mortgage and have her property logged for more assets.

    Deguia-Reed was also in possession of a 2015 Jeep Cherokee that was leased and registered to the woman without her knowledge, police said.

    In addition, evidence points to Deguia-Reed using fraudulent forms to obtain her job as a home healthcare worker, according to court documents.
Source: Police: Home healthcare worker stole from elderly client (Grace Deguia-Reed free on $10,000 bail).

Tuesday, August 15, 2017

Career Conman Again In Hot Water, Accused Of Using Forged Deed To Score $441K In Refinancing Proceeds Secured By One Victim's Home, Falling Short In Similar Effort Involving $250K Loan Against Another Homeowner's Property

In Miami, Florida, the Miami Herald reports:
  • In his most infamous scam, longtime con man George French Jones targeted wealthy celebrities and sports figures, promising them Miami Heat courtside season tickets during the height of the LeBron James era.

    Now, Jones is back in Florida facing charges in an audacious new enterprise: declaring himself the owner of other people’s luxury real estate.

    Posing as a high roller, police say, Jones used phony documents to try to gain ownership of a high-end South Beach condo while at the same time trying to take out a $250,000 loan against the property. He’s also facing a second criminal case, accused of impersonating a condo owner to secure a $441,000 loan against the woman’s posh Brickell home.

    In two other cases, civil lawyers allege Jones pulled similar scams — using phony driver licenses and court documents — to gain control of a beachfront Fort Lauderdale condo, as well as a mansion in the Cocoplum neighborhood of Coral Gables.
    It was in February that he began text messaging his neighbor, a high-end real estate agent named Linette Guerra, inquiring about buying her unit next door to where he lived.

    In a series of messages released by prosecutors, he casually offered $2.5 million for the unit while playing up a playboy lifestyle. In one text, he bragged that his girlfriend was “having too much fun at Ultra,” the popular Miami electronic music festival. In another, he apologized for taking too long to return a text. “Just woke up rock star evening,” he wrote.

    What Guerra did not know was that Jones was using her company’s name on documents to try to get the $250,000 loan against her own property, detectives said. When confronted by police, Jones acknowledged his “extensive white-collar criminal past” and numerous companies but refused to talk about the loan, according to an arrest report.

    Jones didn’t actually get the loan money wired to him.

    But in the case of Ana Marzal de Bolivar, the owner of a condo at Brickell Icon, lawyers say he succeeded in getting hundreds of thousands of dollars sent to him as a loan against her property in late 2015. According to court documents, Jones filed a phony deed giving himself control of the property, then got the $441,000 loan by signing his own name and Bolivar’s.

    Her attorneys, Henry Bell and Manny Reboso, won a suit against Jones and one of his companies, which never replied to the legal action. The lawyers also complained to police, who are now looking to arrest Jones.

    “Ms. Bolivar, like many other individuals, has been defrauded by George French Jones,” said Reboso, of Lagos & Priovolos. “We are confident that he will ultimately be held accountable for his criminal acts.”

Tampa Feds Squeeze $475K Civil Settlement From Real Estate Operator Accused Of Peddling Condo Apartments To Elderly Buyers By Recruiting Them, Paying Them To Artificially Inflate Sales Prices, Then Failing To Disclose Material Information When Obtaining Reverse Mortgages To Cash Out On Transactions

From the Office of the U.S. Attorney (Tampa, Florida):
  • Acting United States Attorney W. Stephen Muldrow announces a civil settlement with Alexander Olympus Zarris that resolves alleged violations of the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) through reverse mortgage transactions engineered by Zarris at a Tarpon Springs condominium complex. Zarris will pay $475,000 to address the damage his conduct caused to a lending program overseen by the Department of Housing and Urban Development (HUD). This is the third civil settlement reached in this vital area of civil affirmative enforcement.
    From 2008 to 2011, the United States Attorney’s Office and HUD’s Office of Inspector General (“OIG”) investigated Zarris’s practices and concluded that he had improperly obtained the proceeds of federally insured reverse mortgages that, but for his conduct, would not have been underwritten by the lenders.

    Investigators learned that Zarris had engaged in sales transactions where he concealed the amounts that he had paid to the buyers to artificially inflate the appraised values of condominium complex units.

    He recruited elderly buyers (over the age of 62) to purchase units at inflated values and, as part of those sales transactions, required them to immediately apply for reverse mortgages in the maximum amount possible. Zarris, or others working with him, would then assist the elderly buyers in applying for reverse mortgages, including filling out their loan applications. The applications submitted on behalf of these buyers failed to disclose certain information that was material to the bank’s decision to underwrite the reverse mortgages. Through these practices, Zarris was able to create the appearance of equity so that the elderly buyers could obtain the reverse mortgages. The proceeds of the mortgages were then wired to a company owned by Zarris at the reverse mortgage closing.

Monday, August 14, 2017

NJ Feds Squeeze Guilty Plea Out Of Operator Of Loan Modification Racket That Screwed Over Two Dozen Homeowners Out Of $400K+

From the Office of the U.S. Attorney (Trenton, New Jersey):
  • The sole proprietor of a purported loan modification consulting company today [August 8] admitted that he fraudulently billed clients more than $400,000 for services that were never performed, Acting U.S. Attorney William E. Fitzpatrick announced.

    Jeffrey Halpern, 62, of Hewlett, New York, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of wire fraud.

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

    Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

    In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of over $400,000.

Real Estate Managing Agent Pinched For Allegedly Bilking 15 Landlords For Over $330K In Rent Collections, Tenants' Security Deposits Held In Company Escrow Account

In Warwick, Pennsylvania, The Intelligencer reports:
  • A Doylestown Township woman who owns a real estate management company is charged with fraudulently using more than $330,000 to pay her business expenses, Warwick police allege in a criminal complaint.

    Helene Senior, 67, of Gatehouse Lane, is charged with four felony counts, including theft and receiving stolen property. According to court documents, a client contacted Warwick police after Senior failed to respond to numerous attempts to contact her, and a police investigation allegedly revealed that Senior had taken $338,494 from 15 customers out of an escrow account and used it for her personal business purposes.

    Police say that Senior owns Mark V. Realty and operates out of an office on Stout Drive in Warwick. The property management firm is primarily tasked with collecting rent for other property owners in Bucks and Montgomery counties and sending her clients the money.

    One of her clients, Scott Cornell, hired Senior to collect rent on three properties owned in Warminster and maintain security deposits paid by the properties' tenants, totaling more than $33,000, in an interest-bearing escrow savings account, police said. Under the agreement, Senior would collect the rent, pay herself a 6 percent commission and send the remainder to Cornell.

    According to the probable cause affidavit, Cornell began collecting the rent himself in April 2016 after Senior failed to perform her duties or call him back after numerous messages. Cornell made a formal request that Senior end the contract and return the security deposits in escrow, but she did not respond to his phone calls or mailed letters, police said.

    Warwick police allege they reached out to Senior's other clients and found 14 additional customers who could not get a hold of Senior nor recover security deposits she agreed to hold in an escrow account. After looking at her bank accounts, police found that the security deposits had been transferred out of escrow and used for business-related expenses, according to court documents.

    Senior met with the police in July and allegedly admitted that she transferred the escrow money into her general accounts and used the funds for salaries and other expenses without her clients' authorization.

    She told police that she intended to pay the money back but, "once it got out of hand she did not have the money to put back into her customers' escrow accounts," the affidavit says.