Tuesday, June 27, 2017

Another Aging Lawyer In Hot Water: Pinched For Allegedly Swiping $63K+ In Sale Proceeds From Dead Client's Home; Investigator: Defendant Said He Needed The Loot For Son's Dental Work, Is Now Broke, & If Deceased's Four Kids Want Their Money, They'll Have To Get It From State Indemnity Fund For Victims Of Sleazy, Thieving Attorneys

In Niagara Falls, New York, The Buffalo News reports:
  • A Lockport lawyer accused of stealing more than $63,000 from the proceeds of a real estate sale told an investigator that he spent the money on his 26-year-old son's dental work.

    "It went in my kid's mouth," Edward R. Thiel told Investigator William Thomson of the Niagara County District Attorney's Office, according to court papers.

    Thomson interviewed Thiel at Thiel's apartment in May, more than two years after the sale.

    "He has had serious dental issues for the last four years," Thiel told Thomson. "It has cost me everything. I gave him the last of my money this morning to go to the dentist."

    Thiel, 73, a former Niagara County assistant public defender, pleaded not guilty to second-degree grand larceny at his arraignment Tuesday in Lockport City Court. If convicted, he faces up to 15 years in state prison.

    The victims of the alleged theft are the four children of Donald K. Beutel of Wilson, a farmer and greenhouse owner who died in 2011.

    He left his property at 4740 Chestnut Road in equal shares to his four grown children. They decided to sell the property to Eric W. Beutel, one of Donald's grandchildren.

    On Sept. 2, 2014, a closing for the deal was held at the Niagara County Clerk's Office in Lockport. Thiel was Donald Beutel's longtime personal attorney, according to William Beutel, the only one of the four siblings who lives in Niagara County.

    William Beutel, in a sworn statement, said Eric Beutel brought a check for more than $7,000 to the closing, which was to be combined with mortgage money for a total of $63,684.54. Thiel took the checks and was supposed to deposit them in an escrow account.

    "Mr. Thiel was to divide the proceeds from the sale by four and distribute this money to myself and my three siblings," William Beutel said in his statement. "To this day, we have not received any money, not one cent. We made numerous attempts to resolve this matter by contacting Mr. Thiel. He never responded. In addition to that, he wouldn't respond to us to close out the estate, either."

    William S. Beutel, who lives in Wilson, said he hasn't talked to Thiel in at least two years.

    "I don't want to talk to him. I just want my money, and get out of my life," Beutel said in an interview Thursday.

    Niagara County Surrogate's Court records show that County Judge Matthew J. Murphy III tried repeatedly to get Thiel to court to close out Donald Beutel's estate, starting in 2014. At one point, the court sent Thiel a letter threatening to fine him $2,500 if he did not show up.

    It took two years before Thiel filed the mandatory accounting of the estate's assets in August 2016.

    On Sept. 20, Lockport attorney Walter E. Moxham Jr. informed the court that he had taken over the estate file because Thiel was "no longer practicing law."

    The estate work was finished in 10 days, but the money from the siblings' sale of the Chestnut Road property remains missing.

    Thiel, during his May 8 meeting with Thomson of the District Attorney's Office, acknowledged the sale proceeds were supposed to go to the children of Donald Beutel, according to the court file.

    "When asked if they got the money, he said, 'No,' " Thomson wrote.

    When Thomson said the Beutels want their money, Thiel answered, "Well, we will have to get them their money from the attorneys' fund," according to court papers.

    That appears to be a reference to the Lawyers' Fund for Client Protection, maintained by the state [of New York] to reimburse people who have lost money to dishonest lawyers.(1) Thomson, according to the report, told Thiel that he would have to be arrested before that process could begin.

    At the arraignment, City Judge Thomas M. DiMillo released Thiel on his own recognizance.
Source: Lockport lawyer blames $63,684 theft on son's dental bills.
(1) In New York, The Lawyers' Fund for Client Protection was created to provide a source of, at least partial, reimbursement to clients who have suffered monetary losses at the hands of dishonest lawyers licensed and practicing in the state.

According to their website, typical losses reimbursed by the Lawyers' Fund include the theft of estate and trust assets, escrow deposits in real property transactions, settlements in personal injury litigation, debt collection receipts, money embezzled in investment transactions with law clients, and unearned fees paid in advance to lawyers who falsely promise their legal services.

Perhaps the best of all the attorney ripoff reimbursement funds in the U.S. in terms of its payout limits, the Fund places a $400,000 maximum limit, per law client loss, on awards from the Fund, fixed by regulation of the Fund's Trustees. There is no aggregate maximum on awards involving one lawyer.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Escrow Agent Pleads Guilty To Pocketing Over $400K From Sales Of Phony Title Insurance Policies Involving 527 Real Estate Transactions Long After Title Underwriter Terminated Outfit's Agency Contract

In St. Louis, Missouri, the Kirksville Daily Express reports:
  • Adair County Title & Escrow owner Nancy Porter has pleaded guilty to one felony count of wire fraud as part of a plea agreement in a federal case stemming from a Missouri Department of Insurance investigation that accused her of multiple violations of state law and fraudulent collection of more than $400,000.

    Porter entered the plea June 7 in U.S. District Court in St. Louis. Records show she will be sentenced by District Judge Henry Edward Autrey at 11 a.m. Sept. 5.

    Terms of the plea agreement were not available.

    The government brought charges against Porter in documents filed June 7. According to the court filing, Porter sold home buyers title insurance policies supposedly underwritten by Stewart Title in 2013, 2014 and 2015, despite that company terminating its contract with Adair County Title & Escrow in December 2013.

    In the subsequent years, Adair County Title & Escrow closed 527 transactions while issuing the false policies.

    “Nancy Porter, for the purpose of executing the scheme described above, cause to be transmitted by means of wire communication in interstate commerce a wire transfer of funds in the amount of $79,583.80 from Bank of America to the American Trust Bank Account Escrow Account of Adair County Title & Escrow,” in violation of federal law, court documents state.

    Porter signed a consent order in June 2015 from the Missouri Department of Insurance, agreeing the department had evidence to prove multiple violation of state law.

    The Missouri Department of Insurance estimates Porter’s company fraudulently collected about $420,000 in Stewart Title premiums and kept those funds in accounts belonging to other individuals.

Oklahoma City Cops Warn Against Scammers' Home Hijacking Racket Where They Pay Off Unpaid Real Estate Taxes, Then Use Forged Documents & Phony Eviction Notices To Boot Unwitting Homeowners

In Oklahoma City, Oklahoma, The Oklahoman reports:
  • If you think someone has paid off your unpaid taxes in the spirit of generosity, think again.

    The Oklahoma County Sheriff’s Office has discovered a scam targeting homeowners with delinquent taxes in which scammers pay off other people's taxes and forge documents in an attempt to claim home ownership.

    The scheme starts with paying someone's unpaid property taxes, which by itself is not illegal, said Mark Opgrande, a spokesman for the sheriff's office

    However, the scammers will then use the payments as leverage when they contact homeowners and ask them to sign over their deed in an attempt to lay claim to the property.

    Despite what the scammers may say to convince their victims, anyone who pays another person's taxes does not have any claim on that person's property, Opgrande said.

    “They have no claim to your home just because they paid your past-due taxes,” Opgrande said.

    The Oklahoma County Clerk's Office has also discovered forged warranty deeds filed on homes by those responsible for the ruse. Some homeowners also have been disturbed to find eviction notices on their homes posted left by the same group of schemers.

    The end game is to fake ownership of a property in order to flip the house and make money, said Oklahoma County Treasurer Butch Freeman.

    "That's the only thing we can speculate," Freeman said.

    For those who receive what they believe to be a fake eviction notice, there are several telling points, Opgrande said.

    In cases of real eviction, homeowners would be notified well in advance of a paper notice stamped on their door, which would give them 48 hours to vacate the premises. The key difference is that a sheriff's deputy would be present upon eviction.

    The scam preys on those who are late on their taxes knowing that they are likely strapped for cash and unable to fight in court, Opgrande said. The sheriff’s office is working nine to ten cases at the moment, but expects to see more as they continue investigating, he said.

    The trend has only been reported in Oklahoma County and nowhere else in the state.

    Freeman said he has met with the sheriff’s investigative team and thinks the scammers will be caught quickly.

    “It’s absolutely a top-notch team,” Freeman said. “I would not want to be those people.”

    The scammers will most likely face charges of forgery or filing a false document, among possible other criminal charges that may come to light, Opgrande said.

    Anyone who is concerned about a fake eviction notice, forged home warranty or paid taxes may contact the Oklahoma County Sheriff's Office at 405-713-1000.

Monday, June 26, 2017

Antitrust Feds Net 60th Real Estate Operator In Ongoing Probe Into Bid-Rigging Conspiracy At Northern California Foreclosure Sales

From the U.S. Department of Justice (Washington, D.C.):
  • A Northern California real estate investor pleaded guilty yesterday [June 14] for his role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

    California real estate investor Ramin Rad “Ray” Yeganeh pleaded guilty to one count of bid rigging in U.S. District Court for the Northern District of California in Oakland. He was charged in an indictment returned by a federal grand jury in the Northern District of California on June 25, 2015.

    According to court documents, as early as September 2008 and continuing until in or about January 2011, Yeganeh conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. The selected properties were then awarded to the conspirators who submitted the highest bids in second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.

    The Department determined that the primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Alameda County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

    The guilty plea entered yesterday was the result of the Department’s ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, California. To date, 60 individuals have agreed to plead or have pleaded guilty.

    These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to real-estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at (415) 934-5300 or call the FBI tip line at (415) 553-7400.

Another Foreclosure Sale Bid-Rigging Real Estate Operator Finds Himself On Short End Of Guilty Verdict; Count Now Up To 23 Who Have Either Been Convicted Or Pleaded Guilty In Ongoing Antitrust Feds' Probe Into Atlanta-Area Public Auctions

From the U.S. Department of Justice (Washington, D.C.):
  • A federal jury convicted a real estate investor of bid rigging and bank fraud related to public foreclosure auctions held in Georgia, the Department of Justice announced today [June 16].

    Douglas L. Purdy was convicted today [June 16] following a two-week trial before the Honorable Richard W. Story in Gainesville, Georgia. The jury convicted Purdy on one count of bid rigging and two counts of bank fraud for participating in the charged conspiracy and scheme at Forsyth County, Georgia, foreclosure auctions from 2008 to 2011.

    The evidence at trial showed that Purdy and his co-conspirators agreed not to compete for real estate at foreclosure auctions in Forsyth County and defrauded lender banks and homeowners. Among other methods, the conspirators held secret “second auctions” of properties they had obtained through rigged bids, dividing among themselves the auction proceeds that should have gone to pay off debts against the properties and, in some cases, to homeowners.

    A federal grand jury in the Northern District of Georgia returned an indictment against Purdy on Feb. 3, 2016. Including Purdy’s conviction, 23 real estate investors have either pleaded guilty or been convicted after trial as a result of the Department’s ongoing antitrust investigations into bid rigging at public foreclosure auctions in the Atlanta area.

    The Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division conducted the investigation, with assistance from the U.S. Attorney’s Office of the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000 or call the FBI tip line at 415-553-7400.

Dallas Feds Score Guilty Pleas Against Pair For Roles In Foreclosure Rescue Ripoff That Milked 70 Homeowners Out Of At Least $242K

In separate announcements, the Office of the U.S. Attorney in Dallas, Texas recently announced that it scored guilty pleas against Christina Renee Caveny and Bruce Kevin Hawkins for their roles in a foreclosure rescue racket that tricked at least 70 homeowners out of at least $242,000.

From the news release announcing Caveny's guilty plea:
  • A federal grand jury in Dallas returned an indictment in December 2016 charging Caveny and three others with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013. Mark Demetri Stein, 36, of Carrollton, Texas, and Richard Bruce Stevens, 51, of San Antonio, Texas, are scheduled to begin trial on August 28, 2017. Bruce Kevin Hawkins, 52, of Desoto, Texas, is scheduled to plead guilty on June 20, 2017.

    According to plea documents in Caveny’s case, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, as foreclosure rescue companies. The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive a new home loan with a reduced interest payment and reduced monthly payment.

    Caveny and other conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage. They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.

    Furthermore, Caveny and other conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.

    As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders. As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”

    Further, according to plea documents, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property. The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners. In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct. Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.

    The defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.

Sunday, June 25, 2017

Jury Slams Lawyer With Guilty Verdicts On 13 Counts In Connection With His Abuse Of POA To Drain His 89-Year Old Grandmother's Trust Fund Out Of Over $1.3 Million; Leaves $24 Balance At Time Charges Were Filed

In Golden, Colorado, KDVR-TV Channel 31 reports:
  • A Lakewood attorney was found guilty of 13 counts for bilking his 89-year-old grandmother out of more than $1.3 million over a nine-year period, the First Judicial District Attorney’s Office said Wednesday [June 14].(1)

    The jury determined Glenn Gregory, 55, took the money from bank accounts opened in the name of a trust fund of his grandmother, Martha Villano.

    The trust fund was to be used until Villano’s death and was dwindled to $24 by the time charges were filed last year. Gregory was trustee for the trust and had power of attorney for Villano.

    Prosecutors said between August 2006 and May 2015, Gregory took more than $1.3 million from the trust’s accounts, including cash, online transfers to accounts that Gregory controlled and gifts to five family members.

    Villano was deposed before the trial because of health concerns and the recorded interview was presented to the jury.

    We believe this is the highest value theft from an at-risk elder in Colorado,” District Attorney Pete Weir said. “Crimes against our older adults are unconscionable and will be prosecuted vigorously.”

    The jury deliberated for two days after a four-day trial. Gregory was found guilty of seven counts of theft, five counts of theft of an at-risk adult and another count of theft.

    He is free on $150,000 bond. Sentencing was set for Aug. 18.
Source: Lakewood attorney found guilty of bilking grandmother out of $1.3 million.
(1) The Colorado Attorneys' Fund for Client Protection is a fund established by the Colorado Supreme Court to reimburse clients who suffer a loss of money or other property from the dishonest conduct of their attorney. The fund is a remedy of last resort for clients who cannot be repaid from other sources, such as from insurance or from the attorney involved. Claimants are expected to make reasonable efforts to collect from these other sources first.

"Dishonest" conduct includes theft or embezzlement of money or conversion of money, property or other things of value, refusal to refund unearned fees and costs deposits, or borrowing money from a client without intention or ability to repay it.

At the present time there is a limit of $50,000 per claim and an aggregate maximum limit of $100,000 for all claims against a single attorney. You must file a claim within three years of the date you knew or should have known about the dishonest conduct of your attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Unable To Resist Urge To Fleece Dead Clients' Estates, Long Island Lawyer Gets Shipped Off For 1 To 3-Year Stay In State Prison; $900K+ In Thefts Include $400K+ Sale Proceeds Of One Victim's Home

From the Office of the Nassau County, New York District Attorney:
  • Nassau County District Attorney Madeline Singas announced that a disbarred attorney was sentenced yesterday [June 12] to one to three years in prison and ordered to pay restitution in the amount of $597,024.10 for stealing from his clients’ estates.(1)

    Robert Alan Wagner, 63, of Bellmore, pleaded guilty before Judge Robert Bogle on March 20 to two counts of Grand Larceny in the 2nd Degree (a C felony).

    This defendant swindled his clients, stealing more than $900,000 and used it to enrich himself and his business,” DA Singas said. “Our Government and Consumer Frauds Bureau has prosecuted more than 15 attorneys in recent years for scamming their clients and this sentence should send a clear message that lawyers who break the law will face serious consequences.”

    DA Singas said that Wagner was first arrested in September 2016 for allegedly stealing more than $400,000 which were the proceeds from the sale of the decedent’s home. At that time, he was released on $200,000 bail with a requirement that he wear a monitor tracking device as well as that he surrender his passport.

    The defendant paid most of the beneficiaries their entitled bequests prior to the commencement of the DA’s investigation, with the last beneficiary receiving $100,000 subsequent to the investigation and prior to the defendant’s arrest.

    The first investigation and review of bank records led to Wagner’s second arrest in November 2016. Wagner was retained by the administrator of a French estate to facilitate the transfer of money from the decedent’s Suffolk County-based bank accounts to accounts in France in November 2013. The defendant was not authorized to distribute, transfer or use the estate funds. However, the investigation revealed that Wagner transferred the estate funds into four of his own Nassau County-based bank accounts between June 2014 and January 2016, ultimately stealing more than $500,000.

    Between May 2014 and April 2015, the French estate administrator repeatedly attempted to contact Wagner to verify the status of the funds transfer. During that time the defendant gave false excuses, saying that he was attending to personal and family health issues, on vacation, or waiting for court approval to transfer funds. The defendant used the money for personal purposes, including cash withdrawals in excess of $250,000 and payments to support his law practice.

    The investigation continued after the second arrest and revealed an additional victim and client theft from a Family Trust of approximately $11,000. In total, Wagner stole more than $900,000.00 from his clients.

    The defendant was legally practicing law when he was retained, but was disbarred by the Appellate Division of the New York State Court of Appeals on March 11, 2015, proximate to the time when he was to facilitate the transfer of estate funds. The disbarment was unrelated to this matter.
Source: Disbarred Attorney Sentenced to 1-3 Years for Stealing more than $900,000 from Clients’ Estate Funds (Robert Wagner was arrested on two separate occasions).
(1) In New York, The Lawyers' Fund for Client Protection was created to provide a source of, at least partial, reimbursement to clients who have suffered monetary losses at the hands of dishonest lawyers licensed and practicing in the state.

According to their website, typical losses reimbursed by the Lawyers' Fund include the theft of estate and trust assets, escrow deposits in real property transactions, settlements in personal injury litigation, debt collection receipts, money embezzled in investment transactions with law clients, and unearned fees paid in advance to lawyers who falsely promise their legal services.

Perhaps the best of all the attorney ripoff reimbursement funds in the U.S. in terms of its payout limits, the Fund places a $400,000 maximum limit, per law client loss, on awards from the Fund, fixed by regulation of the Fund's Trustees. There is no aggregate maximum on awards involving one lawyer.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Disgraced Lawyer Who Once Held Powerful Post In Rhode Island Legislature Gets 51 Months For Fleecing Dead Client's Estate Of Over $675K, Disabled Woman's Trust Fund $8,900

In Providence, Rhode Island, the Providence Journal reports:
  • Former state lawmaker Raymond E. Gallison Jr. is headed to prison for four years and three months for looting almost $678,000 from a dead man’s estate, stealing from a disabled woman’s trust and pilfering from a taxpayer-funded nonprofit where he worked.(1)

    U.S. District Chief Judge William E. Smith on Friday [June 16] sentenced the one-time chairman of the powerful House Finance Committee, saying Gallison’s crimes amounted more to a breach of his fiduciary duties as a trust fund lawyer and estate executor than public corruption.

    Still, said Smith, his abuse of that fiduciary responsibility harmed “the reputation of the General Assembly, the reputation of the bar and the reputation of the state.”

    Gallison’s lawyer Anthony M. Traini argued Gallison’s political position played little in his crimes and did not rise to the level of political corruption, which could have meant harsher punishment.

    Smith agreed to an extent, but said, “It’s just undeniable” when you are in a position of power and public visibility, as Gallison was, that when you engage in crime it has “all the same impact public corruption has.”

    To the average citizen, said Smith, the legal nuances of Gallison’s criminality “gets lost in the fog of public corruption that permeates the state.”

    Gallison stood during his sentencing and made a brief apology for the “hurt” he had caused his victims and “my family and friends who I have let down.” He will surrender himself on July 10.

    Earlier this week Traini asked Smith for leniency in recommending the Bristol Democrat and lawyer serve three years. He described his client as cooperative with investigators and has willingly paid $162,000 in restitution already.

    In response, prosecutors described in court papers an arrogant Gallison undeserving of a downward departure in sentencing guidelines. They described how Gallison had once confronted an undercover agent watching him, by asking if he knew “who he was [expletive] dealing with,” and who continued to cash dividend checks from his primary victim.

    And prosecutors noted that Traini only returned the stocks his client had stolen after the government seized the stock accounts. Prosecutors recommended that Gallison serve five years.

    “The defendant was a scoundrel who engaged in dishonest, unscrupulous behavior” and hid behind his political position, prosecutor William Ferland said during the sentencing hearing. He recommended Gallison serve up to five and a half years.

    Gallison exploited the trust a vulnerable and disabled woman placed in him — conduct Ferland called “reprehensible” and deserving of stiff punishment: “Stealing from our neighbors, stealing from vulnerable people is unacceptable.”

    And as well as being an embezzler, said Ferland, “he’s a tax cheat.”

    “The defendant was lulled into a sense of entitlement,” thinking that because of his powerful political position “that he wouldn’t be questioned,” said Ferland. “He stole for greed...Plain and simple.”

    A state representative for 16 years until his abrupt resignation in May 2016, Gallison pleaded guilty in March to nine felony counts including wire fraud, aggravated identity theft and filing false tax returns. The identity theft charge alone carried a two-year mandatory federal prison term.

    Prosecutors described a four-year scheme that began two months after Ray Medley, of Barrington, died in 2012.

    That’s when Gallison, as the will’s executor, began stealing from the estate. With the bachelor’s credit cards, he went to Sam’s Club, Walmart and Stop & Shop buying groceries, clothes and personal-care products.

    Gallison sold Medley’s Toyota cheap to his own son, a Bristol police officer, and pocketed the $500 rather than deposit the money into Medley’s estate account.

    Eventually he took $677,957 from Medley’s estate, money from stocks that Medley had asked Gallison to distribute to a dozen charities upon his death.(1)

    Gallison also pleaded guilty to misappropriating more than $64,575 from a Providence-based educational nonprofit called Alternative Education Programming ["AEP"], a recipient for years of taxpayer-supported grants.

    Gallison served on the House Finance Committee that approved many of those grants, which also paid his salary for what prosecutors described as a no-show position.

    In 2014 Gallison rose to Finance Committee chairman, even though seven years earlier he had paid a $6,000 ethics fine for repeatedly not disclosing the money he earned at AEP.

    Gallison also pleaded guilty to stealing from a disabled woman, who had hired him as her trustee. Gallison took $8,900 from her trust account and used it to try to hide his misappropriation of money from AEP.

    Traini downplayed the significance of Gallison’s crimes, noting all of the money stolen had been returned — largely because the federal government froze the stock accounts Gallison had taken charge over — and that the victims were largely charities.

    “The victim is also Mr. Medley,” the judge interjected. “He had wishes and intentions when he was alive. Those are part of what should be considered today.”

    Judge Smith said Gallison’s sentence hopefully will particularly deter other lawyers and estate executors, fearing that if they violate the trust given them, they too, could “end up like Ray Gallison.”
Source: Former R.I. Rep. Gallison gets 51 months for stealing from dead man, disabled woman and nonprofit agency.
(1) The Rhode Island Bar Association's Client Reimbursement Fund was established to provide a public service and to promote confidence in the administration of justice and the integrity of the legal profession by providing some measure of reimbursement to victims who have lost money or property because of theft or misappropriation by a Rhode Island attorney, and occurring in Rhode Island during the course of a client-attorney relationship. The Rhode Island Bar Association through a committee administers the Fund. The Fund is funded by annual contributions made by attorneys who are members of the Rhode Island Bar Association.

Not all losses are compensable by the Fund. A loss must have occurred while the attorney was providing legal services or while the attorney was serving in what is known as a fiduciary capacity, such as a trustee, guardian, conservator, etc. You must file your claim within one year of when you became aware of the theft or misappropriation or from the date when the attorney was publicly disciplined.

The maximum amount, which any one claimant may recover from the Fund arising from an instance or course of dishonest conduct is $50,000, provided, however, that the aggregate maximum amount for which the Fund shall reimburse losses as the result of the dishonesty of a single lawyer or group of lawyers acting in collusion is $200,000.00.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Prosecutor: 20 Months Prison Time Not Enough For Now-Disbarred Attorney Who Purloined Over $600K From Unwitting (Or Dead) Clients, Announces Plans To Appeal Sentence; State Bar's Indemnity Fund That Compensates Victimized Clients Of Thieving Lawyers Shells Out $160K

In Moore County, North Carolina, The Pilot reports:
  • A former Pinehurst attorney and Moore County Board of Education member has pleaded guilty to embezzling money from her clients.

    Lu Pendleton “Penny” Hayes was charged with two counts of felony embezzlement in excess of $100,000, three counts of felony embezzlement and two counts of felony obtaining property by false pretenses. The charges stemmed from incidents that occurred between November 2011 and March 2014 and affected six of Hayes’ clients and their estates.

    Hayes was disbarred in October 2014 after admitting to misappropriating more than $400,000 in entrusted funds and engaging in fraudulent bank transactions. The State Bureau of Investigation began looking into her conduct at the request of District Attorney Maureen Krueger, which led to Hayes being indicted on Nov. 17, 2015.

    The indictments were connected to incidents that allegedly occurred between November 2011 and March 2014 and affected six individuals or their estates.

    In four indictments for embezzlement, a grand jury found that Hayes “unlawfully, willfully and feloniously did embezzle, fraudulently and knowingly misapply and convert to her own use” $335,843.64 from the estate of Joseph George Wilson between October 2012 and March 2013 and another $213,712.76 from Andrea Fabiana Ale between March 12 and March 17 in 2014.

    According to the indictments, the amounts Hayes is accused of stealing varied over the years. For instance, one indictment lists a $100,000 withdrawal on Feb. 25, 2014. Another $100,000 was withdrawn from the same account the next day, using a sequential check. On Feb. 28, a check for $1,600 was withdrawn from the same account.

    Hayes, who has been represented by local defense attorney and former colleague Eddie Meacham, pleaded guilty to the charges Tuesday in Moore County Superior Court. Assistant District Attorney Craig Slagle presented evidence during the hearing “that Hayes victimized numerous clients and the total amount of funds embezzled exceeded $600,000,” according to a news release from the District Attorney’s Office.

    The release also said Slagle “presented evidence that Hayes had not paid restitution to any of the victims,” although $160,000 worth of compensation was provided by the North Carolina State Bar through its Client Security Fund.(1)

    Slagle reportedly asked visiting Superior Court Judge Mary Ann Tally to sentence Hayes to two consecutive prison terms of 58 to 82 months — the minimum sentence under state law for felony embezzlement. But Tally sentenced Hayes on Wednesday [June 7] to 20 months in prison and 36 months probation. She was also ordered to pay $449,564 in restitution, the release said.

    Tally reportedly said the lighter sentence was justified by “extraordinary mitigation,” citing Hayes’ “good standing in the community.” The state Attorney General’s Office plans to appeal the sentence, according to the release.
For the story, see Local Attorney Sentenced to Prison for Embezzlement.
(1) In North Carolina, the Client Security Fund was established by the state Supreme Court in 1984 to reimburse clients who have suffered financial loss as the result of dishonest conduct of lawyers engaged in the private practice of law in North Carolina.

There is a dollar limit on reimbursements of $100,000 for an applicant who suffered a reimbursable loss (or losses) as the result of the dishonest conduct of one lawyer.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Lawyer Faces Charge Of Breach Of Trust With Fraudulent Intent For Allegedly Pilfering $450K From Two Landlords; Money Meant To Be Used To Settle Now-Resolved Foreclosure Proceedings On 200+ Rental Units

In Charleston, South Carolina, The Post and Courier reports:
  • A suspended Charleston lawyer faces a felony charge for allegedly pocketing $450,000 from a real estate partnership that rents to low-income residents in North Charleston.(1)

    Two former clients of David Athell Collins watched during a bond hearing Thursday [June 8] as Collins said he’s focused on trying to repay them “to make this go away in a proper and legal manner.” The 55-year-old resident of Hoff Avenue in Charleston is charged with breach of trust with fraudulent intent.

    “This is something that’s been going on for almost a year now and we’ve finally gotten to the point where these gentlemen have pressed criminal charges against me, and I understand that,” Collins said via the video conferencing system at Charleston County Bond Court.

    Joseph Walters said he and his business partner, Tom Taylor, paid Collins $450,000 in February 2016 to settle foreclosure lawsuits involving properties they own in the Chicora-Cherokee neighborhood. They each paid $225,000. After four months of waiting for settlement documents, Collins told them he had taken the money, Walters said.

    A North Charleston Police Department incident report says Collins told investigators he invested the money in a business in Georgia.

    Collins took the men to a bank and repaid $63,000, but the remaining $387,000 is unaccounted for, Walters said.

    “We basically told him, ‘Look, all we really want is for our lawsuits to get handled. Give us our money back. Here’s a timeline on how you can do it,’ ” he said.

    In July 2016, Collins signed a confession of judgement agreeing to pay the men back. That same month, the S.C. Supreme Court placed Collins on interim suspension from practicing law.

    Walters said he’s not counting on seeing the money returned. A bigger issue, he said, is that Collins’ actions could have impacted the 200-something families he and Taylor rent to. The business partners eventually settled the civil action against them with the help of other attorneys.

    “What happened to us, that’s not the big picture. We were fortunate because we had good counsel that represented us and cleaned up this mess,” he said. "Somebody else, they may not be as fortunate as us."

    Collins’ attorney, Bill Thrower, said he didn't yet know how his client plans to repay the men.

    “It’s an ongoing civil matter, and I think these guys got — understandably so — I think they’re a little frustrated because restitution is going slower than what they’ve hoped for,” he said.

    Collins was released from jail on personal recognizance bond. He will be required to pay $25,000 if he doesn’t show up for his next court date.
Source: Suspended Charleston attorney charged after allegedly pocketing $450,000 from two clients.
(1) In South Carolina, the Lawyers Fund for Client Protection was established by the state Supreme Court and administered by the South Carolina Bar to reimburse clients for money or property mishandled by Bar members.

The Fund places a $40,000 maximum limit, per law client loss, on awards from the Fund. There is an aggregate maximum limit on awards involving one lawyer of $200,000.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

Saturday, June 24, 2017

With Collaborative Help From Mobile Home Park Landlord & Affordable Housing Non-Profits, 41 Lot-Leasing Residents Form Co-Op To Buy Out The Land Underneath Their Homes For $1.55 Million

In Kalispell, Montana, the Daily Inter Lake reports:
  • Residents of Morning Star mobile-home park in Kalispell have purchased their park for $1.55 million through a resident-owned community loan program that enables them to keep their lot rent affordable and have control over the property in perpetuity.

    Morning Star Community Homes is the second resident-owned community in Kalispell — and the 202nd such community in the United States. It has 41 mobile homes and is located on South Woodland Drive, next to Green Acres, which became the first resident-owned community in the Flathead Valley six years ago.

    When Morning Star owner Tim Ohler decided to sell the mobile home park, he contacted NeighborWorks Montana about creating a resident-owned community, said Danielle Maiden, a cooperative housing specialist with NeighborWorks.

    “The owner knew about Green Acres and when he got ready to sell he reached out to us,” Maiden said. “We came in and knocked on doors and told them what we could offer.”

    The biggest advantage of a resident-owned community is that it gives residents control over their housing future and keeps the lot rent affordable, she said.

    Resident ownership provides rent stability, control over maintenance and repairs and the security of knowing the community will not be closed.

    To establish a resident-owned community, a minimum of 60 percent of the mobile-home park residents create their own nonprofit organization. ROC USA,(1) based in New Hampshire, provided the 30-year loan, while NeighborWorks provided a secondary loan and offers technical assistance over a 10-year period.

    “We have a special structure [that] makes it so their down payment is membership in the cooperative,” Maiden said. “It’s a really amazing program.”

    There is a $100 one-time membership fee to belong to the resident-owned community that is refunded when a mobile-home owner moves out of the community. Incoming residents will be required to belong to the community.

    Members set the lot rent, and if a large maintenance project needs to be funded, members vote whether to raise the lot rent to cover the expense.

    “The beauty is it really secures them having a home,” Maiden said. “This keeps things affordable in perpetuity. It gives them pride of ownership. It’s really security in the long run for their housing.

    “It’s really amazing what it does for residents, how empowering it is for them,” she added.

    The Flathead Valley, which struggles to provide affordable housing, is one of NeighborWorks Montana’s priority areas, Maiden said. The organization strives to facilitate the purchase of two resident-owned communities each year in Montana.

    Its first successful project was with homeowners in Mountain Springs Villa in Red Lodge. There are now eight resident-owned communities in Montana. Others include two in Missoula, two in Great Falls and one in Pablo.

    Tom Tornow, a Whitefish attorney who provided the legal assistance with the Morning Star acquisition, said he sees the potential for resident-owned communities in Whitefish, where the lack of affordable housing has reached a critical level.

    “We’ve lost two of our largest mobile-home parks in the last few years,” said Tornow, who chairs the Whitefish Affordable Workforce Housing Task Force. “It’s a real blow to the affordable housing in our community.”

    In 2006 the 55 mobile-home owners in the Greenwood Trailer Court, many of them senior citizens, were forced to leave the trailer court when the property owner decided to put the 12-acre site up for sale. Eleven years later the property is vacant land, and still for sale.

    Lot rent in resident-owned communities are 17 percent, or about $86 per month lower than the market lot-rent rate, according to NeighborWorks. Almost 14 percent of homes in Montana are manufactured, nearly twice the national average. Of those homes, 76 percent are owner-occupied.

    The resident-ownership model was developed 30 years ago by the New Hampshire community Loan Fund, which has helped more than 100 mobile-home communities in that state become resident-owned. ROC USA was created in 2008 to make the model available nationwide.
Source: Kalispell Mobile-Home Residents Buy Their Park.
(1) ROC USA, LLC is a non-profit organization with a mission of making quality resident ownership possible nationwide by helping lot-leasing mobile home owners form co-operatives to buy their manufactured home communities or “mobile home parks” from their landlords.

Mobile Homes: Cheap Housing ... But With A Catch

From a recent story in the Houston Press (Houston, Texas):
  • [W]ith costs significantly lower than standard houses, mobile homes have become the main source of unsubsidized affordable housing in the United States. Almost two million Texans live in mobile homes, according to the 2015 American Community Survey, including more than 130,000 people in Harris County.

    But while these parks offer bargain prices, they don’t always provide stability. That’s because they lease their land. In Texas, residents can be evicted from a property with 60-day notice, even if they’ve owned their homes for decades.

    When trailer parks are sold or forced to close, the void often leaves hundreds of low-income families searching for a new place to put their home — as well as the funds necessary to move it. Esther Sullivan, a sociologist at the University of Colorado Denver, spent two years living at trailer parks in Texas and Florida. Her study, published in April, looks at what happens when people are evicted from trailer parks in these states.(1)

    Texas has one of the highest numbers of trailer park residents in the country, but provides no aid for people evicted from them.

    The costs of a mobile park eviction can easily eat up a lower-income resident's finances, Sullivan found. She also discovered that Texas trailer parks don’t always give the appropriate legal notice before evicting tenants. A common theme among residents was the desire to control the “terms and timing” of a move-out, Sullivan said.

    For many, evictions became a semi-regular part of life. “These aren’t one-time traumas,” Sullivan said. “There were significant numbers of residents in parks that had previously been evicted.”

    In her study, she proposes community ownership as a way to give trailer park residents more stability. That would make trailer parks more like condominiums, leaving residents in charge of their park’s destiny.

    Sullivan spent time at five parks that were closing or in a precarious position. She lived for eight months in 2013 at Ramos y Ramos, a trailer park in the town of Alvin, near Pearland. The Alvin City Council had passed an ordinance in 2007 requiring expensive upgrades to parks. Ramos y Ramos survived, but she watched as two other parks were forced into closure. (Sullivan used pseudonyms for the names of the parks she studied to protect the identities of residents.)

    There would be three generations of the same family living in these parks,” she said. “Evictions were extremely traumatic.”

    Trailer park residents have about the same legal protections as normal renters. The problem, she says, is that the stakes are higher. Renters don’t own or maintain their apartments. If they’re evicted, they don’t have to take their apartment with them.

    Theoretically, a mobile home can be moved and reinstalled elsewhere. But after transportation, reinstallation and permits, the cost of moving a mobile home even a modest distance could run from around $5,000 to $12,000, according to estimates given by people in the mobile-home business.

    So long as a trailer park wasn’t closing, mobile-home residents could choose to sell their homes instead of transporting them. But unlike standard houses, mobile homes almost never appreciate in value. Like cars, they lose value as soon as they leave the factory or sales lot.

    How many mobile-home owners face the prospect of eviction? Sullivan says it’s almost impossible to know for sure. Property deeds and tax filings record the name of the trailer park and its owners — not every resident. Many residents don’t even have real addresses. Unless an eviction goes to court, there could be no public record that it happened.

    Nor is it easy to get data on how many trailer parks are closing, Sullivan says. There are no federal or state registries of trailer park closures. For her study, Sullivan had to collect some of this data herself, by recording whenever a trailer park changed its zoning.

    Loopnet, a commercial real-estate website, shows 85 mobile home parks for sale in Texas, including a few in the Houston area. The Houston Press called one seeking comment for this story. When a reporter mentioned evictions, an employee hung up and did not answer again.

    The median listing price for a home in Houston is $319,000, according to real-estate website Zillow. A brand-new mobile home can go for around $60,000, said DJ Pendleton, executive director of the Texas Manufactured Housing Association.

    “When I say affordable housing, what image pops into your brain?” he asked rhetorically. “You need a $65,000 house for it to be truly affordable.”

    When asked about evictions, Pendleton points out that not all mobile home owners live in trailer parks. Some build their homes on family land, or buy a plot way out in the country.

    He said around 90 percent of mobile home sales were “personal property transactions,” meaning the purchaser was not also buying land. He didn’t think all those people lived at trailer parks, but admitted it was hard to know for sure. Census data on mobile homes don’t record how many people own their land.

    Sometimes, Pendleton said, a trailer park decides to sell. This was more of a problem in cities, where land was a hot commodity. But often, he said, mobile homes are driven out when local governments impose zoning changes or make expensive demands for upgrades.

    Pendleton said he sees a classist and racist tinge in the hostility to mobile homes. “Nobody will say at an open city council hearing, ‘We’re going to create all these pretenses, but the real intent is, we just kind of want to move all the poor people out and we don’t really care where they go,’” he said.


Failing Sewage Lagoon, Inability To Tap Into City Waste Disposal System May Lead To The Boot For Dozens Of Lot-Leasing Mobile Home Park Residents

In Prince Albert, Saskatchewan, the Prince Albert Daily Herald reports:
  • Residents of the North Bay trailer park have formed a committee to save themselves from eviction.

    They met on Wednesday [May 31] in a dark, dusty warehouse in Red Wing. Seated in a circle on ten wooden chairs, they tried to figure out a plan. The province’s Water Security Agency has issued an order to shut down the park’s aging sewage lagoon. If nothing’s done by a September deadline, more than 50 homeowners will have to vacate their lots.

    “We all want to stay here,” resident Linda Dewhurst said. “The majority can’t afford to move.”

    The night before, a few of the committee members sat in on a call with the park’s owner, James Wankel. The existing lagoon, he told them, is almost impossible to upgrade. There’s a patch of government land about 1.5 kilometres south, and Wankel says he’s looking into it. But he fears it could cost about a million dollars to build a sewage system from scratch.

    “Like James said, he’s only willing to spend up $350,000 for a lagoon,” Mike Layton told the committee. “He probably won’t go that far. So the city probably is our only option.”

    Wankel has been pushing the City of Prince Albert to approve a hookup to their sewage system. But Mayor Greg Dionne has come out strongly against the idea. He said the city has some spare capacity, but it’s reserved for new development within city limits.

    “So what’s the next plan of action then, go to the city somehow?” Mick Kuchirka asked.

    “That’s our next plan of attack,” said Greg Howat.

    The first leg of their strategy will focus on the administration: the planning department, public works, the city manager. They’ll try to schedule appointments and argue their case. Then they’ll push for an audience with council. If they hit a wall with the city, they’ll try to win support from the citizens of Prince Albert.

    “I think we write up a petition and we take it to a few businesses in the city,” said Howat, “because we all work, we all shop, we all pay our bills in the city of Prince Albert.”

    Wankel has proposed to spend about $250,000 on a hookup to the city line – the amount he was quoted by the rural water utility. The residents don’t understand why the city won’t sign off on the deal.

    “We’re not asking them to pay for it,” Howat said.

    “Approve it,” said Layton. “All you need is approval. Then James signs the cheque.”

    Apart from capacity issues, Dionne said he has concerns about liability. The sewage lines could overflow, he warned, putting the city at risk of a lawsuit.
Source: Plan of attack. failing sewer

Failing Sewage System In Aging Mobile Home Park Forces Judge To Boot Over A Dozen Lot-Leasing Homeowners Due To Health Concerns; Landlord Objects To Town's Financial Support In Helping Residents Move Their Trailers, Claiming To Have An Innkeeper's Lien On Them For Unpaid Rent

In Zionsville, Indiana, Current In Zionsville reports:
  • More than half of the tenants at Zionsville Mobile Home Park are being forced to relocate after a judge ordered parts of it shut down because of what it deemed broken sewage systems.

    “The eastern and central sewage systems were failing, causing health concerns for the residents,” stated Corey Elliott, press secretary for the Indiana attorney general’s office, in an email.

    But the mobile home park manager, Laura Lei, denies those claims. She said that the septic system is aged but not failing and that none of the residents have experienced any health issues or other major problems as a result of sewage problems. If anything, they’re feeling “miserable” and “depressed” from being displaced, she said.

    “Everybody is very upset,” Lei said. “They said they have no (drain or sewage) issues and (wonder) why the court ordered them to go.”

    Lei said the problems stemmed from three clogged pipes – a problem the homeowners were required to fix but didn’t. She said she hired plumbers who successfully unclogged the drains and that the system is working as it should.

    “We fixed the issue,” she said.

    But Boone Circuit Court Judge Justin Hunter ruled Jan. 30 that all but 12 of the 31 tenants move out of the park at 9111 E 600 S by April 30. As of early June, some of the tenants required to move were still on the property, according to court documents. Lei said June 15 that she believes all of the tenants but one were gone.

    Hunter ordered Jan. 30 that Lei provide the Indiana State Dept. of Health with “proof that all sewage materials that have discharged from the ground surface under the unoccupied home on lot 6017 has been bagged and hauled to a sanitary landfill and that lime has been applied to the contaminated ground.” The state said it did not receive proof as of June 6 that Lei had met that requirement, but Lei said she cleaned up the site as required.

    Court records show that Lei and the mobile home park have been ordered to pay $279,950 in restitution and that the park is operating without a license. According to the ISDH website, its license expired at the end of 2015.

    Lei said she sent in the fee for the license but that the state has been refusing to renew it until the sewage problems are fixed. She said the state is refusing to acknowledge the work she’s done.

    Zionsville Director of Communications Amanda Vela said that the town is providing financial support to displaced Zionsville Mobile Home Park tenants without the resources to accomplish the relocation of their homes through its public assistance program.

    Lei said that the court order required the people to move, not the mobile homes. She said the park has an innkeeper lien on most of the homes, as their owners are behind on lot rent payments, and she doesn’t believe that that the town should have spent approximately $15,000 to help former tenants relocate.

    “The people can move out to rent an apartment or another house/home,” she stated in an email. “They don’t have to and shouldn’t have taken their mobile home with them due to the existing innkeeper lien against their mobile homes.”

Mobile Home Park Landlord's Sale Of Premises May Leave Some Lot-Leasing Homeowners Homeless; City's $2,500 Offer To Relocate Aging, Unmovable Trailers Gives No Assistance To Residents Getting The Boot

In Fairborn Ohio, WDTN-TV Channel 2 reports:
  • Residents of Glen Acres mobile home park in Fairborn will soon be looking for a place to live.

    The owners of the park sent the eviction notices because they plan to sell the land to the city of Fairborn.

    City officials say they’re willing to pay the mobile home residents to relocate, however some people don’t have any place to go.

    Patricia Ann Collins has lived in the Glen Acre’s trailer park since 1986. She’s one of six units facing eviction.

    “It makes me feel like anyone that lives in a mobile home is always looked down on to begin with and him not calling back makes me feel like I’m a piece of trash,”sad Collins.

    Collins is referring to Fairborn’s Community Development Director and Assistant City Manager, Michael Gebhart.

    Gebhart’s name is in the eviction letters from the property owners lawyers along with an offer of $2,500 from the city to help relocate the remaining trailers at Glen Acres.

    However, residents say they haven’t been able to reach the city and say trailers can’t be moved.

    One man feared being on camera, but explained the situation as, “You can’t relocate a 25-year-old trailer. The axle and everything underneath is too old. None of the companies around here are willing to do it.”

    Taxpayer money will be used to relocate the trailers and officials say the city will not purchase the land unless the tenants are gone.

    “It’s called a mobile home for a reason. Not to be insensitive, but for us to put up $2,500 to help with that move , that’s the most we can do,” said Michael Gebhart.

    Some residents have left, while others don’t have a place to go.

    “I have no where to go and live, and I’m just going to sit here tell the end I guess,” said Collins.

    The owners of the park did not respond to 2 NEWS when we called them and their lawyers.
Source: Pending sale of mobile home park to City of Fairborn leaves residents worried.

See also, Glenn Acres Mobile Home Park residents ordered to leave property (The mobile home park, located on Zimmerman Road, has approximately 12 mobile homes on it and six of those are still occupied by residents).

Friday, June 23, 2017

Cops: Pastor Used Forged Deed To Sell Church Valued At $1.5 Million To Himself For $1

In Bridgeport, Connecticut, the Connecticut Post reports:
  • The pastor of the Fountain of Youth Cathedral won the hearts of his congregation — then stole their church, police said.

    Bishop Franklin L. Fountain may eventually have to answer to a higher authority but in the meantime he will face a Superior Court judge.

    Fountain is charged with first-degree larceny and second-degree forgery after police said he forged deed documents and sold the Madison Avenue church to himself for $1.

    City property records show Fountain is now the owner of the church and property valued at $1.5 million.

    “Isn’t this all ridiculous,” Fountain, 55, said Wednesday [June 14] after being released on a promise to appear in court. “I am the pastor and I deserve respect and I expect that this will all be worked out.”

    He could face more than 20 years in prison if convicted of the charges. His lawyer, Erroll Skyers, said he is anxiously waiting to see the police report before commenting.

    Police Detective Francis Podpolucha said they had received a complaint from the church’s Board of Directors, Fountain’s younger brother James Fountain and his uncle Donald Fountain that without authorization from the board, Bishop Fountain had altered the deed documents and sold the church at 324 Madison Ave. to himself.

    Franklin L. Fountain took over as pastor of the church, which was founded in 1960, from his father, Franklin D. Fountain who died in 2005.

Cops: Caretaker's $100K+ Ripoff Included $68K In Loan Proceeds Pocketed After Duping Elderly Homeowner Into Getting Reverse Mortgage On Her Home

In Bridgeton, New Jersey, The Daily Journal reports:
  • A criminal case is moving ahead against a Vineland woman charged more than two years ago with stealing more than $100,000 from an elderly woman and her disabled son.

    A Cumberland County grand jury in May issued an 11-count indictment against Tami. A. Harold, 51, of the 500 block of North 6th Street. Harold was heavily involved in a 2014 movement to remove then-Vineland Mayor Ruben Bermudez from office.

    The alleged crimes took place between September 2011 and September 2014. Millville police charged her in October 2014, and she was released after posting a bond and denied the allegations.

    The indictment identifies the victims as Millville residents Mary R. Smith, now in her early 90s, and Bryan J. Smith. Harold had taken responsibility for caring for the family, police said at the time.

    A police investigation indicated Harold had the woman “unknowingly” agree to a reverse mortgage on her home involving a loan of more than $68,000, took more than $33,000 from a checking account, and passed about $9,000 worth of bad checks.

    The indictment charges Harold with four counts of theft; two counts of misapplication of entrusted property; two counts of forgery; securing execution of documents by deception; unlawful theft or receipt of a credit card; and fraudulent use of a credit card.

Cops: Son Abused POA To Drain Over $100K From Dementia-Stricken Dad's Bank Account, But Fails In Attempt To Swipe Home Equity By Obtaining Reverse Mortgage On Victim's House

In Hernando County, Florida, the Tampa Bay Times reports:
  • A man has been accused of stealing more than $100,000 from his father and trying to obtain a reverse mortgage on his home.

    Vincent Caliendo, 39, was arrested May 30 in South Carolina, more than a year after Hernando deputies issued a warrant for his arrest, and brought to the Hernando County Detention Center on June 11.

    In October 2015, Caliendo obtained power of attorney over his father, Bernard, who was diagnosed with early-stage dementia, according to a Sheriff's Office news release.

    On March 29, 2016, Bernard Caliendo reported missing funds from his bank account to the Sheriff's Office. Authorities found that his son had withdrawn $105,888.99 from both his father's checking and savings accounts between March 17 and March 28, then transferred the money to his account, which previously had a negative balance, according to the Sheriff's Office.

    Authorities said Vincent spent $16,128.37 on hotels, restaurants, retailers and bills. None of the purchases were for his father's benefit.

    When his father confronted him over the phone about the missing funds, Vincent told him he'd never see the money again, according to the Sheriff's Office report.

    Vincent's largest withdraw was $100,864 at Wells Fargo Bank in Spring Hill on March 28. He was given a cashier's check, which he deposited the next day at a Wells Fargo Bank in Clermont.

    On April 4, he returned to the bank in Clermont, asked for cash and was given $10,000. Two days later, he came back, asking for $89,473.

    Because Wells Fargo had placed notes on both the father's and son's accounts regarding the Sheriff's Office investigation, Clermont police were notified, and they apprehended Vincent before he left the bank. That money was later returned to his father and Vincent was let go at the Clermont bank since the offenses took place in Hernando, the Sheriff's Office said.

    During the investigation, Hernando deputies learned that Vincent had tried to obtain a reverse mortgage for $48,070 on his father's home.

    Detectives obtained a warrant to arrest Vincent on May 12, 2016. However, deputies were unable to locate him. He was apprehended in Lexington County, S.C., last month, on May 30, as a result of a Crime Stoppers tip.

    He was arrested on charges of exploitation of an elderly person or disabled adult and grand theft, and remained in custody this week in lieu of $20,000 bail.

Thursday, June 22, 2017

L.A. Feds Bag Alleged Head Of Foreclosure Rescue Racket That Abused Bankruptcy Process To Stall Forced Sales, Evictions; Defendant Pocketed Over $7 Million By Using Fractional Interest Deed Transfers To, & Court Filings On Behalf Of, Phony 3rd Parties To Trigger Automatic Stay Provisions In Effort To Keep Homeowners From Losing Their Homes, Getting The Boot: Prosecutors

From the Office of the U.S. Attorney (Los Angeles, California):
  • The alleged mastermind of a foreclosure-avoidance scam that targeted distressed homeowners has been arrested on federal charges that he orchestrated a bankruptcy fraud scheme that brought in more than $7 million from victims.

    Michael “Mickey” Henschel, 68, of Van Nuys, was arrested Wednesday morning [June 14] by federal agents with the FBI and the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG). Henschel was arrested pursuant to an 11-count indictment returned by a federal grand jury on June 8.

    During a court hearing this afternoon [June 16], Henschel was ordered detained pending trial.

    According to the indictment unsealed after his arrest, Henschel owned a Van Nuys-based company he operated under several names, including Valueline. Henschel and several co-conspirators marketed illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages and renters who were facing eviction.

    As part of the scheme, Henschel and the others allegedly convinced homeowners to sign fake grant deeds that purported to show the homeowners had conveyed an interest in their properties to fictional third parties.

    Henschel and his co-conspirators allegedly filed bankruptcies in the names of fictional persons and entities to trigger the automatic stay provision of the Bankruptcy Code, which meant that foreclosure sales were stalled.

    Henschel allegedly delayed evictions in a similar way, filing fraudulent documents in state eviction actions and sending similar documents to sheriff’s offices.

    Henschel allegedly charged some homeowners large fees before agreeing to clear title to their properties, in addition to the monthly fees paid for the illegal services. During the course of the scheme, from October 2010 through July 2013, Henschel and his co-conspirators collected more than $7 million, according to the indictment.

    The indictment charges Henschel with one count of conspiracy, eight counts of bankruptcy fraud and two counts of wire fraud.
Source: Van Nuys Man Named in Federal Fraud Indictment Alleging $7 Million Foreclosure-Delay Scam Targeting Struggling Homeowners.

See, generally, Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

L.A. Man Cops Guilty Plea To Peddling Phony Rental Lists To Apartment-Seeking Tenants, Clipping $200 From Over 1,000 Victims

In Los Angeles, California, KNBC-TV Channel 4 reports:
  • The man who state authorities called the "mastermind" of rental scams pleaded guilty Wednesday [June 14] to a felony charge of defrauding Southern California customers who were looking for affordable rental homes and apartments.

    As part of a plea agreement, Richard Rodriguez of Alhambra received a three-year suspended jail sentence and five years supervised probation in exchange for pleading guilty to conspiracy to defraud customers of his rental listing business, Superior Consulting in Rowland Heights. Superior is just one of numerous rental listing agencies run by Rodriguez over the last 20 years.

    "As a term and condition of probation, he has to provide restitution to the over one thousand victims and he's no longer allowed to be in any location where rental services are offered," Los Angeles Deputy District Attorney Jessie McGrath said.

    The NBC4 first exposed Rodriguez and his "rental listing" businesses in 2012. The I-Team reported that Rodriguez or his employees asked customers to pay them $200 cash, and in return they promised to provide listings of affordable apartments and homes to rent.
For more, see Rental Scam 'Mastermind' Pleads Guilty to Defrauding Customers (The guilty plea comes after years of investigations by the NBC4 I-Team).

Wednesday, June 21, 2017

After Investing Time, Money Into Repairing Recently-Purchased Fixer-Upper, 1st Time Homebuyer Stunned To Discover That Title Transfer Didn't Include Backyard, Shed, Part Of Back Deck

In Salmon River, Nova Scotia, CBC News reports:
  • Imagine buying a home with a deck, a shed and a big fenced backyard, only to discover you own neither the backyard nor the shed and only part of the back deck.

    That's what happened to Ryan Manning of Salmon River, N.S., who has since spent months looking for answers from everyone from the real estate agent and lawyer to the previous owner and the company that sold him title insurance.

    "It was a huge shock," Manning told CBC News, recalling the moment last fall when a man knocked on his door and offered to sell him the back half of what he thought was already his property.

    "I didn't know what to do at that point. I wouldn't have bought my house knowing that situation."
    He started working on the fixer-upper, hoping to live in half and rent out the other side to help cover his mortgage.

    Everything was going as planned until that fateful knock on his door in October 2016.

    Manning was stunned to learn the land his home sat on was one legal parcel of land while his backyard was on another. Each has a separate parcel identifier, commonly known as a PID.

    "I seen pictures [of the backyard] right there in my listing," said Manning, adding he believed the real estate agent.

    "They're the ones that are supposed to be there for me to tell me the truth about my property, to know what I'm buying."
    Not covered by title insurance

    Manning's lawyer, who has also since retired, did initially advise him to have a full survey completed or a location certificate obtained before purchasing the property.

    In a letter from Patterson Law, Manning was told an alternative was title insurance, which "would step in to compensate you if the property you purchased had issues with respect to location and boundaries, water potability, etc."

    It went on to say "a mortgage company will generally accept a title insurance policy in lieu of a location certificate or survey."

    Stewart Title Guaranty, the company from which he purchased title insurance, said the insurance covered the lender, not him.
    Agreement reached, says law firm

    Since CBC News contacted Patterson Law, which originally handled the purchase for Manning, it has been working with him to resolve the matter.

    In an email late Wednesday afternoon [June 14], managing partner George White said "we are pleased to advise that an agreement has been entered into between the parties which should result in a successful conclusion." It thanked CBC for bringing the matter to its attention.

    Manning isn't suggesting anyone intentionally deceived him. A lawyer for Genworth, the company selling the foreclosed property, said in a letter: "I don't think anyone knew of the second PID prior to the sale, including the purchaser and/or the Realtors."

    But the first-time homebuyer said the whole situation has created a huge amount of stress since he can't sell the property as it currently exists and he doesn't have the money to buy what he thought was his backyard.

    "It's something that could financially cripple you," he said.

    "I put so much money into my home to fix it up, to try to make it an income property."
Source: 1st-time homebuyer stunned to discover new backyard isn't his (Nova Scotia man told he doesn't own the backyard he thought he'd purchased with his home).

Aspiring Homebuyer/Couple Under Rent-To-Own Deal Lose Their Home After Two Years Despite Not Missing Any Payments & After Making Significant Repairs; Rent-Skimming Seller Pocketed Deposits, Monthly Payments, Then Stiffed Bank On Undisclosed Mortgage, Allowing House To Go Into Foreclosure

In Clay, Alabama, WBRC-TV Channel 6 reports:
  • Nakecia Stone scrolls through photos of her old home. With a flick of her finger, an image of her daughters cuddling in their bedroom flashes across the screen, followed by another of them in the front yard.

    “I loved the area, I loved my neighbors,” Stone said of the Clay-Chalkville home.

    She says they moved to the single-family home in 2013 under a rent-to-own agreement. It required a $5,000 down payment and $1,000 per month, she said, and promised they could own the house one day in the future.

    “The reason the down payment was so low was that we agreed to do all repairs,” Stone said.

    She recalls they spent about a month and a half cleaning the house of debris, installing new flooring and bathrooms, and refurbishing the outdoor swimming pool.

    “My husband is a workaholic, so him working on the house thinking it was going to be our house…that was over the top for him,” she remembered.

    They enjoyed the home for about two years, until one summer day in 2015. The dream of home ownership was interrupted.

    “My neighbor was coming over to see me one day and she said ‘you’ve got a note on your door.’ A note? I got the note and it says 'You’ve got 30 days to vacate. The house has been placed into foreclosure,'” Stone explained.

    A baffling moment for Stone because she says they always paid the bills on time. But as she would learn, it was not their delinquency that cut her dream short.

    The sellers had a mortgage on the home and had stopped paying the bank, prompting the foreclosure, costing the Stone family their home and investment.

    “When I saw them sell it, I knew it was over,” Stone said with tears in her eyes.

    Some say rent-to-own property agreements, which are like lease-purchase contracts, give people who cannot qualify for a home loan an opportunity to achieve the American dream that would otherwise elude them.

    But, housing lawyers say the agreements are too risky. In Alabama, there is virtually no regulatory oversight. And the agreements promising a chance at home ownership attract people who often cannot afford a lawyer to review the agreements.

    “This is an area where we need some regulatory help,” said Nancy Yarbrough, Executive Director of Birmingham Volunteer Lawyers.(1) She says acquiring the deed to a home through a rent-to-own deed is “like winning the lottery.”
    Internet posts suggest the prevalence of the rent-to-own offerings across the state. Searching listings for about 6 hours over the course of several days revealed nearly 400 properties offered for rent-to-own.

    But, the lack of public records makes it impossible to know with certainty how many properties have been sold through a rent-to-own transaction, or how many have failed.

    No governmental entity tracks rent-to-own properties. The contracts are not recorded with public offices.

    Lawyers in Texas surveyed about 1,300 people who had rent-to-own agreements. Their findings, reflected in the report “The Contract for Deed Prevalence Project,” show that the deals failed nearly 45 percent of the time.

    “The problem with a lot of these transactions is that the family never ends up with title, they never end up actually owning the home,” explained Professor Heather Way, The University of Texas at Austin. “And families end up spending thousands and thousands of dollars. They think it’s going towards ownership, but it’s not.”

    The Alabama Office of the Attorney General received 99 complaints about landlord-tenant issues in 2016. These would include rent-to-own issues, though those cases are not separately counted.

    Yarbrough, of Volunteer Lawyers, said her team of 500 lawyers volunteering time to help low-income people of Birmingham, assisted with more than 540 housing cases. Many, she says, were rent-to-own agreements.

    And, [lead housing lawyer for Legal Services of Alabama(2) Chris] McCary estimates he gets around 40 cases of rent-to-own issues every year.

    “I know it’s just a drop in the bucket of what’s out there,” said McCary. “I may have just one case on the docket for that day, but I’ll see several cases go in front of me.”

    And he believes there is room for success too.

    “I only see the ones where the dream has been interrupted, but it could be that some that are successful,” he said. “It would be hard to predict the other way how many are successful. There’s no regulation of it, there’s nothing to keep up with it,” explained McCary.

    But Yarbrough isn’t as optimistic.

    “It’s like winning the lottery,” she said of getting deed through a rent-to-own deal.

    Losing the house can happen in under a month.

    When there’s a breach of a rent-to-own agreement, through non-payment or otherwise, and a lawsuit is filed, usually it’s in district court. It’s called an “unlawful detainer.”

    “It is a fast mechanism, probably the fastest we have in Alabama to get someone off the property,” said attorney McCary. Someone can be forced out of the home in under a month.

    Landlords file unlawful detainer actions on the fast track against tenants when agreements do not make the promise of ownership and don’t require larger down payments.

    But lawsuits against property owners, where there is an ownership interest, a deed or mortgage, must be filed in a different court, called the circuit court. There, the process can take months.

    McCary says when sellers in rent-to-own agreements sue, they typically file on the faster track in district court.

    “I would assume that’s why some try to file in the district court,” said Judge Robert P. Bynon, Jr. He presides over the district court for Jefferson County in Birmingham.

    “Sometimes, you have a seller trying to take advantage of a buyer, or a buyer trying to take advantage of a seller, and you’ve got to work in good faith with one another. That’s the only way this is going to work,” Bynon explained.

    When he sees disputes over rent-to-own agreements filed in the district court, he throws them out.

    That’s got to go to circuit court for an ejectment action. It’s a completely different process and it takes a little longer than an unlawful detainer,” said Bynon.

    But many times it’s hard to know when to toss the case because often buyers represent themselves and may not know the significance of the down payment they made, and how that could potentially get them more time in circuit court.

    Sometimes, nobody, the seller nor the buyer, will not tell the court that they paid $20,000 down to have the option to buy and rent this house. You find out way after the case is over with,” said Bynon.

    And that’s how, McCary says, buyers in the rent-to-own deals are often forced out of the home on the fast court track.

    “Over the 90 percent of the time, they treat them like a tenant,” explained McCary. "Someone can be out in under a month.”

For the story, see On Your Side Investigation: Do unregulated rent-to-own contracts deliver what they promise?
(1) The Birmingham Bar Volunteer Lawyers Program (BBVLP) is a non-profit program that matches income-qualifying residents of Jefferson County, Alabama, with volunteer attorneys to help with legal matters. Applicants must meet certain financial criteria before they can be assisted through the Program.

(2) Legal Services Alabama is a non-profit, public interest law firm that serves low-income people throughout the state by providing civil legal aid and by promoting collaboration to find solutions to problems of poverty. It has seven offices, located in Birmingham, Dothan, Huntsville, Mobile, Montgomery, Selma and Tuscaloosa. land contract for deed

Rent-To-Own Rackets Not Limited To Dilapidated Homes; Many Trucking Outfits Use Business Model To Rope Their Drivers Into One-Sided, 'Take-It-Or Leave-It' Lease Contracts For Company Trucks In Arrangements That Leave Many Working For Peanuts & Under Threat Of Losing Everything They've Paid If They Miss One Payment

In Los Angeles, California, USA Today reports:
  • Samuel Talavera Jr. did everything his bosses asked.

    Most days, the trucker would drive more than 16 hours straight hauling LG dishwashers and Kumho tires to warehouses around Los Angeles, on their way to retail stores nationwide.

    He rarely went home to his family. At night, he crawled into the back of his cab and slept in the company parking lot.

    For all of that, he took home as little as 67 cents a week.

    Then, in October 2013, the truck he leased from his employer, QTS, broke down.

    When Talavera could not afford repairs, the company fired him and seized the truck -- along with $78,000 he had paid towards owning it.

    Talavera was a modern-day indentured servant. And there are hundreds, likely thousands more, still on the road, hauling containers for trucking companies that move goods for America’s most beloved retailers, from Costco to Target to Home Depot.

    These port truckers -- many of them poor immigrants who speak little English -- are responsible for moving almost half of the nation’s container imports out of Los Angeles’ ports. They don't deliver goods to stores. Instead they drive them short distances to warehouses and rail yards, one small step on their journey to a store near you.

    A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.

    If a driver quit, the company seized his truck and kept everything he had paid towards owning it.

    If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Then they turned around and leased the trucks to someone else.

    Drivers who manage to hang on to their jobs sometimes end up owing money to their employers – essentially working for free. Reporters identified seven different companies that have told their employees they owe money at week’s end.

    The USA TODAY Network pieced together accounts from more than 300 drivers, listened to hundreds of hours of sworn labor dispute testimony and reviewed contracts that have never been seen by the public.

    Using the contracts, submitted as evidence in labor complaints, and shipping manifests, reporters matched the trucking companies with the most labor violations to dozens of retail brands, including Target, Hewlett-Packard, Home Depot, Hasbro, J.Crew, UPS, Goodyear, Costco, Ralph Lauren and more.
    There are 800 companies regularly operating at the LA ports. Almost all of them turned to some form of a lease-to-own model, some without thinking through the consequences, said industry consultant and lobbyist Alex Cherin.

    “Flying by the seat of their pants and making it up as they went along,” he said of the scramble to find trucks for drivers. “Ultimately what they were trying to do was survive in a business with very thin margins.”

    Truckers at dozens of companies describe the same basic scene. They were handed a lease-to-own contract by their employer and given a choice: Sign immediately or be fired. Many drivers who spoke little English said managers gave them no time to seek legal advice or even an interpreter to read the contract.

    It was "take it or leave it," according to Fidel Vasquez, a driver for Total Transportation who said he couldn’t read the contract because it was in English.

    Jose Juan Rodriguez owned his own truck and drove primarily for Morgan Southern, where two dozen drivers have filed claims for back pay at the California labor commission and civil court. Like many drivers, Rodriguez said he didn’t understand what he was signing, but felt he had no choice.

    His wife has stage three breast cancer and his adult son has severe brain damage requiring frequent doctor visits.

    “Where do I sign?” Rodriguez recalled asking right away. “The only thing I had to worry about is work, because I have a family.”

    One-sided contracts

    The contracts work like sub-leases. Knowing drivers could not qualify for their own loans or leases, trucking companies arranged to finance their fleets. Then they had drivers sign up for individual trucks.

    Drivers gave their old trucks – many of which they owned outright – to their company as a down payment. And just like that they were up to $100,000 in debt to their own employer. The same guys would have had a tough time qualifying for a Hyundai days earlier.

    As far back as August 2008, a trucking finance firm warned Port of Long Beach board members that 40% of drivers were likely to default on truck leases. But no one stopped the deals, which place almost all of the financial risk onto the workers.

    Drivers' names were not on the truck titles. And many contracts effectively barred drivers from using their truck to work for other companies.

    The companies also retained the power to decide how much work to give their drivers. They decide who gets the easiest and most lucrative routes -- and who gets to work at all.

    That leaves drivers in constant fear of upsetting managers, who can fire them for any reason, or simply stop sending them business, a process some call “starving” them out of the truck.

    On a five-year lease, drivers could pay in for four years and 11 months. If they got sick, fell behind on the lease or were fired in the last month, they could lose everything – as if they had never paid a dime.