Saturday, June 10, 2017

Disbarred Lawyer Now Faces Lawsuit From 84-Year Old Woman, Accusing Him Of Stealing By Pocketing $89K In Bail Refund As Fees For Merely Assisting In Bonding Out Victim's Son From Jail; Incident Was One Of Cases That Earned Attorney Bar Boot

In Albuquerque, New Mexico, KRQE-TV Channel 13 reports:
  • A controversial Albuquerque lawyer who has been disbarred is now being sued, accused of stealing money from a client.

    In a federal lawsuit, a woman claims she wired $100,000 to attorney David “Chip” Venie to bond her son out of jail in 2012.

    Her son bonded out of jail, then she switched lawyers. The new lawyer got the charges dismissed, but the $100,000 was refunded to Veinie.

    He charged the 84-year-old mom $89,000 for his time.(1)

    That was one of the cases that got Venie disbarred this year.
For the story, see Disbarred Albuquerque lawyer accused of stealing money from client.
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(1) For "attorney ripoff reimbursement funds" that sometimes help reimburse victimized clients of theft committed by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.  ripoff reimbursement

posted by Home Equity Theft Reporter at 4:08 AM

Disbarred For Pilfering At Least $150K In Client Funds, Disgraced Ex-Lawyer Now Faces Criminal Charges In Connection With Alleged $37K Theft From One Victim

In Warren, Ohio, the Tribune Chronicle reports:
  • A former Lisbon attorney and village solicitor pleaded not guilty Monday [April 24] to felony criminal charges accusing her of stealing $37,500 from a victim from Trumbull County.

    Virginia Barborak, 46, of Salem, was arraigned before Trumbull County Common Pleas Court Judge Peter J. Kontos, who issued a personal recognizance bond for the disbarred attorney. She faces charges of theft, perjury, forgery and two counts of tampering with evidence in connection to her private practice, according to prosecutors, who also allege the activity began in March 2015.

    She was disbarred in December by the Ohio Supreme Court because of a six-year “pattern of dishonesty,” during which she misappropriated client funds and intentionally submitted false documentation to the courts.(1)(2)
Source: Ex-attorney, village solicitor arraigned (Accused of stealing $37K from victim).
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(1) See Ohio Supremes Yank Attorney's Law License For Pilfering $150K+ In Client Funds (Investigator Unable To Determine True Financial Harm Suffered By Victims Because Lawyer's Crappy Trust Account Records Were In Shambles, Replete With False Statements).

(2) For "attorney ripoff reimbursement funds" that sometimes help reimburse victimized clients of theft committed by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.  ripoff reimbursement

posted by Home Equity Theft Reporter at 4:06 AM

Central Florida Lawyer/Ex-State Lawmaker Gets Bar Boot For Allegedly Misappropriating Over $160K In Clients' Cash From His Trust Account

In Central Florida, the Tampa Bay Times reports:
  • The Florida Bar revoked former state Rep. Larry Crow's license in light of allegations that he misappropriated client funds and mishandled an estate case, according to court records.

    A petition filed in the Florida Bar case provides details of the disciplinary charges against Crow, who was elected to the Florida House in 1994 as a Republican from Palm Harbor and served four terms. In one case, an audit showed that Crow misappropriated at least $161,396 of client funds from his trust account.(1) In a separate case, Crow "failed to act with diligence in settling an estate which has been pending for over two years," the records state.

    Crow filed a petition for "disciplinary revocation" of his license, which means he decided not to contest the charges. The Florida Supreme Court granted his petition April 13.

    Crow had a Tarpon Springs firm at 1247 S Pinellas Ave. He practiced several kinds of law, including criminal, personal injury and real estate, according to his Florida Bar profile.
Source: Florida Bar revokes former state representative's law license.
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(1) For "attorney ripoff reimbursement funds" that sometimes help reimburse victimized clients of theft committed by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.  ripoff reimbursement

posted by Home Equity Theft Reporter at 4:04 AM

Tennessee Supremes Green-Light 5-Year Suspension For Lawyer Who Jerked Around Client By Refusing To Disburse $40K In Settlement Proceeds Due To Disagreement Over $1,800 In Miscalculated Expenses

In Chattanooga, Tenessee, The Chattanoogan reports:
  • The Tennessee Supreme Court has upheld an attorney’s five-year suspension and $7,500 in restitution, concluding that the sanctions were not arbitrary or capricious or characterized by an abuse of discretion.

    This disciplinary matter arose out of an attorney’s representation of his client in an employment claim. The matter ultimately was settled for $75,000, which was paid into the attorney’s trust account. The attorney and client entered into an agreement by which the client would receive $40,000 of the settlement proceeds after payment to the attorney of remaining fees and expenses.(1)

    A short time later, the attorney contacted the client stating that he had miscalculated his expenses and requested an additional $1,800 of the settlement proceeds, to which the client refused.

    Accordingly, the attorney refused to pay the client the $40,000 of the settlement proceeds.
For more, see Tennessee Supreme Court Upholds Attorney's 5-Year Suspension.
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(1) For "attorney ripoff reimbursement funds" that sometimes help reimburse victimized clients of theft committed by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.  ripoff reimbursement

posted by Home Equity Theft Reporter at 4:02 AM

England Not Immune To Problems Created By Sticky-Fingered Lawyers

From a blog post by the London, England-based law firm Herbert Smith Freehills LLP:
  • This blog post will consider a number of recent cases in England where solicitors have been convicted of offences or struck off the register for misappropriating client funds from deceased estates. These shed light on the surprising levels of abuse uncovered by the Courts and the English Solicitors Regulation Authority (the “SRA”), and the zero tolerance approach taken to solicitors who seek to personally benefit from the trust placed in them by their clients.

    A number of common themes run through the cases, namely that offenders have often sought to explain and justify their actions through desperation, ill health and financial hardship. Further, the solicitors in question generally practised in local firms or as sole practitioners, where clients place a high degree of trust in them due to their geographical proximity and personal familiarity. Finally, the offences appear to have taken place over a number of years, with initial abuse turning into a pattern of offending.

    During its investigations the SRA asserted that it is only in exceptional circumstances that a solicitor found to have acted dishonestly will avoid being struck off the register. Explanations and mitigating circumstances advanced in the cases below were not sufficient to overcome the serious breaches committed and the need to uphold public confidence in the legal profession.

    Simon Kenny, Emma Coates and Stephen Hiseman

    Kenny (60), a former deputy district judge, his assistant Coates (47) and Hiseman (60), a "fee earner" in their firm CK Solicitors who had no legal qualifications, were convicted of fraud and jailed in January 2017.

    The fraud

    The trio were involved in the transfer of monies from CK Solicitors' client accounts over a period of four years, telling staff that monies were being moved to offshore accounts due to the Northern Rock banking crisis. At one point, approximately £60,000 of client money was transferred to Hiseman's own foreign bank account. Hiseman had also misappropriated approximately £5,000 from a client through misrepresenting the outcome of a debt settlement.

    When CK Solicitors was shut down by the SRA in 2011, Coates established another firm, Coates and Co., and continued to misappropriate £85,000 from the estate of an elderly client.
    ***
    Linda Mary Box

    Box (67) was a senior partner at Dixon Coles & Gill when she misappropriated £4 million of client money, around £2 million of which was taken from deceased estates.
    ***
    Giles Scott

    Scott (64) was a partner at Langleys Solicitors LLP when he abused his power of attorney over the accounts of four clients to make improper transfers totalling £468,712.
    ***
    David Christopher James Barr

    Barr (66) was a partner at Brighouses Solicitors in Southport when he misused hundreds of thousands of pounds worth of client money to expand his property portfolio and to settle personal debts.
    ***
    Conclusion

    The Courts and the Tribunal have emphasised the sanctity of the trust placed in solicitors by their clients and the risks posed to public confidence in the profession if solicitors abuse that trust for personal gain.

    It is clear that pleas of financial hardship, ill health and stress are insufficient evidence to justify a sanction other than a strike off for solicitors' dishonesty. Such circumstances are also unlikely to be taken as mitigating factors in Court.

posted by Home Equity Theft Reporter at 4:00 AM

Friday, June 09, 2017

Customer Complaints Pour In At State AG's Office Against Home Improvement Contractor Accused Of Pocketing Thousand$ In Homeowners' Deposits Without Completing Work; Stiffed Building Materials Supplier Begins Slapping Liens On Unwitting Victims' Homes

In St. Charles County, Missouri, KMOV-TV Channel 4 reports:
  • Customers claim they paid thousands and received nothing.

    Cardinal Home Improvements, based in Cottleville, Missouri, is facing numerous consumer complaints.

    "I feel completely robbed," said Jill Templeton of Overland. Templeton paid Cardinal Home Improvements $3,500 for a patio cover, but so far she's received nothing.

    Sisters Barb and Kathy Velker of St. Charles paid Cardinal Home Improvements nearly $40,000 for home renovations including a kitchen, but after floors and walls were torn out, work abruptly stopped. The Velkers say materials including cabinets were paid for, but never delivered. Fighting back tears Barb Velker said, "I wake up every day going through it over and over again."

    In O'Fallon, Missouri, Sherida Smith paid Cardinal Home Improvements more than $14,000 for a backyard fence. Smith says she was satisfied with the job, but angry when she received a notice of "intent to lien" from an East Peoria, Illinois supply company. "I wouldn't wish this on anybody," said Smith.

    The notice is from L/S Building Products and claims Cardinal Home Improvements owes more than $7,600 for materials.

    According to a representative with L/S Building Products, three other homeowners are receiving the same "intent to lien" notice after Cardinal Home Improvements bounced checks totaling $18,000.

    Smith is filing a complaint with the Missouri Attorney General because she claims Cardinal Home Improvements provided her with a signed lien waiver for the full amount paid.

    Smith provided a copy of that lien waiver to News 4.

    Cardinal Home Improvements is operated by Jeff Fawcett. Fawcett says he's making "every attempt to get them done," referring to the complaints.

    Fawcett also tells News 4 "there are some legal things going on, on my behalf against some other individuals with some tampering and sabotage." He tells News 4 a competitor interfered with his business.

    The Cardinal Home Improvements storefront was dark and locked during a recent visit by News 4.

    A lawsuit filed in St. Charles County reveals Cardinal Home Improvements is being sued for back rent at its business address.

    Fawcett claims he is open for business, but admits there have been recent problems with his main phone number. A notice posted on the front door offers consumers an alternative number to reach the business.

    Kathy Velker says she's been unable to reach Fawcett for answers.

    "I have no idea what his logic is, you can't get a hold of him. You don't know what's going on," said Velker.

    The Missouri Attorney General's Office has received at least 14 complaints regarding Cardinal Home Improvements. A representative with the Attorney General's Office is encouraging anyone that's lost money to Cardinal Home Improvements to file a complaint.

posted by Home Equity Theft Reporter at 4:06 AM

Home Repair Contractor Accused Of Felony Financial Exploitation Of The Elderly For Allegedly Overcharging Homeowner For Unneeded Work & Doing So By Making False Claims

In St. Joseph, Missouri, News-Press Now reports:
  • The owner of a home repair business was charged with felony financial exploitation of the elderly in Buchanan County.

    Prosecutors allege Michael Anthony Stewart, 43, attempted to deprive a homeowner of the use of her property. Stewart owns a company called Budget Home Repair of St. Joseph.

    Stewart told News-Press Now that he is “innocent and will have paperwork to prove it.”

    The homeowner had a sump pump failure and the defendant allegedly represented the cost of repairs to be $25,700. Stewart is alleged to have claimed failure to do so would require the homeowner to have to tear the property down, according to court documents.

    Richard Shelton, a St. Joseph Police Department detective, stated in court documents that Stewart overcharged for work not needed and did so by making false claims.

    Stewart was arraigned [] before Buchanan County Circuit Court Judge Patrick Robb. He appeared with his attorney, Michael Insco.

    Insco waived formal arraignment for his client and asked for a one-month delay to try and work the case out with Ron Holliday, the assistant Buchanan County prosecutor. [...] Stewart remains free on a $25,000 cash bond.
Source: Local businessman accused of exploiting elderly. home improvement contractor

posted by Home Equity Theft Reporter at 4:04 AM

Homeowner: He Fleeced Me Out Of $13K For Home Improvement Work That Left My House Torn Up; Suspect Pinched On Theft By Deception Charge

In Louisville, Kentucky, WAVE-TV Channel 3 reports:
  • A Louisville man was arrested Tuesday [May 23] for a crime he's accused of having committed in February.

    Wallace Begley, 56, and a second, unnamed defendant offered a woman help with some home repairs, according to Begley's arrest report. The two suspects "would come to the (woman's) home and act like they were working, tearing up (her) home," the report said.

    The defendants collected $13,000 in payments from the woman, but "the work was not getting done," according to the report.

    Police said the woman's electricity didn't work, her door didn't close and her home "is torn up."

    Begley is charged with one count of theft by deception. It's not clear what the other suspect's charges are.

posted by Home Equity Theft Reporter at 4:02 AM

Contractor Pinched On Charge Of Obtaining Property Under False Pretenses After Local Media Troubleshooter Report Profiled Local Homeowner Who Was Allegedly Ripped Off Of $2,800 For Tree Removal Work That Was Never Done

In Wake County, North Carolina, WTVD-TV Channel 11 reports:
  • A contractor accused of ripping off a homeowner after Hurricane Matthew is facing criminal charges.

    Michael Mandale Williams is behind bars and charged with obtaining property under false pretenses. His arrest comes after a Troubleshooter report in November 2016.

    Garner homeowner Cassetta Scott is out $2,800 after paying Williams in full to take down several trees in her yard after Hurricane Matthew.

    "He said three to four different times he was supposed to come out and he failed to show up," Scott explained.

    Despite several promises from Williams, the job was never done and her money was not returned.

posted by Home Equity Theft Reporter at 4:00 AM

Thursday, June 08, 2017

Wall Street Landlord Drags Feet For 3 Years On Lead Remediation Request, Causing Tenant To Go Out Of Business Running Home-Based Daycare Center Serving Low-Income Kids; Lost Income After Cancellation Of 'Head Start' Contract Leaves Couple Facing Eviction

In Oakland, California, KQED-TV reports:
  • Renting from a Wall Street Landlord

    [V]anessa and Richard were paying more to rent their new house than they had been paying on their mortgage before their first home was lost to foreclosure, but in many ways, the rental was perfect. It only had one level, so Richard didn’t have too many steps to climb, which is hard after his stroke. And the house was spacious, with lots of room for Vanessa’s daycare, Tender Arms Family Child Care. She had a contract with Head Start to care for low-income children.

    Vanessa wanted to plant greens with the kids in the backyard as she had at her old home, so in the fall she called a group to come out and test the soil. That’s when she ran into a big problem: The level of lead in the soil was 1,350 parts per million, right in the area that the kids used for the playground.

    The amount of lead in the Bulnes’ backyard was more than three times the amount the federal Environmental Protection Agency considers a hazard in play areas, and almost 17 times the amount California’s Office of Environmental Health Hazard Assessment considers a health risk.

    When Vanessa got the lead results back, she called Head Start immediately, and they came out and put a temporary rubber cover on part of the patio. But they emphasized a permanent solution had to be found if she wanted to keep her contract. Alameda County has a financial assistance program to help low-income residents remove or fix lead problems, with priority for family child care providers like Vanessa. If Vanessa had still lived in a home she owned, she would have had it done right away. But now, she was renting.

    “Because we’re not the owners, we couldn’t apply to have the work done, we needed the owners to give us consent, and that’s where we didn’t get any cooperation with the property owner,” Vanessa said.

    The owner of the Bulnes’ new home wasn’t just any landlord. It was a corporation: Waypoint Homes. It merged in 2016 with another top real-estate investor, Colony American Homes, to become Colony Starwood Homes. Co-chairman of the board, Thomas Barrack, is a billionaire who helped raise $35 million for President Trump’s campaign and chaired his inaugural committee. The company owns more than 30,000 single-family homes across the country and close to 4,000 in California. On the company website, Colony Starwood boasts, “We recognized the unique opportunity created by the housing crisis and acted upon it in a bold way.”
    ***
    Now, Vanessa Bulnes had to rely on them to get the lead fixed, so she could keep her contract with Head Start.

    “So I’m on the phone, my husband and I, we’re calling Waypoint, and emails and everything like that,” Vanessa said. “Here we are, the clock is ticking. I’m like OK, I’m taking pictures, this is the area, this is how big it is, this is what we need you to have done.”

    Vanessa first contacted Waypoint in 2013, when the lead was found. But she says property managers came and went, and each time she had to start the process again. In June 2016, almost three years after the lead had been found, Head Start told Vanessa they couldn’t renew for the next school year if the lead wasn’t fixed by September.

    “And I’m like, ‘OK, this is affecting my income.’ I give all these red flags about what’s going to happen if nothing is done. Still no urgency on their part,” Vanessa said.

    In one email in August 2016, a regional manager for Waypoint Homes wrote simply, “Unfortunately, we are not in a position to work with this program at this time.”

    It wasn’t until November that someone from Waypoint Homes finally came to walk through the property with someone from Alameda County. When questioned why it took the company so long to fix the lead problem, a spokesperson did not respond, instead stating that the company finished the work on Nov. 28, 2016.

    By that time, three years after Vanessa’s initial request, it was too late. The school year had already begun, and Head Start had canceled her contract. The family’s main source of income, which had gotten them through the stroke and the foreclosure, was gone. They had to apply for assistance for food, and Vanessa had to change her health insurance from Covered California to Medi-Cal. They began to fall behind on their rent.

    Even before they started working on the lead remediation, Colony Starwood Homes had already begun trying to evict the Bulneses.
For the story, see From Foreclosure to Eviction: One Family’s Struggle to Recover. paint lead contamination epa environmental protection agency

posted by Home Equity Theft Reporter at 4:06 AM

Legal Aid Lawyers Sue City On Behalf Of 2-Year Old Toddler Over Its Alleged Failure To Respond To Significant Lead Poisoning Problem In Rental Housing; Probe Triggered After Tenants' Young Child's Blood Test Showed High Lead Level

In Cleveland, Ohio, The Plain Dealer reports:
  • The chubby Cleveland toddler wears a long-sleeved purple shirt that proclaims she is "Daddy's little darling." The youngest of five girls, her parents say the 2-year-old is an expert at cracking smart phone passcodes. Already, she sings her ABCs.

    The Legal Aid Society sued Cleveland on her behalf last week, in hopes the court will force city officials to follow state lead laws designed to protect children exposed to the brain damaging toxin, often in their homes.

    "I don't want for her to grow up with all the problems they say lead can cause and forever be hindered by that," her 28-year-old mother said in an interview last week.

    The toddler and her parents aren't named in the lawsuit. The Plain Dealer agreed to identify the toddler only using her family nickname, 'Mama (pronounced ma-mah) to protect her privacy.

    As 'Mama's mother considered those "what ifs," a pained look washed over her face and she closed her eyes and pressed her lips together. "I just want a safe, happy, healthy baby, the way she was when I had her," she said.

    The toddler's parents said they weren't seeking to sue the city when they approached Legal Aid last fall for help with their housing situation.

    They do, however, want city leaders to understand the realities families like theirs face in finding affordable housing in Cleveland that's also safe for their children.
    ***
    Legal Aid lawyers say the suit was filed now, in part, because of the glacial pace at which the city was moving to address its failures in responding to a significant lead poisoning problem. And that, despite more than a year of attention to the issue, city health officials still were not following basic rules or the state laws in place to protect children once they are poisoned in homes, day cares or schools.

    Judges at the Ohio 8th District Court of Appeals last week referred the case to a court mediation program.

    Real life repercussions

    'Mama had a test in October, as part of routine doctor visit, that showed she had 10 micrograms per deciliter of lead in her blood, enough to trigger an investigation in her West Side home.

    City health officials performed environmental tests at the home in November that showed 38 places in the three-story home had hazardous levels of lead. But they failed to properly inform her parents -- and the family's landlord -- of the results, according to the lawsuit.

    Later, Legal Aid helped them get the report. It turned out the most dangerous lead levels in the home - levels four times what is deemed hazardous by the U.S. Environmental Protection Agency - were in the toddler's small attic bedroom, where she slept and where her toys and clothes were kept.

    When the family first moved in last spring, they picked the room for their baby because it was close to where her parents slept.

    "Now she can't go in there and she cries. She doesn't understand," her mother said.

    There are other things the little girl and her sisters can't do. They can't touch the windowsills, play on the front porch or bring in toys from the yard where the soil contains lead. No more making mud pies either.

    The parents use twice as many baby wipes now, obsessively cleaning their youngest daughter's hands to prevent her from getting any lead dust in her mouth.

posted by Home Equity Theft Reporter at 4:04 AM

City To File Parallel Criminal/Civil Charges Against Landlords Of Three Lead-Contaminated Homes, Request Injunctions Against Selected Others Over Failure To Remediate Toxic Conditions; Properties Deemed Unsafe For Habitation After Young Kids' Blood Tests Reveal High Lead Levels

In Toledo, Ohio, The Toledo Blade reports:
  • The city of Toledo and the Toledo-Lucas County Health Department plans to file criminal and civil charges against the owners of three lead-contaminated homes where children had been poisoned and continue to live in the property despite orders to vacate.

    Mayor Paula Hicks-Hudson said Thursday [May 25] she authorized city prosecutors “to become more aggressive” and file charges.

    “We must use every tool we have available to ensure we reduce any incidence of lead that can adversely affect our children,” the mayor said.

    Joe Howe, city housing prosecutor declined to identify the three properties or the owners until charges are filed, which is expected to occur Friday.

    More than 500 homes in Ohio, including 27 others in Toledo, were included on a list published this month by the Ohio Department of Health that have been deemed unsafe for habitation after a child living there tested with high lead levels, and property owners failed to make required repairs.

    Health Department officials knew for months, and in some cases more than a year, that people should not be living in those lead-contaminated homes. In the oldest case, at 116 Steel St., records show that health inspectors issued a report in October, 2014, detailing lead hazards in the home.In September, health officials issued a "vacate" order for the property.

    A Blade report earlier this month found more than half of the homes in Toledo ordered vacated are currently occupied, many with children in them. Many residents said they were unaware of the vacate orders or lead issues entirely.

    Mayor Hicks-Hudson Thursday said there were missteps.

    “That is why we are here today, to put people on notice,” she said.

    Health Commissioner Eric Zgodzinski said families living in lead-contaminated homes need to have “safety nets” to make sure they have a new home.

    “It is all about the kids and the families,” he said. “We want to make sure we have a safety net for families that might run into issues with the remediation because you don't want to be in the house at that same point in time.”

    Mr. Zgodzinski said four of the 27 homes are vacant and some have been or are in the process of being cleaned up. The health department is still targeting 16 homes because of the lead problems.

    State law gives property owners 90 days to repair identified hazards after a risk assessment report is issued detailing results of the property inspection and required improvements. Property owners can apply for three, 90-day extensions. If those expire, the property is deemed noncompliant and orders to vacate are given. Within 14 days of that order, health department officials are to post signs on residences warning of the hazard and vacate warning.

    Mr. Howe said the property owners would be charged with a first-degree misdemeanor, which carries a penalty of up to six month in jail and a $1,000 fine.

    “As a prosecutor, there is nothing more important than protecting children they are our most vulnerable,” he said.

    City Attorney John Madigan said the Hicks-Hudson would also file for a “civil injunction action against selected landlords,” in an attempt to keep the owners from continuing to rent the properties until the lead hazard is removed.
Source: Toledo to file charges against owners of lead-contaminated homes. paint contamination epa environmental protection agency

posted by Home Equity Theft Reporter at 4:02 AM

Buyer Of Two Buffalo Apartment Buildings 'Inherits' Prior Landlord's Toxic Lead Problems From Deteriorating Paint; Reaches Settlement w/ NY AG To Engage In Extensive Remediation Of 69 Units; Probe Triggered In Response To Reports Of Tenants' Young Kids Having Confirmed Elevated Blood Lead Levels

From the Office of the New York Attorney General:
  • Attorney General Eric T. Schneiderman today [May 18] announced that he reached a settlement with two Buffalo-area property owners to address lead-based paint hazards in two Buffalo apartment complexes, Elmwood Anderson Apartments (33 units) located at Anderson Place and Elmwood Ave and owned by Anderson Apartments LLC; and the Lafayette-Barton Apartments (36 units) located at Lafayette Avenue and Barton Street and owned by Lafayette Barton Apartments LLC. The two apartment complexes have a history of property violations issued by the Erie County Department of Health and the City of Buffalo.(1)

    In response to reports of children with confirmed elevated blood lead levels, the Erie County Department of Health, on at least two occasions, issued violations for conditions conducive to lead poisoning to the properties’ former owner; the City of Buffalo issued property violations for improper maintenance of interior surfaces (including peeling paint).

    The settlement announced by Attorney General Schneiderman today requires the current property owners to address the lead-based paint hazards in the buildings by following a detailed work plan that includes replacement of all windows, tight-fitting doors, cabinet drawers, floors, and other “friction surfaces” that contain lead-based paint. The agreement provides for an independent monitor to oversee the work’s completion.

    “Exposure to lead paint and lead dust poses a serious health hazard to everyone, but is especially harmful to our young children,” said Attorney General Schneiderman. “This settlement requires major permanent fixes that will help protect future generations of children. Buffalo is among the most dangerous lead hotspots in America, and my office will continue fighting to hold property owners accountable and ensure that families in Western New York and across the state can rest assured that their homes are free of dangerous lead.”

    The Attorney General’s investigation revealed that the vast majority of the apartment buildings’ units contained deteriorated lead-based paint—that is, paint that is peeling, chipping, chipping, chalking or cracking, or located on a surface that is damaged or deteriorated—a significant potential threat to the health of the tenants.

    Lead abatement work should begin on the Elmwood Anderson Apartment complex this summer and be completed within three months of the commencement of the work. In March of this year, a fire caused severe damage to the Lafayette-Barton Apartments; the Attorney General may issue a lead-paint remediation plan to the Lafayette-Barton Apartment’s owner once a final assessment of the damage is made.

    This settlement is Attorney General Schneiderman’s most recent effort to combat lead poisoning in Buffalo. Previously, in February 2016, Attorney General Schneiderman announced that he was investing an additional $346,825 in the Buffalo Green and Healthy Homes Initiative to increase the initiative’s home lead hazard intervention and remediation efforts.

    In May 2016, Attorney General Schneiderman reached a settlement with First National Solution LLC for violations of lead and related home health and safety laws, whereby the owners were required to forfeit six Buffalo east-side properties, cease doing real estate business in Erie County, and fund a $334,000 restitution account that compensated tenants and brought the premises into clean-and-green code compliance.

    Erie County’s old and often-deteriorated housing stock is the source for much of the lead poisoning that occurs in the area. Buffalo has the highest percentage of homes built before World War II of any large city in the nation, and many of the area homes pre-date the banning of lead paint which occurred in 1978.

    The Erie County Department of Health has successfully lowered lead poisoning rates, but the issue remains a serious local concern. In Buffalo, children are testing positive for lead poisoning at more than three-times the statewide average; in fact, one-third of all lead poisoning cases reported in New York State outside of New York City are located in the Buffalo area. The Centers for Disease Control and Prevention (CDC) has determined that there is no safe blood lead level for children. Even small amounts of lead can cause permanent neurological damage including loss of I.Q., developmental delays, learning disabilities, memory loss, and other maladies.

    New York law requires that health providers screen children at one and two years old for elevated blood lead levels, and continue to monitor children through six years old for risk of lead exposure. If a child does have an elevated lead level, the provider must provide further testing and resources, and refer the case to the local health department.

    Attorney General Schneiderman thanks the U.S. Department of Housing and Urban Development (HUD), the Erie County Department of Health, and the City of Buffalo for their assistance with this investigation.
Source: A.G. Schneiderman Announces Settlement With Buffalo Landlords To Fix Lead-Based Paint Hazards (AG’s Investigation Found Properties Had History Of Violations, Including Several Related To Lead-Poisoned Children; Buffalo Children Test Positive For Lead Poisoning At More Than Three-Times The Statewide Average; Schneiderman: We Will Keep Fighting To Hold Landlords Accountable And Protect Buffalo Families From Lead Exposure).

Go here for the Spanish version of the press release.
-------------------------
(1) See The Buffalo News: Abatement of apartment buildings called for in lead paint settlement:
  • [T]he settlement papers state that the case began with a separate investigation by Schneiderman’s office of Crawford Costa LLC, Crawford Lafayette Barton LLC and David D. Crawford, which the document says were the previous owners of the two buildings.

    In 2015, the buildings – already subject to lead paint violations by the county – were sold to Glendale. The Attorney General’s Office told Glendale just prior to the property closings that the properties were being investigated for lead paint poisoning problems. Crawford then put $415,000 into an escrow account to address future abatement work.

    The buildings' current owners do not acknowledge any wrongdoing in the settlement and the documents from Schneiderman state that they cooperated with his probe. The settlement document was signed by Matthew Cherry of Glendale Development.

    Cherry stressed that the probe began before his company bought the properties and that word of Schneiderman's investigation surfaced as it was conducting its due diligence process leading up to the closing on the properties. "We are currently in productive negotiations with the seller as to the escrow, which we assert should fund our remediation efforts. At this time, we are not prepared to estimate the full cost of remediation,'' Cherry said in a written response to questions about the settlement.

    The undisclosed costs of the work are to come from the current owners or the previous owners' escrow account. No federal or state grant money is to be used to cover the work, the deal states. contamination epa environmental protection agency

posted by Home Equity Theft Reporter at 4:00 AM

Wednesday, June 07, 2017

Jury Convicts Pair In Scheme Targeting Unsophisticated Aspiring Homebuyers With Crappy Credit & Fleecing Them Of Their Downpayment Cash; Over $1.8 Million Purloined From At Least 106 Victims; 3rd Defendant Copped Pre-Trial Guilty Plea, Then Squealed At Trial On Other Two

From the Office of the U.S. Attorney (McAllen, Texas):
  • Two men have been convicted for their roles in a “second chance” mortgage lending scheme, announced Acting U.S. Attorney Abe Martinez. A federal jury convicted Luis Antonio Rodriguez, 36, of Mission, and Rogelio Ramos Jr., 36, of Pharr, of conspiracy to commit wire fraud late Friday, May 26, following a seven-day-trial and approximately nine hours of deliberation.

    A third defendant - Guadalupe Artemio Gomez, 31, of Mission - pleaded guilty before trial and testified against both Rodriguez and Ramos.(1)

    All three were accused of operating a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The investigation revealed Gomez, Rodriguez and Ramos conducted business in McAllen, Mission, Edinburg, Houston and San Antonio by hiring recruiters to funnel prospective home buyers to Infinite Properties. The homebuyers then gave 10 percent of the purchase price as a down payment to Infinite Properties.

    During trial, the jury heard from victims, law enforcement and an FBI forensic accountant who testified that instead of using the down payments as intended, the money was used for personal expenses, trips to Las Vegas and to purchase other real estate.

    The defense claimed they had no intent to defraud the victims because they had attempted to get a $10 million loan. The jury was not convinced and found both men guilty as charged.

    Rodriguez and Ramos defrauded 106 people out of more than $1.8 million in down payments.

    Anyone who believes they may be a victim of fraud in relation to this investigation or any other similar crime may contact the FBI at 210-225-6741.
Source: McAllen Federal Jury Returns Guilty Verdict in Second Chance Lending Scheme.
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(1) See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observation, made in the context of drug conspiracy cases, on the so-called "race to the courthouse/prosecutor's office" that frequently takes place during the early stages of these "multi-target" criminal conspiracy investigations:
  • In practical terms, [] conspiracy cases have become a race to the courthouse. When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

posted by Home Equity Theft Reporter at 4:04 AM

Investigators: Lawyer's Receipt Of $220K From Client To Be Held In Escrow For Home Purchase Bypassed Trust Account, Went Directly Into His Pocket; Bar Officials Say He Glommed An Add'l $100K From Three Other Clients In Unrelated Complaints

In Manchester, Connecticut, the Hartford Courant reports:
  • Authorities searching for a local lawyer and real estate investor found him hiding in a hotel in Manchester Friday night [May 26] and charged him with larceny.

    Wayne Francis, a 46-year old real estate lawyer from the Hartford area, is the subject of investigations by state prosecutors, the Rocky Hill police department, the state police and investigators for the state judicial department who prosecute misconduct by lawyers.

    He was taken into custody at the Hampton Inn in Manchester Friday night and was being held over the weekend by Rocky Hill police.

    Inspectors for the state's attorney's office in New Britain located Francis and arrested him on a first degree larceny warrant issued by the Rocky Hill police. He is accused of stealing about $220,000 from a client in Rocky Hill.(1)He is expected to be presented in Superior Court in New Britain on Tuesday.

    The Office of Chief Disciplinary Counsel, which disciplines wayward lawyers, also had been searching for Francis, who is the subject of multiple grievances by clients, three of which accuse him of taking another $100,000 or so under questionable circumstances.
    ***
    A complaint by Office of Chief Disciplinary Counsel asserts that the $220,000 or so Francis is accused of stealing consisted of two checks he obtained from a client preparing to close on the purchase of a home in Rocky Hill. The client was a family of real estate investors. Normally, lawyers deposit closing funds in law firm trust accounts. There are indications that Francis did not. Subpoenaed bank records obtained by state investigators show that Francis's office trust account had a balance of no more than $90 over recent years.

    The Rocky Hill Police Department in recent days has refused to discuss its case against Francis and said it would not make public its arrest warrant because doing so could jeopardize a related investigation by another police agency. According to two sources, that agency is the state police, which last week had begun looking into matters connected to an attempt by Francis to obtain a new loan from another private lender.
    ***
    Authorities had been searching for Francis for several days, going so far as to lay in wait at a courthouse in Rockville where Francis was scheduled to appear. Law enforcement officials said Francis avoided the trap by hiring another lawyer to act as his stand-in.

    Inspectors for the New Britain State's Attorney, who obtained the arrest warrant, had been trying unsuccessfully to locate Francis in recent days by sending signals to his cellular telephone. The telephone apparently was turned off. A law enforcement official said the inspectors got a positive signal Friday night that led them to the Hampton Inn.

    Officials said Francis refused to cooperate and the authorities had to obtain another warrant to enter the room and take him into custody.
Source: Local Lawyer, Real Estate Investor Charged With Larceny.
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(1) In Connecticut, the Client Security Fund is a fund established by the rules of the Connecticut Superior Court to provide reimbursement to individuals who have lost money or property as a result of the dishonest conduct of an attorney practicing law in the State of Connecticut, in the course of the attorney-client relationship. The fund provides a remedy for clients who are unable to obtain reimbursement for their loss from any other source.

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.

posted by Home Equity Theft Reporter at 4:02 AM

Racket Disguised As Solution For Underwater Homeowners To Unload Their Homes Turns Out To Be Lease-To-Own, Rent Skimming Scam

In Phoenix, Arizona, KNXV-TV Channel 15 reports:
  • People around the country blame a couple of Valley businesses after losing their money and their homes to something that sounded like a great deal.

    Scottsdale attorney Laura Bramnick represents Thomas Ferry, who owed more on his Indiana home that it was worth. He didn’t want to sell it at a loss and he didn’t want to default.

    “He was looking for solutions to keep his home until it could increase in value enough that he could sell it and break even,” she says.

    What he found was Phoenix-based Mortgage Relief Solutions.

    “They had a program where they would make his mortgage payments, put a tenant in the property and the tenant would also be interested in purchasing the property,” Bramnick says.

    Mortgage Relief Solutions’ sister company, Lease with a Plan, would find the tenant. Once the tenant became credit-worthy, they would buy the house and the company would pay off the original loan.

    Bramnick says that didn’t happen. After a couple of months of keeping up to date, her client says Mortgage Relief Solutions didn’t pay the mortgage for five months. He says he was ignored when he tried to get answers and continued paying the mortgage himself to prevent a foreclosure.

    “At that point (he) wanted to collect the rent from the tenants that were in there and he was not able to do that unless and until we sued and got an order from the judge, basically rescinding everything that happened," she says.

    In 2016, he sued Mortgage Relief Solutions, Lease With a Plan, business officer Eric D. Brown, and T.M Shelby for breach of contract. A judge awarded Ferry more than $10,000 in damages.

    We tracked down homeowners in Arizona, Illinois, Indiana, Michigan, Maryland and tenants in Virginia. They all found the companies online. And they all say the companies stopped paying the mortgage or never paid at all.

posted by Home Equity Theft Reporter at 4:00 AM

Tuesday, June 06, 2017

Pennsylvania Supremes Unanimously Put Kibosh On Sneaky Philly District Attorney Office's Use Of Civil Forfeiture To Snatch Away Innocent 72-Year Old Grandmother's Home, Auto In Connection With Her Son's $140 Drug Sale On Premises; Court: Property Owner Must Know Of & Consent To Bad Acts, Seizure "Must Bear Some Relationship To Gravity Of Offense It's Designed To Punish"

In Philadelphia, Pennsylvania, The Philadelphia Enquirer reports:
  • In a decision that strengthens the hands of homeowners swept up in civil forfeiture actions, the Pennsylvania Supreme Court ruled that authorities must have strong evidence showing a home or car was used in a crime and that the owner consented to the illegal activity before they move to seize the property.

    In a unanimous, 73-page opinion, the court found that although authorities have the right to seize property used in illegal enterprises, they must prove that the owner not only was aware of the illegal activity but also had agreed to it. The court also found that property seizures may breach the Eighth Amendment’s prohibition against excessive fines if the seizure is “grossly disproportional” to the underlying offense.

    “The amount of forfeiture must bear some relationship to the gravity of the offense that it is designed to punish,” Pennsylvania Supreme Court Justice Debra Todd wrote.

    The ruling, issued late Thursday [May 25], came in the case of Elizabeth Young, a 72-year-old grandmother from the Cobbs Creek section of West Philadelphia, whose house and minivan were seized by the Philadelphia District Attorney’s Office in 2013 after her son was arrested for selling small amounts of marijuana there.

    Young contested the seizure, but Common Pleas Court Judge Paula Patrick ruled in favor of the DA’s Office, finding that Young had ample knowledge of her son’s activities because the police had searched the house and seized drug paraphernalia, but the drug dealing continued.

    “I am glad that this has come to some kind of conclusion,” said Young, who has been out of the house since 2013 and is currently living in Yeadon. “I am glad that I will be here to see this thing cleared up. I never did anything wrong and I have been out of my house long enough.”
    ***
    The Supreme Court decision upheld a December 2014 opinion by Commonwealth Court, a mid-level appeals court in Pennsylvania, overturning the seizure. The Supreme Court sent the matter back to the trial court for further review, which means there is no timetable for when Young will be able to return to her house. A team of lawyers at Center City’s Ballard Spahr represented Young pro bono.

    “It is a mandate for the government and to law enforcement and a victory for civil liberties,” said Ballard partner Jessica Anthony, who argued the case before the Supreme Court.

    Civil forfeiture is a practice long used by law enforcement to crack down on drug dealers not only by throwing them in jail but also taking their property. And it has generated heated opposition in Philadelphia and in jurisdictions around the country with seemingly innocent people getting swept up in the net. Because it is a civil proceeding, it can be used against homeowners such as Young, who haven’t been convicted or even charged with a crime, but who are deemed by authorities to have indirectly participated in the criminal activity.

    To prevail, prosecutors had to merely show that it was more likely than not that the homeowner was aware of or consented to the activity, a standard well below that of criminal trials.

    The problem with that standard, the Supreme Court said, is that most of the people caught up in civil forfeiture proceedings are poor and typically appear without a lawyer because there is no right to counsel in civil proceedings. Although civil forfeitures can be an effective tool in fighting crime, the unique vulnerability of people subject to seizure actions requires that such trials be conducted with extra care, the court said.

    In Young’s case, even though the police had searched her house, and seized what they said were drugs and drug paraphernalia, she was under no obligation to believe them, the Supreme Court said. Moreover, she had been ill during the time that the police had targeted her son and thus was less able to judge his activity. Even if authorities could show that Young was aware of her son’s drug dealing, they must also prove that she consented to it, the court said.

    The court cited both state and federal case law in setting new guidelines for civil forfeiture in Pennsylvania, noting that the U.S. Supreme Court had earlier ruled that such seizures, to withstand judicial scrutiny, must be in proportion to the underlying offense. In Young’s case, her son eventually was arrested for selling $140 worth of marijuana.
For the story, see Pa. Supreme Court makes it harder for the D.A. to seize your home.

See also, Grandmother Who Lost Her Home Because Her Son Sold Marijuana Wins Pennsylvania Supreme Court Case (Without ever being charged with a crime, a West Philadelphia grandmother had her home and her car confiscated because her son sold less than $200 worth of marijuana).

posted by Home Equity Theft Reporter at 4:04 AM

Georgia Supremes Unanimously Slam Shut 'Super Lien' Racket That Allowed Sneaky Real Estate Operators To Swiftly Snatch Away Homes From Homeowners Falling Behind On Their Property Taxes

In Atlanta, Georgia, the The Atlanta Journal-Constitution reports:
  • Georgia homeowners who fall behind on their property taxes now have a new protection. No longer can cunning investors quickly snatch away their homes and everything the owners had paid on it.

    For years, such investors and their attorneys, armed with only a piddling second unpaid bill, used a loophole in Georgia law to override safeguards designed to help struggling taxpayers. The maneuver was so powerful it was dubbed a “super lien.”

    But this month, a Georgia Supreme Court decision stripped the super lien of its super powers. Homeowners still gripped in the process may get immediate relief.

    “I think this party’s over,” said Hugh Wood, a real estate attorney who has defended clients against super liens. “I don’t think they’re going to game the system anymore, because they can’t guarantee that they will get the land and the excess proceeds. It’s too dangerous.”

    A 2013 investigation by The Atlanta Journal-Constitution exposed how several Atlanta law firms, working on behalf of investors, had put such claims against hundreds of properties. The practice was based on a series of court decisions between 2003 and 2010.

    It would happen so fast, homeowners often didn’t know what hit them.

    Jessica Sims and her brother, James Davis, lost their late father’s Cherokee County home three years ago after $14,000 in taxes went unpaid and a Florida company called Trintec imposed a super lien. They said the company used an outside debt to do it — their uncle’s unpaid medical bill, since he was a part-owner in the property.

    Sims and Davis hired an attorney to challege the action but ended up settling for a fraction of the home’s value. After paying their attorney’s fee, they said, they wound up with $5,000 each for a house valued at more than $200,000.

    “It feels like losing hope,” Sims said. “I’m a single mom with a special needs child, and I do it by myself. So that was my little bit of hope, that I would be able to provide something for her for the future.”

    Critics accused such investors of exploiting homeowners in dire straits — particularly the sick and the elderly — who may not understand Georgia’s convoluted foreclosure laws.

    “I call them pirates,” said attorney Mark Thompson, who waged a successful argument against the process before the state Supreme Court. “The result that they’re trying to achieve is extremely inequitable, and it provides a financial bonanza for the pirates.”

    [...]

posted by Home Equity Theft Reporter at 4:02 AM

$13K In Emotional Distress Damages Award Part Of $44K In Sanctions Against Bankster For Violating Bankruptcy Rules By Making Continuing Contact w/ Bankrupt New Hampshire Homeowner After Home Loan Debt Was Formally Discharged

In Concord, New Hampshire, Bloomberg BNA reports:
  • Ocwen Loan Servicing LLC and Bank of New York Mellon were fined more than $44,000 for attempting to collect on a mortgage after the property was in foreclosure and the debtors received a bankruptcy discharge (Todt v. Ocwen Loan Servicing, LLC (In re Todt) , 2017 BL 165139, Bankr. D.N.H., No. 15-1040-JMD, 5/17/17 ).

    The May 17 opinion by Judge J. Michael Deasy of the U.S. Bankruptcy Court for the District of New Hampshire may serve as a reminder to mortgagees and mortgage servicers of what they can and can’t do when a borrower is awarded a discharge in bankruptcy.

    Suffering from illness and financial setbacks, Randall and Sharon Todt filed a Chapter 7 case July 1, 2011. At that point they stopped paying for the mortgage on their house.

    The Todts received their discharge—effectively wiping out their debts, including under the mortgage—Jan. 26, 2012.

    Ocwen began foreclosure in 2013 but continued to send invoices for the debt and contact them regarding “resolving” their “mortgage problems.”

    Although the bankruptcy code allows lenders to attempt to collect payments in lieu of foreclosure, that provision doesn’t apply once the foreclosure is underway, the court said.

    No Get Out of Jail Free Card

    Ocwen argued that because the Todts had received a discharge its invoices were informational only, pointing to language on their backs saying as much.

    But the language was mere boilerplate and didn’t overcome the fact that the statements were clearly seeking payments for the mortgage, the court said. “The use of a pro forma bankruptcy disclaimer is not a ‘get out of jail free’ card that can absolve a creditor of liability for a pattern of conduct that is inconsistent with the terms of the disclaimer,” it said.

    The court awarded $13,000 actual damages for the Todts’ emotional distress(1) from the collection efforts, plus attorneys’ fees and costs of $31,077.

    The court denied the Todts’ request for punitive damages, noting that the debtors had already had the advantage of living in their house for many years without paying their mortgage, property taxes, insurance, or any kind of rent.
Source: Ocwen Fined for Violating Bankruptcy Injunction.
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(1) From the court ruling:
  • The Court held a trial on March 9, 2017, in order to determine whether any other actions by Ocwen and BONY violated the discharge injunction and whether the Debtors are entitled to damages. Mr. Todt was unable to testify due to his ongoing medical issues. Mrs. Todt testified as did one of her health care providers and a former co-worker.

    The health care provider testified that she has seen Mrs. Todt on an annual basis since 2005 and that starting three or four years ago (so starting in 2013 or 2014) Mrs. Todt reported that she was feeling stressed, was teary, and was having difficulty sleeping. She further told her provider that her husband was ill, that she was the only one working, and that the Debtors were having financial issues and were concerned about losing their home and being out on the street.

    Mrs. Todt's co-worker testified that she and the Debtor worked together, speaking on a daily basis, for a five-year period from 2011 through 2016. She observed that Mrs. Todt was emotionally upset and cried often at work. The co-worker indicated that the crying started gradually over time, probably starting in 2014 and 2015, and that she (and other co-workers) noticed it, with consistent crying occurring during the last six months of 2016. She testified that Mrs. Todt was often distraught at work and that her issues escalated over time. She indicated that Mrs. Todt informed her that she was experiencing financial difficulties, had filed bankruptcy, and was feeling pressure from her mortgagee. She testified that Mrs. Todt was afraid someone would come to her home and lock her out.

posted by Home Equity Theft Reporter at 4:00 AM

Monday, June 05, 2017

Accused Of Bid Rigging At Northern California Foreclosure Sales, Trio Nix Plea Offers, Roll Dice By Going To Trial & Lose; Antitrust Feds' Hit List Now Up To 68 Guilty Real Estate Operators With Indictments Still Pending Against Others

From the U.S. Department of Justice (Washington, D.C.):
  • A federal jury today [June 2] convicted three real estate investors for their roles in a conspiracy to rig bids at public real estate foreclosure auctions held in Northern California, the Department of Justice announced.

    After a three-week trial, the jury convicted Michael Marr, Javier Sanchez, and Gregory Casorso, on all counts. Marr, Sanchez, and Casorso were convicted for conspiring to rig bids at foreclosure auctions in Alameda County, California, between June 2008 and January 2011. Marr and Sanchez were also convicted on charges of conspiring to rig bids at foreclosure auctions in Contra Costa County, California between July 2008 and January 2011. The three defendants were charged in an indictment returned by a federal grand jury in the Northern District of California on Nov. 19, 2014.

    The evidence at trial showed that the defendants conspired with others to rig bids to obtain hundreds of properties sold at foreclosure auctions. The conspirators designated the winning bidders to obtain selected properties at the public auctions, and negotiated payoffs among themselves in return for not competing. They then held second, private auctions at or near the courthouse steps where the public auctions were held, awarding the properties to conspirators who submitted the highest bids.

    Including today’s convictions, 68 individuals have 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 Northern California. Indictments are pending against other real estate investors who participated in the conspiracy.

    The investigation is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging at 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.

posted by Home Equity Theft Reporter at 4:06 AM

Indianapolis-Based Rent-To-Own Real Estate Operator Tagged With Fair Housing, Federal Consumer Lending Lawsuit Accusing Outfit With Targeting Poor, Homebuying-Aspiring Minorities With Predatory Contracts That “Saddle Consumers With All Of The Disadvantages Of Renting & All Of The Disadvantages Of Buying”

In Indianapolis, Indiana, the Indianapolis Business Journal reports:
  • An Indianapolis-based company that has purchased and rented out hundreds of houses in the city is being sued by a not-for-profit housing group and four former customers over what they are calling a “predatory and unlawful rent-to-own scheme.”

    Rainbow Realty Group Inc. and its owner, James R. Hotka, were sued Tuesday [May 30] by the Fair Housing Center of Central Indiana Inc. and individuals Nelly Espinoza, Mory Kamano, Marvin Martinez and Norma Tejeda.

    The plaintiffs are seeking class-action status for their lawsuit, which was filed in U.S. District Court in Indianapolis by local law firm Cantrell Strenski & Mehringer and Washington, D.C.-based Relman Dane & Colfax.

    The suit alleges Hotka, Rainbow Realty and affiliated firm Empire Holding Corp. target minorities with deceptive contracts that “saddle consumers with all of the disadvantages of renting and all of the disadvantages of buying” homes.

    Rainbow’s actions violate several fair housing, equal credit opportunity act, truth-in-lending and condition-of-premises laws, the lawsuit alleges.

    Rainbow, the lawsuit says, buys abandoned, rundown houses and sells them without performing repairs through rent-to-own contracts at prices three to five times higher than the purchase price.

    The dwellings are often unlivable, with leaky roofs, flooded basements, faulty wiring and plumbing, mold, missing doors, and rodent or bug infestations, according to the suit.

    The rent-to-own contracts typically carry interest rates ranging from 11.8 percent to 18 percent, and steep late fees that almost guarantee the buyer will begin missing payments shortly after entering into the agreement, the lawsuit said. That’s because most of the buyers will not be able to afford the monthly payments while also spending large sums to make repairs on the house.

    “Defendants have built into their business model the expectation that most of their customers will not be able to maintain their monthly payments, and so screen out few if any customers,” the lawsuit says. “According to defendant Hotka, in 70 percent of the contracts, the buyer falls behind within the first six months alone and is summarily evicted.”

    The lawsuit alleges that 95 percent of the contracts ended in eviction from 2009 to 2014, with 175 evictions taking place in the first four months of 2017 alone.

    “Given the condition of their houses and their reliance on deception to ensnare victims, defendants need vulnerable customers to perpetrate this scheme,” the suit says. “Defendants target minority neighborhoods because they believe that, due to the historic denial of equal opportunities for good credit and homeownership, many people in minority neighborhoods are especially susceptible to this predatory scheme.”

    Hotka, who says he has been in the real estate business since 1974, founded Rainbow in 1992. The company says it has bought and fixed more than 1,000 homes in the area since 1974.

    Hotka could not be reached by phone at Rainbow Group on Tuesday afternoon despite several attempts.

    The company also is fighting a separate lawsuit filed by the state in 2012 over the same alleged practices.

    Rainbow disputes the charges in a statement on its website.

    “The Indiana Attorney General has made allegations against Rainbow Realty Group and [has] published press releases which tell only one side of the story,” the statement says. “The AG complaint challenges our fair and just right to evict customers for non-payments. … We believe these claims are baseless and untrue. In fact, over the years we have helped hundreds of families and individuals become satisfied homeowners.”

    The Fair Housing Center of Central Indiana, a not-for-profit founded in 2011 that tries to “ensure equal housing opportunities by eliminating housing discrimination,” said it has “interviewed dozens of people who put hundreds to thousands of dollars into their homes in the hope of getting their houses to a condition that was livable, depleting their finances, until eventually they were overwhelmed. They are then evicted, without any protection or recognition of the equity they had put into their homes.”

    The four individuals joining the Fair Housing Center are all minorities who were evicted from houses by Rainbow Realty.

    The suit says it is seeking compensatory, statutory and punitive damages for the four plaintiffs and others who join the suit.

posted by Home Equity Theft Reporter at 4:04 AM

Victimized By Crappy Construction, NYC Homebuyers Of Recently-Constructed, High-Priced Condos Are Being Left Holding The Bag With Little Recourse By The Courts

In Brooklyn, New York, The Real Deal (NYC) reports:
  • The LLC veil used by condo developers in Brooklyn just became Kevlar.

    A new appellate court ruling will make it harder for condominium boards in the borough to sue individual developers of apartment buildings for construction defects.

    Over the years, a number of Brooklyn condo buyers filed lawsuits in New York Supreme Court against the actual developers behind the projects they lived in, alleging construction defects. One such case, against real estate investment firm Savanna and their 86-unit condo at 125 North 10th Street in Williamsburg, made its way to appellate court.

    The judges in that case have now ruled that claims can only be brought against the development entity, in this case, an LLC. The takeaway: Developers aren’t personally liable for the buildings they put up.

    Previously, cases naming individual developers as defendants were justified by developer signatures on the “certification of sponsor,” a document in which stakeholders affirm that all the contents of a new condo offering plan are true and representative. Brooklyn developers singled out in breach of contract lawsuits in recent years include Amir Yerushalmi and Alan Messner. The appellate court department covering Manhattan, however, has established precedent for dismissing cases brought on this argument. With the Savanna ruling, Brooklyn, covered by the appellate division’s second department, has gone the same way.
    ***
    In 2012, buyers at the condo Street sued Savanna and its principals, including co-founders Christopher Schlank and Nicholas Bienstock, as well as architects, management and construction firms involved in the project. Residents complained of hot water flowing through fixtures, deficient heating and cooling systems, flooding in the garage, foul odors and balcony railings unsafe for children. Although many of the firms and individuals were dismissed from the case in a Kings County court, Savanna and partner Investcorp couldn’t get their names removed from the breach of contract suit.

    In the ruling, the appellate judges held that the individuals “cannot be held individually liable for the breach of contract alleged by the plaintiff, based solely on violations of the offering plan, merely by their certification of that offering plan in their representative capacities on behalf of the sponsor…”

    Jennifer Bock, attorney for the condo board, did not return a request for comment.

    This is not the only recent case with big implications for condo developer liability. In April, a Brooklyn judge ruled that Fortis Property Group was not responsible for defects at condos it sold after acquiring them from their original developer, Isaac Hager.
For the story, see Attention, Brooklyn condo buyers: Good luck trying to hold your developer personally accountable (Appellate court shoots down attempt to pierce LLC veil in construction defect case against Savanna).

posted by Home Equity Theft Reporter at 4:02 AM

Despite Continuous, Uninterrupted Use Of 2-Bedroom Rent-Stabilized NYC Apartment As Primary Residence, 70-Year Old Woman To Get The Boot From Home Of 43 Years For Pocketing In Excess Of Allowable Amount By Using One Bedroom As Airbnb Sharing Deal

In New York City, the New York Daily News reports:
  • An elderly woman recovering from breast cancer can be evicted from her rent-stabilized apartment in Greenwich Village because she made a hefty profit through Airbnb, appeals judges ruled Tuesday [May 23].

    “I don’t know what I’m going to do. I don’t have that long to be here,” said Linda Lipetz, 70. “I’m going to lose all my medical. If I don’t have an address, I’ll never be able to get anything. I’m going to wind up in a homeless shelter,” she added.

    Lipetz, 70, began searching for a roommate for her two-bedroom apartment at 39 Fifth Ave. in 2010, after she was diagnosed with the disease and lost her job.

    The former fashion and interior designer said she needed a roomie to help her keep her apartment of 43 years, which she rents for $1,758 per month.

    Lipetz charged $95 per night for one person and $120 for couples. For 338 days over 18 months, Lipetz had at least one Airbnb guest, earning her $33,592, according to the ruling by a mid-level appeals court.

    She "continued to use the apartment as her primary residence, and cooked meals for each guest," Justice Ellen Gesmer wrote in a dissent. "Each guest shared the entire apartment with her, including the one bathroom and unlimited use of the kitchen. They even watched TV together."

    “I think it's a crime against people ...” Lipetz said of the ruling. “... It’s outrageous what’s going on, how America treats their seniors and disabled. It’s a crime what they’re doing to people. It’s a crime.”

    Nevertheless, landlord Shari Lynn Goldstein moved to evict Lipetz in 2012, alleging she was unlawfully profiting off of her apartment.

    Three out of five judges in Manhattan's Appellate Division First Department agreed, ruling that the amount of money Lipetz earned was enough to void her lease and get her evicted.

    "I'm devastated," Lipetz said. "I have no place to go. I'll be out on the street."

    The law allows a rent-stabilized tenant to sublease an apartment for no more than a 10% premium. But Lipetz's own rent per day was $57.80 — meaning she turned a 72% profit, the judges found.

    "We are mindful of the fact that defendant's age and health status naturally evoke sympathy," Justice Peter Tom wrote for the majority. "However, it is simply undeniable that…she exploited the governmentally-conferred privilege of her rent-stabilized tenancy to take financial profits unavailable to her landlord."

    Howard Grun, an attorney for the landlord, said the ruling had broader legal significance. "It puts to rest whole notion these transient occupants who come through Airbnb are roommates," he said. "That's crucial."

    Lipetz's attorney, Fred Seeman, said an appeal was likely but that he needed to speak to his client.

    He said Lipetz had not hidden her Airbnb operation, and stopped once she was told to. The landlord will sell the apartment for millions once Lipetz is gone, he said.

    "She'll just be another statistic in the toll of gentrification in the city," Seeman said.

    An Airbnb spokesman said the company believes "regulations should be in place that prevent profiteering off rent stabilized units while allowing New Yorkers to share their own homes to pay their rent or medical bills and age in place."

posted by Home Equity Theft Reporter at 4:00 AM

Sunday, June 04, 2017

Disbarred Attorney's Wait For Law Enforcement Ends; Investigators Come Knocking, Haul Disgraced Lawyer Away For Allegedly Purloining At Least $1.5 Million In Entrusted Funds From 11 Clients; Cops Believe There May Be Add'l Victims; Bail Set At $3 Million

In Tampa, Florida, WFLA-TV Channel 8 reports:
  • A disbarred Tampa attorney faces a litany of charges after detectives say he embezzled at least $1.5 million from his clients.(1)

    Agents with the Florida Department of Law Enforcement arrested David Land Whigham on Tuesday [May 16] after a year-long investigation revealed that between July 2011 and April 2016, Whigham took funds from 11 victims, including charities and disabled adults and children, and used them for his own personal benefit.

    He was taken into custody and charged with 22 felony counts of grand theft and organized scheme to fraud.

    Whigham is being held at the Hillsborough County Jail on a $3 million bond.

    “It’s the ultimate breach of trust,” said Florida Department of Law Enforcement Special Agent Rick Taveras. “This case is unbelievable. People trust their attorneys to look out for their welfare and in this case, Mr. Whigham was taking advantage of him and lying to him.”

    News Channel 8 spoke with the attorney who represents two of the alleged charities targeted, including Shriners Hospital for Children and the Scottish Rite Schizophrenic Research Foundation of the Northern Masonic jurisdiction in Lexington, Massachusetts.

    “I said, ‘well, where is the money?’” attorney Hamden Baskins III told News Channel 8. “He said, ‘I used it for expenses.’ His office expenses. And I said ‘all of it’s gone? That’s a million dollars.’ He said ‘all of it.’”

    Agents said Whigham used the money to pay credit card and cell phones bills, and for boating, hunting and fishing.

    “Clients expected him to take care of their needs using their funds and instead, he used it for personal gain,” said FDLE agent Taveras.

    As for the attorney representing the two charities, he’s still dumbfounded.

    When asked if he’s ever come across an experience like this in his 30 years of practicing law, he said, “I never have. This is the most egregious situation I have ever seen.”

    Agents believe there may be additional victims.

    As for Whigham’s attorney, he wasn’t available for comment.
Source: Former Tampa lawyer arrested for embezzling at least $1.5M from charities, disabled people.
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(1) In Florida, the Clients' Security Fund was created by The Florida Bar to help (at least partially) compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Florida-licensed 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.

posted by Home Equity Theft Reporter at 4:08 AM

Another Aging Lawyer Wraps Up Decades-Long (40 Years) Career By Being Frogmarched Out Of Tennessee Courtroom To Begin 15-Year Prison Stay After Pleading Guilty To 'Grave-Robbing' $763K From His Dead Clients (& Their Heirs, Beneficiaries)

In Sullivan County, Tennessee, the Bristol Herald Courier reports:
  • A disbarred Bristol, Tennessee attorney who stole nearly $800,000 from clients was sentenced to 15 years in prison Monday [May 22].

    Don W. Cooper pleaded guilty to 10 counts of theft involving the estates of four clients in Sullivan County Criminal Court Monday, according to Sullivan County District Attorney Barry Staubus.

    Cooper stole a total of $763,000 from four estates, according to court documents.(1) Cooper immediately began serving his sentence after he was sentenced.

    He practiced law in Bristol, Tennessee for 40 years, primarily handling wills, estates and trusts. Cooper was suspended from practicing law in December 2015 for misappropriation of client funds, according to court documents.

    At the request of Staubus, the Tennessee Bureau of Investigation began investigating Cooper in November 2015. Sullivan County Chancery Court Clerk Katie Priester aided in the investigation.

    It found that between August 2012 and October 2013, Cooper pocketed more than $304,000 from the $1.3 million estate of Alva Frye. Between December 2008 and November 2009, Cooper stole $52,000 from the estate of Phyllis Pendergrass. The bulk of that money was supposed to go to St. Jude Children’s Research Hospital.

    The investigation also found that from April 2006 to October 2015, Cooper took a total of $350,000 from seven trusts out of the $2 million estate of Anthony Tiller. And in 2010, he kept $57,000 from the sale of property belonging to the estate of Helen Shipley.

    Cooper was disbarred in February and ordered to pay nearly $1 million in restitution to multiple estates and trusts.
Source: Former Bristol, Tenn. attorney sentenced to 15 years on theft charges.
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(1) The Tennessee Lawyers’ Fund for Client Protection was established to reimburse claimants for losses caused by dishonest conduct committed by lawyers duly licensed to practice in the state.

For similar "attorney ripoff reimbursement funds" that attempt to clean up 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.

posted by Home Equity Theft Reporter at 4:06 AM

Judge Terminates Lawyer's Guardianship Duties Over 95-Year Old Dementia-Stricken Woman For Allegedly Grossly Overbilling Her $488K To Help Her Get Her Driver's License Back; His Associate Recently Copped Guilty Plea To Ripping Off Victim For $530K+

In Santa Ana, California, The Orange County Register reports:
  • An Orange County Superior Court judge on Thursday, May 25, took guardianship away from a suspended Santa Ana attorney who is the trustee for a 95-year-old woman he billed more than $488,000 to help her get her driver’s license back.(1)

    Wayne Irwin McClaskey has been suspended from practicing law since January 2015, for billing Lola Wilber $488,700 to “resist the adverse decision of the DMV on her driver’s license renewal,” according to the State Bar.

    But McClaskey remains Wilber’s trustee and has control over her trust containing at least $600,000, said Senior Deputy District Attorney Marc Labreche. He appeared at Thursday’s hearing as a “friend of the court” because he prosecuted McClaskey subordinate, Thomas Chapman Hood, who pleaded guilty to stealing about $534,000 from Wilber.(2)

    McClaskey sold Wilber’s home after taking out a reverse mortgage on the property, Labreche said.

    The Orange County Public Guardian is now in charge of caring for Wilber and her estate, Labreche said. A hearing will be held on July 5 to make the temporary order permanent.

    Hood, 69, pleaded guilty Monday to multiple felonies and was sentenced to five years of formal probation and 212 days in jail, or time already served in the case, Labreche said. The prosecutor worked out the plea deal based on Hood’s health, which has worsened in custody as he underwent a procedure on his heart in the medical ward, Labreche said.

    Hood put up $150,000 toward restitution to the victim, as well, according to Labreche, who said insisting on a prison sentence would have meant Wilber wouldn’t have gotten any money back.

    Hood, who stole the money by forging McCaskey’s signature on checks, is under an order to continue making full restitution, Labreche said.

    McClaskey also lost his right to practice law because he kited three checks on Wilber’s accounts.
Source: Judge takes guardianship from Santa Ana man after he’s suspected of stealing $488,000 from 95-year-old.
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(1) The California State Bar's Client Security Fund is a discretionary fund that can reimburse clients who have lost money or property due to theft or dishonesty by a California lawyer. It is a State Bar program funded entirely by California lawyers. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

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.

(2) See Newport Coast man who stole $500,000 from elderly woman with dementia is sentenced to probation.

posted by Home Equity Theft Reporter at 4:04 AM

Bond Set At $400K For Lawyer Pinched On 14 Felony Counts Alleging He Fleeced $435K From Clients' Family Trust For Which He Acted As Trustee; Prosecutor Seeks Forfeiture Of Two Homes, Two Vehicles, Law Practice

In Bowling Green, Ohio, The Toledo Blade reports:
  • A local lawyer entered not guilty pleas today [May 23] in Wood County Common Pleas Court where he is charged with 14 felony offenses alleging he stole more than $400,000 from a client.

    Robert Searfoss III, 40, of Perrysburg was named in a secret indictment handed up by a Wood County grand jury last week charging him with two counts of aggravated theft, four counts of engaging in a pattern of corrupt activity, four counts of money laundering, three counts of theft, and one count of grand theft.

    Judge Alan Mayberry set bond at $500,000.

    The indictment alleges that between April, 2015 and April, 2017, Mr. Searfoss stole approximately $435,000 from Eric Walker and the Alice C. Walker Revocable Trust, for which he was the trustee. He allegedly used the stolen funds to make payments on a home equity loan of credit associated with real estate he owns on Georgetown Drive in Bowling Green.

    The indictment includes numerous forfeiture specifications that seek forfeiture of the Georgetown Drive property as well as a home on Shawnee Drive in Perrysburg, his law practice on Oak Street in Bowling Green, and two vehicles.
Source: Local lawyer pleads not guilty to 14 felony offenses (Robert Searfoss III is accused of stealing more than $400K from a client).
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(1) In Ohio, the Lawyers’ Fund for Client Protection is an agency of the Supreme Court of Ohio created to reimburse victims of attorney theft, embezzlement or misappropriation. The Board of Commissioners of the Lawyers' Fund for Client Protection determines which claims are eligible for reimbursement. After the Lawyers' Fund for Client Protection staff investigates the claims, they are submitted to the Board for a determination of eligibility.

The maximum award amount is $75,000 per client. Clients who believe they have sustained financial losses resulting from theft, embezzlement or misappropriation by an Ohio attorney should contact the fund at 614.387.9390 or toll free in Ohio at 1.800.231.1680.

For similar "attorney ripoff reimbursement funds" that attempt to clean up 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.

posted by Home Equity Theft Reporter at 4:02 AM