Posted by John Schenk on 9/30/09 3:00pm
Msg #305722
Maryland AG wins $1M Judgment in Foreclosure Scam
Maryland AG wins $1 million judgement in foreclosure scam
DateWednesday, September 30, 2009 at 9:38AM
In the following press release Maryland Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has won a judgment in the Circuit Court for Baltimore City against brothers Michael K. Lewis and Earnest Lewis, Cheryl Brooke, In the House Technology, Inc., and Winston Thomas based on violations of Maryland’s law against foreclosure rescue scams. The Honorable Barry G. Williams issued an order that bars the Lewis brothers, Brooke, and Thomas from offering and selling services of any kind to a homeowner who is in default on a mortgage or is in foreclosure, and requires them to pay over a million dollars in restitution and penalties. The order also requires them to provide regular reports to the Division concerning their employment.
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[Editor note:
Those mentioned above were recently sentenced in what is believed to an associated criminal case in the Federal courts. Click here for that entry]
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The Consumer Protection Division sued the Lewis brothers, Brooke, Thomas and In the House Technology, Inc. for engaging in a foreclosure rescue enterprise in violation of Maryland’s Consumer Protection Act and Protection of Homeowners in Foreclosure Act. The Division alleged that the main objective of the foreclosure rescue enterprise was to take title to consumers’ homes and then strip the homes of equity.
The Division also entered into a consent order with Cornerstone Title & Escrow, Inc., a real estate settlement company, that the Division sued for participating in the scheme and for using practices that violated the Consumer Protection Act. Cornerstone denied the Division’s allegations and has not admitted any wrongdoing.
“Maryland law prohibits foreclosure consultants from collecting fees before fully performing the services promised and now prohibits them from arranging foreclosure rescue transactions,” said Attorney General Gansler. “Additionally, Maryland law requires foreclosure consultants to provide clients with notices that explain the homeowner’s rights.”
The consent order entered with Cornerstone requires the company to pay $100,100 and bars Cornerstone from performing settlement services for either of the Lewis brothers, Brooke, Thomas or In the House Technology, Inc. The consent order also bars Cornerstone from performing settlements where the purchaser provided foreclosure consulting services to the seller or the purchaser is acting on behalf of a person who provided foreclosure consulting services to the seller.
Consumers facing foreclosure should always be wary of businesses claiming they can help consumers avoid foreclosure. Instead, the Office of Attorney General recommends consumers consult one of the HUD-approved nonprofit housing counselors listed on the Attorney General’s website at www.oag.state.md.us/consumer/foreclose.htm.
Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has won a judgment in the Circuit Court for Baltimore City against brothers Michael K. Lewis and Earnest Lewis, Cheryl Brooke, In the House Technology, Inc., and Winston Thomas based on violations of Maryland’s law against foreclosure rescue scams. The Honorable Barry G. Williams issued an order that bars the Lewis brothers, Brooke, and Thomas from offering and selling services of any kind to a homeowner who is in default on a mortgage or is in foreclosure, and requires them to pay over a million dollars in restitution and penalties. The order also requires them to provide regular reports to the Division concerning their employment.
The Consumer Protection Division sued the Lewis brothers, Brooke, Thomas and In the House Technology, Inc. for engaging in a foreclosure rescue enterprise in violation of Maryland’s Consumer Protection Act and Protection of Homeowners in Foreclosure Act. The Division alleged that the main objective of the foreclosure rescue enterprise was to take title to consumers’ homes and then strip the homes of equity.
The Division also entered into a consent order with Cornerstone Title & Escrow, Inc., a real estate settlement company, that the Division sued for participating in the scheme and for using practices that violated the Consumer Protection Act. Cornerstone denied the Division’s allegations and has not admitted any wrongdoing.
“Maryland law prohibits foreclosure consultants from collecting fees before fully performing the services promised and now prohibits them from arranging foreclosure rescue transactions,” said Attorney General Gansler. “Additionally, Maryland law requires foreclosure consultants to provide clients with notices that explain the homeowner’s rights.”
The consent order entered with Cornerstone requires the company to pay $100,100 and bars Cornerstone from performing settlement services for either of the Lewis brothers, Brooke, Thomas or In the House Technology, Inc. The consent order also bars Cornerstone from performing settlements where the purchaser provided foreclosure consulting services to the seller or the purchaser is acting on behalf of a person who provided foreclosure consulting services to the seller.
Consumers facing foreclosure should always be wary of businesses claiming they can help consumers avoid foreclosure. Instead, the Office of Attorney General recommends consumers consult one of the HUD-approved nonprofit housing counselors listed on the Attorney General’s website at www.oag.state.md.us/consumer/foreclose.htm.
http://www.mortgagefraud.org/journal/
They're going to the pokey also.
JJ
| Reply by MistarellaFL on 9/30/09 3:13pm
Msg #305726
Lets hope that other employee leasing companies
(SS) catch the drift.
<<<The consent order also bars Cornerstone from performing settlements where the purchaser provided foreclosure consulting services to the seller or the purchaser is acting on behalf of a person who provided foreclosure consulting services to the seller.>>>
| Reply by John Schenk on 9/30/09 3:30pm
Msg #305731
In This one the NOTARY got hit for 4 counts.
Four indicted in Massachusetts mortgage fraud & foreclosure rescue scheme
DateMonday, September 28, 2009 at 10:21PM
In the following press release Massachusetts Attorney General Martha Coakley’s Office announced that a Worcester County Grand Jury returned indictments on Friday against an Oxford man, a real estate lawyer, a real estate paralegal and a notary public for their roles in a complex scheme in which fraudulent documents were used to defraud homeowners and mortgage lenders in numerous real estate transactions involving distressed properties in the Worcester County area. Allen Seymour, age 41, of Oxford, Raymond A. Desautels III, age 43, also of Oxford, Jason Passell, age 51, of Worcester, and Judith Piette, age 44, of Worcester, are charged as follows:
Allen Seymour
Forgery (4 counts)
Uttering (8 counts)
Inducing a Lender to Part with Property (12 counts)
Larceny by False Pretenses
Raymond A. Desautels, III (real estate lawyer)
Inducing a Lender to Part with Property (5 counts)
Jason Passell (real estate paralegal)
Forgery
Uttering (7 counts)
Judith Piette (notary public)
False Written Report by Public Officer (4 counts)
This is the second phase of a 24-month investigation stemming from a referral from the Massachusetts Division of Banks. The first phase of the investigation covered the alleged creation of fraudulent Verifications of Deposit, a document used to prove a borrower’s assets to a lender. Phase I of the investigation led to indictments of five individuals, including mortgage broker Erik Tancun, on a variety of charges stemming from the alleged creation of these false documents.
The second phase of the investigation focused on 14 real estate transactions in the Worcester County area. Massachusetts State Police and financial investigators assigned to the Attorney General’s Office have uncovered a scheme, allegedly organized by Allen Seymour, whereby Seymour was able to transform apparent equity in distressed properties into cash.
According to authorities, Seymour targeted properties in danger of foreclosure. He personally approached the owners of these properties and presented a variety of rescue options. For those homeowners who merely wished to sell their property to avoid foreclosure, Seymour allegedly offered to purchase the property for the amount owed to the foreclosing lenders. For the several homeowners who wanted to remain in their homes, Seymour allegedly presented rescue plans which ranged from “lifetime leases” and “reverse mortgages” to a simple refinance. Some of these homeowners were told they would need to transfer title of the property to an “investor,” and some were not. Seymour allegedly had some homeowners sign innocuous documents to begin the process. These innocuous pages were then discarded and substituted with pages purporting to grant Power of Attorney from the homeowner to Jason Passell.
Simultaneously, Seymour found individuals with good credit who were looking to begin investing in real estate. Many of these “investors” were told they would be helping homeowners in danger of foreclosure. Seymour told several investors that the purchase would only be temporary, and the homeowners would purchase the property back from them after Seymour repaired the homeowner’s credit. Others were allegedly told that Seymour’s company would repair and rehab the properties, and then sell them at a profit, to be shared by Seymour and the investors.
None of the proposals made to these “investors” matched the transactions presented to the homeowner. The investors were not told of the “lifetime leases” and “reverse mortgages” Seymour had promised to the homeowners.
Investigators discovered that nearly $3 million dollars in loans were obtained for these purchases. Loan documents indicate the lender believed the purchase price was far greater than the amount the homeowner was selling the property for, if in fact the homeowner knew they were selling the property at all.
Raymond Desautels, III, conducted all of the real estate closings. The lender wired funds into his legal business account based on the erroneous belief that the homeowner was selling the property for the inflated price. The lender was unaware that the stated price was in fact inflated. Authorities allege that on five occasions Desautels prepared documents indicating the investor had brought their own funds to the closing table, further bolstering the lender’s misunderstanding about the transaction and the purchase price. The homeowners never attended these closings, as their documents were signed using a fraudulent Power of Attorney.
Desautels issued a proceeds check payable to the homeowners, based on the false purchase price. Seymour and Passell, with both this check and false Power of Attorney in hand, then allegedly cashed the check at a check cashing business in Worcester. In a roughly 18-month time period, authorities allege that Seymour cashed well over $1 million dollars in proceeds checks.
After the closing, several investors state that Seymour abandoned them to the mortgage payments. Without Seymour’s assistance, the investors were unable to pay the loans, and these mortgages themselves fell into foreclosure. Some homeowners, promised lifetime leases, have been evicted from their homes by these foreclosures.
On four occasions, documents signed by the homeowner were presented to notary public Judith Piette. Although Piette never saw the homeowner, Piette allegedly signed these documents stating the homeowner had personally appeared before her and acknowledged they had signed the document voluntarily and for its intended purpose. There is no evidence Piette had any knowledge of the larger scheme.
The indictments against these individuals were returned late Friday afternoon by a Worcester Grand Jury. Arraignment dates in Worcester Superior Court have not yet been scheduled.
The case is being prosecuted by Assistant Attorneys General Andrew Doherty and David Lieberman of Attorney General Coakley’s Corruption and Fraud Division. The case was investigated by Financial Investigator James McFadden and Massachusetts State Troopers assigned to the Attorney General’s Office, with assistance from the Worcester field office of the FBI.
http://www.mortgagefraud.org/journal/?currentPage=2
"There is no evidence Piette had any knowledge of the larger scheme." BS! Notarizing previously signed docs on four (4) separate occasions and she doesn't know something was up? Gimme a break.
JJ
| Reply by MW/VA on 9/30/09 8:12pm
Msg #305754
Great news. The net is closing on these scam artists--hooray!
| Reply by John Schenk on 9/30/09 8:46pm
Msg #305756
They're hitting them civilly and criminally. Assuming there is a finding of fraud in that judgment, and would certainly think there would be, they can't even file bankruptcy to discharge it as a judgment based upon a finding of fraud isn't dischargeable, with some quirks here and there.
A state court ruling that finds fraud against the party, if that state's requirement is that the finding of fraud be based upon preponderance of the evidence, rather than clear and convincing evidence, collaterally estops a bankruptcy court from even being able to reconsider the fraud issue (i.e. it's already been tried with the same parties, same issues, and the finding of fraud has been found). A finding of fraud by clear and convincing evidence is not binding on a bankruptcy court as it is a court of equity and they must only find fraud by a preponderence of the evidence. The different burden of proof opens the issue up to be relitigated in and adversary proceeding AGAIN in BK court, which really sucks.
Got a case just like that right now. The funny thing is they pled res judicata and collateral estoppel. Res judicata doesn't apply, but collateral estoppel does/could. We agree with them that collateral estoppel applies, but for MUCH different reasons. LOL Really shouldn't be able to avoid the discharge, but it "might" just fly. I don't really have much day to day contact with BK cases, but I do work on the very technical issues when they arise, which I really do love to do. I think we have better than a 50/50 chance of discharging one. Not because it really SHOULD happen, but simply because you did a better job than the other side. Before I worked on it our chances were virtually nil. These things endear my employer to me, and they give me a break from the crap I've been doing for 29 years, which I still love, but everyone likes something new once in a while. I may pull up the judgment just out of curiosity.
JJ
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