Vermont Attorney General William Sorrell has announced the settlement of a consumer fraud complaint stainst Parkside Properties, a rental property management company failed to maintain properties in compliance with the state’s lead paint abatement law, despite telling consumers that it understood and applied the correct law when performing maintenance services. The Montpelier-based landlord will have to pay a $5,000 penalty to the state if it fails to comply with lead paint management standards in 54 buildings. Sorrell said in a statement that lead paint in older buildings is the main cause of lead poisoning in children, which can lower children’s IQs.
Illinois Attorney General Lisa Madigan is suing Brian H. Meyer, doing business as BHM Golf of Villa Park, alleging that Meyer violated the Illinois Consumer Fraud and Deceptive Business Practices. The Better Business Bureau and Madigan’s Consumer Fraud Bureau have received over 200 consumer complaints about the online sport retailer. Complaints range from customers never receiving paid for merchandise to Meyer abusively handling consumer complaints.
Madigan’s lawsuit asks the court to prohibit Meyer from engaging in the business of selling sporting goods over the Internet and from further violating Illinois’ consumer protection laws. The lawsuit seeks restitution to consumers and court costs. In addition, Madigan’s suit seeks a civil penalty of $50,000 and additional penalties of $50,000 for each violation found to have been committed by Meyer with the intent to defraud.
60-year-old Dennis Ray Lunde of Poulsbo, Washington, has been charged with first-degree theft in an alleged Internet commerce scam, in which Lunde posed as a Navy captain and sold model ship kits via the internet. Buyers sent money but never received the kits. Some of the buyers received emails appearing to come from Lunde’s wife claiming he’d suffered a heart attack and had been hospitalized as an explanation of why he hadn’t sent the kits. Police reports indicate that Lunde himself sent those emails. Lunde has reportedly scammed 13 people out of about $6,000 since 2004.
The New York Times recently reported that the FBI and other Officials are falling behind in keeping up with mortgage fraud cases. The number of mortgage fraud cases has doubled since 2005. The rate is eight times higher than it was in 2002. Banks filed 47,717 reports this year, up from 21,994 two years ago, according to statistics from the Federal Bureau of Investigation and the Financial Crimes Enforcement Network of the Treasury Department.
Mortgage fraud often involves elaborate flipping schemes, where criminals falsify statements on mortgage applications that involve multiple properties. The fraud is often a collaboration effort of corrupt appraisers, title companies and straw buyers. The straw buyer lets the house fall into foreclosure, leaving the bank with the loss. Losses involving federally insured banks totaled $813 million in the 2007 fiscal year, more than double the $293 million lost in the 2002 fiscal year.
Per a recent press release, Ohio Attorney General Marc Dann and the Ohio Department of Commerce have sued Randall Mortgage Services Inc. and its owner and president, Robert Shepherd, for allegedly abandoning customers’ loan and personal financial information after the mortgage broker company closed its offices.
Randall Mortgage Services surrendered its mortgage broker certificate of registration on August 29, 2007. The company’s main office was in Dublin, and it had branch offices in Fairlawn and Cincinnati.
“We need to protect our personal information to prevent identity theft,” said Attorney General Marc Dann. “Businesses that collect our personal information are responsible for protecting it just like they would protect their own information. It must be properly maintained, so that no one else will gain access to it. If they don’t, we will hold them accountable.”
Randall Mortgage Services’ landlord informed the State that its tenant left behind personal information of its customers. On October 25, 2007, the Department of Commerce sent a warning letter to Shepherd informing him to take possession and to safeguard the records.
Shepherd did not respond to the letter and has not taken possession of the records.
The suit alleges violations of the Ohio Mortgage Broker Act and the Ohio Consumer Sales Practices Act. The State is seeking a permanent injunction, civil penalties against Randall Mortgage Services Inc. and Robert Shepherd, and a declaratory judgment stating that their acts or practices violate the Consumer Sales Practices Act. The suit also seeks attorney fees and court costs from the defendants.
Randall Mortgage Services initially registered as a mortgage broker in 1993. The company took mortgage loan applications from consumers and obtained their financial information, including current loan account information, wages, credit reports, bank account information and social security numbers.
In September 2003, Ford allowed his electronic signature to be used on a fraudulently inflated appraisal for a loan to purchase a property in the 4000 block of College in Kansas City. In November 2003, Ford and others received more than $199,000 in loan proceeds obtained by means of a fraudulent appraisal of a property on East 58th in Kansas City.
Ford’s sentencing is set for Feb. 25, 2008. He faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on the wire fraud charge and a maximum penalty of five years and a fine up to $250,000 on the conspiracy charge.
Per a recent National Mortgage News article, Terrell Ford of Kansas City has pleaded guilty to one count of wire fraud and one count of conspiracy after creating a scheme to obtain mortgage loans based on inflated property appraisals.
In his plea, Ford admitted the conspirators convinced low-income borrowers to apply for home loans or refinancing by promising them loans regardless of income or credit problems. The conspirators obtained loans by submitting fraudulently inflated real estate appraisals and false financial information to lenders.
“Lenders suffered an actual loss of more than $2.5 million as a result of criminal activities in which Mr. Ford was involved,” said U.S. attorney Eric Melgren in a statement.
Washington Secretary of State Sam Reed is warning business owners about a new scam run by a company called National Business Registration. The company is sending out letters claiming that Under the Patriot Act of 2001, businesses need to register with the National Corporation Registry. The letter requests a fee of nearly $500 and states that the money should be sent within 14 days.
Reed warns that there is no such national corporate registry. He says businesses that receive the final notice should contact the United States Postal Inspections Service at 877-876-2455 to report the fraud or report the crime online at http://postalinspectors.uspis.gov.
Illinois attorney General Lisa Madigan has filed three more lawsuits against mortgage rescue companies for allegedly violating the Illinois Mortgage Rescue Fraud Act and the Consumer Fraud and Deceptive Business Practices Act. Madigan is suing Homeowners Assistance Association (along with affiliated company Foreclosure LMS), Lender’s Foreclosure Relief, Inc., and United Home Servers, LLP because the companies allegedly falsely promised to save homes after they fell back on their mortgage payments, per a release from Madigan’s office.
Madigan’s lawsuit against Homeowner’s Assistance Association alleges that the company illegally charged homeowners upfront fees of $500-$2,000 for mortgage foreclosure rescue services. Its affiliated company, Foreclosure LMS, deceptively claims to be affiliated with the city’s foreclosure prevention program.
The suit against Lender Foreclosure Relief, Inc, alleges the company charged homeowners illegal upfront fees of $1,395 for a “Pre-Mortgage Workout Program” while the third suit, against United Home Savers, LLP, says the company similarly required an illegal upfront fee of $1,200 for services.
All three companies allegedly violated either the Consumer Fraud and Deceptive Business Practices Act or the Illinois Mortgage Rescue Fraud Act, which became law in January 2007 and prohibits mortgage rescue companies from requiring payments from customers prior to completing all the terms of the contract. The law also requires rescue businesses to fully disclose to a homeowner the exact terms and nature of the proposed services and their rights to cancel the contract.
In each case, Madigan is asking the court to order the companies in question to stop all deceptive business practices and pay restitution to defrauded homeowners. Each also seeks a civil penalty of $50,000 and additional penalties of $50,000 for every violation found to have been committed with the intent to defraud.
Honest parents who wanted to buy computers for their kids for Christmas were taken for thousands of dollars in a computer layaway scam run by Financing Alternatives Inc. According to a recent Consumer Affairs article, FAI, based in Chesapeake, Va., advertised nationwide, “Bad credit? No credit? No problem!” Countless thousands fell for the layaway scheme and it’s possible they will never be reimbursed.
The Virginia attorney general has sued the company, but days before FAI’s assets were frozen by a Virginia Circuit Court on Oct. 5, investigators say the company’s founder, George Christian, funneled most of the assets, estimated at over $1.5 million, into his wife’s various accounts and a defunct company he owned called Liberty Financial. He allegedly removed the company’s physical belongings from its office suite – a short walk from the courthouse. Investigators say Christian’s wife, Michele, snagged all the financial records so no one has any idea how much is owed to customers.
Christian has already tried to start another company, presumably with FAI’s assets. It was called Green Frog Funding and it offered an identical computer layaway scheme. But when local media picked up on it, the company took down all the promotional gimmicks on its website, which now says “COMING SOON.”
Federal prosecutors have charged nine people on 64 counts in the largest case of mortgage fraud in Alaska’s history.
Per a recent KTTU news report, the group’s ring leader is said to be 34-year-old broker Lance Lockard. His father-in-law, 64-year-old Gary Paterna, was used as a buyer / investor, as was 33-year-old builder Jonathan Ruf. Real estate agents
Don Murray, 35, and Keith Facer, 41, are also accused in the schemes along with 74-year-old appraiser Charles Carlson and 30-year-old Holli Stroud, a loan closer. Alaska State Mortgage is also charged along with its former loan originator, 31-year-old Cerise Sanders and its current loan officer, 41-year-old Suzan McCready.
Industry experts say those worried about their purchase or sale should carefully review their closing documents to ensure everything is on the up and up and accounted for. Concerned parties can also contact the FBI for peace of mind.