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Archive for December, 2013

California Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Real Estate Foreclosure Auctions

December 31, 2013 Leave a comment

Happy New Years Eve!

 

 

The Department of Justice announced today that a Real Estate Investor pleaded guilty to 11 counts of fraud related to bid rigging at public real estate foreclosure auctions.

You can see the press release here

 

The Crime

 

According to the press release,

A private investor, Joachim, conspired with others not to bid against one another at foreclose auctions and to instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Joaquin County.

Joachim was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected San Joaquin County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy

 

 

The Effect

 

According to the DOJ: the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices.

The result is that funds that should have gone to pay off  lien holders, and homeowners is diverted to the private investors involved in the bid rigging.

 

The Penalty

 

Joachim pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine.

Joachim also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.

 

 

The Task Force

 

The investigation was conducted by the President’s Financial Fraud Enforcement Task Force.  According to the DOJ, “The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.”

 

Question:

What type of bid rigging (if any) do you believe is going on in your state? In Michigan, for instance, where there has been record numbers of foreclosed properties since 2008, there has been a market for flipping and rehabbing residential real estate. This has also created opportunities for scam artists, including loan modification companies, and other individuals looking to purchase owners remainder interests in their home with the promise of allowing them to “buy back” their home after passing them the deed. These are just a few examples.

 

Feel free to email me with any questions or comments:

 

Jeshua@dwlawpc.com

http://www.dwlawpc.com

 

 

 

 

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$3 Million Penalty Assessed Against American Express Bank by OCC For Unfair Billing and Deceptive Marketing Practices

December 30, 2013 Leave a comment

The latest  news from the Office of Comptroller of Currency (OCC)…

If you aren’t familiar with the OCC, check out the website

Pursuant to the OCC’s mission statement on its website, “The OCC’s primary mission is to charter, regulate, and supervise all national banks and federal savings associations.” [The OCC’s] goal in supervising banks and federal savings associations is to ensure that they operate in a safe and sound manner and in compliance with laws requiring fair treatment of their customers and fair access to credit and financial products.

 

On December 19, 2013, the OCC penalized American Express Bank for Unfair Billing and Deceptive Marketing Practices, and further ordered restitution to bank customers.

 

According to the Stipulation and Consent entered into by American Express Bank:

From October 2009 to July 2012, the Bank, through its vendors, billed customers of identity protection products who were not receiving public records monitoring, credit monitoring, and/or credit report retrieval services for the full fee of the product, even though those customers were not receiving all of the benefits of the product.”

By reason of the foregoing billing practices for its identity protection products as described in Paragraphs (1) to (3) of this Article, the Bank engaged in unfair practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a)(1).

As a result, American Express Bank agreed to a civil penalty in the amount of $3 million.

According to the OCC, “The $3 million civil money penalty reflects a number of factors, including the scope and duration of the violations and financial harm to consumers from the unfair and deceptive practices.  The penalty will be paid to the U.S. Treasury.”

 

The Consent Order contains a detailed action plan for the bank to comply with, including how it plans on providing restitution to bank customers.

Quite a lengthy process.

 

 

Questions? Comments? I’d like to hear.

 

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

 

Categories: Uncategorized

Lesson from Court: The Sobering Reality of Injustice.

December 23, 2013 1 comment

I was in Circuit Court this morning in Ottawa County, Michigan. I was there to make legal arguments in a real estate lawsuit.

 

During the hearing, I found myself engrossed in making notes, mentally responding to the legal arguments that were being made by opposing counsel, and at the end of his oral argument the Judge asked us to recess for a few minutes to take a “plea on the record” related to a criminal case.

 

Coming up to the podium standing next to where I was seated in the courtroom was a man who was entering a plea to a crime that he was charged with.

(For those of you who aren’t familiar with Michigan Courts, Circuit Courts are the courts where all felony – serious crimes –  are tried. So, initially, I know the guy must have been charged with something pretty serious)
The prosecutor read the charge that the man was pleading to – Felony Assault/Child Endangerment.

 

How awful.

 

The man then explains the facts of what he did – it involved shaking his 3 month old child on several occasions.

 

Heart-breaking.

 

The man will spend significant time in prison for this offense.

 

After the plea was entered, the Judge looked at me and asked me if I was ready to proceed with my oral argument about my real estate lawsuit.

 

The Judge gave me this look, that I read as: “I don’t know how anybody could be ready after listening to such an awful story, but please go ahead counsel!”

 

In all honesty, I was overwhelmed with concern for that 3 month old boy and his family. My prayers go out to them in this Christmas season.

 

Regardless, I proceeded with my oral argument and advocated for justice for my client in his real estate matter.

 

However, it only took me a moment to listen to the plea that was being entered from the man standing right next to me in the courtroom to alter my perspective.

 

It reminded me that there is great injustice going on in this world.

 

There are families and individuals that are truly hurting this holiday season.

 

There people who have lost loved ones, who are victims of injustice.

 

It reminds me that often I need to look outside of what is affecting my normal work day, and look around at this hurting world that needs help.

It is then that I thank God for all the great ministries in West Michigan and across the world that support people in need, like Mel Trotter Ministries, Kalamazoo Gospel Mission, Volunteers in Service, Westwood Christian Services, Goodwill Industries of Greater Grand Rapids, World Vision, Compassion International, and many, many more.

 

I hope you will join me in this Christmas season and send out gifts and prayers for all those victims of injustice in our world.

God bless you all.

 

 

Questions? Comments?

email me: Jeshua@dwlawpc.com

http://www.dwlawpc.com

 

 

 

 

 

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Estate planning lawyer gets 6 years in $46 million scheme preying on terminally ill???

December 19, 2013 Leave a comment

So I received a nice check in the mail a few weeks back addressed to my law firm for approximately $1 Million.

 

It was related to a “request” from a foreign company (very far away, too far away to meet in person) to retain me as counsel in a business transaction in Michigan.

 

They wanted me to deposit the approx. $1 million check into our firm trust account, then disburse the check to the other party (less my legal fees, of course)

My first thought when the check came in…

Fake Check for big bucks.

Fake Check for big bucks.

do they really think I am that stupid?

 

I know better.

 

Then it got me thinking, if I know better, then why do these scam artists really think I am going to fall for their  ploys?

 

Honestly, I receive countless of similar emails, fortunately, most of these emails get sent to my spam folder.

 

The answer becomes obvious when I peruse the headlines of the American Bar Associations Latest Stories:

 

“Estate planning lawyer gets 6 years in $46 million scheme preying on terminally ill”

How awful is this headline? It breaks my heart just reading it.

http://www.abajournal.com/news/article/lawyer_gets_six_years_in_46_million_scheme_on_the_terminally_ill/?utm_source=maestro&utm_medium=email&utm_campaign=daily_email

 

“Unwitting lawyer is suspended for arranging client loans to secure Nigerian inheritance”

Well, there is, literally, my answer to my own question.

http://www.abajournal.com/news/article/unwitting_lawyer_is_suspended_for_arranging_client_payments_for_nigerian

 

What is going on with our world?

As hard as it is for me to believe, these are real stories.

 

To answer my own question, the reason scam artists direct schemes at lawyers is because some lawyers fall for the schemes!

These con artists are relying on dollar signs trumping common sense and sound judgment in lawyers.

 

Don’t hear me wrong…

The vast majority of the lawyers I work with and know are men and women of integrity. They, like me, strive to make good choices every day and seek the best interest  of their clients and their community.

 

However…

It only takes a few individuals to headline the ABA Journal to tarnish our profession.

 

I take these headlines, and the fact that I continually get spammed, as a further encouragement to continue to run this race and live my life (personally and professionally) with integrity.

 

Questions? Comments? 

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

 

 

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Under Penalty of Perjury: Former Real Estate Chief Pleads Guilty to Perjury

December 16, 2013 Leave a comment

These past few weeks I have been inundated with depositions in several real estate lawsuits.

 

Whenever I prepare my clients for depositions I always emphasize the overarching rule when being deposed:

 

tell the truth.

 

There can be serious consequences for giving false statements under oath.

 

Under Michigan Law, MCL § 750.423 perjury is a felony.

“(1) Any person…of whom an oath is required by law, who willfully swears falsely in regard to any matter or thing respecting which the oath is authorized or required is guilty of perjury, a felony punishable by imprisonment for not more than 15 years.”

 

A felony is a serious deal!

 

Apparently A former chief of the real estate investment and capitalization practice at Troutman Sanders took lightly to the oath to tell the truth he gave while testifying at a deposition.

The ABA Journal reports the story here:

http://www.abajournal.com/news/article/formger_practice_group_chair_at_well-known_firm_takes_plea_in_perjury_case/?utm_source=maestro&utm_medium=email&utm_campaign=daily_email

 

The testimony concerned a complex real estate litigation involving a real estate mogul Ruby Schron, and a $1.3 billion leverage buyout in 2004 of nursing home operator Mariner Health Services, the article explains.

In a statement made before a court on Wednesday, the former chief of real estate stated : “On January 25, 2011 I testified at a deposition in the civil matters at a law office in Manhattan. Prior to giving my testimony, I affirmed before a notary public that I would testify truthfully. During the deposition, however, I intentionally made a false statement that I did not believe to be true” . “I testified at that deposition that, in the summer of 2009, I told [an associate] that the $100 million loan had not been funded, a relevant fact, when in truth I did not have that conversation.

 

The District Attorney’s Office for Manhattan provided more details: http://www.manhattanda.org/press-release/da-vance-former-attorney-and-law-firm-partner-convicted-perjury-false-testimony-during

 

This former chief of real estate practice (and also a former attorney) received a misdemeanor conviction, fine, and 150 hours of community service.

 

 

 

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

 

 

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Michigan Real Estate Legislative Update: Is There a “Squatter” Epidemic?

December 9, 2013 Leave a comment

Tomorrow the Michigan Senate Judiciary Committee will meet to consider recommendations concerning certain bills. See the full committee meeting agenda at the link below:

http://www.legislature.mi.gov/(S(01p0h355lm5hedyrzapzi255))/mileg.aspx?page=committeemeeting&objectname=2013-SCS-0be3e630-b23f-4577-a74b-89bb5231896e&chamber=Senate

 

Among those bills discussed are three proposed bills that would modify “squatters rights” and make certain actions of unlawful tenants a crime.
HB5069 Provide exception to liability for damages if landlord enters premises if occupant is squatting;
HB5070 Provide for definition of squatter, and provide penalties for squatting on certain premises;
HB5071 Enact sentencing guidelines for crime of squatting;

 

What I found most interesting was the bill analysis for HB 5069, see below:

http://www.legislature.mi.gov/documents/2013-2014/billanalysis/House/pdf/2013-HLA-5069-56CE1BB5.pdf

 

Apparently there is an epidemic of “professional squatters” who abuse the system.

 

I had no idea that this was a problem – although I do see where the system lends itself to abuse:

 

  • It is a problem if landlords/owners have to evict trespassers from their own home;
  • It is a problem if trespassers move from REO to REO forcing financial institutions to pay them thousands to vacate a house that they are illegally staying in;
  • It is a problem if trespassers can simply fabricate a lease, and claim they have paid months in advance, and effectively stay rent free in property until the owners can convince a district court judge of the truth.

 

Again, all of these scenarios can be abused, but I would like to know – how prevalent is this problem?

 

 

Thoughts? Questions?

 

Email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

 

 

 

Categories: Uncategorized

Michigan Home Healthcare Agency Owner Sentenced to Prison for Medicare Fraud

December 5, 2013 Leave a comment

I was in court this past week for an unfortunate scenario: family members were fighting over guardianship for their elderly mother.

The primary fight was over where mother would receive proper health care- at home through a home care agency, or through some  nursing facility.

As a side note, this case was a classic example of why estate planning is crucial – and having the correct documents in place (financial and medical powers of attorney) that give power to loved ones to act in your best interest.

 

In the news,

 

The U.S Dept of Justice reported today the 65 month prison sentence imposed on an owner of a home healthcare agency who perpetrated a medicaid fraud scheme over a 2 year span. http://www.justice.gov/opa/pr/2013/November/13-crm-1191.html

 

The Owner of a Michigan home health care company called “Acure” was found guilty of paying doctors to refer non-homebound patients for physical therapy treatment that was medically unnecessary.

 

According to the press release, evidence presented at trial established that the owner, Javidan paid physical therapists and physical therapy assistants employed by Acure to create false and fraudulent physical therapy files using the blank, pre-signed forms to make it appear as if physical therapy services were actually rendered, when in fact, the services had not been rendered.

 

Javidan then directed the submission of Acure’s falsified billing to Medicare.  Acure was paid more than $2.2 million from Medicare between December 2008 and November 2010.

 

Interestingly, a government task force was created to combat this type of fraud. The Task Force is known as: Health Care Fraud Prevention and Enforcement Action Team (HEAT)

To learn more about HEAT, go to www.stopmedicarefraud.gov.

The DOJ reports that since its inception in March 2007, the Medicare Fraud Strike Force,has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.

…Yikes! There is a lot of financial abuse going on!

In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.\

 

I am thankful for the vigilance of our government in combating this abuse.

 

It also reminds me that decisions over where elderly loved ones receive home health care are very important!

 

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

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