Real Estate Fraud

 

Traditionally, the phrase “stealing a home”, referred to getting a good deal on the purchase of a home.  But recently that term has taken on a more literal meaning as an increasing amount of scam artists have been using homes as vehicles to commit various frauds, including selling homes “stolen” from the rightful owners.  Few industries have created as much wealth in the past few years as the real estate business.  Unfortunately, this surge has led unscrupulous individuals to try to get in on the action.  These people are just looking for opportunities to take advantage of unknowing victims.

 

As real estate fraud becomes more prevalent in our county, the homeowners must learn to protect themselves.  Scam artists often exploit cracks in the system to swindle overeager, but legitimate homebuyers, mortgage brokers and commercial lenders.  

 

Surprisingly, crooks are able to steal money simply by forging documentation and  falsely making it appear as though one conveyed property to another, and then filing the phony deeds with the City Register.  Thus it would appear to anyone reviewing, and relying upon official records, as though the property was transferred to the crook or to an accomplice.  So, one way to help prevent mortgage fraud would be through legislation requiring the City Registers to notify the owners of property if ever someone attempts to record a document which on its face would affect ownership rights in real property.

 

George Marks recently used forged documentation to steal two houses, and then used his claimed ownership in one of the houses to commit further crimes.

           

In 2006, Marks had recorded with the City Register two forged deeds, ostensibly indicating that in 2001 the legitimate owner of two buildings in East Flatbush conveyed these properties to Marks.  The legitimate owner of the building had died in 2002. 

 

Documentation supposedly signed in 2001 in connection with the purported transfer of the properties was forged.  In fact some of these documents were created from boilerplate templates which had not even been in existence at the time when the seller supposedly signed them.  Blank deeds and other documents generally used to transfer property are available in many stationary stores, and information on who owns property is available on land records that can be accessed on the internet.

 

Because George Marks filed the bogus deeds with the City Register it would seem to one doing a title search that Marks owned the properties. 

 

Marks later used one of the houses to steal from an unsuspecting buyer, to whom he agreed to “sell” the house. This victim paid ten thousand dollars to Marks.  But the deal never was consummated – and for that matter never could be consummated because Marks did not own the house legitimately.  Marks never returned the ten thousand dollars.

 

The fraud did not stop there.  Marks and a business associate of his also stole more than four hundred thousand dollars from a commercial lender.  They filed documentation with the lender making it appear as though Marks sold the building - which of course he did not own in the first place and thus could not sell - to the associate.  The lender paid Marks four hundred thousand dollars believing that he was entitled to the money.  Marks pocketed the money.  The commercial institution would not be able to exercise their remedy to foreclose on the property since the sale to the associate was invalid.

 

An investigation by the Kings County District Attorney’s Office led to the indictment of Marks for various crimes including Grand Larceny in the First Degree.

 

Another indictment resulting from an investigation by the Kings County District Attorney’s office is pending against Mavis Samuel and Carlyle Ebanks.  In this case a single building was used in two separate transactions as a vehicle by which Samuels and Ebanks stole money from two financial institutions. 

 

Samuels and Ebanks had convinced the victimized institutions that two unsuspecting acquaintances of theirs had applied for loans to be secured against the equity in the building.  Relying on false documentation which Samuels and Ebanks submitted, the commercial institutions lent money to the acquaintances.  In one instance, the income of the acquaintance was inflated on the loan application making it appear as though he earned more money than what he actually earned, and thus ensuring that the lender would approve the loan.

 

The acquaintances however had neither applied for the mortgages nor allowed the scammers to do so using their names.  The commercial lenders nevertheless, under these false pretenses, paid moneys to Samuels and Ebanks, neither of whom had any intention to repay the lenders.  Not surprisingly, Samuels and Ebanks did not repay the money.  And, the building, ultimately destroyed in a fire, was worthless, thus leaving the lender with virtually nothing.

 

A grand jury has indicted Samuels and Ebanks for Grand Larceny in the Second Degree,  Falsifying Business Records in the First Degree and other crimes.

 

Other common scams investigated by the District Attorney’s office include foreclosure rescue scams, and predatory lending.

 

Foreclosure rescue scams occur when a homeowners is in danger of foreclosure.  The scammer tricks the homeowner into transferring title of their homes to the crook.  In theory, title is supposed to be returned to the homeowners after certain conditions are met.  These conditions include making payments in amounts greater than what the homeowner could afford.  Thus the conditions often go unmet, and so title to the homes never is returned to the victims.

 

Predatory lending occurs when a victim purchases a home priced beyond the means of the buyer.  Often times unscrupulous brokers – who are more concerned with earning their commission than assisting a buyer in acquiring an affordable home - are complicit in predatory lending scams.  They convince the buyers to inflate their income and financial worth on applications for mortgages.  And, sometime, the brokers without the consent of the buyers, insert bogus numbers onto the application.  The end result is that commercial institutions lend the buyers more money than what the buyers can afford to repay under the terms of the mortgage.  So the house is destined for foreclosure, and buyers ultimately loose any equity in the home, including the down payment. 

 

Here are some warning signs of Real Estate Fraud:

 

Directions by sellers, brokers, or someone else, to inflate the amount of money a borrower earns or has in savings.

 

Routine bills (water, electricity, etc.) stop arriving at the home.

 

Blank spaces on document to be submitted as part of the loan application process.

 

A suggestion that someone else use one’s good credit to get the other person out of financial distress.

 

Here are some tips on how to prevent real estate fraud:

 

Before engaging in any transaction involving real estate (including purchasing or selling a home, or borrowing money against the equity in a home) seek legal representation, apart from any lawyers provided by, or representing, the other parties involved in the deal.

 

Before signing a mortgage, be sure to calculate the monthly payments and ensure that they fit into the household budget.  Consider that variable interest rates might suddenly and drastically increase.

 

To determine whether a scammer is using one’s personal identification information to obtain credit or mortgages, request credit reports from the three major credit agencies, by contacting them at the following: Experian (www.experiangroup.com); Equifax (www.equifax.com); Trans Union (www.transunion.com).  Everyone is entitled to receive one free credit report annually from every credit agency. 

 

Be sure to thoroughly understand all of the terms contained in any document before signing, including documents provided by general contractors. 

 

Prior to hiring a general contractor, the contractor’s history of complaints with the Better Business Bureau and references provided by the contractor.

 

Become familiar with what legitimate deeds looks like.

 

Be sure to check routinely on unoccupied property to ensure that no unauthorized people have taken control of it.

 

Bureau Chief Laura Neubauer and Deputy Bureau Chief Joseph A. DiBenedetto, both of whom are assigned to the Rackets Division prosecute many of the mortgage fraud cases in the District Attorney’s Office.

 

LAURA NEUBAUER

 

 

Laura Neubauer is a Bureau Chief in the Rackets Division.  She has a Bachelors Degree from the University of Illinois and a Law Degree from the University of Illinois Law School.  Soon after receiving her law degree, she began working at the District Attorney’s Office.  As an Assistant District Attorney from 1989 to 2001, she prosecuted general felony and domestic violence cases.  She was promoted to Senior Trial Attorney in 1994.  In this role, she conducted investigations, presented cases to grand juries, negotiated plea agreements and tried numerous felony cases.  She was eventually promoted to Bureau Chief where she managed and supervised prosecutions, trained Assistant District Attorneys, interacted with representatives from the NYPD and regional leaders to enhance community prosecution, and prosecuted many of her own complex cases.

 

Ms. Neubauer left the DA’s Office in 2001 to work for the U.S. Department of Justice, Office of Overseas Prosecutorial Development, Assistance and Training in Sarajevo, Bosnia and Herzegovina.  She worked on legislative reform and implementation, conflict/post-conflict issues including amnesty and pardon during peace negotiations, legislative reform projects, implementation of new laws, task force development and prosecution guidance in the areas of terrorism and human trafficking.  In addition, Ms. Neubauer held the title of Head of Rule of Law Special Projects for the Office of the High Representative (OHR) where she worked on specific areas of law reform.

 

Ms. Neubauer returned to the DA’s Office in 2006 in her current role as Bureau Chief in the Rackets Division where she investigates, and supervises others who investigate numerous matters including enterprise corruption, fraud, organized crime and official corruption.

 

JOSEPH DIBENEDETTO

 

 

Joseph A. DiBenedetto is Deputy Bureau Chief in the Rackets Division of the District Attorney’s Office.  He has a Bachelors Degree from Manhattan College and a Law Degree from St. Johns University School of Law.  Mr. DiBenedetto began his tenure at the District Attorney’s Office in 1996.  For three years, he investigated and prosecuted cases in various departments within the DA’s Office including Criminal Court, Domestic Violence, Sex Crimes and Narcotics Grand Jury. 

 

He was assigned to the Rackets Division as an Assistant District Attorney in 1999.  He was later promoted to Senior Assistant District Attorney and then Counsel to the Rackets Division.  He was promoted again to his current position as Deputy Bureau Chief in 2005.  In this role, Mr. DiBenedetto handles many types of cases including political corruption and real estate fraud.  He has been the lead prosecutor on many high profile cases including the recent indictment of a defendant who was responsible for a building collapse in East New York.

 

 

The news articles listed below, courtesy of the National District Attorney’s Association (ndaa.org), may be of interest to you or members of your community.

 

Spartanburg Herald-Journal

New Task Force Aims To Reduce Scams On State’s Elderly

 

Advocates for the elderly hope a task force announced Thursday will stop scams that rob the state’s seniors of their hard-earned savings. The state Office on Aging will direct scam victims who call an 800 number to agencies that can help them. The partnership includes prosecutors, the AARP, banks, law enforcement, and the state Revenue and Consumer Affairs departments. ”We’re serious about protecting our seniors, and we’ll put you in jail,” said Lt. Gov. Andre Bauer, who announced the task force. He noted that an alert bank employee prevented an 80-year-old woman from losing $8,000 earlier this year to a scam claiming she’d won a Jamaican lottery.

 

Elderly advocates also say seniors are often too trusting, may suffer from some level of dementia or don’t want to be rude because it goes against their Southern roots. More than 550,000 - or 13 percent - of the state’s residents are 65 or older, according to 2006 Census estimates. With that number expected to more than double by 2025, attempted scams are sure to increase too, Bauer said. Last year, 6,000 people complained of fraud to the state Department of Consumer Affairs. Elderly advocates believe the number scammed is actually much higher, since seniors often are either too embarrassed to call or don’t know they can.

http://www.goupstate.com/article/20080508/APN/805080846

 

The Washington Post
Investigators Look for Favoritism in Justice Department Grants

 

Lawmakers and Justice Department auditors are examining millions of dollars in crime-fighting grants awarded by the agency last year in an effort to determine whether personal ties may have influenced the process, according to sources familiar with the inquiries.

The House Oversight and Government Reform Committee has interviewed current and former employees in the Justice Department's grant-making units about whether officials disregarded independent reviews and steered awards to favored groups, the sources said.

The Justice Department's inspector general, meanwhile, is looking into allegations of an improper hire, according to people who have been contacted because of the probe.

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/18/AR2008061803072.html