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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Law Firm, Lender & Broker Settle Kickback Allegations
Reiner & Bendett, P.C., a Farmington, Connecticut law firm, Absolute Mortgage Solutions, LLC, an East Hartford, Connecticut lender, and Access America, LCC, DBA Century 21 Access America, a Wethersfield, Connecticut broker, will pay $700,000 in fines, forfeitures and restitution to settle allegations they engaged in illegal kickback and inducement schemes. Of the money, $125,000 will pay restitution to about 500 Absolute consumers who overpaid for certain mortgage-related services as a result of one of the schemes.
In an October 2007 lawsuit filed on behalf of the Department of Consumer Protection (DCP) Commissioner and the Insurance Department, it was alleged that Reiner, which also sells title insurance, used sham service, rental and other agreements to conceal $142,200 in kickbacks and unlawful inducements between 2002 and 2005. In exchange, Absolute and Access allegedly steered title insurance business to the law firm. Connecticut law prohibits title insurance agents from paying for referrals.
“This law firm used service and other sham contracts to camouflage kickbacks and sidetrack state law,” Attorney General Richard Blumenthal said. “Consumers were overcharged because of this underhanded scheme. Reiner and Absolute conspired to conceal illegal payments as fake fees, secretly forcing consumers to cover the cost of kickbacks. The law firm hid illicit payments to Access in phony ‘marketing’ and ‘rental’ agreements. These steering schemes increased consumers’ costs and denied choice, while unjustly enriching the lawbreakers.”
“Each of about 500 consumers will receive $200 early in the New Year. These firms will rightly give back their ill-gotten gains to compensate consumers and help the state fight similar schemes. I will fight to enforce state laws banning kickbacks and other anticompetitive practices that increase costs to consumers,” Blumenthal added.
Insurance Commissioner Thomas R. Sullivan said, “This type of practice is not only harmful, but it puts yet another burden on homebuyers by adding unnecessary expense to real estate transactions involving title insurance.”
DCP Commissioner Jerry Farrell, Jr., said, “Today’s settlement should serve as a very strong message to the real estate community that behavior of this sort is clearly against the law and will be prosecuted. It is of particular concern to me as the licensor of real estate salespeople and brokers to hear that this has occurred, and if we find other examples they will be equally and vigorously investigated.”
Reiner agreed to pay mortgage broker Absolute $200 per customer to perform certain closing services, including ordering a title search, assembling closing documents, assuring insurance was in place and coordinating the closing. Reiner paid Absolute $76,200 in 2004 under the agreement.
Consumers, however, had already paid Absolute for the same and other services. Blumenthal and Sullivan charged that the arrangement was a ruse to conceal illegal payments to Absolute for steering customers to Reiner for their title insurance.
Under the settlement announced today, about 500 Absolute customers are eligible to receive $200, returning unnecessary fees charged them to underwrite the kickback scheme. Consumers will be notified by mail how to apply for the refund.
Reiner used two other bogus agreements to conceal $66,000 in kickbacks to Access between 2002 and 2005. One contract called for Reiner to pay Access for nonexistent “marketing” services. Under a second oral agreement, Reiner paid Access to “rent” space in Access offices for closings and other business.
Of the $700,000, $125,000 will compensate Absolute consumers, $425,000 will be deposited into the state’s General Fund and the remainder used for consumer education by the Attorney General’s Office, DCP and the Insurance Department.
The agreement caps a two-year joint investigation by the Insurance Department and the Attorney General’s Office. The investigation was prompted by unusual market activity reported to the Insurance Department. DCP and the Banking Department also participated.
Situations like these can be avoided if there is a direct and continuous contact between the seller and the buyer, especially if both parties are given enough time to scrutinize details of the estate. If people could only realize the perks of their mobile’s network service, they might be saved from these kinds of fraud. For the buyers, try to ask your network. For the agents, you still have to ask your network
Posted by on 12/11 at 08:44 AM
Good. This helps the parties to transactions that are acting honestly. One sad note for the borrowers that paid too much at closing, AND included those fees in the loan amount: they will be paying finance charges on those fees for the life of the loan. That adds up!
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Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
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Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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