Archives For Foreclosure Rescue

Bradford Barneys, 51, Odenton, Maryland, was sentenced by U.S. District Judge Michael P. Shea in Hartford to 30 months of imprisonment, followed by three years of supervised release, for conspiring with Timothy W. Burke in a long-running fraud scheme that targeted distressed homeowners throughout Connecticut. Barneys was an attorney licensed to practice in Connecticut and has an office in Bridgeport.

According to court documents and statements made in court, between approximately 2010 and November 2015, Timothy W. Burke, formerly of Easton, engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development (HUD) by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents that Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership. Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that Burke owned the property.

Burke or one of his agents then collected rent from tenants, and Burke used the funds for his own benefit. He also failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowner’s mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.

Burke undertook extensive efforts to disguise his true identity, and hide his criminal past, from his victims through the use of multiple aliases and business entities, and to conceal the sources of and expenditures from his criminal proceeds.

Between approximately 2011 to at least 2014, Barneys participated in dozens of meetings with Burke and with homeowners at Barneys’ law offices in Bridgeport. At the meetings, Burke represented to homeowners that he would purchase their properties and presented to the homeowners quitclaim deeds, management agreements, indemnification agreements, and third party authorizations.

Barneys was paid more than $72,000 in fees and other monies for his participation in the fraud.

At some point after BARNEYS began representing Burke in these meetings with homeowners, BARNEYS knew that Burke had no intention of buying the properties and paying the outstanding mortgages on the properties. Nevertheless, BARNEYS continued to participate in these meetings and represented that these transactions were legitimate. When questioned by homeowners about the status of their sales, BARNEYS would assure them that their sales to Burke or one of his companies were progressing as Burke promised. BARNEYS also knew that, once Burke obtained the properties from the homeowners, he would rent them out to tenants.

BARNEYS also represented Burke and his companies in eviction proceedings against tenants.

The investigation further revealed that BARNEYS engaged in separate fraud scheme similar to the scheme that Burke engineered. BARNEYS assisted two Maryland residents in purchasing a commercial property located on Boston Avenue in Bridgeport. BARNEYS then acted as a purported landlord for the property, executed long-term lease agreements with at least two tenants, and collected tens of thousands of dollars of rent without the actual owners’ knowledge or authorization and kept the funds for his own use.

On February 21, 2017, BARNEYS pleaded guilty to one count of conspiracy to commit mail and wire a fraud.

BARNEYS’ law license was temporarily suspended by state authorities after he pleaded guilty, with additional proceedings scheduled to determine whether further discipline is warranted. Judge Shea ordered BARNEYS not to apply for reinstatement of his law license, and not to engage in any business related to real estate, while he is on supervised release.

On January 24, 2017, Burke pleaded guilty to one count of mail fraud and one count of tax evasion. On April 28, 2017, he was sentenced to 108 months of imprisonment.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced the sentence. The matter was investigated by the U.S. Department of Housing and Urban Development – Office of Inspector General, U.S. Postal Inspection Service, and Internal Revenue Service – Criminal Investigation Division, with the critical assistance of the Middletown, Plainville, Easton and Coventry Police Departments, the Connecticut State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The case was prosecuted by Assistant U.S. Attorneys David T. Huang and Sarah P. Karwan.

Christina Renee Caveny, 37, Dallas, Texas pleaded guilty to one count of conspiracy to commit mail fraud.  Bruce Kevin Hawkins, 52, Desoto, Texas, pleaded guilty to one count of mail fraud.

Caveny faces a maximum statutory penalty of five years in federal prison and a $250,000 fine while Hawkins faces a maximum statutory penalty of twenty years in federal prison and a $250,000 fine. Restitution could also be ordered. Caveny will remain on bond pending sentencing, which is set for September 18, 2017.  Hawkins has been in custody since the time of his arrest in January 2017. Sentencing has not yet been scheduled.

A federal grand jury in Dallas returned an indictment in December 2016 charging Caveny, Hawkins, and two others with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013. Mark Demetri Stein, 36, of Carrollton, Texas, and Richard Bruce Stevens, 51, of San Antonio, Texas, are scheduled to begin trial on August 28, 2017.

According to documents filed in the case, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, as foreclosure rescue companies. The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive a new home loan with a reduced interest payment and reduced monthly payment. Hawkins and other conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage. They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.

Furthermore, the conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.

As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders. As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”

Further, according to plea documents, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property. The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners. In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct. Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.

The defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.

This case is one of several felony prosecutions of bankruptcy-related crimes prosecuted as a result of the Bankruptcy Fraud Initiative in the Northern District of Texas. Since May 2013, a total of 26 defendants have been charged as part of that initiative. To date, 20 defendants have been convicted, one resulted in a mistrial, and five are pending trial.

U.S. Attorney John Parker of the Northern District of Texas announced the pleas..The Dallas FBI investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

Drew Alia, 40, Philadelphia, Pennsylvania, attorney, was sentenced to a 12 month and 1 day term of imprisonment for willfully failing to file federal income tax returns for tax years 2010 through 2013 . Alia operated a home mortgage rescue service that was designed to assist home owners who were facing foreclosure.

During the sentencing hearing before United States District Court Judge Paul Diamond, the Court noted that Alia had received approximately $1.6 million in gross income. Alia was charged, by Information, with four counts of failing to file returns resulting in a tax loss of $127,037. In addition to a term of imprisonment, Judge Diamond also ordered Alia to pay restitution to the Internal Revenue Service for the tax loss he caused after he is released from prison.

The sentenced was announced Acting United States Attorney Louis D. Lappen.  The case was investigated by Internal Revenue Service’s Criminal Investigation Division and was prosecuted by Assistant United States Attorney Floyd J. Miller.

Timothy W. Burke, also known as “Bill Burke,” “William Burke,” “Kerry Saunders,” “Pat Riley,” “Jim Caldwell,” “Jim Saunders,” “Tom Morrisey,” “Jimmy,” “Phil Burke,” “Phil,” “Burt,” “James Burke,” and “M. Soler,” 65, formerly of Easton, Connecticut, was sentencedby U.S. District Judge Michael P. Shea in Hartford to 108 months of imprisonment, followed by three years of supervised release, for defrauding distressed homeowners, and tax evasion.

According to court documents and statements made in court, between approximately 2010 and November 2015, Burke engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development (HUD) by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third party authorization letters, which Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership. Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that Burke owned the property.

Burke or one of his agents then collected rent from tenants, in person, and Burke used the funds for his own benefit. Burke failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowner’s mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.

Burke undertook extensive efforts to disguise his true identity, and hide his criminal past, from his victims through the use of multiple aliases and business entities, and to conceal the sources of and expenditures from his criminal proceeds. Burke has been associated with multiple entities, including Quality Asset Management Services, LLC; Birmingham Investments, LLC; the Birmingham Group of Companies; Saunders Associates; New Haven Investments; Realty Partners Group; Preston Associates II; Landlord Maintenance Services, LLC; Turnkey Construction Services LLC; The Complete Handyman, LLC; and Woodbridge Associates.

Dozens of distressed homeowners, property renters and mortgage lenders were victimized during this scheme. Judge Shea will determine the amount that Burke will be ordered to pay in restitution after further court proceedings.

In addition, between 1994 and 2012, Burke evaded paying approximately $403,726 in federal taxes. He now owes the Internal Revenue Service more than $1 million in back taxes, interest and penalties.

Burke has been detained since his arrest on November 19, 2015. On January 24, 2017, he pleaded guilty to one count of mail fraud and one count of tax evasion.

In 2002, Burke was indicted by a federal grand jury in New Jersey on charges of conspiracy, mail fraud, and equity skimming. Burke subsequently pleaded guilty to conspiracy to commit both equity skimming and mail fraud, and he was sentenced to 60 months in prison, followed by three years of supervised release. Burke was released from federal custody in approximately August 2007 and began his federal supervised release at that time. One of the special conditions of Burke’s supervised release was that he refrain from employment in the real estate business or mortgage industry. Based on his motion for early termination of his supervised release, the New Jersey federal court terminated his supervised release approximately one year early in August 2009.

Bradford Barneys, a Bridgeport-based attorney who assisted Burke in this scheme, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud. In pleading guilty, Barneys admitted that participated in numerous meetings with Burke and homeowners during which Burke represented to homeowners that he would purchase their properties. Barneys represented that these were legitimate transactions ever though he knew that Burke had no intention of buying the properties and paying the outstanding mortgages on the properties, and that Burke was renting the properties to tenants. Barneys also represented Burke and his companies in eviction proceedings against tenants.

Barneys awaits sentencing.

Deirdre M. Daly, United States Attorney for the District of Connecticut, announced the sentence. This matter has been investigated by Internal Revenue Service – Criminal Investigation Division, the U.S. Department of Housing and Urban Development – Office of Inspector General, and U.S. Postal Inspection Service, with the critical assistance of the Middletown, Plainville, Easton and Coventry Police Departments, the Connecticut State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case is being prosecuted by Assistant U.S. Attorneys David T. Huang and Sarah P. Karwan.

Timothy W. Burke, also known as “Bill Burke,” “William Burke,” “Kerry Saunders,” “Pat Riley,” “Jim Caldwell,” “Jim Saunders,” “Tom Morrisey,” “Jimmy,” “Phil Burke,” “Phil,” “Burt,” “James Burke,” and “M. Soler,” 65, formerly of Easton, Connecticut, plead guilty before U.S. District Judge Michael P. Shea in Hartford, Connecticut, to fraud and tax evasion offenses stemming from a long-running fraud scheme that targeted distressed homeowners.

According to court documents and statements made in court, between approximately 2010 and November 2015, Burke engaged in a scheme to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development (HUD) by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third party authorization letters, which Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership. Burke also told homeowners that the process of negotiating with the lenders can take time and that, in the meantime, to ignore any notices regarding foreclosure. After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that Burke owned the property.

Burke or one of his agents then collected rent from tenants, in person, and Burke used the funds for his own benefit. Burke failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowner’s mortgages and property taxes, and he failed to pay any rental income he was collecting to the homeowners. Many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.

Burke undertook extensive efforts to disguise his true identity, and hide his criminal past, from his victims through the use of multiple aliases and business entities, and to conceal the sources of and expenditures from his criminal proceeds. Burke has been associated with multiple entities, including Quality Asset Management Services, LLC; Birmingham Investments, LLC; the Birmingham Group of Companies; Saunders Associates; New Haven Investments; Realty Partners Group; Preston Associates II; Landlord Maintenance Services, LLC; Turnkey Construction Services LLC; The Complete Handyman, LLC; and Woodbridge Associates.

In addition, between 1994 and 2012, Burke evaded paying approximately $403,726 in federal taxes.

In 2002, Burke was indicted by a federal grand jury in New Jersey on charges of conspiracy, mail fraud, and equity skimming. Burke subsequently pleaded guilty to conspiracy to commit both equity skimming and mail fraud, and he was sentenced to 60 months in prison, followed by three years of supervised release. Burke was released from federal custody in approximately August 2007 and began his federal supervised release at that time. One of the special conditions of Burke’s supervised release was that he refrain from employment in the real estate business or mortgage industry. Based on his motion for early termination of his supervised release, the New Jersey federal court terminated his supervised release approximately one year early in August 2009.

Burke pleaded guilty to one count of mail fraud, which carries a maximum term of imprisonment of 20 years, and one count of tax evasion, which carries a maximum term of imprisonment of five years. Judge Shea scheduled sentencing for April 18, 2017.

Burke has been detained since his arrest on November 19, 2015.

The guilty plea was announced by Deirdre M. Daly, United States Attorney for the District of Connecticut. The matter is being investigated by Internal Revenue Service – Criminal Investigation Division, the U.S. Department of Housing and Urban Development – Office of Inspector General, and U.S. Postal Inspection Service, with the critical assistance of the Middletown, Plainville, Easton and Coventry Police Departments, the Connecticut State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The case is being prosecuted by Assistant U.S. Attorneys David T. Huang and Sarah P. Karwan.

Domonic McCarns, 41, Irvine, California, was sentenced to 14 years in prison by U.S. District Judge Kimberly J. Mueller for conspiracy to commit mail fraud for his participation in a nationwide foreclosure-rescue scam, Acting U.S. Attorney Phillip A. Talbert announced.

McCarns is the final defendant to be sentenced for a pair of schemes that lured homeowners with the promise to help them avoid foreclosure and repair their credit. Two indictments were brought in 2008. Four defendants were convicted after two jury trials, 13 defendants pleaded guilty, and now, all 17 defendants have been sentenced. On September 9, 2013, Charles Head was sentenced to 35 years in prison, and on October 29, 2014, his brother and fellow leader in the scheme Jeremy Michael Head was sentenced to 10 years in prison.

According to court documents, the defendants solicited homeowners facing foreclosure, and through misrepresentations, fraud, and forgery, substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants, or were solicited on the internet. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

Initially, the scam focused on distressed homeowners in California before expanding throughout the United States. In the course of the schemes, between January 2004 and June 2006, the defendants obtained over $90 million in fraudulent loans, caused estimated losses of over $50 million, and stole title to over 300 homes.

On December 2, 2013, McCarns was convicted after a five-week trial along with Charles Head, 36, Pittsburgh, Pennsylvania, (formerly of Los Angeles); and Benjamin Budoff, 49, Colorado Springs, Colorado. Head had been previously convicted in a trial in a nearly four-week trial in May 2013 with his brother Jeremy Michael Head, 34, Huntington Beach, California.

The case was the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris prosecuted the case.

Fourteen other defendants have been sentenced:

Elham Assadi, 39, Irvine, California, sentenced to 5 years’ probation with 6 months of home detention;

Leonard Bernot, 50, Laguna Hills, California, sentenced to 18 months in prison;

Akemi Bottari, 36, Los Angeles, California, sentenced to 3 years’ probation with 6 months of home detention;

Keith Brotemarkle, 51, Johnstown, Pennsylvania, sentenced to 5 years, 10 months in prison;

Benjamin Budoff, 49, Colorado Springs, Colorado. sentenced to 4 years in prison;

Joshua Coffman, 37, North Hollywood, California, sentenced to 20 months in prison;

John Corcoran, 61, Anaheim, California, sentenced to 4.5 years in prison;

Sarah Mattson, 33, Phoenix, Arizona, sentenced to 3 years’ probation with 3 months of home detention;

Omar Sandoval, 36, Rancho Cucamonga, California, sentenced to 4 years and 10 months in prison;

Xochitl Sandoval, 37, Rancho Cucamonga, California, sentenced to 8 months in prison;

Lisa Vang, 31, Westminster, California, sentenced to 3 years’ probation;

Andrew Vu, 38, Santa Ana, California, sentenced to 6 months in prison with 6 months of home detention;

Justin Wiley, 37, Irvine, California, sentenced to 18 months in prison, and

Kou Yang, 40, Corona, California, sentenced to 4 years in prison.

Acting U.S. Attorney Phillip A. Talbert said, in announcing the sentence: ‘This scheme purposely targeted the financially vulnerable during their time of greatest distress with promises of help. The defendants tricked the victims into handing over their most valuable assets, their homes. Few economic crimes are more reprehensible. This final sentence in this case will bring some measure of justice for their victims.”

In large fraud schemes like the one devised by Charles Head, we can’t forget about the individual homeowners who comprised the millions of dollars in losses,” said Monica M. Miller, Special Agent in Charge of the Sacramento division of the FBI. “Today’s sentencing ends an investigation that has been ongoing for more than 10 years and brings some closure to the innocent people who were victimized by Head’s callous scheme.”

Dominic McCarns and his co-conspirators assured innocent homeowners across the country facing foreclosure that they could turnaround their misfortunes and keep their homes,” said Michael T. Batdorf, Special Agent in Charge, IRS-Criminal Investigation. “However the defendants had other plans which resulted in one of the most harmful mortgage fraud schemes in the country. The sentence handed down today by the court is befitting of this defendant and his actions.”

Sergio Roman Barrientos, 62, Poway, California, was indicted by a federal grand jury in a six-count superseding indictment that charged both Barrientos and Zalathiel Aguila, 42, Fairfield, California.

According to the indictment, Barrientos, Aguila, and Omar Anabo, 53, Vallejo, California, engaged in a foreclosure rescue fraud scheme that began in September 2004 and continued to February 2008. Barrientos and Aguila are charged with conspiracy to commit and the commission of wire fraud affecting a financial institution, bank fraud, and conspiracy to make and making false statements on loan applications. On January 15, 2016, Anobo pleaded guilty to conspiring to make false statements on loan applications (case number 2:16-cr-001 GEB). He is scheduled for sentencing on November 4, 2016. Continue Reading…

Ligia Sandoval Spafford (Sandoval), 48, Roseville, California, was sentenced  by U.S. District Judge Troy L. Nunley to two years and three months in prison for a scheme to defraud distressed homeowners Sandoval was ordered to self-surrender on June 9, 2016.

Sandoval paid $115,065.00 in restitution, the full amount of restitution ordered by the Court, to compensate the victims for the losses that they incurred as a result from this fraud scheme. In February 2015, Sandoval and her then husband, Martin Wayne Flanders, 51, Roseville, California, pleaded guilty to mail fraud for the fraud scheme. On October 29, 2015, Flanders was sentenced to six years and five months in prison.

In sentencing, Judge Nunley stated: “She knew what was going on and enticed these people to become part of this scheme. They trusted her. … She ruined some peoples’ lives. That she paid restitution does not do anything to take away from the anxiety and fear they [the victims] had at the time that this was occurring. These victims were devastated.Continue Reading…

Randy Poulson, 44, Woolwich Township, New Jersey, was sentenced to 72 months in prison for scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors – secured by those same properties – that netted him more than $3 million in illicit profits.  Poulson previously pleaded guilty before U.S. District Judge Renée Marie Bumb to Count One of an indictment charging him with mail fraud.

According to documents filed in this case and statements made in court:

Poulson owned and operated Equity Capital Investments, LLC and Poulson Russo LLC and was the former president of the South Jersey Real Estate Investors Association. Paulson gave speeches, seminars, monthly dinners and various private tutorial sessions, purporting to teach real estate investing tips to individuals who paid fees to attend. Continue Reading…

Zalathiel Aguila, 42, Vallejo, California, and Omar Anabo, 53, Vallejo, California pleaded guilty to conspiracy to make false statements on loan applications.

According to court documents, between October 2004 and May 2007, Aguila and Anabo operated Vallejo‑based Capital Access LLC, an entity targeting homeowners facing foreclosure. The defendants’ “Keep Your Home” program purported to be a temporary rescue plan whereby “qualified investors” took over the mortgages while the homeowners paid rent and worked on rebuilding their credit. The defendants convinced homeowners to sign over title to their homes, which were then sold to straw buyers. The straw buyers obtained loans under fraudulent pretenses by claiming on loan applications that, for example, they intended to occupy the homes as primary residences and that no part of the down payment for the purchase was borrowed. In fact, Capital Access provided the down payment amounts, and the straw buyers never intended to live in the properties. The defendants stripped the equity from the homes and used it to pay the operating expenses of Capital Access, additional fraudulent home purchases, monthly housing payments on the homes for a limited period of time, and personal expenses. Continue Reading…