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Foreclosure Scam Artist Gets 11 Years in Federal Prison

Here is a good example of why you need a reputable bankruptcy attorney to help when you have financial troubles with your house. A fraud artist who claimed to help distressed homeowners stave off foreclosures has been sentenced to 11 years in Federal prison after he was finally caught in Waterloo, Canada. Here was his scam.

Mr. W would solicit homeowners who were facing foreclosure on their home. He told them that for a fee (usually $700) he could legally delay the foreclosure. After he was paid, he would get a list of people who had filed for bankruptcy in the homeowner’s state. He would then prepare a phony deed that would transfer a fractional share of the homeowner’s home to someone who had filed bankruptcy. After recording the deeds, he would mail them to the bank or lender foreclosing on the house informing them that they were stayed from doing the foreclosure because the owner (the person in bankruptcy who never knew about the phony deed) was in a bankruptcy. The bank would then postpone the foreclosure for several months until it finally figured out in the bankruptcy that the bankrupt really had no interest in the home. When the unwitting debtor in bankruptcy would finally disavow that he owned part of the house, Mr. W would then just pluck another name from the bankruptcy database and start this process all over again. In this manner, he filed fraudulent foreclosure documents on 824 homes, using at least 414 bankruptcies filed in 26 judicial districts. He collected about $1,200,000 from clients during the life of the scheme. Needless to say, the homeowner ended up losing his house in the end. Mr. W. pleaded guilty to bankruptcy fraud and identity theft. He received a sentence of 11 years in prison, was ordered to pay nearly $60,000 in restitution and was ordered to forfeit about $100,000 of property previously seized by law enforcement.

What do we learn from this? If it sounds too good to be true, it probably is. If your home is in financial trouble and in danger of foreclosure, a chapter 13 bankruptcy reorganization can often save your home. You do this by going to see an experienced bankruptcy attorney. You do not go see Mr. W.