By Deborah Goonan, Independent American Communities
Real estate fraud schemes in the world of association-governed communities.
Former HOA treasurer gets jail time in theft
After McKee revelations, can City Hall and the developer work it out?
By Jacob Barker St. Louis Post-Dispatch
May 21, 2018
As a trial to determine the value of a north side building developer Paul McKee once bought played out in St. Louis Circuit Court this month, never-before-aired details about some of the developer’s transactions raised new questions about his future relationship with City Hall.
Among the biggest revelations were that McKee was awarded Distressed Area Land Assemblage tax credits for purchases attorneys for the city alleged were “shams” because no money changed hands. The Missouri Department of Economic Development flagged some of the “sales” as improper. In 2013, it blocked one and clawed back tax credits awarded for another by reducing the amount awarded to McKee on future transactions.
Since the trial aired those details, St. Louis Mayor Lyda Krewson has called for an internal investigation. Some St. Louis aldermen want a criminal investigation. The Department of Economic Development is now aware of a McKee transaction similar to others it deemed improper where the developer was awarded $2.5 million in tax credits that the department never clawed back.
An FBI agent is investigating Paul McKee, a “controversial” developer who owns hundreds of acres of land in St. Louis. City government is forced to confront inconvenient facts presented in court, pointing to “sham” sales and misuse of tax credits.
Judge convicted of fraud to seek retention
CHICAGO (AP) — A Cook County judge who was convicted by a federal jury in Chicago of fraudulently obtaining mortgages for investment properties is seeking retention.
The Chicago Sun-Times reports Judge Jessica O’Brien filed paperwork May 2 with the State Board of Elections setting herself up for a retention vote in November. O’Brien filed her paperwork the week after the Illinois Supreme Court barred her from practicing law.
O’Brien is trying to convince a federal judge to overturn the jury’s verdict. She continues to be paid while appealing her conviction.
Nothing like a corrupt judge dabbling in real estate investment!
BSO Detective Follows Trail From Squatter Complaint to $11.8 Million Fraud Case
NBC 6 (Miami)
Published at 7:06 PM EDT on May 8, 2018 | Updated at 10:36 AM EDT on May 9, 2018
Foreclosure defense attorney Mark Stopa draws praise, criticism at penalty hearing
CLEARWATER — Homeowners from as far away as Texas and North Carolina crowded a Pinellas County courtroom Monday in support of embattled foreclosure defense attorney Mark Stopa.
Facing possible disbarment for professional misconduct, Stopa also drew support from several lawyers and judges, including one who said Stopa had forced judges to “rethink ” the entire foreclosure process.
“He’s had a hand in advancing the law in the area of foreclosure,” said Judge Morris Silberman of the Second District Court of Appeal in Lakeland.
Silberman was among those testifying in the penalty phase of the Florida Bar’s case against Stopa, who says he has helped as many as 7,000 homeowners. Based on testimony at a trial in March, Pinellas Circuit Judge Linda Allan found that the Bar had proved five of its six counts against him including some alleging that he nearly cost two clients their homes when he failed to tell them of bank settlement offers.
Among the critics was Hillsborough Circuit Judge E. Lamar Battles, whom Stopa once tried to have disqualified from hearing a case because the judge allegedly was biased against Stopa’s client, an older Hispanic woman.
Noting that his own wife is “of Spanish descent (and) between 55 and 60,” Battles called Stopa “very aggressive, not to be confused with zealous.”
“He talks over opposing counsel; he’s very rude to opposing counsel; he’s unprofessional in his interactions” with others, Battles added.
Victor Veschio, who represents banks, said he was sitting on a bench in a court reception area once when Stopa began yelling at him in “a very aggressive manner and tone.”
“Then he leaned over and whispered, ‘You are an a–hole and I’m going to crush you,” Veschio testified.
At a recent disbarment hearing, both supporters and critics gave the judge an earful. Supporters say Stopa is a fierce defender of homeowner rights in bank foreclosure actions. Stopa says he’s a victim of a conspiracy to destroy his career.
Critics say his style is too aggressive and unethical. The Florida Bar has already decided that Stopa violated Bar Rules. Stopa awaits final determination of his penalty.
The state investigators determined that Nocton reported a small portion of that income on his taxes from 2012 to 2016. The announcement said they found Nocton issued checks to his business totalling $116,996 and to himself totaling $62,608. The department says that means he owes more than $17,800 in taxes, penalties and interest.
Each of the five counts carries a maximum penalty of five years in prison, a $10,000 fine, or both.
The condo association couldn’t get their former board President on theft charges. But investigators are able to prosecute on evasion of state taxes.
Fired property manager refuses to hand over files, keys, access to accounts
By Benny L. Kass, Chicago Tribune
May 16, 2018 12:05 PM
I am a trustee of a 10-unit condo association, which hired a new building manager. When the outgoing manager received the separation letter, he claimed that owners didn’t support the decision and that he wasn’t going to leave the job. He refused to turn over the keys, files and bank accounts. Although he was told the change was uncontested, he would not relent, so a cease-and-desist was sent to enforce the change. He replied that he had an attorney to fight it. (The attorney is his wife and co-owner of their business.) In the meantime, the outgoing building manager is the only one with oversight of our bank accounts. I went to the bank with copies of the notarized statement filed with the registry of deeds to prove that I am a trustee and our declaration of trust, which states that trustees have fiduciary oversight. I explained our concern about the manager being fired and still having sole oversight of our accounts. The bank claimed it needed additional documents but couldn’t explain what they were. The outgoing property manager hasn’t shown us an actual bank statement in at least two years, which is concerning.
This is an advice column, but I share it as an example of red flags pointing to embezzlement or fraudulent management.
Great advice from a fraud expert.