In the following press release State of Connecticut Division of Criminal Justice announced that MICHAEL E. DAUBERT, age 42, of Sandy Hook, was arrested today on a warrant charging him with Identity Theft in the First Degree, Larceny in the First Degree, 28 counts of Forgery in the Second Degree, and one count of Criminal Impersonation.

According to the arrest warrant affidavit, Mr. Daubert, a former police officer in Bethel and Naugatuck, used the name and identifying information of a New York man to obtain a mortgage on a property that Mr. Daubert owned. The warrant states that Mr. Daubert fabricated numerous documents related to the mortgage application, including a driver’s license and bank statements. As a result of these forgeries Mr. Daubert received more than $200,000 cash from the refinancing, the warrant alleges.

Identity Theft in the First Degree and Larceny in the First Degree are class B felonies, each carrying a maximum penalty of 20 years incarceration. Forgery in the Second Degree is a class D felony, each count carrying a maximum penalty of 5 years incarceration. Criminal Impersonation is a class B misdemeanor and carries a maximum penalty of 3 months incarceration. Mr. Daubert was held on $350,000 bond. He will be arraigned in Danbury Superior Court, G.A. No. 3, on October 1, 2007.

At the time these crimes were allegedly committed, Mr. Daubert was on probation for his 2005 convictions for Conspiracy to Commit Larceny in the Fourth Degree, two counts of Forgery in the Third Degree, and Criminal Trespass in the Second Degree. He was serving a total effective sentence of 30 months incarceration, execution suspended.

While the investigation related to the Identity Theft and Larceny was pending, Mr. Daubert was charged with Threatening in the Second Degree, Unlawful Restraint, Disorderly Conduct, and Breach of Peace for an incident occurring on July 8, 2007.

Mr. Daubert is scheduled to appear in Waterbury Superior Court, G.A. No. 4, on October 10, 2007, in connection with these cases.

On the next day, Mr. Daubert was charged in Putnam County, New York, with Menacing in the Second Degree-Stalking and Harassment in the First Degree for another incident involving the same victim. Subsequently, Mr. Daubert was charged with a Violation of a Protective Order for an incident involving this victim.

As a result of these incidents, Mr. Daubert was also charged in Connecticut with a violation of his probation. The charges against Mr. Daubert are merely accusations, and he is presumed innocent until proven guilty beyond a reasonable doubt. The cases are being prosecuted by the Statewide Prosecution Bureau in the Office of the Chief State’s Attorney.

Resources:
Press Release

In a press release Connecticut Attorney General Richard Blumenthal announced a lawsuit against several defendants alleging an extensive statewide predatory lending scheme that devastated dozens of consumers.

The defendants are Royal Financial Services, LLC, of Trumbull; First Source Mortgage Solutions, Inc. of Branford; Elizabeth Athan Real Estate, LLC, of Shelton; J.G. Property Management & Investment, LLC, of New London; Brian Guimond, d/b/a Cutting Edge Contracting of Norwich; and Jose Guzman and Mauricio Lancia for allegedly managing the schemes on behalf of the defendant companies.

Blumenthal sued on behalf of Department of Banking Commissioner Howard F. Pitkin and the state in coordination with Department of Consumer Protection Commissioner Jerry Farrell, Jr.

Blumenthal alleges that through a multi-layered scheme, the defendants mislead consumers and mortgage lenders into property purchases that financially destroyed dozens of homebuyers, while benefiting only the defendants, their associates and family members.

“This pervasive predatory lending scheme left a trail of shattered lives and lies – false promises to first-time homebuyers about property values, loan terms, and income levels,” Blumenthal said. “Our investigation has uncovered consumers who sought the American Dream – but bought a financial nightmare. Our lawsuit charges that homebuyers were victimized by a vast scheme with multiple layers of lies and co-conspirators. We allege that this predatory lending scheme enticed consumers with false promises of profits from investment rental properties and nonexistent management services for tax and mortgage payments and other expenses. Homebuyers were purposefully lured to buy properties whose values were inflated, using mortgages with concealed costs that they could never realistically afford, because their incomes and assets were falsified with bogus bank and employer records. They were discouraged from seeking outside assistance from outside home inspectors and lawyers. These practices preyed on the most vulnerable citizens – many of them first-time unsophisticated low-income homebuyers who spoke little or no English. The conspirators were illegally enriched by profits from inflated prices for properties, and fees and commissions.

“Financially battered and blindsided, some consumers face foreclosure and years of damaging credit ratings. They deserve relief immediately.

“Our legal action seeks money back to consumers and severe penalties for practices that undermine an entire industry, endangering not only consumers directly involved, but the economic welfare of the region. This case is only the beginning of a challenging time in the real estate and lending industry. This turmoil and calamity, only one in numerous emerging cases, has revealed the worst of the lending industry.”

Blumenthal’s lawsuit seeks restitution for every consumer harmed; an order preventing further violations; and civil penalties to the state.

“These defendants were conducting illegal business in this state and they misled Connecticut consumers by implementing a predatory lending scheme,” Commissioner Pitkin said. “Through our joint effort with the attorney general and the commissioner of consumer protection, we can ensure that Connecticut consumers are safe once and for all from the illegal conduct of these individuals.”

Commissioner Farrell said, “This lawsuit will serve as a message to the real estate and financial communities that the State of Connecticut considers real estate fraud and predatory lending egregious acts that will not be tolerated. State and federal agencies, working together, are directing their efforts to limit the losses that consumers suffer.”

Blumenthal described how the alleged scheme worked:

· J.G. Management and Guzman, who were not licensed by the state to engage in real estate transactions, and Elizabeth Athan Real Estate, solicited low-income consumers, including renters receiving federal housing assistance, to buy through them multiple or multi-unit residential properties. They promised consumers, among other things, favorable mortgage terms, cash back at closing, and diminished monthly housing expenses.

· J. G. Management and/or Guzman also pledged to provide property management services for rental properties that the consumers purchased through them – services including maintenance, finding renters, collecting rent and making mortgage and tax payments.

· Once a consumer agreed to work with the defendants to purchase properties, the defendants referred consumers to Royal Financial or First Source to act as the mortgage broker.

· J.G. Management, Guzman and the Elizabeth Athan agency would then select the property or properties for purchase from a stock of properties owned by the defendants, their family members or associates. The properties were sold to consumers at inflated prices – often tens of thousands of dollars more than what they were purchased for months earlier. The defendants substantiated the inflated prices to consumers and lenders through bogus and artificially inflated appraisals.

· When consumers inquired about hiring a home inspector, the defendants often convinced them it was unnecessary or potentially adverse to the consumer.

· In order to qualify consumers for mortgages, Royal Financial and First Source falsified information on consumers’ mortgage loan applications, including details about their income and assets. Cutting Edge or another home improvement company involved in the scheme would falsify consumer employment and wage records, indicating the consumers earned money from Cutting Edge and others as employees.

· Royal Financial and First Source also submitted bogus forms to lenders “verifying” bank account balances and rental income to artificially inflate consumer income and assets.

· Once consumers were approved for mortgages, the defendants arranged closings presided over by attorneys who the defendants knew would not alert consumers or lenders to the significance or irregularities of the transactions.

· Many consumers were non-English speaking and first-time buyers so Guzman “translated” and “guided” them through closings. In reality, he misled consumers about the details and nature of the documents that they signed. Royal Financial and First Source blindsided consumers on closing day with previously undisclosed closing costs.

· Because of these practices, consumers misunderstood their financing terms and, in some cases, did not even realize they had purchased more than one property until after the closings.

Resources:
Law Suit
Press Release

In the following press release Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that JOHN M. CLAYDON, JR., age 57, formerly of Trumbull, Connecticut, waived indictment and pleaded guilty today before United States District Judge Mark R. Kravitz in New Haven to one count of bank fraud arising from his scheme to defraud a federally insured bank in connection with residential real estate loans.

According to documents filed with the Court and statements made in court, CLAYDON was a practicing attorney in Fairfield, Connecticut, who performed real estate closings. In pleading guilty, CLAYDON admitted that he was engaged by People’s Bank to act as a closing attorney in connection with the refinancing of mortgage loans on two properties owned by friends of his. At the time, CLAYDON was experiencing substantial financial problems relating to his law practice. In October 2004, when CLAYDON received checks from the bank as part of the refinancing transactions, he converted the money – more than $1.2 million – to his own use. Only after being confronted with his failure to use the proceeds as directed and repay the underlying loans did CLAYDON eventually pay the bank approximately $469,050. He has not repaid the balance.

Click here to read the Criminal Information.

Judge Kravitz has scheduled sentencing for March 12, 2007, at which time CLAYDON faces a maximum term of imprisonment of 30 years. CLAYDON also will be required to pay restitution to his victims.  CLAYDON is currently detained in state custody on pending charges.

This matter was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Paul Murphy.

Update on Wednesday, March 14, 2007 at 03:38PM by The Editor - Ian Shuter

On March 12, 2007 Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that JOHN M. CLAYDON, JR., age 57, formerly of Trumbull, Connecticut, was sentenced today by United States District Judge Mark R. Kravitz in New Haven to 60 months of imprisonment, followed by three years of supervised release.

Click here for the press release

 

On November 8, 2006 The Connecticut Dept of Banking issued a Notice to Issue a cease and Desist Order against Raymond L. Patrice who was registered as a loan originator with VIP Mortgage Corporation (“VIP”).

The Dept allege that on February 9, 2006, Respondent took two loan applications from a borrower for the purchase of two different properties, each of which indicated that the property was going to be the borrower’s primary residence. Based on one of the applications, Credit Suisse Financial Corporation, a first and secondary mortgage lender/broker licensee, made a first mortgage loan and a secondary mortgage loan, both of which closed February 23, 2006. Based on the other application, IndyMac Bank, F.S.B. made a first mortgage loan and a secondary mortgage loan, both of which closed on February 27, 2006

Click here to view the complete Notice.

On November 16, 2006 The Connecticut Dept of Banking issued a Notice to Issue a cease and Desist Order against Yvette Allen who was formerly a loan officer employed with Stanley Capital Mortgage Company, Inc. whose principal office is at 270 Sylvan Avenue, Suite 260, Englewood Cliffs, New Jersey.

The Dept of Banking allege that on October 11, 2004, Allen took a loan application from a borrower for the purchase of a Connecticut property, which indicated that the property was going to be the borrower’s primary residence. Based on the application, First Franklin Financial Corporation, a division of National City Bank of Indiana, made a first mortgage loan that closed on November 12, 2004. On November 22, 2004, Allen took another loan application from the same borrower for the purchase of another Connecticut property, which also indicated that the property was going to be the borrower’s primary residence. The address stated in the application as the borrower’s residence was the same as that stated in the October 11, 2004 loan application, and the application did not reflect the borrower’s mortgage obligation for the loan that closed on November 12, 2004. Based on the application, IndyMac Bank, F.S.B. (“IndyMac”) made a first mortgage loan that closed on December 30, 2004.

On October 29, 2004, Allen took a loan application from another borrower for the refinance of his primary residence in Connecticut. According to the application, the borrower’s monthly base income from his employment was $5,000 and the borrower owned one other property. Based on the application, IndyMac made a first mortgage loan which closed on December 31, 2004. On December 28, 2004, Allen took another loan application from the same borrower for the purchase of an investment property. The application stated that his monthly base income was $5,500 when it was actually $4,604. Based on the application, Greenpoint Mortgage Funding, Inc., a first and secondary mortgage lender/broker licensee under Part I of Chapter 668, Sections 36a-485 to 36a-534a, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Brokers and Originators”, made a first mortgage loan and a secondary mortgage loan, both of which closed on January 27, 2005.

Click here to view the complete Notice.

In the following press release the Connecticut States Attorney announced that a Terryville man was arrested today (11/7/2006) on 13 criminal counts for allegedly defrauding the State of Connecticut and exploiting his elderly father who was unable to manage his own affairs.
 
CHRIS H. YARD, age 53, of 140 Scott Road, Terryville, was arrested on a warrant charging him with three counts of Larceny in the Second Degree, five counts of Larceny in the Second Degree involving a Victim over the Age of 60, two counts of Forgery in the Second Degree and one count each of Larceny in the Third Degree, Larceny in the Fourth Degree and False Statement in the Second Degree.
 
According to the arrest warrant affidavit, Mr. Yard is accused of submitting false documents or failing to provide an accurate accounting of his father’s assets to the State of Connecticut Department of Social Services in connection with his father’s nursing home  care paid for by the Medicaid program.
 
Between September 1, 2005, and June 30, 2006, Medicaid paid more than $85,000 on behalf of the father, the warrant states.
 
Additionally, Mr. Yard is accused of using a power of attorney to embezzle more than $28,000 in his father’s assets and with diverting $93,000 from a reverse mortgage or equity loan he obtained on his father’s house, the warrant states.
 
The charges against Chris Yard are merely accusations and he is presumed innocent until and unless proven guilty.
 
Mr. Yard was released on a $100,000 non-surety bond. He is scheduled to appear in Bristol Superior Court, G.A. No. 17, on November 15, 2006.
 
The case is being prosecuted by the Elder Services Bureau in the Office of the Chief State’s Attorney.

In the following press release Connecticut Chief State’s Attorney Christopher L. Morano announced the arrest of a former Hamden attorney on charges of embezzling approximately $190,000 from a client and forging attorney malpractice insurance documents.

EDWARD BOTWICK, age 50, of 54 Forest Glen Drive, Woodbridge, was charged with one count of Larceny in the First Degree by Embezzlement, a felony carrying a maximum prison term of 20 years, and two counts of Forgery in the Second Degree, felonies each carrying a maximum prison term of five years.

According to the arrest warrant affidavit, Mr. Botwick received $1,440,708.24 at a December 28, 2004, closing on a mortgage which he agreed to hold in his escrow account on behalf of his client. Mr. Botwick agreed to wire the funds to the client’s creditor, but kept $190,708.24 for his personal use, the warrant alleges. Mr. Botwick, who practiced law in Hamden, resigned as an attorney effective August 30, 2005, according to the warrant.

The warrant further alleges that Mr. Botwick falsely represented that he had a $1 million Lawyers Professional Liability Coverage policy. Inspectors from the Office of the Chief State’s Attorney determined that Mr. Botwick had not been issued any professional liability policy since 1998.

Subsequent investigation revealed that Mr. Botwick forged two certificates of insurance by altering the dates and signatures on expired certificates of insurance, the warrant states.

Mr. Botwick was arraigned this morning in New Haven Superior Court, G.A. No. 23. The Honorable Joan K. Alexander set bond at $50,000 and continued the case until March 28, 2006, in New Haven Superior Court, Part A.

This case is being prosecuted by the Statewide Prosecution Bureau in the Office of the Chief State’s Attorney in Rocky Hill. The charges against the defendant are merely accusations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Update on Thursday, June 29, 2006 at 04:51PM by The Editor - Ian Shuter

In a further press release  the CT Attorney General announced another charge has been made against Edward Botwick who is now also accused of forging another attorney’s signature on a release of a lis pendens filed against the property Mr. Botwick’s client was attempting to sell.

Update on Tuesday, March 13, 2007 at 04:12PM by The Editor - Ian Shuter

On March 12, 2007 the Connecticut Attorney General annouced that following his December 2006 guilty plea The Honorable Judge Richard A. Damiani sentenced Mr. Botwick to a total effective sentence of five years, execution suspended after six months, and a three-year conditional discharge. Mr. Botwick has already made full restitution.

Click here for the press release

Connecticut Attorney General Richard Blumenthal, Department of Banking Commissioner John P. Burke and Department of Consumer Protection Commissioner Edwin R. Rodriguez today announced a $750,000 settlement in a Waterbury home purchase scam. GRZ, LLC , A Home Connection, LLC, and Mortgage SuperCenter, Inc., along with their owners, Michael Grady, Robert Zappone and Joel Rosario, will pay the money to settle allegations they tricked Waterbury consumers into buying at inflated prices dilapidated houses that had been cosmetically repaired. In addition, Blumenthal’s lawsuit accused the companies and individuals, who also provided financing, of manipulating consumers’ credit histories, charging improper fees, and other lending abuses.

The money will provide restitution to dozens of consumers victimized by the scheme. The state will receive any money left after restitution has been paid.

“This money will compensate consumers victimized by this unconscionable scam,” Blumenthal said. “These unscrupulous operators turned the American Dream of homeownership into a nightmare, tricking consumers into buying houses that were literally falling apart. Today’s settlement sends a powerful message: predatory lending and housing scams will not be tolerated in Connecticut. The vast majority of real estate professionals are honest and upstanding, and I will keep fighting to assure they are not unfairly besmirched by a few bad apples.”

“I am pleased to join with the attorney general in announcing this settlement, which involves Mortgage SuperCenter, a mortgage lender regulated by the Department of Banking,” Burke said. “The agreement not only returns funds to innocent victims, but provides for a two-year monitoring process that will ensure Mortgage SuperCenter’s compliance with Connecticut mortgage banking laws going forward.”

“I am pleased that homeowners will be getting restitution for all their troubles caused by the way their homes were sold to them,” Rodriguez said. “Buying a house is the biggest investment consumers make, therefore I hope that with this settlement, it will help them with any losses incurred.”

The complaint charged that the companies and individuals bought rundown houses at rock bottom prices, many of them in serious disrepair. They then resold the houses at inflated prices after making superficial repairs or failing to tell buyers about serious defects. The companies and individuals discouraged consumers from hiring independent home inspectors.

Problems included damaged or partially collapsed roofs, malfunctioning or nonworking heating systems, major plumbing defects, rotting studs, walls, framing, doors, windows and sills, and infestation by termites or mice.

The action charged that companies and individuals tempted buyers by offering no money down, no closing costs and low monthly payments. They manipulated some credit histories and used fraudulent money transfers to qualify consumers for loans they could not afford, especially when saddled with the cost of repairing defects that seller should have fixed or disclosed.

Under the settlement, the companies and individuals will pay $350,000 now and another $400,000 over five years.

The Attorney General’s Office will contact all consumers who filed complaints with the state. Most are expected to receive from hundreds to thousands of dollars depending on their case to pay for repairs and, in some cases, as refunds for mortgage fees improperly shared among the defendants.

Consumers who have not contacted the state are asked to apply for restitution within 60 days. They should contact the Attorney General’s Consumer Protection Division at (860) 808-5400.