9:02AM

Former HomeGold CEO Indicted On Ten Counts

In a Press Conference and subsequent Press Release South Carolina Attorney General Henry McMaster announced today (11/17/05) that Ronald J. Sheppard, age 48, former Chief Executive Officer of HomeGold, Inc., residing at 125 Belle Chase Drive in Lexington, was indicted on Wednesday, November 16, 2005 by the State Grand Jury, on ten (10) criminal counts to include securities fraud, conspiracy, bank fraud, insurance fraud, forgery, perjury, breach of trust and obtaining goods under false pretenses.

You can listen to the Press Conference by clicking here.         Read the indictment by clicking here

If convicted on all counts, Mr. Sheppard could face fifty-seven (57) years in prison and over one hundred sixty-five thousand five hundred dollars ($165,500.00) in fines for his role in the Carolina Investors collapse. A bond hearing is scheduled for Tuesday, November 22, 2005 at 12:30 p.m. before the Honorable Reginald Lloyd at the Richland County Courthouse in Columbia.

The indictment (click here to read it) alleges that Mr. Sheppard did knowingly and willfully violate the following laws:
Count One – Securities Fraud
Count Two – Bank Fraud
Count Three – Forgery
Count Four – Forgery
Count Five – Insurance Fraud
Count Six – Insurance Fraud
Count Seven – Obtaining Signature or Property Under False Pretenses over $5,000
Count Eight – Breach of Trust
Count Nine –Perjury
Count Ten – Conspiracy

HomeGold, Inc. was a Lexington based finance company engaged in the business of originating, selling and servicing sub-prime first and second-lien residential mortgage loan products. HomeGold, the parent company to Carolina Investors, Inc., used Carolina Investors’ unsecured investments to fund its volatile sub-prime mortgage lending activities.

When HomeGold filed for bankruptcy protection on March 31, 2003, Carolina Investors had closed its doors, owing approximately $275 million on 8,000 accounts. This is the fifth indictment resulting from the state grand jury’s investigation into Carolina Investors, HomeGold and related entities.

In previous indictments, the Attorney General’s Office alleged that Carolina Investors and HomeGold officers conspired to and purposely mislead investors about the financial condition of HomeGold and Carolina Investors and pressured investors not to make withdrawals.

Former Carolina Investors President Larry Owen pleaded guilty on July 22, 2004 to twenty-two (22) counts of Securities Fraud in violation of S.C. Code Sections 35-1-1210(1) and 35-1- 1210(2). On March 30, 2005, Mr. Owen was sentenced to eight (8) years in prison.

Former Carolina Investors Chairman Earle Morris was convicted on November 18, 2004, on twenty-two (22) counts of Securities Fraud in violation of S.C. Code Sections 35-1-1210(1) and 35-1-1210(2). Mr. Morris was sentenced to forty-four (44) months in prison. He is currently out on bond pending an appeal.

Former Carolina Investors Vice-President Anne Owen pleaded guilty on July 18, 2004 to eight (8) counts of Securities Fraud in violation of S.C. Code Section 35-1-1210(2). Mrs. Owen is awaiting sentencing before Judge James Johnson.

Karen Miller
, former Chief Financial Officer of HomeGold Inc. pleaded guilty on Tuesday, September 13, 2005, to one (1) count of Conspiracy in violation of S.C. Code Section 16-17- 410. Ms. Miller’s sentencing is being deferred while she cooperates with the state grand jury investigation.

“The State intends to prove that Mr. Sheppard did knowingly and willfully participate in the large scale securities fraud and conspiracy which led to the financial collapse of Carolina Investors, Inc.,” said McMaster.

McMaster emphasized that today’s indictment does not close the state grand jury’s criminal investigation into HomeGold and related entities. “We continue to follow the evidence wherever or to whomever it is leading us.” McMaster pointed out that all defendants are innocent unless and until proven guilty. Agents of the State Law Enforcement Division, working with the Attorney General’s Office and the state grand have investigated this case.

8:00AM

Woman Arrested for Elder Abuse in Real Estate Fraud Scheme

San Bernardino , CA - Investigators from the San Bernardino County District Attorney’s Real Estate Fraud Unit arrested Pamela Churchill-Ames, 53, of Jamul, Ca. on Tuesday, November 15, 2005. Churchill-Ames was arrested in the city of San Bernardino for felony counts of financial elder abuse and grand theft.

In April 2004, Mrs. Churchill-Ames allegedly pressured the elderly victims into signing over their property, via a Grant Deed, taking title. The victims, who reside in Yucca Valley, were misled into selling their property to the suspect because of an impending tax auction. Subsequently, the victims only learned the true value of their property after being notified by the San Bernardino County Tax Collector.

Churchill-Ames was booked into the Central Detention Center and bail is set at $100,000.

7:53AM

11 title companies closed down in Colorado

In a Press Release the Colorado Division of Insurance announced that on Tuesday November 15, 2005 , they closed down 11 “sham” title insurance agencies. The Division asserted that the agencies were created as vehicles to provide kickbacks to mortgage brokers. In addition, the Division suspended the license of the title agent identified as the companies’ responsible producer. According to the Division, Douglas Farr, the primary owner and the title agent listed as the responsible producer for the agencies, misappropriated escrow funds collected by the agencies in furtherance of residential real estate closings. The agencies’ underwriters are obligated to honor the title commitments issued to consumers through the suspended agencies to avoid consumer harm. Title insurers Dakota Homestead and Attorneys Title underwrite or have underwritten policies for the agencies.

This summer, the Division commenced an investigation of ownership arrangements between and among all 500 or so licensed title insurance entities and those who refer business to the agencies. The investigation was prompted by an explosion in the number of title agencies seeking licensure, and complaints that the agencies were created solely to provide kickbacks to realtors and lenders who referred business to the agencies. Providing remuneration to those who refer business to title agencies is prohibited under state and federal law.

Farr’s companies were the first to be investigated. Division investigators determined that some of the agencies performed no title services, had few or no employees, and in at least one case, had no physical office location. In addition, Mr. Farr and the agencies failed to pay one of the agencies’ underwriters, Attorneys Title, approximately $500,000 in premium. Consequently, several thousand Colorado consumers did not receive title insurance policies. The Division is working with the underwriter to ensure no consumers are harmed.

The Division expects to take more regulatory actions as the investigation progresses. “Affiliated business arrangements are not inherently bad,” said Commissioner David Rivera. “However, sham agencies affect the ability of legitimate title agencies to compete fairly in the marketplace. It’s our goal to take appropriate regulatory actions to level the playing field and ensure a competitive title insurance marketplace that will benefit Colorado’s consumers”, he said.

The companies closed down are:
Elite Title Services
Douglas P. Farr,
Neighborhood Title Services, LLC,
CPR Title of Crested Butte, LLC,
Fidelity Title, LLC,
First Choice Title, LLC,
Freedom Title & Escrow, LLC,
KD Title & Appraisal, LLC,
Lenders Title, LLC,
Top Notch Title, LLC,
Tri City Title, LLC,
Uptown Title & Escrow, LLC.

5:32AM

Man indicted in ID Theft scheme, tried to buy new home in with stolen ID

The AZ Attorney General announced Peter Mohammed Sharma of Anthem was found guilty Monday by a Maricopa County Superior Court jury of taking the identity of another, theft and unlawful possession of access devices. The latter charge applies to such things as possessing bank ATM cards that bear false or stolen names. Sharma, 70, has also been indicted on charges of fraud, forgery and perjury. He is scheduled to stand trial on those charges in the coming weeks.

 

Sharma is the third identity theft defendant prosecuted by the Attorney General’s Office who has attempted to file a legal name change to the identity theft victim’s name after learning of the charges. Attorney General Terry Goddard is considering draft legislation that would require people filing for a legal name change to disclose if they have been charged with or convicted of identity theft.

 

Sharma was caught using the name "Peter Reynolds" and false Social Security numbers in transactions with Salt River Project, Cox Communications, Chase Manhattan Bank, Pulte Homes and Bank of America. Because he was caught in the process of the crime, the victims were able to minimize their losses. In one case, Pulte Homes was able to cancel his attempted purchase of an Anthem home valued at $242,000 under a false name, date of birth and Social Security number.

 

Sharma, who faces up to 10 years in prison, is scheduled for sentencing on Dec. 19. Todd Lawson prosecuted this case.

 

3:47PM

Attorney charged over escrow funds

In a press release the Manhattan Distrcit Attorney revealed that GARY BERENHOLTZ, an attorney who practiced law at 225 Broadway in Lower Manhattan, has been indicted for stealing $63,000 from his former law partner’s escrow account four days after the partner’s death.  In mid-September, 2005, the law partner’s health began to fail and he asked BERENHOLTZ to cover a real estate closing for him. While hospitalized, the law partner, Joseph Frost, gave the defendant two blank signed checks from his escrow account with the understanding that the first check would disburse the contract deposit and the second would cover any costs, real estate taxes and fees associated with the closing. Immediately after the defendant left the hospital, Frost realized that only one check was necessary for the closing. The error was communicated to BERENHOLTZ and he agreed to tear up the extra check.

Click here for the Press Release

On September 26, 2005, Frost died of heart failure. The defendant went to the funeral and paid daily condolence calls to the family. On September 30, 2005, just four days after Frost’s death, BERENHOLTZ forged a withdrawal slip transferring $63,000 from Frost’s business account into Frost’s escrow account. BERENHOLTZ then wrote out the second check - the one that had previously been signed by the now-deceased lawyer and which the defendant had agreed to tear up - to himself for $63,000 and deposited it into his own personal account.

The defendant has been indicted for Grand Larceny in the Second Degree and Criminal Possession of Forged Instruments. He will be arraigned on the indictment later today.

3:44PM

Attorney charged over down payment

A Manhattan DA press release reveals that MICHAEL LARRY GOLDMAN, was a former partner in Goldman and Rio, located at 1841 Broadway in Manhattan. In early 2004, the defendant represented the sellers of a house in Glen Cove, Long Island. The prospective buyer successfully bid on the house and gave the defendant a check for $43,000 to be placed into escrow for the closing, which was scheduled for the end of May, 2004. GOLDMAN was suspended from the bar in May, 2004 but did not tell the buyer of his suspension. For a variety of reasons, the house closing was delayed until September, at which point the buyer demanded the return of the down payment. GOLDMAN stalled, and the house wound up being sold to someone else. GOLDMAN never returned the $43,000 that the victim had given him to be placed in escrow.

The defendant has been charged in a felony complaint with Grand Larceny in the Third Degree and will be arraigned in New York City Criminal Court later today.

3:41PM

Manhattan attorney charged over dispersement of mortgage funds

In a press release the Manhattan Distrcit Attorney announced that MICHAEL A. SZEGDA, an attorney who formerly practiced at 300 East 42nd Street, was retained to represent Delwar Hussain in the sale of a property in upper Manhattan in 2001. The proceeds of the sale, $350,000, were placed in SZEGDA’s escrow account. The completion of the transaction was delayed due to litigation involving the property until 2003. Despite the resolution of that litigation and repeated requests that the escrow funds be dispersed to Mr. Hussain, SZEGDA has never done so. SZEGDA was suspended from practice in September, 2005 after failing to respond to complaints of ethical misconduct filed against him with the Departmental Disciplinary Committee. SZEGDA has been charged in a felony complaint with Grand Larceny in the Second Degree.

Click here for the Press Release

3:22PM

Illinois Senator Obama calls for Senate hearings on Mortgage Fraud

U.S. Senator Barack Obama has asked the Senate Committee on Banking, Housing and Urban Affairs to hold hearings on mortgage fraud. The Democratic senator from Illinois Monday sent a letter to the committee’s Republican chairman and to the ranking Democrat on the committee.

Obama cited the findings of a Chicago Tribune investigation that has found predatory mortgage fraud disproportionately affects poor and black residents. Obama says the Senate should hold hearings to determine whether law enforcement and regulatory agencies have enough resources to enforce lending laws.