2012 starts off well for Veldora Arthur and once again, the tax payers get screwed!

As most of you already know, convicted fraudster and ex City of Miami assistant fire chief Veldora Arthur got to keep her pension.  We sat through an hour long hearing last week at the City of Miami Fire Fighter and Police Officer Retirement Trust, let's just say that the hearing was a farce.  Our sources tell us that there was a bunch of back room dealing that went on before the hearing virtually guaranteeing that Veldora got to keep her pension despite the crimes that she committed while on the job, we'll cover that in detail later this week, in the mean time, check out our friend Melissa Sanchez's coverage of the hearing at the from the Miami Herald here.


While I expected Ms. Arthur to get to keep her pension, what I didn't expect was this...

Veldora Arthur Restitution Order

That's right, in case you missed it, here's the part that left me FLOORED!

What was that?

HUH?

That's the icing on the cake, isn't it?  It's bad enough that Ms. Arthur got to collect her full pay and benefits while sitting at home awaiting trial, now she's sitting in prison STILL COLLECTING HER $167,000 PENSION and as a parting gift, the federal government has decided that despite the fact she cost the banks millions of dollars worth of losses as a result of her nefarious schemes, she now doesn't have to repay them a single red cent!


So there you have it, the tax payer takes it up the ass not once, but TWICE!  We'll done!

More on former City of Miami assistant fire chief Veldora Arthur's lawsuit against J.P. Morgan Chase for fraud!

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As we mentioned last week, just days after City of Miami assistant fire chief Veldora Arthur was convicted for various types of fraud in federal court, lawyers on her behalf (as well as several others) filed suit against J.P. Morgan Chase for of all things, FRAUD!  From the Daily Business Review article...

Boca lawyer goes on offensive against Chase

Adolfo Pesquera

Most lawyers who represent homeowners in foreclosures use defensive strategies in their efforts to hold off the lender, but not W. Jeffrey Barnes.

The Boca Raton lawyer has launched an offensive against JPMorgan Chase using state racketeering law.

Barnes filed a state civil RICO action in Palm Beach Circuit Court against Chase claiming the lender engaged in a national pattern of "fraudulent foreclosure proceedings based on false and fraudulent misrepresentations."

It may not be the preferred legal strategy in challenging Florida foreclosures, but that doesn't necessarily mean it's a bad idea, prominent foreclosure defense attorney Thomas Ice said.

"We've looked at all sorts of plaintiff-side actions, particularly the class-action type lawsuit," said Ice, managing partner of Ice Legal in Palm Beach Gardens. But ultimately we decided they aren't suited for our client base. We'll continue to use defensive strategies rather than offensive strategies."

Going down the beaten path has not been Barnes' method. The founder of the Newport Beach, California-based Foreclosure Defense Nationwide website and blog has built a national network of 39 law firms, allowing him to defend against foreclosures in 26 states. The latest lawsuit, Linda Zimmerman et al v. J.P. Morgan Chase and Chase Home Finance, represents his alliance with the Washington Mutual Homeowners Support Group, a grassroots organization of former WaMu mortgage customers.

The lawsuit is not intended to save anyone's home, Barnes explained. It is a counter-punch intended to hurt the bank by exposing its alleged fraud.

"This was never intended to be arm-twisting to get the bank to do loan modifications," he said. "These are damages claims."

Foreclosure Rights

The alliance had its genesis in how Chase claimed the right to foreclose on the defunct WaMu's home loans.

When WaMu failed in 2008, the Federal Deposit Insurance Corp. sold certain assets to Chase. But in filings submitted in Deutsche Bank v. FDIC and Chase, Chase said it "did not become WaMu's successor in interest," Barnes cited in the lawsuit.

Despite that admission, Barnes said Chase — through its servicer Chase Home Finance — instituted foreclosure proceedings nationally on WaMu mortgages, listing itself as successor in interest to carry forward WaMu's ownership interests.

The lawsuit claims Chase and Chase Home used the electronic clearinghouse Mortgage Electronic Registration Systems and bogus assignments to improperly pursue foreclosures. The bank also allegedly ignored state laws, such as required certifications in New Jersey and mandatory good faith pre-foreclosure resolution efforts in California.

"This pattern of filing false declarations ... and failure to provide proof of legal ownership in Florida and other jurisdictions is consistent with Chase's pattern of falsely misrepresenting the legal scope of the FDIC affidavit," Barnes said.

Chase has received a 30-day filing extension, delaying its answer to the Palm Beach Circuit lawsuit, Barnes said.
Chase representatives did not respond to calls for comment by deadline.

The lawsuit seeks an injunction to stop to all Chase foreclosure activity in eight states: California, Florida, Massachusetts, New Jersey, New York, Tennessee, Washington and Wisconsin. They are home to the 32 homeowners suing Chase individually, not as a class.

"We expect that there are going to be more," Barnes said.
One of the reasons the suit was filed in Florida is the operations of the servicer, Chase Home Finance, he said.
"I termed it nationalized mail fraud in the lawsuit because of the generation of documents out of (Chase Home's) nerve center in Jacksonville," he said.

Legal Options

Zimmerman, a Boca Raton legal researcher, claims she was suckered into a negatively amortized loan, something she didn't realize until after the closing in 2008. Her $1,800-a-month mortgage quickly turned into a $3,425-a-month payment, and she fell into default in February 2009. Her house today is worth a third of its original value.

Relying on her professional training, Zimmerman became a resource for the WaMu Support Group. She said the assignment document used against her listed a receptionist as a bank vice president.

"It's a person who was not an official of the bank," Zimmerman said. "Their fraud became very evident."

She and the Support Group approached Barnes about using the Florida Civil Remedies for Criminal Practices Act, the state RICO law, against Chase.

"I had considered different options, class action lawsuits," Zimmerman said. "The only ones that seemed to benefit from class actions were the lawyers."

She noted the example of an acquaintance in California who was in a class action against Bank of America. His portion of the settlement came to $3,009. She did not think that was a solution.

Document Fight

Lenders and servicers have been successful in avoiding having questionable documents used against them in Florida courts by dismissing foreclosure actions when homeowners allege fraud, Barnes said.

"In other Chase litigation, I have to fight to get documents. Routinely, they object to almost everything. They fight you on the discovery. That's probably why we've had so many cases dismissed for discovery violations. Once there's an order compelling discovery, the banks just don't respond or they ask for open-ended extensions or they file incomplete responses. The judge files a dismissal without prejudice with the refiling conditioned on providing discovery, and they just don't do it," he said.
A nationwide RICO action broadens the possibilities for discovery. Barnes pointed to a case in Las Vegas.

Troy Fox, an associate at Crosby & Associates in Las Vegas, handled a case accusing Wells Fargo of using a fraudulent notary stamp on a deed of trust assignment. This surfaced during the third loan modification mediation.

"They again denied the client for a modification. We asked about the stamp. They said, 'We don't think it's an issue.' We did," Fox said.

Fox is asking for an evidentiary hearing on the fraud claim and sanctions sufficient to bring the mortgage down to the current market value.

"Nevada is a nonjudicial state," Fox said. "They cannot rescind the notice of default unless we agree."

While Ice, who has been at the forefront of probes into the robo-signing scandal, has opted not to pursue RICO claims, he applauds attorneys who try different approaches. Any method that exposes more fraud can only help other attorneys, he said.

"It becomes much easier for you to get your own information because you already have a road map of where you want to go," Ice said.

While I agree that the practices engaged by the banks recently in these foreclosure proceedings are just as egregious as the frauds that the borrowers engaged in when they borrowed the money, at the end of the day what you can't get around is the fact that these people ARE NOT PAYING THEIR DAMN MORTGAGES!  Regardless, why aren't these banks punished in the same manner as the people who submitted fraudulent paperwork on their loans?  Why the double standard?  Over the course of our blog, we've seen several instances where people where convicted and sentenced to prison for simply misstating their incomes on loan applications or by submitting some fake paperwork in order to get approved for a home mortgage, so why the double standard?  Why aren't these banks held accountable just like the average citizen?


Regardless, here's the lawsuit for your reading pleasure.  The first eleven pages consist of legal maneuvering by Chase's attorneys to get the case removed from circuit court and into the proper federal venue, enjoy...

Veldora Arthur Sues Chase for Fraud

A bit of advice to the attorney who filed this suit, Mr. W. Jeffrey Barnes, perhaps next time you may want to vet your clients a little better and make sure that they weren't just federally convicted for FRAUD before you file suit on their behalf!

What happened in the Veldora Arthur federal mortgage fraud case in her own words. And guess who's suing J.P. Morgan Chase for FRAUD?!

We're fortunate enough to get a rare glimpse into what exactly happened in the City of Miami Assistant Fire Chief Veldora Arthur's federal mortgage fraud case, that is what happened according to Veldora herself as she explained it to the FBI.  Here's a transcript of what she told the FBI and the AUSA during her interview on August 5, 2010...

FBI Interview of Veldora Arthur

We'll go through it in detail on Monday, but till then, has anyone guessed who's suing J.P. Morgan Chase for fraud?  I'll give you a hint...

You got it, just days after she was thrown in Federal Prison for all sorts of fraud, lawyers on behalf of Veldora ACTUALLY SUED J.P. Morgan Chase for fraud on her behalf!

LOL!  We're digging up the complaint now, we'll discuss on Monday.  Have a nice weekend!

Meanwhile back at the Herald...

While we were rather impressed with ourselves for being mentioned the other day in the Miami Herald regarding our coverage of the Veldora Arthur mortgage fraud trial, we actually missed the Herald's first attempt at covering the verdict last week.  Take a look for yourselves at the story that was buried in the business section, as always click on the image to enlarge...

Funny how the City of Miami's Assistant Fire Chief gets convicted of several counts of mail and wire fraud yet somehow it doesn't make the headline, instead the story is led off with...

Broward man sentenced in fraud schemes.

Even worse, the Herald's staff writer Toluse Olorunnipa couldn't even figure out where Veldora worked, from the article...

...a former assistant to Miami-Dade’s fire chief was found guilty of taking part in an $11 million mortgage fraud scheme in Aventura...

Oh really?

I could have sworn Veldora was employed by the City of Miami and not Miami-Dade county!

Despite the Herald's failure to put together a proper story, their real failure was highlighted by our friends over at Random Pixels yesterday.  While the Herald has been largely ignoring Veldora's story and has relegated it to the back pages of the paper, the Herald's Spanish sister publication, El Nuevo Herald, deems Veldora's mortgage fraud capers to be front page news...

From the El Nuevo Herald article (with translation thanks to Random Pixels via google translate)...

by Melissa Sanchez
El Nuevo Herald

Veldora Arthur, the Deputy Chief of the Miami Fire Department, convicted Friday of mortgage fraud, will be eligible to continue receiving almost $167,000 in annual pension while jailed.

Robert Nagle, manager of the Retirement Fund for the Fire and Police of Miami, said a lawyer for the Fund is reviewing the federal case against Arthur to determine whether the crime in her capacity as deputy chief - for example, in uniform or during hours.

"Committing a felony could cause a recipient of a pension to lose [his/her] pension, but the crime must have been connected to his position," said Nagle. "If it was something they did in their private time, then they keep their pension."

Amazing how the Herald won't cover sensitive City of Miami related matters and how us non Spanish speaking readers have to look to the Spanish version of the Herald to find out WTF is going on!  Regardless, we're still looking into documents regarding Veldora's crimes in order to determine whether or not she used her official possession at the City (not the county) during the commission of the frauds she was indicted for, we'll update as soon as we find anything new.

What everyone wants to know, was Veldora Arthur committing mortgage fraud while on the job at the City of Miami Fire Department?

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Now that City of Miami Assistant Fire Chief Veldora Arthur has been convicted of several counts of mail and wire fraud, the question that everyone seems to be asking is whether or not she's going to keep her City of Miami FD pension.  The litmus test seems to be whether or not she committed the crimes while on the job at the fire department, from our comments sections yesterday...

It's gonna have to be proven that she used her official position to commit the felony.

Understood, so how can we prove that she used her official position to commit the crimes she was indicted for?  Once again from our comments section...

There was a rumor that she used her City fax or email to transmit some of the fraudulent communications. Can you look into that?

Of course we can!  Without having the entire case file at my disposal, this was a bit of a challenge, that is until I found this bit of information regarding a dispute Veldora had during the purchase of another home unrelated to the indictment where her primary residence was called into question.  Take a look at this excerpt...

It bears mentioning that after the purchase of Unit 3711, Loan City, the lender, conducted a review of the documents submitted in support of the loan for Unit 3711 and came to the conclusion that the defendant had misrepresented, among other things, her occupancy of the property as her primary residence. Loan City sought indemnification from WCS Lending who processed and collected the information on behalf of Loan City. In connection with that dispute, the defendant on June 27, 2006 wrote a letter that was faxed that same day from the City of Miami Fire Department wherein she stated as follows: “In regards to the statement regarding my residency, I have never stated to any official at Loan City or any other agency that I don’t reside at 3370 Hidden Bay Drive, Unit 3711. That statement is totally false as I have been residing there since I purchased the unit.”

In this instance, Veldora was purchasing a home on the west coast and inadvertently listed her primary residence as her home in Weston, when the mortgage broker who was reviewing the loan package for the home on the west coast that they had just lent her the money on, they spotted the Hidden Bay drive unit on her credit report (which was one of the homes that were part of the federal indictment) and realized that she had submitted conflicting statements about where her primary residence was.  In an effort to cover her tracks, Veldora wrote a letter to the lender where she stated...

“In regards to the statement regarding my residency, I have never stated to any official at Loan City or any other agency that I don’t reside at 3370 Hidden Bay Drive, Unit 3711. That statement is totally false as I have been residing there since I purchased the unit.”

Unfortunately Veldora sent this bogus letter while on the job at the City of Miami Fire Department...

"the defendant on June 27, 2006 wrote a letter that was faxed that same day from the City of Miami Fire Department"

While this is the only evidence we've been able to find of Veldora using her position at the FD to commit the frauds she was ultimately convicted of, we're told that there were several other instances where she used her time on the job to further her criminal activities.  The question that remains is whether or not this is enough to get her pension taken away from her.  We'll keep looking for a definitive answer and report back.

Update on the Veldora Arthur mortgage fraud case.

Looks like the United States Attorney's Office issued a press release regarding the outcome of the Veldora Arthur, Neil Fagan and Pamela Johnson mortgage fraud trial late Friday afternoon.  Here it is in it's entirety...

JURY FINDS MORTGAGE FRAUD DEFENDANTS GUILTY OF ALL COUNTS IN MORTGAGE FRAUD SCHEME INVOLVING THE HIDDEN BAY CONDOMINIUM COMPLEX IN AVENTURA, FLORIDA

September 30, 2011
FOR IMMEDIATE RELEASE

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that a federal jury found defendants Neil Fagan, Pamela Johnson, and Veldora Arthur guilty of conspiracy to commit wire and mail fraud, and all substantive mail-fraud counts set forth in the February 3, 2011 superseding indictment. The indictment included charges of conspiracy to commit wire and mail fraud and substantive mail fraud. The conspiracy and mail fraud counts carry a statutory maximum sentence of 20 years’ imprisonment. All defendants were remanded into the custody of the United States Bureau of Prisons following their convictions.

Fagan and Johnson were charged in Counts 1 through 5 of the indictment and were convicted on all counts. According to the evidence, Fagan recruited the straw buyers who bought the properties listed in the indictment and received approximately $1,300,000 in mortgage fraud proceeds. Johnson served as the settlement agent who handled the real estate closings and diverted fraud proceeds to herself and family members. Arthur, charged and convicted of Counts 1, 3, and 5, was an Executive Assistant to the Fire Chief in the City of Miami Fire Department who served as a straw buyer. Arthur received approximately $317,000 in fraud proceeds in less than a month.

The properties in the case were located at 3370 NE 190 Street in Aventura, Florida, which is known as the Hidden Bay Condominium Complex. During the course of the conspiracy approximately $11,000,000 in fraudulent loans were issued, resulting in a loss to lenders of approximately $7,000,000.

Sentencing for Johnson and Fagan has been scheduled for December 15, 2011at 8:30am. Sentencing for Arthur has been scheduled for December 16, 2011 at 8:30 am.

Mr. Ferrer commended the investigative efforts of the FBI. The case was prosecuted by Assistant U.S. Attorneys Armando Rosquete and Sean McLaughlin.

I missed a crucial part of the press release after a quick glance, earlier today our friend Bill Cooke from Random Pixels highlighted what we missed... 

All defendants were remanded into the custody of the United States Bureau of Prisons following their convictions.

HOLY SHIT!  How the hell did I miss that?  Veldora and company were thrown in jail right after the verdict came down?  Lo and behold, Veldora and her codefendants are actually sitting in the federal detention center in downtown Miami!  For the foreseeable future Ms. Arthur is going to be known as federal inmate #96343-004 and will be calling a cell much like this one in the Miami FDC home...

This really caught me off guard since most defendants that I've known of are allowed to stay out on bail while they're awaiting sentencing, I'm amazed that they took her into custody right after the verdict.  Regardless of what Veldora may have done, I can't begin to imagine how hard this must be for herself and her family, first the indictment and now the incredible fall from being the City of Miami's first black female firefighter and assistant fire chief to now simply being a convicted felon sitting in jail possibly for the next twenty years.

BREAKING NEWS!!! Veldora Arthur found GUILTY!

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This just in, it's confirmed, city of Miami assistant fire chief Veldora Arthur and her codefendants were all FOUND GUILTY on all counts in their federal mortgage fraud trial!  Here are the verdicts...

Veldora Arthur Federal Mortgage Fraud Trial Verdict

Pamela Johnson Federal Mortgage Fraud Trial Verdict

Neil Fagan Federal Mortgage Fraud Trial Verdict

To put it lightly, the defense team failed miserably.  Detail coming up a little later this evening.