Foreclosure scammer pleads guilty

Discussion of various forms of Advance Fee Fraud, including application fees for loans that never materialize, self-liquidating loan scams, as well as mortgage elimination scams and related debt elimination scams [Nigerian-type scams should go in the Nigerian 4-1-9 forum]
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Foreclosure scammer pleads guilty

Postby rogfulton » Wed Jan 04, 2012 11:45 pm

Central Texas man Frederic Alan Gladle will plead guilty to mortgage fraud and identity theft.

Here's two links to articles in the local paper (the second link is the Associated Press version)

http://www.statesman.com/news/local/lakeway-man-to-plead-guilty-in-scheme-to-2073869.html?cxtype=rss_ece_frontpage

http://www.statesman.com/news/texas/texas-man-to-plead-guilty-in-foreclosure-scam-2074676.html?cxtype=rss_ece_frontpage

Victims paid Gladle to transfer a fraction of the ownership to another person in order to delay foreclosure. The identity theft comes into the picture because Gladle was using the names of persons in bankruptcy proceedings without their knowledge.

It's a new one on me and I haven't seen anything similar posted to Quatloos.
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Re: Foreclosure scammer pleads guilty

Postby JamesVincent » Thu Jan 05, 2012 12:25 am

OK... couple of questions. How long would that slow down an actual foreclosure? and If someone is so strapped that their going into foreclosure, how in the world did they come up with the up to $750/ month that the article claims this man was charging to delay the foreclosure? Wouldnt that money be better served making some sort of effort to pay down the loan? Ok, maybe more then a couple of questions. How in the world do you just "slip" a house into a bankruptcy proceeding? Oh, Im sorry Your Honor, it seems we misplaced this fractional ownership of a property. Son, Im not in the mood for jokes. Im not joking Your Honor, it just showed up in our printouts this morning and we have to work it into our spreadsheets.
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Re: Foreclosure scammer pleads guilty

Postby add2cart » Thu Jan 05, 2012 2:49 am

It could easily slow it down a foreclosure for a year or more. Just sayin'....

Nothing they devise in their warped minds would surprise me.

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Re: Foreclosure scammer pleads guilty

Postby fortinbras » Thu Jan 05, 2012 2:50 am

People who are facing foreclosure are usually thousands behind on their mortgage. They might be able to ante up $750 but not the thousands demanded by the mortgage lender. This fellow swindled people in both directions. The banks lost time and some money, the clients lost both their homes and most of their money - maybe even going into further debt paying that $750 monthly fee.

This guy will be safer in prison than in a room with his former clients.

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Re: Foreclosure scammer pleads guilty

Postby Kestrel » Thu Jan 05, 2012 5:37 am

JamesVincent wrote:OK... couple of questions. How long would that slow down an actual foreclosure?

The filing of a bankruptcy puts an automatic "stay" on all creditor collection actions until the court conducts a hearing and determines which creditors get paid and in which order.

If someone is so strapped that their going into foreclosure, how in the world did they come up with the up to $750/ month that the article claims this man was charging to delay the foreclosure?

That's the same question any experienced landlord asks of prospective tenants who show up with a wad of cash for the deposit and first month's rent. They probably got it by stiffing their previous landlord. After that happened to me too many times I got out of the rental business.

How in the world do you just "slip" a house into a bankruptcy proceeding? Oh, Im sorry Your Honor, it seems we misplaced this fractional ownership of a property. Son, Im not in the mood for jokes. Im not joking Your Honor, it just showed up in our printouts this morning and we have to work it into our spreadsheets.

Bankruptcy clients "accidentally" omit assets all the time. Sometimes it really is an accident. But I've also seen official records being filed by bankruptcy debtors immediately after a key court hearing date as if the assets miraculously appeared. One fellow claimed to be an insurance agency employee until the Section 341 Meeting of Creditors was held, then filed his LLC paperwork as the agency owner, and made preparations to sell the business for a tidy sum while stiffing his creditors. Another fellow completely "forgot" to mention he owned an airplane. A third fellow (this is an old classic) testified with a straight face that he had no cash on hand and nothing in bank accounts, but omitted mentioning he had casino chips worth half a million dollars in plastic bags in his closet.

A prudent bankruptcy attorney who doesn't want to risk being party to bankruptcy fraud will pull his client's credit report and search for assets before the initial filing, then update those reports before the plan confirmation or discharge hearing.
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Re: Foreclosure scammer pleads guilty

Postby Judge Roy Bean » Thu Jan 05, 2012 7:19 am

Kestrel wrote:
JamesVincent wrote:OK... couple of questions. How long would that slow down an actual foreclosure?

The filing of a bankruptcy puts an automatic "stay" on all creditor collection actions until the court conducts a hearing and determines which creditors get paid and in which order.

If someone is so strapped that their going into foreclosure, how in the world did they come up with the up to $750/ month that the article claims this man was charging to delay the foreclosure?

That's the same question any experienced landlord asks of prospective tenants who show up with a wad of cash for the deposit and first month's rent. They probably got it by stiffing their previous landlord. After that happened to me too many times I got out of the rental business.

How in the world do you just "slip" a house into a bankruptcy proceeding? Oh, Im sorry Your Honor, it seems we misplaced this fractional ownership of a property. Son, Im not in the mood for jokes. Im not joking Your Honor, it just showed up in our printouts this morning and we have to work it into our spreadsheets.

Bankruptcy clients "accidentally" omit assets all the time. Sometimes it really is an accident. But I've also seen official records being filed by bankruptcy debtors immediately after a key court hearing date as if the assets miraculously appeared. One fellow claimed to be an insurance agency employee until the Section 341 Meeting of Creditors was held, then filed his LLC paperwork as the agency owner, and made preparations to sell the business for a tidy sum while stiffing his creditors. Another fellow completely "forgot" to mention he owned an airplane. A third fellow (this is an old classic) testified with a straight face that he had no cash on hand and nothing in bank accounts, but omitted mentioning he had casino chips worth half a million dollars in plastic bags in his closet.

A prudent bankruptcy attorney who doesn't want to risk being party to bankruptcy fraud will pull his client's credit report and search for assets before the initial filing, then update those reports before the plan confirmation or discharge hearing.


All that being said, the creditor side of the process should not be considered to have clean hands in their representations. The absurdities among creditor's claims are too-often baptized in what really is a cesspool of self-dealing and predatory claims. If the fine for bogus claims ($250K) were really enforced we might be able to fund the bankruptcy courts and trustees until the predators learned they weren't in control of the process and gave up on utterly specious claims they currently seek.
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Re: Foreclosure scammer pleads guilty

Postby Kestrel » Thu Jan 05, 2012 2:37 pm

Judge Roy Bean wrote:All that being said, the creditor side of the process should not be considered to have clean hands in their representations. The absurdities among creditor's claims are too-often baptized in what really is a cesspool of self-dealing and predatory claims. If the fine for bogus claims ($250K) were really enforced we might be able to fund the bankruptcy courts and trustees until the predators learned they weren't in control of the process and gave up on utterly specious claims they currently seek.

You are absolutely right about the lack of clean hands on the creditor side. But the topic I was addressing was fraud on the debtor side.

I've worked in bankruptcy case administration for over a decade. Thwarting fraud attempts by the debtors keeps life interesting; fortunately most such attempts are pretty unsophisticated. Occasionally we have seen creditor fraud in foreclosure, but it's very occasional in our district and the judge takes an extremely dim view of the foreclosure motion when it does happen. The vast majority of foreclosures, by far, are legitimate actions driven by the debtor's failure to pay. And I've heard every excuse in the book for nonpayment.
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Re: Foreclosure scammer pleads guilty

Postby Prof » Thu Jan 05, 2012 3:28 pm

Creditor and debtor fraud are fairly unusual, in my experience (I have been a bankruptcy lawyer since 1975, when Pat Higgenbotham ask me if I had taken bankruptcy in law school; I answered "yes," and an hour later Hon. Bob Porter was swearing me into the federal courts so that I could got to bankruptcy court for Pat -- he hated the place).

Debtor fraud seems to most often result from failure to disclose assets but is sometimes related to a failure of the bankruptcy attorney to explain what is property of the bankruptcy estate. Almost as often, the fraud involves conveyances of assets on the eve of bankruptcy to children, parents, etc. Sophisticated frauds seem rare.

Creditor fraud, in my experience, usually involves filing claims for debt barred by limitations. Credit card debt owners do this all of the time. Less often, there is fraud by a mortgage lender who does not actually hold the debt, etc. I have often written about this second problem.
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