Attorney General Martha Coakley Obtains Judgments Against Multiple Defendants in Alleged Foreclosure Rescue Scheme
The judgments, entered against Primary Mortgage Resource, Leo Desire, Sr., Robert Marks, Pierre Joseph and Daphne Mompoint, provide for payments of restitution to victims and civil penalties to the Commonwealth and prohibit the defendants from engaging in certain activities that facilitated the scheme.
The judgments announced today partially resolve two related lawsuits filed by the Commonwealth in March 2007 against Leo H. Desire, Sr., Primary Mortgage Resource, Inc., and others. The first lawsuit alleged that nineteen defendants participated in a foreclosure rescue scheme targeted at distressed homeowners facing foreclosure. Each of the defendants allegedly conspired through their respective roles as mortgage brokers, real estate brokers, closing attorneys and straw buyers (i.e., buyers who allowed their identities to be used to obtain loans to purchase the distressed properties) to deceive homeowners into selling their homes under the false promise of avoiding foreclosure and retaining their homes and their homes' equity. Loans were obtained by submitting false income, assets and employment information. As part of the scheme, the closing attorneys also submitted to lenders HUD-One Settlement Statements containing false information about deposits and closing costs paid by the buyers. The defendants obtained title to the distressed properties and stripped the homes' equity by disbursing loan proceeds for payment of unearned fees among themselves and to entities they owned and controlled. In certain cases, the defendants resold the homes amongst themselves, stripping additional equity.
In addition to the five consent judgments announced today, the Commonwealth obtained consent judgments against five other defendants (closing attorney Valerie Hanserd and straw buyers Marie Betey Mereus, Neville Francis, Jean Roll Joseph and Robens Joseph) within the last year. The case remains pending against defendant closing attorney James J. Alberino, defendant real estate salesperson Robin Hayes, and seven other defendants who failed to appear or defend in the action and as to whom the Commonwealth obtained entries of default. On August 13, 2010, the Commonwealth and Robin Hayes requested approval of a consent judgment from the United States Bankruptcy Court for the District of Massachusetts where Hayes has a pending bankruptcy proceeding. If approved, the Commonwealth will seek entry of the consent judgment in the Superior Court.
The second lawsuit alleged that three of the same defendants - Primary Mortgage Resource, Inc., Leo Desire and Valerie Hanserd - engaged in multiple, unlawful sales or "flips" of a fire-damaged property in Revere using straw buyers, loans obtained using false income, asset and deposit documentation, inflated appraisals, and, in a 2006 flip closed by attorney Valerie Hanserd, a falsified deed and a false HUD-One Settlement Statement. The Commonwealth resolved its allegations against Leo Desire, Sr. and Valerie Hanserd by entry of consent judgments in mid-2009. The consent judgment against Primary Mortgage Resource, Inc. announced today resolves the Commonwealth's claims against Primary Mortgage Resource, Inc. in both lawsuits.
Details relating to the recent judgments are as follows:
- Mortgage loan originator Leo H. Desire, Sr. stipulated to liability and agreed to entry of a judgment that provides for $300,000 monetary relief and further provides for extensive injunctive relief prohibiting him from acting as a mortgage broker, real estate broker, trustee, notary public, or escrow agent or participating in any way in any business relating to the financing of real property in the Commonwealth of Massachusetts;
- Primary Mortgage Resource, Inc. agreed to entry of a judgment that provides for payment of $80,000 to be directed to consumer restitution and $20,000 to civil penalties and further provides for extensive injunctive relief prohibiting it from participating in any business relating to the purchase, sale or financing of real property located in the Commonwealth;
- Robert P. Marks agreed to entry of a judgment that provides for payment of $30,000 to be directed to consumer relief and $70,000 to civil penalties and further requires him to refrain from acting as a closing attorney for seven years, retroactive to May 18, 2007, the date the Preliminary Injunction in the first lawsuit was entered;
- Pierre Joseph and Daphne Mompoint agreed to entry of judgments that prohibit them from acting as straw buyers.
This case is being handled by Assistant Attorneys Generals Gillian Feiner and Amber Anderson Villa, with assistance from Paralegal Yolanda Kruczkowski of Attorney General Coakley's Consumer Protection Division with Investigators Nancy Ward and Monique Cascarano of Attorney General Coakley's Investigations Division.