Author Archives: The Fisherman

Sham Marriage and Bankruptcy Fraud

This was an interesting story that came out that we think is complementary to the focus of this site. It’s a story of a woman, Gabriela Rosa, who was a public servant, who faked her marriage to get something from the US (in her case, it was citizenship). Back in the 90s she perpetrated a fake marriage. Was there something in the water in the 90s that made people think it was okay to fake marriages? She was able to fly under the radar for many years, which also seems to be prevalent. And she also committed bankruptcy fraud for giving a false amount of income on her bankruptcy schedule. This seems to also be something that people think they can get away with. She seemed to believe that she wouldn’t have gotten caught had it not been for her being a public official, which we don’t agree with.

 

Short post this time, but it speaks for itself. Fish do get caught when they find themselves to be trapped in nets that they weren’t paying attention to. At least her husband was a real person.

Malingering for Federal and State Benefits

Thanks to everyone who commented on the last blog post concerning surveillance and disability fraud investigations. Due to the comments we posted (and those we didn’t), we are writing this post about the concept of Malingering. What is it, and why would someone do it?

According to Medscape, malingering in the DSM-V is described as “”The essential feature of Malingering is the intentional production of false or grossly exaggerated physical or psychological symptoms, motivated by external incentives such as avoiding military duty, avoiding work, obtaining financial compensation, evading criminal prosecution, or obtaining drugs.” That’s a mouthful! Let’s look at a few cases involving the financial compensation part.

Larry Benson’s Fraud of the Day site recently wrote about a guy who was “mooching” by claiming to have an injury that didn’t prevent him from playing basketball and working out at the gym (good old surveillance at work). That guy got almost 9 years time for his fraud.

The military handles malingering under Article 115. You can find it by clicking HERE. It is a punishable offense. THIS retired Air Force captain suggests that the VA could possibly have fewer cases of malingering on their hands if they got corroboration from civilians who know what is really going on with the people they live and interact with (a form of surveillance and intel). Another story of a guy malingering and lying about injuries to obtain benefits (and being reported by others) can be found HERE. He faces a maximum of 15 years and a $250,000 fine.

It’s not just limited to physical injuries, unfortunately. The numbers of people getting diagnosed with PTSD has swelled through the past several years. And so have the numbers of people that actually have “Pseudo-PTSD”. Without a doubt, true sufferers of PTSD deserve all of the help, medical and financial, that our Country can give to them. Their symptoms also are COMPLEX. People who actually have Pseudo-PTSD, and are malingerers, take away the ability to do justice to the true sufferers. Many articles can be found on this but journal articles are respected more and one can be read by clicking HERE . A fantastic writeup done by an attorney on how to combat someone’s claim of PTSD (which includes surveillance and digging into the past of the claimant) can be found HERE.

Perhaps the Veteran’s Benefit Administration AND the Social Security Administration could financially benefit from using some of these resources in order to combat such fraud. Perhaps they already are!  Your Country thanks you for your help in detecting it.

NOTE: it’s been one year since this blog started. We almost made it to 75,000 page hits! Many thanks for spreading the word, and we look forward to doubling the numbers in year 2. There is a lot left still to write about.

Using Surveillance to Catch Disability Fraud

Fraudulent claims for disability have been a problem for the Social Security Administration for years.  The ways that fraud investigators find the fraudster range from simply putting two and two together with documents, to relying on anonymous tips via their fraud hotline. In between, investigators often root out the fraudster from simply watching them.  It happens more and more these days.

THIS guy was receiving more than $6000 per month for his “disability”, but meanwhile was seen playing basketball, doing yardwork, and washing his boat that the author says was probably purchased using his disability payments.  He was getting money from SSA and Veteran’s Affairs.

THIS woman was caught committing worker’s comp fraud by using video surveillance.  One minute, she needed a cane and a brace, and the next she could function just fine without it.

The Social Security Administration has a Cooperative Disability Investigations Program that routinely employs the use of video surveillance in order to catch fraudsters.  A few of their cases can be read about by clicking HERE.  More can be found on video surveillance by clicking HERE.  An attorney did a nice writeup about the ways that surveillance is conducted.  It includes interviewing 3rd parties and reviewing information found on social media.

THIS story reports on the retired officers and firefighters who were charged with making fraudulent PTSD claims for disability to the Social Security Administration.  There were more than 100 of them. On their paperwork, apparently they kept writing that “I’m unable to perform any type of work activity in or out of the house”.  But they were found to be jet skiing, piloting planes and doing work.  If you write that you can’t do things, than don’t be seen or heard doing those things.  Period.

You should especially not be out in very public venues doing any of the things that you attested to not being able to do.  Being on The Price is Right, grabbing the big wheel when you are getting disability pay for a shoulder injury, is a no-no. Going zip-lining while on vacation with your partner, is another.  I’d like to know how they found out what Cathy Cashwell was doing while on vacation! (ooh, it’s probably by first checking bank and credit card statements and getting it confirmed from pictures!) It’s called malingering (faking an illness for personal gain).  The Form 3368 for a malingerer, makes for interesting and entertaining reading indeed!  A note to fraudsters: if the doctor you listed in Section 8 is someone who is known to certify for bogus claims, you may want to turn yourself in before you are caught. And shame on you for listing and wasting good meds that could be used for someone who really intends to take them.

How can you get away with disability fraud?  Here’s advice from the investigator written about in the story above: ““The best way and only way of beating the system is completely staying in your house, not leaving for three to five years.” Cathy, I bet you don’t have that smile you had on the Price is Right video now!

Bankruptcy Attorneys Being Naughty

I don’t think that anyone truly thinks that fraud and actions to cover up fraud don’t exist in our world. I myself have spent many times around the watercooler at my job, talking with co-workers about the lengths that people go to in order to make it that their illegal actions don’t see the light of day. What we are blown away by are stories where attorneys are doing the illegal activities to help their client who has been fraudulent in the first place. The last blog post sparked our interest in these sorts of situations.

And they do happen.

The good news for those of us who think there is no hope for a system where these things are tolerated by the very officers who are entrusted with the care of that system, is that they often times get caught. That is the subject of my post: those naughty bankruptcy attorneys.

Federal Rule of Bankruptcy Procedure 9011 provides guidance about an attorney’s filings:

“The attorney “is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances” that the information presented by the attorney to the court is such.

So you can’t just upload things just because you feel like it, and you can’t to purposefully cause delay, and you can’t to try to increase the cost of litigations, and you can’t make allegations unless you have evidentiary support for them. So actually I wrote it wrong to say “you can’t”. You CAN, but doing so will subject you to sanctions, and a nice big fat Order for Show Cause that starts the ball rolling. Bankruptcy courts can impose sanctions in three situations: where papers that are submitted demonstrate factual frivolity, legal frivolity, or where papers are submitted for an ‘improper purpose.’ Attorneys have been penalized by the bankruptcy court for their actions.  THIS case involves sanctions against an attorney who advised their client not to disclose assets. And THIS case shows the importance of the attorney having information to back up their claims, and what happens when your client contradicts their facts to save themselves.
At all times once an attorney is retained as their counsel, it is THEY who are running the show and are responsible for authenticity of information on schedules. It doesn’t work to say you believed what your client told you about the amount in their accounts or their income amount, if you don’t get the statements to corroborate what they’ve said. Attorneys are responsible for doing discovery on their clients’ information BEFORE filing things in the court about them. Not that you can’t do that, but if you do, it is your ass in the sling swinging in front of the Judge at your Show Cause hearing. It’s also a no-no to repeatedly submit unconfirmable plans (see Dahlgren v. Palone case), and to do so in a deliberate attempt to multiply or delay proceedings subjects the attorney to sanctions also. It’s a privilege to operate in the court, and if you abuse it by being negligent, too bad for you (see Thao Tran).

Finally, it’s worth mentioning that an attorney’s show cause hearing isn’t the place for them to lie about what or why they did what they did. Ask Kathy Cruz, who put wrong information on schedules that affected funds available to creditors, mischaracterized monies in order to obtain confirmation for their client, and then made misrepresentations in her show cause hearing to the Judge about her actions. Fines, mandatory reeducation and suspension of practice for 6 months. Was that little money your client gave you really worth all of that, Kathy? Kathy isn’t alone. If attorneys think they can get one over on a determined Judge, just look at this case, also found on the internet, involving what at first was an attorney not using Federal upload system in accordance with the Rules:

Download (PDF, 127KB)

There is a blog post found HERE, where an attorney asks “what has happened to honesty in the Bar, for Pete’s sake?” We applaud any avenues that exist to bring out and showcase the fraudulent behavior of clients hell-bent on committing bankruptcy fraud, and their attorneys who are determined to “win” by any means necessary to help them.  At some point, it becomes clear that your client is committing fraud, and an attorney that keeps walking beside them to help them do it… well, hopefully they don’t mind their character and reputation being judged accordingly.  Birds of a feather, do tend to flock together!

What price would YOU pay for bankruptcy fraud?

This segment reports on the antics of Steven K. Zinnel, who got himself into serious trouble when he planned and decided to commit bankruptcy fraud.  Bankruptcy fraud isn’t such the big story with this case, but what is interesting is the way that his fraud got detected and the fallout from it.  First, some backstory.

Mr. Zinnel went through a horrible divorce and child support battle with his now ex-wife.  Mr. Zinnel was a businessman with significant holdings and assets, but he wanted to control how much of it would be given to his ex-wife or kids.  Essentially, he didn’t want to be told by the State court how much of his money would be given for his obligations.  So what did he do?  He filed personal bankruptcy.  Best way to get protection is the Federal kind, while in bankruptcy.  Because of the nature of the relationship between he and his ex, she knew information about his holdings, and he knew that.  She wasn’t going to make it easy for him to just screw her and the kids out of what would rightfully be theirs otherwise.

Here’s where it gets interesting.  Zinnel decided, along with his attorney, Derian Eidson, that they would set up trusts and companies in a way that would shield his assets from detection from the bankruptcy trustee.  He put property into other peoples’ names both before and after his bankruptcy too.  THAT, is a no-no.  Zinnel apparently made it clear in the divorce case that he believed he could conceal his true financial picture in order to avoid his financial obligations (his kids).  He wanted a little bit of help to achieve his goal of getting his wife off his trail, so he did what anyone would do: he contacted the FBI.  His ex was making things uncomfortable for him by requesting records about him, so he decided to make things uncomfortable for her.  He asked the FBI to investigate his ex-wife for requesting the records.   According to THIS write-up on the story, “According to papers on file with the court, when agents followed up on Zinnel’s call to the FBI, his own bankruptcy crimes were discovered.”  According to the write-up by TIME found HERE, Zinnel’s BK judge noted that, “having roused the beast, like the professor in Frankenstein, [Zinnel] was soon fighting off his own creation.”  It took a while, but the FBI was able to piece together his asset transfers, saw the sources of his income that he didn’t declare, and found the proof of his various bankruptcy frauds.

Oh, and let’s not forget about his female lawyer that put her own credentials on the line in order to assist her client with his fraud.  Difficult to imagine that an attorney would be so focused on winning for their client, that they would be willing to lie for them and help them commit fraud.  Clean hands doctrine, anyone?  Eidson was convicted of one count of conspiracy, and one of attempting to commit money laundering.  She also had to forfeit assets due to her conduct.  One has to wonder how much her integrity was bought for, assuming she had it to begin with?

 

Zinnel tried to appeal his bankruptcy, but it got stayed until after the criminal proceedings were completed.  You can read about that by going HERE.  Zinnel’s Judge had this to say: [“You don’t lie before a court of law,” Judge Nunley admonished Zinnel. “You don’t continue to lie, which is what you did.” Judge Nunley found that Zinnel’s gifts of being articulate and charismatic were used toward promoting Zinnel’s “own selfish ends.”]  Federal prosecutors had this to report in their filed briefs: “[Zinnel] showed his true nature: ‘hateful, vindictive, and incorrigible,’ read the court papers.  More on that HERE.

Zinnel got fined that $500,000 that is mentioned on nearly all of the bankruptcy paperwork that debtors have to acknowledge.  He also ended up having to forfeit almost $3 million of his assets to the government, and let’s not forget the time that you do for doing the crime that you did: more than 17 years!  Here’s a copy of the Prelim Order:

Download (PDF, 192KB)

We asked on this site, “can you make someone do the right thing?”. We were writing about our Pisces, Ms. Proctor.  We certainly hope she is reading this post, along with her attorneys.  This story is directly relevant to her, and she (and they) certainly know why! It’s time to be honest. Even Teresa, from the Real Housewives of New Jersey is doing it. SEE?

 

More found below:

http://www.justice.gov/usao/cae/news/docs/2013/07-2013/07-17-13Zinnel.html

http://www.sacbee.com/2014/03/05/6210229/man-who-hid-assets-in-divorce.html

give a chance

A Site Recap for Newbies

The site has expanded in ways that we didn’t originally plan, and since we have more planned for 2014, we wanted to pay homage to our original goals in order to do a check to see how we’ve done.

We originally sought to explore the following with our Pisces, Gail R. Proctor:

1) How easy is it for someone to defraud the Federal Government for years undetected?

2) Is it possible for someone to create a person out of thin air and get financial benefit from it for years?

3) Can a person take paperwork from a Federal agency, and submit an altered version of it to a related State agency, undetected, and get financial benefit?

4) Can a person claim a disability that doesn’t exist, and get paid for it?

5) How easy is it to conceal assets, stockpile money and give false statements on your Federal bankruptcy schedules under the alleged “penalty of perjury”?

6) How easy is it to claim that you live in a State that has no income taxes, in order to avoid paying taxes in another State where you do live (that has taxes)?

And here are the posts that have been done, that address each of the above subject areas.

It all surfaced on mortgage applications for houses that were secretively in bankruptcy:

http://www.tocatchafish.net/being-stuck-in-fraud/

 

Which led to the REAL fake husband of Ms. Gail Renai Proctor’s that appears to be:  http://www.tocatchafish.net/bah-fraud-solve/

 

Which led to finding this:

http://www.tocatchafish.net/she-claims-she-is-married/

http://www.tocatchafish.net/mr-black-will-be-turning-60/

 

Is there disability fraud going on?

http://www.tocatchafish.net/maryland_and_full_disability/

False claims of Florida residency in order to avoid paying Maryland taxes

http://www.tocatchafish.net/maryland-tax-evasion/

Continuing to operate a business in Maryland without paying its MD personal property tax or filing a company tax returns with IRS

http://www.tocatchafish.net/md_corp_fraud/

Making false statements in order to try to quiet someone who knows your Federal fraud:

http://www.tocatchafish.net/pretend_victim/

Committing Bankruptcy fraud (same old pattern of fraudulent statements):

http://www.tocatchafish.net/bankruptcy-fraud/

This one was a bonus, not on our original list.  Maryland First-Time Homebuyer fraud:

http://www.tocatchafish.net/fraud-in-md-again/

 

This is meant to be a recap for those who want to quickly know the main focus of this site.  More to come! Thanks for sharing us with your friends, and we appreciate your comments.

finding facts

What’s the Temperature of BAH Fraud Cases in the US?

An internet search reveals that the number of BAH fraud and other entitlement cases here in the US has increased. As one legal firm that we found put it, “The government has gotten serious about getting its money back”. It’s time they did.

A case in Arizona has popped onto the radar involving Air National Guard airmen who have been charged with stealing $1.4 million of money that they weren’t entitled to receive. 8 officers, included a Retired Colonel, and 13 enlisted airmen have been accused and charged with this crime.  Yes, you read right, even a Colonel. People see the title “Colonel”, and think that the person would be above reproach and wrong-doing. The Air Force Times article linked below states that leaders “failed to uphold military standards of integrity in part because they were ethically compromised by their own misconduct.”

 It must be a common enough offense these days, considering the number of internet results that you get when looking for BAH fraud attorneys. One military lawyer answered a question asked regarding how hard it is to be charged with BAH fraud. He answered by giving the elements of fraud quoted from military justice law, and then gave guidance on how a person can be convicted once the fraud is proven. His advice boiled down to “So to prove BAH fraud, they would need to prove that the service member, on purpose, filed a claim for BAH that they knew at the time was fraudulent.” His full writeup can be found below.

How do they connect the dots to show that you knew at the time the claim was fraudulent? Looking back to the legal firm who noted how serious the government is getting, they write that you should expect that the records you used to submit and justify the claim will be examined along with phone records, bank records, etc in order to prove that you intended to steal in the first place and then kept the money that you knew you weren’t entitled to have. Unlike overly-vexatious folks who jump the gun and file lawsuits just to be pains in the asses to people, the government takes its time to gather all of the evidence it needs by interviewing people who may know more than the servicemember will tell, and obtaining and reviewing what the actual documents show. No sense relying on the words of someone who, if they were intent on deceiving you in the first place, aren’t likely to tell you the truth even if you ask them. The forms they submit state that you are signing them, under penalty of perjury, so if you lied, then time to get the penalty that you signed your name as understanding that you might get if caught.

Many of the cases conclude with the person being stripped of rank, stripped of retirement pay and benefits, and made to pay restitution for the money they stole. In the case of someone who is no longer in the military, the penalty wouldn’t involve rank stripping that doesn’t mean anything on the civilian world anymore, anyway. Remember the case we reported on previously regarding the MD vets who stole monies they weren’t entitled to? They were all retired, getting disability pay for fictitious ailments. Wonder if there’s ever been a case of fictitious husband created to get entitlement not earned, along with fictitious ailments for fake disabilities? It would seem that anything is possible.

A case where the penalty was determined by EVERY month that the servicemember took BAH pay and didn’t give it back:

Download (PDF, 35KB)

There is a saying: Never lie to someone. Odds are that they already know the truth and just wanted to hear how you decided to spin it!

Site One

Site Two

Site Three

that lie

Disability Fraud Of Maryland Vets Exposed

In this post, we are going to talk about a case of VA benefits fraud and illegal tax breaks in Maryland. The backdrop for this is the story that broke a few months ago concerning six veterans who were found to be receiving “agent orange” benefits as well as MD state tax waivers fraudulently. Apparently, the Deputy Chief of Claims at the Maryland Department of Veterans Affairs, David Clark, was helping vets to get these illegal benefits by falsifying their records and amending them to back up claims. He was receiving a cut of the illegally obtained money as payment for services rendered. Apparently, since Mr. Clark knew what was needed in order that the claims would sail through, his position of authority made it easier for the fraud to go undetected until now.

The story that we’ve attached also references the use of “using counterfeit DOD forms to change service.. records.”, and another story about Clark referenced below indicates that he also submitted false doctor’s letters regarding illnesses. Apparently, Mr. Clark also changed paperwork to place medical diagnoses on them that didn’t actually exist.

The story also references the claim that there are too many claims being processed “..to be able to double-check the accuracy of information..” submitted on them. It is also noted that “outdated systems make it more difficult to catch schemes and people.” It looks to us to be yet another case of people and agencies relying on the moral integrity and honesty of the people giving information.

We think that they should check the Maryland disability claims that were processed in Maryland after the date that Mr. Clark submitted one fraudulently for himself: 2001.

On another blog site that we found that is also chatting about this story, there are people who have commented about things such as:

Being able to “forge a DD-214”

“There is no doubt that a DD-214 and other discharge paperwork, even orders could be forged.”

“I would not be surprised if 10% or more of the VA’s budget goes to pay for compensation, medical care, etc . . . , that’s based on fraudulent claims.”

“They don’t seem to cross-check this against official records at NPRC and/or the services.”

“To be fair, virtually ANY document, paper or electronic, can be forged if the forger is determined enough.”

That site can be found HERE

One of the best suggestions made by someone on that site, is that the Vet should be asked to “..fill out and sign a SF180 giving you access to his records.” In the case of medical records while in the military, you would need the vet’s written permission to access them. You won’t need their written permission in order to get their exit/discharge order. You will clearly be able to see on it, if they were really discharged for medical reasons as they are claiming, or perhaps just “retired”. This would go a long way to catch those who are attempting to commit fraud for personal financial gain.

It would appear that one of our site’s question of “Can a person claim a disability that doesn’t exist, and get paid for it?” has been answered in the affirmative. Stay tuned. We will report the other stories that are bound to surface related to issues such as this. Keep going, US Attorney Rod Rosenstein!!

The Baltimore Sun story is below:

Download (PDF, 46KB)

The other Sun story is linked HERE

Can You Make Someone Do The Right Thing?

When someone is determined to do the wrong thing, and for purposes of this post, we will say “lie under penalty of perjury on federal documents for court”, ·one might wonder if it is possible to make them tell the truth. Let’s imagine what that looks like for someone’s Federal bankruptcy. Let’s say that someone has submitted their schedules disclosing their income and expenses, and they deliberately leave off thousands of dollars that they are receiving monthly. You are probably wondering how that could happen without someone checking it or finding out. One way it could happen is by claiming that you are a victim of identity theft, and requesting that the company paying you monthly stop doing direct deposit of the money, so that you will get a check instead. Then, you just cash the check and deposit the part of the money that you want the Trustee to know about. That way, it only shows up for a deposit amount that you actually deposit, instead of the full check amount. Next, you find yourself a bankruptcy lawyers who won’t actually ask you to verify or even show your bank statements. Granted, this is not proper for the bankruptcy lawyer to do, but it does happen.Has bankruptcy fraud happened? Yes it has. Has the lawyer helped commit it? Yes they did. With bankruptcy reform, lawyers were made to be more responsible and accountable for the actions of their clients. How this still goes on in today’s world, without penalty, is a question that is better posed to the Trustee’s office of bankruptcy courts.

Back to the original question of “what can you do about it”?

You can request that a Rule 2004 examination be done so that you get the opportunity to examine what the debtor has done regarding financial transactions, and if you find evidence of fraud, report it. This may initially be hard to do if the debtor is determined to keep the concealment of those funds secret, but you can prevail if you persistently stick with it and keep your eyes open. Interestingly, when a person files bankruptcy, they are afforded protections from their creditors, so the court often gives them the benefit of the doubt since they are seeking protections from those creditors. This means that merely saying you believe there is fraud, won’t be enough. You will have to supply proof. You need to get it from that 2004 exam, or seek alternative methods outside of the court and provide it when you uncover it.

Bankruptcy fraud costs ALL of us in the long run, even if you personally never file. Companies lose out on monies that they otherwise would have been able to recover (apply to the debt), and they ultimately write off the loss. Please understand that in doing that, the costs for everything associated with those debts goes up. Why? Because the money doesn’t evaporate into thin air just because the debt is written off. Products were made out of materials and salaries were paid to people to make them. A profit was supposed to be made in order to keep the cycle going. Mess up the equation, and the cost side of it has no choice but to go up (not to mention the costs of credit associated with it). So you see, we all pay for the fraud of those bold people that don’t seem to be phased by the possible $500,000 penalty for doing it.

So, if YOU have information that someone is doing any of the things that are bankruptcy fraud:

Deliberately leaving off monthly income amounts

Deliberately leaving off bank accounts

Transferring money or assets to others within 2 years of filing, to hold for you until the coast is clear (no one is looking anymore)

Deliberately leaving off expensive artwork, jewelry, real estate holdings or investment accounts

Placing someone’s name onto a bank account simply in the hopes that the Trustee will think some transactions aren’t yours (ie. they won’t take the time to ask)

Making large cash withdrawals from bank account prior to filing bankruptcy to hold into your house

You can report them to the Criminal Enforcement division of the Trustee’s office in the Federal district where they have filed bankruptcy. According to the website, the more documentation you provide them, the more likely it will be that they will investigate and possibly prosecute the person. In addition, be aware that the FBI is the agency that investigates suspected bankruptcy fraud. Here is a link that provides information on reporting suspected fraud:

Reporting suspected bankruptcy fraud

 

Examples of bankruptcy fraud prosecutions

Maryland woman goes to prison for bankruptcy fraud

Can you make someone do the right thing? We don’t know yet. Tell us if you’ve had an experience that answers this question for us!

We can all help one another stop bankruptcy fraud

We can all help one another stop bankruptcy fraud

Houses are going, going gone!

One by one, the houses that were purchased by Marlena Jareaux and Gail Proctor are going under. Well, actually, they’ve been “under” for quite some time since they are no longer worth what they were purchased for. Back in 2004, two women decided to pool their financial resources together in order to purchase investment properties in the fine city of Baltimore Maryland. They sat down at the settlement table 8 times in a one year and seven month period in order to purchase those houses. Each of them were likely starry-eyed as they forked over their hard-earned monies and cashed out stock accounts in the hopes of creating a solid financial future backed by the American dream of real estate investment. Where else can one purchase a 3 bedroom home that is rent-ready for $53,000 that is so close to our Nation’s capitol?

Well, as it has always been said, there is no “sure thing” except death and taxes. Well, and for some people, taxes aren’t even a sure thing, but we’ll save THAT story for another post. Real estate is not a sure thing, just ask the many many investors who bought in Baltimore (and other places) and lost their shirt as they got pulled under by the housing crisis that anyone who can see or hear has surely heard about. This post isn’t about the “derivatives” that were created by bankers to package and sell mortgages to investors as securities. This post isn’t about the deplorable MERS system created by those same bankers, that robbed local land records offices nationwide of fees that could have gone to pay for vital local government services (but instead lined the pockets of greedy mortgage bankers). Note: is that slander? Hm.

No, this post is about what can go wrong with a business partnership. You MUST be able to trust your business partner. More importantly, you MUST do your due diligence to ensure to the best of your ability that your business partner is actually trustworthy. That means, you should be able to rely on their word. You should be able to know who you going into business with, and what they are bringing to the table. Particularly, when you are investing ALL of your money that you slated for your child’s future college needs. Ouch!! Yes, yes, the world unfortunately has its’ share of Bernie Madoffs who are intent on using those who they think are weak and vulnerable, in order to further their own selfish agendas at YOUR cost.

What would you do if someone that you trusted with your savings nest egg did the following:

  1. Bought houses with you, seemingly with money that was theirs to pledge
  2. Worked right along side of you painting, etc in those houses when things were “good”
  3. Form a company (an LLC) with you to handle the processing of tenant rent payments and expenses for those houses
  4. Stopped working in the houses when communications were “bad”
  5. Disappear and cease all communications with you for almost two years, making you wonder if  they were even alive. Essentially leave their investment unattended.
  6. Reappear when you file suit to try to sell the houses, once you realize that it’s too much work for one person to do all by themselves and you are tired of being the only one putting your money into the houses when there are two people who are supposed to be responsible for them
  7. Convince you to stop the forced-sale of the houses by the Baltimore City judge, and promise to work along side of you again until the houses can be sold in order to protect each others’ credit (and promise you that you will be reimbursed for the personal investment you made above and beyond theirs)
  8. Sign with you to list the houses for sale, watch while they don’t sell because they are no longer worth what is owed on them, and then say that they don’t agree to doing short sales on the houses because they don’t want to be forced to sell off their own assets in order to pay deficiencies (meanwhile, you have none because you put them all into keeping the houses going for years)
  9. File a $500,000 lawsuit against you, three months after the conversation in point #8 above, on behalf of the company you cofounded with them (alleging that YOU are the reason for the financial ruin that is coming because you’ve decided to cease putting your time and money into the houses to your detriment). Persist with the suit after it was thrown out by a Judge, then refile by reducing the ridiculous amount to $150,000 instead (still ridiculous)
  10. Remove you from the company bank account; file charges with police and the State’s Attorney’s office insisting that the company credit card that they themselves opened up and were also using was instead opened by you alone fraudulently AND that a Suntrust home equity line that was opened up by the both of you on one of the houses was instead opened up and used by you fraudulently (and to your own financial detriment by the way since you still owe money on that line)
  11. Stop making payments to Suntrust Mortgage and Wells Fargo on those seven mortgages and one equity line, while continuing to deposit tenant rent monies into an account now solely controlled by them
  12. Spend the money from those rents (not on mortgages though), despite the Federal 1-4 Family Rider that was attached and executed on each of the mortgages since they were investment properties that said that you both agreed to hold tenant rents for the benefit of those mortgage companies
  13. Insist that the rent money somehow belongs to the company, instead of the owners of the houses (or the mortgage companies)
  14. Collect over $40,000 in tenant rent payments and deposit into the company bank account, while ironically NOT pay the required Maryland personal property tax return that enables it to be a legal entity operating in the State of Maryland
  15. File personal bankruptcy, and thereby avoid your lawsuit where you filed against them in Baltimore City for only half (your share) of those rent monies collected on houses that you co-own
  16. Report that they don’t really remember any details of having sat down at the settlement table with you to buy the houses, that it was all “a blur”, and that it was YOU who was taking advantage of THEM all the time when they were gone as they were flying to California to seek alternative therapies for an alleged mental impairment sustained as a result of service to our country in the military (unbeknownst to you until you read it in the court filings they authored)

You may spend time:

  1. Wondering why the person you sat down at the settlement table with won’t expend anywhere near the same amount of time, energy or money as you did to keep the houses going as you did for years without them.
  2. Defending yourself in the legal system by spending even more money hiring a defense lawyer while you are waiting for the person to come to their senses that you at some point wonder if they even ever have

Or you may do both, and then realize that sometimes, people will go to great lengths to start fires all over the place, so that everyone will be focusing on everything BUT what they themselves did to create the mess in the first place. That takes a different breed of person that can stay-up in the wee hours of the night devising a plan of how to leave their unsuspecting (but now very-prudent and wiser) business partner hanging out to dry. We here at To Catch A Fish know that those people exist in the world. We’re count ourselves fortunate to be on the list of those who are in good health, surrounded by people who genuinely love us, and able to look ourselves in the mirror everynight before having a good night’s sleep! You can do those things when you live with integrity, despite what others attempt to do to drag you down to their level.

Oh, some housekeeping: a certain someone got the great idea to send anonymous letters to friends and family members of Ms. Jareaux regarding the $500,000 lawsuit described above as well as the foreclosure on her personal residence which has already occurred (along with one of her own investment properties at 2106 Herbert Street in Baltimore). Marlena had already had a party in DC about a year prior to that, announcing to everyone who was there (included friends and strangers) that she was in personal financial ruin as a result of the housing meltdown and the lawsuit with her prior business partner, so it wasn’t REALLY news to anyone. But the idea was a great one after all: please, feel free to go to the Howard County Circuit Court in Ellicott City Maryland, and give the file clerk case number 13-C11085869. There are three rather large file jackets on this case, so you’ll be there for a while. But you should pay close attention to the affidavits that are on file for both Ms. Jareaux and Ms. Proctor. As that letter indicated that was sent anonymously, if you want to see for yourself what has been going on, go there, and make copies of whatever you wish. We will be posting a few of those documents here, well, since they ARE public information! You can come back to this site then, and confirm for yourself what is true and what is not. In the meantime, here are some supporting documents for things written above:

Download (PDF, 96KB)

And then, the biggest mistake of all!

Download (PDF, 36KB)

To integrity! A toast to integrity!