Friday, July 20, 2018
Business

Pasco lawyer accused of altering documents in foreclosure cases

Five years ago, attorney Constantine "Chuck" Kalogianis got in trouble with the Florida Bar for not doing enough for his clients.

Now he faces allegations that he did too much — altering documents in at least five Pasco County mortgage foreclosure cases in which he represented the delinquent borrowers.

The claims of evidence tampering are laid out in an unusual 258-page motion filed in Pasco Circuit Court last week by a company seeking to foreclose on one of Kalogianis' clients.

Written in dramatic Perry Mason style, the motion eliminates what it calls "other suspects'' and says Kalogianis was the only one with the means and motive to alter records and make it appear that the companies starting the foreclosure actions didn't have legal standing to do so.

The goal, the motion says, was to make it impossible to foreclose on Kalogianis' clients. In one case, a judge initially ruled in his favor and ordered a bank to pay him $170,000 in legal fees.

"There is nothing wrong with wanting to win a case,'' says the motion by Bayview Loan Servicing, which handles loans for Bank of America and other major lenders. "There is something terribly wrong with repeatedly tampering with and defacing evidence entrusted to the Clerk of Court in order to do so."

Kalogianis, a well-known Pasco lawyer and former congressional candidate, said Thursday that he does not generally comment on pending litigation. But in the case that prompted the motion, he said, the bank lacked the original document it needed to foreclose and was trying to "turn the tables'' on him rather than lose the case.

"It is the plaintiff's own improper conduct … that should be reviewed,'' he said.

During the foreclosure crisis, in which millions of homeowners defaulted on their mortgages, it was the banks that often were accused of filing fraudulent, inaccurate or incomplete documents in their zeal to foreclose. The cases involving Kalogianis apparently are the first in which a lawyer representing borrowers has been accused of altering records.

"I've never heard of that,'' said Matthew Weidner, a St. Petersburg lawyer who has defended hundreds of homeowners. But, he added, "defense attorneys have been fighting (against) forged and faked documents from the beginning of this crisis and our claims largely have been ignored.''

The allegations against Kalogianis center on promissory notes, the document in which a borrower promises to repay the lender. Promissory notes often change hands as mortgages are sold and resold. Many lenders went out of business after the housing crash. Because it was not always clear whom a borrower owed, promissory notes often were stamped with a "blank endorsement'' — whoever the promissory note was endorsed to would be legally entitled to foreclose and collect any money due.

"It's like a blank check,'' Weid­ner said.

In cases defended by Kalogianis, the companies seeking to foreclose said they filed promissory notes with blank endorsements. But at some point, the motion says, the notes in four of the cases were altered to show they had been endorsed by "Bank of New York, as trustee.''

In the fifth case, a blank endorsement was altered to show Wells Fargo had signed it, the motion says.

One company, BAC, lost its case against a Kalogianis client in 2014 when Kalogianis argued at trial that only Bank of New York could foreclose because it was the one that had endorsed the promissory note. (The case has since been reopened.)

While acknowledging there are "no videos, no confessions, DNA or fingerprint evidence'' as to who allegedly changed the promissory notes, the motion says that "the potential perpetrators … become more and more limited as opportunity and motive are examined.''

Of those with access to the original notes, judges and court clerks "have no dog in the fight'' and could be eliminated, the motion says. Lawyers for the companies trying to foreclose could be ruled out because they would have been "sabotaging their own cases.'' And Bank of New York had no motive because it had "absolutely nothing to do'' with the loans involved.

"This process of elimination could leave only defendants' counsel'' — Kalogianis, the motion says. It seeks a final judgment of foreclosure and attorneys fees in its case against one of Kalogianis' clients, Nicholas Verrengia.

Both he and another client, Panagiotis Bouziotis, called the Tampa Bay Times Thursday to praise Kalogianis and accuse the other side of committing fraud in their cases.

"He's one of the most hard-working and diligent attorneys I've ever worked with,'' said Bouziotis, who has been in foreclosure since 2009. "If not for his efforts, we would have lost our house.''

In 2011, the Florida Bar publicly reprimanded Kalogianis for professional misconduct and ordered him to attend ethics school for violating several Bar rules. It found he did not keep in touch with clients, including one who said he refused to return a $9,000 retainer even though he had done little work on her civil case. (An arbitrator later awarded her a $6,000 refund.)

The Bar also said Kalogianis had failed to properly supervise a non-lawyer assistant, who offered legal advice to clients and steered them to businesses in which the assistant had a financial interest.

Last November, the Bar filed a complaint against Kalogianis stemming from a 2007 business transaction in which a client agreed to loan him $227,644 to be secured by mortgages on Kalogianis' then-homestead as well as on two lots in the Williamsburg subdivision he was developing in New Port Richey.

At the time, the complaint says, Kalogianis did not disclose his financial "distress'', including that he had taken out mortgages totaling more than $2 million that eventually would go into default. He also failed to disclose that there were unsatisfied liens at the time against a 9,000-square-foot home he was building for himself in Williamsburg.

In his response, Kalogianis acknowledged that one of the client's mortgages was wiped out in a foreclosure action but he denied any wrongdoing in his dealings with her. He said she had never filed a civil action against him and instead was "seeking to have the Florida Bar act as her debt collection agency at no expense to her.'' The complaint is pending before the Florida Supreme Court.

Kalogianis, a founder of the West Pasco Democratic Club, unsuccessfully ran for the U.S. House in 2002. He gained national attention when it was learned he had worked as a stripper while in law school.

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate.

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