Monday, September 24, 2018

Housing scam: Rise of fraudulent deeds throws wrench into home ownership

Two years ago, Realtor Rod Banks put a vacant home in Valrico on the market. One day, when he stopped by to check on the house, it was vacant no more.

Someone had moved in, along with roomfuls of furniture. There were sofas, throw pillows and a cocktail table in the living room. Paintings hung on the walls. One bedroom had been transformed into a cozy den.

To Banks’ surprise, a woman who was clearly living in the spacious pool home produced a deed showing she owned it. Except that she didn’t. The deed was a fraud.

"The defendants tried to steal a $300,000 house," says Hillsborough State Attorney Andrew Warren. Last month, his office charged Carolyn Doris Knight-Williams and Brenda L. Robinson with felonies.

In the Tampa Bay area, fraudulent deeds have become a big enough problem that clerks of court now offer a free service that can alert owners if a scamster is trying to get possession of their property.

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As recent cases show, however, detecting fraud is often just a first step. Then it can take months to straighten out title issues so the property can legally be sold. In the meantime, the house might sit vacant and fall into disrepair, hurting property values of neighboring homes.

In Pinellas County, nearly 7,000 individuals and businesses have signed up for the alerts since the service started three years ago.

"We have received calls and unofficial reports from subscribers of alleged fraudulent activities," said Nancy Dickman, the clerk’s manager of recording services. "We refer them to law enforcement agencies."

The St. Petersburg Police Department has active investigations into alleged deed scams throughout the city. Complicating such cases is that they sometimes involve identity theft and collusion with a notary public who falsely claimed that a deed was signed in his or her presence.

"So then we have to track down the notary," said Sgt. Kevin Smith, head of the department’s economic crimes division. "In one instance we had a deceased person who couldn’t have been present at the signing."

Typically, deed scams occur with houses that are unoccupied because they are in foreclosure or the owner has died. St. Petersburg police have not made any recent arrests though they did nail a particularly brazen scamster a few years ago.

Through a series of fraudulent quit claim deeds — one involving a company called Believe in God Real Estate — convicted robber Patrick Banks got possession of a vacant bayfront home in St. Petersburg’s Venetian Isles neighborhood.

Banks started remodeling the $700,000 house, which was in foreclosure, while collecting rent on a second house that he had also obtained through a fraudulent deed. Suspicious neighbors alerted police, who arrested him on a variety of charges.

He is now serving 20 years in state prison.

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The Hillsborough clerk’s office launched its free alert service two years ago. As of this month, it had 2,167 subscribers and had sent out 8,637 alerts.

"While we call them fraud alerts, they are also useful in case a document is filed in error," said Tom Scherberger, the office’s director of communications. "Mistakes do happen; a lien could be placed on your property without your knowledge until you go to sell it and a title search discovers it."

But Hillsborough has had its share of fraudulent deeds, as Rod Banks, the real estate agent, discovered in two separate instances. (He is not related to Patrick Banks).

The first instance involved a mansion in Stone Lake Ranch, a gated community in eastern Hillsborough County. After former Tampa Bay Buccaneers player Dexter Jackson defaulted on his mortgage, SunTrust foreclosed, took back the house and hired Banks to sell it.

Three weeks after the property hit the market, a warranty deed was recorded showing that SunTrust had deeded the house to Global Trust 283153-691032-102031 of Danville, California. Global then deeded the house to the "Alexander Buchanan Estate Trust."’

That seemed strange. Banks was still trying to sell the house for $960,000 so why would SunTrust suddenly deed it away? But with a deed in hand, the new "owners" showed up at Stone Lake.

"We had quite a drama," Banks recalled. "They’d periodically come to the gate demanding to be let in. They said they owned the house and they were going to occupy it and to let them in — ‘here’s the deed.’’’

They never succeeded. When it became apparent the deed was a fraud, gatekeepers were instructed to turn away anyone who didn’t have Banks’ authorization to visit the property. "I was basically on call," he said.

SunTrust was forced to sue Global Trust and Alexander Buchanan to get the house back. The case dragged on for almost a year before a judge agreed the deed was fraudulent and cleared the title.

The house eventually sold for $877,800.

Buchanan did not return calls to a phone number linked to him. He has not been charged with any offense.

At the same time Banks was dealing with the Stone Lake house, he was having bigger problems with the home in Valrico’s gated Diamond Hill community.

In that case too, a lender had repossessed the house and hired Banks to sell it. But a few weeks after he put it on the market, the clerk’s office recorded a warranty deed showing the bank had conveyed the title to the "Carolyn Doris Knight Estate Private Trust."

Banks already had found a buyer for the house but that didn’t stop Knight and others.

"They actually got in somehow and brought lawn chairs and paintings and furniture and were setting up house in the property," Banks said. "In the meantime, I’ve got a contract and we’re watching all this happen from the outside."

He called the sheriff’s office, which sent deputies to the house on the morning of March 17, 2016. A photo taken then shows a woman clutching a pillow in the fully furnished living room.

She made a call, and a man soon drove up. Deputies then tried to sort it all out.

"They had me telling them (the deed) is a fraud and them saying it’s real so they don’t know who to believe," Banks said of the deputies. "Everybody had to leave while they figured out what was going on."

Banks was allowed to secure the house, which sat in limbo for months while the lender sued Knight to get back the title. The buyer, frustrated by the delay, backed out.

In October, the state attorney’s office charged Knight-Williams, as she is now called, and Robinson with grand theft and unlawfully filing a false document.

According to a criminal report affidavit, Knight-Williams obtained the false deed in early 2016 by claiming to be a trustee of U.S. Bank. She then "sold" the house to Robinson, 54, in exchange for a $5,000 money order.

"These actions resulted in (Robinson) moving into the home believing she was the new owner, which caused a series of events which victimized financial institutions and persons," the affidavit said.

Robinson, 54, has not yet entered a plea. The 66-year-old Knight-Williams, who has pleaded not guilty. Neither could be reached for comment

Warren, a former federal prosecutor elected Hillsborough’s state attorney last year, said both women are part of the sovereign citizen movement — a loose affiliation of individuals who claim they are not subject to government laws and taxation.

"It is not uncommon to see people who call themselves sovereign citizens to perpetrate these types of fraud," Warren said. Among his office’s priorities, he said, will be prosecuting "these crimes of greed (that) threaten the homes, life savings and financial security" of law-abiding citizens.

As for Banks the Realtor, he still has a hard time believing that in one year he was involved with two houses that had fraudulent deeds.

"My family has been selling real estate since 1969 so I’ve heard every story," he said, "but this was a new one to me."

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

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