J. Thomas Black - Bankruptcy News - Posted for Foreclosure? Watch Out for Scams Like This One

3 There is also a second note secured by the Homestead in theamount of $23,980. (See Ex. C-1.) a secured claim against the Whites and a lien on the Homestead,
pursuant to an Adjustable Rate Note in the original principal amount of $95,920, dated September 29, 2003 (“Note”), and a Deed of Trust also dated September 29, 2003, both of which were executed by the Whites, were duly recorded, and later assigned to HomEq. (See Ex. C-1.)3
4. The Debtors defaulted on their obligations to HomEq by failing to make payments required under the Note. Shortly after the Whites filed their current bankruptcy case, HomEq filed a motion for relief from the automatic stay [doc. no. 24] to pursue its state law remedies with regard to the Homestead. Then, on September 29, 2006, an Agreed Order Modifying Automatic Stay [doc. no. 37] was entered with respect to the Homestead. (See Ex.C-2.) The Agreed Order provided, among other things, that the automatic stay as to the Homestead would continue so long as the
Debtors resumed normal monthly mortgage payments and cured their arrearages to HomEq pursuant to certain terms. The Agreed Order contained certain provisions requiring notice to the Debtors and opportunity to cure, in the event of a subsequent default by the Debtors under the Agreed Order.
5. The Debtors, unfortunately, failed to comply with the terms of the Agreed Order. On December 7, 2006, HomEq filed a Certificate of Default [doc. no 44] notifying the Debtors, parties in interest, and the court that the Whites had defaulted under the Agreed Order; had been given notice of the default and opportunity to cure the default; but the Debtors had failed to cure. (See Ex. C-3.) Thus, the automatic stay of the Whites’ bankruptcy was terminated as to HomEq, in December 2006, pursuant to the specific terms of the Agreed Order.
6. Soon thereafter, HomEq noticed the Whites that there would be a nonjudicial foreclosure sale on the Homestead on
February 6, 2007. (See Ex. C-4.) However, some intervening events occurred in January 2007 that are disturbing but not unfamiliar to this court.
A. The Fictitious Conveyance of a 1% Interest in the Homestead on the Eve of Foreclosure
7. Prior to the scheduled foreclosure, Mr. White executed a document entitled “Warranty Deed,” indicating that he had
conveyed a 1% interest in the Homestead to an individual named Chaka Casey on January 2, 2007. (See Ex. C-5.) On January 4, 2007, the grantee, Chaka Casey, filed a bankruptcy case in the United States Bankruptcy Court for the Central District of California, Los Angeles Division, Case No. 07-10064-AA. Oddly, Chaka Casey did not list in her Bankruptcy Schedules the 1% property interest in the Homestead that she had allegedly been deeded just 2-days prepetition. (See Ex. C-10.) Email evidence also suggested that the Warranty Deed was
executed in early February 2007. (See Ex. D-A.)
8. In any event, on February 6, 2007—the date of the scheduled foreclosure sale—HomEq received, via facsimile
communication, the document entitled Warranty Deed reflecting the 1% interest of Chaka Casey, along with the Chaka Casey bankruptcy petition. The facsimile cover sheet showed that the facsimile was sent from someone named “Jason” and the transmission trail at the top showed the facsimile machine was that of a “Sally Wilson.” The totality of evidence at the Show Cause Hearing overwhelmingly suggested that the Warranty Deed was backdated to January 2, 2007 and was really prepared in February (since, among other things, the notary signature appears to indicate that Mr.
White appeared before the notary and signed the document on February 2, 2007).4 In any event, despite the questionable validity and effect of the Warranty Deed document, and despite the mysterious manner of its delivery (from anonymous senders), HomEq did what one might hope any prudent creditor would do: it took no further action with regard to its collection efforts as to the Homestead (i.e., it did not record the substitute trustee’s deed reflecting the foreclosure sale that had already occurred earlier in the day) out of concern over the implications of the Chaka Casey bankruptcy case and the automatic stay as to her alleged 1% interest.
5There were no objections, Ms. Casey is not within the subpoena power of this court, and the affidavit’s trustworthiness appeared in all ways reliable.
6Note that the Warranty Deed does not contain Chaka Casey’s signature—just the alleged grantor’s, Mr. White’s (see Ex. C-5).
9. HomEq soon made contact with Chaka Casey, who was a pro se debtor. Ms. Casey credibly represented (in fact later provided a sworn affidavit which this court accepted into evidence5) (see Ex. C-6) that she does not know the Whites, had absolutely no knowledge of the alleged 1% conveyance,6 and did not now or ever claim an interest in the Homestead. The evidence was that Chaka Casey was quite upset about the impact of these events on her own bankruptcy case.
10. HomEq brought these matters to the court’s attention in a Motion Requesting Show Cause Order, which prompted this court to indeed issue the Show Cause Order [doc. no. 56], requiring the Whites to appear at a scheduled hearing (“Show Cause Hearing”) and explain this series of events. The Whites did, indeed, appear at the Show Cause Hearing (represented by their counsel) and quite candidly and cooperatively testified. In fact, the court heard a wealth of evidence at the Show Cause Hearing (through both the Debtors and HomEq) that the court found both credible and disturbing.
B. The Phenomenon of Fraudulently Conveying a Fractional Interest in a Homestead to an Unwitting Stranger in Bankruptcy to Forestall Foreclosure.
11. HomEq credibly represented that the 1% ownership transfer of the Homestead in the case at bar is not an isolated
incident. The transfer is merely but one of a stream of conveyances orchestrated by a person or group of persons (whom this court will refer to as “Bankruptcy Servicers”—for lack of a better term) who take great strides to remain anonymous.
12. Specifically, several times a month, HomEq will have this same type of event occur: the conveyance of a fractional
interest in a homestead to some debtor in California (usually a pro se debtor in a Chapter 7 bankruptcy case in the Central District of California, Los Angeles Division) on the eve of a foreclosure, with a facsimile notification from “Jason” from the “Sally Wilson” facsimile machine. HomEq’s counsel described this credibly as “an ongoing occurrence.”
13. If this were the end of the story, a compassionate (and naive) person might simply think “desperate times call for
desperate measures,” and these are simply desperate and unsophisticated people who are trying anything they can to stave off foreclosures (when the bankruptcy process has not afforded them the relief they thought it might). It might seem as though the worst thing that has happened here is that a mortgage lender has had to wait an extra month or so to finalize foreclosure on the Whites’ house (and maybe a few other families’ houses every once in a while).
14. But here is the rest of the story.
C. A New Cottage Industry of Bottom Feeders: For Every Action
(i.e., Foreclosure Crisis) there is an Opposite Reaction (i.e.,
Folks Trying to Make a Buck).
15. The Whites testified (similar to other debtors this
court has heard on a few occasions in other cases) that, starting
in mid-December 2006 (around the time that they defaulted under
the Agreed Order and their Homestead was posted for foreclosure),
that they began receiving numerous letters/solicitations from
companies in the mail regarding ways to prevent the upcoming
foreclosure on their Homestead. Sometimes they would receive 8
to 12 of these solicitations per day (e.g., from “foreclosure
specialists” offering to stop foreclosure without bankruptcy).
Mr. White estimated he probably received solicitations from 40
such companies. The Debtors, assuming that these were legitimate
companies with possible solutions, called the phone numbers shown
on various of these mailings (Mr. White estimated calling 5 to 6
companies, all of which charged large fees for their
“services”—some as high as $2,000 per month). The Whites
proceeded to deal with a company called North American
Foreclosure (whose literature they had received in the mail) and
7 Mr. White has interchangeably referred to dealing with both
a “Jeremy” and a “Jason” in both written pleadings and in sworn
testimony. The court interprets the totality of evidence to
suggest that there was both a Jeremy and Jason involved in the
Whites’ case and that perhaps Mr. White could not always keep
straight which one he dealt with at which time.
8The court notes that some of the evidence described herein
was arguably hearsay. Not only was no objection made, but none
of it was offered to prove the truth of the matter asserted, but
rather to explain the Debtors’ conduct, in response to the
court’s Show Cause Order. Moreover, there was documentary
evidence in this matter to corroborate much of the testimony.
9
an individual there who called himself “Jeremy” or “Jason.”7
16. Jeremy or Jason (with whom Mr. White spoke 10 to 12
times) explained to the Debtors that he could help them with a
“completely legal” procedure to stop foreclosure on their
Homestead. See Mr. White Affidavit, dated May 9, 2007, ¶ 4 [doc.
no. 58] & Mr. White’s live testimony from Show Cause Hearing.
17. Jeremy or Jason explained8 that the Whites could convey
a 1% interest in their Homestead to the company (presumably North
American Foreclosure or some company it formed) and the company
would file bankruptcy in California and stop the foreclosure
(since a 1% ownership in the Homestead would then be owned by a
company in bankruptcy with a new automatic stay). The Whites
would then be required to “pay back” the 1% interest by paying
the company $650 per month until the 1% interest was paid back
(this is not a typographical or other error; this was, in fact,
the strategy as Mr. White described it). Of this $650 per month,
9 HomEq’s lawyer represented at the Show Cause Hearing that
no monies were ever forwarded to HomEq.
10 Documentary evidence (i.e., the form of Client Agreement
submitted by the Whites) showed the following contact
information: North American Foreclosure, Foreclosure
Specialists, 2700 S. Figueroa St., 11th Floor, Los Angeles, CA
90007-3256. (See Ex. D-A, p. 3) Mr. White also testified that
Jeremy/Jason’s phone number had a “201” area code.
11 See Ex. D-B, which is a business card Mr. White was given
by David Curtis, President, of Jireh Capital Services, LLC, at
[?]20 N. Joe Wilson Suite., 1412, Cedar Hill, TX 75104. The card
gives phone, facsimile, and email information, along with a logo
indicating that Jireh is a member of the Dallas/Northeast Texas
Better Business Bureau. See also Ex. C-8 (www.myspace.com page
for a David Curtis, President of Jireh Capital Services, LLC,
Cedar Hill, Texas). See also Ex. C-9 (a Better Business Bureau
listing for Jireh Capital Services, LLC at 1431 Greenway Drive,
Suite 800, Irving, Texas 75038).
10
a portion would allegedly go to HomEq.9 Jeremy or Jason also
suggested that monies would get distributed through the
bankruptcy case in California. Mr. White never met Chaka Casey.
He believed Chaka Casey was a “representative of the company.”
18. The mysterious Jeremy/Jason implied that he was located
in California (at the company’s main office),10 but that the
company had contacts or people in the field in the Dallas-area
(namely a David Curtis with Jireh Capital Services, LLC)11 that
could come directly to the Whites’ residence and meet with them
about implementing this strategy. The Whites, trusting that this
was all a legal strategy, proceeded to deal with David Curtis,
who (after some initial phone contact) came to the Whites’
residence and further assured them of the legality and proven
12 Mr. White’s exact testimony was that David Curtis paid
several visits to the White’s house, allegedly for their
convenience, and the Whites never went to or knew where David
Curtis’ offices were.
13 The Client Agreement provided to the Whites (see Ex. D-A,
pp. 3-4) required, at Section C, that the clients/Whites pay a
$650 monthly service fee on the first of every month “in CASH,
and made via Western Union;” that this was a monthly fee to
suspend foreclosure “for as long as the client requires our
services. Only [a] small portion of this monthly fee is paid to
the lender;” and the Client Agreement also provided that the
Whites were required to “cease all further contact with the
Lender/Parties initiating the Foreclosure process.” The Client
Agreement goes on to provide for assessment of certain other
types of fees occasionally, including “late fees” and
“reinstatement fees” (Section E) and that “The foreclosure
process can be delayed six (6) to thirty-six (36) months. The
eviction process can be delayed three (3) to six (6) months.”
(Section F).
11
success of this strategy.
19. Shortly after the initial David Curtis meeting, the
Whites decided to embark upon this strategy. David Curtis
emailed the Whites a Client Agreement and the form of Warranty
Deed on February 1, 2007 (see Ex. D-A), and then soon thereafter,
David Curtis came to the Debtors’ residence,12 and brought
original documents out for the Debtors to sign, the Debtors
signed them and had them notarized, and David Curtis took the
original documents back with him. The Whites delivered to David
Curtis $650 cash as the first payment that the Whites owed,
pursuant to the Client Agreement, for implementation of this
strategy.13
20. The Debtors were promised a follow up progress report
12
from David and/or Jeremy in the next 24 to 48 hours, to confirm
foreclosure had been stopped. The Debtors were supposed to
continue to pay $650 per month for however long the company’s
services were needed. The Debtors made one more $650 payment to
David Curtis. The third payment was never made, because Debtors’
counsel contacted the Debtors about this Show Cause Matter and,
at that point, the Debtors realized there was a problem.
21. Mr. White testified that he has attempted to reach
Jeremy and David subsequently and all contact numbers are
disconnected.
22. There is credible documentary evidence for much of what
is described herein, including: (a) Email correspondence dated
February 1, 2007 to Mr. White from a David Curtis from Jireh
Capital Services, LLC (showing phone, facsimile and email contact
information and also an advertisement for Jireh Capital Services
as “Providing fair and honest home solutions since 2003”) (Ex. DA,
p. 1); (b) the form of Client Agreement provided to the Whites
from North American Foreclosure, LLP (Ex. D-A, pp. 3-4); (c) two
receipts from David Curtis (one dated February 3, 2007 and one
dated March 31, 2007), indicating his receipt of the two $650
payments made by the Whites (Ex. D-A, pp. 6-7); and (d) a
cancelled check from the Whites’ Guaranty Bank checking account
in the amount of $650, made payable to David Curtis, dated March
31, 2007 and cashed by David Curtis on April 5, 2007 (the back of
14 Even though the Client Agreement required cash payments
delivered via Western Union, Mr. White made both payments
directly to David Curtis in person (as evidenced by two receipts)
and one such payment was by check to David Curtis, which Mr.
Curtis accepted and negotiated—creating a paper trail Mr. Curtis
may live to regret.
15 Mr. White was questioned at length regarding his belief
in the legality of this strategy. Mr. White testified credibly
that David Curtis convinced him that, since documents were being
notarized and filed in the California Bankruptcy Court, that it
was all legal. Of course, nothing that this court is aware of
was filed in the California Bankruptcy Court.
13
the check was included in evidence, with David Curtis’ signature
and deposit information reflected) (doc. no. 64—submitted at
court’s request post-hearing).14
23. This court is satisfied that the Whites have been
naively duped in this matter and have not themselves knowingly or
fraudulently participated in acts that might be described as a
bankruptcy crime. See 18 U.S.C. §§ 152 and 157. At worst, they
appear to be “bit characters” in a scheme to defraud borrowers
and lenders alike who are in the midst of foreclosure
proceedings. The court heard credible evidence that the Whites
did not consult with their bankruptcy counsel—believing that all
options had been exhausted in their case with the termination of
their automatic stay. The court also believes Mr. White’s
testimony that he assumed this whole Jeremy/Jason strategy was
legal and that it would “buy” him some time to save his house.15
There was further credible evidence that Mr. White was injured in
16 HomEq provided as additional evidence a transcript of a
hearing that occurred March 8, 2007, in a matter styled
Homecomings Financial, LLC f/k/a Homecomings Financial Network,
Inc. v. Clifford Chandler, et al., Cause No. CC-07-02498-A,
County Court at Law No. 1, Dallas County, Texas. Ex. C-7. Sworn
testimony from some homeowners, the Chandlers, in that matter,
reads eerily similar to the testimony that this court heard from
the Whites. The Chandler testimony reveals that the Chandlers,
after getting deluged with mail when their home was posted for
foreclosure (from various companies that alleged they could help
the Chandlers), ultimately decided to deal with a “Jeremy” at a
company called “Time Lenders” and/or “Foreclosure Solutions” (the
Chandlers also dealt with individuals associated with Time
Lenders named Robert Paulson and Dr. Frank Ford; one of the
individuals in this scenario was from Rowlett, Texas). The
Chandlers described that a homeowner must call Jeremy and wait
for a call back (always from a private number). The Chandlers
14
a car wreck with a commercial vehicle, had surgery on his
shoulder, and was expecting an imminent settlement from the
accident, at the time of all of these manueverings, and that he
believed the settlement proceeds would eventually help him catch
up arrears on his home—thus, the need to “buy” some time.
Unfortunately, the settlement ultimately resulted in only $2,000
to the Debtors—which was not enough to help with the Homestead
arrearages.
24. As previously mentioned, HomEq credibly represented to
the court that a similar scenario as that described herein (i.e.,
facsimiles from “Jason/Sally Wilson” on the eve or day of
foreclosure, showing a conveyance of a fractional interest in
real property on the eve of foreclosure from a borrower to some
random pro se debtor in California) occurs with regard to a HomEq
scheduled foreclosure multiple times per month.16 It is a
described representations to them made by Time Lenders that it
could forestall foreclosure on their home up to three years. The
Chandlers purportedly conveyed a 1% interest in their home
through a Warranty Deed, to a Mr. Keith Ward (a complete stranger
to the Chandlers who, as it turns out, was a debtor in bankruptcy
case #1:06-bk-12037-KT in the Central District of California, Los
Angeles Division). Ex. C-7 (last 3 pages). The Chandlers simply
signed documents they were sent by facsimile and instructed to
sign by Time Lenders. The Chandlers testified that they paid
$600 per month to Time Lenders from June 2006 through February
2007. The Chandlers’ description of conversations they had with
Jeremy and Time Lenders sounds disturbingly like legal advice was
being given by nonlawyers to the Chandlers (including advice
regarding how to handle an appeal of an eviction order). Ex. C-
7, p. 14.
17 This court has some general awareness of the “fractional
interest conveyance scheme” from proceedings before it in the
matter of In re Evelyn Corley, Bankruptcy Case No. 06-32758-SGJ-
13 (Aug. 18, 2006 hearing transcript). This court has even seen
the name “David Curtis” come up before as a person who offers
assistance to debtors facing foreclosure. See In re Sammie Lee
and Monta Netta Chance, Case No. 02-36551, Transcript of
Proceedings 3/31/05 [doc. no. 76], p.7, line 14.
15
scheme, HomEq says, that many people in the industry are aware
of, but perhaps no one is “connecting all the dots” and pursuing
the perpetrators—the bottom feeding “Bankruptcy Servicers.”17
According to HomEq, many times, evidence of these schemes only
gets developed at the “end of the road,” so to
speak—specifically, at eviction proceedings involving the
borrowers/debtors well after foreclosure—and such eviction
proceedings occur before Justices of the Peace, whose courts are
not courts of record (and such Justices of the Peace do not
always feel comfortable interpreting the bankruptcy automatic
stay).
16
CONCLUSIONS
Congress, in recent years, has taken significant strides to
put an end to the problem of unscrupulous bankruptcy petition
preparers. See 11 U.S.C. § 110. A bankruptcy petition preparer
is defined at section 110 as “a person, other than an attorney
for the debtor or an employee of such attorney under the direct
supervision of such attorney, who prepares for compensation a
document for filing” and “document for filing” means “a petition
or any other document prepared for filing by a debtor in a United
States bankruptcy court or a United States district court in
connection with a case under this title.” (All emphases added.)
Section 110 goes on to require the bankruptcy petition preparer
to make certain disclosures on any documents filed with the court
and also to the debtor on a prescribed form of notice indicating
that the bankruptcy preparer is not an attorney and may not give
legal advice (which must be signed by the debtor). Section
110(e) goes on to provide the means for a debtor, creditor,
trustee or U.S. Trustee to file an action in the bankruptcy court
to enjoin the bankruptcy preparer from engaging in conduct in
violation of Section 110 and damages may also be awarded in the
action.
This court is not convinced that the conduct that was
described in the Show Cause Hearing fits neatly within Section
17
110. Moreover, no section 110 action has been initiated before
this court. It may be that Congress has not specifically
described or proscribed in section 110 the exact activity
involved in the case at bar. However, this court is confident
that there are tools available under the law (some available to
this court, some not) to deal with actors in the system like the
elusive Jason/Jeremy, David Curtis, North American Foreclosure,
LLP and Jireh Capital Services.
ORDER
Accordingly, based on the findings of fact set forth above,
it is hereby ORDERED as follows:
1. DISCHARGE OF SHOW CAUSE ORDER AS TO THE DEBTORS. All
matters raised in the Show Cause Order are hereby resolved to the
court’s satisfaction, with respect to the Whites and their
actions pertaining to the 1% conveyance. No further action is
required of the Whites in this matter.
2. SHOW CAUSE ORDER/HEARING AS TO NORTH AMERICAN
FORECLOSURE, LLP, DAVID CURTIS, AND JIREH CAPITAL SERVICES, LLC.
The court has heard evidence suggesting that North American
Foreclosure, LLP (who may be at 2700 S. Figueroa St., 11th Floor,
Los Angeles, CA 90007-3256) and actors associated therewith,
David Curtis (who may be at 301 Wedgewood Lane, Cedar Hill, Texas
75104), and Jireh Capital Services, LLC (who may be at 445 E. FM
1382 Suite 3, Cedar Hill, Texas 75104-6046 or at _20 N. Joe
18
Wilson, Suite., 1412, Cedar Hill, Texas 75104 or at 1431 Greenway
Drive, Suite 800, Irving, Texas 75038) may have committed acts
that constituted willful violations of the automatic stay in the
Whites’ bankruptcy case, pursuant to section 362 of the
Bankruptcy Code. The court hereby ORDERS North American
Foreclosure, LLP, David Curtis, and Jireh Capital Services, LLC
to appear before this court on January 9, 2008, at 10:00 a.m.,
Courtroom of the Honorable Stacey G.C. Jernigan, United States
Bankruptcy Judge, 14th Floor, 1100 Commerce Street, Dallas, Texas
75242, and SHOW CAUSE why they shall not be found to have
violated section 362 and potentially liable for damages pursuant
to section 362(k). This hearing shall be in the nature of a pretrial
hearing conference, at which the court will hear arguments
as to what discovery might be needed by any particular party and
the timing needs/preferences for an ultimate evidentiary hearing
on the merits.
3. Section 362 (d) & (j) Relief as to HomEq. Pursuant to
section 362(j) of the Bankruptcy Code, on request of a party, the
court shall issue an order under section 362(c), confirming that
the automatic stay has been terminated. The court can also,
pursuant to section 362(d), annul the stay or retroactively
validate an act that may have technically been committed while
the automatic stay was in place. HomEq has, in its pleadings
filed herein, essentially made a request for this type of relief.
18Just to be clear, the court finds that no transfer of a
property interest in the Homestead occurred as to Chaka Casey.
The Whites had no authority to convey an interest in their
Homestead to a third party without an order from this court. The
act would be a violation of, among other authority, sections 362
and 363 of the Bankruptcy Code. The fact that this court had
granted relief from the automatic stay to HomEq with regard to
the Homestead, for HomEq to pursue its state law rights with
regard to the Homestead, does not alter that reality. Chaka
Casey has submitted a credible sworn affidavit that she has no
interest in the Homestead (and had no role in this matter
whatsoever)—meaning that no declaratory judgment action or other
adversary proceeding is procedurally necessary here to establish
her lack of interest in the Homestead. Thus, this court is in
the position to hold that HomEq’s actions have not violated the
stay in Chaka Casey’s case because there was no property interest
of hers involved. This court, as a court with jurisdiction over
HomEq and the Whites’ property interests, has the jurisdiction
and power to interpret the applicability of the automatic stay in
the Chaka Casey case as to HomEq’s actions and this property.
See generally Hunt v. Bankers Trust Co., 799 F.2d 1060, 1069 (5th
Cir. 1968) (citing In re Baldwin-United Corp. Litigation, 765
F.2d 343 (2d Cir. 1985)).
19
This court concludes that any attempted transfer of a 1% interest
in the Homestead to Chaka Casey was invalid, fictitious and a
legal nullity. Chaka Casey has submitted a sworn affidavit
confirming this. Accordingly, pursuant to sections 362(c), (d),
(j), and the court’s additional authority under section 105, the
court hereby validates actions taken by HomEq with regard to the
Homestead, after the termination of the stay as to HomEq in
December 2006. Specifically, HomEq’s February 2006 foreclosure
sale was in no way a violation of the automatic stay, either in
this case or the case of Chaka Casey, and recordation of a
substitute trustee’s deed and other acts to effectuate the
foreclosure sale are in no way prohibited.18
20
IT IS SO ORDERED.
The court also is taking the following additional measures
with regard to these matters:
A. Reporting of Possible Bankruptcy Crimes (18 U.S.C.
§ 3057; 18 U.S.C. § 152; 18 U.S.C. § 157). Pursuant to section
3057 of title 18, any judge (among others in the bankruptcy
system) having reasonable grounds for believing a violation of
laws of the United States relating to insolvent debtors has been
committed, or that an investigation should be had in connection
therewith, shall report to the appropriate United States
attorney, all facts and circumstances of the case, the names of
the witnesses and the offense or offenses believed to have been
committed. The duties of the United States attorney after such a
report is made are further elaborated in the statute. This
Memorandum Opinion is being forwarded to the United States
Attorney for the Northern District of Texas, as this court has
reasonable grounds to believe that a violation of one or more of
the following provisions of title 18 (“Bankruptcy Crimes
Statutes”) may have been committed by North American Foreclosure,
LLP and individuals associated therewith, David Curtis, and Jireh
Capital Services, LLC: 18 U.S.C. §§ 152(1), (5), (6), (7), (8) &
157. The witnesses to this matter include at least the Debtors,
HomEq, and Chaka Casey, as set forth in this Memorandum Opinion.
This court believes that other federal and state crimes may be
21
implicated.
B. Courtesy Copy to the Chief Judge of the United States
Bankruptcy Court for the Central District of California, Los
Angeles Division. This court is transmitting a courtesy copy of
this opinion to the Chief Judge of the United States Bankruptcy
Court for the Central District of California, Los Angeles
Division. This court is unaware of the exact magnitude of the
problems described in this matter by HomEq and/or whether the
courts in California have reason to be fully aware of these
issues (since the Warranty Deeds described herein are likely not
being filed in cases of the stranger pro se debtors). However,
under the assumption that knowledge of what other courts are
hearing can only help and not hurt, this Memorandum Opinion is
being forwarded.
C. Courtesy Copy to the Texas Attorney General. This
court is transmitting a courtesy copy of the Memorandum Opinion
to the Texas Attorney General for it to consider whether further
investigations on its part are warranted.
D. Plea to the Consumer Debtor Bankruptcy Bar. The court
urges attorneys representing consumer debtors to warn their
clients of the apparent schemes being solicited to debtors such
as the Whites. While this court is of the view in this matter
that the Whites were naive “bit characters” who did not fully
understand the consequences of their actions and did not set out
19 This court does not mean to cast aspersions on some of the
legitimate consumer debt counselors who act wholly within the
bounds of the law.
22
to defraud HomEq, this may not always be the case. The Whites
have lost $1,300 and have not saved their home. This court
suspects other debtors have lost even more. The court hopes that
it will become a standard part of consumer debtor representation
in this district to warn debtors of the hazards of dealing with
some of the non-attorney Bankruptcy Servicers that are offering
the illusion of relief from foreclosure for a steep fee.19
### END OF MEMORANDUM OPINION AND ORDER ###