Editor's note: FEDs: Zach, this Shark gets regular calls on the Shark Line from victims who are being scammed by the Probate Court of Cook County, its judges and lawyers. It is the same line over and over...create havoc in families and churn the estate for unneeded legal fees. Please don't forget about these folks who place their trust in our legal system. Lucius Verenus, Schoolmaster, ProbateSharks.com
Three indicted in Washington National Trust mortgage fraud
An alleged mortgage scam that swindled at least 54 suburban, primarily Hispanic homeowners out of $220,000 has resulted in three federal indictments.
Melvin T. Bell, 37; Monica Hernandez, 43; and Carlos Rayas, 39, face federal fraud charges tied to their operation of Washington National Trust, which promised struggling homeowners in the Aurora area a way out of foreclosure and into reduced mortgage payments for a fee of $5,000 to $10,000.
But Washington National wasn't a trust, wasn't licensed to make mortgages or modify loans, and the fees collected were used to operate the business, pay finders' fees to people who helped ensnare other victims, and for personal use, the U.S. attorney's office charged in an indictment unsealed Tuesday.
Arrest warrants have been issued for Bell and Hernandez, a former licensed real estate broker, each charged with four counts of mail fraud. Bell also goes by the names Alex Crown, Minister Bey, Sovereign King Bey, King Bey and S.K. Bey, authorities said. The pair last were residents of Oswego.
Rayas, an Aurora resident and Hernandez's cousin, was arrested Tuesday. He pleaded innocent to two counts of mail fraud and was released on his own recognizance. A status hearing on the case is set for Jan. 10 in U.S. District Court.
It was odd wording in an promissory note filed last year with the Kane County recorder's office, one that a homeowner signed promising to pay Washington National Trust $159,000, that raised a red flag with employees and led to a monthslong investigation into the company and its principals by the Illinois Department of Financial and Professional Regulation.
By the time its investigators had turned over their findings to state and federal law enforcement agencies, the department had found 54 homeowners who had signed quitclaim deeds of their homes to Washington National Trust in what they thought was the first step in saving their homes from foreclosure. Many of them also paid thousands of dollars in illegal upfront fees for loan modification services they allegedly never received, investigators said.
The operations of Washington National Trust, and the toll those operations took on Aurora families, were detailed in an April story in the Chicago Tribune.
Among the alleged victims was Connie Vazquez, who said she paid the company $7,625 in summer 2012 because she believed Hernandez's statements that Washington National could help her with her mortgage and that she should stop trying to work directly with Chase Bank, her mortgage servicer.
Vazquez said she stopped attending court appearances related to the foreclosure and handed all her mail from Chase to Hernandez. Too late, she realized that no actions had been taken on her behalf and that her home had been repossessed, Vazquez said.
Vazquez and her family now live in a small apartment in Aurora. While happy to hear of the indictment Tuesday, Vazquez said it represents just one of the many unscrupulous firms that she believes prey on struggling homeowners.
"I think there are a lot of companies out there that do this," Vazquez said. "I want to be there (in court.) I want to see them. I don't know if I'll get my money back, but I want to see them. It was devastating for me and my family."
Washington National operated out of an office building in downtown Aurora, but documents listed its headquarters on Lake Street in downtown Chicago. Later, clients discovered that the address was a UPS store location. The company had a website, official-looking documents and relied on word-of-mouth advertising.
The company allegedly promised to work directly with lenders and cut mortgage payments in half. Fees ranged from $5,000 to $10,000, money that Bell, Hernandez and Rayas allegedly said would go toward reducing the loan amounts due after Washington National bought the mortgages from the banks.
The charges note that at no point were homeowners told that Washington Trust had been barred by Kane County Circuit Court from filing deeds, that the state had ordered the company to stop using the word "trust" in its name because it was not a trust, and that Bell, Hernandez and Rayas had been told to stop engaging in unlawful residential mortgage activity.
The investigation remains the state department's largest case of mortgage rescue fraud based on the number of people allegedly victimized.
"We're pleased federal law enforcement authorities recognized the severity of these allegations and the alleged harm it caused innocent homeowners," Manuel Flores, acting secretary of financial and professional regulation, said in a statement. "We will not tolerate schemes targeting Illinois homeowners who are struggling with economic hardships."
Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or a fine that totals twice the gain from the alleged illegal activity, or twice the loss, whichever is greater.
mepodmolik@tribune.com
Twitter @mepodmolik
Melvin T. Bell, 37; Monica Hernandez, 43; and Carlos Rayas, 39, face federal fraud charges tied to their operation of Washington National Trust, which promised struggling homeowners in the Aurora area a way out of foreclosure and into reduced mortgage payments for a fee of $5,000 to $10,000.
But Washington National wasn't a trust, wasn't licensed to make mortgages or modify loans, and the fees collected were used to operate the business, pay finders' fees to people who helped ensnare other victims, and for personal use, the U.S. attorney's office charged in an indictment unsealed Tuesday.
Rayas, an Aurora resident and Hernandez's cousin, was arrested Tuesday. He pleaded innocent to two counts of mail fraud and was released on his own recognizance. A status hearing on the case is set for Jan. 10 in U.S. District Court.
It was odd wording in an promissory note filed last year with the Kane County recorder's office, one that a homeowner signed promising to pay Washington National Trust $159,000, that raised a red flag with employees and led to a monthslong investigation into the company and its principals by the Illinois Department of Financial and Professional Regulation.
By the time its investigators had turned over their findings to state and federal law enforcement agencies, the department had found 54 homeowners who had signed quitclaim deeds of their homes to Washington National Trust in what they thought was the first step in saving their homes from foreclosure. Many of them also paid thousands of dollars in illegal upfront fees for loan modification services they allegedly never received, investigators said.
The operations of Washington National Trust, and the toll those operations took on Aurora families, were detailed in an April story in the Chicago Tribune.
Among the alleged victims was Connie Vazquez, who said she paid the company $7,625 in summer 2012 because she believed Hernandez's statements that Washington National could help her with her mortgage and that she should stop trying to work directly with Chase Bank, her mortgage servicer.
Vazquez said she stopped attending court appearances related to the foreclosure and handed all her mail from Chase to Hernandez. Too late, she realized that no actions had been taken on her behalf and that her home had been repossessed, Vazquez said.
Vazquez and her family now live in a small apartment in Aurora. While happy to hear of the indictment Tuesday, Vazquez said it represents just one of the many unscrupulous firms that she believes prey on struggling homeowners.
"I think there are a lot of companies out there that do this," Vazquez said. "I want to be there (in court.) I want to see them. I don't know if I'll get my money back, but I want to see them. It was devastating for me and my family."
Washington National operated out of an office building in downtown Aurora, but documents listed its headquarters on Lake Street in downtown Chicago. Later, clients discovered that the address was a UPS store location. The company had a website, official-looking documents and relied on word-of-mouth advertising.
The company allegedly promised to work directly with lenders and cut mortgage payments in half. Fees ranged from $5,000 to $10,000, money that Bell, Hernandez and Rayas allegedly said would go toward reducing the loan amounts due after Washington National bought the mortgages from the banks.
The charges note that at no point were homeowners told that Washington Trust had been barred by Kane County Circuit Court from filing deeds, that the state had ordered the company to stop using the word "trust" in its name because it was not a trust, and that Bell, Hernandez and Rayas had been told to stop engaging in unlawful residential mortgage activity.
The investigation remains the state department's largest case of mortgage rescue fraud based on the number of people allegedly victimized.
"We're pleased federal law enforcement authorities recognized the severity of these allegations and the alleged harm it caused innocent homeowners," Manuel Flores, acting secretary of financial and professional regulation, said in a statement. "We will not tolerate schemes targeting Illinois homeowners who are struggling with economic hardships."
Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or a fine that totals twice the gain from the alleged illegal activity, or twice the loss, whichever is greater.
mepodmolik@tribune.com
Twitter @mepodmolik
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