Archives For Michigan

James Mulholland, 59 and Thomas Mullholland, 59, have been sentenced to 10 to 20 years in prison on eight felony convictions by District Judge William Collette for running an $18 Million Ponzi scheme. The prison sentences for all eight convictions will be served concurrently with the maximum being 10-20 years.

These two men abused the trust they were given for their own personal gain and today’s sentence is long overdue,” said Michigan Attorney General Bill Schuette in making the announcement. “The sentences today will not repay the life savings they stole, but it will stop these brothers from ever doing this again.”

They were found guilty in a jury trial in front of Judge Collette at Ingham County Michigan District Court on August 9, 2016.

Thomas and James Mulholland started their business, Mulholland Financial in 1987. They bought real estate to be used as rental properties mostly in college towns. At the height of their business Mulholland Financial managed $22 million worth of highly leveraged real estate however they were not prepared for the recession in 2008.

Starting in 2009 until they filed for bankruptcy in 2010, the brothers raised almost $2 million from investors. They made no mention that their business was in trouble and promised a 7% rate of return from the real estate profits and that the principal and interest were guaranteed and could be liquid within 30 days of making a written request.

In reality almost every month from January 2009 to February 2010, Mulholland Financial lost money and new investor money began being used to pay off earlier investors. The Mulholland brothers knew the business was losing money and consciously decided to purchase more property in an attempt to get themselves through the crash. To do so, they increased their attempts to procure investors. At the end of 2009, they reached out to previous investors and urged them to reinvest. They again said there would be a guaranteed 7% return and they also indicated that 2009 had been their best year ever, not revealing any of the financial problems they were facing.

Mulholland Financial was forced to file for bankruptcy in February of 2010 due to overwhelming debt. By this time there were multiple investigations being conducted into the business practices. The case sat dormant with another agency until spring of 2016 until Schuette’s office picked up the case. Over 250 investors lost $18.3 million.

All the victims have been identified and were listed in various bankruptcy pleadings. The Attorney General is seeking $208,000 from the Mulholland brothers in restitution. Under Michigan law,  restitution can only be ordered in counts charged that result in conviction. All victims received some proceeds from their 2010 bankruptcy.

The Mulholland brothers were sentenced on all eight charges as follows. All charges will be served concurrently:

  • One count of Criminal Enterprises – Conducting, 10-20 years in prison
  • One count of Conspiracy to Commit Criminal Enterprise – Conducting, 10-20 years in prison;
  • One count of False Pretenses -$20,000 Or More But Less Than $50,000, 100 months -15 years in prison;
  • One count of False Pretenses – $1,000 Or More But Less Than $20,000, 3-5 year sin prison;
  • One count of Blue Sky Laws- Fraudulent Schemes/ Statements, 6-10 years;
  • One count of Securities Fraud, 6-10 years;
  • One count of Blue Sky Laws Offer/Sell Unregistered Securities, 6-10 years; and,
  • One count for Violation of the Securities Act, 6-10 years.

Stephen Barry Ruza, attorney, 52, Orchard Lake, Michigan, former owner of Home Legal Group Inc., was sentenced to 12 months in Oakland County Jail, followed by five years of probation on one felony count of Conducting a Criminal Enterprise.  Ruza pleaded guilty to the charges of defrauding his victims with a fake mortgage assistance scheme in September, 2015.

At the time of sentencing, Ruza was ordered to pay $445,895.16 in restitution to the first 297 of his victims. Under stipulations of his plea deal, Ruza could be ordered to pay hundreds of thousands more in restitution based on the final number of victims. That count is still being determined. Continue Reading…

Steven Barry Ruza, 52, Orchard Lake, Michigan and his company, Home Legal Group, Inc., pled guilty to one count of Conducting a Criminal Enterprise.  Ruza and his company were accused of stealing hundreds of thousands of dollars from Michigan residents that were facing mortgage foreclosures. As part of the plea, restitution will be paid to the victims, with the possibility of additional restitution at the judge’s determination.

Ruza and his company promised victims that they could obtain mortgage modifications and save their homes from foreclosure but then did nothing, or very little, to obtain mortgage modifications for the victims.  In many cases, Ruza even filed false documents with the bank.  The victims never received a modification through Ruza and Home Legal Group and most lost their homes to foreclosure. Continue Reading…

Authorities in Lansing, Michigan recently advised home buyers to beware of a Craig’s List home selling scam where scam artists meet potential home buyers at a home they do not actually own and take payments from the buyer.  This scam is operating across the country and is not limited to properties in Lansing Michigan.  (It is also being perpetrated against potential renters who are “rented” homes that are not owned by the scammers.)

In the Craig’s List scams, a home buyer can generally protect themselves by depositing the earnest money with their own real estate agent or with an escrow company rather than handing money over to the scammers.  The fact that the scammers don’t actually own the property will be discovered during the title search that is conducted while the sales transaction is pending.

This is not the only scam that involves fake sales.  In another common scam, fake sellers actually forge quit claim deeds and ‘transfer’ the property to themselves.  Sometimes these scammers also rent the property from the real owners so that they can ‘show’ the property to potential buyers.

Looking at current ownership in these fake sales transactions may not be enough.  Home buyers and real estate professionals also need to look at the last transactions recorded against title to the property.  If the property has recently transferred by way of quit clam deed, a little more due diligence may be in order before handing over the earnest money deposit or purchasing the property. It is as easy as contacting the “prior” record title holder – who may not even be aware that their property has been transferred.  Quit claim transfers are not always fraudulent.  And fake transfer can be done by way of regular grant deeds.  We just see more fake transfers by quit claim.

In the Craig’s List scam, the fake sellers walk away with the earnest money deposit or down payment.  In a fake sales transaction, if it is not detected by the title company, the scammers walk away with the entire purchase price.

If a homeowner falls for one of these fake sales transactions and purchases a property that doesn’t actually belong to the seller and was transferred by way of a forged deed, the new homeowner’s only real recourse will be their title insurance policy.

Steven Barry Ruza, 52, Orchard Lake, Michigan, and his company, Home Legal Group, Inc., have been charged with 30 felony counts for allegedly stealing hundreds of thousands of dollars from Michigan victims that were facing mortgage foreclosures.

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Anthony Carta, 53, Detroit, Michigan, was sentenced to 30 to 99 years in prison for taking hundreds of thousands of dollars from more than 100 victims who believed he was going to help them with mortgage loans through his Southfield, Michigan, entity Freedom By Faith Ministries.

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Anthony Carta, 53, Detroit, Michigan, has pleaded guilty to seven felonies associated with his formation of a faith-based mortgage assistance scam.

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Joel Wilson, 32, Saginaw, Michigan, was convicted by a jury on nine felony charges for his role in an extensive Michigan Ponzi scheme wherein he defrauded hundreds of Michigan victims out of millions of dollars. In January 2014, extradition efforts were initiated to retrieve Wilson from Germany after he was on the lam in Europe for more than a year.

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GTL Investments, Inc., doing business as John Adams Mortgage Company, Southfield, Michigan, a mortgage lender, has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act in its origination of loans backed by the federal government.

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Sixteen people have been charged for operating a fraudulent telemarketing scheme that involved losses of over $20 million to more 290 victims in 46 states and Canada, including Michigan.

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