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An Iraq War veteran has filed a potential class-action lawsuit against CitiGroup's CitiMortgage division, alleging that the lender violated the Servicemembers Civil Relief Act by foreclosing on his home and that of "thousands" of other active-duty soldiers.

The lead plaintiff in the case bought a home in Texas in 2003. CitiMortgage later took over the loan from the original lender and ultimately foreclosed on the property, selling it at auction. The lawsuit states that the foreclosure occurred while the plaintiff "was engaged in a period of military service in the Texas Army National Guard or was otherwise entitled to the protections of the Servicemembers Civil Relief Act."

From the suit:

While [the plaintiff] was on lock down training at Fort Hood, CitiMortgage initiated foreclosure proceedings against his property and sold it at a foreclosure sale on May 2, 2006. The foreclosure sale was not conducted pursuant to a court order and was not approved by a court. That same day, CitiMortgage's lawyers filed an affidavit in the real property records of Travis County, Texas, stating that [the plaintiff] was 'not on active duty with any branch of the Armed Forces of the United States or w[as] not protected by the Servicemembers Civil Relief Act.' Those statements were false.

The SCRA protects active members of the Armed Forces, including the National Guard. According to the suit, "lenders may not foreclose on a covered servicemember's mortgage while he or she is on active duty, or within a specified grace period thereafter, without court approval."

"This was not an isolated incident," says the plaintiff, who seeks class-action status for the suit. "From Dec. 19, 2003 to date CitiMortgage initiated thousands of foreclosure proceedings across the United States without adequate safeguards to ensure that servicemembers on active duty were not targeted by CitiMortgage's foreclosures."

Class Claims CitiMortgage Illegally Foreclosed on 'Thousands' of Servicemembers' Homes [Courthousenews.com]

Marshall E. Home, a self-styled 'sovereign citizen' in Arizona and former Tucson mayoral candidate, has been arrested on two federal charges of making false claims related to a "business" he ran that purported to save homes from foreclosure.

The complaint alleges that Home also tried to place the U.S. in bankruptcy in March, and falsely claimed he had a claim of $3 billion against the federal government.

Home, 81, was arrested Friday in Tucson after a criminal complaint charged him with two counts of false claims in bankruptcy. The complaint identifies him as a sovereign citizen -- someone who doesn't believe in the legitimacy of the U.S. government.

According to the complaint, Home and another individual operate "Individual Rights Party; Mortgage Rescue Service," which claims it can help people stop foreclosure on their homes for a $500 fee as part of his "larger overall bankruptcy liquidation." Home also calls himself the Chairman of the similarly-themed "Independent Rights Party - Foreclosure Recovery Services." That site promises: "Conceivably you could stay in your home, being only a few monthly service fees out of pocket, then in the future receive a tremendous check for damages pertaining to the fraud perpetrated by the bankers."

In a press release, prosecutors allege that Home filed a suit trying to place the U.S. government into involuntary bankruptcy and filed $3 billion in false claims against the government. From the release:

Home filed or caused to be filed 173 false claims against the United States in the Bankruptcy Court relating to individuals participating in the "Mortgage Rescue Service." Many of these false bankruptcy claims involve loans guaranteed by Freddie Mac and Fannie Mae. The criminal complaint alleges that these claims totaled over $2.5 trillion dollars. The specific charges in the two counts of the criminal complaint involve claims of $2.5 billion and $50 million.

"The anti-government paranoia of so-called 'sovereign citizens' becomes a self-fulfilling prophecy when they use their false claims and fraudulent practices to rip-off others," U.S. Attorney Dennis K. Burke said in the release. "We will continue to work with our law enforcement partners to pursue and prosecute those who make false claims against the government to cover for their wrongdoing."

If convicted, Home faces up to five years in prison, a $250,000 fine, or both.

This is not Home's first brush with the courts. He had been campaigning for mayor of Tucson -- first as an independent, then as a Democrat -- but dropped out in June after a court case challenging his residency. In that particular case he argued: "I reside within my body. That is my definition of residency."

Home subsequently filed a lawsuit against his Dem opponent Jonathan Rothschild arguing that because Rothschild is an attorney he is part of the judicial branch, and therefore cannot serve as a legislator. The Arizona Supreme Court ruled against him and ordered him to pay legal costs for Rothschild and the Pima County Democratic Party.

Home was also recently thrown out of the bankruptcy hearings for the Chicago-based Giordano's pizza chain, after he made vague threats and generally disrupted the proceedings. Home had filed a $150 million lien against Giordiano's, which the pizza chain's trustee said is fraudulent.

The criminal complaint against Home cites the example of "J.A.," who "owned and operated a business in Chicago" as one of Home's allegedly false claims. This is likely John Apostolou, who owned Giordano's, and had sought help from Home in the chain's bankruptcy case. Apostolou and his wife were among the signatories of the bankruptcy claim against the U.S. and the state of Arizona. Apostolou claimed he and his wife didn't understand what they were signing, and "he had signed documents for Home but had never borrowed or lent him any money."

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Friday, July 29, 2011

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