The opinion of the court was delivered by: Eduardo C. Robreno, J.
Plaintiff Shakiela Clark ("Plaintiff") filed this action alleging that the Defendants engaged in a "Foreclosure Rescue Scam." Second Am. Compl. ¶ 1, ECF No. 36. It is alleged that Defendant El Jeffre Blackfoot-Bey ("Bey") is a professional con artist functioning under various employment and corporate guises. Id. ¶ 6. Bey conducts business individually and under the guise of All Family Home Improvement Co. ("AFHI"). Defendant Wilburt James ("James") is Bey's brother. It is alleged that James aids his brother in Bey's foreclosure scam by acting as a straw party investor. Id. ¶¶ 7-8.
Defendants Partners in Charity, Inc. ("PIC") and Restoration America, Inc. ("Restoration") are both corporations. Id. ¶¶ 9-10. PIC is the corporate sponsor of Emerald Vantage Partners LLC ("Emerald"), a Nevada LLC. Id. ¶¶ 11-12. The President of both PIC and Restoration and signer on the bank accounts for PIC, Restoration, and Emerald is Charles Konkus.
Id. ¶ 13. It is alleged that Emerald is an alter ego of PIC and Restoration.*fn1 Id. ¶ 14. It is alleged that Emerald is used by PIC and Restoration as a remote conduit to fund Bey and James' foreclosure scams by lending the amount of a down payment to the buyer/scammer (in this case James) and then listing the loan as a fictitious second mortgage debt of the seller on the loan transaction's HUD1 settlement statement. Id.
In or around October 2007, Plaintiff needed major repairs to her home which she could not afford. Id. ¶ 21. Plaintiff met with Defendant Bey, and Bey advised Plaintiff that he could obtain a refinancing loan for Plaintiff to pay for her home repairs and back taxes if Plaintiff would agree to stop paying her current loan. Id. ¶ 23. Plaintiff did as Bey said.
Id. ¶ 24. Next, Bey advised Plaintiff that she would need to sell her home to an investor, Defendant James, who would then lease the home to Plaintiff. Id. ¶ 25. Plaintiff was told that if she adequately paid her lease payments then she would build credit and be able to qualify for a refinancing loan which Bey would obtain for Plaintiff. Id. ¶ 26. Soon after these conversations, Plaintiff received foreclosure notices. Id. ¶ 27.
On or about October 17, 2007, closing for the foreclosure rescue sale occurred. Plaintiff executed the documents to sell her home to Defendant James for the sum of $120,000.00. Id. ¶ 31. The HUD1 form from the transaction indicates that part of this money went to a first mortgage loan payoff to Chase, a second mortgage payoff to Emerald, and a third mortgage payoff to AFHI. Id. ¶ 32. Neither prior to nor after the rescue transaction did Plaintiff have a second or third mortgage recorded against her property. Id. ¶ 33. Contrary to the HUD1 form, the $19,200 that was alleged to go to Emerald for a mortgage really went to Restoration and PIC for the $17,575.64 they loaned to James to help make the purchase. Id.
¶¶ 36-37. Thus, Restoration and PIC made a profit. Id. ¶ 37. The $14,108.46 alleged to go to AFHI really went to Bey and James as a disguised "fee." Id. ¶ 39. After the closing, Plaintiff could not reach Bey. Id. ¶ 41.
To purchase the property on the aforesaid date, Defendant James, as Mortgagor, granted a certain mortgage in the original principal amount of $108,000 to Defendant OneWest Bank, FSB d/b/a Indymac Mortgage Services, which was recorded on December 7, 2007. Notice of Removal, Clark v. OneWest Bank, Civ.
No. 11-5340, Ex. 1 (Civil Action Compl./Quiet Title ¶ 8)[hereinafter "Quiet Title"].
In or around July 2008, Defendant James falsely sued Plaintiff for non-payment of rent. Second Am. Compl. ¶ 42. After this wrongful eviction by James, Plaintiff realized that a scam was perpetrated upon her to take her home and she was unable otherwise to finance repurchase of her home. Id. ¶ 43. By stipulation signed and ordered by the Court on May 3, 2011, Plaintiff and Defendant James agreed to vacate the Deed executed between Plaintiff and Defendant James, thereby restoring title to the property to Plaintiff. Quiet Title ¶ 12. Based on all of the above facts, Plaintiff requests that the OneWest Bank mortgage be marked satisfied, released, and extinguished of record with respect to the subject property, or, in the alternative, that a new mortgage be entered of record from Plaintiff in favor of OneWest Bank in the amount of any liens existing against the property prior to October 17, 2011. Id. ¶ 13.
Plaintiff brings four claims: (1) Violation of the Credit Repair Organizations Act against Defendant Bey; (2) Fraud/Fraudulent Misrepresentation/Unfair Trade Practices against all Defendants; (3) Conspiracy and Aiding/Abetting against all ...