Video above: Wells Fargo handbook on falsifying documents
Long-time activists Cliff and Mary Ann Stafford convicted of charges related to defrauding Wells Fargo Bank
Judge Michael Hathaway steered jury with instructions including “aiding and abetting” uncharged parties
Wells Fargo has “done more foreclosures in Detroit and the state of Michigan than any other firm,” is “Detroit’s number one property tax scofflaw.” — “Butch Hollowell
Unethical practices used to verify signature on questioned deed: “If your handwriting matches, you are going to jail.”
Hathaway related to new Wayne County Treasurer Richard Hathaway, who oversees Register of Deeds–should he recuse himself from sentencing?
By Diane Bukowski
December 17, 2015
Investigator Mary Jones previously was with Detroit Police Department for 25 years. Photo from WDIV online video.
Detroit – WDIV Channel 4 aired a report Dec. 16 on the Wayne County Mortgage and Deed Fraud Task Force, showing its glitzy new SUV, driven by Investigator Mary Williams Jones, roaming Detroit streets to nab “deed thieves.” Prior to her five years on the task force, Jones retired from 25 years in the Detroit Police Department.
“Unfortunately we’ve had to investigate I think about 2500 cases and we’ve returned about 190 homes [over the last 10 years],” Wayne County Register of Deeds Bernard Youngblood says in the report.
“We focus on those crimes that affect a lot of people, that are organized attempts to defraud on a large scale,” the Task Force’s lead attorney Abed Hammoud said during a 2011 forum in Ann Arbor.
Community advocates Clifford and Mary Ann Stafford
Meanwhile, neither Wayne County, the City of Detroit, nor the State of Michigan have investigated, sued or jailed representatives of the banking industry, which has caused the loss of at least 237,000 homes in Detroit alone to illegal mortgage foreclosures based on predatory lending, a national practice which led to the 2008 global economic meltdown.
Instead, on Dec. 4, Investigator Jones, featured in the WDIV video, obtained the convictions of two long-time community anti-foreclosure activists, Clifford and Mary Ann Stafford, on charges that THEY defrauded Wells Fargo bank, which boasts it is “the largest bank in the world by market value.” Mrs. Stafford was convicted of “False Pretenses,” which carries a maximum sentence of 15 years, and both Staffords were convicted of “Obstruction of Justice,” a misdemeanor.
Wells Fargo has itself settled or been convicted in numerous lawsuits filed by the U.S., state attorney generals, local governments, and others for crimes including altering documents, defrauding the FHA, racial discrimination, inflated insurance to pay for kickbacks, loan modification denials, mortgage origination fraud, predatory lending practices, selling properties they did not own, robosigning, securities fraud, and laundering money for drug traffickers. (See http://www.vaughns-1-pagers.com/economics/wells-fargo-lawsuit-summary.htm)
Watch out–this car may be coming for YOU, not the global banks which have destroyed Detroit.
Butch Hollowell, at the time the general counsel for the Detroit NAACP, said Wells Fargo has “done more foreclosures in Detroit and the state of Michigan than any other firm,” and is “Detroit’s number one property tax scofflaw.”
The Staffords face sentencing Jan. 13, 2016 in front of Wayne County Circuit Court Judge Michael Hathaway. They are asking all those they have helped through the years, and all who oppose illegal foreclosures, water shut-offs, and other crimes against the people, to attend.
“I am 66 years old, and the only person I answer to is the person that created me,” Mrs. Stafford said. “Our creator is going to make them all pay. Somebody has got to step up to the line. Put me in jail. I know what I’m going to do next.”
Wayne Co. Circuit Court Judge Michael Hathaway
Wayne Co. Treasurer Richard Hathaway
Judge Hathaway likely should recuse himself from the rest of the trial including sentencing, since his relative Richard Hathaway was appointed Wayne County Treasurer Dec. 11. The Treasurer oversees the Register of Deeds, whose Task Force targeted the Staffords.
Richard Hathaway previously served as Chief Assistant Prosecuting Attorney under Wayne County Prosecutor Kym Worthy, who nominated him for Treasurer.
Hathaway clearly steered the jury toward the Staffords’ convictions through his jury instructions, which lumped them in with uncharged parties including Wells Fargo, Fannie Mae, mortgage brokers, and title companies who perpetrated a scheme related to the sale of a house at 13236 Nautica in Belleville, MI. The defense contended the Staffords were unwitting dupes of these entities.
“The evidence is clear that there are a number of wrongdoers here,” Hathaway said. “There could have been others guilty of deliberate wrongdoing.” He instructed the jury that it could decide whether the defendants “aided and abetted” the uncharged parties as part of the original charges against them.
Atty. Steve Lockhart
Atty. Patrick McQueeney
The Staffords’ attorneys Patrick McQueeney and Steve Lockhart objected in part to the instructions after the jury decision.
Hathaway also severely berated an older Black woman juror for showing up at 9:15 am on the third day of the trial, gave her no chance to explain, then removed her, changing the composition of the jury and possibly intimidating other jurors. Jurors had been coming in at 10 a.m. every other day in the trial.
Hathaway told the juror she should have been there for the testimony of Attorney Antonio Tuddles at 9 a.m., which Hathaway had rescheduled from 3:45 pm the day before.
Attorney Antonio Tuddles
Tuddles, scheduled to testify about a quiet title lawsuit he argued for the Staffords, showed up at the scheduled time of 3:45 pm the previous day. Hathaway conducted an ex parte discussion at the bench with him for 10 minutes, then rescheduled his appearance for the following day at 9 a.m.
It is not known what transpired between Judge Hathaway and Tuddles during their conversation. But the next day, Tuddles testified only briefly that he would not have pursued a “frivolous” lawsuit. He did not testify to more extensive events he put on the record in a case evaluation filed in Dec. 2010. His testimony on those events may have influenced the jury in the other direction.
The Staffords, who have four children, lived for 25 years on Gilchrist on Detroit’s northwest side, where Mr. Stafford was president of the neighborhood block club. The Wyldons were their neighbors.
They run a low-profile company called Private Consumer Consulting Services, LLC. Mrs. Stafford and her friend Anita Brown began the company as a DBA called PCCS/Consumer Advising during the 2007-08 economic crash. Mr. Stafford and witness Jammi Muhammad, both retirees from Ford Motor Company and U.S. military veterans, testified that PCCS, LLC was founded in February, 2008, to assist and educate people facing the thousands of foreclosures that devastated metro Detroit before, during and after the crash.
Global economic crash of 2008 caused by predatory lending practices of global banks, mortgage companies.
“As veterans, we wanted to give back to the community,” Muhammad said.
To raise capital for the organization’s functions, it bought and sold various properties. Its members hoped to make some profit by selling them after renovation or after equity accrued.
Mr. Stafford testified that the group began as Freedom Trust, an informal organization that met at the Staffords’ home. He said it included people from all walks of life, including community members, realtors, mortgage brokers, and people in the skilled trades. He said a committee was formed to set skilled trades training for Detroit’s youth, so that they could be employed, and participate in renovation of the houses that would be purchased
Uncharged parties in Nautica ripoff: Wells Fargo, Fannie Mae, Valerie and Kevin Kauth, Avis Washington, Glen P. Boggess, Jr.
The Staffords’ trial produced abundant testimony alleging criminal wrongdoing against uncharged institutions and individuals.
These included Wells Fargo for loaning the inflated amount of $395,000 to Trenise Wyldon without a valid title, or title and mortgage insurance for 13236 Nautica, during the height of the predatory lending bubble, according to defense expert Richard Woonton. Donny and Joann Carlton had sold the house to PCCS for $312,500.
Wells Fargo foreclosed on the property, receiving $406,000 plus interest from Fannie Mae. Fannie Mae later also foreclosed, compensating Trenise Wyldon, the alleged owner listed on the allegedly invalid title, for $2,000. They sold the property on July 18, 2013 for $273,000.
Other uncharged parties include the short-lived Reliant Title company (founded in March, 2006 and dissolved in April, 2009). Brokerage NOVA 2000 with its DBA Loan Origination Concepts (LOC) illegally worked with Reliant Title, even having employees in common, to finagle the deal, according to testimony at the trial.
Kevin Kauth was President of Reliant Title, and Valerie Kauth signed, endorsed and notarized documents in the Nautica deal, including the deed allegedly signed by Mrs. Stafford. She even endorsed one check made out to PCCS, which she had no membership in, according to a prosecution exhibit.
Avis Washington, according to her testimony, worked for both Reliant Title and brokerage NOVA 2000/LOC. Glen P. Boggess, Jr. was president of NOVA 2000/LOC. It was incorporated in August, 2004 and is noted in state records with an “automatic withdrawal” in July, 2011.
Washington, a key witness for the prosecution, repeatedly said she could not recall events as long as eight years ago, but said she DID recall the Staffords’ presence at an alleged Dec. 5, 2007 closing on the Nautica house. Both the Staffords repeatedly denied that allegation earlier; their attorneys called it “a phantom closing.” Washington said she could not remember where the closing took place, or everyone present, only that it was around a “conference table.”
As an employee of Reliant Title and NOVA 2000, she said she did not work out of an office, conducting her work from her home, primarily over the phone. She said she could not remember the names of any co-workers.
House at 31250 Country Ridge in Farmington Hills.
Mr. Stafford said during his testimony that it was Avis Washington who took him to see the Nautica house, along with other properties.
They included one on Country Ridge in Farmington Hills, which he said PCCS purchased, then sold to obtain the capital to buy the house on Nautica. He said Washington and Boggess used to attend some of the early PCCS open meetings, but were not members.
Wayne County Assistant Prosecutor Jennifer Douglas said in her opening statement that “the Staffords sold a house at 13236 Nautica [in Belleville, MI] before they owned it, then lied about it.”
Contradictorily, her first exhibit was a Warranty Deed for that property from Donny and Joann Carlton to PCCS dated Dec. 5, 2007, for the amount of $312,500. It was notarized in Oklahoma and processed by Title Partners, Inc. Attached to it was a record of sale and an owner’s affidavit.
Central to the prosecution’s case was its second exhibit, a signed Warranty Deed ALSO dated Dec. 5, 2007, conveying the house from Mary Ann Stafford, d/b/a PCCS, to Trenise Wyldon, a former neighbor of the Staffords, for the inflated amount of $395,000.
Deed Staffords contend was forged.
Tuddles said in his case evaluation, “When comparing the handwriting on the fraudulent document to Mary A. Stafford’s original handwriting, you can see that someone tried to duplicate her handwriting.” He attached copies of her driver’s license and Michigan State ID.
Mary Ann Stafford has strongly denied in various statements that it was her signature on the deed.
Thomas Riley of MSP forensics lab.
Tuddles also noted that the deed was notarized by Valerie Kauth, wife of Kevin Kauth, the owner of Reliant Title Company which handled the alleged transaction. He said “a notary public may not perform any notarial act for any person if that person is the notary public’s spouse, parent, sibling, children, spouse’s parent, spouse’s sibling, spouse’s child or child’s spouse.”
Douglas relied heavily on the testimony of Investigator Jones and Thomas Riley, a questioned document examiner for the Michigan State Police forensics lab.
Riley testified that he had instructed Jones to obtain 30 “exemplars” of Mrs. Stafford’s signature on documents SIMILAR to the warranty deed. He said Jones sent him a package containing a COPY of the warranty deed, along with 30 exemplars. Since the questioned document was a copy, he said he gave a “qualified” decision that no differences were noted in all the signatures.
Both Riley’s and Jones’ practices were tainted, likely deliberately, according to an article title “Collecting Exemplars” by Certified Forensics Document Examiner Katherine M. Koppenhaver, founder of the International Association of Forensics Document Examiners.
Jones testified that she took the original Warranty Deed, and whited out the signature, apparently destroying a critical piece of evidence. She said she Xeroxed 30 copies of it, and then had Mrs. Stafford sign the 30 copies, in direct opposition to Riley’s instructions to use SIMILAR documents.
It was unclear from her testimony whether the warranty deed which Douglas showed on the screen with Mrs. Stafford’s signature, purporting to be a copy of the original, was actually one of the 30 copies of the same deed that Mrs. Stafford signed as exemplars. The document had a line down the middle, like that produced on a copy when a Xerox machine is running out of ink.
“Jones told me, ‘if your handwriting matches the signature, you are going to jail,’” Mrs. Stafford told VOD. “I told her I have nothing to hide.”
At one point, Prosecutor Douglas put the copy of the alleged deed on the screen, along with a copy of a statement Mrs. Stafford signed in Jones’ office. She improperly asked the jury, as if they were forensics experts, “Aren’t those the same signatures?”
Katherine Koppenhaver
In “Collecting Exemplars,” Koppenhaver, who herself has handled more than 3000 questioned documents cases since 1982, writes, “Informal handwriting exemplars are more reliable for comparison purposes than request writing.”
Informal samples are those which already exist, taken from documents earlier executed in the regular course of business, while request writing is that which the signer is asked to execute by the examiner. Koppenhaver says it is preferable to have the examiner (i.e. Riley) carry out the collection of request exemplars. Instead, Jones, not trained in document examination, collected the request exemplars.
Regarding request writing, Koppenhaver says, “Courts consider request writing taken after the fact as self-serving and may not allow it. Some writers will deliberately disguise their request handwriting. The person taking the request writing needs to take this into consideration.”
She adds, “Ideally, original writing should be available for the scrutiny of the document examiner. Original writing is always better than a photocopy or a facsimile. If it is impossible to obtain original documents, a first generation photocopy should be supplied. The original documents should be requested whenever a photocopy is supplied by the adverse party.”
Rev. Edward Pinkney with wife Dorothy at his left, during first rally against Michigan Gov. Rick Snyder’s emergency manager act, PA 4. It later became PA 436.
Riley never testified that he requested the original document. Earlier, in the case of Rev. Edward Pinkney, now jailed on allegations of falsifying dates on election recall petitions, the MSP forensics document examiner testified he also examined copies.
Based on the allegedly fraudulent deed, Wyldon then procured a $395,000 mortgage from Wells Fargo Bank, also dated Dec. 5, 2007.
“This is ridiculous,” Cornell Squires of RICObusters, who observed the trial, said. “There is no way all those events could have taken place on the same day.
Wyldon claimed on her credit application that she had worked for PCCS for “2-6 years,” was making $10,000 a year, and that the house would be her primary residence.
In their quiet title lawsuit, and in statements to Investigator Jones, the Staffords disputed Wyldon’s claim, saying PCCS as a voluntary group never had employees, and specifically that it did NOT employ Wyldon or her husband Emmett Wyldon.
Wyldon pled guilty to a charge of “False statement on a credit application” Jan. 13, 2014, based on a settlement offer that she would “cooperate with ongoing deed/mortgage fraud investigations and testify truthfully when subpoenaed to do so.” The offer recommended no jail time.
Judge James Chylinski
Without a hearing of record, Wayne County Circuit Court Judge James Chylinski signed off on a dismissal of the charge against Wyldon Aug. 20, 2014. Wyldon showed up for the preliminary exam of the Staffords, but never testified, and was not present during their trial.
Mrs. Stafford denied signing the warranty deed for the property to Trenise Wyldon. The filing of the quiet title lawsuit, and statements the Staffords gave to Jones later, after they asked the Task Force to investigate mortgage fraud in the sale, were used as the prosecutor’s grounds for charging the Staffords with “obstruction of justice.”
They were given no warning when they went to the Task Force offices at 400 Monroe that they were actually walking into the lion’s den. Jones testified on cross exam that Mr. Stafford had come into the office prior to her interview for an intake session. She then typed up what appeared to be leading questions for her interviews with both Staffords, and had them respond in handwriting. The Staffords were not warned they were being considered for prosecution, and had no attorneys present.
The Wyldons resided in the Nautica property for two years. It was then foreclosed by Wells Fargo and sold to Fannie Mae. Wells Fargo got $406,121 back with interest from Fannie Mae, and Reliant Title, including representatives Glen Boggess, Ava Washington, and Valerie Kauth walked away with their fees. Fannie Mae paid the Wyldons $2,000 for the property after it foreclosed, then later sold it for $273,200.
Clifford Stafford said PCCS made “not one red cent” on Nautica deal.
PCCS made “not one red cent” on the transaction, Mr. Stafford testified. In fact, he said PCCS had paid numerously monthly mortgage costs for the property while the Wyldons lived there, not knowing that Trenise Wyldon had fraudulently conveyed the property to herself alone.
Richard Woonton, called as an expert witness for the defense, testified that the $395,000 mortgage package for Trenise Wyldon and other documents were severely flawed.
In a comment after the trial, he angrily called the whole transaction nothing but “money-laundering.”
Woonton said he is licensed as a mortgage loan officer for the State of Michigan and 38 other states. He said he began his career in 1982, clearing up bad loans, corruption and fraud, and authenticating various documents.
The defense produced a purchase agreement dated Sept. 13, 2007, signed by Avis Washington on behalf of Glen Boggess for the Nautica property. The amount cited was $322,500, not the amount of the mortgage obtained by Wyldon. Woonton said the signers are supposed to be the sellers and the buyers, not Avis Washington, who processed the purchase agreement.
Hathaway asked him whether purchase agreement signers sometimes back off later, but Woonton testified the agreement was part of the entire Wells Fargo bank file.
He said Trenise Wyldon was the only signer of the uniform residential loan application to Wells Fargo. (See http://www.freddiemac.com/uniform/pdf/form65.pdf)
He said the existence of another deed other than the original one conveying the property to PCCS from the Carltons was not possible because it was not contained in the bank file.
“There was only a five percent down payment, so there should have been a mortgage insurance certificate in the file,” Woonton said. “Anytime you don’t put 20 percent down to cover the lender in case of loss, you must have mortgage insurance.”
He said certificates for mortgage and title insurance were not included in the Wells Fargo package, and that the HUD settlement agreement didn’t have an address where the closing took place. He said it also falsely identified PCCS as the sellers.
A little sloppy? Wells Fargo CEO John Stumpf.
“It was the Carltons whose Bank of America loan that Wells Fargo paid off,” he testified. He added that after Wells Fargo supplied the money for the loan, Reliant Title issued a check to PCCS for $67,000. That check was however endorsed by Valerie Kauth, ending up in the title company’s escrow account.
He said Reliant Title then illegally issued a $23,143 check to Trenise Wyldon, money which she supplied as the down payment on the house, asserting that it was from her own funds. He said return of the original documentation of the mortgage must go to the company that owns it, which was Wells Fargo. However, he testified that on the document in question, “Wells Fargo” is crossed out as the returnee, and fraudulently replaced by Reliant Title.
Judge Hathaway asked, “Isn’t it possible that Wells Fargo just got a little sloppy?”
(Regarding getting a little sloppy, see http://philipstern.com/weblog/2015/04/14/sloppy-paperwork-derails-wells-fargo-foreclosure/ and http://nypost.com/2012/01/01/sloppy-seconds-feds-probe-million-in-double-billing-by-banks/.)
Related stories:
http://www.clickondetroit.com/news/team-hits-wayne-county-streets-to-prevent-deed-theft#
http://foreclosurenation.org/breaking-news/inside-the-foreclosure-factory-wells-fargo-is-working-overtime-and-it-appears-the-fraud-never-ends/
http://www.vaughns-1-pagers.com/economics/wells-fargo-lawsuit-summary.htm
http://voiceofdetroit.net/2012/08/26/naacp-wells-fargo-and-the-road-less-traveled/
http://voiceofdetroit.net/2011/11/23/banks-financing-drug-cartels-admitted-in-wells-fargo-deal/
http://voiceofdetroit.net/2013/08/14/swaps-probe-finds-banks-including-detroit-creditors-rigged-rate-at-expense-of-retirees/
http://voiceofdetroit.net/2015/04/24/u-s-sues-dan-gilberts-quicken-loans-over-mortgage-fraud-one-cause-of-detroit-blight/
http://voiceofdetroit.net/2014/08/21/bank-of-america-agrees-to-nearly-17b-mortgage-fraud-settlement-helped-destroy-detroit/
http://voiceofdetroit.net/2012/10/25/u-s-sues-bank-of-america-for-brazen-mortgage-fraud/
http://voiceofdetroit.net/2013/10/27/jpmorgan-said-to-reach-13-billion-u-s-settlement-on-mortgage-bond-sales/
http://voiceofdetroit.net/2013/02/06/usdoj-slams-standard-poors-with-5-billion-fraud-lawsuit/
http://voiceofdetroit.net/2011/08/16/anger-over-fannie-mae-foreclosures/
http://voiceofdetroit.net/2011/06/16/make-the-banks-pay-to-rebuild-detroit-and-u-s-2/