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Schneiderman releases: Mortgage loan assistance, debt collection settlement, dentist Medicaid theft, auto insurance fraud ring.
Text of press releases.

January 11, 2015

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
Twitter: @AGSchneiderman


AG’s New York State Mortgage Assistance Program Provides Loans Of Up To $40,000 To Families Struggling to Avoid Foreclosure

More Than 140 Applications Received And More Than 20 Loans Approved In The Program’s First Three Months

NEW YORK — Attorney General Eric T. Schneiderman today announced that the first loans have been closed in the New York State Mortgage Assistance Program (NYS MAP), bringing tangible relief to New York homeowners at immediate risk of losing their homes. NYS MAP provides loans to families who are struggling to avoid foreclosure by offering them a way, for example, to pay off back property taxes or a second mortgage – debts that have kept them from receiving a mortgage modification. With a MAP loan – of up to $40,000 – families are able to stay in their homes. The program is an enhancement to the Attorney General’s Homeowner Protection Program (HOPP), which provides struggling borrowers with free legal and housing counseling services, and has served more than 35,000 homeowners across the state since the launch of the program in October 2012.

“For families across New York, receiving a NYS MAP loan will means they are going to be approved for a mortgage modification and that they are going to be able to stay in their homes. It’s hard to imagine a better investment in our communities and homeowners who are continuing to struggle in the aftermath the foreclosure crisis,” Attorney General Schneiderman said. “We know that our Homeowner Protection Program has had real results, helping thousands of families keep their homes. I’m pleased that our Mortgage Assistance Program is now starting to send a lifeline to families in need.”

Using funds from the National Mortgage Settlement, the Attorney General launched NYS MAP in two stages, first opening up the program to families in Long Island in late September, and then to families across the rest of the state in mid-October. In just over three months, the program has received 146 applications from every corner of the state. This includes: 50 from New York City, 41 from Long Island, 14 from Monroe County and the surrounding area, 10 in the Hudson Valley, seven in the Capital Region, and four in Buffalo and the surrounding area. Since mid-November, NYS MAP has already been able to approve 26 loans, including nine on Long Island, six in Monroe County and the surrounding area, and five in New York City.

Azeez Ruheem Smith, who lives in Brentwood, Long Island, fell on hard times when his wife passed away from breast cancer — leaving him as the sole provider for his three children. When Smith suffered a temporary loss of employment, he fell behind on his mortgage and the bank moved to foreclose. Smith found his way to the Economic Opportunity Counsel, a HOPP provider in Suffolk County. The group helped him apply for a NYS MAP loan. The loan provided Smith with just over $17,000, enough to settle the mortgage arrears and terminate his foreclosure proceedings.

“Without the support of the Attorney General and the funding for HOPP and NYS MAP we would not be able to assist homeowners in such a meaningful and efficient way," said Carol Yopp, a Senior Housing Counselor at Long Island Housing Partnership. “The fact that my client submitted his full application on November 20th and the loan was closed by December 15th proves just how nimble and effective this program is at keeping New York families in their homes.”

Mary Gammariello, of Rochester, NY, also defaulted on her mortgage loan because of mounting medical bills resulting from her cancer treatments, causing her to go into foreclosure. Once she got in touch with The Housing Council, she was able to apply to NYS MAP. Her $29,000 loan will pay off her mortgage loan in full, ensuring she can stay in her home.

While working to ameliorate the effects of housing crisis, Attorney General Schneiderman’s office discovered that many families were being denied mortgage modifications as a result of small outstanding debts. Even families with reliable income streams are often denied modifications because of outstanding debts, such as unpaid property taxes, a series of missed mortgage payments, or delinquent second- or third-mortgage liens that need to be satisfied before a first mortgage holder will grant a modification. By filling the gap for families, the NYS MAP program is empowering consumers to negotiate with their mortgage holders and ultimately remain in their homes.

Eligible loan uses include, but are not limited to, paying off arrears including mortgage payments or unpaid interests and fees; paying down second or third mortgages; satisfying property tax liens or other liens that might lead to loss of homeownership; and supplying borrowers with a “matching” fund to achieve principal reduction or other beneficial first lien modification terms.

Consumers are eligible to apply for loans of varying amounts, but not to exceed $40,000 per borrower, and the Attorney General anticipates that the program will have the capacity to disburse several hundred NYS MAP loans over the next 12 months. In all cases, a NYS MAP Loan will result in homeownership retention at the time the loan is made.

The Attorney General Program is working with the Center for New York City Neighborhoods (CNYCN), as well as the Empire Justice Center, to assist in the operations of NYS MAP. Both agencies are contracted by the Office of the Attorney General to assist with the administration of the HOPP and NYS MAP.

"Together with the Empire Justice Center and HOPP agencies across the state, we've launched a program that helps keep New Yorkers in their homes, and in their neighborhoods. A NYS MAP loan can make all the difference for a family fighting to keep their home,” said Christie Peale, Executive Director of the Center for NYC Neighborhoods. “If you're behind on your mortgage, now is the time to act. Call the AG's hotline and get high-quality help today."

To access NYS MAP, homeowners will work with an existing HOPP counselor or legal aid provider to complete the application. The Attorney General’s office launched the website where prospective applicants can find out about the program and get connected to a HOPP lawyer or counselor. Consumers can also contact the New York Attorney General Consumer hotline at 855-HOME-456.


News from Attorney General Eric T. Schneiderman

January 9, 2015

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
Twitter: @AGSchneiderman


Encore Capital Group Inc. Will Vacate More Than 4,500 Improperly Obtained Judgments Totaling Nearly $18 Million; Reform Practices; And Pay $675,000 In Penalties And Costs

Schneiderman: We Will Continue To Pursue Debt Collectors And Lenders Who Improperly Take Advantage Of Courts And Hardworking New Yorkers

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has obtained a settlement from Encore Capital Group, Inc. (“Encore”), a major debt buyer, for bringing improper debt collection actions against thousands of New York consumers. For years, Encore sued New York consumers and obtained uncontested default judgments against consumers who failed to respond to the lawsuits, even though the underlying claims were untimely under New York law. Under the settlement, Encore will seek to vacate more than 4,500 improperly obtained judgments totaling nearly $18 million. Encore will also reform its debt collection practices and pay civil penalties and costs in the amount of $675,000.

“New York has laws in place to ensure no one can prey on consumers, and debt collectors are required to follow those rules,” said Attorney General Schneiderman. “Today’s settlement ensures that thousands of New Yorkers will see millions in relief from debts that were not enforceable in the first place. We will continue to take action against any company that abuses the power of the court system at the expense of hardworking families.”

Encore is a debt buyer that purchases unpaid consumer debts such as credit card debts from the original creditor or from other debt buyers at deeply discounted prices. Encore’s subsidiaries, which include Midland Credit Management, then attempt to collect on the debt. Through its subsidiaries, Encore is one of the most active debt collection plaintiffs in New York State, filing tens of thousands of debt collection actions each year.

It is unlawful for a debt collector to bring suit against a consumer when the claims are outside of the applicable statute of limitations. Under New York law, in order for an action to be timely filed, it must be commenced not only within New York’s statute of limitations, but also within the statute of limitations of the state where the cause of action accrued, if other than New York. In debt collection actions, a cause of action accrues where the original creditor of the debt resides. For example, while New York’s statute of limitations to collect on a debt is generally six years, if the original creditor on the debt was located in Delaware, which has a three-year statute of limitations, the shorter statute of limitations would govern the action.

The Attorney General’s investigation found that, despite the clear requirements of New York law, Encore brought debt collection claims that were untimely under the statutes of limitations where the causes of action accrued. Because most consumers fail to respond when they are sued by a debt collector, Encore obtained default judgments in its favor based on these time-barred claims.

In addition to seeking to vacate more than 4,500 improperly obtained judgments and paying $675,000 in civil penalties and costs, Encore has agreed to several important reforms of its current practices in New York. These include:

Disclosing in written or oral communication about a debt that is outside the statute of limitations that the company will not sue to collect on the debt.

Disclosing in written or oral communications about a debt that is outside the date for reporting the debt provided for by the federal Fair Credit Reporting Act that, because of the age of the debt, the company will not report the debt to any credit reporting agency.

Alleging certain information relevant to the statute of limitations in any debt collection complaint, such as the name of the original creditor and the date of the consumer’s last payment on the debt.
In addition to filing time-barred debt collection actions, Encore was also engaged in a practice that is often referred to as “robosigning”: Encore employees signed hundreds of affidavits submitted in support of debt collection actions each day without reviewing the affidavits and without possessing personal knowledge, as alleged in the affidavits, about the claimed debts and the amounts owed. The settlement requires Encore to institute reforms to ensure that “robosigning” does not occur and to ensure that all sworn statements filed in debt collection actions are reviewed prior to execution.

This settlement is a part of the Attorney General’s continuing efforts to combat unlawful and abusive debt collection activity. In May 2014, Attorney General Schneiderman obtained settlements from two major debt buyers, Portfolio Recovery Associates and Sherman Financial Group, who filed time-barred debt collection cases. Those settlements resulted in the vacature of more than 3,000 improperly obtained judgments. More information on those settlements is available here.

In addition, in September 2014, New York’s Court System adopted a comprehensive set of reforms related to consumer debt collection actions that incorporate many of the recommendations of the Attorney General’s Office. More information on those reforms is available here.

Consumers facing default judgments arising from debt collection actions brought by Encore or its subsidiaries (including Midland Credit Management) who believe that the default judgment was improperly obtained because the claim was time-barred should contact the Attorney General’s Office within ninety days. Such judgments may be eligible for vacature pursuant to the settlement.

This case was handled by Special Counsel Carolyn Fast, Special Assistant Attorney General Stephen Mindell, and Bureau Chief Jane Azia, all of the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General for Economic Justice Karla Sanchez.


January 8, 2015

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
Twitter: @AGSchneiderman


Defendant Charged With Filing False Dental Services Claims For Patients He Never Treated

NEW YORK – Attorney General Eric T. Schneiderman today announced the arrest of a Manhattan dentist for filing false claims and stealing $11,479 from Medicaid. Howard Rothenberg, 64, of West Nyack, NY, allegedly claimed to have provided services to patients he never met or who he treated only in prior years. The defendant is a licensed, practicing dentist with an office located at 205 East 111th Street in Manhattan.

“The defendant used his profession as a dentist to place personal gain ahead of his ethics and responsibilities to his patients. Although this office prosecutes Medicaid fraud on a regular basis, a doctor who fabricates patients to receive public benefits is particularly appalling,” said Attorney General Schneiderman. “We will continue to hold accountable those individuals, including licensed professionals, who try to cheat the system at the expense of the public trust.”

From on or about January 1, 2010 to August 20, 2013, the defendant billed, and was paid by Medicaid, for services he falsely claimed to have rendered. The complaint filed today in court alleges that a patient of the defendant, when interviewed, stated that not only had they not receive the services for which the defendant had billed, but indicated that they had never heard of the defendant. The charges filed today encompass other patients who, when interviewed, recounted similar experiences.

The defendant was charged with one count of Grand Larceny in the Third Degree, a Class D Felony, and one count of Offering a False Instrument For Filing In the First Degree, a Class E Felony.

The investigation is continuing and it is anticipated that the theft will be greater than $11,479.

The fraud was initially uncovered by the Office of the Medicaid Inspector General based upon randomly generated Explanation of Medicaid Benefits from Medicaid recipients. Further investigation by the Attorney General’s Office confirmed the false filings and theft.

Attorney General Schneiderman thanked the Office of the Medicaid Inspector General for its assistance with this investigation.

The investigation was conducted by Investigator Stanislav Tabakov and Associate Special Auditor-Investigator Lisandra Defex and Principal Special Auditor Investigator Jerome Hosinking. The criminal case is being prosecuted by Special Assistant Attorney General William J. Wallace with the assistance of Regional Director of the Medicaid Fraud Control Unit Christopher M. Shaw. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations – Downstate. Kenneth Morgan is the MFCU Deputy Chief Investigator Downstate. MFCU is led by Acting Director Amy Held. The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

The charges in the criminal complaint are merely accusations and the defendant is presumed innocent until and unless proven guilty in a court of law.


January 7, 2015

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
Twitter: @AGSchneiderman


Five Defendants Charged With Arranging Accidents Involving Rented U-Haul Trucks; Submitting Over $100,000 In Fraudulent Insurance Claims

Schneiderman: Insurance Fraud Costs All New Yorkers, My Office Will Hold Offenders Accountable

NEW YORK– Attorney General Eric T. Schneiderman today announced the arrests of five individuals for their alleged roles staging automobile accidents in Nassau and Suffolk counties to fraudulently receive insurance payouts. The defendants, including alleged ringleader Jean Guilberto, are charged with participating in a series of staged accidents in which rented U-Haul trucks were intentionally crashed into cars loaded with participants, who were then directed to be treated for fictitious injuries at a medical clinic in Freeport. As a result of the three allegedly fake accidents and falsely reported injuries, the defendants are also charged with submitting fraudulent insurance claims, totaling more than $100,000. The defendants are charged on three indictments with multiple felonies, including Insurance Fraud in the Third Degree (a class D felony), Grand Larceny in the Third Degree (a class D felony), and Falsifying Business Records in the First Degree (a class E felony). If convicted, Guilberto faces as much as 21 years in prison.

“Insurance fraud costs all New Yorkers and my office will hold those who seek to scam our insurance and medical systems accountable,” Attorney General Schneiderman said. “Breaking up staged automobile accident rings means safer streets and safer communities. It also means a fairer market for consumers whose insurance premiums skyrocket as a result of this kind of fraud.”

The defendants, who were arrested and arraigned today, are charged with conspiring to create three staged accidents, between October 2010 and June 2011, in order to fraudulently bill insurance carriers and collect illegal payouts. According to statements made by the prosecutor at arraignment, the defendants rented U-Haul trucks and then intentionally drove them into cars operated by other participants. The accidents were allegedly organized by Guilberto, who allegedly recruited the U-Haul drivers and the occupants of the second vehicle with promises of cash payments or lucrative personal injury settlements. After they staged the accidents, the defendants allegedly lied to the responding police officers and pretended that the accident had been real.

Also according to statements made by the prosecutor at arraignments, the occupants of the cars struck by the U-Hauls were directed by Guilberto to Freeport Medical, P.C., located at 50 South Main Street in Freeport, NY. At Freeport Medical, these defendants allegedly filled out insurance forms that included false information about the accident and the defendants’ purported soft tissue injuries. Based on the fraudulent claims of injury, Freeport Medical billed insurance carriers over $25,000 for each accident and over $100,000 in total.

In New York State, a person injured in a motor vehicle accident is automatically covered by the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the No-Fault law. No-Fault insurance carriers are required to provide reimbursement for a wide range of medical and health services for injuries related to car accidents, up to $50,000 per person.

In addition to medical coverage, a victim in a motor vehicle accident may be eligible to recover money from an insurance carrier for a bodily injury lawsuit stemming from injuries resulting from the accident.

The defendants were arraigned today before Justice William C. Donnino in Nassau County Court on three indictments, related to three accidents:

An accident dated October 30, 2010, at the intersection of Brook Avenue and Mildred Avenue in Bay Shore, in which a U-Haul truck rear-ended a Mitsubishi;

An accident dated December 19, 2010, at the intersection of Patton Avenue and East Little Neck Road in Babylon, in which a U-Haul truck sideswiped a Chevrolet; and;

An accident dated June 29, 2011, at the intersection of Milburne Avenue and Harold Avenue in Hempstead, in which a U-Haul truck rear-ended a Toyota.
The following defendants are charged in the indictments:

Jean Guilberto, 35, of Wyandanch, NY, the alleged organizer of the three staged accidents, is charged with three counts of Insurance Fraud in the Third Degree and three counts of Grand Larceny in the Third Degree;

Jahmari Monroe, 27, of Bronx, NY, driver of the U-Haul in the October 30, 2010 accident, is charged with one count of Insurance Fraud in the Third Degree and one count of Grand Larceny in the Third Degree;

Troy Russell, 32, of Amityville, NY, driver of the U-Haul in the December 19, 2010 accident, is charged with one count of Insurance Fraud in the Third Degree and one count of Grand Larceny in the Third Degree;

Alecia Holland, 38, of Wyandanch, NY, a passenger in the car struck by the U-Haul in the December 19, 2010 accident, is charged with one count of Insurance Fraud in the Third Degree, one count of Grand Larceny in the Third Degree, and one count of Falsifying Business Records in the First Degree; and

Larry Henley, 46, of Uniondale, NY, driver of the U-Haul in the June 29, 2011 accident, is charged with one count of Insurance Fraud in the Third Degree and one count of Grand Larceny in the Third Degree.
If convicted, defendant Guilberto faces up to 21 years in prison, and the remaining defendants face up to 7 years in prison. The charges against the defendants are merely accusations, and the defendants are presumed innocent until and unless proven guilty.

Guilberto is currently in custody on $5,000 cash over a $2,500 bond on each indictment; Russell is in custody on a $5,000 bond over $2,500 cash bail; and Henley is in custody on a $2,500 bond over $1,500 cash. Monroe and Holland were released on their own recognizance. Judge Donnino ordered that all defendants surrender their passports.

The Attorney General thanks the New York State Department of Financial Services, the National Insurance Crime Bureau, U-Haul, RepWest Insurance Company, Allstate Insurance Company, GMAC Insurance Company, 21st Century Insurance Company and Gary Armstrong of GDA Investigations Inc. for their valuable assistance in this investigation.

The investigation was handled by Investigators Adrian Klapper and Kevin McCann. The Auto Insurance Fraud Unit is led by Deputy Chief Leonard D’Alessandro and Supervising Investigators Edward Keegan and Natalie Shirfin. The Investigations Bureau is led by Chief Dominick Zarrella.

This case is being prosecuted by Assistant Attorney General Jeff Minett of the Auto Insurance Fraud Unit of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau, with the assistance of Legal Analyst Bradley Rutty. The Bureau is led by Bureau Chief Gary T. Fishman and Deputy Bureau Chief Stephanie Swenton. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.