This blog post primarily concerns the allegations "in story form" contained in Melony Michaels' and John Foster's "Third Amended Complaint," a lawsuit filed against various individuals and businesses in the wake of the mortgage fraud at 1564 Hillside Ave. N., which sent Larry "Maximum" Maxwell to prison.
Part One, "moore than meets the eye" with former JACC executive director Jerry Moore, click here.
Part Two, a tale of two court trials, Moore has a foot planted in both, click here.
Part Three, a strange bounce of the legal ping-pong ball makes Moore a defendant, once again, in the civil suit, click here...and this after the crazy Mpls Mirror lady crowed about him being dropped. "Silence is deafening" from Moore's critics, Moore "vindicated," blah blah blah.
Part Four, the "cast of characters" in the lawsuit, including Jerry Moore, click here.
In this, Part Five, these characters will fall into place and act out their little drama of fraud, as outlined in the allegations of the "Third Time's The Charm" Amended Complaint...
The lawsuit tells its own story well enough, and to be in "readable, entertaining blog format" only requires a bit of editing. Creative credit for this clear, easy-to-understand chronological account goes primarily to the Lowden Law Firm.
Perfect Credit Makes Foster A Target For Identity Theft
Around June of 2006, John Foster's identity, social security number, credit worthiness, and personal/financial documents were stolen, altered, and used to purchase two properties in June and July of that same year, namely 1564 Hillside Ave. N. and 8900 12th Ave. S. in Bloomington.
At least two additional properties were in the process of being sold to this same "imposter Foster," but these failed to close after Plaintiffs discovered the illegal sale of the Hillside property. These properties were at 3000 Girard Ave. N. and 2642 James Ave. N.
The "imposter Foster" was a guy named Jerome Kingrussell, who presented himself as Foster for the two closings and forged Foster's name to various real estate documents, as well as presenting a poorly made fake Minnesota drivers license bearing Kingrussel's resemblance and John Foster's name, as well as a fake social security card.
(Please note, though Jerome Kingrussel might capitalize the "R" in the middle of his surname, this blog will not engage in that ridiculous practice, though it is scrupulously written that way in the lawsuit. Also, from time to time in some news coverage, internet commentary, and this very blog, Melony Michaels' first name has been spelled "Melanie" like the 1960s singer known for "Lay Down--Candles In the Rain," but that is incorrect, it is spelled "Melony.")
The forgery efforts were elaborate. There was a falsified W2, a falsified check stub for the real John Foster's actual place of work, a false letter regarding "Foster's" interest in registered property, falsified TCF bank statements, and documents pertaining to Foster's credit worthiness. All that stuff you hear about protecting yourself from "identity theft?"
This was it. This was identity theft. But it wasn't just a stolen credit card used to buy a tank of gas before the card could be canceled. This was a carefully-planned heist. The purpose of the fraud was for Maxwell and Kingrussel to "financially benefit themselves and others from this trickery and forgery in the form of post-closing disbursements, commissions and fees."
Jerry "I'll Sue You For Defamation" Moore's Purported Role
It is merely an ALLEGATION, let's all keep that in mind. According to the Third Amended Complaint, "Moore introduced Reitman to Maxwell resulting in the Hillside property sale Moore was illegally promised Five Thousand Dollars ($5,000.00) for the referral as a kickback. Maxwell being a learned man of real estate realized he could not outright pay a kickback devised a scheme whereby he included an invoice of $5,000 for 'windows' in the settlement statement. Moore, Snotty, (sic) (The REAPG selling agent) Maxwell, Reitman, and Kingrussell knew that windows had not been installed or purchased on the property. Moore accepted the $5,000 disbursement knowing he was not entitled to it."
Layers Of Lies and Liars
All In One Appraisal provided a falsely inflated appraisal of the Hillside property, appraising it approximately $80,000 over market value, to allow Maxwell to push the sale forward. The appraisal was not done according to industry standards or regulations.
(Allegedly) Cox and Staten individually and doing business as REAPG, Moore, Reitman, Lang, Gill, Snotty, (sic) Maxwell and Kingrussell received monies improperly and unjustly following the closing of the Hillside property and concealed their independent knowledge that the property was not accurately appraised, that windows were not purchased or installed, and that improvements or repairs to the property had not been completed. Or started.
On behalf of (Robert) Anderson, Martindale Appraisals submitted an improper and inflated appraisal of Anderson's home, the 12th Avenue Property, attempting to conceal that Anderson had completed the improper appraisal on his own home. Martindale and Anderson concealed the true value of the property. Martindale received payment for the faulty appraisal and Anderson's first and second mortgages as well as a small loan to Wells Fargo were paid following the closing. Allegedly.
At Maxwell and/or Reitman's request, Gill Construction submitted false invoices totalling $24,810 for non-existent repairs/improvements to the Hillside property. Maxwell, Reitman, Gill concealed the fact Gill was not entitled to this money listed in the settlement statement.
Maxwell, Bowman Closed On 40 To 50 Properties, FAST
Defendant Trent Bowman, the acting loan officer for Centennial Mortgage and Funding, Inc had developed a business relationship with Maxwell in which they closed on 40 to 50 properties together through Centennial. Bowman was aware that Maxwell liked to act fast with his business transactions. Bowman accepted Maxwell's false statements at face value without questioning the validity of any of the sales, until after the scheme was discovered by Plaintiffs.
Bowman additionally accepted bogus documents presented by Maxwell, Kingrussell, Anderson, Gill, Moore, (ALLEGEDLY!) All In One and Martindale without reasonable review of the documents.
Bowman's oafish "unwittingness" was demonstrated by his mailing of the Christmas Card From Hell to Melony Michaels and John Foster, which arguably derailed the whole scheme. If you watch Bowman testify, it becomes clear he's not the sharpest tool in the shed, but he has a sort of "charge straight ahead" outlook. I had a gut feeling if Bowman was anything, he was a hard worker. With Maxwell's steady stream of business, Bowman found himself making money by the bucketful from a seemingly endless river. How, where and when would Bowman ever have such luck, such opportunities again? With his personality, intelligence, and skill set?
Bowman dug in like a wood tick, it appears, and tried to make financial hay while the sun was shining. But around the time of the winter solstice (the darkest day of the year) he effectively worked himself out of a job, sending out (what must have been) dozens, even hundreds of "We appreciate your business" Christmas cards, one of which arrived in the mailbox of John Foster, the REAL John Foster.
Where did all of Bowman's money go?
Bowman hasn't even retained counsel, it appears from MNCIS.
Coates Was Last Chance To Stop The Fraudulent Deal
Janie Coates the closer and notary accepted Kingrussell's forged signature without correctly verifying his identity, without noticing the poorly made fake drivers license, and proceeded with the closing. Coats hasn't retained counsel and will probably end up being a "talkative little fish."
Duty, Breach, Causation, Damages
The remainder of the lawsuit cites the appropriate statues and explains how defendants allegedly violated these statues seven ways from Sunday. The particular laws are cited which apply to those involved in real estate, appraisal, and notary activities.
The lawsuit accuses Maxwell, Cox, Gill, Anderson, Moore, and Martindale of "civil theft by swindle." Damages to Plaintiff happened in the following ways: increased interest rates on existing credit, lost wages while Melony Michaels investigated and ultimately assisted with the prosecution, John Foster's lost wages for time spent at the criminal trial, having credit denied to purchase a vehicle and refinance their home, monetary penalties for having to cash in stock to pay debts and the tax consequences of that, credit repair services, (endless) copying costs to provide copies of various documents to law enforcement, parking and milage for various meetings and higher insurance premiums.
The plaintiffs seek damages of $50,000 plus punitive damages. One interesting aspect of the lawsuit is that it characterizes a social security number and creditworthiness as "stolen property." This is a legally fascinating lawsuit in that way alone, even if Jerry Moore wasn't named.
"A Vast And Comprehensive Scheme"
If you can prove a swindle, it shouldn't be that hard to prove a CONSPIRACY to swindle. The lawsuit accuses Maxwell, Cox, Kingrussell, Anderson and Martindale of a "vast and comprehensive scheme to trick Centennial, First USA, Coates and New Beginnings into closing on the 12th Avenue property."
In like manner, the suit accuses Maxwell, Cox, Kingrussell, Gill, and Moore of a "vast and comprehensive" (but apparently not UNIQUE) scheme in regard to the Hillside Ave. N. property, only this time the lawsuit goes out of its way to detail more items, including the infamous $5,000 invoice to J.L. Moore Consulting for "windows." Pointed mention is made of creating a false impression of the true condition of the property.
Receiving Stolen Property, Allegedly
The Plaintiffs allege Defendants Maxwell, Cox, Kingrussell, Gill, Anderson, Moore, and Martindale "received monies or caused monies to be transferred to pay off loans or other alleged creditors as a result of their theft by swindle."
Dishonorable Mention For Inflated Appraisal
Anderson and Martindale have their own special section of the lawsuit for the inflated appraisal over the 12th Ave. Property.
Unjust Enrichment, With One Exception
All the defendants except Staten are sued for unjust enrichment. Staten is only excluded because of the Honorable Judge Dickstein's previous ruling, part of the "strange bounce of the legal ping pong ball" which brought Moore and Anderson back into the lawsuit.
However, a count of (alleged) negligence against Staten survives. A negligence count against Cox (Maxwell's wife) also survives. A separate section alleged negligence against Coates. Part of the allegation in the lawsuit (and I witnessed this come out in the criminal trial) was that a fairly lame and obvious fake ID was used. Coates also processed the Hillside closing documents with the "Lang family" disbursement without documentation of a legitimate property interest.
Negligence against Bowman is also alleged, and not just because he's dumb enough to send a Christmas card to an identity theft victim. Centennial is also sued for negligence. At some point the Plaintiff lawyer throws in the fact monies weren't even held IN ESCROW for the work to be completed on 1564 Hillside Ave. N.
Invasion of Privacy
The final count alleges "invasion of privacy." It's an interesting allegation. Arguably, identity theft is a combination of "invasion of privacy" and "stealing property." But how do you plead this stuff in a lawsuit? When this case is appealed (appeal is inevitable, at least if Jill Clark still has her law license) "Michaels vs. First USA Title, LLC" may become a much-needed case law in regard to "identity theft."
Maxwell Is Guilty, See Attached
Documents pertaining to Maxwell's criminal conviction are attached as exhibits to the civil suit, including a document saying Maxwell shall pay "restitution" to John Foster, his victim. So far, I don't have word of any money being skimmed off the top of the prison canteen fund and forwarded to Foster. All the same, in regard to Maxwell (and KingRussell, and REAPG, whose "guilty" sentences are attached) the case is a "gimme." The only question is...who has INSURANCE?
Staten Is Negligent, Says The Department of Commerce, Please See Attached
Halisi Edwards-Staten already admitted she was negligent in a consent order by the Department of Commerce. Additionally (first I've heard of this) the consent order mentions Staten "failed to satisfy a civil judgment" in violation of a Minnesota statute. Oh, also, she failed to submit an address notification in a timely way.
Notably, Staten didn't "admit nor deny" the contents of the consent order, she just voluntarily withdrew her real estate brokers license. That "didn't admit or deny" becomes important in precisely this instance; a civil suit over alleged negligence.
Mike Martindale Loses His Appraiser's License, Please See Attached
Michael B. Martindale, of 6760 Gretchen Lake N., Oakdale, MN, lost his appraiser's license over signing off on the inflated appraisal completed by Robert J. Anderson, in which Anderson appraised Anderson's own home.
According to a Consent Order of the Department of Commerce, Martindale voluntarily gave up his license after being informed Commissioner Glenn Wilson was prepared to commence formal action in regard to the dishonest appraisal document.
I have not been keeping exact count of the licenses lost, businesses dissolved as a result of Larry Maxwell's web of fraud. Seems to me the count is around half a dozen. And let's not forget Tynessia Snoddy ("Snotty" in the lawsuit) went down, too.
We're Not Done With Halisi Edwards Staten, Quite Yet, See Attached Document
In a manner similar to Martindale giving up his license, so did Staten give up hers, but besides the "consent order" there is another interesting document about Staten attached to the "Third Amended" civil suit, a document called Notice And Order For Prehearing Conference, dated 11-17-08, signed Emmanuel Munson-Regala, Deputy Commissioner, Market Assurance Division.
In the course of informing Staten about what facts would be under consideration during the prehearing conference, the Department of Commerce documented some relevant and colorful stuff concerning Staten's relationship to Maxwell, and the police investigation of REAPG, which was the partnership between Vicki Cox Maxwell and Staten, with the felon Larry Maxwell working at REAPG, as follows:
Cox-Maxwell was issued her real estate broker's license on January 31, 2006. The very same day, REAPG was issued a real estate partnership license. Staten was registered as the broker of the partnership, but it was a partnership between Staten and Cox-Maxwell. Real estate agents authorized to act on Staten's behalf included Cox and Maxwell. REAPG's home address was the house where Larry Maxwell lived with his wife, Vicki Cox-Maxwell.
It was November 15, 2007 when Bloomington Police raided the house. Minnesota Commerce Department investigators accompanied the police. It was during the raid when Cox admitted Staten was not supervising REAPG and didn't even live in the state anymore. When asked about the execution of contracts and checks, Cox stated that she "just signs Halisi's name." Cox claimed that Larry Maxwell "runs the company."
While being interviewed by the Bloomington Police, Maxwell confirmed Staten wasn't supervising or monitoring much of anything. Oh, sure, she used to come back to Minnesota but hadn't for some time and was residing in Georgia.
Leave Your Desperate Verbal Missive After The Beap
The day after the raid, Staten called the Department of Commerce and (wouldn't you know it) didn't reach a live person. She left a message on an answering machine, as follows:
My name is Dr. Halisi Edwards Staten. I am the broker for Realty Executives. I'm in Atlanta right now and I received a call informing me that my office was raided yesterday by the Commerce Department and one of my salespeople was arrested. I would like someone to call me to let me know what exactly is going on. I would expect I would have heard from someone yesterday. My salesperson who was arrested is Larry Maxwell. I would like the investigator handling this matter to call me...
It was November 20 when the Commerce Department's investigator called Staten and made it clear their department hadn't carried out the raid. The investigator wanted to know what was up with Staten's address. Why was she living in Georgia when Department records reflected residence in Minnesota. Staten tried to say she'd called the Department when she moved and supposedly was told "it was okay." But, of course, Staten couldn't say who she'd spoken to...couldn't recall if she'd submitted that information in writing.
Within minutes of speaking to the investigator, apparently in an ex post facto attempt to get herself as far away from criminal charges and civil liability as possible, Staten fired off the following email at 9:48 a.m.
(...) Based on the fact I am currently residing in Georgia, I am voluntarily returning (sic) my license to the Department of Commerce. As of November 20, 2007, I am no longer a salesperson or broker within the State of Minnesota. If there is any additional information or follow-up that I need to do, please notify me ASAP...
There was another email, January 16, 2008, in which Staten admitted she failed to supervise Maxwell.
The document summarizes the charges against Larry Maxwell, at that point not yet adjudicated, and then adds this little nugget of info: Al's Benjamin Franklin plumbing obtained a judgment against Staten of $7,324.24 in Hennepin County District Court. (27-CV-07-15135) On the date of the document, Staten had failed to satisfy the judgment.
This information just makes me want to dig like a bloggy woodchuck into the rest of the civil cases in which Halisi Edwards Staten is named. Looking at MNCIS I see six of them in addition to the one noted above. However, Staten is a tangent to be pursued down the road. Keith Reitman's statement to the authorities about the fraud at 1564 Hillside Ave. N. and Jerry Moore's alleged, purported and supposed role is, I suspect, much more interesting to readers.
Keith Reitman's Feline Tells All In "Cat Typed" Statement
In Part 6, I will present slumlord Keith Reitman's transcribed statement, to be forever immortalized as the "Keith Reitman Cat Typed" statement for reasons that will become obvious.