DLLR at Your Door - A Monthly Update from DLLR Secretary Thomas E. Perez

A Message from Secretary Perez

Recent news accounts detailed a massive mortgage fraud investigation that led to the indictments of eight individuals for scamming at least 100 homeowners out of more than $10 million in equity. The Metropolitan Money Store case was the largest mortgage fraud investigation in Maryland history, and the groundwork was laid by DLLR’s investigators.

The case is the poster child for the need for regulatory and statutory reform at the state level. The General Assembly this year passed and Governor O’Malley signed two new laws that provide state prosecutors with critical new tools to go after scam artists who prey on vulnerable homeowners by offering deals that sound too good to be true, because they are.

Cracking down on fraud by strengthening our state laws and working in partnership with our federal colleagues will play a fundamental role in safeguarding homeowners from future crises like the one that has wreaked havoc on our neighborhoods, our communities and our nation’s economy over the last year. The charges in the Metropolitan Money Store case should send a strong message that Maryland will not tolerate practices that exploit distressed homeowners.
 

DLLR Financial Regulation Investigators Applauded for Background Investigation in the Metropolitan Money Store Mortgage Fraud Scheme

A federal grand jury indicted eight individuals with conspiracy to commit mail and wire fraud, mail fraud and money laundering, in connection with a massive mortgage fraud scheme which promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, but left them homeless and with no equity. United States Attorney Rod J. Rosenstein thanked the Maryland Department of Labor, Licensing and Regulation for their investigative work that prior to turning the case over to the Federal Government.

Joy Jackson, age 40; her husband, Kurt Fordam, age 38, of Ft. Washington, MD; Jennifer McCall age 46; her husband, Clifford McCall, age 47; McCall’s daughter, Chandra Jones, age 30; Wilbur Ballesteros age 32, all of Lanham, Maryland; Kurt Fordham’s sister Katisha Fordham, age 35, of Washington, DC; Ronald Chapman, age 33 of Washington, DC, are charged with conspiracy to commit mail and wire fraud and 15 counts of mail fraud to obtain money and property from homeowners and lenders through their “foreclosure reversal” scheme. Jackson and Kurt Fordham are also charged with six counts of money laundering and Jennifer McCall, Clifford McCall and Chandra Jones are each charged with one count of money laundering.

“We are using every available tool in our regulatory arsenal to protect Maryland homeowners from fraud and other unscrupulous practices,” Secretary Perez said. “We appreciate the leadership of the U.S. Attorney in this case, and we look forward to a continued partnership with the federal government to ensure individuals who prey on distressed homeowners are brought to justice.”

According to the indictment from September 2004 through June, 2007, the defendants, operating through several companies, including the Metropolitan Money Store, controlled by Joy Jackson and Jennifer McCall, fraudulently promised to help homeowners avoid foreclosure, keep their homes and repair their damaged credit, by directing the homeowners to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a one year period, during which time the defendants would help the homeowners obtain more favorable mortgages, improve their credit rating and eventually return title to their homes to them. The defendants told the homeowners that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit.

In fact, the indictment alleges that the defendants: paid approximately $10,000 to each of the straw buyers to participate in the scheme; fraudulently bolstered the credit of the straw buyers so they could qualify for more favorable mortgages; obtained fraudulently inflated loans on the properties in the straw buyers names; stripped away the bulk of the homeowners equity proceeds and converted that money to their own personal use; and stopped making the mortgage payments on the homes, resulting in the homes being foreclosed upon. According to the indictment, the defendants used the proceeds of the scheme to pay their personal expenses including art, cars, fur coats, international trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding for Jackson and Kurt Fordham.

As a result of the scheme, the indictment alleges that the defendants obtained over $35 million in fraudulent loans on over 100 homes and the homeowners suffered losses of over $10 million in stripped equity. The indictment also seeks forfeiture of $35,873,150 obtained as a result of the scheme, including 11 properties owned by the defendants.

The defendants all face a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy and each of the 15 mail fraud counts. Jackson, Kurt Fordham, Jennifer McCall, Clifford McCall and Chandra Jones also face 10 years in prison and a $250,000 fine on each count of money laundering. An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
 

Beware of Mortgage Foreclosure and Foreclosure Rescue Scams
 

BRAC Workforce Development Projects
First Round of Workforce ONE Maryland BRAC Projects Announced

Secretary Thomas E. Perez and Assistant Secretary for Workforce Development Andrew A. Moser announced the first round of Workforce ONE Maryland project grants for BRAC-related workforce development efforts.

This first round of grants will total around $400,000 and were awarded to Cecil College, Chesapeake Bay Region Technical Center of Excellence, Fort Meade Alliance, Frederick Community College and Harford County Public Schools. The funds are part of a $4 million grant awarded to DLLR last year by the U.S. Department of Labor to assist in the State’s planning and implementation of initiatives that address the workforce challenges created by the 2005 BRAC process. The majority of the $4 million will fund innovative workforce projects designed to address workforce development, training and education needs in Maryland's BRAC-impacted regions.

  • Fort Meade Alliance will focus on Security clearance preparation and education for 7th - 12th graders;
  • Cecil College will focus on the development and implementation of a fast-track certification program in government contracting;
  • Harford County Public Schools will focus on access to career pathways in homeland security and hands-on technology training for high school students;
  • Chesapeake Bay Region Technical Center of Excellence will focus on a BRAC-impact commuting study with recommendations for improvement; and
  • Frederick Community College will focus on a Sensitive Compartmented Information Facility (SCIF) curriculum development and training program.

Governor's Workforce Investment Board

Over the past several years, the Governor’s Workforce Investment Board (GWIB) has provided research and support to identify workforce development needs across eleven different industries. Representatives of each industry have met in Steering Committees to discuss employment needs, analyze surveys, and review and evaluate data from national, regional, state, and local agencies. The Education Industry Initiative Steering Committee, established in 2006, was charged with addressing the workforce development challenges of all education industry sectors – PreK-12, Community Colleges, Business/Technical/Trade Schools, and Four-Year Institutions (public and private).

Three important outcomes resulted from the Steering Committee’s year-long meetings. A white paper titled Maryland’s Education Industry was published in August 2007. The white paper identified three critical thematic areas that were common among all sectors — Policy, Workforce, and Workplace. Issues common to these sectors were identified, as well as issues critical to each specific sector (PreK-12, Community Colleges, Business/Technical/Trade Schools, and Four-Year Institutions). The white paper was widely distributed to education stakeholders across the State as required reading for the Education Industry Symposium — the second important outcome of the Steering Committee. The Symposium was held at Anne Arundel Community College on November 1, 2007 and attracted nearly 150 attendees. Sector-specific groups discussed the white paper and created recommendations and strategies for successfully attracting, training, and retaining education employees in Maryland. Recommendations focused on elevating the value and prestige of teaching as a profession, increasing professional development opportunities, enhancing incentives such as grants, tuition remission, and competitive salaries to increase attraction and retention rates, modernizing the centuries-old education delivery system, and ensuring a workplace environment to better address the professional needs of a diverse group of educators, administrators, support staff and students.

This comprehensive report represents the third major outcome of the Steering Committee. Symposium participants contributed meaningful recommendations and strategies, and the Steering Committee condensed and prioritized those discussion points into actionable items. This report serves to record the education industry’s current self-evaluation and to provide a lesson plan for successfully addressing the industry’s most critical workforce needs. The real work of creating a better future for Maryland’s workforce requires immediate attention and long-term commitment. Click here for full report.
 

Workforce Creation and Adult Education Transition Council Members

On July 1, 2008, the new law aligning adult education and correctional education programs with workforce creation under the DLLR umbrella took effect. The law presents an incredible opportunity to design a new paradigm for the alignment of adult and correctional education and workforce creation in Maryland.
Below is a list of the members appointed to serve on the Workforce Creation and Adult Education Transition Council. Broad participation in the Council's work is important to ensure input from a wide variety of stakeholders and experts, and there has been tremendous interest. There will be considerable opportunities for non-council members to participate in the transition planning process.

Given the enormity of the task at hand, the Council will establish four work groups to examine specific issues. The bulk of the work will be done through these work groups:

  1. Adult Basic Education (including family literacy, workplace literacy, ESL)
  2. Corrections
  3. Funding Strategies
  4. Internal Administration

Participation in these work groups are open to anyone interested in becoming involved in the process. If you are interested in participating, please email adulted@dllr.state.md.us. The first meeting of the Transition Council will be on July 29, 2008 from 1 p.m. to 4 p.m. at the Reginald F. Lewis Museum in Baltimore.
 

State of Maryland Department of Labor, Licensing and Regulation
500 N. Calvert Street / Baltimore, Maryland 21202