Consumer Protection

Attorney General Edmund G. Brown Jr. and Los Angeles County District Attorney Steve Cooley have agreed to coordinate their investigations into the recent allegations of official wrongdoing in Bell, California.

The District Attorney will focus on possible criminal activity, while the Attorney General will focus on possible civil wrongdoing and obtaining relief for the taxpayers.

"What happened in Bell is a travesty, and I intend to get to the bottom of it and to get all the relief that the law allows,' Brown said.

"The Los Angeles District Attorney's office has a decades-long record of aggressively pursuing public corruption. We will do so in this case,' Cooley said.

LOS ANGELES -- Attorney General Edmund G. Brown Jr. subpoenaed personal financial records of present and former officials involved in the City of Bell salary scandal today and ordered them to appear for depositions to be taken under oath within two weeks.

Brown also announced that his office has set up a toll-free telephone hotline for citizens to report allegations of possible illegal election conduct by Bell officials.

“My office has received several reports from residents of Bell indicating that city officials encouraged them to fill out absentee ballots and then collected the ballots,” Brown said. “We have seen similar reports in the Los Angeles Times. If these allegations are true, this could be a serious violation of state law.”

California law requires that absentee ballots must be mailed or brought to a polling place by the voter unless the voter is disabled or ill.

In the case of Bell, it appears as though improper procedures may have been followed by public officials in the very election that allowed the city to give out these outrageous salaries. If so, there may be grounds to seek additional civil or even criminal penalties.

“When city employees of a tiny suburb of L.A. make as much as or nearly double the salary of the President of the United States, things are out of control,” Brown said.

Present or former residents of Bell who had absentee ballots picked up by city officials should call the attorney general’s toll-free hotline, (866) 625-4400. Brown and his staff would also like to hear any information regarding conflicts of interest or self-dealing by Bell officials.

“It’s possible that some people who were victimized by Bell officials may no longer live in Bell, and the only way we have to find these people is for them to call us,” Brown explained.

Earlier today, Brown subpoenaed the testimony of past and present Bell officials and city council members. A team of state lawyers will depose these officials under oath on August 19 and 20. Before then, the officials are required to produce records related to pay and pension benefits, federal and state income tax returns, gifts received by or given to city officials, bank accounts and outside business interests. As part of his expanded investigation, Brown also issued a supplemental subpoena, demanding the release of records involving the city’s former law firm.

Brown’s investigation is aimed at determining whether criminal or civil action should be taken against Bell officials and others. He launched the investigation on July 22 following newspaper reports that Bell City Manager Robert Rizzo was paid $787,637 a year, Police Chief Randy Adams was paid $457,000, and Assistant City Manager Angela Spaccia was paid $376,288. The three have since resigned.

Four of five Bell city council members received nearly $100,000 a year each, but after vocal citizen protests, they reduced their annual stipends to $8,000.

On July 26, Brown issued subpoenas to the City of Bell for hundreds of employment, salary and contract records. Hundreds of pages of documents have been turned over, and Brown said he expects additional documents to be produced today and even more to be handed over in response to the new subpoenas.

Bell is one of a cluster of working class cities in southeast Los Angeles County with a high proportion of low-income residents. Its population was 36,624 in 2000.

In conjunction with the Bell investigation, Brown is also reviewing whether excessive salaries and pension benefits are being paid by local jurisdictions around the state.

SACRAMENTO — Attorney General Edmund G. Brown Jr. today announced that his office has brought formal charges against a father and son who promised to recover unclaimed funds for dozens of citizens and then “surreptitiously stole” more than $1.6 million from them, using forged documents and fictitious mailing addresses.

“This larcenous pair scoured the Controller’s database of individuals with unclaimed property, contacted many of them, and promised to help recover their assets,” Brown said. “Instead, employing forgery and fraud, they surreptitiously stole more than $1.6 million.”

Thomas Rodine, 56, of Carmichael and Dustin Rodine, 28, of Citrus Heights were arraigned today, following their arrest on July 23. Each is charged with three counts of embezzlement and one count of submitting fraudulent claims to the state Controller. Both face a maximum of seven years, six months in prison. To date, victims have been repaid more than $700,000 and full restitution is expected.

Agents in Brown’s Special Crimes Unit initiated an investigation into the father and son duo at the request of Controller John Chiang in January, after the Controller’s internal audit identified fraud.

Brown’s investigation found that from 2007 to 2009, Thomas and Dustin Rodine used their Carmichael-based asset and heir location business, Rodco & Associates, to locate and solicit individuals with assets in the Controller’s unclaimed property fund.

The scheme worked like this: After claimants agreed to have Rodco & Associates seek to recover their funds, the Rodines forged documents to reroute the recovered assets to a network of post office boxes they controlled. The Rodines also forged claim documents to collect funds that were never disclosed to claimants. From the pool of money they collected, the Rodines withheld unauthorized fees and claims totaling $1.675 million.

The thefts ranged from just over $100 to more than $300,000 and involved funds from personal bank accounts, foundation trusts, stocks and other assets in the Controller’s unclaimed property fund. Investigators located victims in cities throughout California, including Alpine, Chico, Los Angeles, Nevada City, San Diego, San Francisco, San Mateo, Sonoma and a number of other cities.

After the initial internal audit by the Controller, payment of all claims initiated by Rodco & Associates was halted.

“My office has worked hard to make it easier for Californians to find and claim their lost property, whether it is cash, stocks, valuable jewelry or family photos and mementos that simply are irreplaceable,” said Controller John Chiang. “Californians need to know that they can claim their property directly from my office for free. I encourage them to do so.”

Following execution of the search warrant, Rodco & Associates established a trust account to repay defrauded claimants. To date, the company has repaid more than $700,000 and authorities expect full restitution for defrauded victims.

The State of California is currently in possession of more than $5.7 billion in unclaimed property belonging to some 11.6 million individuals and organizations.

This property is acquired through California’s Unclaimed Property Law, which requires “holders” such as corporations, business associations, financial institutions, and insurance companies to report annually and deliver property to the Controller after there has been no customer contact for three years. Often, the owner forgets the account exists, moves and does not leave a forwarding address or the forwarding order expires. In some cases, the owner dies, and the heirs have no knowledge of the property.

The Controller allows claimants to recover property directly, without the use of so-called “asset locators” or other third parties. To find out if you have unclaimed property and for instructions on how to claim it, visit: www.ClaimIt.ca.gov.

A copy of the complaint, filed in Sacramento County Superior Court, is attached.

SAN DIEGO -- Attorney General Edmund G. Brown, Jr. announced today the successful completion of “Operation Watchdog,” an unprecedented law enforcement sweep to verify that 300 registered sex offenders in San Diego are obeying the law and living at the address they have reported to authorities. Nine arrests were made.

“Because of sex offenders’ propensity to reoffend, keeping tabs on them is crucial to protecting the public,” Brown said. “As in many things, the price of safety is constant vigilance, and my office is committed to providing that.”

Led by David Collazo, a special agent supervisor in Brown's office, Operation Watchdog involved more than 100 state, federal and local law enforcement officers, who fanned out over San Diego County yesterday to check on more than 300 registered sex offenders. Five of the 26 task force teams took along specially trained dogs to check for illegal drugs and guns.

Some 4,600 registered sex offenders live in San Diego.

Sex offenders on probation or parole were searched. The others were questioned to make sure they were complying with all state laws, including living at the same address they provided to law enforcement authorities. Arrests were made for parole and probation violations and possession of drug paraphernalia and guns.

As Operation Watchdog began yesterday morning, the Attorney General visited the command center and was briefed. Besides its enforcement function, the Attorney General’s office maintains a website at http://meganslaw.ca.gov/ that lists the locations of 63,000 sex offenders in the state, along with other pertinent information.

The SAFE (Sexual Assault Felony Enforcement) task force that conducted the operation was formed nearly a decade ago to reduce the number of sex crimes in San Diego County and apprehend the perpetrators of those crimes. SAFE assists in criminal investigations such as the case of convicted sex offender John Albert Gardner III, who was sentenced to life in prison earlier this year for the 2009 rape and murder of 14-year-old Amber Dubois and the February 2010 rape and murder of 17-year-old Chelsea King. Gardner had lied to authorities about his residence, listing Riverside County instead of San Diego.

Yesterday’s sweep was the first such large-scale effort, although SAFE conducts hundreds of face-to-face interviews with sex offenders each year to make sure they are in compliance with the law.

LOS ANGELES -- Attorney General Edmund G. Brown Jr. today announced a settlement with Washington state-based Rena Ware International, Inc., which “made fraudulent and unethical claims” that its high-priced cookware could cure diseases such as diabetes and heart disease. The company agreed to pay more than $600,000 in refunds and other fees.

“This company made fraudulent and unethical claims that its products cured serious diseases,” Brown said. “Their illegal, high-pressure sales tactics preyed on the fears of vulnerable Californians.”

Rena Ware targeted Spanish-speaking immigrants in the Los Angeles-area to sell its high-priced cookware. Sales representatives employed deception to enter people’s homes -- claiming to offer health and nutrition information, to be taking an opinion poll, or to be willing to service the consumer’s current cookware.

Once inside the home, the representatives claimed the consumer’s cookware caused a variety of diseases such as cancer and Alzheimer’s, diabetes and heart problems. The representatives claimed Rena Ware’s products were not only safe to use but could actually cure some of these diseases.

Consumers who were persuaded to buy the products were often enticed into financing plans with a rate of more than 21% a year. Sales representatives often did not tell consumers they had a three day cooling-off-period to change their minds and cancel the order, a right California law guarantees all consumers who buy products from door-to-door salespeople.

Rena Ware sent consumers harassing debt collection notices purportedly signed by an attorney, but no attorney had signed the notices or seen customers’ files to verify whether the debts were actually owed. The purpose of the notices was sheer intimidation.

In late 2008, a Rena Ware International sales representative went to the home of Mercedes Ballestero in Los Angeles. The representative requested an in-home demonstration to show off Rena Ware’s products and put to shame Ms. Ballestero’s current cookware. The representative claimed Rena Ware’s products could reduce high blood pressure by removing hormones from meat as it cooked. Ms. Ballestero bought a set of Rena Ware cookware for more than $1,500 with a hidden interest rate of 21.5 percent. After discovering the high interest rate, Ms. Ballestero canceled her contract, but the company refused to return her deposit.

Today’s agreement requires Rena Ware to pay $135,400 in penalties, $250,000 in refunds to consumers, and $239,600 in other costs.

Rena Ware must also obtain an independent monitor to ensure the company refrains from using false information or high-pressure sales tactics to lure customers.

Brown’s office was joined in today’s agreement by the Los Angeles County District Attorney. The Los Angeles County Department of Consumer Affairs assisted in the investigation.

In 2008, Brown obtained a judgment against Hy Cite Corporation for similar misrepresentations in the sale of its “Royal Prestige” line of cookware. Hy Cite was required to pay more than $1.3 million in penalties, restitution and costs, agreed to three years of independent monitoring, and forced to change its business practices.

Rena Ware customers who are eligible for a refund will be contacted by mail, and any consumers who feel they have been victimized by Rena Ware International, Inc. or other houseware companies may file a complaint with the Attorney General’s Public Inquiry Unit at www.ag.ca.gov/consumers/general.php, or by calling (800) 952-5225.

Copies of the complaint and settlement, filed in Los Angeles County Superior Court, are attached.

LOS ANGELES – Attorney General Edmund G. Brown Jr. today announced the arrests of nine people in a San Bernardino County Medi-Cal fraud case in which employees of a skilled nursing facility and their associates falsified documentation and “callously stole” more than $150,000 from patients and their families for their own personal use.

“This scam ripped off both senior citizens and our desperately needed public health funds,” said Brown. “These thieves callously stole thousands of state dollars meant to be spent on seniors in this skilled nursing facility.”

The investigation was launched in January by the Attorney General’s Bureau of Medi-Cal Fraud and Elder Abuse after an initial investigation by the state’s Department of Health Care Services.

Brown’s office charged employees and associates at Community Extended Care Hospital of Montclair with committing Medi-Cal fraud in order to steal assets from the trust accounts of elderly patients, which were held by the facility.

From 2006 to 2009, several employees of the extended care hospital conspired with a former San Bernardino County employee who fraudulently submitted documentation to the Medi-Cal program so that Medi-Cal would pay the entire monthly bill for more than 50 patients in the facility.

Then the conspirators told patients and their families they were required to pay a share of the cost of their care directly to the facility. The payments made by the patients and their families were then placed in patient trust accounts, and the suspects took that money for their own personal gain.

The scam involved hospital employees writing checks, ranging from $250 to $6,900, from the patient accounts to individuals in the gang, including a UPS driver, their own relatives, and a next door neighbor, who would then cash the checks, take a percentage of the stolen funds and return most of the cash to the hospital employees. The checks were approved by officials at the hospital.

Nine suspects were arrested this morning and are now in custody at San Bernardino County Jail. Bail was set for $1 million on each defendant. One suspect, Maribel Velazquez, is still at large.

The ten individuals charged in the crime are:

Johannes Simanjuntak, 59, of Pomona, a former administrator at the hospital
Peggy Lee Hoskins, 58, of Upland, a former personnel manager at the hospital
Laurie Diane Powell, 46, of Riverside, former San Bernardino County employee
Sean Matthew Ashton, 22, of Riverside, Powell's son
Andy Perry Tricas, 46, of Duarte, boyfriend of suspect (now deceased)
Arnon Graham, 50, of Rancho Cucamonga, UPS driver
Claudia Zaragoza, 34, of Bloomington, Social Services designee
Orelious Antonio Peevy, 41, of Chino, Social Services designee
Maribel Velazquez, 36, of Chaparral, New Mexico, administrative worker at the hospital (not in custody)
David Carmona, 74, of LaVerne, neighbor of deceased employee

"Our anti-fraud partnership with the Attorney General's Office has once again helped protect our most vulnerable citizens and ensure that valuable Medi-Cal funds are used for their intended purpose,' said Karen Johnson, Department of Health Care Services Chief Deputy Director. 'We will continue our coordinated efforts as we work to prosecute offenders to the fullest extent allowed by law.'

The complaint is attached.

OAKLAND — Attorney General Edmund G. Brown Jr. today issued a consumer alert warning of a “serious health hazard” after he demanded that retail stores Rainbow and 5-7-9 remove from their shelves jewelry with parts containing as much as 97% lead, a potentially fatal health hazard, especially for young children.

“This jewelry represents a serious health hazard,” Brown said, “and it is especially dangerous if a child gets a hold of it and puts it in his or her mouth. Some of these bangles are almost solid lead. The jewelry must be banished from retailers’ shelves once and for all.”

Some pieces of the lead-infested jewelry were labeled “KIDS” and one piece was marked “lead free” although its clasp contained more than 80% lead.

There is no safe level of lead exposure. In 2006, a four-year-old Minnesota boy died after he swallowed a pendant from jewelry that was more than 90% lead, and it became stuck in his intestinal tract.

In a letter to the stores’ corporate parent, Rainbow Apparel, Brown said, “Some of the jewelry had components that would be highly toxic, and potentially lethal, if ingested, and all of it contains sufficient lead to contribute to long-term health risks.”

California law bans the sale of jewelry that fails to comply with strict limits on the amount of lead it contains. The law was the result of a 2006 settlement of a lawsuit brought by the Attorney General and two environmental groups, Center of Environmental Health and As You Sow.

In that settlement, Rainbow and other retailers agreed to stop selling jewelry containing more than traces of lead. But four times in a little more than a year, the Attorney General has sent notices of violation to Rainbow for breaking the law and the terms of the settlement by selling jewelry made of lead.

Using a fund created in the 2006 settlement, the Center for Environmental Health monitors the stores. In May, it purchased 16 items containing lead from Rainbow stores in Northern California. Fifteen of the pieces contained more than 50% lead. One was 97% lead, and one labeled “KIDS” and “lead free” had a clasp that contained 81% lead. It’s all inexpensive costume jewelry made in China.

Brown’s letter to Rainbow Apparel follows:

June 24, 2010

RE: NOTICE OF VIOLATION to Rainbow Apparel of America, Inc.

This is a Notice of Violation to Rainbow Apparel of America, Inc., Rainbow Apparel Distribution Center Corp., A.I.J.J Enterprises, Inc., and The New 5-7-9 and Beyond, Inc. (collectively, “Rainbow Parties”). I am writing to you about jewelry purchased at Rainbow and 5-7-9 stores in northern California that exceeds the lead standards established in a consent judgment that applies to the Rainbow Parties, and that violates California Health and Safety Code section 25214.2(b)(3). This letter constitutes a Notice of Violation pursuant to Section 4.2 of the consent judgment. A copy of the consent judgment is available on our web site, at http://ag.ca.gov/prop65/pdfs/amendedConsent.pdf.

Using a grant from the Jewelry Testing Fund created under the consent judgment, the Center for Environmental Health purchased sixteen different pieces of jewelry with excess lead at your stores. Most of the pieces contained plated metal components with more than 80 percent lead, and two of the pieces had more than 95 percent lead. The consent judgment prohibits plated metal components with more than six percent lead. (§ 3.2.2.1.) One of the violations is for a plastic faux leather bracelet with 955 parts per million lead, which is nearly five times above the standard of 200 ppm. (§ 3.2.2.3.) Similarly troubling is the fact that one of the necklaces is labeled “lead free” even though its pendant contains 80 percent lead, and several of the pieces are marked “KIDS” below the bar code.

Enclosed with this letter is a table that lists the reference number for each piece of jewelry, a description of the jewelry, the date and location where the jewelry was purchased, the component with lead, and the lead level. Photographs of each piece of jewelry and the test results also are enclosed. We will provide additional documentation from the lab upon request.

This is the fourth notice of violation for illegal jewelry we have sent the Rainbow Parties in little over a year. Previously we sent notices of violation on May 22, 2009, October 5, 2009, and January 29, 2010. Each time the company has responded that it shares the Attorney General’s concern regarding the sale of jewelry with excess lead, but each time more jewelry is discovered that violates the consent judgment and California’s ban on lead-containing jewelry. We understand that the Rainbow Parties have instructed their vendors to provide compliant jewelry, and after each notice of violation it has addressed the violation with the vendors involved. But clearly that is not enough. Some of the jewelry at issue here has components that would be highly toxic, and potentially lethal, if ingested, and all of it contains sufficient lead to contribute to long-term health risks. Moreover, labeling jewelry as “lead free” when it contains a component with 80 percent lead raises additional concerns about false and misleading advertising. The company must do more to stop selling jewelry that is potentially dangerous and that violates the law.

We therefore request, in addition to responding to this notice under section 4.2.3 of the consent judgment, that you and your client meet with our office to discuss what steps the company will take to ensure that it stops selling jewelry with excess lead. Please contact me to schedule a meeting. Further, in your written response to the notice of violation, we ask that you provide specific data about the amount of the each kind of jewelry offered for sale, sold, and removed from shelves in California stores.

Sincerely,

EDMUND G. BROWN JR.
Attorney General

Photos of some of the pieces of jewelry found to be in violation are attached.

SACRAMENTO – Attorney General Edmund G. Brown Jr. today launched an investigation aimed at protecting the rights of the “forgotten victims” of the housing market collapse -- the tens of thousands of tenants facing eviction from buildings that have been foreclosed by banks.

“Tenants who live in properties in foreclosure are the forgotten victims of the collapse of the housing market,” Brown said. “We’ll fight every step of the way to ensure they aren’t rousted from their homes in violation of the law.”

As a part of his investigation, Brown today sent letters to 24 banks, loan servicers, private investors, and law firms demanding information about whether they are complying with federal, state, and local laws regarding foreclosed properties and their treatment of tenants.

More than 20 housing rights and public interest groups from across California have petitioned the Attorney General to take action, citing a “pattern of illegal conduct” and tenant harassment by banks, real estate agents and lawyers attempting to speed up evictions so that foreclosed properties can be sold.

More than one-third of all California residential units in foreclosure are rentals, according to tenants’ rights groups, and more than 200,000 California tenants have been uprooted from their homes during the housing crisis.

Since March 2009, Tenants Together, a statewide tenants’ rights organization, has assisted 3,000 tenants involved in foreclosures. The group cited many examples of abusive tactics by banks and their representatives in foreclosure situations, including intimidation, threats and misrepresentations. One case involved a Chula Vista tenant who found a chilling letter posted on his door indicating the property was “being monitored.” A Dublin tenant found a note on his door saying the locks on his unit had been changed and giving a contact if he wished to claim “personal property” left inside.

In his letter, Brown requires banks, loan servicers, private investors and law firms to provide information by July 19 about their policies and procedures when dealing with foreclosed properties and current tenants. It specifically asks the recipients to outline how they “promote or preserve tenancies after foreclosure”.

In May 2009, the federal government enacted the “Protecting Tenants at Foreclosure Act” giving tenants new protections, such as the right to stay in their homes for at least 90 days after receiving an eviction notice. While state and local laws also contain strong protections, unlawful evictions and harassment of tenants continue.

Tenants should know their rights under the law. These rights include:

• Tenants cannot be required to move out of their homes for at least 90 days following an eviction notice.
• Tenants can insist on staying until the end of their leases. The only exception occurs when the new owner of a single-family home wants to move in.
• Tenants can require banks and their agents to put all communication in writing.
• Tenants are not obliged to accept “cash for keys” money to move out sooner than the law prescribes.
• Harassment, such as improper entry into a person’s home, shutting off water and lights, or changing the locks without a court order is illegal.
• The above rights extend to tenants living in government-subsidized Section 8 housing, who may also have additional protections under state and local laws.
• If a city has a just cause for eviction law, a landlord must have a specific reason to evict a tenant, and foreclosure may not be recognized as a legitimate basis for eviction. Tenants should check local ordinances.

Sixteen cities in California have just cause for eviction ordinances: Berkeley, Beverly Hills, East Palo Alto, Glendale, Hayward, Los Angeles, Maywood, Oakland, Palm Springs, Richmond, Ridgecrest, San Diego, San Francisco, Santa Monica, Thousand Oaks, and West Hollywood.

Brown’s office has fought for Californians’ rights during the housing crisis by shutting down loan modification scams and other illegal mortgage practices. To learn more about these actions, visit: http://ag.ca.gov/loanmod/.

If you think your rights as a tenant have been violated and want to file a complaint, contact the Attorney General’s Public Inquiry Unit at http://ag.ca.gov/consumers/general.php.

Brown’s letter, sent today, is copied below:

Re: Protecting the Rights of Tenants Residing in Foreclosed Property

Dear Sir or Madam:

California is facing an unprecedented threat to its economy because of skyrocketing residential property foreclosures. As the foreclosure crisis continues to plague California homeowners, renters in foreclosed properties have become innocent victims of the crisis. It is estimated that more than one third of all California residential units in foreclosure are rentals. Once a rental property goes into foreclosure, renters may face a multitude of problems, including utility shutoffs, lockouts, and unlawful evictions. The Office of the Attorney General has learned of numerous instances where tenants have reported harassment and misconduct by realtors, brokers, and landlords, as well as improper attempts to evict them from their homes by eviction law firms.

The recently enacted Protecting Tenants at Foreclosure Act (PTFA) grants certain protections for tenants residing in foreclosed property, including the right to continue living in the premises for the duration of their lease, and the right to a 90-day eviction notice when there is no lease. State and local laws also provide specific protections for tenants residing in foreclosed property. We are concerned about the increasing number of tenant evictions without compliance with federal and state law. Given the importance of this issue, we ask that you provide the following information by July 19:

1. What policies and procedures do you have that promote or preserve tenancies after foreclosure?

2. What process do you use for determining whether a residential property is owner or renter occupied?

3. When it is determined that a renter occupies the residential property, do you notify the occupant that a Notice of Default has been filed? If so, what notice do you provide?

4. What procedures do you use to notify tenants in advance of the trustee sale? Please furnish a sample copy of a Notice of Sale and the specific language advising renters of their rights.

5. How do you notify tenants that you are the new owner of the property following the trustee sale? Please furnish a sample copy of any such letter or notice and the specific language advising renters of their rights.

6. Once it is determined that the foreclosed property is renter occupied, how do you determine whether renters are protected under the PTFA and/or local rent control ordinances?

7. What policies or guidelines are in place for your contractors, agents or property managers when it has been determined that a foreclosed property is tenant occupied? Do you have any policies that call for the properties to be vacated in order to prepare them for sale? Are your contractors, agents or property managers given any monetary compensation or other incentives if the properties are vacated?

a. Please furnish an example of any written contracts, agreements, or memoranda of understanding that you have with your contractors, agents or property managers.

b. Please furnish copies of any written policies, procedures, or guidelines advising rental agents or property managers about renters’ rights.

c. Please furnish copies of any written contracts, guidelines, policies, or procedures relating to any “cash-for-keys” incentives offered to occupants.

8. What steps are taken when a rental agent or property manager does not comply with those policies, procedures, or guidelines as described above?

9. Which California attorneys or law firms do you retain for the purpose of terminating a tenancy or bringing eviction proceedings against occupant renters?

10. Please furnish us with the following information regarding California properties that you obtained through foreclosure since January 1, 2009:

a. The number of foreclosures of single family homes, condominiums, and multi- unit rental property that resulted in you becoming the new owner or successor in interest.

b. Of the foreclosed properties described in subparagraph a. above, the number of tenant termination notices or unlawful detainer evictions you filed against the remaining occupants. Please include the name of the occupants, the property address, the date of the trustee sale, and the date that any unlawful detainer was filed against the occupants of the foreclosed property.

c. The number of foreclosures of elderly residential-care facilities that resulted in you becoming the new owner or successor in interest. These residential-care facilities include assisted living facilities, skilled nursing homes, group homes, and intermediate care facilities.

d. Of the foreclosed properties described in subparagraph c. above, the number of tenant termination notices or unlawful detainer evictions you filed against the remaining occupants. Please include the names of occupants, the property address, the date of the trustee sale, and the date that any unlawful detainer was filed against the occupants of the foreclosed property.

We look forward to receiving the requested information and also welcome any suggestions you may have to help eliminate these and other problems facing renters occupying properties in foreclosure.

SAN FRANCISCO – Attorney General Edmund G. Brown announced today that 3,500 investors, whose holdings in auction rate securities were frozen in the financial crisis of 2008, have recovered $1.4 billion through a settlement the Attorney General hammered out with Wells Fargo affiliates.

“We went to bat for people who believed their investments were like cash,” Brown said, “but discovered after the financial meltdown that they couldn’t get their hands on even a dime of their money for two long years. Now, because of the settlement, they have all of their money back.”

The investors, big and small, included retirees, working families, small businessmen, and charities. Nearly half are Californians, who received $695 million through buybacks of their securities by Wells Fargo.

Many invested in the securities because of assurances they were “like cash” -- safe and liquid. The securities turned out to be neither. Unable to sell the securities, investors were stuck.

More than 90 percent of the owners of the securities elected to take the Wells Fargo buyback offer under the settlement.

“Getting this money back takes a lot of pressure off me,” said Johanna Markley of Newport Beach, who suffers from cancer. “I wondered who would fight for us.”

“I’m retired and over 70 years old,” said William O’Brien of El Dorado County. “It was frustrating to have that money just sitting there for over two years and being unable to access it when we needed it.”

“Getting the investment back has helped save jobs in our company,” said Boris Levine, a San Francisco businessman.

Brown said Wells Fargo was co-operative throughout the repayment process and did what it said it would do.

In November, the Attorney General reached a settlement with Wells Fargo Investments, LLC; Wells Fargo Brokerage Services, LLC; and Wells Fargo Institutional Investors, LLC. The buybacks were made pursuant to that agreement.

Auction rate securities are long-term bonds whose interest rates are adjusted frequently at auction. If there are no takers for the bonds, they can become frozen and effectively worthless.

The Attorney General’s Office has submitted a request for dismissal of its action against Wells Fargo in San Francisco Superior Court, signaling the successful completion of the repayments.

LOS ANGELES — Attorney General Edmund G. Brown Jr. today joined the California Department of Real Estate and the State Bar of California to warn homeowners about an alarming rise in short sale fraud across California in a field “rife with scam artists”.

A short sale is an arrangement in which a homeowner sells his or her home for less than the outstanding mortgage, with the consent of the lender.

“While short sales can provide homeowners with a last-ditch alternative to foreclosure, this market is rife with scam artists,” Brown said. “Homeowners and buyers, agents, and lenders should beware of short sale negotiators who operate without licenses, use straw buyers or charge illegal fees.”

With so many homeowners now considering short sales, an entire industry of so-called short sale negotiators has emerged. These individuals solicit homeowners by promising to expedite the process and help coax lenders into taking part in the transaction.

The Department of Real Estate is investigating more than 40 complaints of short sale fraud, up from “virtually zero” cases only three months ago, a spokesman said.

In April, the Obama administration launched a new initiative called the Home Affordable Foreclosure Alternatives Program, which encourages homeowners in financial distress -- especially those who have failed to complete a trial modification or qualify for a loan modification -- to consider a short sale as an alternative to foreclosure.

Before working with -- or paying -- any short sale negotiator, homeowners should consider the following red flags:

No license
With limited exceptions, only licensed real estate agents or attorneys can engage in short sale negotiations with a homeowner’s lender.

Up-front fees
Licensed real estate agents wishing to collect up-front fees from homeowners for short sale transactions must first submit an advance fee contract to the Department of Real Estate and receive a no-objection letter.

Surcharges
With many distressed properties listed well below market value, negotiators and agents are charging potential buyers thousands of dollars in surcharges and hidden fees just to place an offer on a home. These illegal fees are frequently not disclosed and are paid outside escrow.

Straw buyers and house flipping
In this scheme, short sale negotiators misrepresent the market value of a property to a homeowner’s lender by only submitting offers on the property from an affiliated straw buyer. After the home is purchased below market value, the fraudsters immediately flip it and pocket the difference.

Short sale negotiators and agents use a number of titles including debt negotiator, debt resolution expert, loss mitigation practitioner, foreclosure rescue negotiator, short sale processor, short sale coordinator and short sale expeditor.

If you are a homeowner who has been scammed, contact Brown’s office at 1-800-952-5225 or file a complaint online at: www.ag.ca.gov/consumers/general.php.

Homeowners can also learn more about avoiding mortgage and real estate fraud by visiting the Department of Real Estate website at: http://www.dre.ca.gov/cons_alerts.html. A complaint form can be accessed online at: http://www.dre.ca.gov/frm_consumer.html.

“Short sale fraud appears to be the fraud of the moment, and it is proliferating statewide,” according to Real Estate Commissioner Jeff Davi. “Consumers, licensees and lenders must all arm themselves with the tools necessary to avoid such scams.”

Homeowners can file a complaint against a lawyer, a legal specialist or a company purporting to operate as a law firm with the State Bar by calling 1-800-843-9053 or visiting: www.calbar.ca.gov.

Homeowners can learn more about the federal government’s Home Affordable Foreclosure Alternatives Program by visiting: http://makinghomeaffordable.gov/hafa.html.

Non-profit housing counselors certified by the U.S. Department of Housing and Urban Development are also available to provide free help to homeowners. To find a counselor in your area, call 1-800-569-4287.

For more information on Brown’s work against loan-modification fraud visit: http://ag.ca.gov/loanmod.