Committee Hearing, May 21, 2008

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LAW AND GOVERNMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, May 21, 2008 10:00 a.m. - - - PRESENT: COUNCILMAN WILLIAM GREENLEE, CHAIR COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER BILL 080424 - An ordinance amending Title 2 of The Philadelphia Code, entitled "City-County Consolidation," by adding a new Chapter 16 providing that prior to the recording of any deed, a check of record ownership be conducted by the Department of Records... RESOLUTION 080176 - Resolution authorizing City Council's Committee on Law and Government to hold public hearings to investigate current policies and procedures relating to real estate transfers... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2

Good morning, everybody. Thank you for being here so promptly. This is the Committee on Law and Government. I would ask Mr. Boyle, the Clerk of the Committee, to please read the bill and resolution.

Ordinance 080424, on ordinance amending Title 2 of The Philadelphia Code, entitled "City-County Consolidation," by adding a new Chapter 13 providing that prior to the recording of any deed, a check of record ownership be conducted by the Department of Records, appropriate documentation be submitted to the Department with certain deeds and requirements for the delivery of deeds to the Department of Records be met; providing for notification to the record owner of the recording of any deed; providing for exemptions and making certain technical changes, all under certain terms and conditions. Resolution 080176, resolution 3 5/21/08 - LAW & GOV'T - BILL 080424 authorizing City Council's Committee on Law and Government to hold public hearings to investigate current policies and procedures relating to real estate transfers and the problem of fraudulent real estate transfers and creating a Task Force on Fraudulent Real Estate Transfers.

Thank you. For the record, we have a quorum here consisting of myself and Councilman Kenney, the Vice-Chair of the Committee, Councilman Goode and Councilman Green. And before we get started with witnesses, I just want to make a brief statement. First of all, Councilwoman Miller, who is the author of the resolution, will be here shortly. She had an issue in her district that she's tending to and she will be here, because it's certainly something that she's worked on a long time. 4 5/21/08 - LAW & GOV'T - BILL 080424 It's been estimated by many people who are involved in this situation over years that sometimes there's as many as over 100 properties that are somehow stolen or deeds fraudulently filed per month. When this issue was first raised -- and, again, Councilwoman Miller has been working on it longer than me -- I had no idea, nor do most others, that it was this serious and this extensive. Now, the reason we're here today for this hearing is actually twofold. Councilwoman Miller's resolution looks at the entire problem and what can be done by city, state and other entities. And there have been a lot of things done already, but there certainly seems to be more things that need to be done. The bill, which I sponsor, makes what we believe is at least some impact on cutting down on these problems and cutting them off before they fester and become more of a problem and take 5 5/21/08 - LAW & GOV'T - BILL 080424 more time for sometimes two victims in the case of fraudulent transfers. And my goal laws, it would not totally eliminate the problem and, sure, the more invented property thief might find ways around it and some innocent people may be inconvenienced. However, based on real people's examples -- and you'll hear a few of them today -- that my office has dealt with, I firmly believe these measures will be positive steps forward. Now, let be clear. There's definitely been action taken by Records Commissioner Decker, the committee under President Judge Jones and many others to deal with this issue, and they should be thanked and recognized. And the purpose of this hearing is not to put blame on any person, department or agency. However, what I think is also very clear is when you hear some of these problems -- and just a couple quick ones. When a soldier is fighting in Iraq, comes home on leave and has to spend all his 6 5/21/08 - LAW & GOV'T - BILL 080424 leave trying to get his house back that was stolen, something is wrong. When a woman had to leave the City because of a domestic violence problem only to come back and have to fight to get her house back, there is a problem. And we have examples of many second innocent victims. When a couple buys a house and finds out that they really bought it from a thief and they're in a fight with the original owner, there's a problem, and it's a problem I think government has a responsibility to try to respond to the best way possible. So that being said, any statements by members of the Committee? (No response.)

Thank you. I'm going to do the witnesses a little bit different. I think it's appropriate that we first hear from some of the victims just to set the base of what we're doing here. So I'm going to 7 5/21/08 - LAW & GOV'T - BILL 080424 ask -- I know Doris Lynch, Mr. Dupont, Ms. Cohen are here. Is Zelda Cannady here yet? (No response.)

So if Ms. Lynch, Mr. Dupont and Ms. Cohen could just come up to the witness table, please. (Witnesses approached witness table.)

And I would just ask all witnesses as much as possible, particularly if you have written statements, they will be put into the record, and if you could just kind of paraphrase your statements, that would be good, so we can keep the process moving and we don't have people sitting here too long waiting to testify. I know you folks don't have copies of your testimony, but that's okay. Ms. Lynch, maybe you want to go first. You can just pull that -- 8 5/21/08 - LAW & GOV'T - BILL 080424 Ms. Lynch is actually our star constituent. We've been dealing with her for a long time on these issues. Ms. Lynch, maybe you can just pull the microphone as close as you can to you, identify yourself for the record, give your name and address, and then just give us a little bit of the background of your problem. Thank you.

Hi. My name is Doris Lynch. I live at 2625 East Birch Street in Philadelphia, Pennsylvania and, as stated, I was the one who had to leave the City due to a domestic situation, and when I arrived back, my house was no 17 longer in my name. It was stolen one month prior to my coming back to the City. Of course, I was devastated and called around and tried to find any advice that I possibly could, and I was told that I was a victim of de-forgery here in Philadelphia. I reached out and was coming 9 5/21/08 - LAW & GOV'T - BILL 080424 back and forth down to City Hall over and over and over and over again. I can't tell you. It was monthly, then it was weekly, and then I was fortunate to get help from Mr. William Greenlee's office as well as Mr. John Taylor's office. Before that, I was not getting anywhere. I was told we'd come down and discuss one thing. We'd be discussing with the judge what kind of work was going to be done on the house. And then I got to court and I was told it's going to be postponed. Do you have the money today? I says, What money? I was told we were going to be discussing the home repairs. And they said, Well, no, it's all about the money. If you don't have the money to pay this, then why did you even come? And that's what I was facing week by week before I got the proper help. I would just go down there and 10 5/21/08 - LAW & GOV'T - BILL 080424 just be devastated, in tears, thinking what is going on here. I was told that when I spoke to Judge Darnell Jones that I was under the impression that it was going to be put in what was called a lis pendens, meaning that it was not going to be possibly sold to anybody else, other than the thief who already sold it, that he was not going to be able to resell it. But that didn't happen. He did resell it, which made it much more difficult, and our lives are still turned upside down due to what happened to us, which my house being stolen. I never in a million years thought my house would be stolen, and people when I tell them, their jaws just drop. But it does happen, and it shouldn't happen. There is someone that's -- it just shouldn't happen. Again, I did get my deed back. I was fortunate for that, but due to the people who had my home, the destruction 11 5/21/08 - LAW & GOV'T - BILL 080424 that was done to it, I'm still not back in my home, which has displaced my son and I. To mention my son, the deed -- I put the deed when I bought the property in trust for my son due to my health condition. And I can't even imagine someone stealing a child's house. That's exactly what happened. They not only stole a house, but they stole it which belonged to a minor.

Ms. Lynch, if I could just ask you for the record, was there ever any documentation of that trust put in when the property was stolen, to the best of your knowledge?

I know I had documentation stating --

But the thief did not.

No. No. 24

He did not provide proof of the trust when it 12 5/21/08 - LAW & GOV'T - BILL 080424 was filed, to the best of your knowledge?

No. No. 4

Thank you.

So that's -- it's shocking that he would get away with that and numerous other properties, to the best of my knowledge, and it just keeps going on and it's not -- I mean, the pain that the people go through is unreal. It's undescribable.

I understand. Thank you.

To not have your home is horrible.

Just one quick question. About how long did it take you once this process started to actually get the deed back in your name?

It was over a year.

Over a year. And about how many times were you in court?

Oh, at least a 13 5/21/08 - LAW & GOV'T - BILL 080424 dozen. At least a dozen.

Thank you.

And I was told that it was only -- in the very beginning I was told it shouldn't take more than two months, and each week I was told this should be it, this should be it, and each week it was just -- every week I would go down there and they would just tell me, I'm sorry, we have to postpone it because of this, I'm sorry we have to postpone it because of this. And I could see everybody asking questions to each other, Well, what do we do, what should we do. Nobody knew how to handle the situation. They told me, Well, this is a new situation. We really don't have the answers to this yet, and we're sorry you're going through this. But that's all I kept hearing was, We're sorry, and I finally did --

Okay.

-- get the deed 14 5/21/08 - LAW & GOV'T - BILL 080424 back, but, as I said, we're still not in our home after all this time. And thank you for letting me speak.

Thank you, Ms. Lynch. First of all, I thought I saw Councilman DiCicco. There he is. For the record, Councilman DiCicco, a member of the Committee, is also here. If it's all right with the Committee, should we hear from the other people and then -- okay. Mr. Dupont, just identify yourself for the record, sir, and then you can go from there. Mr. Dupont, speak into the microphone, please.

I purchased a house from a lady named Leah Sharp and --

Just state your name for the record first, your name and address.

My name is Wilbert Dupont. I live at 422 Mansion Street. 15 5/21/08 - LAW & GOV'T - BILL 080424

Hi. I'm speaking in regard for Mr. Dupont.

Identify yourself for the record.

My name is Michael Ferguson. Mr. Dupont had came to me about two years ago regarding to the matters of his house being stolen. He had purchased a house to a lease to purchase. That purchasing was never registered, but quite often that's done commonly. He had purchased the house and completed purchase. The contract wasn't executed in regards to actually the title being transferred to his name. He had a tenant move into that property. The tenant had found out that the title was never transferred into his name. She had fraudulently conveyed the property in her name by means as her being the grantor of the woman who was actually the registered name of record by establishing that this woman had died. 16 5/21/08 - LAW & GOV'T - BILL 080424 She stated on the deed that she was the sole surviving heir of that woman and then transferred the property to herself, along with the tax certification. We didn't know where she was at. I had located the woman and found that she's alive and well. We had -- I had the deed transferred back to his name, but we were never able to register it. I had filed a quiet title, because this has been an arduous process. What she did, she had the Indenture notarized by a City of Philadelphia employee from the Register of Wills Department. That validated the deed automatically. People will believe it. She was able to record it. She even stated in the Indenture that Ms. -- the woman's name is Ms. Leah Sharp -- had departed from this life in 1999.

Did she put any documentation in to that effect?

She didn't even bring a death certificate. No death 17 5/21/08 - LAW & GOV'T - BILL 080424 certificate. No documentation was produced, not even an application as for the administrator of that estate was filed. And, by the way, the notary public works in the Register of Wills Department. So after that had occurred, we had gone down -- we filed the quiet title. I had to do a lot of research on this process. The judge told us that we had to get attorneys. Well, the woman who stole the property applied for the VIP program. He had went to the Legal Aid Society. By the way, speaking of the war, he is a Korean War veteran. We had gone down there and filed the process regarding to being his financial concerns that he was able to get or should have been able to get legal representation through the VIP program. Well, the woman who stole the property filed first. He got a letter back stating that there was a conflict of interest and the VIP program could not 18 5/21/08 - LAW & GOV'T - BILL 080424 represent him. And here's a woman who stole the property was about to get legal representation at the taxpayers' expense. So I had gone up to the Mayor's Action and talked to Mr. Haver, and that didn't happen. I had to go see Mayor John Street at that time, and then they sent us back down there, and then finally we had some action at that point. And I thank God for Councilwoman Jannie Blackwell and also Councilman Greenlee as well, as well as Councilman Curtis Jones, because we finally started to get some action. This has been going on for two years. This woman has taken out four loans against this property, one amounting to 49,000, one amounting to 65,500, one amounting to 75,500, and even after the lis pendens was filed, just this past year of 11/13/2007, she's taken out another loan for 89,650 from Countrywide. There are multiple mortgages against this property. 19 5/21/08 - LAW & GOV'T - BILL 080424 This has been one of the most arduous processes that I have ever seen. We're going back and forth, back and forth. They had just gone to arbitration just this past Friday. God willing, there will be a trial date established. The deed has been recorded. However, to protect his interest -- because we don't know the stability of the person that's living in this house. We don't want any harm coming to the property. And he actually lives right across the street and has been threatened. We had the police involved. There's a complaint involved. Detective DiLacqua from the Major Crimes Unit has been with us through the whole process, had the woman arrested. Charges were dropped because people were not prepared to go to trial. So he's worrying about his safety, as well as the property. I'm inquiring now about getting what they call the home equity insurance or what they call the hazardous 20 5/21/08 - LAW & GOV'T - BILL 080424 insurance. Well, with all these mortgages pending, no one is going to insure this property right now. We're being swung back and forth, back and forth as a result. There isn't any safeguards for the deed of Recordation Department, because certain things could have been filed if a death certificate was produced when the notary public is acting as the closing agent on that contract. No one even established to call to find out. I went around playing Columbo. I'm just playing dumb to ask questions why such a thing would happen. I was told by a supervisor of the deed of Recordation Department that the operative issue was the grantor was the sole surviving, and as a result of that, just that phrase of "sole surviving," that they believe that this property would not be contested. Whether there was an estate or intestate, it didn't make a difference to them, and it was just that 21 5/21/08 - LAW & GOV'T - BILL 080424 easy.

And just to be clear, if there had been a requirement for the death certificate, this very well could -- when it was filed, right?

Yes. Even though there's other ways of getting around that process, which I had investigated, by the way, but at least it would have been a red flag and some safeguard measure to establish stating that Ms. Sharp is not dead. I even went there down to Register of Wills. They went on the system and I have a letter, document, stating that based on the record from 1980 to the present, that there wasn't any will that was probated, nor was the person death unknown. That had been a simple measure to establish that, wait a minute, we have to go further into this to find out if there is a death certificate.

Okay. I 22 5/21/08 - LAW & GOV'T - BILL 080424 understand. Thank you, sir. Just for the record, so everybody knows, I know the gentleman mentioned about notaries, and obviously we can't control notaries. That's a state issue, but I know Representative Taylor has been involved, as Ms. Lynch said, and also Representative Jewell Williams is -- I don't know if he's actually introduced the bill, but has a bill to put more safeguards, including a thumbprint when a notary is done. So hopefully that will help some of these problems, too, but I think you gave an example of a couple issues that could have been done that could have -- he wouldn't have to go through all this.

And the mortgage company as well.

Well, that's another issue, too.

That's a whole other aspect, but the fact is is that 23 5/21/08 - LAW & GOV'T - BILL 080424 this is -- it makes the process of getting this house conveyed back to him and removing all the other interest on that property away, and even if someone -- we're not dealing with a stable human being in this property.

I understand.

And so there's a lot of things here at stake and we're just -- every time we come to something, another minefield comes, another minefield, and this has been a domino effect.

Got you. Okay. Thank you, sir. I know people might have questions, but, Ms. Cohen, why don't you identify yourself for the record, name and address, and proceed.

My name is Syma Cohen. I live at 1435 Levick Street in Philadelphia. In August of 2003, I started a 24 5/21/08 - LAW & GOV'T - BILL 080424 process to use my property as collateral for a transaction. About the second week in September I was told that there was a $40,000 lien against my property. When I spoke to the girl at the title search company, she informed me that my neighbor, who has the same address as I do, except her last two digits are 53, mine are 35, had taken out a $40,000 loan with Citizens Bank, and it was recorded because they had transposed the last two digits against my property. I called Citizens Bank. I was told they do not make mistakes. I spoke to people in City Hall. I spoke to everyone, and, finally, I called Citizens Bank and got the number for the Fraud Department. At the same time, my son, because this woman's daughter is an attorney, who is not listed in the phone book, he went into the Legal Directory and got her phone number and left a message for her to call me. 25 5/21/08 - LAW & GOV'T - BILL 080424 I spoke to the Fraud Department first and I told them that Citizens Bank had perpetrated a fraud against me, and I explained what was going on. I was well into six and a half weeks. I was completely and totally disgusted. And I said to the person that I spoke to, if this were not satisfied by the close of business that Thursday, that I was going to file in federal court action against Citizens Bank.

Ma'am, let me just interrupt you for one second. I know this is a mortgage and not a deed, but when this was filed through Records, it was the wrong address. There was no 18 check to see that this person was not the owner of the property, correct?

Nothing. Nothing.

Okay. Thank you.

And he said, That doesn't give me much time, and I said, I've been going back and forth with your 5/21/08 - LAW & GOV'T - BILL 080424 bank for much too long. The woman's daughter called the bank, told them they had made a mistake. By the close of business on Thursday, my son was faxed a satisfaction, and they had -- they stated that it would be lifted immediately. People should not have to threaten, nor should people not be notified when there is a problem. If somebody takes out a loan to put against their own property, the bank does it wrong by the transposition, you have to fight a bank so that they will admit they've made a mistake. After it was lifted and my transaction was complete, I received two letters from the City telling me that this transaction had been placed against my property. It was from the Secretary of Housing and Urban, the Department of Records. These letters should be going out prior to them recording anything. It 27 5/21/08 - LAW & GOV'T - BILL 080424 took me two months, and I was more fortunate than most, because I know that after X amount of time, you make a solid threat, they're going to respond. And I would absolutely have sued them in federal court.

I believe that, ma'am. You look determined.

Yes, I was. And --

I understand.

I was fortunate because I was home. Had I not been home and able to be on the phone, I would have never completed this.

I understand. But I guess the key for the purpose of this hearing is -- and I understand that this is a mortgage transaction, but there was no check originally that that person was not the owner of your property.

No. And the irony of it is her home was up for sale and she 28 5/21/08 - LAW & GOV'T - BILL 080424 sold it before this was done. She had not gone to settlement or they would have been out $40,000.

Okay. Thank you, Ms. Cohen. Thank you for your testimony.

Thank you.

Ms. Cannady, why don't you -- maybe, Ms. Cohen, you could switch seats with Ms. Cannady.

Absolutely.

Thank you very much, all of you, for your testimony.

Thank you.

Ms. Cannady, if you could just identify your name and address for the record and proceed. If you could just give a brief synopsis of what your problem has been, I'd appreciate it, and then we have a lot of time for questions if anybody has any questions for anybody. 29 5/21/08 - LAW & GOV'T - BILL 080424

Good morning. My name is Zelda Cannady. I live at 1810 Bainbridge Street. I'm here because of May 2006 I got a copy of my mother's deed in the record room and found out that the name was altered. My sister went and applied her name onto this deed. I went through the papers of the deed and found out that there was no notary. I questioned how was this paper filed, because that makes it a legal document, and they sent me to Room 154, where they gave me a form to fill out for a complaint. I filled it out, sent it in, didn't hear from anyone, so I kept calling and calling and calling. I spoke with Ms. Joan Decker, who assured me that the document was not supposed to have been filed and that it was nothing that she could do about it and that I had to retain a lawyer. So I went to seek legal help. Every lawyer I found, $5,000 was a 30 5/21/08 - LAW & GOV'T - BILL 080424 retainer or $200 an hour. I have a part-time job. I'm not able to pay for that. So I started going through legal aid, which one person, Ms. Seldin, sent me a letter explaining to me that my sister didn't have full control of the property, it was 50, because I was able to file my mother's estate. I tried to do that. I wasn't able to because they said that me and my sister would have to come to the Wills of Registry office with a lawyer to file. So within the three years, I've been trying to find someone to help me with this, because my mother did not give my sister authorization to apply her name to this deed. She's been trying to evict me from the home. I've been there for 37 years. And I had gotten Mr. William Wysonick's name, and he told me to come in to tell my story. I'm trying to find out whether or not this is acceptable from City Hall, that someone just can come in and apply 31 5/21/08 - LAW & GOV'T - BILL 080424 their names.

Well, it shouldn't be, I guess is the short answer to your question. Just let me be clear, if I could. How was this deed transferred into this other -- I wasn't real clear.

My sister, after speaking to her briefly, she told me that she -- I have a copy. It went to a lawyer, and my mother supposedly had signed it over to her, but my mother passed away. She did not have a will and she did not want to do a living will, because she was sick. So my sister said that she gave her the home. There's no 18 documentation and I have never received anything from the City saying that the deed was altered.

It was under your mother's name and how did your sister get it in her name?

My sister applied her name to it. It's in my mother and my 32 5/21/08 - LAW & GOV'T - BILL 080424 sister's name.

She added it, in other words?

She added it.

Okay. And this problem is still going on, right?

Yes, because I refuse to move until someone tells me whether she owns this property or not.

I understand.

And no one has been able to tell me this.

Well, I think between Councilwoman Miller's office and ours, maybe we can help resolve this.

Okay.

So I know you're dealing with Councilwoman Miller's office, but if we can help too, we certainly will.

Okay. 33 5/21/08 - LAW & GOV'T - BILL 080424

Thank you for your testimony. Are there any questions by members of the Committee? Any comments? The Chair recognizes Councilman Goode.

Just a few questions out of personal interest. Mr. Ferguson?

Yes, sir.

You're representing Mr. Dupont. Can you tell me if you know or if Mr. Dupont can tell us how he came about finding that tenant.

I'm sorry?

How he came about finding that tenant.

Well, we're Muslims and we go to the same Musella, and the woman that came to move into the house at the time was a practicing Muslim and she had several children, and she came with a story that she was in dire need of housing and her father or family 34 5/21/08 - LAW & GOV'T - BILL 080424 member was suffering from an addiction, and out of compassion, he had allowed her to move into the house with the conditions of circumstances regarding --

So she approached Mr. Dupont?

Yes. Yes.

Out of familiarity through --

Yes.

Do you know if she has done this in the past in terms of other properties?

Well, going through -- and I have done thorough investigation, and I had a close rapport with the Police Department. They had did a criminal background check and didn't find any information regarding, but one thing is that she's always been one step ahead regarding to the matters of prolonging the circumstances, from legal representation to the minefields, of even how to get around getting another 35 5/21/08 - LAW & GOV'T - BILL 080424 financing on the property. So either she's being informed from some outside entity or she has prior experience with this. Either way, something is always telling me inherently that she's receiving or had done this before in regarding how to continue this process, because this has been going on over two years.

Okay. Thank you. Ms. Cannady, you said that you discovered that your mother's property was taken by your sister from reviewing the deed. What caused you to review the deed?

Because she kept harassing me and my daughter. I have two daughters and three grandchildren who lived in the home at that time, and when I would go to work, she would come and harass them, and then she would leave messages saying that she will have the Sheriff Department come and evict us. 36 5/21/08 - LAW & GOV'T - BILL 080424

So she did tell you that she owned the house or had taken --

No. She didn't say that per se. She just said that, Y'all have to leave. And then me and my other sister said, Well, we're going to go check the deed, and that's when we went to go check, and her name was on it.

What would give her the right to tell her to leave if she hadn't changed the deed?

Because she said that my mother had informed her to clear up all her untied business and that she said that she could sell the property once she passed. But she never said that, you know -- there was no document saying that my mother gave her sole ownership of the property, because there's seven of us.

Okay. Thank you.

Thank 37 5/21/08 - LAW & GOV'T - BILL 080424 you. Any other questions or comments? (No response.)

If the record could also reflect Councilman Kelly is present, also a member of the Committee. I know we have a lot of other people to testify, but I really appreciate you coming down here. I know some of you are on the road to recovery, some are not, but I think what we were just trying to show that there are real faces, real problems. Maybe this bill that we're talking about or maybe there's other things that still would not make it perfect to solve all your problems, but as I said in the opening statement, I believe that at least some of these could be solved by some proactive action early, before you get into all this stuff, and that's really the goal of this bill. So 38 5/21/08 - LAW & GOV'T - BILL 080424 thank you all very much for coming down.

Thank you.

If I could ask for Panel 2. I know, Mr. Massaro, you have to get out of here, but I was going to ask Judge Jones, Stephanie Fleischer Seldin -- I hope I'm pronouncing that right -- to come forward, please. And is Lisa Caulfield from the District Attorney here? I'm sorry. I didn't see you back there. If you could come up, too. And then, Mr. Massaro, you'll be after this group. (Witnesses approached witness table.)

Good morning, everyone. Thank you for coming. Judge Jones, you have precedence here. If you would like to start. Identify yourself for the record, please, and proceed. JUDGE JONES: Thank you. First of all, good morning. 39 5/21/08 - LAW & GOV'T - BILL 080424

Good morning. JUDGE JONES: I am C. Darnell Jones, President Judge of the Court of Common Pleas. I want to begin by commending Council and this Committee for taking this most progressive step toward addressing a major problem within the City of Philadelphia, and I would add that it is also, quite frankly, a national problem. I also want to take the opportunity to recognize at least two other entities that did a lot in this regard, one of them being Ms. Williams from Fox 29 and also Jill Porter in writing about these issues, bringing this to the forefront. This issue of fraudulent conveyance of real property has been addressed by the First Judicial District in a limited manner, and that's because we are, as the court system, restricted 40 5/21/08 - LAW & GOV'T - BILL 080424 in what we can do about the problem. First and foremost, I had a case myself that was filed in equity, a matter to quiet title, a couple of years ago when I sat in the Commerce Case Management Program, the business court. We took equity cases at that time. One of the cases that I had involved a man who had purchased a home, at least so he thought, and rehabbed it, put a substantial amount of money into that property, then decided to rent it out. A young man drove by the property and noticed that the property had been rehabilitated, contacted his grandmother, who owned the property, and she had no 18 knowledge about it. After they confronted the man who purportedly bought the property, the man who bought the property filed an action to quiet title. The matter ended up here in Court of Common Pleas. It took almost a year for me to work through the mire as the judge in 41 5/21/08 - LAW & GOV'T - BILL 080424 that case to get that title straightened out, because unbeknownst to anyone, the lady who actually owned the property inherited it by reason of her parents dying intestate, without a will. She had two siblings. One lived in Atlanta, Georgia; one lived in upstate New Jersey. In order for the property to be transferred properly, they had to sign off on this deed to transfer the property to this man who thought he owned it. Keep in mind, however, the purchaser was the one who brought the action, causing the elderly lady who owned it to have to come to court. She had no funds to hire an attorney. I had conferences at 6 o'clock in the evening, 7 o'clock in the evening to try to work through this to make sure that everyone was going to be fairly treated, and ultimately this matter was resolved, but ironically, it was resolved because the attorney for the man who brought the petition to quiet title 42 5/21/08 - LAW & GOV'T - BILL 080424 worked for the lady who actually owned the property and also went and sent notices to Atlanta and sent the notices to upstate Jersey for them to sign off on to transfer the title back to the lady who is the rightful owner. Ultimately, there was a settlement. The gentleman who bought the property had put so much money into the property paid the lady who actually owned the house a portion of the monies. All ended well in that regard, but the attorney, as we have right now with people who volunteer their time to help out, did a yeoman's job there, but that cannot be the solution to the problem. Ms. Porter wrote an article 19 about it, and I read that article and thought about the case that I had and spoke with some other people and decided that there's something that we had to do about it, so, therefore, I created the Fraudulent Transfer Property Program, with the goal of doing three things: 43 5/21/08 - LAW & GOV'T - BILL 080424 One, to give the cases specialized attention; two, to provide counsel when we could do so by asking the private Bar to volunteer their services as pro bono counsel; and, three, to expedite the process, because when I got involved in this, it could take upwards of two years or more to resolve these problems.

Our goal was to expedite the matters to get them down to a time approximately four months to five months for resolution. Now, I heard Ms. Lynch's testimony, and her matter was extraordinarily complicated, because there were other back taxes issues involved. The court system can only be so proactive. I would also add that thanks to Commissioner Joan Decker, who did put into operation the notification of property owners when deeds were registered, and I also agree with Ms. Cohen that I think that probably the better thing to do would be to have these 44 5/21/08 - LAW & GOV'T - BILL 080424 notices sent out before the deed is recorded, but I know that real estate transactions sometimes are expedited. But nevertheless, I had, through Ms. Decker, the opportunity to speak to the Property Records Industry Association last fall in Washington, DC at their conference. It became quite clear that this is a nationwide problem and also that Philadelphia, the First Judicial District, was really at the forefront of doing something proactively about it, because the other jurisdictions around the country have not done so. As a result of that presentation, I have now been asked to come to Phoenix, Arizona to speak to the International Association of Clerks, Recorders, Elections Officials and Treasurers, because likewise their conference recognizes that this is a national epidemic and no governmental body is doing anything about it. So I, therefore, commend this 45 5/21/08 - LAW & GOV'T - BILL 080424 body for taking a very proactive stance in trying to address the problem.

Judge, if I could just add one thing, and I guess this is -- maybe the other two witnesses can address this, too. Would we all agree that it would be great if it didn't get to you guys, if somehow it could be dealt with before it got to the point where it's going to take some time, no 12 matter -- we can debate the time, and I agree that you have done a very good job in cutting down that time in most cases. Everything is different. But if we could somehow have more safeguards in the beginning and it doesn't get to you, that that would be in everybody's interest, correct? JUDGE JONES: Absolutely. And we have a short list of suggestions, and we recognize certainly that the issue of notaries is a major issue in this regard, which we also recognize that you don't control. 46 5/21/08 - LAW & GOV'T - BILL 080424 If I may just give you some statistics. We have approximately in 2007 -- last year we created the program, in April of 2007. Of 110 cases, we've disposed of 62 cases. We have currently 50 active cases. In 2006, there were 122 cases reported, and so far we have new 9 cases in 2008. We disposed of one so 10 far. But these are complex matters, and, 11 again, it is very, very important if we 12 can have counsel represent the rightful 13 owners to the property. 14

Thank 15 you, Judge. 16 Again, maybe if all three would 17 have their testimony, then we could have 18 whatever questions. 19 Ms. Seldin. 20

Hi. Good morning, 21 Chairman and members of the Committee. 22 My name is Stephanie Fleischer Seldin and I am the Managing Attorney at Philadelphia VIP, which provides free legal services to low-income clients by 47 5/21/08 - LAW & GOV'T - BILL 080424 connecting those clients to private attorneys. I first want to thank City Council for your support of VIP through the Office of Housing and Community Development. I would be remiss in mentioning that the funding that you provide us not only allows us to assist hundreds of clients each year with homeownership issues, but also supports the very, very important Tangled Title Fund, which pays the filing fees, taxes and other non-waivable costs for clients, one of which I am going to speak about today, and also to commend President Judge Jones for the Fraudulent Transfer Program, which among one of the things he didn't mention was that it provides clients the opportunity to file a pro se complaint, which one of the victims today testified about. And while we at VIP would really like to be able to provide free legal services to every single client who walks in our door, that's 48 5/21/08 - LAW & GOV'T - BILL 080424 not -- the resources that we have, it's not possible. So to have the ability for our clients to have access to a pro se complaint is really a wonderful step for these clients. And thanks also to Chairman Greenlee for asking me to be here today. So I have written testimony, which I have provided to the Committee. So I'd like to talk about only one of the clients, then you can refer to my testimony.

Thank you.

Helen is the true record owner of a property, but someone named George purported to own the property and fraudulently conveyed title to Javius. Javius then sold the property to VIP client Andrea, but because George never had title to the property to pass to Javius and Javius in turn never had title to pass to Andrea, Andrea does not really have title to that property. So 49 5/21/08 - LAW & GOV'T - BILL 080424 her only hope would be to find the true owner of the property, Helen, and persuade her to give or sell her the property. As the Chairman mentioned, she bought from a thief. Andrea has been living in this home where she lives with her two children for four years. She has significantly improved her home and paid for four years' worth of property taxes. She cannot sell her home. She cannot further improve it without cash in advance, and she cannot transfer it to her children. But worst of all, if Andrea stays there, she faces the prospect that the original owner, Helen, or her heirs could show up and force her out. Councilmember Greenlee's bill 21 would require the Department of Records to verify that the named grantor is the record owner before recording a deed. I believe this could have prevented Andrea's problem. 50 5/21/08 - LAW & GOV'T - BILL 080424 This bill would also codify a significant improvement instituted by Commissioner Joan Decker to address fraudulent deed transfers. It requires the Department to notify the record owner by mail within 30 days of a deed being recorded. This is how many of our clients learn about a fraudulent conveyance. Even though the notice is received after the transfer, the notice can be received before a mortgage is taken out on the property or before it is resold. Both of these circumstances highly complicate the legal case. I do have one major suggestion for improving the bill. Don't frown. It's not a big one. I would request that in addition to requiring the Department of Records to mail the record owner when a deed has been recorded, the bill should also require the Department to mail that notice to the occupant at the address of the home being transferred. Many of our clients and one of the victims here today 51 5/21/08 - LAW & GOV'T - BILL 080424 were not record owners. They have entered into a lease-purchase or a rent-to-own agreement. Their ownership rights are jeopardized, if not eliminated, by a fraudulent conveyance, and they should be notified. I conclude by noting that these cases can be very complicated, as Judge Jones mentioned. They're time consuming for both VIP in-house staff and for the pro bono attorneys who ultimately resolve them. But, more importantly, they're devastating to the clients, as you already heard from today. On behalf of the low-income clients that VIP serves, such as Andrea, thank you again for inviting me to testify today and for your ongoing support of our work. We applaud your initiative and look forward to working with Council.

Thank you, Ms. Seldin. By the way, I wasn't frowning when you made that suggestion. 52 5/21/08 - LAW & GOV'T - BILL 080424 Wait until the Records Department and Law Department comes up here. Then I'll be frowning.

Then you'll be frowning? Okay. Good.

Thank you. Ms. Caulfield.

Good morning, gentlemen. I prepared written testimony. I do have copies for you, if you don't pardon my reading. Good morning, Chairman Greenlee, members of City Council. Thank you for the opportunity to give testimony regarding Councilman Greenlee's proposed amendment to The Philadelphia Code to address the issue of the recording of forged deeds. My name is Lisa Caulfield. I am the Chief of the Economic Crime Unit of the Philadelphia District Attorney's Office. I have been a prosecutor for 13 years and have been prosecuting economic 53 5/21/08 - LAW & GOV'T - BILL 080424 crime for the last five. I am here today on behalf of Lynne Abraham, District Attorney of Philadelphia County, and the Philadelphia DA's Office. DA Abraham and the members of the Economic Crime Unit are well aware of the problems associated with house stealing or fraudulent conveyances. We have learned that these frauds are facilitated in part because of loopholes in the manner in which deeds are recorded and in the Notary Public Law. We applaud Councilman Greenlee on his efforts and believe his proposed amendment to be a good first step toward crafting a plan of action that will prevent these crimes. Unfortunately, we do not believe this amendment in its present form goes far enough to stem the tide of this criminal activity and hope my testimony will serve to highlight issues deserving of attention and inclusion in the ordinance. My testimony today and my office's support of this new ordinance is 54 5/21/08 - LAW & GOV'T - BILL 080424 based on my experience in apprehending and prosecuting individuals who have perpetrated this fraud on the citizens of Philadelphia. " I believe that amending The Philadelphia Code will aid law enforcement not only in gathering evidence of forgeries, but also will serve to deter criminals by demonstrating that they will no longer be able to exploit the present inadequate identification requirements. Victims of fraudulent conveyances are usually persons who own but do not occupy the property in question. Often the property is vacant or unoccupied due to the death of older relatives and remains so for years. Sometimes the property is unoccupied because the owner has been hospitalized or is an elderly person or a surviving spouse who has moved in with relatives or to a care facility. Often several years 55 5/21/08 - LAW & GOV'T - BILL 080424 will have passed and the relatives will have done nothing to secure letters of administration to transfer the property into the rightful names. One of the telltale signs of a target property are years of unpaid real estate taxes and water bills. With this in mind, it is important to note that there are currently over 200,000 citizens in Philadelphia 65 years of age or older. After targeting a property, a forger will go to a notary and pose as the property owner. The forger will then deed the property to a buyer, the grantee, who is often part of the criminal scheme as well. Often the deed will be for a dollar and often the forger will declare that this buyer is a relative to avoid paying Philadelphia's real estate transfer tax. The notary may even be complicit in the scam, in which case no one needs to even pose as the true owner. Anyone can then take this fraudulent deed to City Hall for 56 5/21/08 - LAW & GOV'T - BILL 080424 recording and the crime is complete. The conspirator buyer/grantee will often then flip the property to a second buyer, who may also be an innocent party, in which case there might be yet a second victim. Many of the victims of fraudulent conveyances are unsophisticated in the world of real estate. If and when they discover that someone has fraudulently transferred title to their property, they don't know where to turn. They often cannot afford a lawyer to initiate a civil action to quiet title, which is absolutely necessary to restore proper title to the property. A law enforcement investigator attempts to locate and identify the parties to these illegal transactions.

If no one is living in the property, the investigator is often left with simply names with no further identifiers. Sometimes the names used are fictitious and the address supplied on the required 57 5/21/08 - LAW & GOV'T - BILL 080424 paperwork is simply that of the stolen property. The investigator can find valuable evidence from two sources, the Records Department and the notary, a person who should have dealt directly with the forger. A valuable source of evidence lies within the Records Department here in City Hall. Since the phenomenon of forged deeds first surfaced years ago, several procedures have been implemented by Commissioner Decker. The first of these was the mailing of a notification letter regarding the recent filing. This notification, however, is mailed after the forged deed has been accepted and recorded. The damage has already been done and the crime is complete. Ideally, the notification letter should be sent out in advance of the actual recording with a corresponding waiting period. This, however, is sure to bring vast objection by the real estate community. Another issue with the letter is that 58 5/21/08 - LAW & GOV'T - BILL 080424 often it is sent only to the address of the stolen house itself, never to be seen by the true owners. Fraudulent conveyancing seems to have become a cottage industry in Philadelphia. As such, in addition to the notification letter, Commissioner Decker has attempted to add other safeguards to the recording process. Unfortunately, these procedures are not mandatory, and even if they were, they remain lacking in certain requirements essential to detection, identification and deterrence. Anyone can come to City Hall and record a deed. They need not have any relationship to the parties involved in the transfer. As a result, the forger often never appears in person. Forger or not, the filer may be a valuable witness or conspirator that still needs to be positively identified. Photographs are now taken. A sign-in log has been instituted. Copies of the IDs are made and should be kept in 59 5/21/08 - LAW & GOV'T - BILL 080424 the ordinary course of business. However, as I said before, these procedures are not mandatory and still need to go further to be effective. The photographing of all individual walk-in deed filers should take place, with no exception. These same people should be required to produce photo identification verifying the name that they are now linking to that photograph. We've had situations where we have clear photographs of targets who file forged deeds, but we cannot confirm their existence using the names that they used to file the deed. The sign-in log should be completed in full, including most importantly the address of the deed being filed. This sign-in log should be checked against the identification provided. If a filer refuses to comply, then their proffered deed should be rejected. Presently there is no link 60 5/21/08 - LAW & GOV'T - BILL 080424 between photographs of filers and the deeds themself. There is no way to link a forged deed to its filer solely by way of the photograph that may have been taken that day. The document recording number on a deed should be linked to every photo taken to confirm that the individual in the photo was the one who filed that deed. Councilman Greenlee's provision regarding providing supporting paperwork on death, trust, power of attorney, et cetera, is helpful in that properties belonging to deceased individuals are routinely transferred illegally, but there is rarely anything on the face of the deed that is filed to indicate that the legitimate owner is dead. Sometimes you do see surviving spouse, sole surviving heir, but often the forger merely drafts a deed transferring the property from the decedent to a new owner, whether that owner is themselves, a straw person or someone who is duped, 61 5/21/08 - LAW & GOV'T - BILL 080424 and signs the decedent's name.

Similarly, power of attorney documents that are filed with deeds are regularly forged and notarized similarly. Lastly, incomplete transfer tax certifications that are to be attached with the deed when it's filed should result in the rejection of the deed. In the majority of cases, we see grantor, who might be dead, who might be completely unknowing, and the criminal grantee both giving their address as the address of the stolen house, with no 15 forwarding information, no phone number, no way to contact them to confirm the legitimacy of the subject real estate transfer or the lack thereof. I feel it is important to just take a few minutes to discuss the role that notaries have in the crime of fraudulent conveyancing. Ideally, an investigator hopes that the notary who notarized the purported grantor's signature will be able to help identify 62 5/21/08 - LAW & GOV'T - BILL 080424 the forger through their records. You might think that the notarization requirement would protect against scams like this, that their record-keeping would deter this crime. To the contrary, our investigations have found that the registers of notaries are often incomplete and not in compliance with the present Notary Public Law. Even complete records which do comply with the Notary Public Law are inadequate to provide sufficient evidence for investigators to determine the identities of parties involved. Under present statutory requirements promulgated by our State Legislature, notaries are not required to keep any identification materials, such as photocopies of photo ID presented, thumbprints, et cetera, which could provide investigators with evidence of the true identity of these forgers. What this means for law enforcement is that in most investigations, the trail leading to 63 5/21/08 - LAW & GOV'T - BILL 080424 the forger gets cold and ends with the notary, who months or years later cannot specifically recall the identity of the persons involved in the transaction or who has filed to record any meaningful information which would lead us to identify the forger. Legislative changes such as the inclusion of thumbprints in notary registers and the photocopying and maintaining of photo ID presented would help protect people from the theft of their most valuable single possession and would aid law enforcement tremendously. Even if a thumbprint didn't lead directly to ID due to the absence of a criminal record and even if the information supplied in the ID document turned out to be false, the photograph itself will still be one of either the forger or presumably a conspirator. I know these proposed requirements will be considered burdensome by notaries despite the 64 5/21/08 - LAW & GOV'T - BILL 080424 technological advancements in their business. As such, I would suggest that any new requirements be limited to instruments involving transactions in real property. I thank you for listening to my testimony. I will be happy to answer any questions and look forward to working with you on this important legislation. I firmly believe that changes to enable immediate detection and identification, if implemented and monitored, will deter criminals from engaging in this rampant crime.

Thank you, Ms. Caulfield. Thank you, everyone. First a comment, Ms. Caulfield. I agree that our bill here maybe doesn't address everything, but would you -- we believe talking to a lot of people that have been involved in this that it will address at least a portion. Now, we can debate what portion that is. So, I mean, 65 5/21/08 - LAW & GOV'T - BILL 080424 do you see anything in there that would be wrong to have in?

No. I don't see anything that would be hurtful or not move things along.

Okay. And, again, I repeat what I said in the beginning. I think anything that we can do so it doesn't have to get to you folks is probably in the best interest of everybody, and I think that's what we're trying to do in the bill. Any amendments, I'm certainly open to discussing with you or anybody in the District Attorney's Office anything that you think could be helpful. We can sit down with the Records Department. I mean, we'll see how this goes. It would be my hope that we can move this bill 21 today, but that doesn't mean it can't be further amended.

Thank you.

Just one question, Ms. Caulfield, because this has 66 5/21/08 - LAW & GOV'T - BILL 080424 come up in some of our discussions. How does the District Attorney determine who to prosecute?

Well, the District Attorney's Office prosecutes anybody who is arrested for this case. I think the issue is, is there a difference in who is doing the investigating, not necessarily the prosecuting. In the majority of cases -- well, not necessarily the majority. In cases where there is a complaint involving one property, a solo property, we generally -- "we," meaning myself and the few of us in the Economic Crime Unit -- would refer that either to the police division where the house is located or to Major Crimes. Mr. Ferguson referred to working with Detective DiLacqua, who works out in Major Crimes' Economic Crime Unit. Our unit, the Economic Crime Unit, gets involved in the investigation aspect when we see that we're looking at 67 5/21/08 - LAW & GOV'T - BILL 080424 a ring of conspirators, multiple houses that are linking to each other, and one of the reasons for that is, we've been told by the Police Department and certain detective divisions that these cases get amazingly complex in a short amount of time, and for that reason, the DA's Office and the Investigations Division would take over the case and use our own detectives, no longer necessarily the Philadelphia Police Department, to work these cases into what ends up being a much bigger situation.

The reason I raise that is in varying looks into this -- and I'm not saying this is a valid criticism. I'm just raising it -- that some people have said that the DA does not prosecute enough cases of these, that they only go after the bigger ones and that that sends sort of the wrong message. Again, I'm not saying that's -- I'm just throwing that out there for your 68 5/21/08 - LAW & GOV'T - BILL 080424 comment.

I think, again, we're just using the wrong verb, for lack of a better thing. We prosecute every case that the police bring to us on forged deeds. They are the ones that do the investigating. They are the ones that do the arrests. We don't turn cases down and say we're not going to prosecute this. It's just in terms of who actually is going to do the more complex investigation. For instance, some of these types of cases, as well as many other economic crimes cases, get taken to a grand jury, and that is something that the DA's Office would handle as opposed to the Police Department.

I understand. Councilman Goode and then Councilman Green. Councilman Goode.

Thank you, 69 5/21/08 - LAW & GOV'T - BILL 080424 Mr. Chair. This question is for the entire panel. I'm interested in knowing how many cases you've been involved in on this matter and how many of those cases are actual professional thieves, so to speak, versus acquaintances of the victim, family members or friends or people who just have some personal knowledge of the victim's property.

You often do see cases involving family members, and they're usually as a result of an ongoing family dispute that has gone on. But in terms of professional criminals, what I would suggest is, these people who engage in this activity don't necessarily start as professional criminals in this regard, but they get very good at it very fast. I think that they see that it's easy to do. Up until this point, there haven't been many sentences handed down that would cause them to be afraid of 70 5/21/08 - LAW & GOV'T - BILL 080424 getting caught. You're starting to see better ways to find out who is doing -- with the advent of PhilaDox becoming a database, that has been extremely helpful, because when people target houses that have lain vacant with ten years of back taxes, usually nobody comes forward and it used to be very hard to try and find these houses, but now with PhilaDox, there's a database where you can go searching for names and the people can't hide as much anymore. You also see buffers being built where you have people start bringing in acquaintances or friends of theirs, not necessarily of the house, and it spreads out.

The question is, what percentage of this is actually done by acquaintances of the victim.

I would say under 50 percent is done by acquaintances of the victim. Normally the only victims is maybe they get brought in as a 71 5/21/08 - LAW & GOV'T - BILL 080424 secondary victim. They buy a house that has already been stolen. I could see that then acquaintance related, but the initial theft I wouldn't say is so much acquaintance related.

And I would say less, actually. I would say it's around percent, and usually it's not 10 acquaintances, frankly. It's usually 11 family members. 12

Judge. 13 JUDGE JONES: I concur. Keep 14 in mind the case that I referred to 15 earlier wherein the gentleman forged the 16 deed -- and I use the term "gentleman" 17 lightly -- that man was in federal 18 custody and was not going to be brought 19 down to court to testify as to how this 20 transaction occurred. The issue was 21 further complicated by the fact that, as 22 has been indicated, there are buffers. 23 But I think in terms of the 24 percentages, we don't know. There's no 25 way that we can track that as the court 72 5/21/08 - LAW & GOV'T - BILL 080424 system, but I will say this, I think that far too few of these cases are prosecuted. And this is not a criticism of the Office of the District Attorney. It's the realization of the complexity in tracking these cases through paperwork, through the transactions as they transpire by the Police Department or a special unit of the Police Department. I think, frankly, that there needs to be an existing unit that specializes both in the Philadelphia Police Department and the Office of the District Attorney to go after this kind of conduct, because if they're brought into the court system for prosecution, they will be heard, but they're not here. And the side that I deal with at this juncture in terms of the fraudulent conveyance, we're talking about the civil program, not the criminal program.

If I may add, sir, just one other thing. If you're talking about an isolated house case, 73 5/21/08 - LAW & GOV'T - BILL 080424 sometimes it is virtually impossible to find out who the parties involved are, because they are simply just a name, and it could be as simple as John Smith, and there's no way of ever finding out who that person is based on what they have to do to file that deed.

So a significant number of these are family members, but not a majority.

I would not say a majority of them.

Last question for the DA's Office. How many convictions have there been on this matter?

Well, I can only speak necessarily from the cases that have come through the unit, and I don't have stats, but I can tell you of some significant ones that have happened over the course of the last five years. We had a case, I would say it was in '07, where there was an individual who was 74 5/21/08 - LAW & GOV'T - BILL 080424 initially involved in the Ricky Williams scam that had hit about seven or eight years ago before I was involved with this. He was a small player in that role and had gotten a sentence. I don't know what it was, but he was on probation at the time. Well, he continued to engage in this behavior, and we looked into it. We broadened the investigation as much as we could until we were up to about five or six houses, and he was eventually forced to plead guilty by virtue of all the evidence that we had against him and he was sentenced by Judge Amanda Cooperman to 11 to 22 years, which was a fantastic verdict and hopefully something that will go out in the community. Often times, again, when you look at the solitary houses, there are acquittals, because when you only have one house --

Ms. Caulfield, my question was how many convictions. 75 5/21/08 - LAW & GOV'T - BILL 080424

I don't have the number for you. I don't.

Do you know of any convictions of family members?

I don't personally know of any conviction after trial of any family members.

Is that because of the lack of cases being brought against family members?

Well, I think it would be because I don't have the numbers of the other cases that go through the office. I only have in my head or at my access the cases that actually go through the unit, the Economic Crime Unit. We do not handle many family member cases.

What percentage would you say of the cases you handle are family members?

Under ten percent.

And that's 76 5/21/08 - LAW & GOV'T - BILL 080424 because you pass them on to the Police Department? Is that your testimony?

We would refer them. If a complaint came in, one isolated house, known doer, no need for extensive investigation, we would refer that to the Police Department.

And so is the expectation that the case would come back to you at some point?

Well, the expectation would be when the police were concluded with doing their work on the case, they would send it to the District Attorney's Charging Unit and it would get prosecuted through the Municipal Court Unit as any arrest by the police does.

How often does that happen?

I would have no 22 numbers for you on that, sir.

Do you know of any cases that have come back after they were sent into the Police 77 5/21/08 - LAW & GOV'T - BILL 080424 Department?

Oh, yes, but I don't know family members versus not family members.

I'm saying do you know of any cases regarding family members that were sent to the Police Department and came back --

Family members, no. 12

-- for prosecution?

I don't.

Thank you.

Thank you, Councilman. Councilman Green.

Thank you. I have a couple questions on the civil side, and, that is, I'm just curious whether or not people who file a quiet title action or something else also file an injunction to get back possession of their property, a temporary and then 78 5/21/08 - LAW & GOV'T - BILL 080424 permanent injunction to get back possession of their property based on the likelihood of success on the merits on the quiet title action. The previous panel, a man testified that someone was living in his house across the street. I don't know the merits of his particular case, so I don't want to talk about that, but in the abstract, it seems to me from the civil side, the different standard of proof that is required than the DA's Office, that someone who demonstrates that they are the person who was the previous owner -- and that's pretty easy to identify -- and that swears that they didn't sell it and the other -- I don't understand why there couldn't be some sort of immediate action that would return possession so that they could protect their property, and I'm just wondering if that's part of what the program is in the courts or if that's part of the relief sought by VIP and 79 5/21/08 - LAW & GOV'T - BILL 080424 others who are bringing these cases. JUDGE JONES: If I might, I think it's a very, very good question. Ironically, that formal relief is rarely requested, and the motivations for that I'm not so certain. But certainly it's an avenue, because as I indicated before, this is an action in equity and they would have a right to ask for that, provided they give the level of proof.

Stephanie.

Yes. Councilman Green, we have not taken that kind of step legally to actually have an injunction filed at the same time as the quiet title complaint, but we can certainly look into that and see whether or not we have clients who have the level of proof that would be required that could go forward with that kind of action at the same time.

And what could that order say? What could you request that that order say? That 80 5/21/08 - LAW & GOV'T - BILL 080424 possession be returned to the person during pendency? I mean --

It seems to me it would be a request for an ejectment at the same time that you're filing a complaint and quiet title, and you would do it both at the same time. Right now our private attorneys are doing it one after the other. So we could look into seeing whether or not the rules would allow us to do it at the same time.

And an injunction perhaps keeping people away from that property so that if they came back, you'd be able to enforce that by calling the police and having them then be in contempt.

Right. Well -- right. A stay-away order, is that what you're thinking of?

Yes. From that property as opposed to --

Right. And presumably the client would be back in 81 5/21/08 - LAW & GOV'T - BILL 080424 the property and wouldn't have access --

Or if they're ever back there, even if they don't reoccupy the property because they can't because it's messed up, that if they're ever there, there would be a court order saying they can't be there and the police could be called and they could be removed whenever they're there.

Right.

Just a couple thoughts that would be a short-term solution to transfer these properties back in the meantime so that there's not additional economic harm during these, what seem to be, very long cases.

Thank you for that suggestion.

You're welcome.

Thank you, Councilman. Any other questions? 82 5/21/08 - LAW & GOV'T - BILL 080424 (No response.)

Thank you all very much. I appreciate your time. And, again, we hope maybe this bill can make your work a little less heavy there. Thank you. JUDGE JONES: Thank you very much.

Thank you. We appreciate that.

Our next witnesses are Thomas Massaro, Steve Arrivello and Janise Williams, whoever is here. (Witnesses approached witness table.)

In the meantime while they're walking up, I'm going to do a little parliamentary thing here, recess the public hearing very briefly, go into a public meeting and recognize Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Mr. Chairman. Thank you for recessing 83 5/21/08 - LAW & GOV'T - BILL 080424 the public hearing. I have Council business outside of City Hall, but I wanted to leave my vote on this bill and any amendments in the affirmative.

Thank you. Any objections? (No response.)

Thank you very much. Thank you, Councilman. That will be noted for the record, Councilman DiCicco voting aye when we go back into public meeting. We're now out of public meeting again back into public hearing. And, Mr. Massaro, again, I know you have to get out of here, so I apologize keeping you so long, but this is pretty complex, as you can see, and I know you have a lot of history here. So please identify yourself for the record and proceed.

Good morning. My name is Thomas Henry Massaro. 84 5/21/08 - LAW & GOV'T - BILL 080424

Proceed with your testimony.

My testimony this morning is offered from three vantages, the vantage of having served as a Housing Director for the Cities of Newark and Philadelphia; the second vantage is having been a real estate developer in the City over 30 properties for affordable housing; and, third, in the capacity of my volunteer work with people and organizations that have suffered from this problem. Listening to the very important testimony offered this morning, I'd like to offer three comments. One, I appreciate the fact that the City Council is looking at this in a comprehensive way. Having served as a victim of this, having my own house stolen, I have deeply appreciated the efforts of Ms. Porter from the Daily News, LuAnn Cahn from Channel 10, Judge Jones, who has not only been helpful and supportive, but he has 85 5/21/08 - LAW & GOV'T - BILL 080424 been incredibly accessible. I have received a call back from the judge on a Sunday night. Myself and other citizens have had access when we want to raise an issue, and that's deeply appreciated. And also Lance Haver, who has been very open and very helpful to the stream of people coming into his office despite the challenge and personal difficulties that he and his family had faced this year. Listening to the testimony, having been a victim and of working with a task force of volunteers to comprehensively address this problem, I think this is where we are. We had a problem that was about the size of a mini compact disk. It is now the size of a wagon wheel with 28 spokes, and the challenge here today is to define the problem and to get each of the 28 spokes in the wheel identified and repaired. And the problem we face now is, the spoke in the wheel that Judge Jones can change, he can change. The several spokes in the 86 5/21/08 - LAW & GOV'T - BILL 080424 wheel that this Council can address, I think you're prepared to address them. And there's a lot of benefits from your bill, Councilman. You should be commended. I know you've had support. Councilwoman Miller's staff has been very helpful. But there's only several spokes in the wheel that you can change. And we still haven't defined the problem. No 11 one knows the extent. No one knows the scope. And so we have to -- the group of volunteers that I've been working with, we're, one, trying to define the problem. Two, we're trying -- in all its comprehensive assets. Whether we're talking revoking the notary license, whether we're talking about something at the Department of Records, something to be done with the Bar Association. We have to define each spoke in that wheel, because if we only repair 14 of them, the wheel will bust and collapse. So the work of this Council, 87 5/21/08 - LAW & GOV'T - BILL 080424 you have to do all you can do and then work on the other spokes in the wheel, and we can only do that if we have a comprehensive effort. We do not have a comprehensive effort. Some of the parties here are working, but not all the parties here are working. Some of us are trying to form a common agenda. Some have a separate agenda. So until we define the spokes in the wheel, have a remediation effort for each spoke in that wheel, even the repairs we make to the wheel will result in a collapse, and that has to be addressed. The resolution would be to once you define the problem, you can first define a problem of deterrence, whether that's revoking the license of the notary, whether that's criminal prosecution of people who have been involved. And, you know, you see patterns if you look at it in the context that I have. Councilman Goode has done 88 5/21/08 - LAW & GOV'T - BILL 080424 marvelous work identifying people involved in predatory lending. This is Chapter 2 for some of those people. The same interests that have perniciously preyed upon people in our communities, this is the next phase for them to prey on people. My house was stolen while I was in a coma in intensive care at the Hospital of the University of Pennsylvania.

And one of the things that my task force has looked at is to identify exactly how people are targeted. The other people that were in intensive care with me did not survive, and some of them had their homes stolen, too. So we came to the conclusion that either someone in that hospital is tipping people off, someone who might work in the accounting office. It could be a nurse. It could be someone who hacks in or taps into the database. It could be someone working at a health insurance company. But there's a very pernicious -- it's a 89 5/21/08 - LAW & GOV'T - BILL 080424 very vile targeting of people. And I think as Judge Jones testified, the commonality is people generally are very sick, they are very poor and they are very old. And even if it was the one case in ten or the one case in five or the one case in where the fraud is 9 detected, they lack the means and the 10 knowledge to identify it, to pursue it 11 and to remediate it. 12 The first thing our task force 13 is going to recommend is that there be a 14 one-stop point for a person who is a 15 victim here. You're going to have dozens 16 of people testify. Again, spokes in the 17 wheel. Where do you go when you find out 18 your house is stolen? Should you go see 19 Lance Haver? Should you knock on Judge 20 Darnell Jones? Do you go to Councilman Greenlee because you read in the paper he's interested or Ms. Miller's staff has been working on it? Where do you go? Where's the first stop? And how many stops do we impose on the citizen who is 90 5/21/08 - LAW & GOV'T - BILL 080424 very sick, very old and very poor? I was an exception and I lived. They didn't count on me doing that. And I guess the first step in my recovery, while I was in a coma, I signed all the papers to transfer the deed and I appeared before the title clerk. I'm the first person to leave HUP's intensive care to go a closing and come back and get right back in a coma. The other extraordinary things that you learned here is the contempt that this industry has for you and the contempt that this industry has for the people of this City. The gentleman in my case who has defrauded the City in numerous instances, he's my brother. Now, there may have been some question that he's my brother. He's a different color. But I've always been a proponent of racial diversity. And the more amazing thing is in one of his incarnations, my brother was born six weeks and two days after I was born, and 91 5/21/08 - LAW & GOV'T - BILL 080424 on Mother's Day I think we should commend my mother for only needing seven weeks to have another child, although he could have been lying or he could have merely been seven months and three weeks premature. So you can take your pick. But it reflects a contempt. When there was a master indictment in my case -- and Ms. Gordon's office has been helpful. Detective Brown has been exceptionally responsive. Ms. Gordon will call you on a Sunday night. My brother, when the judge adjourned and we were out in the hallway, the gentleman in my instance, he has been exempted from the real estate transfer tax in my instance, because he's my brother, even though he's only six -- I'm only six weeks older than him. He's also -- I met the other victims. He's also the brother -- he's African-American, but he's also the brother of Tomas Enrico Massaro. He is the brother of a Russian Orthodox Jew. 92 5/21/08 - LAW & GOV'T - BILL 080424 He is the brother of a Cambodian refugee, an African-American woman from the South and a Jamaican national. So he should either be honored by the International Habitat for Humanity by promoting housing on four different continents simultaneously or maybe he should be in jail by this point. But the fact is -- I mean, I can say it in a humorous way, but that's the contempt that they have, because nothing happens. Nothing happens. The day Ms. Porter wrote a story in the Daily News -- and some people laugh.

Housing chief has house stolen -- this gentleman appeared in Councilwoman Miller's office. His picture was in the paper. I happened to call her office at 9:15 to see -- because she was mentioned in the story, and when I answered, they said, He's here. Now, Councilwoman Miller's staff has known me for 28 years. They know I wasn't him, and they're looking at 93 5/21/08 - LAW & GOV'T - BILL 080424 the paper and he walks in. They asked him his name and he said he's Tommy Massaro and he was looking for public assistance to help develop the property as well. And you can laugh if you want, but it shows the contempt that they have, and there's no fear that they will be held accountable. And that's outrageous, because they know now if you repair this spoke in the wheel, Councilman, they're going to hit the other weak links. So, again, I would say the one thing that my task force -- we haven't completed our work. Mercy Healthcare is trying to help us, because they see it as something where a lot of elderly people are systematically, in a very vile way, the victims here, but until we have a comprehensive effort, if we could take my task force and get the City to be of assistance, until we identify all the spokes in the wheel, until we have a remediation plan to deter it, to enforce it and to remediate it, it will continue. 94 5/21/08 - LAW & GOV'T - BILL 080424 That's what I'm willing to share today.

Thank you, Mr. Massaro. And let me -- I certainly agree with you, and we are under no illusion that this is a be-all and end-all today. Again, as I stated earlier, I'm hoping if the Committee sees fit, we can move the bill today, but the resolution, we're certainly going to keep the record open, we're going to continue it and we're going to have more discussion with this, and you'll certainly be a valuable player in this. We thank you for all your efforts way back when you and I had more hair, back when you were the Housing Director and through this time now. So thank you. Before we go to the other witnesses, I want to recognize that Councilwoman Miller is here. As I said earlier, she's been involved in this for a really long time and it's her resolution, and she's been working hard on trying to deal with the various 95 5/21/08 - LAW & GOV'T - BILL 080424 problems, the various spokes that Mr. Massaro alludes to. And if the Committee sees fit, I'd like to recognize Councilwoman Miller for any statements she'd like to make.

Hi. Thank you. Thank you. Good morning. Good morning, Tom. We didn't know whether it was a contempt for the system or whether he had not read the paper and was just dumb enough to come into our office seeking assistance. And certainly he did not know how familiar we were and are with you. I think I may be wrong, but I think they actually did come back again. I mean, the gentleman that came into the office was supposed to be the brother of -- he was your brother, too, but he was also the brother of the other Tom Massaro, and I think he's someone that was taken advantage of, because he looked like he had a problem with some type of substance abuse. I agree with you that someone 96 5/21/08 - LAW & GOV'T - BILL 080424 in the healthcare or insurance industry must be a part of this, because so many of the people are people that are sick and shut in. And I think this is an important issue that we have to figure out how to use or figure out ways to connect, as you describe, all the spokes so it doesn't happen. People work hard for their homes and properties, and one should not just be able to walk in and in a few months become the owner of something that they acquired illegally. So I want to thank you for coming today. And as Councilman Greenlee said, this is a discussion that's going to have to continue, because we're going to have to figure out how we can correct this problem.

And Council Lady, I also want to remind you that this gentleman threatened me in court two months ago when the judge -- right in the middle of the session, I had to call Ms. Gordon last week. He called and 97 5/21/08 - LAW & GOV'T - BILL 080424 threatened me again, and he's not catching on that not everyone is going to roll over on this. They'll play the game of continuances, hoping that all of us from five continents who he's pilfered our homes are going to stop coming. We're not going to stop coming, because we understand that he's kind of like a textbook example of an octopus and he's done dozens of properties, and each of these tentacles has been cut off, the corrupt notaries, the corrupt title people, whose ever targeting the victims in intensive care. Also people -- there's some that were transferred within one week of the death. So we think people are looking at death notices when you look at when these dates happen that people are triggering off death notices. And so, again, each tentacle of the octopus has to be cut off as well.

I agree. We just can't take one part of it. We have to look at the whole picture. 98 5/21/08 - LAW & GOV'T - BILL 080424

And Chris Drumm should be invited. He's like a Senior Vice-President for Mercy, and Chris sees it from the point of view of the number of elderly people on Medicare who are being -- so Mercy has been very helpful to us to try to help get this information and take a look at that angle as to where that information may be available where it's being polluted actually, the information is being polluted, to commit these invidious acts of theft.

Okay. All right. Thank you. Thank you, Mr. Chair.

Thank you, Councilwoman. Again, we're going to go out of the public hearing just briefly and go into a public meeting, and I recognize Councilman Green.

Yes. Thank you, Mr. Chairman. I have to leave briefly. I may be able to get back for 99 5/21/08 - LAW & GOV'T - BILL 080424 the vote, depending upon when it is, but I would like to be on record for voting for the bill and for any amendments recommended by the Chair. Thank you.

Thank you, Councilman. Thank you very much. That will be for the record that Councilman Green is voting for the bill and amendments when the public meeting occurs. We're back into the public hearing. Sorry to hold you folks. Mr. Arrivello, I got you next. If you'd like to state your name for the record and proceed. And Mr. Massaro, I know you have to leave, so anytime you have to --

I have a few more minutes.

Okay. But, again, thank you very much.

My name is Stephen Arrivello and my address is 1725 Fairmount Avenue. 100 5/21/08 - LAW & GOV'T - BILL 080424

The 15th Ward, I may add.

Say that again.

It's the 15th Ward, where I happen to be the ward leader. I always mention that.

That's right. So thank you for hearing me. I think I'm going to bring a little bit of a different perspective that I've heard. I heard a lot of stories and I know a lot of stories, but my perspective is as an investor. I am actively engaged in finding properties that are broken down, beat up and have taxes due, finding the owners and legally purchasing them, and I've had several situations where I've been in the process of obtaining these properties from the heirs and had them stolen, fraudulently conveyed by thieves. I can give testimony to there are a lot of holes in the system. It's exceedingly easy to steal a property in the City. All you really need is a 101 5/21/08 - LAW & GOV'T - BILL 080424 notary stamp. You need someone to sign and you need a notary stamp. And as I tried to tell people who can't believe me when I tell them I've had my property stolen, all you need to do is get it stamped and recorded and, bang, you've got a property, and now the onus is on the rightful owner to spend the money to engage the attorneys and to get the property back. Mr. Massaro has given me a whole different perspective on it, but the thieves I find are concentrating in a very active area near Temple University and other hot areas where there is investor activity. One of the gentlemen -- and the two properties that I've been involved in have had entities stealing the properties. They've had in the one case it was a CDC, a community development corp, which was behind one of the property's thefts, and another is a company that's stolen seven or eight properties that I've been able to 102 5/21/08 - LAW & GOV'T - BILL 080424 identify in the immediate area. It serves me a lot of problems, and I'm hoping that my attorney would be successful in quieting the title, but it serves a lot of problems in serving notice on the thieves and trying to get the properties back. So that's my testimony. If there are any questions, I'm happy to hear them.

I'm sorry. I was distracted for a minute.