Hamilton man found guilty in nationwide foreclosure scam

Federal authorities said the defendants preyed on homeowners who had defaulted on their mortgages and convinced the victims to pay to take part in fraudulent programs on the promise it would save their homes.

The jury convicted Buckner and Sealy of conspiracy to commit mail and wire fraud as well as conspiracy to commit bankruptcy fraud. The court has not yet set a sentencing date, but conspiracy to commit mail and wire fraud are punishable by up to 20 years in prison. Conspiracy to commit bankruptcy fraud carries a potential maximum penalty of up to five years in prison.

Buckner, who in 2019 unsuccessfully attempted to sue a Butler County judge for “criminal treason,” and Sealy were two of four defendants who began trial on Nov. 14 in federal court in Cincinnati. The other two trial defendants ― Joel Harvey, 40, of Cincinnati, and Garrett Stevenson, 45, of Cincinnati ― pleaded guilty during the trial.

Buckner, described as a “vexatious” litigant by a federal judge, had sued Butler County Common Pleas Court Judge Noah Powers in early 2019, claiming some unusual allegations, including criminal treason. He was seeking $2 million. By the end of February 2019, Buckner’s case was not only dismissed, but he was fined $500 “based upon his contumacious (obstinately disobedient) conduct in filing this patently frivolous lawsuit.”

Buckner and Sealy’s verdicts were announced Thursday following the trial heard by Senior U.S. District Judge Michael R. Barrett. There are additional defendants in this case. Buckner, Sealy, Harvey, and Stevenson are four of 13 defendants.

According to court documents and trial testimony, from 2013 through 2018, the defendants took advantage of homeowners’ desperation to save their homes and used money from homeowner victims to personally enrich themselves.

“The defendants took advantage of folks’ financial despair and emotional vulnerabilities to fill their own pockets,” said U.S. Attorney Kenneth Parker. “It was a priority for our office and our law enforcement partners to address this nationwide foreclosure scheme.”

Co-conspirators used multiple companies to engage in a multi-level marketing scheme. The companies include:

The defendants promised affiliates a commission by recruiting distressed homeowners to the above-named companies. Ways to recruit affiliates included conference calls and direct mailings. Affiliates were encouraged to be aggressive in recruiting homeowners. Affiliates used online databases and court records to identify vulnerable, financially distressed homeowners who had recently received notices of foreclosure.

More than 56,000 postcards were mailed by co-conspirators in the Southern District of Ohio and elsewhere promising that they could “stop foreclosure” or “stop the sheriff sale” for a fixed fee. They also used Craigslist ads, websites, email, and social media platforms to reach homeowners.

On the promise of reducing or eliminating mortgage obligations in exchange for a fee, initial recruiters would collect payments from homeowners and refer the victims to the co-conspirator companies.

Among other things, the referral programs promised:

Defendants also represented that they had “proprietary” methods or “legal tactics” to help homeowners stall or completely avoid foreclosure. But in reality, they simply persuaded homeowners to file Chapter 13 bankruptcies to delay foreclosure actions.

Defendants filed skeletal bankruptcy petitions that they called “pump fakes” or “missiles.” These petitions intentionally failed to disclose the co-conspirators as preparers, giving the appearance that the homeowners had filed the petitions on their own, or pro se. Any relief from a foreclosure delay was temporary, ending when the bankruptcy court dismissed the proceeding.

Previous reporting by Journal-News reporter Denise G. Callahan was used in this story.