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Attorney General Roy Cooper investigates squatter scam

North Carolina Attorney General Roy Cooper has obtained a court order to stop a group of six people and some trusts from filing fraudulent deeds on foreclosed homes for sale in Raleigh, Wake Forest and Apex.

The alleged scam is similar to an erroneous-deed problem that has been affecting the Charlotte area. The Mecklenburg Times was the first to report on the Charlotte-area scams, in which deeds claiming ownership to vacant and foreclosed upon homes have been filed in the name of the Moorish Science Temple of America. At least two Charlotte men have been arrested in a case stemming from Union County.

Cooper said he has obtained a temporary restraining order against Natural International Land Trust, ONCE International Land Trust, Nu Vision International Trust and the six individuals.

“Pretending that you can own a home just by filing phony paperwork filled with gibberish is an insult to honest homeowners and a fraud on the whole system,” Cooper said in a press release.

The order bars the defendants from trying to take possession of homes by filing deeds and other documents that have no legal basis. The defendants are also barred from destroying any records, and they have been ordered to turn information over to Cooper.

Cooper is seeking a permanent order against the various trusts and individuals alleged by his office to be behind them: Shawn Adrian Pendergraft, Nathaniel John Church, Don Cornelius McCullers, Malandie Terrell Winston, Montreal Lee White and Lawrence Christopher White.

A complaint, filed by Cooper’s Consumer Protection Division this week, also asks the court to make the defendants pay civil penalties. A hearing on a preliminary injunction is scheduled for 9:30 a.m. Aug. 19.

Cooper’s complaint says the defendants learned about foreclosed homes for sale and filed fraudulent paperwork with the Wake County register of deeds’ office transferring the properties to themselves. They also filed $1.2 million in common law liens on properties, according to Cooper’s office. The liens were filled with phony legal language lifted from the Internet and designed to intimidate the properties’ real owners and potential buyers into thinking that the property couldn’t be sold without paying the phony liens, Cooper’s office says.

Pendergraft has said publicly that this is his way of “working the system” and that anybody can file documents like that with the register of deeds, according to the complaint. But according to Cooper’s office, only someone with ownership interest in a property can file a deed that legally transfers ownership.

Affidavits filed with the case show that the defendants actually moved into some of the houses, which is common in such scams. Real estate agents trying to show the homes to potential buyers arrived on site to find the “for sale” signs removed and the locks changed, according to Cooper’s office.

In June, Union County police arrested two Charlotte men — Kenneth W. Lewis, 53, of 2909 Burgess Drive, No. 1,  and Asaru A. Ali, 39, of 2619 Century Oaks Lane — for allegedly filing a fraudulent deed for a $700,000 foreclosed Weddington home and then changing the locks and moving themselves in. Union County Register of Deeds Crystal Crump said she has seen 25 of the phony documents filed in her office this year.

The phony document problem is plaguing Mecklenburg County, too. David Granberry, the county’s register of deeds, said he has seen more than 200 fraudulent documents filed in his office in 2011 alone.

State Rep. Frank McGuirt and Sen. Tommy Tucker have said they would support legislation addressing the problem of fraudulent documents being filed in the registers of deeds offices. Tucker attempted to push through emergency legislation June 21, but because of the limited scope of the special session of the legislature the legislation could not be introduced. Only matters related to vetoes, redistricting and constitutional amendments can be heard during special sessions.

Until the legislation is introduced to stop the phony documents, not much can be done to stop someone from filing a fraudulent document as long as it meets the basic filing requirements of registers of deeds offices.

In the meantime, Cooper is offering this advice to homeowners: “Don’t believe anyone who claims that you can buy a house or make your mortgage disappear without paying a dime by simply filing a few documents.”

Ramsey can be reached at tara.ramsey@mecktimes.com.

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