WEST SIDERS BEING VICTIMIZED AS ATTORNEY GENERAL TRIES TO CRACK DOWN ON HOME IMPROVEMENT SCAMMERS
Ernestine Hawkins, 87-year-old victim of Mark Diamond’s home repair fraud scheme, with neighbor Patricia Marshall, who is trying to protect her from further abuse. Ms Hawkins has already paid Diamond more than $330,000 and her house is a wreck. Workmen stole her appliances, removed her radiators, and damaged her gas and electrical systems. He continues to call on her regularly and the Attorney General’s office refuses to protect her from his harassment. (Photo by Brad)
On January 27, THE GARFIELD-LAWNDALE VOICE reported the story of 87-year-old Ernestine Hawkins, who had hired a construction firm headed by Mark Diamond to make repairs on the North Lawndale home she has lived in for 61 years. Throughout the summer, workers had methodically stolen her appliances, damaged her gas and electrical lines, and even removed her radiators. A neighbor, Patricia Marshall, acted to help Ms Hawkins when she overheard workers in the senior’s backyard drinking and boasting, “This is our house now.” Marshall ran off the phony construction workers and rallied the community to help out Ms Hawkins by putting her home back together on Dr. King Day.
Neither Ms Marshall nor THE VOICE had any idea then the extent or viciousness of Mark Diamond’s fraud schemes. Following publication of the story, a woman called THE VOICE and said her 94-year-old father had almost lost his home on Grenshaw to Mark Diamond and his crew in a similar scam. She said it took $10,000 and much heartache to save her father’s house. She warned that Ms Hawkins was in for the fight of her life and said the Attorney General’s staff would be of little or no help. Officer Beverly Rodgers, the 15th district senior advocate, echoed those sentiments from her experience of investigating similar fraud cases targeting elderly Black West Siders, especially seniors living alone without close relatives or protective social networks.
The Attorney General’s staff refutes these allegations, but emphasizes that their office cannot represent individual victims. They advise such people to hire their own attorneys, but victims are often poor, confused by the process, and impaired by age and poor health. The Attorney General’s staff provides them with no advice, referrals, or protection.
For example, THE VOICE has learned that last September Attorney General Lisa Madigan filed a lawsuit against Mark Diamond and five home repair and mortgage companies for conducting schemes targeting African American senior citizens on Chicago’s West and South Sides that have stripped nearly $1.3 million in equity from the homes of at least 36 consumers, including several who lost their homes to foreclosure. Ms Hawkins herself has paid Diamond nearly $340,000 and her home is a shambles after being looted by workmen. Still, Diamond is calling on Ms Hawkins, who is said to be scared and intimidated, but no one but Patricia Marshall is around to protect her. As Madigan’s suit wanders through the courts, Diamond and his accomplices continue to prey on West Side seniors and the Attorney General’s staff says they are powerless to stop his looting spree.
In October 2008, Natasha Korecki of The Sun-Times reported on Tommie and Louise Harris, who lived in their Kenwood home for 44 years, behind the Obamas. They won a federal court settlement against Mark Diamond who they say talked them into taking on a mortgage that rose from $142,000 to $500,000 in less than a year.
They sought to renovate their home – including their coach house – which they have rented to Secret Service as a base of operations for Obama’s security team.
In 2003, the Attorney General’s office and Federal Trade Commission fined Diamond’s company and restricted his work as a broker, but Diamond is ignoring these orders and the Attorney General’s staff appears powerless to enforce them.
Raymond Gye, a housing specialist on the staff of Congressman Danny K. Davis, has been contacted by victims of Mark Diamond’s fraud schemes and is gathering facts on their situations, while attempting to obtain protection for them. He, too, is frustrated by the lack of aid provided by the Attorney General’s staff for people without knowledge of or access to protections of the legal system. He is attempting to create a community-based support system for vulnerable seniors and is recommending that Congressman Davis recruit a corps of experienced attorneys to represent victimized seniors on a pro bono basis.
Madigan’s complaint alleges that Mark Diamond owns or works with multiple financing and home repair companies in a coordinated scheme to defraud homeowners and strip equity from their homes. Based on their role in this fraud scheme with Diamond, the Attorney General is also suing the three home repair and remodeling companies – United Construction of American, Inc., United Residential Services and Real Estate, Inc., and Skyway Builders #1, Inc. – and two finance companies – OSI Financial Services, Inc., and Harbor Financial Group, Ltd. Diamond is president of United Residential Services and OSI Financial Services, and he works as an agent for the other companies named in Madigan’s lawsuit, according to the Attorney General.
It appears that Diamond may be recruiting churches in Black communities to refer vulnerable seniors who, with the pastors’ recommendation, agree to sign up for the fraudulent schemes.
Raymond Gye says he has heard of 25 victims of these schemes and the Attorney General’s office refers to 36 in her lawsuit, but there are probably many more in Chicago’s West Side neighborhoods, with Diamond recruiting more every day. We have reports Diamond has several African American women working for him to gain the trust of potential victims and soften them up for his attack.
Madigan alleges that Diamond targets elderly and African American residents, offering to refinance their mortgages with lower interest rates or lower monthly payments. To entice consumers who say they do not need to refinance, Diamond allegedly persuades the homeowners that refinancing will make it possible to use their home equity to make repairs, such as replacing aging roofs, or to add upgrades to the house, such as new kitchens and bathrooms. Diamond baits consumers with low interest rates and lower monthly payments, but later sticks them with higher interest rates and larger monthly payments that they cannot afford. Without the knowledge of the homeowners, Diamond also allegedly inflates their income and assets on loan applications, which also contributes to their inability to afford the loans.
Madigan’s lawsuit further alleges that Diamond employs deceptive, high-pressure tactics to ensure that consumers do not object to the altered loan terms. For example, Diamond allegedly fails to tell some consumers about the closing dates for their loans, instead forging the consumers’ signatures on the closing documents. When consumers do appear for closings, Diamond allegedly discourages them from bringing their own attorney. If consumers question the loan terms, Diamond allegedly offers to refinance consumers’ loans one year later, but then usually fails to do so, unless the consumer still has equity in the home a year later.
After the closings, Diamond allegedly convinces consumers to endorse over their cashout checks to him to pay for home repairs. According to Madigan’s complaint, however, Diamond’s repair companies often fail to begin construction. When they do start construction, Diamond’s repair companies often perform substandard work or do not complete the project, leaving homeowners with outstanding loan balances for unfinished work and owing more on their homes than ever before.
The Attorney General is seeking to permanently enjoin Diamond and all companies affiliated with him from operating in Illinois and to revoke any licenses that he or the companies hold. In addition, Madigan’s suit asks the courts to rescind all consumers’ contracts and award restitution to consumers.
Persons who are being victimized by Mark Diamond and his accomplices are urged to immediately call lawyers in the Attorney General’s office handling the case – Michelle Garcia at 312/814-4982 or Junko Minami at 312/814-7130. They should also call Raymond Gye in Congressman Davis’ office at 773/533-7520. Victims should also immediately seek a private attorney to represent them and protect their interests, if possible.
Ms Hawkins’ handsome North Lawndale graystone is typical of the homes owned by West Side seniors Mark Diamond and his agents target for their fraud schemes, according to the Attorney General’s lawsuit. (Photo by Brad)
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