A method citizens can use to attack crooked government officials who pass unconstitutional laws???? Probably

http://www.azcentral.com/community/ahwatukee/articles/0222lienfraud0222.html

Questionable liens hit Arizonans Convicted debtor faces Calif. charges

Robert Anglen The Arizona Republic Feb. 22, 2006 12:00 AM

A financial setup orchestrated by a convicted criminal has left more than a thousand homeowners in Arizona and California facing illegitimate liens on their homes.

The liens are being used to force people to pay thousands of dollars to a California collection agency. In order to get the liens lifted, homeowners are told by the agency that they must pay credit-card debts that, in many cases, have already been paid, written off in bankruptcies or aren't actually owed.

An Arizona Republic investigation found that Pacific States Credit Co. has filed more than 600 such liens in Maricopa, Pima and Pinal counties, as well as hundreds more in several counties in southern and northern California over the past two years.

The owner of Pacific States, Jeff McCoon, has a criminal record for defrauding businesses in Colorado, where he is wanted for arrest, accused of violating the terms of his probation. He also is awaiting trial in California on 148 felony counts of attempted extortion, forgery and filing false documents over liens he filed against homeowners in Orange County.

But authorities in Arizona were unaware that McCoon has been operating here since 2004, filing liens, threatening people with lawsuits, demanding payments for questionable debts and, in at least one case, forcing someone to sign over the deed to his home.

Steve Wilson, spokesman for the Arizona Attorney General's Office, said the allegations raise serious concerns.

"If they are true, we want to look into the case," he said.

McCoon, who lives in Oakhurst, Calif., a small farming community near Modesto, did not respond to repeated interview requests at his business. The phone number for Pacific States is answered by a message for another McCoon business, a corporation registered in the Bahamas as Sierra Consumer Acceptance.

John Brewington of Phoenix, who filed a complaint about McCoon with the attorney general this month, said authorities need to act fast.

"I think anyone who has ever had a debt is at risk from this guy," said Brewington, whose friend was hit with a lien. "In fact, anybody in the community is at risk. . . . I would strongly suggest that every person check their credit and check their property records."

Liens, which can ruin credit and prevent owners from selling or refinancing, cloud title to property. Someone trying to sell or refinance a house is often required to pay off a lien before the transaction can be completed. Liens are traditionally filed in cases in which real estate was used as collateral but can also be filed against homeowners for failure to pay income taxes and by contractors who are owed money for work on a home.

McCoon, however, has been filing liens based on credit-card debt, records show, even though legal and financial experts say typical credit-card debt is not secured by real estate. County records, court documents and letters from Pacific States show that McCoon has filed liens and then demanded payment for credit-card debt, along with payments for penalties and interest.

Court records show that liens sometimes were filed against people who never owed debt or against people who had discharged the debt years earlier in Bankruptcy Court.

Homeowner's surprise

Phoenix homeowner Kim DeGeorge said she didn't learn that Pacific States had filed a lien against her home until she tried to sell it last month.

"We had no idea. We didn't know until the first contract on our home was about to be signed," she said.

The lien was based on a Bank of America Visa card, which had been written off when the DeGeorges filed for bankruptcy. The lien stalled the sale for a couple of weeks.

"We called and called and called," DeGeorge said. "Finally, I left a message saying I was getting a lawyer."

A few days later, the lien was terminated.

"We didn't know what we were going to do. My husband wanted to pay it off and try to get it back later, just so we could sell the house," DeGeorge said.

Court records in Orange County, Calif., show that McCoon sent demand letters to escrow officers, offering to release the liens upon payment via wire transfer into his bank account.

He also sent homeowners documents titled "summons and complaint," along with copies of the liens, giving some the impression that they were being sued. But records showed the "summons" was never filed with the court.

"He doesn't give people an opportunity to prove the debts are valid. He files the liens as an opening salvo," said Leslie Young, Orange County deputy district attorney. "Eight of our victims never owed anybody any money in their lives."

Young has charged McCoon with 148 felony counts stemming from liens he filed against 144 homeowners in Orange County from 2003 to 2005.

Investigating McCoon

McCoon, who pleaded not guilty in Orange County last year, is free on $150,000 bond. But this is not his first run-in with the law.

On Feb. 10, a warrant was issued for McCoon's arrest in Arapahoe County, Colo., stemming from a 1996 conviction that earned him 14 years' probation. The warrant was issued after McCoon stopped making restitution to a series of businesses that authorities say he bilked out of $475,000.

In the Orange County case, eight homeowners paid McCoon a total of $75,025 to make liens go away, according to an affidavit to search McCoon's home and business.

Young said some of the liens were filed against parents whose children racked up credit-card debt. Others were cases of mistaken identity.

In one case, a disabled senior citizen couldn't sell her house because of the lien. Sandra Kellerman told prosecutors she didn't know the lien existed until she attempted to sell her home and retire to Florida. She said her real estate agent and the escrow officer sent numerous messages to Pacific States asking about the lien.

When those calls went unanswered, Kellerman said she was forced to put $50,000 in an escrow account to act as collateral against the lien. The money is still in escrow, and Kellerman's retirement plans have been put on hold.

Young said her investigation found that McCoon filed hundreds of liens in four other California counties.

Young said McCoon has indicated that some liens may have been filed by mistake because he collects both unsecured and secured debts and treats all of them the same.

Court records and interviews indicate he buys credit-card debt from a company called Unifund in Cincinnati.

Unifund buys bundles of debts at auction from banks and sells them to outside collection agencies. It pays pennies on the dollar for a chance to collect money from debtors that banks have written off.

Unifund Vice President Jeff Schaffer said virtually all the debt it buys is unsecured, meaning it has no connection to real estate.

Even if the credit-card debt was secured, it would apply only to items purchased with the card and not real estate, according to legal and financial experts. It would not result in a property lien.

Owner loses home

In Arizona and California, McCoon filed the liens through county recorders' offices, which have no authority to determine if liens are legitimate.

"If it meets the proper format, we record it," said Barbara Frerichs, a manager with the Maricopa County Recorder's Office. "Unfortunately, the laws don't even require the signature of the debtor."

She said her office was not aware of the liens filed by McCoon. But after reviewing them, Frerichs said her office will ask for an investigation.

"I'll definitely turn this over to our county attorney. We'll also turn it over to the Attorney General's Office," she said.

But any action will likely be too late to help Joe Peck.

"(McCoon) told me, if I didn't pay, he was going to take my house," the 31-year-old Peck said. "I was naive and scared. . . . I believed what he told me."

Peck, who owned a modest home in Chandler, said McCoon contacted him in 2004 over a Providian Visa card that he had stopped paying in 2001. Although the original debt was for $2,600, McCoon demanded $7,000 in penalties and interest.

"I begged him not to take my house. I told him, 'My daughter was born in this house,' " Peck said, choking back tears. "He offered to put me on a payment plan."

To qualify for McCoon's payment plan, Peck said he had to sign documents McCoon provided him, one of which was a deed to his house.

A year later, Peck filed bankruptcy and stopped paying. That's when he said Pacific States initiated foreclosure.

"(McCoon) said, 'That paper you signed says you can't file bankruptcy, and you still owe me,' " Peck said. "He said I signed away the rights to my house and he was going to take it."

Peck said his bankruptcy included the Providian Visa credit card, which was not secured by real estate. But instead of fighting McCoon, Peck said he quickly deeded his house to a real estate agent, who agreed to assume the mortgage and pay off Pacific States.

"(McCoon) got $7,000, and I lost my house," said Peck, who lives in an Ahwatukee apartment with his wife and daughter.

"I'm just an average guy. I didn't know any better," Peck said. "He scared me into thinking I was going to lose everything. He did a good job of it, too."


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