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Grand Jury brings charges in alleged property scheme
By PATRICK MALONE
THE PUEBLO CHIEFTAIN
December 22, 2006

A grand jury investigation that lasted several months has resulted in charges against five people accused of racketeering by purchasing houses at inflated prices, then letting them lapse into foreclosure and pocketing the profits from the financing for the homes, estimated at $2.5 million.

Maurice Goring, 40, Judith Smith (aka Katzenberg), 22, Jeanette Waller, 29, Denise Tucci, 41, and Alvin Jack Woolford, 57, face felony charges of violating the Colorado Organized Crime Control Act. If convicted, they each face up to 24 years in prison and fines of $25,000 or more. They also could be required to reimburse the cost of investigating and prosecuting their cases.

Goring and Smith have been arrested in Arizona. Tucci and Waller were arrested in Pueblo, and Woolford was arrested in Colorado Springs. 

“White-collar crime like this is just as damaging, if not more damaging, than other types of crimes,” said District Attorney Bill Thiebaut. “It violates the whole system of checks and balances put into place to govern property and who owns it. Economic crimes such as this affect far more people than most of the crimes we prosecute.”

Thiebaut would not comment on whether the grand jury probe targeted others who were not indicted. 

The indictments allege that the defendants solicited investors to buy homes and used a variety of schemes to get returns far greater than the homes were worth. The tactics they allegedly employed included inflating appraisals of the homes, generating fraudulent second deeds of trust that were not legally recorded and garnering financing for the homes that exceeded their worth. 

The defendants also are charged with selling homes under the terms of rent-to-own contracts, and then selling the homes to others for more money than the rent-to-own contracts specified, or allowing the homes to go into foreclosure while still collecting payments from the rent-to-own tenants. 

Allegations also are contained in the indictment that the defendants notarized documents for people who were not present in the state at the time, and added information to signed, otherwise blank notarized documents without the signer's knowledge. 

Through these means, the defendants allegedly raised $2.5 million between November 2002 and this past September. 

Goring and Smith are accused of soliciting investors, procuring inflated appraisals, securing financing for the homes and keeping it, in addition to using unrecorded, second deeds of trust under the umbrella of Goring's businesses Trinity Benefits Group Inc., TBG Properties II and TBG Properties3. 

Woolford is accused of giving inflated appraisals. Goring, Smith, Waller and Tucci are accused of conducting the fraudulent real estate closings. The indictment's specific allegations are that the group participated in the enterprise through a pattern of racketeering that included theft, conspiracy, forgery, possession of forged documents and presenting forged documents for legal recording. 

Falsely inflated appraisals and other fraudulent tactics have a ripple effect of elevating property tax assessments for entire neighborhoods, Thiebaut said. In turn, neighboring homeowners could face increased insurance rates. 

Fraud is also a contributing factor in Colorado's present astronomical rate of foreclosure, according to Thiebaut, who saw firsthand how vast amounts of home foreclosures can damage a community. He was Pueblo County public trustee during the late 1970s and early 1980s, when sweeping home foreclosure numbers were driven by a local economy crippled by the struggles of CF&I Steel. 

“To lose your home because of economic reasons is devastating,” said Thiebaut. “To lose a home because someone is ripping you off is even more devastating. We're probably seeing more fraud in Pueblo today than we did during those lean economic years. I would venture to say that's a trend nationally.”

It certainly appears to be a trend throughout Colorado, according to Colorado Bureau of Investigation Agent Marc Micciche, who participated in the investigation that led to the five indictments. 

“Pueblo is not an isolated community when it comes to mortgage fraud activity,” Micciche said. “A recent CBI case prosecuted by the district attorney in Jefferson County also resulted in COCCA charges stemming from approximately 200 bad house deals and over $34 million in fraud. The analysis of this type of criminal enterprise is complex and labor-intensive, but we are basically dealing with the underlying crimes of theft, forgery and filing false instruments.” 

The grand jury indictment is the first in Pueblo since Thiebaut took office in January 2005. He formed an economic crimes unit in the district attorney's office and pledged during his campaign for the office that he would take a hard line with white-collar crime.

Thiebaut said the grand jury continues to investigate other cases, but he would not elaborate on the nature of those probes, citing confidentiality rules that govern grand juries.