Elderly, News

Blacks are the ones most victimized by consumer fraud

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Frederick H. Lowe

Dorothy Pruitt, a 65-year-old African-American woman, paid $85,118.03 to Mark Steven Diamond, a Chicago area home repairman, well known to federal, state officials and some consumers for his shoddy or non-existent work, to tear down and build a new back porch.

African Americans are the largest victims of money-losing scams.
African Americans are the biggest victims of money-losing scams.

Diamond deposited Pruitt’s money into one of his companies’ bank accounts. And for her high payment, Pruitt got an unfinished two-story porch without steps that she would have to jump several feet to reach the ground below.

“Mark Diamond did not complete building Ms Pruitt’s rear porch and did not refund Ms. Pruitt any money,” according to court documents. “Mark Diamond tore down the existing porch, but did not replace the second floor. The unit opens onto thin air, creating a hazard if there were a fire and someone needed to exit the second floor unit.”

Pruitt was one of four black senior citizens who testified against Diamond in court. Their testimony and Diamond’s lack of a defense persuaded a Cook County, Ill., Circuit Court Judge David B. Atkins to issue in June a preliminary injunction against Diamond who has bilked elderly African Americans out of hundreds of thousands of dollars through a reverse mortgage schemes. The Illinois Attorney General’s office got the preliminary injunction. Agency lawyers will argue for permanent injunction on January 21 before Judge Atkins.

Judge Atkins ruled that Diamond, also known a Mark Steven Diamond, violated Section 2 of the Illinois Consumer Fraud Deceptive Practices Act because he failed to do any of the agreed on repairs and refused to return any money paid to him.

Blacks are biggest fraud victims

Diamond’s rip off of African American senior citizens supports the Federal Trade Commission’s research that blacks are the nation’s biggest victims of fraudulent transactions compared to Hispanics and whites.

“Consumer Fraud in the United States, 2011:  The Third FTC Survey,” reported that 17.3% of blacks said they were victims of fraudulent transactions, compared to 13.4% of Hispanics, 9.0% of Non-Hispanic whites and 6.2% of Asians. The report was published in April 2013. The survey focused on fraudulent transactions that generated the most complaints. Fraudulent transactions cost unsuspecting consumers nearly $2 billion annually, according to the FTC which promotes consumer protection.

The most frequently reported schemes, included weight-loss products, prize promotions, being billed for a buyers’ club membership that one had not agreed to purchase, being billed for Internet services that one had not agreed to purchase, and fraudulent work-at-home programs.

Someone becomes a victim of a fraudulent transaction when he or she is deceived and doesn’t get what he or she paid for, such as what happened to Diamond’s victims.

In June, a group of panelists from the FTC Midwest Region, FTC Division of Consumer and Business Education, Better Business Bureau of Chicago and Northern Illinois, Chicago Department of Business Affairs and Consumer Protection, Illinois Attorney General’s Office discussed fraud and scams during a conference at Chicago’s Columbia College.

The discussion was organized by the FTC, Public Narrative at Columbia College and New America Media, which is based in San Francisco.

The meeting was part of a five-city tour to educate the ethnic media about different kinds fraud so they can write about it for their readers and provide them leads in finding help, said Sandy Close, executive director of New America Media and the event’s host. The other cities were Los Angeles, Atlanta, Cleveland and Seattle.

Jennifer Leach, assistant director of the FTC’s Division of Consumer and Business Education, told the audience comprised of consumer advocates, lawyers, reporters and journalists and journalism students that 2.6 million complaints were filed with FTC last year. That figure, however, includes fraud, identity theft and other types of complaints.

Taking more money with a pencil than a gun

Diamond told the homeowners he would make needed repairs to their homes if they agreed to let him apply for reverse mortgages using their homes as collateral, according to court documents.

When the reverse mortgages were approved, Diamond, who either is an agent or president of several home repair companies deposited the money into his businesses’ bank accounts. He never did any of the promised repairs, according to court documents.

His companies operate under the names: United Construction of America Inc., Skyway Builder #1, Inc. and Harbor Financial Group Ltd., United Residential Services & Real Estate Inc. and Osi Financial Services, according to court documents.

Diamond specifically entered into contracts with Pruitt, Dorothy Hillman,79, Clyde Ross,92, Frankie Jenkins,55, and Levada Johnson,79. All testified against Diamond who took the Fifth Amendment against self incrimination. He claimed witnesses would testify on his behalf but they never showed up, according to court documents.

With a sharp pencil not a gun, Diamond took $70,000 from Hillman, $83,099.04 from Johnson and $38,500 from Ross. Jenkins testified that Diamond had him sign a blank home repair contract to indicate no home repair was being done as part of Jenkins’ refinancing. He later learned, however, the blank home repair contract was filled in, according to court documents. No amount of money was specified.

“Mark Diamond initiates and completes the paperwork for the consumers to get reverse mortgages or refinance their homes, ” according to court documents. Mark Diamond deposits checks, issued by the consumers’ banks after refinancing of their home, into an account controlled by him. Mark Diamond either does not begin or does not complete the promised home repair and fails to provide consumers with a refund.”

African Americans also become victims of fraud due to their own ignorance. In the case involving Mark Diamond, the consumers were elderly, unsophisticated financially and dealt exclusively with defendant Mark Diamond.

“There is no evidence that any of the four  consumers who had reverse mortgages ever received housing counseling,” according to court documents.

Diamond also eliminates any suspicion the black elderly may have about him by reportedly partnering white men with black women, a team trusted in the black community.

One way to file a complaint with the Illinois Attorney General’s office is to go to the department’s website and write in great detail about how he or she was victimized by fraud. For someone not comfortable or adept at writing this can be a daunting challenge.  Several groups that speak for the elderly said senior citizens are often confused by the process.

The AG’s office offers alternative ways of filing a complaint.

The Illinois AG’s office operates a toll-free hot line that enables victims to file a complaint. The number is 1-800-386-5438. The AG also operates local and regional  offices that victims can visit to file a complaint.

 

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