Leon E. Bard Jr.
P.O. Box 74
Bowdoin, Maine 04287 July 24, 2009
To: Shaun K. Stuart, Attorney
Office of the United States Trustee
537 Congress Street
Portland, Maine 04101
Re: Suspected Bankruptcy Fraud
Leon E. Bard Jr. & Carol J. Bard, Case No. 06-20410, Filed in Portland, Maine
Dear Ms. Stuart,
I recently became aware of a US District Court ruling in Massachusetts, whereby the financial institutions and law firms involved were sanctioned for filing fraudulent or misrepresentative claims in a bankruptcy case. I believe that the same may be true for the bankruptcy case that my wife and I filed in 2006. I learned in late 2007, about the importance of knowing who was the “holder in due course” of the original “wet ink copy” of the promissory note. Since then, I have requested, at least four times, that the creditor produce the original notes for viewing. So far they have refused to produce the originals.
In June of 2008, Anne Brubach, a former employee of BOWDOINHAM FEDERAL CREDIT UNION, told me that several times in May of 2004 prior to closing, she heard the CEO of BFCU, Dan Daggett, make the following statement: “We have to hurry up and get the house, so we can sell it.” In September 2008, I accessed online, BFCU’s finance reports that they filed with the National Credit Union Administration. From the third quarter of 2002 thru the second quarter of 2007, these reports reveal that BFCU was in fact selling mortgages into the secondary market, and with only one exception, they did not retain the servicing rights for the loans that they sold. Over this five year time period, BFCU sold millions of dollars worth of mortgages. In searching the Sagadahoc County Registry of Deeds, I have been unable to locate documents that would support this kind of ownership transfer.
Another possibility is that BFCU may have gotten paid by their insurance company. According to an insurance investigator, finance institutions are required to have insurance policies to cover delinquent loans. Once a loan becomes 90 to 120 days past due, the institution is allowed and/or required to file a claim, and the insurance company pays off the loan. I’m not sure about my mortgage loan, but my equipment loan document lists a Group Policy Number, this number can only apply to their insurance as I did not purchase any coverage for this loan. This may explain why in the summer of 2005, BFCU started refusing my loan payments. Within days of successfully pushing me past the threshold, BFCU filed suit claiming that I was not making payments.
It’s interesting to note here that BFCU’s Finance Report dated September 30, 2005, did not list either of my loans as being delinquent.
While in court on October 17, 2005, I told Brenden Smith and Robert Ireton-Hewitt, that I had an opportunity to sell one of the trailers. Mr. Smith told me to contact the credit union when I got home. I left a message on Mr. Ireton-Hewitt’s voicemail, when he returned my call a couple of hours later he stated that they could not figure out how to split the trailer from the loan. On October 24, 2005, BFCU accepted a payment of $7,800, which was more than what was required to bring the equipment loan current. About a week later I left another message for Mr. Ireton-Hewitt, suggesting that they figure out how to split the trailer from the loan before I lost the sale.
I’m told that after a finance institution sells your note, they will try to get you to recontract with them. What happened next seems to support this theory. A meeting was scheduled for 8:00 PM on November 10, 2005. (audio of meeting available) Present were Brenden Smith and Robert Ireton-Hewitt and myself. During this meeting, I was informed that the only way that I would be allowed to sell the trailer was that I had to comply with the following: refinance my house, refinance the equipment, and surrender the title to a third trailer. The interest rate on each loan would increase by one percentage point, bringing the mortgage to 9.5 % and the equipment loan to 12 %. After deducting $20,000 from the equipment loan, as a result of the sale of the trailer, another $30,000 would be transferred to the mortgage. $2,000 in closing fees would also be added to the mortgage. Mr. Smith tried to convince me that this was a good deal, because my payments would be reduced by $500/month. I neglected to tell him that I was renting the trailer that I was going to sell, for $1,500/month. Complying with their demands would mean loss of ownership of the trailer and a net loss of $1,000/month. Each time I refused to accept their “refinance offer”, BFCU would send the Sheriff up to my house and tie up my truck so as to prohibit me from working. The first time this happened, I called Dan Daggett at his house. When I told him that the Sheriff had just visited, he replied “Well, I call it leverage”.
In Brenden Smith’s affidavits filed into our bankruptcy case, he states that he attended two one week seminars with Collections Expert William Mapother. Mr. Mapother died in June of 2006. I got a chance to review his website before it was removed. Brenden Smith was listed as among those that attended a seminar in 2004 and again in 2005. Mr. Smith’s employer was listed as Recovery CUSO, LLC., a Maine company founded in April of 2005.
Gretchen L. Jones Esq., of Auburn, was the clerk/registered agent for BFCU in 2005. Included in this package, is a letter Dated: October 11, 2005. It is from the legal counsel at the NCUA, it is addressed to Gretchen L. Jones, Esq. and is in response to an inquiry she made to them. Subject is in regards to: Permissibility of CUSO’s Purchase of Nonperforming Loans for Debt Collection. The following quote was taken from the letter:
“According to your description, the CUSO will provide debt collection services to its credit union owners, using a salaried attorney from one of the owner credit unions. The CUSO will reimburse the credit union for the attorney’s work and, in turn, will seek reimbursement from the credit unions using the debt collection service. Maine law, however, prevents the member credit unions from reimbursing the CUSO for the attorney’s work on debt collection unless the CUSO owns the nonperforming loans.”
The timing of this letter is important to note, it is dated three days after I was served a summons to court. Although this letter does not refer to the credit unions by name, it does state that they plan to use “a salaried attorney from one of the owner credit unions”. To my knowledge, BFCU is the only credit union that had a full time in house salaried attorney, who was also an officer of the credit union. Isn’t it a conflict of interest for an officer of the credit union to also be their collection attorney?
On page 17, of BFCU’s September 2005 finance report, (included in this package) there is another CUSO listed: Collections CUSO LLC. A current search on the Secretary of States website yielded no results for this CUSO.
In the summer/fall of 2004, Anne Brubach, along with Dan Daggett and Kaj Johansen of BFCU, attended William Mapother’s seminar in Waterville, Maine. Several times during the seminar, Dan Daggett would get excited when Mapother would tell them things that creditors could do in the collection process. Anne Brubach told Dan Daggett that some of those things were illegal in Maine and that she was not going to jail for him. Several months later, on February 17, 2005, knowing that she would not go along with his plans, Dan Daggett fired Anne Brubach, claiming that she couldn’t do her job. The previous month she had gotten the employee of the month award. Anne had been the one that trained Dan Daggett on the teller line, when he was hired at the credit union. This was well planned, as Robert Ireton-Hewitt had already been hired, and took Anne’s place a couple of days later, this is when my problems with BFCU started. Anne Brubach was not aware that BFCU had been selling the mortgages into the secondary market until I showed her the finance reports in September of 2008. Since her job was collections, it now makes sense that Dan Daggett would keep this information from her. Anne would have had a problem collecting payments on loans that BFCU no longer owned. In November of 2006, Robert Ireton-Hewitt was fired from BFCU. A little over a year ago, I was told that the reason that he was fired had to do with my case. He did act strange at the creditors meeting on October 20, 2006.
In the fall of 2004, Dan Daggett implied to me that he had taken a seminar on providing benefits to members. As I found out a year later, the seminar had nothing to do with providing benefits to members, it was the Mapother seminar on aggressive collection techniques. In December of 2004, Dan Daggett talked my wife and I into signing a second lien on our property, it connected the equipment loan to our real estate. This document was totally fabricated and was simply titled “Mortgage”. A casual observer would not know that this was referring to my equipment loan. This document was signed on December 14, 2004, but for some strange reason it was not recorded in the Sagadahoc County Registry of Deeds until March 31, 2005. Although BFCU regularly recorded documents during this three and a half month period. In exchange for signing this “Mortgage”, Dan Daggett loaned us additional money on the equipment loan, which was used to clean up a few business bills and gave us skip payments on both loans. Within this second mortgage is a statement that says: “Mortgager acknowledges and warrants that the value of the property herein exceeds the balance owed on all encumbrances against the property and there exists equity in the property for the benefit of mortgagee.” The sum of both liens against the real estate exceeded the value of the real estate by $75,000. Did Dan Daggett give us skip payments and delay the recording of the second lien, in order to give himself plenty of time to sell the first mortgage? Did he then sell out this second lien as a mortgage, even though it was my equipment loan?
It appears that BFCU was having financial problems, and eventually merged with DOWN EAST CREDIT UNION in the end of July of 2007. In April of 2008, DECU with the assistance of the Sagadahoc County Sheriff’s Department successfully repossessed my truck and trailers. I had over $200,000 invested. On June 11, 2008 I filed a suit against Dan Daggett, Brenden Smith and Robert Ireton-Hewitt in US District Court in Portland. The Sagadahoc County Sheriff’s Department refused to acknowledge the federal law suit along with other documents filed in both federal and state courts. On June 25, 2008, the Sheriff’s Department seized our home of 32 years. When we stopped to take care of our animals, my wife and I were illegally arrested for criminal trespassing on our own property and we each spent time in jail. Last week we had to scrape together $640 to pay the fine in order to avoid being found in contempt of court.
On October 24, 2008, I spoke with David Tozier, CEO of DECU, I asked for a meeting with him to discuss my case, and view my file. He said my file was quite large, I replied that all I needed to see was the original notes. He said he could bring certified copies, I replied that copies were not acceptable and that I would have to see the originals, he replied, OK. I offered to meet him halfway, but he said that he would meet me in Bowdoinham at 11:00 AM on Wednesday the 29th, a three hour drive from Baileyville. At approximately 2:00 PM on Tuesday the 28th, he called and cancelled the meeting. A review of DECU’s past finance reports indicates that before the merger, they were not selling the mortgages into the secondary market. This may explain why Mr. Tozier felt it wouldn’t be a problem to produce the originals, since they were kept in the Baileyville office. But as he was preparing for the meeting on Wednesday, he may have realized that my loan originated with BFCU, and discovered that they did not possess the original loan documents.
On December 3rd, 2008, I had an opportunity to speak with former Sheriff Mark Westrum, I stated to him that if the credit union didn’t have the original notes for both my truck loan and the house loan, that everything that they had done to me was null and void. His chin dropped and his head bobbed, he understood what I meant. I asked him if he would testify for us at trial in January, he replied “I suppose that I could be subpoenaed”. So I sent him a subpoena, when he received it he realized that he would be implicating himself and the Sheriff’s Department. He requested that the court quash the subpoena, which they immediately obliged. Coincidently, on the same day, the Asst. DA sent an offer to settle the trespassing charges, first offer in six months. I subpoenaed David Tozier, CEO of DECU and requested that he bring the original loan notes, and I also subpoenaed Dan Daggett, former CEO of BFCU. DECU’s attorney sent a letter to the court requesting that the subpoenas be quashed, again the court obliged.
On March 25, 2009, I sent a RESPA letter to DECU via Registered Mail. About a week later I received a response from their attorney Mark Frenette, saying that they would not be answering my letter. The RESPA letter required them to identify the holder in due course of the notes for my truck loan and house loan.
I sent copies of the RESPA letter to HUD, DOJ, FBI and FTC in Wash. DC. Last week I got a response from the FBI, Financial Crimes Section, the package that I sent to them would be forwarded to the FBI office in Augusta, Maine. (letter included)
I have prepared an identical package as the one that I’m sending to you. I will send it to the Augusta office of the FBI, since they have jurisdiction over Sagadahoc County.
I don’t know if after reading this, you will come to the same conclusion that I have or not. But deep down, I know there is something terribly wrong with the way this case has evolved. Of all the finance companies that I have associated with over the years, I have never been so viciously attacked and threatened. We had been members at this credit union for almost ten years, with never a problem that couldn’t be resolved. From October of 2005 to February of 2006, I made payments to BFCU totaling almost $20,000. I feel like a guinea pig for the Mapother technique.
Is there a way to discover who owns the notes?
Thank you for your consideration in this matter.
Leon E. Bard Jr.
P.O. Box 74
Bowdoin, Maine 04287
Joseph Field Administrative Hearing Officer at West Bath District Court-For issuing a void judgment
Sagadahoc County Sheriffs Department-For false arrest, kidnapping and violation of due process rights
HERE IS AN E-MAIL THAT I SENT TO SOMEONE WHO HAD WORKED ON WALL STREET FOR MANY YEARS, THEIR RESPONSE FOLLOWS
I've just finished reading your recent article, in regards to the Financial Crisis on Wall Street. Since the early part of last year, I've lost both my business and our family home to predatory lenders, a local credit union. It wasn't until I downloaded their finance reports from the NCUA's website, that I learned that they were selling the mortgages into the secondary market, and did not retain servicing rights. So far they have refused to produce the original notes. In addition to my home mortgage, I believe that the credit union converted my business/equipment loan to a mortgage (via a fabricated document) and may have sold it also into the secondary market. One of the points that you raised in your article is the fact that purchasers of these mortgages, skipped the actual physical recording of the mortgage at the county registry of deeds. This seems to be true in the local county registry of deeds, as I have been unable to find assignments that represent the millions of dollars worth of mortgages sold by the credit union. Both of my loans were obtained in May of 2004. In November of 2005, the credit union tried to get me to refinance both loans. Now I believe that they tried to get me to recontract with them because they had sold my notes. In addition to their finance reports, I have a witness that was an employee of the credit union at the time I obtained the loans, who overheard the CEO of the credit union make the statement that "they had to hurry up and get the house so that they could sell it". Are you aware of any means of tracking mortgages sold into the secondary market?
Thank You Leon Bard Bowdoin, Maine
HERE IS THEIR RESPONSE
Your story suggests the possibility to me that the CEO and/or officials of the credit union are receiving kickbacks to generate product for a firm doing securitizations. Credit unions are there for their members; they do not exist to churn loans as you experienced. When this happens, something untoward is going on.
I strongly suggest that you set up an appointment with your county District Attorney. If you feel he's compromised, send a detailed chronology via priority mail to your State Attorney General. Since it's likely these loans are crossing state lines, you could also call the FBI.
Once you have an easily understandable chronology with supporting documentation available, you should select a top investigative reporter at a trusted area newspaper to dig further and cover the story. If you wish to remain anonymous, you can give the information to the reporter "as background only."
Good luck to you.