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TAMPA — A Tampa paralegal will spend 15 months in federal prison for conspiring to commit bankruptcy fraud while trying to deceive mortgage companies and homeowners with properties in foreclosure.
Eric Liebman, 34, will serve three years of probation when released and must repay $167,478.96 in addition to his time in prison, according to a statement from the U.S. Attorney's office. He was sentenced Jan. 27 by U.S. District Judge James Moody.
Liebman, who pleaded guilty Sept. 24, 2019, had faced five years in prison and a $250,000 fine. His sentence was reduced after he “cooperated with the government in a long-running bankruptcy fraud investigation” and provided information on his co-conspirator, attorney James Lee Clark, federal prosecutors say in court papers.
“In particular, the defendant’s cooperation significantly strengthened the government’s case against co-conspirator Clark” who pleaded guilty in November to one count of conspiracy to commit bankruptcy fraud and one count of wire fraud.
In addition to the mortgage fraud, Liebman admits diverting client funds for his personal use.
Clark will be sentenced March 17. He faces 25 years in prison on the two counts and $500,000 in fines.
According to court papers, Liebman was working for Clark’s firm, Clark Law Group, when the scheme began.
Liebman and Clark would approach homeowners facing foreclosure, some his own clients, claiming they would negotiate with creditors on their behalf in exchange for transferring the homes via quitclaim or warranty to Florida Recovery Property Solutions. Florida Recovery was a company controlled by Liebman. (A quitclaim is a formal renunciation of a legal claim against another person.)
After getting the homes transferred, the men would convince these homeowners to either sign leases or put the house up for sale.
As part of their pitch, the men would tell the homeowners they would negotiate with the mortgage holders to save the home or renegotiate the terms of the mortgage, according to Clark’s plea agreement.
“In contrast to these representations and promises, Clark generally did not make any effort to negotiate…In fact, he often abandoned his representation of the distressed homeowners," prosecutors say.
Instead, to make sure rent kept coming in or to profit from a sale, the men would file fraudulent bankruptcy petitions in the name of homeowners to stop the mortgage holders from pursuing the foreclosure and eventual sale of the property.
The idea was that by filing for bankruptcy the automatic stay provision in bankruptcy law would stop the banks from foreclosing on the properties, at least for a short time.
The men never intended to pursue the bankruptcies, which eventually were dismissed.
This, according to Clark’s plea, gave the men time “to collect ill-gotten rental income and/or legal fees associated with the preparation and filing of the petitions.”
The scheme ran from January 2010 to February 2017.
According to The Florida Bar, Clark’s license was permanently revoked Feb. 16, 2017.
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