Mark Sedmak’s trip into the strange realm of Philadelphia real estate fraud began innocently, when he decided he wanted to go bicycling over Memorial Day weekend.
Sedmak left his home in Germantown and drove to a small apartment building in Oak Lane, which he purchased 15 years ago as a real-estate investment. That’s where he kept his bicycle built for two, in the basement.
But when he got to the building — vacant for the past 16 months and in the middle of a remodeling project — Sedmak found himself locked out. “There were big padlocks on the door,” Sedmak said.
His mind raced: Had a lien been filed, triggering a sheriff’s sale? Had the place been condemned for building code violations? Had the building been seized for the $3,000 in back taxes he owed from an earlier year?
None of them made sense. But neither did the truth:
His house had been stolen from him.
Without Sedmak’s knowledge, someone had filed phony documents in City Hall, transferring ownership of the building to someone Sedmak never heard of. In fact, by the time Sedmak found out, the building had been transferred to another stranger.
The first public exposure of the house-theft scam came in May, when the Daily News reported that a 72-year-old grandmother had her house stolen. But now it’s clear that this scam is much bigger than just a few victims.
Our investigation has found at least nine additional cases in the past year — and numerous others that appear suspicious — where bogus deeds have been filed in City Hall, in attempts to steal unoccupied properties from the legal owners.
And a grand jury probe by the district attorney’s office has confirmed 25 stolen-house cases and is investigating 25 more suspicious deals, according to law-enforcement sources.
Both the Daily News investigation and the District Attorney’s probe are based on leads from a handful of people who were victimized by the scam and went to authorities, all within the past four months. The number of so-far-undiscovered cases could be much, much bigger.
The house thefts range all over the city — from Mount Airy to Northern Liberties, from North Philadelphia and Oak Lane to Southwest Philadelphia.
But most of them follow similar patterns. The basic scam is simple and cheap to pull off:
- The scam artist finds a target house — apparently vacant, but still in fair condition, in a neighborhood where houses are easy to resell.
- From public records open to anyone who visits City Hall, he gets a legal description of the property. He might also check to see if real estate taxes are overdue — another sign that the owner may have died or moved away.
- The crook obtains a blank deed from an office supply store and fills it out, using the name of the current owner, a real or fictitious buyer, and the same property description used the last time the property changed hands.
- Armed with phony identification, the thief visits a notary public and gets the forged signature of the real owner notarized on the deed transfer. State law sets no specific requirements for identification, so a crook could get by with a doctored driver’s license or as little as a supermarket check-cashing card.
- With a fee of just $37, the new deed is filed in the Recorder of Deeds office on the first floor of City Hall. The house is officially sold.
Scam victims are often ailing elderly people who’ve moved in with family or into nursing homes, such as Devota Clark, the grandmother who called attention to the scam after her Southwest Philadelphia home was stolen. Others are investors who aren’t paying close attention to their property, like Mark Sedmak .
But often, the real owners have died and their heirs live elsewhere.
Consider the case of 7117 Cresheim Road, in West Mount Airy.
From 1964 until early this year, city records show, the house was owned by Mamie L. Gross.
In fact, Gross died in 1974, leaving the home to her son, Dr. Bernard Gross, a former Rutgers University professor who now lives in Baltimore. Dr. Gross never transferred the title to his own name, but he stays at 7117 Cresheim — his boyhood home — on frequent trips to Philadelphia.
When he visited in early February, Dr. Gross couldn’t unlock the door. At first he thought the key was just sticky.
“Then I saw shavings on the ground,” he recalls. “Someone had apparently changed the lock. ”
Gross called police. Eventually, he wound up in the city Recorder of Deeds Office, where he learned that his mother — dead for more than 25 years — had signed over the property to her “granddaughter,” Ina Singelton, on Jan. 18, 2000.
She had no granddaughter named Ina Singelton.
Three days later, records show, the house was sold again, from Singelton to a person identified as Singelton’s mother-in-law, Everonne Permint. The price was listed as $7,000, but because the documents said the parties were related, no city real estate transfer tax was paid.
The case is among those being investigated by the District Attorney’s office. And Gross, irate that “there’s no oversight over this kind of process,” has hired a lawyer to help him regain legal possession of the house and recover damages for stolen items, including a grandfather clock that had been in the family for 60 years.
He wonders this: “How did my mother sign a document 25 years after her death? ”
That’s an essential key to the scam.
None of these houses could have been stolen without at least one bogus signature, somehow approved by a notary public and accepted by the city’s Recorder of Deeds.
How is it that state-licensed notaries are authenticating fake signatures of the real property owners?
Are they lax and inattentive and not scrupulously checking identification? Are they being duped by fake identification?
David Ladenson, 78, a notary for more than 50 years, was the person who authenticated the signature of Gross’ dead mother and the signatures on a dozen other suspicious transactions.
In an interview at his storefront office at 4752 N. Broad St., Ladenson said he had no recollection of any of the transactions. He no longer had any records to refer to, because they’d been confiscated by the DA’s office, along with the rubber stamp that he uses to certify documents.
But he insisted he was not involved in fraudulent transactions.
“I’m not part of any scam,” he said.
Once a notary authenticates the fake signature of the rightful property owner, the swindle is nearly complete, because the city Recorder of Deeds has no authority to investigate the validity of a document, according to Commissioner of Records Joan Decker. If a signature is notarized, it’s accepted as legitimate.
“We accept the information on its face value,” she said. “We’re not an investigating agency . . . Our objective is to establish a public record, not verify the information. ”
As long as a document meets 15 mandated criteria for recording — such as being typed and dated and including the correct property description — the deed is accepted and recorded, Decker said.
In most of the stolen-house deals, the buyers did not have title insurance, which would have protected them from bogus transfers that occurred before they bought the property.
Some companies are now offering coverage that would protect an owner from future problems — like someone trying to steal a house with a forged deed transfer.
But in a city with an aging population and thousands of vacant buildings, the system of transferring real estate has few built-in safeguards against fraud.
That’s what Mark Sedmak discovered when he found his investment property padlocked the Friday of Memorial Day weekend.
Sedmak , a former real estate agent who now works for an auction company, had begun renovating the building last year. But family obligations interrupted his remodeling and he’d visited the property less and less.
“I hadn’t been showing up much since November,” he said — making the property ripe for the taking.
When Sedmak discovered the doors were padlocked, he called police and began a feverish attempt to find out what happened.
When he called the Revenue Department to see if the city had foreclosed for unpaid taxes, he got startling news: he was no longer listed as the owner of the property.
On April 26, someone had appeared at the Recorder of Deeds office on the first floor of City Hall and turned in a new deed, transferring the Oak Lane property from Sedmak to Ramond Brown, identified as Sedmak’s son-in-law. The sale price was listed as $1 — a common practice for real-estate transfers between relatives.
The new deed was carefully typed, with Sedmak ‘s notarized signature at the bottom. Because Sedmak and Brown were purported to be relatives, the deal was exempt from transfer tax.
Sedmak’s notarized signature at the bottom of the new deed was a fake. He’d never heard of anybody named Ramond Brown. And Sedmak doesn’t have a son-in-law.
Then, Sedmak said, he discovered that Brown had immediately resold the property to someone else — a West Philadelphia real estate speculator named Leo Parks, identified as Brown’s brother-in-law.
Sedmak was so incensed that he began trying to track down Brown and Parks.
He couldn’t find Brown.
But he did locate Parks, who runs a real-estate company called Leo Parks Financial Services on Haverford Avenue at 56th Street.
After Sedmak confronted Parks about the property, Parks went to the city Recorder of Deeds office and attempted to transfer the deed back into Sedmak ‘s name, Sedmak said.
But Sedmak said he was advised instead to go the legal route and file a civil suit to “quiet title,” that is, to establish the rightful owner.
And that’s another frustrating aspect of this scam: even when a property clearly has been stolen, the real owner must pay for a civil court proceeding to regain the title.
“It’s unconscionable the city would allow this to go on and I have to pay,” Sedmak said. “Perhaps we should all get together and file a class action suit against the city. ”
Two reporters from the Daily News showed up at Parks’ office last month and he refused to discuss any aspect of his real-estate dealings.
He said he’d been advised not to talk because of the DA’s grand jury investigation. He refused to say who had given him that advice.
Parks said he is a religious man whose fate was in God’s hands.
“God has it covered,” Parks said before closing the door.
Officials with the National Notary Association, based in Southern California, said Los Angeles had a significant problem with fraudulent real estate transfers in the early 1990s and they occasionally heard of similar real estate swindles in other cities.
“If you have a lot of abandoned houses, occasionally you’ll see one or two of these things pop up,” said Charles N. Faerber, vice president of notary affairs for the organization.
But it hasn’t been noticed before in Pennsylvania, at least on this scale.
District Attorney Lynne Abraham alerted the rest of the state’s prosecutors to Philadelphia’s stolen-house scam at a conference in July. She said her office will be looking into potential safeguards to incorporate in model legislation, ranging perhaps from tightened notary standards to modified recording procedures.
“Our real goal in this is to dissuade people from doing this in the first place,” she said.
Abraham said the scam isn’t being perpetrated in smaller towns across the state, where people are more likely to know each other.
DAs Patrick Meehan in Delaware County and Bruce L. Castor Jr. in Montgomery County said they hadn’t seen any evidence of the house-theft scam moving to the suburbs.
by Jill Porter & Bob Warner, Staff Writers