Investigation uncovers apparent real estate scheme, including forged signatures of dead people
9:43 AM, Feb 4, 2013
10:18 AM, Feb 5, 2013
KANSAS CITY, Mo. - A 41 Action News investigation has uncovered a Kansas City real estate scheme revolving around forged deeds. In some cases, the supposed signatures of homeowners are people who have been dead for years.
For four months, 41 Action News followed the paper trail, tracked down relatives of the deceased, contacted previous property owners and eventually questioned the people who appeared to be stealing homes when no one else was looking.
On Monday, a spokeswoman with the FBI said the agency is aware of the findings in the 41 Action News investigation and is looking into them.
Family reacts to deed supposedly signed by dead woman
Bobby Broils was flooded with memories as he strolled through his old, familiar neighborhood.
"Looks like I can walk up to the door and Mom will come up to it," Broils said, while peering at his childhood home on the 4400 block of E 56th Street in Kansas City.
Bobby's mother, Jessie M. Broils, raised four kids in the home. She only moved out shortly before her death, living with her oldest son as she battled her second bout with breast cancer. She succumbed to the disease in March 2008.
After her death, the bank approached Bobby and his siblings about taking the home. Their mother had refinanced several years earlier to pay for upgrades like installing wood floors and hanging custom shades. The balance on the loan was more than any of the kids could afford.
"The house just went vacant after that," Bobby said. "I figured the mortgage company would take it over."
Last year, Bobby heard his mother's old home would be sold on the courthouse steps for back taxes. He and his brothers talked about making a bid. The home still had sentimental value to them.
But then they heard from neighbors that someone had moved into the home on E 56th Street and assumed the bank had found a willing buyer before the tax sale.
Bobby forgot about the sale, until he received a call from 41 Action News.
Bobby was stunned to learn somebody had signed his mother's name on a quit claim deed, more than four years after her death. The transaction had transferred ownership to a complete stranger. No money was exchanged. No questions were asked.
"It's just not right. It's something about the morals. It doesn't seem like people have those anymore," Bobby said.
The signature on the 2012 quit claim deed was a stark contrast to Jessie Broil's real signature on other real estate documents reviewed by 41 Action News.
The new owner paid a chunk of the delinquent taxes to remove the home from the auction block. It was then rented out, according to neighbors.
"That person needs to go to jail," Bobby said.
Investigation reveals other forged deeds
41 Action News found at least a dozen homes that seemed connected to the same scheme.
There were other examples of dubious signatures from people who were dead.
Melinda Caley passed away in January of 2009. Three years later, her signature appeared on a quit claim deed to her longtime home in the 700 block of E 72nd Street in Waldo. Again, it displayed almost no resemblance to Caley's signatures on earlier real estate records.
And in 2010, a quit claim deed showed Johnney and Ernestine Lee transferring their home in the 3000 block of E 59th Street. However, death records show Ernestine passed away in 2004. Johnney had been dead since 1980.
41 Action News also found forgeries of people who are still alive.
Sandra White raised six kids in her home on the 2500 block of Victor Street. A few years ago, she struggled to keep up with the mortgage payments and rising utility bills. The kids had moved out of the house, so White decided to walk away.
"I just really couldn't afford it," she said.
41 Action News showed White a quit claim deed she purportedly signed last November. She immediately said it wasn't her signature, and added she had never heard of the person to whom she supposedly transferred the property.
"Hell yeah, I'm mad," White said. "That is plain wrong. I know I walked away from the house, but you can't forge someone's name."
How is it happening?
41 Action News contacted the husband and wife legal team of William Black and June Carbone, both professors at the UMKC School of Law, to explain the apparent fraud scheme.
Carbone teaches property law and said quit claim deeds are typically used to transfer property between family members. That type of deed does not come with the warranty of a clear title, unlike a normal real estate purchase.
For that reason, banks that approve a mortgage loan would never allow a quit claim deed.
"A quit claim deed doesn't come with that warranty. It says whatever I have is yours, but I might have nothing," Carbone said.
According to Carbone, a handful of quit claim deeds to one person in a short timeframe should be a red flag.
"But no one is looking to see who's acquiring anything," she said. "There's no police force to look at deeds."
Black is a former financial regulator who has studied real estate fraud schemes as a white collar criminologist. He said the person or people involved are most likely making money by finding unsophisticated buyers willing to pay in cash, or renting the homes to tenants.
"Renters of course don't demand from the landlord, 'I want to see your deed!" Black said.
It is possible the homes are originally being targeted due to the delinquent taxes. If a home is going to be auctioned, people might be checking to see if it is vacant.
41 Action News discovered all the homes were behind on property tax payments by several years and scheduled to be sold on the courthouse steps. Two of the homes have since been removed from the auction block because the delinquent taxes have been paid.
The remainder of the properties will be slated for this summer's tax foreclosure sale unless a repayment plan is agreed upon with the Jackson County Collections Department.
Black said there are clever aspects to the scheme, including the overt transparency of filing the forged deeds with Jackson County.
"They've recognized the right kind of vulnerability and that's a key thing in a fraud," Black said. "They've picked one that has relatively low risk of detection and prosecution, which is very good as well because you don't want to go to prison."
Who is behind the scheme?
In the past year, Jackson County property records show eight homes have transferred to Willis King through quit claim deeds.
41 Action News questioned King, 71, at his home in the 4400 block of Myrtle. When asked about the properties, King appeared surprised and confused.
"This is the only home I have right here," he said.
King said he has a son named Willis Watson who owns several properties, which he believed had been acquired through tax auctions.
Is it possible that Watson was getting the quit claim deeds and filing them under his dad's name?
"This is shocking to me," King said. "I think you need to ask him about it. This would make me mad, especially if there's something illegal about it."
The most recently-acquired home was in the 6100 block of Forest Avenue and belonged to Phyllis Rippley.
Rippley said she had moved out of the home late last year because she could not afford the mortgage payments and a growing list of maintenance work. In November, she received a letter from Jackson County, indicating the home would be sold for delinquent taxes.
According to the quit claim deed, Rippley signed away her home on December 28. However, Rippley told 41 Action News she had never signed anything and claimed the signature on the deed was a blatant forgery.
"If someone wanted the house, we could have worked something out. But it's not okay to forge my name," Rippley said.
On January 25, 41 Action News found Willis Watson working inside Rippley's home on Forest Avenue.
Watson refused to answer any questions about why he was at the home and whether he had been involved with the forged deed. He even denied that his name was Willis Watson as he covered his head with his sweatshirt and drove away in a van.
41 Action News investigative reporter Ryan Kath gave Watson a business card and told him to call when he was ready to talk.