FLORIDA CHIEF FINANCIAL OFFICER ALEX SINK'S WEEKLY
Volume 5, Number 4, January 25, 2008
This Tuesday, Floridians will cast two votes that will have a great
impact on our future.
You will be asked to vote for your preference among presidential
candidates in both parties.
You will also vote on Amendment 1 and whether to increase the
homestead exemption and allow homeowners to transfer their tax
benefits to a new residence. It is estimated that the increased
homestead exemption will save homeowners an average of $240
The amendment also would create a new $25,000 exemption for some
business properties and would cap assessment increases for
non-homesteaded properties at 10 percent annually.
Please be an informed voter and exercise your right to vote on
CFO SINK ANNOUNCES 62 ARRESTS IN STATEWIDE THREE-DAY OPERATION
Anti-fraud operation targets 84 suspects from Pensacola to Miami
Florida Chief Financial Officer Alex Sink today announced 62
Floridians have been arrested in a statewide, three-day operation
that began Tuesday, targeting 84 individuals for various insurance
fraud charges. The arrests, which range from Pensacola to Miami,
involve alleged fraud schemes uncovered during months-long
investigations with millions of dollars in potential losses.
Arrests on Tuesday included a Clearwater couple accused of title
insurance fraud estimated at more than $7 million.
“Insurance fraud causes real financial pain and hurts Florida’s
families, businesses and communities,” said CFO Sink, who oversees
the Department of Financial Services. “Criminals need to know that
we will not tolerate insurance fraud of any kind and we will
aggressively pursue those who commit fraud on innocent Floridians.”
The charges stem from investigations by the Department of Financial
Services’ Division of Insurance Fraud (DIF), a sworn statewide law
enforcement agency responsible for the investigation of insurance
fraud. The DIF made more than 800 insurance fraud-related arrests in
the last fiscal year.
Arrests occurred in numerous cities including Tallahassee,
Pensacola, Jacksonville, Ocala, Orlando, St. Petersburg, Tampa, West
Palm Beach, Fort Myers, Plantation and Miami. Charges are varied and
include workers’ compensation fraud, title fraud, staging automobile
accidents and grand theft. The operation was organized through DIF’s
regional offices, with charges being prosecuted by state attorney
offices in the various jurisdictions. Potential sentences could
range from five years to 30 years in prison per count.
Insurance fraud in Florida has been estimated to cost Florida
families as much as $1,400 a year. The DIF investigates various
forms of fraud in insurance, including health, life, auto, property
and workers' compensation insurance. Depending on the estimated loss
amount, the department will pay up to $25,000 for information
directly leading to an arrest and conviction. Anyone with
information about suspected insurance fraud is asked to call the
department's Fraud Fighters Hotline at 1-800-378-0445 or log on to
www.MyFloridaCFO.com/fraud. Complaints can be tracked online.
CFO SINK JOINS AG
McCOLLUM TO PROTECT HOMEOWNERS FROM MORTGAGE-RELATED FRAUD
On Tuesday, January 22, Florida Chief Financial Officer Alex Sink joined
Attorney General Bill McCollum in announcing a lawsuit, legislation and
a task forced aimed at protecting Floridians from mortgage-related
fraud. The Foreclosure Rescue Fraud Prevention Act, sponsored by Senator
Mike Fasano and Representative Clay Ford, will help to strengthen
existing consumer protections by ensuring homeowners are properly
informed about their rights when they are signing a contract with a
foreclosure rescue entity.
See press release below:
McCOLLUM SUES "RESCUE FORECLOSURE" COMPANY, ANNOUNCES LEGISLATION TO
FIGHT MORTGAGE-RELATED FRAUD
~ Attorney General, state leaders seek to protect homeowners from
deceptive practices ~
TALLAHASSEE, FL – Attorney General Bill McCollum today announced a
multi-pronged initiative to combat mortgage-related fraud, specifically
fraud involving “rescue foreclosure” scams. As part of the litigation
and legislation-based initiative, the Attorney General today filed a
lawsuit asserting South Florida-based National Foreclosure Management
and multiple affiliates defrauded at least 80 homeowners out of
approximately $1.7 million in home equity. These allegations were
investigated by a new task force developed by Attorney General McCollum
to target mortgage-related fraud, an effort bolstered by proposed
legislation to strengthen provisions against mortgage rescue scams. The
legislation, sponsored by Senator Mike Fasano and Representative Clay
Ford, was unveiled this afternoon.
“The Attorney General’s Office is taking action against unscrupulous
individuals who attempt to take advantage of our citizens when they are
desperate to protect their homes,” said Attorney General McCollum. “We
are tackling this growing problem from several directions to help keep
families in the homes they’ve worked so hard to achieve.”
Beginning in October 2004, National Foreclosure Management – which now
does business as American Home Rescue, Inc. – selected homeowners who
had substantial equity in their homes but were in the process of being
foreclosed upon. The company would offer to hold the titles to the homes
for a year, refinance the debt, and provide cash and credit repair
counseling to the homeowner, all while allowing the homeowner to remain
in the house. The company claimed it would deed the property back at the
end of the year after the foreclosure had been avoided and the
homeowner’s credit was repaired.
Once the company had obtained the title to the house, the Attorney
General’s lawsuit alleges the company would strip the equity from the
homes by refinancing them at inflated prices and by assessing fraudulent
fees and costs, leaving little or nothing for the homeowner to recoup.
The home would then be sold outright to an investor or a straw buyer who
would lease the home back to the homeowner at a rental rate far
exceeding the original mortgage payment, virtually ensuring the
homeowner’s eventual eviction. According to the lawsuit, the homeowners
would end up with neither the titles to the homes nor the equity that
rightfully belonged to them.
The lawsuit, filed with the Office of Financial Regulation, seeks
restitution to the affected homeowners, dissolution of the rescue
foreclosure companies, and revocation of the mortgage brokers’ licenses
revoked. Don Saxon, Commissioner of the Office of Financial Regulation,
expressed gratitude to Attorney General Bill McCollum and Chief
Financial Officer Alex Sink for their continued support and commitment
to protect consumers.
“Mortgage fraud is a destructive crime that can destroy a family’s
future in an instant, and we need stronger laws to protect Florida’s
consumers,” said Chief Financial Officer Sink, who oversees the
Department of Financial Services and who heralded today’s actions as
essential to the fight against mortgage-related fraud. “It is downright
disgraceful that some would use trickery to steal the dream of
homeownership from a struggling Floridian.”
The lawsuit is the first filed by the Attorney General’s Mortgage Fraud
Task Force, created to investigate these various schemes and, where
appropriate, seek solutions to protect consumers. The task force has
been in operation since September and is comprised of 25 lawyers and
investigators in the Attorney General’s Office, stationed in locations
throughout the state.
In addition to filing the lawsuit, the Attorney General today announced
the filing of the “Foreclosure Rescue Fraud Prevention Act,”
sponsored by Senator Mike Fasano (R—New Port Richey) and Representative
Clay Ford (R—Gulf Breeze). The proposed legislation will ensure that,
among other things, homeowners are properly informed about their rights
when they are signing a contract with a foreclosure rescue entity.
“When people are on the brink of losing their homes, they are desperate
for any assistance available and all too often they trust a wolf in
sheep’s clothing,” said Senator Fasano. “We must strive to protect
Florida’s homeowners from such a dangerous situation.”
“This legislation is designed to protect homeowners from individuals who
attempt to prey upon them in their time of distress,” said
Representative Ford. “We must make every effort to shelter our citizens
from this blatant form of deception.”
The proposed legislation offers the following key provisions:
A five-day right of cancellation period that allows the consumer to
cancel the agreement with the foreclosure rescuer;
Requirements that foreclosure rescuers include in the contract clear
and conspicuous notice to homeowners of this right of cancellation as
well as a recommendation that the homeowner contact the lender or
mortgage servicer prior to the signing of the agreement and a provision
that states the consultant is prohibited from accepting any form of
payment until all services are completed;
Definitions of such terms as “Equity Purchaser,” “Foreclosure
Consultant,” “Foreclosure-related Services,” and “Foreclosure Rescue
That all violations of this act are defined as an unfair and
deceptive trade practices and are subject to the penalties included in
Part II of Chapter 501, Florida Statutes.
Today’s legislation is filed under Senate Bill 992 and House Bill 643.
Parties named in today’s lawsuit are National Foreclosure Management,
Inc; American Home Rescue, Inc.; National Property Holding Group, LLC;
The Mortgage Practice, Inc.; Southeast Capital Mortgage Company;
Barrister Title Services, Inc.; GMC Land Services of Florida, Inc.,
doing business as Richmond Abstract, Inc.; Bernard Williams; Wyman F.
Roberts; Lakeisha Marion; Anna Silva; Albert Nae; Linda Rubinchik; Rhona
Oliver; Tracy Needleman; Gina Rock; John Sarlo, Dianna Brown-Flournoy;
and Reina Roman.
A copy of the lawsuit against National Foreclosure Management is online
CFO SINK TO SPEAK AT FLORIDA EDUCATION ASSOCIATION 2008 CENTRAL FLORIDA
Florida Chief Financial Officer Alex Sink will be the keynote speaker this
evening at the Florida Education Association (FEA) 2008 Central Florida
Leadership Conference, to be held at the Hilton Orlando/Altamonte Springs.
CFO Sink will speak about her role as Florida’s CFO and the role of teachers
in securing a strong economic future for Florida.
From the FEA Web site at
http://www.feaweb.org/: We are teachers and education staff
professionals, working together to maintain the right to a free, quality
public education system for all students to learn and succeed. We are
working to advance professional growth, development and the status of all
the employees who serve the students in Florida's public schools.
CFO SINK SPEAKS AT ECONOMIC DEVELOPMENT CORPORATION OF SARASOTA
COUNTY’S ANNUAL ‘ECONOMIC OUTLOOK’ LUNCHEON
Florida Chief Financial Officer Alex Sink was the keynote speaker today at
the Economic Development Corporation (EDC) of Sarasota County’s annual
“Economic Outlook” luncheon, held at Michael’s On East in Sarasota. CFO Sink
spoke about her role as Florida’s CFO as well as highlighted the challenges
and opportunities in Florida’s economic future.
From the EDC Web site at
www.edcsarasotacounty.com: The EDC of Sarasota County is the
private, not-for-profit corporation leading the community’s economic
development strategy to add high-wage jobs and diversify the local economy.
The EDC provides business assistance to companies in Sarasota County and
helps forge solutions to community challenges that affect quality of life.
The EDC works in partnership with chambers of commerce, local governments
and other organizations throughout the county and the region.
CITIZENS TASK FORCE WILL MEET FEBRUARY 1
Task Force on Citizens Property Insurance Claims Handling and Resolution
will hold a public meeting on Friday, February 1, 2008, at 8301 Cypress
Plaza Drive, Suite 108, Jacksonville, Florida, from 12:00 noon to 4:00
p.m. The agenda is posted on the Web site at
The meeting will be held in Jacksonville and interested parties may
want to listen to the meeting via conference call at dial-in number
(888) 808-6959, Conference Code: 4132880. If you wish to attend the
meeting via conference call, please place your phone on mute and please
be aware that if you place your phone on “hold” all participants will
hear your “hold” music. Callers will not be able to participate in the
meeting, however, if there is a specific issue that you would like to
bring to the Task Force’s attention, please email your concern to
Vicki Twogood by Monday, January 28, 2008. If time permits,
submissions will be read during the Public Testimony period or at the
next Task Force meeting that is tentatively scheduled for Tuesday,
February 26, 2008, in Tallahassee. The February 1 meeting will be video
recorded and posted on the website.
CFO SINK AND REP. GALVANO TOUR BRADENTON HEALTHCARE FACILITY
Call for increased focus on affordable healthcare for Florida’s
In an ongoing effort to increase awareness about Florida KidCare, the
state’s affordable healthcare program for Florida’s children, Florida
Chief Financial Officer Alex Sink joined State Representative Bill
Galvano (R-Bradenton) last week for a tour of the Manatee County Rural
Health Services (MCRHS) facility in Bradenton. The MCRHS center mainly
treats patients who are uninsured or participants in the KidCare
program. During the tour, CFO Sink and Rep. Galvano visited the health
center’s dental facility, pharmacy, and tele-pharmacy.
In addition to overseeing the Department of Financial Services, CFO Sink
serves as the chair of the Florida Healthy Kids Corporation. During the
past year, CFO Sink worked closely with Rep. Galvano and other Healthy
Kids advocates to develop recommendations to streamline the program and
make it easier for eligible working families to enroll their children.
Consumer Services Helpline