Unforgivable
Student Loans
This week, Dark Brandon released a plan to eliminate an estimated $300 billion worth of student debt, and make debt repayment significantly easier for those who have remaining balances.
This has predictably caused a meltdown on the right - the same people who had no problem forgiving $740 billion worth of PPP loans are suddenly very concerned about low- and middle-income families getting a small measure of debt relief.
There’s much to like about the proposal, which is - uncharacteristically - more than the absolute bare minimum the government can do. Lost in the partisan bickering is the fact that for decades, the government has been charging borrowers interest on money it lends for free, lining the pockets of private loan servicers who regularly mislead and abuse those borrowers, and losing the government money to boot:
From 1997 to 2021, the Education Department estimated that payments from federal direct student loans would generate $114 billion for the government. But the GAO found that, as of 2021, the program has actually cost the government an estimated $197 billion.
Granted, $102 billion of those funds are attributed to the repayment pause under the 2020 CARES act, but that’s still $200 billion in losses running a program that, on paper, should be ‘making’ money.
Much of the $200 billion is due to a higher-than-expected percentage of borrowers using income-driven repayment (IDR) plans, which will be beefed up by Biden’s new executive order. IDR plans are for people who can’t make the full payments on their loans, around half of borrowers, which is a pretty damning indictment of the cost of a college degree.
While the changes to the rules on IDRs are long overdue, it’s important we keep a close eye on how the program is administered, because it’s historically had a raft of problems:
NPR obtained two-dozen pages of internal department documents, including emails and, most notably, a previously unreported, 2016 review of student loan servicers' struggles to implement IDR. The documents shed new light on the 2021 revelation that, at the time, 4.4 million borrowers had been repaying for at least 20 years but only 32 had had loans canceled under IDR.
The documents also offer surprising new revelations. For example, some servicers weren't clearly tracking IDR payments and did not know when borrowers qualified for cancellation.
It’s one thing for the White House to issue rules and guidance for student loan repayments, and another for it to enforce those rules with servicers, some of whom have a record of blithe non-compliance:
State prosecutors said Navient, which did business as Sallie Mae until 2014, was willing to give private loans to borrowers it knew couldn’t pay them back because they were a money-losing lure for a far more profitable product: federal student loans.
Student loan servicers are some of the worst actors in lending, primarily because they’ve been propped up by government-backed loans and giant service contracts for years. They’re an unknown in the execution of Biden’s plan, and only strong oversight from the government will ensure this needed debt relief actually makes it to borrowers who’ve been in debt purgatory for years.
Deed Theft
If you live in a city, you may notice ‘We Buy Homes’ signs plastered to telephone poles and flapping in the wind on grassy medians. Some of these businesses may be legitimate - house flippers offering to help people who need to sell for financial reasons - but many are not. One scam these alleged buyers run is called deed theft - they pay cash and promise to finance a ‘short sale’ on the house, in exchange for the owner signing over the deed to the property. Here’s one guy in New York who’s made a fortune doing it:
A close review of Mr. Solny’s holdings and transactions — drawing on housing court cases, lawsuits, city property records and interviews — reveals a long record of questionable dealings and a largely ineffective government response. Over more than a decade, Mr. Solny and companies linked to him took ownership of at least 140 properties, The Times found. The former owners of 40 of those buildings — which include a coveted brownstone in gentrifying Bedford-Stuyvesant, Brooklyn, a three-story apartment building near Rockaway Beach and a suburban Craftsman-style home with a lawn in Rosedale, Queens — have claimed they were victims of deed theft, civil and criminal court records show.
Solny spent years approaching distressed homeowners - whose data is available in public record databases - and offering them quick cash deals in exchange for what they thought was debt relief:
Homeowners are told they qualify for a short sale — a deal in which the lender settles for less than the amount owed on the mortgage. The owners, already resigned to losing their properties to foreclosure and confused by a mountain of paperwork, believe the deal will at least relieve them of their debt and give them a small amount of cash.
In reality, the documents they sign transfer ownership of the building while still leaving the homeowners responsible for the debt. The person committing the fraud brings in tenants and collects rent, sometimes for years, until banks or other lenders finally foreclose on the property.
Seems like a pretty obvious fraud, right? Not exactly. Because the homeowners sign legal documents - arguably under duress - the legal system has a tough time going after chronic offenders like Solny:
Prosecutors say they are hamstrung by the law: They must show there was criminal intent in cases that are not as slam-dunk as those they prefer to bring to court. Years can go by before a homeowner realizes what happened, and the transactions are complicated. What one person claims as fraud can be defended as just a lopsided business deal.
Unsurprisingly, deed scammers do not take good care of the properties they only sort-of own:
Homeowners are not the only ones affected. Tenants and city agencies have complained of serious safety and health hazards at buildings owned by companies linked to Mr. Solny.
Of the 19 disputed properties those companies still owned as of June, 15 had open housing violations, including for heat and hot-water failures, unsafe wiring and pest infestations.
“They’re not doing nothing — never have heating, never fix nothing,” said Sandy Triunfel, a home attendant who in 2017 stopped paying rent on her apartment in Crown Heights, Brooklyn, according to court records, because she said she did not receive hot water or gas for months.
The owner, Blue Realty & Services Group, a company tied to Mr. Solny, evicted her the next year.
Deed theft not only robs homeowners of the remaining value in their properties, putting them on the hook for huge debts they can’t pay and are often unaware of, it ends with tenants dealing with deadbeat landlords who can evict them, ruining their chances of finding new housing. Really a vicious cycle of greed and theft, enabled by a housing and lending system not up to the task of holding criminals accountable in a timely fashion, or offering any restitution to the victims of their scams.
Philly PD
Back in February we talked about the abnormally high number of Philadelphia police officers on, let’s call it indefinite leave due to questionable on-the-job injuries, collecting tax-free pay and benefits for basically doing nothing. The evidence is pretty damning that many of these ‘injured’ cops are not injured at all, and the department claims it’s going to investigate and discipline any bad actors. But, how did the program get so out of control?
It turns out that in 2003 the city’s FOP lodge negotiated itself the power to select its own doctors to diagnose and treat Heart and Lung disability cases. It chose, to put it mildly, some real pieces of work:
Since 2004, the FOP has chosen seven long-term doctors, all of whom belonged to small or solo practices. Five have some history of alleged questionable behavior, The Inquirer has found.
Of course. If you’re going to hire doctors to oversee a multi-million dollar long term disability plan, you’d definitely want doctors facing accusations of wrongdoing, including but not limited to: writing prescriptions in exchange for sex, drugging and sexually assaulting patients, giving blank prescription pads to patients, and many more.
Incredibly, the FOP has total control over the system and city officials weren’t able to do much of anything about the abuses for years, despite repeated complaints and lawsuits. It took all the negative press associated with this year’s expose in the Inquirer for any serious investigations into the program as a whole to be launched.
Another thing I learned from the article is that Philly has a thriving market for prescription diet pills:
One day in 2006, Albert Kofsky, a physician with a tiny office in Northeast Philadelphia, left a note on his office door that he was retiring, directing patients who were interested in continuing a weight-loss program to Glickman, according to deposition testimony.
A Glickman employee testified that Glickman called her on a Sunday, asking to help him set up an empty suite to accommodate the patients.
“So we started seeing diet patients in Suite D the next day,” Glickman’s staffer said.
I mean, sure okay, seems a bit odd but not too out of the ordinar-:
What Glickman’s staff didn’t know was that Kofsky had been federally indicted for trafficking massive amounts of diet pills under the guise it was part of a legitimate medical practice, when in fact he sold them first-come, first-serve to anyone who had the cash.
Kofsky had operated this $8.7 million pill mill for more than a decade. When authorities searched his home, in Huntingdon Valley, they discovered more than $1 million in cash stuffed between his basement walls.
Holy shit! Believe it or not, other doctors involved in the Philly PD scheme were also running diet pill mills:
In 2007, the FOP picked a new practice to treat its injured members. Situated in Northeast Philadelphia, where many lived, Holmesburg Family Medicine became a preferred destination for hundreds of officers.
Holmesburg is accused of buying bulk diet drugs and selling them for cash to patients, many of whom bought from unlicensed relatives of staff physicians:
Instead, according to allegations in the lawsuit, a female relative of Joseph Pongonis — the physician who started the practice — sold [Donna] McGinnis Phentermine and Phendimetrazine pills for cash, Schedule III and Schedule IV stimulants, similar to amphetamines.
The relative was not a dietitian, nutritionist, or other medical professional. She allegedly recorded McGinnis’ weight, took her blood pressure, then sold her the pills — more than 15,000 between 2002 and 2015.
Excessive use of said diet pills can cause hypertension, heart problems, and psychosis. The woman in question - the mother of a police officer, ironically - was hospitalized repeatedly for psychiatric issues and heart problems, gained weight despite her heavy addiction, and died at 58. Holmesburg had three hundred recorded diet pill customers, in addition to treating hundreds of ‘injured’ Philly cops, raking in millions from the city.
All this is depressing, upsetting, and a clear indictment of what can happen when police departments are left unchecked to do something as mundane as administer their own disability programs. But let’s end with a grim laugh, shall we? Here’s Adina Dees, a Holmesburg doctor who was selected to replace Glickman after he finally violated too many laws for the FOP to stomach:
In 2018, while [Adina] Dees was still treating injured cops, she filed for Chapter 13 bankruptcy. She reported her annual salary as $156,720, and listed $432,532 worth of assets, and $589,900 in liabilities.
Two years later, in January 2020, a witness told a Morton Borough police officer in Delaware County that she’d seen a woman, identified as Dees, drive her Lexus down some railroad tracks, then back up and strike a railroad gate.
At the scene, the officer smelled alcohol on Dees’ breath, and Dees admitted that she’d had drinks after work. Asked to submit to a sobriety test, Dees claimed that she was a Philadelphia police officer, according to a criminal complaint.
[…]
“You don’t know who I am, do you?” she asked.
The officer found marijuana and marijuana cookies in Dees’ Lexus, and a prescription bottle — with another person’s name on it — with 27 oxycodone-acetaminophen pills.
Listen, I know we’re currently facing a doctor shortage, and there are probably ethical objections an average doctor would have to rubber stamping fake disability claims for lazy cops, but surely in a city the size of Philly you could find seven doctors who are not doing sexual assault, running illegal pill mills, or driving through railroad gates while drunk and high? Seriously.
Vegas, Baby
Movies and television want us to believe that FBI stings are gritty, dangerous endeavors leading to car chases, shootouts, or cleverly scripted surprise reveals. According to actual reporting, they’re mostly agents entrapping mentally ill Muslim men. Sometimes they involve Secret Service agents impersonating biker gang members to steal Bitcoin.
Anyhow, if you are an FBI agent headed to Las Vegas on a sting operation, you should try to stay away from the craps table:
A former FBI agent was sentenced to three months in federal custody this week for gambling away more than $13,000 in government money during an undercover operation in Las Vegas.
Oh my. How did that happen?
The agents conducted an operation at a hotel cabana and afterward went to the Bellagio Resort and Casino for their last night together, according to court records. Before leaving the hotel room, [Scott] Carpenter took $10,000 of government money from a hotel safe.
The agents went to the resort's high roller room, where Carpenter bought $10,000 in chips. He played blackjack for several hours and lost all $10,000.
"He then pressed [another] undercover agent to give him additional money belonging to the United States the undercover agent had brought with him from the suite," according to the plea agreement. "Carpenter then gambled away that money as well."
According to Bellagio records, Carpenter lost $13,500 over two to three hours, with an average bet size of $721.
Scott! Come on, dude. I am wondering why his fellow agents did not stop him from dropping $700 a hand in the high roller suite during a sting operation. I don’t know what possesses someone who’s spent years becoming an FBI field agent to go on a gambling bender with government money, but it’s a rough way to end your career - three months in prison, a criminal record, and no winnings to show for it.
Short Cons
CNN - “In a complaint filed last month by Ohio Attorney General Dave Yost, the ringleaders of the auto-warranty robocall scheme are identified as Roy Melvin Cox, Jr. and Aaron Michael Jones, two California individuals described as repeat offenders of US telemarketing rules.”
MarketingBrew - “Eventually—and during the rest of our research—almost every other ad we watched was for a publisher, including Vanity Fair, MadameNoire, and HealthCentral. By the end of the three weeks, we’d watched 365 ads on Subway Surfers, and 124 of them were articles from 26 different publishers.”
Insider - “Among the board members listed for the show was a self-described "medicine hunter" who promotes the "ritual use of hallucinogens" to achieve wellness and an acupuncturist who sells herbal remedies to fight COVID-19 and an energy therapy called "Infinichi" to treat ailments from upset stomach to fibromyalgia.”
Eater - “Operators allege CloudKitchens has also been plagued with a variety of security and safety issues, ranging from burglaries to arson to physical altercations.”
Tips, thoughts, or debt jubilees to scammerdarkly@gmail.com