The Washington
Post had an article by Michael Sallah and Debbie Cenziper about Aeon Financial’s
foreclosures. Aeon Financial has no owners, officers, or website, but it has
been threatening to foreclose on hundreds of struggling homeowners. Aeon
Financial is incorporated in Delaware, but has mail drop boxes in Chicago and
is represented by a law firm with an address on an estate near Vail, Colorado.
Because all of this makes since.
Naturally, Aeon has been accused of predatory and unlawful practices because
of course. They have also been accused by local judges of overbilling. They
have pushed to foreclose on more than 700 homes in DC. Aeon is a tax lien
company that has little government oversight that moves from city to city with
clever lawyers. Aeon employs a ton of different tactics. In the District they
sent families threatening letters demanding $5,000 or more in legal fees. In
Maryland, they filed 1,000 foreclosure cases in some of the poorest counties.
In Cleveland, they took the deeds to dozens of houses and then failed to care
for them prompting the city to level 100 code violations. Naturally, the Aeon
execs didn’t return any calls about the Washington
Post piece.
The District hasn’t been able to determine who owns the company and when
city lawyers challenged Aeon to divulge its owners, the company filed a
protective order. The Post spent
three months looking at Aeon’s corporate history traveling between Chicago,
Cleveland, and Maryland. They found that the trail began and ended with a
Chicago lawyer named Mark Alan Schwartz. He is Aeon’s lawyer that bought 89
liens worth $65,000 from DC’s public auction. Over the next four years the company
became one of the top purchasers in DC.
Aeon has been described as a machine, buying lien after lien and then
demanding these high fees and payments showing no sympathy for the clients being
foreclosed upon. In 2009, local judges stepped in and found Aeon’s charges
unusually high and excessive. In 2010, Aeon stopped buying liens in DC, but
they still have 300 active foreclosures. After this they moved to Cleveland,
Ohio.
Cleveland,oh Cleveland. Some of you may know that Cleveland was high hard by the
foreclosing crisis right off the bat in 2007. That link takes you to an aerial
view of where I grew up, Slavic Village (or South Broadway). It is pretty dated
though because there is a school shown that has been a vacant leveled lot for
at least six months to a year old. However, you can see all the vacant lots,
well some there are many more, and with the foliage it is hard to see some of
them unless you zoom in close. Although, I think I can count eight. The map
also does you as a viewer a disservice because you can’t see which homes are
vacant. For example, both of the houses next to my parents’ are vacant,
recently one had the aluminum siding stripped off it because aluminum is still
worth something, well that and copper. The spray paint on the doors which
houses are vacant because of drugs and which one’s are missing the copper
because people were stripping it incorrectly and the homes were burning down.
Aeon spent $25 million buying thousands of homes in Cleveland and the
surrounding Cuyahoga County. In DC, homeowners tried to pay the fees. In Ohio,
we didn’t. I mean that shouldn’t shock anyone. There is no money here. There
never has been in the neighborhood I’m showing. Aeon foreclosed on more than
400 properties in Slavic Village. Aeon then couldn’t sell the properties because
obviously no one has any money to buy them. The houses were left to rot, which
prompted city inspectors to condemn 41 properties and issue 100 code
violations. It is hard to describe this kind of decay and the impact it has on
those who live there.
One of Aeon’s major lenders was CapitalSource Bank, which was founded in
2000 by John Delaney, who of course was elected to the US House of
Representatives. Because where else would the men responsible for this be? One
of Delaney’s spokesmen claimed he had no knowledge of the Aeon’s problems in
Ohio or DC.
An attorney for Aeon in Cleveland didn’t comment, but over the last year,
attorney Kirk Liederbach claimed Aeon had invested heavily in the city and “didn’t
contemplate” taking title of so many rundown properties. I can’t say I’m sorry
for them. Reap what you sow, buddy. Prey on the weak, vulnerable, and very
literally powerless (44105 as some of the lowest property rates in Cuyahoga County
making it a Mecca of sorts for the recently released from prison, you know men
of color who can’t vote), but you can’t get blood from a stone.
Jay Westbrook, a 33 year member of the Cleveland City Council, says the company
refuses to take responsibility, “Aeon has an extra-vicious business model—take no
prisoners, take no responsibility.” Aeon is dropping property in Cleveland
fast, which has prompted some city council member to question whether the sales
are legal or attempts to get out of the fines and violations. Aeon’s lead agent
who signed the deeds was John A. Lord, who was permanently disbarred in 2007
for deceiving and abandoning clients and keeping their money. He had no comment
either, of course. Lord also signed legal documents to foreclose on homes in
Baltimore.
DC officials still don’t know who owns Aeon. Aeon refused to share financial
records filing a protective order. The District agreed to stop pressing the issue
if Aeon swore the Schwartz’ law firm had no ownership, but Aeon refused again.
A judge focused on Aeon’s legal bill saying it is “rife with inaccuracies and
vague descriptions.”
The Post continued to do some
digging and found the Aeon Properties, the predecessor of Aeon Financial, was
run by Schwartz’s younger sister, Stacy Lynn Schwartz, a clinical social
worker. To which I scream shenanigans. WTF? A social worker has a code of
ethics and values, this woman if she proves to be involved in this should lose
her license. In 2011, records should Schwartz listed as a director, as was his
sister and a neighbor, Robert Mesch; these records were in Kentucky because why
not?
Records show that Axis Investment Holdings Trust, which apparently shares
an office with Aeon in Chicago’s Willis Tower, has ownership of both Aeon
Financial and Axis Capital. Someone should probably check out Axis Capital.
Schwartz is CEO of Axis Capital, which has a subsidiary, Records Direct. The
suite in Willis Tower is registered to Records Direct. I’m going to need a flow
chart.
In Schwartz’s divorce proceedings it came out that Schwartz and his wife
were used to a lush lifestyle, but the economy hurt him. *sads* People in DC
think the city should continue to go after Aeon and determine ownership.
Nickles, a former DC attorney general, said DC should pursue the case, “This is
debt collecting that leads to the destruction of the lower economic level of
the community. Anyone who would be behind that kind of scheme—and it was a
well-thought-out scheme—I don’t think they would be very happy about their
names being disclosed on the public record.”
Names on the public record? That’s the worst we can do to them? I take
issue with some of what Nickles says because as long as we employ an economic
system that encourages the exploitation of some for the benefit of others I don’t
see how what Aeon is doing is different than what Walmart, McDonalds, or any
other poverty-wage employer. I’m reminded of that tactic going around after the
banks sold all these bad loans, which was refuse to pay until they show you the
paperwork. Well, fingers-crossed, DC goes after these bastards and get some
kind of results.
