U.S. Shuts Eviction-Aid Firms That Targeted Central L.A.

A federal crackdown on agencies illegally offering to help renters evade eviction by filing false bankruptcies has resulted in 14 arrests and led to the shutdown of two operations that preyed heavily on Pico-Union and South-Central residents.

The agencies, known as petition mills, charged clients $200 to $1,000 to file bankruptcy claims to delay evictions. Some told clients that they would be entitled to up to seven months of free rent after the start of the eviction process, said Maureen Tighe, an assistant U.S. attorney handling the case.

Unlike legitimate agencies that help clients file for bankruptcy, petition mills often file incomplete or false information, giving tenants the impression they have forestalled eviction.

Under state bankruptcy laws, tenants can remain in their homes without paying rent until their bankruptcy court proceedings are concluded. But because the false petitions are eventually dismissed by court clerks, tenants end up being evicted and landlords often lose as much as $10,000 in legal fees and unpaid back rent, Tighe said.

Many of the agencies targeted in the crackdown operated from offices as far away as San Diego and Alameda counties, but often preyed on residents in Central Los Angeles, said Rod Field, the housing law coordinator for the Legal Aid Foundation of Los Angeles.

“Many targeted Pico-Union and South-Central residents,” Field said. “In interviews, (the petition mill operators) told us they would look at eviction notices in court files and send letters to people with Spanish surnames.”

The petition mills, Field said, often contacted their clients after getting copies of unlawful detainer filings, until a state law went into effect last January, preventing public access to such files for 30 days. Since then, Field said, the operations have increased efforts to solicit business with door-to-door flyers.

Unlawful detainer filings are landlord complaints seeking eviction that precede a final notice to vacate an apartment.

Field estimated that over a 10-year period, the Legal Aid Foundation has represented thousands of Central city residents who have been taken in by illegal petition mill operations.

“They had big impact on this area,” he said. “We did not see many coming from the Valley and other areas.”

Paul Lee, director of litigation for the Legal Aid Foundation, said most of the 7,000 eviction cases the agency handled in 1992 were mill cases.

He said the operations advertised their services in Spanish-language newspapers, posted signs on billboards, bus benches and trees, paid individuals to pass out flyers on the streets and generated word-of-mouth advertising.

Tighe said 30% to 40% of the 80,000 bankruptcies filed in 1991 in Los Angeles were petition-mill cases. The mills often provide a bogus lists of client’s debts, forge signatures and list fake Social Security numbers, she said.

Since Dec. 19, a federal crackdown coordinated by the U.S attorney’s office and the Federal Bureau of Investigation has led to 14 arrests in Southern California, Tighe said. In Los Angeles, authorities shut down a firm known as J.J. Williams agency of South Los Angeles, run by Nannie Jean Williams, and Downtown-based Latin American Legal Services, run by Esperanza Serrano with Hugo Dahdah, Martha Dahdah, Diana Heineberg and Oscar Lozano.

“My client is not prepared to make any statement on this case,” said Teresa Sanchez-Gordon, a deputy federal public defender who represents Williams. “As far as I’m concerned and as far as she (Williams) is concerned, she is innocent until proven otherwise.”

Attorney Morton Boren, who represents Serrano, could not be reached for comment.

All of the operators were arrested or indicted on multiple counts of perjury and bankruptcy fraud are now free on bail. Lozano and Hugo Dahdah are still being sought.

If convicted, they face up to five years in prison and a $250,000 fine, Tighe said. Trials in federal court will begin Feb. 23, she said.

Field said area residents who plan to file bankruptcy should consult a private attorney or legal-aid agencies.

But federal officials said some petition mills have been posing as legal-aid agencies and cautioned individuals to verify an agency’s legal credentials.

“The system is being misused,” Field said. “There is no need to fight eviction by running to bankruptcy court.”