The State Bar of California announced today it has shut down the operations of an Ontario lawyer who allowed his name and law license to be used in a scheme to defraud distressed homeowners.
The bar obtained a court order (attached) this morning to assume jurisdiction over the law practice of Gary David Tracy, 50, (bar # 167212). His firm, known as Realty Attorney Group APC and Realty Group & Consulting LLC, gave false hope to dozens of clients whose homes were already in foreclosure. Many of the clients’ homes had already been sold. In return for thousands of dollars in fees, the firm filed shell petitions in U.S. Bankruptcy Court that only delayed the inevitable loss of the clients’ homes.
The bankruptcy fraud scheme represents the newest variation of the loan modification scams emerging from the housing crisis. Since February 2009, the State Bar’s Office of Chief Trial Counsel has received thousands of complaints against attorneys regarding loan modification fraud. More than 100 attorneys have been disciplined so far, including 22 who have been disbarred.
Tracy formed an illegal partnership with a convicted felon, Mike Denno, aka Maik Georges Denno, and abdicated responsibility and control of his law practice to non-attorneys. Denno is a convicted felon who pled guilty to eight counts of grand theft in 2002.
Denno and Christopher Defoort are said to have formed Realty Group & Consulting, LLC. Denno is the Chief Financial Officer of the company. Prior to his association with Tracy, Denno formed unlawful partnerships with two other attorneys: Gregory Alan Baker and Eric Camiling.
“The clients in these situations are desperate and in financial turmoil,” the petition said. “They are vulnerable and seeking a lifeline from a legal professional that can save their home.”
In July, the U.S. Bankruptcy Court for the Central District in Santa Ana sanctioned Tracy $10,000 after it found his firm was responsible for 80 bankruptcy filings, most of which did not identify the firm as the preparer of the petition.
The State Bar has identified at least nine clients who paid money to the firm and were abandoned. One woman paid the firm $12,400, including an $800 payment deducted from her account after she lost her home and was evicted. Many of the clients had never met Tracy.
Thursday’s order by San Bernardino County Superior Court Judge Brian S. McCarville authorized the bar to secure the firm’s files, freeze its bank accounts and notify its clients to seek new counsel.
Clients who have additional questions are advised to call the State Bar at 213-765-1778.
The full court document on this matter can be read here.
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I received an error form that was allegedly filled out by Christopher Defoort that said: “I was listed as a person that formed this company. I was not in any way associated with this fraudulent company. Retract any statement with my name in it.” – Christopher Defoort
After an investigation into the error form submitted by Defoort I was able to confirm Christopher Defoort was listed in the article from information listed in the complaint.
According to State of California records, Defoort was listed as a member of Realty Group & Consulting, LLC.
“Realty Group & Consulting LLC has a location in Upland, CA. Active officers include Christopher Defoort and Mike Denno. Realty Group & Consulting LLC filed as a Domestic on Thursday, April 29, 2010 in the state of California and is currently active.” – Source
We received another error form submission which we are publishing below.
I did not believe that you came up with my name out of no where. I am simply letting you know that I have no affiliation with this company. I am a Real Estate Broker and have never had a complaint or disciplinary action againts me. Because my name is really all I have in business, I do not want it being connected with a company I am not and never was part of. I occupied the space at 715 N Mountain Ave # 200 Upland, CA. After the collapse of the real estate market I was forced to close my doors and Mike Denno was the next occupant at the same address. I think that maybe how my name is coming up. I did not form a company with Mr. Denno and I am not an officer on any company of Mr. Denno’s. – Christopher Defoort