Rob Peter, pay Paul, hurt people

From: Denver Post - Denver,CO,USA - May 30, 2004

By Diane Carman
Denver Post Columnist

For everyone cashing a nice tax refund check from the state of Colorado this spring, it's time once again to give thanks. This money is coming your way because of the Taxpayer's Bill of Rights.

That and Freddie and Sara Smith.

The Smiths, who are deaf, mute and barely literate, not only got victimized by a predatory lending scheme, they got robbed by the Colorado legislature.

The legislature did it all for you so that the lines at the Department of Motor Vehicles won't be an inconvenience, so the state parks will be open when you want to camp and so your taxes will remain among the lowest in the country.

So maybe you should get to know the Smiths, a couple from east Denver.

Freddie is 70. Born deaf, he works as a dishwasher and janitor at a school. Sara, 54, lost her hearing from meningitis when she was 4.

In 1988, they invested their life savings in a small house.

A decade later they refinanced so they could make repairs and improvements. But since Freddie can't read and Sara reads only a little, they didn't really understand the terms.

Suddenly they couldn't handle the increased house payments. They fell behind, got slapped with late fees and struggled futilely to catch up. Then the bank foreclosed. They were desperate.

Prime targets for Jeffery Meythaler and his associates.

Other real estate advisers might have recommended that they sell the house, move into an apartment and use the more than $51,000 in equity to live, but according to the civil suit, Meythaler's group persuaded them to enter into a sale/repurchase scheme with the promise that they could stay in their home.

They turned over the title to the property and all their equity to Meythaler and his associates. Their payments ramped up. In a few months, the Smiths got an eviction notice when they couldn't pay up.

"This band of thieves stole their house," said John Head, an attorney who agreed to represent the Smiths when they contacted the Colorado Legal Aid Office. "They didn't even need a gun."

Last week, the Smiths' lawsuit was heard in Denver District Court. Head said Senior Judge Gaspar Perricone heard the case and awarded them triple damages, based on three times the $51,000 equity lost by the Smiths plus interest calculated on the rate given to the Smiths in the repurchase arrangement: 13.99 percent.

The judge assessed $100,000 in punitive damages against Meythaler, a lawyer and real estate agent, and ordered him to pay the attorney fees, Head said.

While the Smiths wait for the judgment, Head said they qualified to receive up to $50,000 in relief from the Colorado Real Estate Recovery Fund, which was created by state statute and funded by annual real estate agents' fees of $40.

The only problem is that another band of thieves - state legislators - raided the money in 2003 for the general fund.

State Treasurer Mike Coffman said the fund had reached $3.2 million when the legislature seized it.

Head said he plans to file a Recovery Fund claim for the Smiths as soon as the judgment is reduced to writing. If the money isn't forthcoming, "I'll garnish the state of Colorado's bank accounts."

Head is representing two other clients with complaints against Meythaler's group. Meythaler didn't return a call last week.

So the Smiths and others will simply have to wait to get their money.

Oh, by the way, there is a peculiar irony in all this.

Besides trying to evict disabled people from their home, Meythaler's other claim to fame is that in 1995 he represented TABOR author Doug Bruce when he was jailed for contempt of court and convicted on an unsafe-building charge.

At that time, Meythaler portrayed Bruce as a hero.

Think about it while you enjoy that refund.

Diane Carman's column appears Sundays, Tuesdays and Thursdays. She can be reached at 303-820-1580 or dcarman@denverpost.com .

Copyright 2004 The Denver Post or other copyright holders. All rights reserved.