Houston lawyer found guilty in mortgage fraud case
By MARY FLOOD
Copyright 2008 Houston Chronicle
Oct. 22, 2008, 7:36AM
A case including celebrities such as Tiger Woods and Chuck Norris, plus a $29,000 Rolex watch and the complexity of consolidated subprime mortgage investments ended in Houston on Tuesday with a 22-count guilty verdict against a Houston lawyer.
Ted Russell Schwartz Murray, owner of Premiere Holdings real estate investments, was found guilty by a jury in U.S. District Judge Vanessa Gilmore's court of conspiracy, fraud and filing false tax returns.
Assistant U.S. Attorney Cedric Joubert told jurors that Murray and his two co-defendants, who entered into plea bargains and testified against him, stole $67 million from wealthy investors including Norris, Jim "Mattress Mack" McIngvale, retired baseball player Vince Coleman and others.
Murray and his co-conspirators promised investors high interest, low fees and quick cashouts, but instead stole most of their money, the prosecutor said.
"This is not about bad business practices. This is about fraud, deceit, misrepresentation and lies," Joubert told the jury in final arguments.
Jurors also heard about Murray dining with Tiger Woods in Scottsdale, Ariz., but failing to hook him as an investor. And he also was the signatory on a letter handed out at a Charles Barkley fundraiser roast touting the investment program.
The jury heard about Murray writing off a $29,000 Rolex as "supplies and equipment" on his taxes and also taking deductions for his mother's rent, her spa treatment, casino gambling and buying small boats.
The more complicated evidence they heard was about subprime mortgages and commercial loans failing and Murray and his cohorts misrepresenting the failures and continuing to bring in investors who eventually lost millions.
Murray's lawyer Ed Tomko said it was Murray's co-defendants, David Isaac Lapin and Jeffrey Carl Wigginton, who ran a subsidiary of Premiere called Lapin and Wigginton Asset Management, who committed all the fraud, and that Murray didn't know about it.
"We are very disappointed in the verdict. We will ask for a new trial and if that isn't successful, I expect he will appeal," said Tomko.
The trial started before the major losses on Wall Street and was interrupted by Hurricane Ike.
"I don't think the jury seeing the economy collapse because of bad mortgages could have helped us," Tomko said.
Murray, who said he's supporting himself by trading natural gas and servicing outstanding mortgages, begged the judge to let him stay free on his $500,000 unsecured bond until his March 2009 sentencing. Gilmore said she will allow him a short period of time to get his affairs in order, but is likely to send him to prison before his sentencing date.
Lapin and Wigginton have pleaded guilty to one count of conspiracy and testified that Murray kept them in the dark about some of the fraud. They have yet to be sentenced.
mary.flood@chron.com
September 8, 2008 Ted Russell Schwartz Murray begins trial today. Trial is at the Federal Court House, 515 Rusk, 9th Floor, Judge Venessa Gilmore. The trial is expected to last 5-8 weeks.
August 11, 2008 Jeffrey Wigginton has plead guilty to federal charges of conspiracy to commit mail fraud and securities fraud in connection with a mortgage investment program. Sentencing will be in November.
August 6, 2008 David Isaac Lapin has plead guilty to federal charges of conspiracy to commit mail fraud and securities fraud in connection with a mortgage investment program. Lapin faces a maximum penalty of up to five years imprisonment and a fine of up to $250,000, U.S. Attorney Don DeGabrielle said. We will keep you posted on the sentencing phase. Sentencing will be in November.
May 2, 2008 The criminal trial of Ted Russell Schwartz Murray, David Isaac Lapin, and Jeffrey Wigginton has been reset to August 2008.
November 17, 2007 The criminal trial of Ted Russell Schwartz Murray has been reset to April 1, 2008. We will provide you further details as we receive them. No trial setting for David Lapin and Jeff Wigginton has been made to our knowedge.
June 27, 2007 The criminal trial of Ted Russell Schwartz Murray is set for October 1, 2007, in the federal court of Judge Vannessa Gilmore at 1:15pm. The court is located at 515 Rusk, Houston, Texas. Please check with the Victim - Witness Coordinator at the court to verify this trial setting. For a copy of the Justice Dept notification, please click HERE.
June 20, 2007 The litigation group known as the Franklin Group has settled with T D Waterhouse.
December 14, 2006 The criminal trial of Lapin, Wigginton and Murray is currently set for April '07. Charges include Mail Fraud, Wire Fraud and Money Laundering. Murray also faces charges of Income Tax Evasion.
December 1, 2006 The Mahaffey-Webber group of investors (tort litigation) has reached a settlement with Raymond-James. The details of the settlement are confidential.
September 15, 2006 In the criminal proceedings of Ted Murray, David Lapin and Jeff Wigginton, the arraignment was held in Houston, Texas, and all three defendants pled not guilty. For a copy of the Justice Dept press release, please click HERE.
September 12, 2006 The criminal indictment for Ted Murray (CEO of Money Mortgage), David Lapin and Jeff Wigginton was unsealed. Lapin and Wigginton were arrested by the FBI on Friday, September 8th. Murray's arrest is unknown at this time. For a copy of the indictment, please click HERE.
July 18, 2006 The recovery from the various general partners liquidating the assets has now recovered over $50,000,000.
July 5, 2006 The trustee has made a fifth distribution to the Class 8 creditors.
August 8, 2005 The litigation group known as the Franklin Group has settled with Raymond-James.
May 11, 2005 The trustee that is liquidating the estate of David Lapin has announced an auction of the following properties: 4.9% of Memorial-Kirkwood Shopping Center; 4.16% in Piney Point Center; 4.9% in Tanglewood Center; 3.03% in Village by the Sea; 4.69% in Jean F. Kaufman Family Ltd. Partnership; and all other interest owned in Potomac Homes, Newkirk Master Ltd Partnership, Q Corps, Slawson Drilling, Multi-Media Venture, Hortense Mortgage, and Heritage Health Systems.
The viewing of the property / documents is available from 9am - 4pm on May 20, 23,24,25,26,27 and 31, 2005 at the office of Kenneth P. Thomas, 4615 Southwest Fwy, Suite 500, Houston, TX 77027.
The AUCTION IS TO BE HELD ON JUNE 24, 2005 AT 10AM, at 333 Clay Street, Suite 330, Three Allen Center, Houston, TX 77002.
January 15, 2005 The Premiere Estate to make another distribution of approximately $2MM to creditors in accordance with the approved bankruptcy plan.
January 14, 2005 The Franklin Group (tort litigation) is in settlement negotiations with Raymond-James. No information will become available until the negotiations are complete and a recommendation is released.
May 12, 2004 The Premiere Estate has made a new distribution and has mailed approximately 800 checks totaling $3.2 million to creditors.
March 2, 2004 The Harris County District Attorney's Office has opened an investigation into a bankrupt mortgage investment operation accused of bilking 700 investors out of more than $100 million. The defunct company was owned by Ted Murray, David Isaac Lapin and Jeffrey Carl Wigginton. Read the Houston Chronicle story.
January 2, 2004 The
Premiere Estate has distributed $3.1MM to Class 7 Creditors (the PFF
program) and Class 8 Creditors (the real estate program). This brings
the total distribution to the investors to $4.6MM. The Class 7 Creditors
receive 65% of the collected funds, and the Class 8 Creditors receive
35%. Checks that were to IRA accounts were delayed due to a precautionary
decision to send the checks directly to the IRA custodians. The decision
was made to send the checks directly to the investors and let the
investors forward the payment to their custodians.
The general partners as of this date have collected and distributed
approximately $37,129,662 to the investors in the real estate program.
September 17, 2003 The
mediation between the L&W plaintiffs and defendants Raymond-James,
Mann-Frankford-Stein-Lipp, and a group of law firms resulted in a
settlement only with various law firms in the amount of a little more
than $6,000,000. The amount will be paid to the Estate, and distributed
to Class 7 and Class 8 investors. The attorney's fees are approximately
40% of this amount.
June 24, 2003 David Lapin's Ch13 Bankruptcy was confirmed June 20th. Lapin's bankruptcy plan to repay creditors $1.25 million through the sale of his home, relinquishment of his individual retirement account and monthly contributions of a portion of his future earnings for three years. Lapin said that he feels confident that investors will receive on average 70 cents on the dollar. And, "In my opinion, nothing was ever illegal."
June 27, 2003 The Lapin
Ch13 bankruptcy hearing continued on June 24th and lasted the entire
day. About 10 investors / creditors attended the hearing. At the end
of the hearing, Judge Steen commented to Mr. Lapin that he has serious
problems with good faith and feasibility. Mr. Alan Buie, the attorney
representing the Securities and Exchange Commission, stated that the
SEC had not yet approved the settlement agreement. It is presumed
that because of the many investor objections and letters of complaint
going to the SEC, that the issue remains unresolved. The judge asked
to be briefed on good faith issues and feasibility. The final trial
to decide if Mr. Lapin will be discharged of debt is set for August
20, 2003.
June 18, 2003 The Lapin Ch13 bankruptcy hearing on the Objection to Confirmation is scheduled for Tuesday, June 24th at 9:30am. Investors are encouraged to attend. If you wish to confirm your objection (even if you have faxed your objection before), please re-confirm by filling out the form and mailing or delivering it to the court. Download Form. Mail or deliver the completed for to:
Bankruptcy Court Clerk
1st Floor
515 Rusk
Houston, TX 77002
May 31, 2003
The Lapin Ch13 bankruptcy confirmation continued on Friday, May 30th
for about 2 hours; however, because of some scheduling conflicts,
the hearing was continued until a later date. Approximately 65 creditors
attended the hearing. The judge will reset the date in the next 1-2
weeks. The issues began with whether or not the approximate 254 investors
who joined with Behar/Fleishman have standing on their objection to
Lapin's Ch13 (reorganization) confirmation and motion to convert to
a Ch7 (liquidation). Lapin's attorney claimed that many of the investors
joining are not creditors of Lapin, and the faxed letters were not
proof that the investors who joined are who they say they are. Lapin's
council also said that the investors did not object to Jeff Wigginton's
Ch13 confirmation. An attorney representing 13 investors who joined
in the Behar/Fleishman objection are clients of the Cowgill / Mehaffy-Weber
tort litigation group, and the attorney told the judge that all 13
of his clients withdrew from the objection; and that 100% of his clients,
totaling 107, were in favor of Lapin's Ch13 confirmation. Mr. Alan
Buie, the attorney for the Securities and Exchange Commission, stated
that the SEC had reached an agreement with Lapin for $250,000, which
needed final approval from Washington; and the SEC had not negotiated
with Lapin on any criminal actions. Lapin took the witness stand and
under oath went through his newest reorganization plan. Some of the
items Lapin will give up in his contemplated Ch13 bankruptcy include
his IRS tax refund, expected to be $175,000. Lapin stated that if
he falls short of the $175,000 refund, that he will personally make
up the difference and pay it to the Estate. His plan also calls for
him turning over his limited partnership assets, one of which is the
former L&W and Money Mortgage building. He claims the value for
his shares of the Katy Fwy location is $80,505, which may be sold
to Mikob Properties. Mikob Properties is a borrower in the L&W
real estate program. Lapin will pay $125,000 in October of 2004, and
another $125,000 in October 2005. Additionally, $2,000 monthly payments
will start in October 2003. Mr. Lapin was asked where he was employed,
and his answer was Personal
Legacy, which he said is owned by his wife. Later in an interview
with Mr. Buie from the SEC, he stated that the SEC's staff could at
a later date make a criminal referral to the Justice Department; however,
he would not state if they intended to do so. We asked several of
the creditors who attended this hearing if the SEC had investigated
their dealings with Lapin and L&W, and we were not able to find
any investor who been interviewed by the SEC.
May 24, 2003 The hearing in the Bankruptcy Court related to David Lapin's bankruptcy filing (Ch13) has been rescheduled for:
FRIDAY, MAY 30, 2003, 9:30am
US Courthouse, Judge Steen
515 Rusk, Houston, TX
Investors are encouraged to attend.
May 21, 2003 Dr. Behar and Mr. Fleishman reported that their effort to obtain investor support has now gone to over 350 in support of Mr. Lapin's conversion from a Ch13 to Ch7 Bankruptcy filing.
May 18, 2003 Lapin files Second Amended Bankruptcy Plan (Ch13).
Click HERE for a copy of the plan.
Click HERE for an Investor Group's opinion and analysis of the plan.
May 15, 2003 Bankruptcy hearing on of the objections of Lapin's filing of Ch13 Bankruptcy, and the investors motion to convert Lapin to a Ch7 (liquidation) will be on Tuesday, May 27, 2003 at 9:30 am at the Federal Courthouse on Rusk, Judge Steen presiding. Investors are encouraged to attend.
May 14, 2003 Over 200 L&W investors have joined the objection to David Lapin's filing of Ch13 Bankruptcy and discharge of debt. Dr. Behar and Clive Fleishman have been noticed by Lapin of his intent to take their deposition in the case. Behar and Fleishman are managers overseeing the attempt by investors to convert Lapin's bankruptcy from a Ch13 to a Ch7 liquidation.
April 4, 2003 The Bankruptcy Court notices a Hearing to Dismiss for deficiencies on David Lapin's bankruptcy filing (Ch13). The hearing is set for 4/22/03 at 9:30 am at the US Courthouse, 515 Ruck, Rm 400, 4th floor. Several investor objected to Lapin filing Ch13, which could have dismissed any future fraud claims.
February 21, 2003 The trustee will be sending out objections to Class 8 claims (related to the real estate program). Currently, most investor claims are for the full $$$ amount owed to them at the time of the bankruptcy filing. The trustee is required to reduce the claim to a reasonable amount based on the estimated recovery from each partnership. Recently, the general partner managers for Washington -, Jefferson -, Roosevelt - , and Adams - Advisors GP, LLC reviewed the estimates provided by the estate and believed them to be reasonable. However, these estimates cannot be guaranteed to be the actual amount recovered.
You will have an opportunity to sign a Agreed Order for the amended claim amount and mail it to the trustee; or you will be able to request to meet with the trustee for a settlement conference if you believe the amount to be in error.
February 18, 2003 The deadline for filing a proof of claim in the David Lapin bankruptcy is March 20, 2003.
January 28, 2003 The Premiere Estate has begun to schedule their "Notice of Objection & Mandatory Settlement Conferences." The Estate is amending the claims by the investors. The investor claims are being reduced based on the estimated value (as of 10/2/01) of the partnership's loan asset, or value of foreclosed property. The investors are being scheduled over 15 days, with a meeting in the morning and another in the afternoon. The investors are being scheduled in alphabetical order.
It is our understanding that the various general partners have provided informal estimates as to the value of the partnership assets, and the Estate has considered the opinions of their own experts, and set an estimated value.
Example: If you have $100,000 invested and it was placed in 2 different partnerships, if one of the investments has paid off 100%, but the other is expected to recover 50%, then your $100,000 claim will be reduced to a $25,000 claim.
It is unknown at this time it the trustee will allow a settlement to be signed and mailed. We will keep you posted on any new developments.
January 8, 2003 David Lapin has filed for Ch13 bankruptcy a few weeks ago. All investors are encouraged by the due date to file a proof of claim in a similar fashion as the previous filing with Premiere.
January 3, 2003 The general partners, through their CPA's, are preparing year-end accounting, partnership tax returns, and K-1's to the investors for partnership distributions for 2002. The GP's and accountants also agreed on several accounting uniformity issues. We all must immediately go through the painstaking
task of collecting this information.
- To be in compliance with the IRS regulations, we need to collect the following:
1. The name of each Investor (i.e. individual, joint, separate property, family trust, family partnership, IRA, business investment)
2. The Social Security number or Federal Tax ID for each entity.
- According to the accountants, K-1's issued by the various partnerships will be cross-referenced by the IRS with the individual's or entity's tax return. It is important for you to provide this information so there are no "red-flags" that may occur in the filing of your return.
- Additionally, there are various issues with the way losses may be reported on your individual return. Please do not hesitate to discuss these matters with your accountant.
The link that you can easily report your Social Security or Federal Tax ID information is: http://www.getmoneyback.org/update.htm
Your conveyance of this information (one time) will be retransmitted to each of the general partners for each limited partnership.
December 2, 2002 The estate has sent out a payment to the Class 7 Creditors, which amounted to approximately 5% of the amount claimed.
November 22, 2002 We have been asked to form a group to oppose David Lapin's Ch13 bankruptcy plan. If the plan is approved, after three years, Mr. Lapin will owe nothing in connection with the L&W scheme. Ch13 bankruptcy dismisses fraud. There is a movement to force the case to a Ch7, which would not dismiss the fraud claims. If you would like to help, please click here and let us know what you think.
November 20, 2002 The law firm of Franklin, Cardwell & Jones, representing a large number of L&W investors in Federal Court, has announced a cut-off date to join this group. The last day is December 10th. If you wish to join, email Cindy Moulton mailto:cmoulton@nickenskeeton.com
September 9, 2002 David Lapin filed for Ch. 13 bankruptcy protection. The case has been assigned to Judge Steen.
June 20, 2002 The law firm of Franklin, Cardwell & Jones, representing a large number of L&W investors filed its law suit Thursday, June 20th in Federal Court. The initial defendants in the case are Raymond James Financial, Inc.; Raymond James & Associates, Inc.; Raymond James Financial Services, Inc.; Robert Thomas Securities, Inc.; TD Waterhouse Investors Services, Inc.; David Lapin; Richard Melamed; Mann Frankfort; Stein & Lipp Advisors, Inc.; Mann, Frankfort, Stein & Lipp, P.C.; and Mann, Frankfort, Stein & Lipp, LLC. As more evidence is evaluated, we anticipate that several more defendants will be added to the case.
The case number is H-02-2304 and the Judge is Vanessa Gilmore.
The general partners have recently received the complete files of most partnerships from Money Mortgage and the Trustee. The transfer of these files had been held up by the bankruptcy court. The files are now being reviewed.
June 9, 2002 The Combined Group's committee has selected a tort litigation firm that we feel is best suited to handle the various tort claims the investors have against Raymond-James, and several other defendants. Raymond-James is the brokerage house that licensed and managed Lapin & Wigginton. click here
May 9, 2002 The trustee has mailed a Third Amended Disclosure Statement and asked the unsecured creditors to vote on the plan. At this time, the Combined Group cannot recommend the plan mainly due to the inaccuracies and how they might affect the recovery and distribution of money. The ballot is due on June 3, 2002. We will provide you a position statement as soon as our lawyer consults with the trustee and other lawyers in the case.
March 25, 2002 The bankruptcy court granted the trustee's motion to allow the trustee to release the Master Service Agreements of the partnerships. The Combined Group will be meeting with the trustee to obtain the records. Some REO properties that owe the estate money for expenses will need to negotiate the amounts and propose a plan to the court.
March 15, 2002 The Sharing Group has interviewed several law firms regarding the tort litigation. We are in the final negotiation stage on the percentage the group will pay on recovery of damages. As soon as this agreement is finalized, we will invite you to participate in the filing of a a law suit against various defendants.
March 11, 2002 10:30 AM Bankruptcy hearing on the release of the Master Service Agreements was moved up; however, because of objections, the motion was not passed. The court is expected to approve the measure on March 25th.
February 25, 2002 10:30 AM Bankruptcy re-hearing on Residential Home Loans. The Judge indicated that he would sign the Order concerning the process of settling home mortgages that have advances on MM's records. According to the Trustee, there are @ 200 home loans of which @ 100- 110 have "advances" related to them. The total of advances is @ $930,000.
The Trustee will have the authority on his own to negotiate and settle home loans that have less than $5,000 in advances. If the advances on a home loan are between $5,000 and $25,000 then the Trustee can negotiate a settlement provided the Unsecured Creditors Committee does not object within 5 days of notice of the terms of settlement. If the advances exceed $25,000 then the Trustee has to get Court approval to finalize the settlement.
February 4, 2002 10:30 AM Bankruptcy re-hearing on the release of the Master Service Agreement of Residential Home Loans that do not have advances by Premier. Hearing is in Room 3401 of the Bob Casey Federal Bldg., 515 Rusk Avenue.
The Home Loans that do not have advances by Premiere have now been released by the court.
January 28, 2002 10:30 AM Bankruptcy Hearing on the release of the Master Service Agreement of Residential Home Loans that do not have advances by Premiere. Hearing is in Room 3401 of the Bob Casey Federal Bldg., 515 Rusk Avenue.
The release of the Master Service Agreements was delayed because of an objection by the law firm of Nathan and Sommers which represents several investors. The motion will again be heard on Monday, February 4th.
January 14, 2002 Bankruptcy Hearing on Jeff Wigginton's personal bankruptcy. 2:00 pm in Room 3401 of the Bob Casey Federal Bldg., 515 Rusk Avenue.
January 15, 2002 Bankruptcy Hearing; continuation of Premiere creditor meeting. 2:00 pm in Room 3401 of the Bob Casey Federal Bldg., 515 Rusk Avenue.
Friday 1/4/2002; Combined Groups selected the next 20 partnerships to replace the GP and amend the current partnership agreement. The "Combined Group" will need for more partners to contribute to the Sharing Agreement to pay legal fees for other partnerships to be processed.
About Selected Partnerships: http://www.getmoneyback.org/first.htm
About the Sharing Agreement: http://www.getmoneyback.org/grouprep.htm
Monday 12/17/2001; First LP round of 11 partnerships were mailed packets containing amendments to the partnership agreements, and a withdrawal agreement whereby Mr. Lapin will resign as GP (without conditions) and the appointment of a new general partner. FOR MORE INFO: http://www.getmoneyback.org/first.htm
Friday 12/14/2001 at 2pm; Creditors meeting in the bankruptcy proceeding on the 6th floor of the Federal Courthouse, 515 Rusk Avenue.
First Round of GP Takeouts; Round I partnerships will begin in the next week. This should include about 10 partnerships. Others will follow within the next 30 days.
If you are in one of the first group of partnerships, you will receive a packet from Lapin (for each partnership) that will (1) amend the partnership agreement to allow the current GP to resign, to appoint a new GP and clean-up language that will allow the new GP to run things more efficiently; (2) a Withdrawal Agreement between the partnership and L & W GP, LLC; (3) a structure for the new GP; (4) establishing a bank account, and (5) hiring a lawyer for the particular partnership.