Joint federal-state lawsuit accuses company of foreclosure rescue scam

STORY HIGHLIGHTS

• Prosecutors allege Bella Homes scammed 450 homeowners
• The homeowners lost more than $3 million in two years, the lawsuit says
• Bella Homes agrees to stop making real estate foreclosure transactions
• The company operates from private residences in Arizona and Georgia, the suit says

(CNN) -- Bella Homes LLC, a real estate investment company, and its principals are being sued by the federal government and the state of Colorado for allegedly preying on homeowners in foreclosure.

Bella Homes LLC, is a limited liability company organized in Delaware. According to the lawsuit, the company operates from the principals' private residences in Arizona and Georgia, and maintains "virtual offices" in Atlanta and Scottsdale, Arizona.

The complaint, filed in U.S. District Court in Denver by Colorado Attorney General John Suthers and U.S. Attorney John Walsh and announced in a joint press release, alleges Bella Homes scammed more than 450 unsuspecting homeowners across the nation, including five in Colorado. The company took in more than $3 million in "rent" between March 2010 and this February, according to a press release from the Colorado attorney general's office.

The Department of Justice alleges Bella Homes convinced homeowners to transfer their home titles to the company and enter into a type of lease agreement, where the homeowners would then rent or lease their homes back for a fee.

During the lease period, Bella Homes claimed if would work to stop foreclosure and would purchase the homeowners' mortgages, according to the release.

In exchange, Bella Homes allegedly promised homeowners they could avoid eviction, foreclosure and ruining their credit.

The company also told homeowners they would have an exclusive option to "repurchase their homes in three years for 90 percent of its fair market value and receive credit for 60 percent of the rent paid to Bella Homes," according to the release. Homeowners would also "enjoy a mortgage payment following their repurchase that is 40 percent to 60 percent lower than previous payments."

The complaint alleges Bella Homes did not pay off or assume the existing mortgage, nor did it make make mortgage, tax or insurance payments on the property. Prosecutors contend the promises made by Bella Homes were false and the company actually does very little to actually help homeowners.

Calls and e-mails to Bella Homes LLC and its Georgia attorney were not returned over several days.

"Bella Homes gave false hope to desperate homeowners, taking advantage of their desire to do anything to save their homes," said U.S. Attorney John Walsh. "Bella Homes's actions not only hurt those vulnerable homeowners, but the housing market generally. The company will now face the consequences of its misconduct."

U.S. District Judge Marcia Krieger granted a temporary restraining order against Bella Homes on February 15 that prohibited the company from entering into additional deals, and froze Bella Homes' assets.

On Sunday, Bella Homes website, bellahomesllc.net, was no longer available. Only the message "This Account Has Been Suspended" appeared on the site.

Bella Homes does not contest the facts, according to court documents, and it consented to stop making real estate transactions. In addition, the company voluntarily arranged to set aside $500,000 for restitution, pending a resolution in the case.

Bella Homes also agreed to cooperate with prosecutors to minimize the negative impact on homeowners and provide a list of homeowners in the Bella Homes program, according to court documents.

In the release, Suthers said Colorado law prohibits a loan modification company to charge a homeowner an upfront fee. The company can charge for services rendered, but only once the services are completed. He further warned homeowners that any time someone stops making payments on their mortgage, foreclosure could result.

Bella Homes and its principals have not filed a response to the allegations in federal court yet, but the parties are expected to be in court March 6 for a scheduling conference.

CNN News

Obama chides governors for education cuts

STORY HIGHLIGHTS

• President Obama calls on the nation's governors to spend more on education
• Higher education shouldn't be a luxury, Obama says
• The president addresses a luncheon with the National Governors Association
• He reiterates his push for students to graduate high school and get higher education

Washington (CNN) -- President Barack Obama told U.S. governors attending a luncheon Monday that they are cutting too much funding for education and need to make reforms while continuing to invest in the future of America's students.

While acknowledging the tough economic climate for state governments, Obama cited the need to prioritize the long-range significance of a strong education system.

"We've all faced some stark choices over the past several years, but that is no excuse to lose sight of what matters most, and the fact is that too many states are making cuts to education that I believe are simply too big," Obama told a White House gathering with the National Governors Association that included some of his harshest Republican critics.

"Nothing more clearly signals what you value as a state than the decisions you make about where to invest," Obama said, "Budgets are about choices, so today I'm calling on all of you: invest more in education, invest more in our children and in our future."

The luncheon is an annual affair that highlights the constant tension over funding issues between the federal government and states. One table included Republican governors and constant Obama foes Chris Christie of New Jersey, Jan Brewer of Arizona, Bobby Jindal of Louisiana and Nikki Haley of South Carolina.

Obama noted the economic outlook is improving from the early days of his administration, saying, "our recovery is gaining speed."

However, he warned that a failure to maintain significant government investment in education now would cause economic harm in the future by leaving U.S. workers unable to compete in a global marketplace.

"I realize everybody is dealing with limited resources. Trust me, I know something about dealing with tight budgets," Obama said before citing statistics on decreasing numbers of teachers and higher university costs.

"No issue will have a bigger impact on the future performance of our economy than education," Obama said, adding that the unemployment rate for Americans with a college degree is roughly half the national average.

"Their incomes are about twice as high as those who only have a high school diploma," he added. "So this is what we should be focused on as a nation. It is what we should be talking about and debating. The countries who out-educate us today will out-compete us tomorrow. That's a simple fact."

Republican presidential candidate Rick Santorum called Obama a "snob" last week because the president advocates that American students to go to college.

Santorum framed the issue as Obama seeking to indoctrinate young Americans in what Santorum called the liberal leanings of a majority of U.S. colleges and universities over a four-year college career.

Obama, however, made clear Monday he was talking about all kinds of higher education, including community colleges and specialized training programs to help young people prepare to enter the modern workforce.

"When I speak about higher education, we're not just talking about a four-year degree," Obama said.

The first step is creating a national expectation that all students graduate high school, "at a minimum," the president said. At the same time, federal and state governments need to do what they can to make college affordable, he added.

"Americans now owe more in student loan debt than they do in credit card debt," Obama said, adding that "state budget cuts have been a major factor in rising tuition costs at state universities."

Insisting that "all of us have to do more," Obama said, "We can't allow higher education to be a luxury in this country.

"It's an economic imperative that every family in America has to be able to afford and, and frankly I don't think any of this should be a partisan issue," he continued to applause. "All of us should be about giving every American who wants to succeed that chance."

CNN News

One dead, four hurt in Ohio high school shooting

About 1,150 students attend Chardon High, which is next to a middle school and across the street from an elementary school.

STORY HIGHLIGHTS

• NEW: Cleveland newspaper, citing student, identifies suspect
• A teacher apparently chased the suspect out of Chardon High School, police said
• The suspect later surrendered to bystanders, according to police
• One died and four were wounded in the shooting, law enforcement officials said

(CNN) -- A gunman wounded five students, one of them fatally, at a suburban Cleveland high school Monday morning before apparently being chased out of the building by a teacher, police said at a news conference.

The Chardon High School shooting suspect -- believed to be a student, according to a school official -- was in custody, police chief Tim McKenna said.

McKenna declined to identify the suspect, who he said is a juvenile. But the the Plain Dealer newspaper in Cleveland cited student Nate Mueller, who was slightly wounded in the shooting, in identifying the suspect as student T.J. Lane.

Two students injured in the shooting, one boy and one girl, were taken to Hillcrest Hospital, spokeswoman Heather Phillips said. One was in serious condition, the other in stable condition, she said.

Three students were taken by helicopter to MetroHealth Medical Center, hospital representative Shannon Mortland said in a statement. Mortland did not provide details on their conditions.

It was unclear where the fatally wounded student had been taken.

A student at Chardon High, Evan Erasmus, said the victims were Chardon students who attended a vocational school in Auburn, Ohio, and were waiting for a bus to take them there.

He said he had heard that the suspect may have posted a threatening message on the social networking service Twitter before the shooting but that he had not actually seen the message.

Police recovered a handgun and gave it to the federal Bureau of Alcohol, Tobacco, Firearms and Explosives for examination, the agency said.

A law enforcement source said the Geauga County sheriff's office and federal agents were executing search warrants in the case, but the official did not provide locations.

The Plain Dealer reported taht Mueller said he was sitting at a table in the cafeteria when Lane approached them.

"My friends were crawling on the floor, and one of my friends was bent over the table, and he was shot," the newspaper quoted Mueller as saying. "It was almost like a firecracker went off. I turned around and saw (T.J.) standing with a gun, and I saw him take a shot."

Mueller said he ran from the building, hid and called police, according to the newspaper.

A student who identified herself as Victoria told CNN affiliate WJW that she heard a boom and turned to look into the cafeteria to see the student holding a silver handgun, standing 10 to 15 feet from a table of students.

"He started walking closer and closer. It was just like, 'Boom, boom, boom, boom,' " she said.

Another student told CNN affiliate WKYC that he heard what he thought at first was firecrackers.

"Then I saw a bunch of people running out, so I started running," said the student, whose name was not available. "I heard someone yell behind me, 'Get down.' "

The boy's mother said she was terrified.

"I had just dropped him off at the school, and not even 10 minutes later, I got a text from him saying there was a shooting at the school," she said.

Investigators took over the school Monday morning and were collecting evidence after students had been evacuated to nearby Maple Elementary School, said Lt. John Hiscox of the sheriff's office.

Multiple calls reporting a shooting at the school flooding into the police dispatch center beginning at 7:38 a.m., just as school was about to get under way, McKenna said.

After police got word from a dispatcher that a teacher had chased the suspect out of the school, officers went inside, soon followed by paramedics to help the injured students, McKenna said.

It was unclear exactly how the suspect was captured. Initial reports from police indicated that the suspect may have turned himself in to bystanders, but McKenna did not mention that during the brief midday news conference. Instead, he said officers "came up with the suspect" after starting a search shortly after the shooting. Police did not take questions during the briefing.

"I want to assure the community of Chardon that we are safe," McKenna said.

School administrators called off school for the day, bringing in grief counselors Monday afternoon and scheduling a candlelight service at a nearby church Tuesday.

"We certainly hope those families know they're in our thoughts and prayers," Superintendent Joseph Bergant said.

Parents eager to retrieve their children hurried to school buildings shortly after the shooting, forming long lines as school officials and police checked identification before releasing students. SWAT team members stood guard outside the school, allowing only a few parents inside at a time, enhancing what was a surreal scene for many.

"This stuff doesn't happen here at Chardon. Everybody's a little upset," said one parent who was preparing to pick up his daughter, a 10th-grader who had been evacuated to Maple Elementary School.

Parents and children frequently embraced and cried when reunited.

Teresa Hunt said she exchanged about 50 texts with her 18-year-old daughter, a senior at the high school. They began about 7:45 a.m., minutes after the shooting was reported. Hunt said her daughter hunkered down with her class inside their classroom, staying clear of the door. She said they could hear police officers running down the hall.

"They're terrified. She was crying. Her anxiety was way up," Hunt said.

"I did ask her, about the third or fourth text in, if she had any indication that something was going to break out," Hunt said. "She said, 'No, this was sudden. I had heard nothing.' Her friends had heard nothing also."

Erasmus said he believed that frequent shooting-situation drills and the quick response of school authorities helped keep the situation from becoming worse.

"We're not that kind of place where it happens, so it's really shocking," he said.

Police were not releasing information on the suspect Monday, but Superintendent Joseph Bergant said the suspect is a student.

There is a long history of deadly violence on school campuses, ranging from incidents in which students stab each other or shoot staff members to mass murders like the ones at Virginia Tech and Columbine High School.

In April 1999, two teenagers, Eric Harris and Dylan Klebold, killed 12 students and a teacher before they killed themselves in the library at Columbine High School in Littleton, Colorado.

Gunman Seung-Hui Cho unleashed one of the deadliest campus attacks in American history at Virginia Tech in April 2007, killing 32 students and staff members. Two handguns were found near his body after the 23-year-old senior finally ended his rampage by killing himself.

Not all school killings are carried out by students. A 32-year-old man, Charles Roberts IV, took 11 girls hostage at a small Amish school in Pennsylvania in October 2006 and killed five of them. The other six were wounded before Roberts killed himself.

CNN's Melissa Gray, Chuck Johnston, Richard Greene and Carol Cratty contributed to this report.

Mosley: Can the press be free but responsible

 Max Mosley is surrounded by the media during practice for the British F1 Grand Prix at Silverstone, England on June 19, 2009.

STORY HIGHLIGHTS

• Mosley's interest in people's treatment at the hands of the media stems from his own experiences
• He asks how media excesses can be curbed without restricting press freedom?
• Two key issues for dealing with media abuse are cost of litigation and enforcement, says Mosley
• Mosley: Whatever system is introduced will also have to work for the internet

Editor's note: Max Mosley, former chief executive of Formula 1's governing body the FIA, successfully sued British tabloid weekly the News of the World after it alleged he had engaged in a Nazi sex orgy. A frequent commentator on media practices, Mosley will be taking part in a debate on regulation Wednesday at the House of Commons in London.

(CNN) -- Just when you think the UK phone-hacking scandal can't get any worse, it does. The last few days have brought allegations of public officials being bribed and a senior newspaper executive ordering the deletion of "unhelpful" emails to conceal evidence.

It's five years since former News of the World royal editor Clive Goodman and private investigator Glenn Mulcaire went to prison for phone hacking. Both were working for News International who maintained no one else was involved.

In reality, journalists had been hacking on an industrial scale -- even, allegedly, the phone of a missing 13-year-old girl who was later found murdered. This led directly to the closure of the News of the World, until then one of the biggest-selling English language newspapers.

I had a problem with the News of the World myself in 2008. They paid a participant to film sexual activity I was engaged in with five women. Not only that, they invented a story this involved "Nazi" role-play -- a complete fabrication. They thought I would be too embarrassed to sue. They were wrong, I sued and won. And the experience made me very interested in what they had done to other people.

The internet is a real challenge because, unlike a newspaper where the editor decides what appears, anyone can publish on the web.
Max Mosley

The News of the World is dead, but it seems unlikely that phone hacking, bribery and other illegal news-gathering techniques were confined to that one paper. So the UK now has a problem. How do we stop these tabloid excesses but without restricting press freedom?

The question is being examined by an official inquiry led by a very senior judge, Lord Justice Leveson. He has already heard evidence from newspaper editors, journalists and their victims. He is now hearing from the police, who must explain why they failed to investigate properly until very recently. After that, it will be our most senior politicians, some of whom were allegedly far too close to certain major newspapers.

Leveson has issued a general request for solutions. He wants a regulatory regime which ensures a free and independent press but without the abuses. Like others, I recently sent him a proposal, which in my case, sets out to solve two main problems. First, cost. Litigation for defamation or breach of privacy is ruinously expensive. This means only the wealthy currently have access to justice. Second, enforcement. The body charged with regulating the press, the Press Complaints Commission (PCC), failed. It had rules but no means of enforcing them.

I believe we need two entirely separate bodies, one to make the rules, the other to enforce them. The rule-making body could even emerge from the existing PCC which already has quite a good, but unenforced code.

But an entirely separate tribunal should apply both the rules and the law. It would have a central secretariat and a nationwide network of adjudicators. These would be practicing lawyers who worked for the tribunal but only when needed. The UK already uses such a system for some of its judges.

Hearings would involve only the immediate parties -- the journalist and the subject; no lawyers save in very exceptional circumstances. Each hearing would start with an attempt at mediation. But if this failed the adjudicator would hear the case.

Any individual could protect their rights, not just the small minority who can afford to risk hundreds of thousands in fees.
Max Mosley

The fundamental change is that, unlike the courts, all this would be free. Any individual could protect their rights, not just the small minority who can afford to risk hundreds of thousands in fees. It would also mean that newspapers would no longer face massive legal costs. It would be rough and ready justice compared to the expensive court procedures we have now but it would be available to all.

The adjudicator would have the same powers as a court. The parties in dispute would not be able to go to the High Court unless a judge was satisfied that both had the necessary means and the complexity of the case required it. This would stop financial power being used by a big newspaper to bully an ordinary individual or by a rich individual to oppress a small newspaper.

Whatever system we build will ultimately need to work for the internet. The internet is a real challenge because, unlike a newspaper where the editor decides what appears, anyone can publish on the web. And it's cross border, so multi-jurisdictional. Yet we need to provide redress, for example, when a child is being bullied on social media or someone is victimized in a very local way.

For this, a network of adjudicators would work well. However, unlike the printed press, where new rules can be introduced quickly, the internet will take time. But international laws and conventions will surely come. And when they do, we would have a suitable system already in place and working.

The opinions expressed in this commentary are solely those of Max Mosley.
CNN News

Afghan anger over Koran burning an emblem of nation's culture war

The unrest over burned Korans shows the visceral distaste for Western behavior and values among many Afghans, but U.S. efforts to wind down the war worry some.

Afghans carry a protester injured during an anti-U.S. demonstration in the northern city of Kunduz. More than 30 people have been killed in the violence that erupted after American personnel burned Korans on a U.S. air base. (Ezatullah Pamir, Associated Press / February 26, 2012)

By Laura King, Los Angeles Times
February 25, 2012, 4:32 p.m.

Reporting from Kabul, Afghanistan— 

The spasm of violence that has shaken the country since copies of the Koran were dumped in a trash incinerator at a U.S. military base is emblematic of a culture war among Afghans themselves, one that is likely to grow more intense as the Western military presence wanes.

Five days of chaotic street battles have left more than 30 people dead, including two U.S. military officers killed Saturday in a heavily guarded Afghan government ministry. The unrest over the desecration of the Muslim holy book illustrated not only the depth of religious fervor felt by many here, but also a visceral distaste for Western behavior and values among a far broader swath of Afghan society.

At the same time, however, the Obama administration's efforts to kindle negotiations with the Taliban have generated deep-seated fear among progressive Afghans of a theocracy-in-waiting that could come to fruition when most North Atlantic Treaty Organization troops depart.

Many worry that the United States and its military allies are so eager to find a way out of this war that they will give their blessing to an accord with the Taliban that does not adequately safeguard women's rights or civil liberties.

"This is not just about relations with the U.S.," researcher Martine van Bijlert wrote on the website of the AfghanistanAnalysts Network in the first days of the Koran-burning protests. "This is part of a wider struggle over what kind of society Afghanistan is becoming, over who the custodians of religious power will be and what they will use it for."

Kabul, the capital, and a few other big Afghan cities have a cosmopolitan veneer of shopping malls and smartphones and gel-spiked hairdos. But in a society steeped in conservative Islam, a decade of U.S. military engagement, coupled with a massive development drive that has brought thousands of foreign civilians to Afghanistan, has generated profound unease over outsiders' behavior as a polluting influence.

The perceived insults are many: not only troops' sometimes heavy-handed treatment of ordinary Afghans, or the video that surfaced last month of U.S. Marines urinating on the bodies of Taliban fighters, but also men and women consorting freely in heavily guarded international compounds, or the consumption of alcohol at restaurants with a mainly non-Afghan clientele.

Moreover, as the conflict's endgame begins in earnest, some Afghans regard public expressions of piety as a way of hedging one's bets. This month, for example, the Information Ministry ordered female television newscasters to cover their hair and refrain from wearing heavy makeup on-air, a directive that was widely ignored, but nonetheless cast a chill.

Those killed and injured in nearly a week of violent clashes, which broke out after U.S. personnel placed copies of the Koran in the "burn pit" at the giant Bagram air base north of the capital Monday night, have included demonstrators, bystanders and Afghan police officers. In addition, two U.S. troops were shot dead Thursday by an Afghan soldier apparently acting in solidarity with the protesters

Information on the killings of the two Americans on Saturday remained murky hours after the shooting. NATO's International Security Assistance Force confirmed the deaths of two of its service members in Kabul, without disclosing their nationalities, although Afghan officials speaking on condition of anonymity identified the two as U.S. military officers who were advising the Interior Ministry.

A ministry spokesman, Sediq Siddiqi, said the officers' bodies had been discovered in a command-and-control center used by foreign advisors, and that the assailant had apparently escaped. U.S. Marine Corps Gen. John R. Allen, the commander of Western troops in Afghanistan, vowed to "pursue all leads" to find the killer.

"The perpetrator of this attack is a coward whose actions will not go unanswered," he said in a statement.

By week's end, the Koran-burning riots had turned into one of the most sustained outbreaks of civil unrest in Afghanistan since the start of the war, despite an early and emphatic apology by Allen. Further expressions of regret, in the form of a letter from President Obama delivered Thursday, also did little to quell public passions, though he was pilloried for the apology by Republican rivals at home.

For some Afghans, particularly the better educated, the scenes of strife triggered conflicting emotions. Many believed that the protests were being deliberately exploited by a variety of players: the Taliban movement, neighboring countries — such as Iran and Pakistan — that generally rejoice at yet another American misstep, and various domestic political factions.

Still, the sense of bone-deep grievance, expressed in furious cries of "Death to America!" that echoed at the scene of virtually every protest, resonated even among those who would never consider taking to the streets with sticks and stones in a rallying cry for Islam.

"I was personally offended by what happened," said Hamed Saboori, a college-educated 30-year-old who described himself as a moderate Muslim. "But there are elements that want to take advantage of this irresponsible act. The whole issue has been manipulated."

Some imams, or mosque preachers, delivered fiery sermons that helped drive the protests, turning the week's events into a broader complaint about the Western entanglement in Afghanistan.

"Burning the Koran at Bagram is an unforgivable crime and sin," Inayatullah Baleegh thundered from the pulpit of a Kabul mosque Friday, the main prayer day of the Islamic week. "But the presence of infidels in a Muslim country is an even bigger sin."

The Taliban, too, sought to portray a society that had fallen in thrall to the West.

"Under the slogan of 'freedom,' new doors of corruption are being flung open every day," the movement said in a midweek statement, as the protests were gathering force. "Blind imitation of the Western infidels is being encouraged in our cities and villages; the veil of modesty and dignity is being lifted from our women under the slogan of 'women's rights.' ... All these things are brought to us by the accursed Western invasion, which is forcing itself upon us in the name of democracy."

Insurgents have previously used violent protests as cover for attacks on government buildings and NATO bases, both of which were targeted repeatedly over a period of days. As the days passed, more gunmen were spotted in the crowds, and some protesters waved the white flag of the Taliban.

Afghan President Hamid Karzai, accustomed to walking a fine line between his American patrons and popular sentiment, called for calm, but tempered that with expressions of sympathy for the protesters' cause, urging police to exercise restraint and patience with "emotional" demonstrators.

Even if the protests show signs of ebbing, lasting damage may have been done to what the Americans regard as essential partnerships with the Afghan government and security forces.

After Saturday's shooting deaths of the two Americans at the Interior Ministry, Allen recalled all Western military personnel working in ministries "for obvious force-protection reasons," a serious blow after years of American efforts to make the ministries more efficient and less corrupt. And the general himself traveled Thursday to the base in Nangarhar province where the two American troops were shot and killed by a member of the Afghan army, urging his troops to stifle any impulse to take revenge.

"Everything that happened this week makes it harder for anyone to trust anyone," said Zeinab Khuttab, a university student in Kabul. "And that was probably the intention behind it all, to drive everyone further apart."

laura.king@latimes.com

Special correspondent Hashmat Baktash contributed to this report.

Los Angeles Time