Blacks are the most victimized by consumer fraud
11th January 2016 · 0 Comments
By Frederick H. Lowe
Contributing Writer
CHICAGO (Special from NorthStarNews Today) – Dorothy Pruitt, a 65-year-old African-American woman, said she paid $85,118.03 to Mark Steven Diamond, a Chicago area home repairman to tear down and build a new back porch.
Diamond allegedly Blacks are the most victimized by consumer fraud companies’ bank accounts. And for her extraordinarily high payment, Pruitt got an unfinished porch without steps so she would have to jump several feet to reach the ground below.
“Mark Diamond did not complete building Ms. Pruitt’s rear porch and did not refund Ms. Pruitt any money,” according to court documents. “Mark Diamond tore down the existing porch, but did not replace the second floor. The unit opens onto thin air, creating a hazard if there were a fire and someone needed to exit the second floor unit.”
Pruitt was one of four black senior citizens who testified against Diamond in court. Their testimony and Diamond’s lack of a defense persuaded Cook County, Circuit Court Judge David B. Adkins to issue in June a preliminary injunction against Diamond, who is accused of bilking elderly African Americans out of hundreds of thousands of dollars through reverse mortgage schemes.
Judge Adkins ruled that Diamond violated Section 2 of the Illinois Consumer Fraud Deceptive Prac-tices Act because he failed to do any of the agreed-on repairs and refused to return any money paid to him.
The Illinois Attorney General’s office filed for a permanent injunction against Mark Diamond and his businesses, United Residential Services Real Estate, United Construction of America and OSI Financial Services, Inc., on Aug. 28, 2015 in the Circuit Court of Cook County.
The Attorney General is seeking $340,000 in civil penalties against Diamond and financial restitution for the senior citizens he is accused of defrauding.
Blacks are biggest fraud victims
Research by the Federal Trade Commission shows that a higher proportion of Blacks are victims of fraudulent transactions than Hispanics, whites or Asians.
In its April 2013 report, “Consumer Fraud in the United States, 2011: The Third FTC Survey,” the FTC found that 17.3 percent of Blacks said they were victims of fraudulent transactions, compared to 13.4 percent of Hispanics, nine percent of non-Hispanic whites and 6.2 percent of Asians. Fraudulent transactions cost unsuspecting consumers nearly $2 billion annually, according to the FTC.
The most frequently reported schemes included weight-loss products, prize promotions, being billed for a buyers’ club membership or Internet service they did not agree to purchase, and fraudulent work-at-home programs.
Someone becomes a victim of a fraudulent transaction when he or she is deceived and doesn’t get what he or she paid for.
A fake Diamond
Diamond allegedly told the homeowners he would make needed repairs to their homes if they agreed to let him apply for reverse mortgages using their homes as collateral, according to court documents.
When the reverse mortgages were approved, Diamond reportedly deposited the money into his businesses’ bank accounts. His clients claim that he never did any of the promised repairs.
Diamond entered into contracts with 65-year-old Pruitt, as well as Dorothy Hillman, 79, Clyde Ross, 92, Frankie Jenkins, 55, and Levada Johnson, who is 79. All five clients testified against Diamond, who took the Fifth Amendment against self-incrimination. He claimed witnesses would testify on his behalf but they never showed up, according to court documents.
With a sharp pencil, not a gun, Diamond took $70,000 from Hillman, $83,099.04 from Johnson and $38,500 from Ross. Jenkins testified that diamond had him sign a blank home repair contract to indicate no home repair was being done as part of Jenkins’ refinancing. He later learned, however, the blank home repair contract was filled in, according to court documents. No amount of money was specified.
“Mark Diamond initiates and completes the paperwork for the consumers to get reverse mortgages or refinance their homes, ” according to court documents. He then “deposits checks, issued by the consumers’ banks after refinancing of their home, into an account controlled by him.”
“Mark Diamond either does not begin or does not complete the promised home repair and fails to provide consumers with a refund.”
Preventing fraud
African Americans can become victims of fraud due to their own ignorance. In the case involving Diamond, the consumers were elderly and financially unsophisticated.
Diamond also avoided suspicion by reportedly partnering white men with Black women, a team trusted in the Black community.
The bureaucracy also creates hurdles. In order to file a complaint with the Illinois Attorney General’s office, the complainant must go to the website and write in great detail about how he or she was victimized by fraud.
For someone not comfortable or adept at writing, this can be a daunting challenge. Several groups for the elderly said senior citizens are often confused by the process.
This story was produced as part of the journalism fellowship with ethnic media in seven states on consumer scams, sponsored by the Federal Trade Commission and New America Media.
This article originally published in the January 11, 2016 print edition of The Louisiana Weekly newspaper.
