EXHIBIT A

TO

COMMONWELATH’S MOTION TO AMEND THE COMPLAINT IN ITS ADVERSARY PROCEEDING

UNITED STATES BANKRUPTCY COURT EASTERN DIVISION, DISTRICT OF MASSACHUSETTS

________________________________________________ )

IN RE ALEC G. SOHMER, ) Chapter 7 )

Sohmer. ) Bankr. Case No. 06-14073-JNF )

________________________________________________) ___________________________________________)

) COMMONWEALTH OF MASSACHUSETTS, )

) Plaintiff )

) Adv. Proc. No. 06-1433 v. ) )

ALEC G. SOHMER, Individually, and as Trustee ) of Certain Named Nominee Trusts; ) JENNIFER SOHMER, Individually and as Trustee ) of Certain Named Nominee Trusts; ) TIMELESS FUNDING, INC.; ) ANDREW P. PALMER, Individually and as a member of ANDREW P. PALMER AND ASSOCIATES; ) SHAUN M. ELLIS, Individually and as a member ) of SHAUN ELLIS, LLC; ) CARTERET MORTGAGE CORPORATION; ) EDWARD DE LA FLOR, ) ) Defendants. ) __________________________________________ )

AMENDED COMPLAINT

I. INTRODUCTION

1. The Commonwealth of Massachusetts, by and through its Attorney

General, Martha Coakley, brings this enforcement action in the public interest under G.

L. c. 93A, '' 2 and 4 of the Massachusetts Consumer Protection Act concerning unfair

and deceptive business conduct in connection with the foreclosure rescue scheme

described in this Amended Complaint.

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2. Defendant Alec G. Sohmer (“Sohmer”), individually and in concert with

defendants Timeless Funding, Andrew Palmer, and others, from 2004 through 2006,

preyed on homeowners facing foreclosure by holding himself out as an attorney who

could help them avoid foreclosure through refinancing, and then deceived the

homeowners into transferring to him, or to his wife Jennifer Sohmer, or to his brother

Bradley Sohmer, ownership of their homes, and the equity built up in their homes.

3. Sohmer tried to cover his scheme by deceiving the homeowners into

executing documents purporting to give them the ability to repurchase their homes at a

later date by paying Arent@ in the meantime. But the Arepurchase@ terms were both

unconscionable and illusory.

4. Ultimately, as a result of Sohmer’s scheme, these homeowners first found

themselves tenants in their own homes paying Arent@ to Sohmer, then evicted by him

when they were late on even one monthly payment, and then facing the prospect of the

sale of their homes from Sohmer to third parties. Throughout this process, Sohmer and

the defendants extracted the equity built up by the homeowners in their property, and

further extracted additional fees, commissions and other payments directly from the

homeowners.

5. The conduct of Sohmer and other defendants constitute unfair and

deceptive acts and practices under the Massachusetts Consumer Protection Act, as

well as violations of specific state and federal laws and regulations designed to protect

consumers from deceptive and unconscionable lending practices.

6. All total, Sohmer orchestrated 26 such transactions, leaving in his wake 26

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families burdened with: (i) significantly higher mortgage principal balances than they

previously had; (ii) high monthly mortgage payments, and in some instances second or

even third mortgages and very high interest rates; (iii) the prospect of no escrow funds

which Sohmer had promised to save for them; (iv) a total loss of home equity; and, (v)

inflated debt at a time when market values for the homes in many instances have

decreased since the time of the transactions.

7. Other defendants aided Sohmer in his scheme, and were integral to its

continuation, as follows:

(i) An attorney, Andrew Palmer (“Palmer”), closed all of the transactions, drafted false HUD-1 Settlement Statements depicting false information about the transactions, and collected attorneys fees and title/closing insurance commissions for each closing; (ii) An attorney, Shaun Ellis (“Ellis), referred clients to Sohmer and accepted referral fees and/or other benefits from Sohmer for the referral of clients who ended up victimized by Sohmer transactions; and (iii) The primary mortgage broker, Edward de la Flor, and his employer

Carteret Mortgage Corporation (mortgage broker/originator), originated and brokered many of the loans involved in the Sohmer transactions. Both Carteret and de la Flor profited from the transactions by collecting closing points, commissions, yield spread premiums, sales bonuses and other fees. 8. Sohmer’s scheme required the participation of lenders who funded the

Sohmer loans, ultimately consummated by the lenders’ attorney (Palmer) at closing.

Without them, Sohmer’s scheme never would have occurred. Each of these defendants

profited from their participation by siphoning off the homeowners’ equity, enriching

everyone but the homeowners, who lost their homes or, at best, were saddled with an

inflated debt secured by their home.

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9. The Commonwealth is seeking through this Adversary Proceeding: (i)

restitution for those homeowners harmed by defendants= practices; (ii) civil penalties;

(iii) permanent injunctive relief; (iv) payment of the Commonwealth=s costs and

attorney=s fees incurred in investigating and litigating this case; (iv) objection to

Sohmer’s discharge in bankruptcy, pursuant to 11 U.S.C. § 727(a); and, if not allowed,

then exception to discharge of certain debts of Sohmer owed to the Commonwealth,

pursuant to 11 U.S.C. § 523(a).

II. JURISDICTION

10. The Commonwealth, through the Attorney General, was authorized to

bring its state court action in the Superior Court for Suffolk County, Massachusetts,

against Sohmer and other defendants, pursuant to G. L. c.93A '' 2 and 4, G.L. c. 12, '

10, and G. L. c. 223A, ' 3(a) and (b). The Commonwealth filed its Complaint on August

30, 2006, which was designated as Civil Action No. 06-3664-A (the “state court case”).

11. On November 6, 2006, Sohmer filed a Chapter 11 Petition in this

Bankruptcy Court. Sohmer’s bankruptcy proceeding was converted to Chapter 7 on

November 20, 2006. The Court assigned In re Sohmer Bankruptcy Case No. 06-

14073JNF.

12 The Attorney General removed its state court case to this Court, by filing a

Notice of Removal on December 12, 2006, pursuant to 28 U.S.C. ' 1441(b) and

Bankruptcy Rule 9027. The state court case is related to In re Sohmer, pursuant to 28

U.S.C. ' 1334(b), and therefore the district court for the Eastern District of

Massachusetts has original, but not exclusive, jurisdiction over the removed state court

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action. This Court designated the Commonwealth’s removed case Adversary

Proceeding No. 06-1433.

13. This Court has subject matter jurisdiction over all defendants in this

Amended Complaint in Adversary Proceeding No. 06-1433 for at least the following

reasons. First, this Amended Complaint includes allegations and actions which

constitute a core proceeding as to the following defendants: Sohmer, Jennifer Sohmer,

and Timeless Funding, pursuant to 28 U.S.C. § 157(b)(1), due, inter alia, to the issue of

the validity of liens on properties nominally and/or legally owned by Sohmer. Thus, this

Court has subject matter jurisdiction over those claims, pursuant to 28 U.S.C.

§ 1334(b). Second, this Amended Complaint contains claims against all defendants,

including Andrew Palmer, Shaun Ellis, Carteret Mortgage, and Edward de la Flor, that

are “related to” Sohmer’s bankruptcy proceeding. Thus, this Court has subject matter

jurisdiction pursuant to 28 U.S.C. § 1334(b). Third, this Court has supplemental

jurisdiction over all defendants in this Adversary Proceeding, pursuant to 28 U.S.C.

' 1367, because the same operative facts are involved in the Commonwealth’s

allegations against Sohmer, and the other defendants, which involve: 1) the same set of

unfair and deceptive practices carried out by all defendants collectively; 2) the same

foreclosure rescue transactions orchestrated by Sohmer and the other defendants; and,

3) the same 26 residential properties affected by those transactions.

14. This Amended Complaint also objects to the discharge of Sohmer,

pursuant to 11 U.S.C. § 727(a), and seeks to except from discharge certain debts owed

to the Commonwealth and consumer victims by Sohmer under 11 U.S.C. § 523(a).

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These claims are core proceedings under 28 U.S.C. § 157(b).

15. The Commonwealth consents to entry of final orders and/or judgments by

the United States Bankruptcy Court. 28 U.S.C. ' 157(c)(2).

III VENUE

16. Venue was proper in Suffolk County, Massachusetts, pursuant to G. L. c.

223, ' 5 and G. L. c. 93A, ' 4 when the Commonwealth filed its state court case on

August 30, 2006. Venue is proper in this court pursuant to 28 U.S.C. '§ 1409(a) and

1452.

IV. PARTIES

17. The plaintiff, the Commonwealth of Massachusetts, represented by the

Attorney General, Martha Coakley, brings this action in the public interest.

18. Defendant Alec G. Sohmer (ASohmer@), is an attorney, licensed to practice

law in the Commonwealth of Massachusetts. His home address is: 23 Roxanne Road,

Pembroke, Massachusetts 02359. His business address is, or was during the acts and

practices relevant to this case, located at: 71 Legion Parkway, Suite 23, Brockton,

Massachusetts; and also at the offices of Andrew P. Palmer and Associates, 200

Cordwainer Drive, Suite 301, Norwell, Massachusetts. Sohmer is a defendant both

individually, and as Trustee to 26 separately formed Nominee Trusts, which are named:

57 STAGE COACH ROAD NOMINEE TRUST (the AGoff Property@) 19 SHANGRI-LA BLVD. NOMINEE TRUST (the AMcCallum Property@) 2 BELGIAN ROAD NOMINEE TRUST ((the AGrigoryan Property@) 1 DIAMOND STREET NOMINEE TRUST (the ABryson Property@) 399 CENTER STREET NOMINEE TRUST (the AWood Property@)

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46 BOURNE NECK ROAD NOMINEE TRUST (the ACoelho Property@) 27 GENERAL PATTON DRIVE NOMINEE TRUST (the ASawyer Property@) 7 BUTTERFIELD LANE NOMINEE TRUST (the AForero Property@) 420 HIGH STREET NOMINEE TRUST (the ABertelli Property@) 5 JOE JAY LANE NOMINEE TRUST (the ALansing Property@) 159 GREEN STREET NOMINEE TRUST (the AAustin Property@) 23 PRIMROSE LANE NOMINEE TRUST (the ACataldo Property@) 72 PURCHASE STREET NOMINEE TRUST (the ADand Property@) 158 ASA MEIGS ROAD NOMINEE TRUST (the AWells-Hamblin Property@) 10 SAMOSET ROAD NOMINEE TRUST (the ABaum Property@) 37 HAYES ROAD NOMINEE TRUST (the APhillips Property@) 36 RESTFUL LANE NOMINEE TRUST (the ATrarback Property@) 9 MIDWAY STREET NOMINEE TRUST (the AMartin Property@) 15 BEECHWOOD DRIVE NOMINEE TRUST (the ALopes Property@) 73 ADAMS AVENUE NOMINEE TRUST (the AMarsh Property@) 49 COURTLAND STREET NOMINEE TRUST (the AImbrogna Property@) 28 VINEYARD AVENUE NOMINEE TRUST (the AGiuffre Property@) 121 WALNUT STREET NOMINEE TRUST (the AHarrison Property@) 3 LADY ALLISON WAY NOMINEE TRUST (the AMonroe Property@) 667 BRIDGE STREET NOMINEE TRUST (the AHinchey Property@) 41 WESTON STREET NOMINEE TRUST (the ACarrigan Property@) 19. Defendant Jennifer Sohmer is the wife of defendant Alec Sohmer, and the

Secretary of defendant Timeless Funding. Her home address is: 23 Roxanne Road,

Pembroke, Massachusetts 02359. Jennifer Sohmer is a defendant both individually,

and as co-Trustee, along with Sohmer, to 6 separately formed Nominee Trusts, which

are named:

57 STAGE COACH ROAD NOMINEE TRUST (the AGoff Property@) 46 BOURNE NECK ROAD NOMINEE TRUST (the ACoelho Property@) 27 GENERAL PATTON DRIVE NOMINEE TRUST (the ASawyer Property@) 5 JOE JAY LANE NOMINEE TRUST (the ALansing Property@) 23 PRIMROSE LANE NOMINEE TRUST (the ACataldo Property@) 2 BELGIAN ROAD NOMINEE TRUST (the AGrigoryan Property@)

20. Defendant Timeless Funding Inc. (ATimeless Funding@), is a corporation

licensed under the laws of the State of Nevada, listed as being located at 1802 N.

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Carson Street, Suite 212, Carson City, Nevada. Its Secretary is listed as Jennifer Di

Domenico, which is the maiden name of the Defendant Jennifer Sohmer, with an

address of P.O. Box 368, Brockton, Massachusetts 02303. Sohmer is listed as the

sole Director. Timeless Funding is not registered to conduct business in

Massachusetts.

21. Defendant Andrew P. Palmer (APalmer@) is an attorney, licensed to

practice law in the Commonwealth of Massachusetts. Palmer currently practices law

under the firm name: Andrew P. Palmer and Associates. Palmer was formerly a

partner with Sohmer in the law firm: Palmer Sohmer, LLP. On information and belief,

Palmer was, or planned to become, a partner, officer, and/or principal affiliate with

Sohmer in Timeless Funding. Palmer, either individually, as a member of Andrew P.

Palmer and Associates, and/or as a member of Palmer Sohmer LLP, served as the

closing attorney on behalf of each lender in each of the Sohmer transactions at issue in

this case. Palmer maintains a home address located at: 360 Prospect Street, Norwell,

Massachusetts. Palmer=s business address is located at: 200 Cordwainer Drive, Suite

301, Norwell, Massachusetts. The business address of Palmer Sohmer LLP is and/or

was located at: 200 Cordwainer Drive, Suite 301, Norwell, Massachusetts.

22. Defendant Shaun M. Ellis (“Ellis”) is an attorney, licensed to practice law in

the Commonwealth of Massachusetts. Ellis currently practices law under the sole

practitioner firm name Law Offices of Shaun Ellis, LLC. Ellis on several occasions

referred his clients to Sohmer for foreclosure rescue assistance, and some of those

clients became victims of Sohmer’s scheme. On at least two occasions, Ellis received a

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referral fee from Sohmer. Ellis maintains a home address located at: 11 Burgess

Street, Sagamore, Massachusetts. Ellis’ business address is located at: 4 Merchants

Road, Suite 9, Sandwich, Massachusetts 02563.

23. Defendant Carteret Mortgage Corporation (ACarteret@), is a corporation

licensed under the laws of the State of Virginia, whose corporate office is located at:

6211 Centreville Road, Suite 800, Centreville, Virginia 20121. Carteret maintains two

offices in Massachusetts, one located at: 236 Huntington Avenue, Suite 418, Boston,

Massachusetts 02115; the other located at: 117 High Street, Charlestown,

Massachusetts 02119. Carteret is a defendant in this case as a result of actions

conducted by Carteret, its present or former employees, agents, representatives,

affiliates, subsidiaries or instrumentalities or any persons, including any attorneys,

brokers, originators, or other entities or individuals acting or purporting to act on its

behalf. Carteret served as mortgage broker for the following transactions:

Baum Property, original lender was Sallie Mae Bryson Property, original lender was Sallie Mae Cataldo Property, original lender was American Brokers Conduit Coelho Property, original lender was Sallie Mae Dand Property, original lender was NBA Mortgage Group Goff Property, original lender was American Brokers Conduit Grigoryan Property, original lender was Sallie Mae Lansing Property, original lender was American Brokers Conduit Lopes Property, original lender was Sallie Mae Sawyer Property, original lender was American Brokers Conduit Trarback Property, original lender was Sallie Mae

24. Edward de la Flor (Ade la Flor@), at all times relevant to this case,

worked as a mortgage broker, current or former employee of Carteret, and/or current or

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former employee of First Horizon Home Loans, a lender for several of the Sohmer

transactions. His home address is: 116A Rockingham Road, Londonderry, New

Hampshire 03053. De la Flor acted as mortgage broker for eleven Sohmer transaction,

while an employee of Carteret, identified in ¶ 23, supra.

V. FACTS

A. SOHMER’S ORCHESTRATION OF HIS AND TIMELESS FUNDING’S FORECLOSURE RESCUE SCHEME

1. The Transactions

25. Alec Sohmer is a lawyer who practices in Brockton, and Norwell,

Massachusetts. On or about late 2004, Sohmer formed a Nevada corporation named

Timeless Funding, Inc. (“Timeless Funding”). He listed himself as sole Director. Under the

Timeless Funding name, Sohmer began offering foreclosure rescue “services” to financially

distressed homeowners in Massachusetts.

a. Sohmer Baited Consumers with Serial Misrepresentations.

26. Sohmer sent solicitation letters, on Timeless Funding stationery, to

homeowners who faced foreclosure, and who often were in Chapter 13 bankruptcy.

Sohmer=s letter from Timeless Funding:

$ stated that, ATimeless Funding is able to significantly reduce your monthly payment;@

$ outlined a monthly payment proposal, with a A3 year maximum term@ that would significantly reduce the homeowner=s monthly payments, in part through an AEquity Return >buydown= . . . utilizing $10,000 of your home equity over the first two years@;

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$ explained that, ATimeless Funding is able to reduce your monthly mortgage payment by securing an interest only loan at the lowest available mortgage rates. We will also access a small portion of your equity to subsidize your payments over the first two (2) years.@

The Timeless Funding letter thus purported to offer replacement financing with a lower

monthly payment. Likewise, when Sohmer verbally solicited homeowners to participate in

his foreclosure rescue transactions, he held out the deal as offering replacement financing

from Timeless Funding, which would allow homeowners to avoid foreclosure and keep their

home.

27. Sohmer used his uncapitalized, shell company ATimeless Funding@ to solicit

clients for his transactions. Sohmer held out Timeless Funding as a corporation that would

provide a Arefinance,@ and Areduce your monthly mortgage payment by securing an interest

only loan . . . .@ Sohmer generated phony mortgage commitment letters that he shared with

the homeowner victims. The letters were signed by Charles Taylor, the purported ACEO@ of

ATimeless Funding,@ and stated:

Please regard this letter as a mortgage commitment regarding the property located at 159 Green Street, N.Weymouth, MA. Timeless Funding agrees to extend financing so long as anticipated payoff and closing costs do not exceed $331,500 (representing 85% loan to value).

[Example of form letter.]

28. In fact however, the transaction ultimately arranged by Sohmer was not

replacement financing, but instead required: (i) the homeowners to convey their homes to

Sohmer, and then (ii) pay Sohmer=s new mortgage loan on a monthly basis, with (iii) the

potential ability to re-acquire the home from Sohmer in the future.

29. Still worse, contrary to the solicitation letter, Sohmer failed to deliver the lower

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payments promised, and often increased monthly payments beyond those that had led to

foreclosure.

30. In the transactions ultimately arranged by Sohmer, he uniformly failed to

provide the monthly payments promised in his solicitation letter. Most monthly payments

increased hundreds of dollars (average increase $358 net payments), and some more than

$1,000. The monthly payments of eleven of Sohmer=s clients increased more than 25%

(from promised to actual), and seven more had payments increase between 10% and 25%.

Because these higher monthly payments were not disclosed until the Aclosing,@ when

foreclosure was imminent, homeowners typically believed they had no choice but to go

forward with the transaction.

b. Sohmer Required Consumers to Sign Misleading Commitment Documents. 31. After soliciting homeowners to use his services through the misleading letter

and his verbal presentation, Sohmer eventually proposed a program purportedly provided by

Timeless Funding. Sohmer purported to describe the Timeless Funding transaction in an

Interim Ownership Agreement, and Disclosure Document, which he, and defendant Palmer,

required homeowners to sign in order to obtain the financing promised by ATimeless

Funding.@ Sohmer typically presented the Interim Ownership Agreement to homeowners

when foreclosure was imminent, and represented that his proposal was the only way

homeowners could stay in their home and preserve home equity. The Interim Ownership

Agreement (AIOA@) and Disclosure Document were misleading in several respects.

32. First, the IOA and Disclosure Document@ prominently featured Timeless

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Funding as the entity that would obtain an interest only loan and arrange the promised

transaction. But Timeless Funding, notwithstanding its bogus Amortgage commitment

letters@ generated by Sohmer, did not provide or arrange funding in any manner; it played no

role in the transactions. Instead, only Sohmer, personally, obtained financing and acquired

title to property in his own name or that of his wife or brother. Sohmer never disclosed to

the homeowners the details of the financing he actually obtained.

33. Second, Timeless Funding is a fiction and its Amortgage commitment@ letters

were patently false. Timeless Funding is not a licensed mortgage lender or broker in

Massachusetts (or anywhere else). It does not provide or arrange financing in any

manner, and it played no role in the eventual transactions. Timeless Funding is a sham

invented by Sohmer to mislead consumers into believing that Sohmer had arranged

financing for them from a mortgage lender. Charles Taylor, ACEO@ of Timeless Funding,

according to Timeless Funding=s corporate filings, is the company=s resident agent in

Nevada. In fact, Sohmer obtained financing and acquired title to property in his own name

(or that of his wife or brother). Only at the Aclosing,@ when foreclosure was imminent, did

homeowners learn that they were dealing not with Timeless Funding, but Sohmer

personally, who was acquiring their home and obtaining a mortgage in his name, although

the homeowner was required to pay Sohmer=s monthly mortgage. Sohmer=s

misrepresentations in connection with Timeless Funding were false and misleading.

34. Third, the IOA stated that the difference between the purchase price and

Sohmer=s mortgage loan, Arepresent(ed) a one time buy down of the new mortgage,@ and

Sohmer explained to homeowners that he would access their home equity to reduce their

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monthly payments. In fact, the Astated purchase price@ was fictitious; Sohmer never paid

that amount to the homeowners. The loan proceeds obtained by Sohmer were used only

to pay off the consumer=s previous encumbrances, including the mortgage loan which was

being foreclosed upon. That difference between the nominal purchase price and Sohmer=s

mortgage loan -- which represented the homeowner=s home equity -- was not used

exclusively to reduce monthly payments. The difference between Sohmer=s mortgage and

the homeowner=s existing pay-offs was used to pay Sohmer=s $15,000 fee, closing costs

ranging from $7,500 to $36,000, and finally, in some cases, an escrow to subsidize monthly

payments.

35. Thus, Sohmer misled homeowners that his transaction would cost only the

$15,000 fee to Timeless Funding. In fact, in order to obtain the replacement financing that

Sohmer promised would allow them to keep their home, each homeowner paid: (i) the

$15,000 fee, sometimes coupled with additional fees to referring attorneys; (ii) closing costs

(including Sohmer’s) which averaged $14,426 per transaction; and (iii) another round of

closing costs and expenses in the event that the homeowner was able to obtain financing to

re-acquire the property within three years. On average across 26 transactions,

homeowners have paid fees and costs of $28,906 for the transaction arranged by Sohmer.

All of these costs were effectively paid from the home equity that homeowners accumulated

prior to dealing with Sohmer. At no time did Sohmer accurately disclose the costs of his

transaction or how these costs sapped the home equity that Sohmer promised to preserve.

36. Fourth, central to Sohmer=s solicitation of clients was his claim that his

transaction would allow homeowners to preserve the equity they had accumulated in their

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home. The IOA and Sohmer claim that Aall equity will remain with the property.@ But the

home equity was immediately conveyed to Sohmer, and used in part to fund Timeless

Funding=s $15,000 fee, and all closing costs for the transaction (with closing costs to be

repeated at re-conveyance). For example, at the outset of every transaction, the

homeowners transferred all of the equity in their homes when they deeded their property to

Sohmer. Thus, Sohmer’s claims of preserving equity were misleading and he failed to

disclose the significant costs of the transactions he arranged.

37. Fifth, Sohmer’s promised “equity buy-down” to decrease the monthly

mortgage payments was misleading, and often did not materialize for homeowners. A

central aspect of Sohmer=s proposal to avoid foreclosure was that Sohmer would Aaccess@

the homeowner=s home equity and use it to Abuy down@ the new mortgage, and that

monthly payments would be decreased by the Aequity buy down@ escrow to be maintained

by Sohmer.

38. In fact, a majority (14 of 26) of the transactions ultimately arranged by

Sohmer, failed to establish the Aequity buy down@ escrow he promised. Fourteen Sohmer

clients either had no escrow, or their escrow account, after paying costs and fees, did not

contain the money necessary to fund the 24 month “subsidy” that Sohmer promised.

39. Sixth, Sohmer also failed to disclose that Timeless Funding is not a licensed

broker or anything other than a shell of Sohmer himself, and that Timeless Funding would

not be providing or applying for the replacement loans. Instead, Sohmer himself, or his

wife or brother, was the applicant for each of the loans at issue in this case.

c. The Closing: False HUD-1 Settlement Statements,

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Transfer Deeds and Nominee Trusts. 40. Once a homeowner signed the IOA and Disclosure Document, Sohmer then

arranged financing for his acquisition of the home. When Sohmer arranged financing for

himself, eventually a Aclosing@ occurred at the office of defendant Palmer. At the closing,

the homeowner was presented, for the first time, with several papers that effected the

transfer of their home to Sohmer, including: (i) a quitclaim deed to Sohmer, and (ii) a

HUD-1 Settlement Statement purporting to document the transaction. Sohmer himself, or

sometimes his wife or brother, signed a Note and Mortgage to his new lender, but did not

share those loan documents with the homeowners.

41. For most of the transactions, on or about the same day as the Aclosing@ of

Sohmer=s acquisition and loan, Sohmer executed several trust-related documents,

including: i) a Declaration of Trust, named for the property at issue; ii) a deed of the subject

property from Sohmer to the new Trust; iii) a Trustee Certificate concerning authority to

purchase the property; and, iv) a Schedule of Beneficiaries, listing the homeowner as 85%

beneficiary and Timeless Funding as 15% beneficiary, together with an acknowledgment of

receipt of the schedule of beneficiaries. Each of these trust documents was signed by

Sohmer alone; none was signed by the homeowner/trust beneficiary.

42. The form trust prepared by Sohmer provided that Sohmer was trustee, to hold

property Afor the sole benefit of@ the listed beneficiaries. Among other terms, Sohmer=s

form trust provides that Adecisions made and actions taken under this trust . . . shall be

made or taken solely by the minority beneficiary [Timeless Funding].@ As a result, the Trust

prepared by Sohmer: (i) gave broad authority to Sohmer, as trustee, to control the trust

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property; and, then (ii) allowed him to exercise that authority as instructed by Timeless

Funding, which is a sham corporation consisting of only Sohmer himself.

d. Sohmer Designed and Participated in at Least 26 Transactions.

43. Between December 2004 and June 2006, Sohmer arranged at least 26

foreclosure rescue transactions, listed below alphabetically, based on the homeowner’s

name:

Closing Homeowner’s Date Name Address_______________________ 10/28/2005 Beth Austin 159 Green Street, Weymouth, MA 02191 4/24/2006 Harry and Melinda Baum 10 Samoset Road, Mashpee, MA 02649 5/6/2005 John and Kathleen Bertelli 420 High Street, Bridgewater, MA 02324 3/29/2006 John and Barbara Bryson 1 Diamond Street, Plymouth, MA 02360 2/25/2005 Shirelle Carrigan 41 Weston Street, Brockton, MA 02301 11/17/2005 Paul and Cindy Cataldo 23 Primrose Lane, Middleboro, MA 02346 1/20/2006 Regina Coelho 46 Bourne Neck Road, Bourney, MA 02352 3/10/2006 Nancy Dand 72 Purchase Street, Brockton, MA 02301 10/17/2005 Julian and Leticia Forero 7 Butterfield Lane, Medfield, MA 02052 3/24/2006 Guy Giuffre 28 Vineyard Avenue, Oak Bluffs, MA 02557 11/23/2005 Ray and Wendy Goff 57 Stage Coach Road, Centerville, MA 02631 1/20/2006 Oleg and Maryana Grigoryan 2 Belgian Road, Danvers, MA 01923 1/05/2005 Linda Harrison 121 Walnut Street, Brockton, MA 02301 10/31/2005 Gail Hinchey 667 Bridge Street, East Bridgewater, MA 02333 4/19/2005 Jeff Imbrogna 49 Courtland Street, Middleboro, MA 02346 11/23/2005 Robert and Karen Lansing 5 Joe Joy Lane, Sandwich, MA 02644 4/3/2006 Brad and Cynthia Lopes 15 Beechwood Drive, Mashpee, MA 02649 2/22/2005 William Marsh 73 Adams Avenue, Pembroke, MA 02359 10/11/2005 James and Mary Lou Martin 9 Midway Street, Wareham, MA 02558 9/2/2005 Ron and Carol McCallum 9 Shangri-La Boulevard, Wareham, MA 02558 9/14/2005 Paul and Wendy Munroe 3 Lady Allison Way, Bourne, MA 02532 3/28/2005 Lori Phillips 37 Hayes Road, East Bridgewater, MA 02333 11/23/2005 Thomas and Deodata Sawyer 27 General Patton Drive, Hyannis, MA 02601 3/28/2006 Sigrid Trarbach 36 Restful Lane, Wareham, MA 02539 9/30/2005 Sara Wells-Hamblin 158 Asa Meigs Road, Marston Mills, MA 02648 6/6/2006 Charles and Carlene Wood 389 Center Street, Hanover, MA 02339

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44. The properties were valued, based on their sales prices in the transactions,

at more than $9.69 million.

e. Sohmer Profited from the Transactions.

45. Sohmer=s HUD-1 Settlement Statements and the loan closing files show how

the money flowed in each transaction. In each deal, Sohmer obtained a mortgage loan that

significantly exceeded the homeowners= existing mortgage loan and other pay-offs (back

taxes and liens). This Aoverage@ ranged from $11,946 to $107,093 and averaged $43,973

per transaction, which on each occasion represented the homeowners= home equity

Aaccessed,@ and then sapped, by Sohmer.

46. Sohmer, in turn, used the money from his loan proceeds to: (i) pay a $15,000

fee to himself (nominally Timeless Funding), and sometimes a $2,000 or $3,000 fee to a

referring attorney; (ii) pay the settlement costs of both Sohmer and the seller-homeowner,

which ranged from $7,525 to $36,404, and averaged $14,426; and, (iii) fund a so-called

Aescrow@ account, maintained by Sohmer, used by Sohmer to subsidize monthly mortgage

payments or for other various payments to the homeowners during the so-called interim

period. These escrow accounts, at their commencement, ranged from zero to $108,000.

47. In total across 25 deals, Sohmer obtained $738,656 in his clients= home

equity (total loans less total prior mortgage payoffs; less tax liens or other mandatory

payments; less all closing costs; less any miscellaneous payments to homeowners). Of

that amount, $362,000, or 49%, was immediately paid as fees to Sohmer ($353,000) or a

referring attorney ($9,000). Sohmer claimed to maintain Aescrow@ accounts for 25 clients in

one IOLTA account, which contained approximately $180,000 as of September 30, 2006.

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48. At least one of the deals involved Sohmer purchasing his own client=s home at

the time Sohmer represented the client in a Chapter 13 bankruptcy proceeding (Carrigan).

Sohmer bought the home, and then a few months later flipped it to a third party, keeping

nearly all of the proceeds, amounting to approximately $84,000.

49. In another deal (Imbrogna), Sohmer closed the transaction on April 19, 2005,

then he transferred the deed to a Nominee Trust, and listed himself as the 100%

beneficiary. Then Sohmer refinanced the April 2005 loan/mortgage only three months after

the closing, on July 19, 2005, for approximately $15,000 more. The additional proceeds on

the loan was apparently used to pay Sohmer, and settlement costs.

50. To complicate matters, Sohmer began conducting the transactions in the

name of his wife, Jennifer (six transactions), who is a defendant in this case, and also his

brother, Bradley (five transactions). Although trusts established by Sohmer own these

properties, Alec, Jennifer and Bradley Sohmer collectively are responsible for

approximately $6.6 million in outstanding mortgage loans to ten different lenders, and

responsible for some $53,436 in monthly mortgage payments.

51. In sum, Sohmer used a myriad of deceptive and unconscionable tactics, to

further his scheme, including: (i) he used his status as the homeowners’ attorney to gain

their= trust, and then misrepresented to homeowners that he would help them save their

homes from foreclosure by refinancing their mortgage to reduce their monthly payments; (ii)

he made material misrepresentations and omissions to homeowners to deceive them into

transferring ownership of their homes to him or to his affiliates; (iii) he deceived

homeowners into transferring to himself, or to other defendants, cash equity the

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homeowners had built up in their homes; (iv) he structured each closing to include false

information on the HUD-1 Settlement Statement and on other important legal documents;

v) he deceived homeowners into paying to him and to other defendants Arent@ to remain in

their homes with false promises that these payments were actually mortgage payments that

would allow them to repurchase their homes at a later date; and, (vi) he evicted or

threatened to evict homeowners from their homes, reconveying the homes to others, and

keeping the proceeds from those sales.

2. Sohmer’s Foreclosure Rescue Transactions Were Rife With Illegal Conduct. a. Sohmer Misrepresented the Transactions to Bait Homeowners into Participating in his Scheme. 52. Sohmer misrepresented his intentions by luring homeowners into his

scheme, and then self-servingly changing the terms, resulting in exorbitant profits for

Sohmer, and a legal nightmare for the homeowners. Sohmer’s conduct,

summarized at ¶¶ 25-51, supra, involved numerous misrepresentations of material

facts, and were unfair and deceptive, in violation of M. G. L. c. 93A.

b. Sohmer Purchased his Clients’ Homes and Thus Violated his Fiduciary Duty as Attorney.

53. Sohmer, a practicing attorney, acquired, directly or through his wife or

brother, at least 26 homes pursuant to Aforeclosure rescue@ transactions that Sohmer

arranged for his ATimeless Funding@ clients.

54. Sohmer was legal counsel for many of the homeowners. For example, on his

legal letterhead, Sohmer routinely wrote to third parties stating: APlease be advised that this

22

office represents [homeowners] relative to [the client=s pending foreclosure].@ Even more

direct, Sohmer was chapter 13 bankruptcy counsel for at least four other homeowners.

55. Thus, Sohmer had an attorney-client relationship with many of the

homeowners victimized by his scheme.

56. Sohmer failed to discharge his duties to his clients consistent with his

fiduciary duty. Sohmer misrepresented and concealed material facts, and failed to ensure

that his clients were fully informed of the nature and effect of Sohmer’s proposed purchase

and of Sohmer’s own rights and interest in the client’s home. Sohmer plainly failed to

provide advice with respect to the transactions, in each of which he had a major financial

stake.

c. A Conflict of Interest Existed Between Sohmer as Property Owner and Sohmer as Trustee.

57. Sohmer served as a trustee with respect to each of the transactions he

arranged. To induce them to convey their homes, Sohmer assured homeowners that their

homes would be placed in trust for their benefit. At or soon after each Aclosing,@ Sohmer

prepared and executed a Declaration of Trust and, in turn, transferred the subject property

into the Trust. For each trust, Sohmer was designated as trustee (sometimes with his

brother or wife), and the List of Beneficiaries identified Sohmer=s client as 85% beneficiary,

and Timeless Funding as 15% beneficiary.

58. The trusts drafted by Sohmer offered no protection to homeowners because

Sohmer had absolute control over the trust property. Sohmer captioned each of his trust

documents as a ANominee Trust.@ But Sohmer drafted his Anominee@ trust so that he, as

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trustee, took his directions not from all the beneficiaries, but from Athe Minority beneficiary,@

Timeless Funding, which is Sohmer himself:

3.2. Decisions made and actions taken under this Trust, including without limitation, amendment and termination of this Trust, appointment and removal of Trustees, directions and notices to Trustees, and execution of documents, shall be made or taken, as the case may be, solely by the minority Beneficiary.

(Declaration of Trust), ' 3.2, at p. 3 (emphasis added). As a result, the Trust offered no

legal protection to homeowners as Sohmer promised. Instead, Sohmer, as trustee, took

his directions concerning the trust and trust property only from himself.

59. The very structure of Sohmer=s trusts assured that he could not comply with

his fiduciary duty of loyalty as trustee, because Sohmer=s individual interests conflicted with

those of the beneficiary. The interest of the homeowner beneficiaries was to stay in their

home and preserve their home equity. But because Sohmer himself (or his wife or brother)

was responsible for the mortgage loan on the property, Sohmer had a personal interest in

making sure the mortgage loan was paid. Sohmer=s individual interest was manifested by

immediately threatening to evict beneficiaries if their payment was even a few days late,

carrying out evictions so that Sohmer could market the trust property, and seeking to sell the

trust property to persons other than his clients-beneficiaries. Each of these actions directly

conflicted with the interests of the trust beneficiaries. Sohmer=s interest as legal owner of

the property (from the mortgage lender=s perspective) cannot and could not coexist with his

purported role as trustee for the exclusive benefit of the beneficiaries. The transactions

Sohmer structured guaranteed that Sohmer would breach his duty of loyalty, and that is

what happened.

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60. Sohmer also breached his duty of loyalty to beneficiaries by draining the trust

property of equity, first through his $15,000 fee and undisclosed transaction costs, and then

by unilaterally taking additional monies from the trust property to pay for late fees and other

charges that conflicted with the beneficiaries= interests.

61. Sohmer=s fiduciary duties as trustee also included providing his beneficiaries

with accurate material information; segregating trust property; and maintaining accurate trust

accounts. Sohmer violated each of these duties because he: a) failed to segregate trust

funds, namely the Aescrows@ maintained for each property which reflect home equity

Aaccessed@ by Sohmer, instead commingling at least 25 separate trust accounts in one

IOLTA account; and b) failed to provide any accounting to the trust beneficiaries of their trust

property, including the escrow accounts maintained by Sohmer.

d. The Transactions Arranged by Sohmer Relied upon a Fictional AClosing,@ Featuring a False and Misleading HUD-1

Settlement Statement.

62. The HUD-1 Statements in each of the transactions arranged by Sohmer were

false, for at least the following reasons:

$ The HUD-1 Statements each state that net proceeds of the sale (Line 603, Acash to seller@) were paid to the home sellers (Sohmer=s Clients/homeowners), in amounts ranging from $78,996 (Goff) to $239,904 (Baum) that never occurred.

$ The Statements each show that Sohmer made a down payment to acquire the property (Line 303, ACash from Borrower@), ranging from $68,518 to $139,989. He did not. The Interim Ownership Agreement, which purports to explain the phantom down payments, was not disclosed on the HUD-1 Statement or anywhere else in the loan closing files.

$ The Statements show an inflated purchase price that was never paid.

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$ The Statements purport to reflect settlement costs paid by both seller and borrower (Sohmer) when, in fact, all those fees were paid by the homeowner.

• The $15,000 fee charged by Sohmer/Timeless Funding to arrange the transaction was never disclosed on the HUD or elsewhere in the loan closing files. If Sohmer were acting as a legitimate mortgage broker, this fee would have to be disclosed on the HUD-1.

63. Because every HUD-1 Statement contains this false or misleading information,

Alec, Jennifer and Bradley Sohmer made false statements each time they certified that the

HUD-1 accurately described the Areceipts and disbursements@ made in the transaction.

Moreover, Sohmer required the homeowners, who were the nominal sellers on the HUD-1

documents, to sign false documents in order to obtain the foreclosure rescue financing

promised by Sohmer.

e. The Transactions Violated the Note, Mortgage and Lender Rules.

64. Sohmer’s promise that his trust arrangement would protect homeowners was

false and misleading for another reason: the trust arrangement violated the financing terms

of every loan that Sohmer had obtained as part of his foreclosure rescue scheme.

65. On or soon after the day that Sohmer obtained mortgage loan to finance his

acquisition of his client=s home, Sohmer conveyed the home into a trust. He claimed that

doing so would protect his clients= interest in the property and preserve home equity.

However, every Note and every Mortgage executed by Alec, Jennifer or Bradley Sohmer in

connection with Sohmer=s 26 transactions contains a prohibition on the borrower=s (Alec,

Jennifer or Bradley Sohmer) transfer of legal or equitable title to the property that secures

the loan.

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f. Sohmer Had No Reason to Believe Homeowners Could Make Payments or Re-Acquire Their Home.

66. Sohmer=s transactions as a whole, were unfair and unconscionable. Because

Sohmer=s replacement financing was designed to last for no more than three years, the

homeowner=s costs and fees were astronomical compared to the value of the replacement

loan over three years. Sohmers= clients paid an average of $28,906 in fees to, in effect,

obtain a three year loan (totaling about $30,000 on average) followed by a massive balloon

payment. Thus, on average, the clients paid nearly as much in fees as their three-year

loan amount. Further, by sapping home equity in order to pay his fees and other costs,

Sohmer made it much more difficult for his clients to obtain the financing necessary to re-

acquire their home, because the mortgage to be paid off was inflated with those fees and

costs.

67. In addition, Sohmer knew or should have known that many of these

transactions would fail and that the homeowner=s re-acquisition rights were illusory.

Although his client homeowners all had faced foreclosure on their prior mortgage, Sohmer

baited them with the promise of lower monthly payments but then failed to actually provide

those payments. Sohmer thus knew or should have known that his clients would default.

Likewise, Sohmer knew or should have known that the homeowners would have difficulty

obtaining the financing necessary to re-purchase their home. After they failed to pay their

prior mortgage, Sohmer saddled them with a new mortgage that was significantly

increased, rendering the re-acquisition illusory for most homeowners, absent a dramatic

change in income or assets.

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g. Under the Equitable Mortgage Doctrine, the Sohmer Transactions Were De Facto Mortgages Vis-à-Vis the Homeowners, Triggering a Variety of Legal Obligations Sohmer Failed to Meet.

68. Sohmer’s foreclosure rescue transactions were Aequitable mortgages@

because homeowners were led to believe that the transactions comprised replacement

financing, and not an outright transfer of their home.

69. The transactions arranged by Sohmer were not outright conveyances.

Sohmer and the documents he prepared convinced homeowners that the Sohmer

transactions would preserve home ownership and avoid foreclosure by virtue of the Interim

Ownership Agreement, the Trust, and the homeowner=s status as beneficiary. Sohmer=s

clients kept all the responsibilities of owning the home, including paying taxes, insurance,

utilities, maintenance and repairs. Sohmer=s nominal ownership was to be temporary. The

deed was to secure the homeowner=s promise to pay Sohmer=s new mortgage, and the

trust supposedly offered further protection to homeowners.

70. Sohmer=s transactions, as de facto mortgage financing, violated a

myriad of state and federal laws that regulate mortgage lending, as discussed at ¶ 106,

infra.

B. ATTORNEY ANDREW PALMER’S ROLE IN THE SCHEME

1. Palmer Was an Affiliate of Sohmer’s and Served as Closing Attorney for the Lenders. 71. Andrew P. Palmer (APalmer@), is an attorney licensed to practice law in the

Commonwealth of Massachusetts, who represented each of the lenders in each of the

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Sohmer transactions at issue in this case.

72. At some point prior to these transactions, Palmer was a partner in the practice

of law with defendant Alec Sohmer. Together, they had formed a partnership: Palmer,

Sohmer LLP, under the laws of the State of Nevada.

73. Palmer played several different roles and relationships with Sohmer. In

addition to being a law partner of Sohmer, Palmer served as an attorney for Timeless

Funding, Inc., Sohmer=s shell company. Palmer is also listed in Timeless Funding=s draft

Business Plan as a future officer or attorney for Timeless Funding. Further, Palmer

represented and served as an attorney and agent for each lender in each of the

transactions which Sohmer and Timeless Funding orchestrated. No transaction closed

without Palmer’s direct involvement.

74. Palmer had knowledge of most, if not all, aspects of Sohmer’s scheme. He

knew how Sohmer solicited clients, particularly through Chapter 13 bankruptcy court

proceedings.

75. In connection with the closings he oversaw, Palmer drafted and/or assisted in

the drafting of numerous documents to effectuate each transaction. For example, Palmer

drafted some or all of the Nominee Trust Agreements, Deeds, Discharges of Mortgage, the

HUD-1 Settlement Statements, and other documents necessary to close each deal.

76. Palmer represented and served as an attorney and agent for each lender in

each of the transactions. The lenders paid Palmer for his legal services and representation

before, during and after each closing.

2. Palmer Closed Each Unfair and Deceptive Transaction.

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77. Palmer had knowledge of Sohmer’s scheme, including what was actually

occurring before, during and after the closings. Palmer had knowledge that the legal

documents he prepared did not accurately represent what Sohmer had told the

homeowner. In summary, Palmer had knowledge of, and/or effectuated at closing, the

following six essential features of the transactions:

1) the HUD-1 settlement statement for each closing, which Palmer prepared, falsely stated that the buyer, nominally Sohmer (or his wife Jennifer or brother Bradley), paid a certain amount of cash at closing when in fact Sohmer (or his wife or brother) never paid any money at closing;

2) the HUD-1 settlement statement for each closing, which Palmer prepared, falsely stated that the seller, nominally the homeowner, received a certain amount of cash at closing as proceeds when in fact the homeowners never received the amount stated on the HUD-1 at closing (and usually never received any sale proceeds);

3) the homeowners paid Sohmer a flat $15,000 fee, from the equity extracted at closing, for Sohmer=s Aservices@, yet Palmer, who prepared the HUD-1 settlement statement, never included this information on the HUD-1s;

4) each of the homes at or soon after closing was transferred into a nominee Trust, for which Sohmer served as a Trustee;

5) Sohmer collected Arent@ from the homeowners, who continued to live in the homes, in the amount of or exceeding the actual monthly mortgage owed to each lender, promised in the Interim Ownership Agreement, which Palmer apparently never disclosed to the lenders;

6) Sohmer maintained certain funds labeled Aescrow funds@, which were extracted from the equity in each transaction, which ultimately were not fully paid or returned to the homeowners.

78. Upon information and belief, neither Palmer, nor anyone in his office,

provided information, disclosures, estimates of settlement or other costs or fees, or any

other documents to any of the homeowners prior to, during or after the closings. Although

30

the homeowners were nominally listed as the sellers, they believed -- and Palmer knew that

they believed -- that they were effectively refinancing their prior mortgages.

79. The homeowners became, and Palmer knew that they became, obligated to

pay Sohmer for the new mortgages, pursuant to the Interim Ownership Agreement. The

homeowners however were entitled, based on their status as the equitable and de facto

borrowers, to full disclosure of the terms of each loan, an accurate estimate of closing and

settlement costs, and other statutory and regulatory disclosures, none of which they

received from Palmer, the lenders, or Sohmer.

80. Palmer, as an attorney representing the lenders in these transactions, knew

or should have known that the transactions contravened state and federal statutes and

regulations, and were unfair and deceptive, and Palmer was thus obligated to stop, and not

participate in, the fictional, misleading and unlawful closings.

3. Palmer Profited From His Participation in Sohmer’s Scheme.

81. Palmer profited from his role as the closing attorney for each of the 26

transactions in several ways. First, the lenders paid Palmer attorney fees, designated on

the HUD-1 Settlement Statement, which were extracted directly from what would have been

the homeowners’ proceeds on the transactions. Palmer typically charged more money to

close purchase and sale transactions, compared to refinancings. Even though the

homeowner thought they were refinancing their mortgages, Palmer nevertheless charged

his higher purchase and sale fees. These fees totaled approximately $35,000 across the

26 transactions.

82. Second, Palmer also served as the agent of Chicago Title Insurance

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Company (“Chicago Title”). Palmer placed title insurance coverage for all of the

transactions with Chicago Title. Palmer profited from generous commissions he received

from Chicago Title’s premiums, for lender and owner title and closing insurance coverage

for each of the closings. Thus, in selling both lender and owner title insurance, Palmer

collected as commissions fully 80% of the premiums paid. Typically in a refinancing

transaction, Palmer would place only lender insurance. Here, even though the

homeowners believed they were refinancing, Palmer placed and charged the homeowners

for both lender and owner title insurance premiums, collecting a total of approximately

$34,000 in title insurance commissions.

83. Third, upon information and belief, Palmer profited by charging homeowners

more for registry and related fees than they actually cost. For example, Palmer typically

charged a higher amount to file a mortgage than the county charged for such service. All

total, Palmer siphoned off approximately $12,000 in over-charges to the homeowners for

services and fees.

D. THE ROLE OF SHAUN ELLIS IN REFERRING HOMEOWNERS TO SOHMER

84. Defendant Shaun Ellis participated in Sohmer’s scheme by referring

homeowners to Sohmer as potential clients for Sohmer. Ellis referred clients to Sohmer on

a regular basis, all of whom were homeowners, and all of whom were up until that time

clients of Ellis’. On at least two occasions, Sohmer completed a foreclosure rescue

transaction and then paid Ellis a referral fee for referring his clients to Sohmer. At the time

he referred his clients to Sohmer, Ellis knew, or with minimal diligence should have known,

32

the true nature of Sohmer’s transactions and that they would cause homeowners to lose

their property, not save it.

85. Ellis received other benefits from his relationship with Sohmer. For example,

some homeowners who were clients referred by Ellis to Sohmer, who then ended up

victimized by Sohmer’s scheme, ended up paying Ellis for old debts, such as accumulated

attorneys fees, from the proceeds of the transaction arranged by Sohmer. Ellis thus

collected fees that were otherwise presumably uncollectible by referring clients to Sohmer’s

fraudulent scheme.

86. Ellis either knew or with a minimum level of vigilance should have known that

Sohmer’s foreclosure rescue scheme was unfair and deceptive. Nonetheless, Ellis was a

willing participant in providing Sohmer with a long list of unwitting homeowners, mostly in or

about to be in Chapter 13 bankrtupcy, to be victimized by Sohmer’s scheme. In addition to

unfairly and deceptively referring clients to Sohmer, Ellis also failed to fulfill his obligations

to his clients because he failed to provide meaningful advice concerning their options with

respect to bankruptcy, lender workouts, and otherwise, instead sending them to Sohmer.

87. Ellis’ conduct in referring clients to Sohmer, and then either receiving a

referral fee, or other benefit from Sohmer for the referral, was unfair and deceptive and in

violation of G. L. c. 93A.

E. THE ROLE OF CARTERET MORTGAGE AND EDWARD DE LA FLOR

88. Defendant Carteret Mortgage Company (ACarteret@) provides mortgage

33

brokerage services and originates loans nationwide. Carteret, through its employee

Edward de la Flor, who was based in New Hampshire, was involved in originating or

brokering loans for 11 of the Sohmer transactions. For seven of the transactions, Carteret

brokered both first and second mortgages. Carteret and/or de la Flor assisted in

completing Sohmer=s loan applications, for interest only loans used to facilitate the

foreclosure rescue transactions.

89. Upon information and belief, Carteret, through its employee de la Flor, knew

or with minimal diligence should have known all aspects of the Sohmer transactions,

including each of the six essential features of the transactions set forth at ¶ 77, supra.

90. Carteret, and separately de la Flor, failed to discharge its duties pursuant to

applicable statutes and regulations governing the conduct of mortgage brokers and their

employees, see ¶ 106, infra. Carteret and de la Flor each engaged in mortgage brokering

without a Massachusetts license by providing mortgage brokering services through a New

Hampshire office for properties located in Massachusetts. de la Flor was not licensed to

broker mortgage loans for Massachusetts properties, nor working under a Massachusetts

licensed broker at the time that he brokered loans for the Sohmer transactions.

91 Carteret, and separately de la Flor, each profited from the points, yield spread

premiums, commissions, accelerators, and fees paid to them by the homeowner in these

transactions.

92. Had Carteret exercised even minimal diligence in connection with the Sohmer

loans, it would have quickly learned that the loans were part of Sohmer’s fraudulent

scheme to take homeowner’s property and equity, that the loans relied on a false HUD-1

34

and fraudulent closing, and that the Sohmer transaction violated the applicable Note and

mortgage. Carteret and de la Flor could have, and should have, stopped the transactions.

Instead, Carteret and de la Flor arranged and facilitated the fraudulent transactions, to

generate fees for themselves.

93. The actions of Carteret and de la Flor in serving as the mortgage broker

and/or originator of 11 of the loans at issue in this case, which resulted in the funding of

money for each of the loans in these transactions, were unfair and deceptive, and

constituted violations of state and federal statutes and regulations, including c. 93A.

F. SOHMER’S CONDUCT RELEVANT TO THE COMMONWALTH’S OBJECTION TO DISCHARGE PURSUANT TO 11 U.S.C. § 727 94. Upon information and belief, within a one year period preceding the filing of

the bankruptcy proceeding, Sohmer and Jennifer Sohmer each owned numerous properties

in their names as individuals and/or beneficiaries of a trust.

95. Upon information and belief, within one year period preceding the filing of the

bankruptcy proceeding, Sohmer maintained bank accounts at Citizens Bank, including one

or more attorney IOLTA accounts.

96. During the period when Sohmer orchestrated and closed the foreclosure

rescue transactions at issue in this case, Sohmer transferred, deposited, withdrew, and

concealed transfers of monies, some of which were obtained or accessed through the

foreclosure rescue transactions. In making the transfers and in concealing them, Sohmer

did so with the intent of or with the effect of, hindering, delaying or defrauding creditors

and/or an officer of his bankruptcy estate.

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97. Upon information and belief, Sohmer has concealed, destroyed, mutilated,

falsified, or failed to keep or preserve recorded information, including books, documents,

records, and papers, from which the Sohmer’s financial condition or business transactions

might be ascertained. For example, as discussed at ¶ 61, supra, Sohmer failed to

segregate and account for trust funds, namely the “escrows” maintained for each property

which reflect home equity “accessed” by Sohmer, instead commingling at least 25 separate

trust accounts in one IOLTA account. As a further example, Sohmer failed to keep a

reasonable accounting of his clients’ assets in his IOLTA account, whether involving

foreclosure rescue transactions or other clients.

98. Upon information and belief, Sohmer has knowingly and fraudulently, in

connection with his foreclosure rescue scheme at issue in this case, made a false oath or

account; and/or, presented or used a false claim. By way of example, during a hearing

before this Court on August 17, 2006, Sohmer, purportedly representing Timeless Funding,

made a false oath or statement, knowingly and fraudulently. Sohmer appeared before the

Court in connection with an Adversary Proceeding in In re Austin, No. 06-12100-JNF,

Adversary no. 06-01335JNF, and misrepresented to the Court his role in the foreclosure

rescue transactions and his relationship to defendant Timeless Funding. At the hearing on

Austin’s motion for preliminary injunction against Timeless Funding, Sohmer stated:

Court: Are you a principal of Timeless Funding? Sohmer: I am not a principal of Timeless Funding. Court: What is your relationship to Timeless Funding? Sohmer: They’re a client. Court: Who are the principals of Timeless Funding? Sohmer: There is a Charles Taylor. It’s a Nevada corporation. I work with them. There are others. I …

36

Court: Who are they? Sohmer: I’m sorry, I don’t’ know that off the top of my head. In re Austin, Adv. No. 06-01335, Aug. 17, 2006 Tr. At p. 16 (emphasis added) (excerpts of

transcript is of record, and also attached to US Trustee’s Motion to Appoint Chapter 11

Trustee). As discussed at ¶ 33, supra, Timeless Funding is a ruse; it is nothing more than

Sohmer. There are no “principals” other than Sohmer. Charles Taylor is simply a resident

agent. Although Sohmer occasionally used his wife or brother as straw purchasers, he

controlled all aspects of the Timeless Funding business, such as it was. Sohmer thus lied

to this Court, in a hearing closely related to his bankruptcy case, regarding one of the unfair

and deceptive transactions (Austin) at issue both in his bankruptcy case and in the

Commonwealth’s Adversary Proceeding.

99. At this time, Sohmer has failed to explain satisfactorily, before determination

of denial of discharge, any loss of assets or deficiency of assets to meet Sohmer’s

liabilities. For example, Sohmer has failed to explain satisfactorily the whereabouts of all

monies paid to him as part of the 26 transactions, including approximately $350,000 in

“fees” to Timeless Funding, and even more money that was “escrowed” into the IOLTA

accounts he controlled.

G. DEBTOR’S CONDUCT RELATED TO EXCEPTING DEBTS FROM DISCHARGE PURSUANT TO 11 U.S.C. § 523 100. Sohmer’s foreclosure rescue scheme, as alleged in detail above, allowed

Sohmer to obtain money, property, services, and/or an extension, renewal or refinancing of

credit by means of: 1) false pretenses, false representations, and/or actual fraud; and/or 2)

37

use of a statement in writing that is materially false, relates to the Sohmer’s financial

condition, was relied upon by a creditor to whom the Sohmer is liable, and/or was made by

the Sohmer or published by the Sohmer with the intent to deceive.

101. Through his foreclosure rescue scheme, in the manner described above,

Sohmer engaged in fraud, defalcation while acting in a fiduciary capacity, embezzlement,

and/or larceny.

102. Sohmer committed willful and malicious injury to another entity or to the

property of another entity by encumbering the properties subject to the foreclosure rescue

transactions with substantial debt and high mortgages.

103. In light of Sohmer’s fraudulent misconduct, any judgment, including

restitution, penalties and costs, entered as a result of this Adversary Proceeding against

Sohmer should be deemed a debt that is excepted from discharge under 11 U.S.C.

§ 523(a)(2), (a)(4), and (a)(6).

104. Further, any civil penalty recovered by the Commonwealth in its Adversary

Proceeding is excepted from discharge pursuant to 11 U.S.C. § 523(a)(7). Likewise,

Sohmer owes the Commonwealth the sum of $10,000, in compliance with the Final

Judgment by Consent as to Contempt Complaint Against Alec Sohmer and Jennifer

Sohmer entered by the Superior Court for Suffolk County, Massachusetts, on March 28,

2007, which is also excepted from discharge, pursuant to 11 U.S.C. § 523(a)(7).

VI. CAUSES OF ACTION COUNT I:

Unfair and Deceptive Acts and Practices in Violation of G. L. c. 93A, ' 2

38

Against: All Defendants 105. The Commonwealth realleges paragraphs 1 through 104 of the Amended

Complaint as if each were fully set forth herein.

106. By collectively soliciting, referring homeowners for, orchestrating, closing,

and/or carrying out the foreclosure rescue transactions alleged above, defendants

Sohmer, Jennifer Sohmer, Timeless Funding, Palmer, Ellis, Carteret, and de la Flor

have collectively engaged in unfair and deceptive acts and practices, in violation of G.L.

c. 93A, 2(a) and regulations promulgated there under pursuant to G.L. c. 93A, 2(c),

including but not limited to one or more of the following:

a. Misrepresenting to homeowners the nature of and purported benefits of the foreclosure rescue transactions proposed by Sohmer, and failing to disclose the disadvantages of engaging in the transactions;

b. Misrepresenting to homeowners that the transaction proposed by Sohmer

will allow the homeowner to keep their home or keep their accumulated equity in the home, when that is not the case, and failing to disclose to homeowners that the transactions may permanently transfer the home to

Sohmer or his affiliates for purpose of resale; c. Failing to disclose to homeowners material information concerning the

transactions proposed and structured by Sohmer; d. Engaging in unfair and unconscionable business conduct by taking unfair

advantage of the financial distress of homeowners, and deceptively cultivating a position of trust with respect to homeowners, while Sohmer held himself out as their attorney, while failing to disclose Sohmer=s actual self-interest, and conflict of interest; e. Soliciting homeowners to engage in a foreclosure rescue transaction and

purporting to offer homeowners advice and consultation as an attorney concerning their financial position and potential foreclosure, but failing to meaningfully disclose to homeowners all available options, instead only directing homeowners to transfer their home to Sohmer via a foreclosure rescue transaction;

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f. Referring homeowners to Sohmer for the purpose of Sohmer arranging a foreclosure rescue transaction; g. Receiving a referral fee or any other benefit, payment or compensation from Sohmer for referring homeowners to Sohmer for the purpose of Sohmer transacting his foreclosure rescue scheme with them; h. Requiring the homeowners to waive and give up Aall proceeds@ in the

closing of the sale of their homes at inflated prices to Sohmer; i. Obtaining homeowners= signatures on documents by misrepresenting the

nature and effect of the documents, thereby using trick or artifice to alter homeowners= rights and property interests;

j. Engaging in unfair and unconscionable conduct by representing that the

transactions arranged by Sohmer can help homeowners maintain home ownership or equity, but structuring transactions, such as lease/buy back transactions, that Sohmer, and all defendants, knew or should have

known were destined to fail, resulting in the transfer of the homeowner=s residence to Sohmer; k Engaging in unfair and unconscionable conduct by structuring

transactions with distressed homeowners that contain provisions, such as monthly payment or buy-back terms, that are unconscionable and which Sohmer, and all defendants, knew or should have known were destined to

fail because the homeowner could not satisfy its obligations; l. Misrepresenting to homeowners that Sohmer=s services were paid for by a limited fee when they were not, as Sohmer sought to generate fees and

windfall profits by buying and eventually selling the homeowner=s residence;

m. Breaching their duty of good faith and fair dealing in their contracts and

arrangements with homeowners; n. Sohmer, and Ellis held themselves out as a lawyer, with expertise in household finance, and able to assist homeowners in addressing financial pressures and potential foreclosure, but breached their fiduciary duty of loyalty and honesty that arose from their role as a lawyer; o. Offering replacement financing to homeowners and purporting to provide

de facto replacement financing to homeowners, but structuring

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transactions in a manner designed to avoid, and soliciting transactions that fail to conform to, state and federal law designed to protect would-be borrowers in loan transactions, including failing to conform to i) G.L. c. 140D; ii) 209 C.M.R. '' 32.32 & 32.34; iii) G.L. c. 93, ' 101; iv) G.L. c. 271, ' 49 (usury law); v) G.L. c. 184, ' 17D(c)(1); vi) federal Truth-In- Lending statutes, 15 U.S.C. '' 1635, 1638, 1639; and vii) RESPA, 12 U.S.C. '' 2601 et seq.;

p. Engaging in mortgage brokering without a license in violation of G.L. c .

255E, ' 2, and G.L. c. 93A, ' 2 pursuant to 940 C.M.R. ' 3.16(3); q. Engaging in mortgage brokering but failing to comply with the mortgage

broker regulations promulgated under chapter 93A, 940 C.M.R. ' 8.00 et seq., including without limitation by: misleading homeowners about avoiding foreclosure (' 8.04(4)(e)), failing to comply with state and federal Truth-in-Lending laws (' 8.04(5)), failing to provide mandatory disclosures (' 8.05), failing to disclose material information about the proposed transactions (' 8.05), making false or misleading statements (' 8.06), and charging and accepting unconscionably high fees (' 8.06); and,

r. Structuring and arranging transactions involving the lease of residential

property that fail to conform to the laws providing protection to tenants, including G.L. c. 186, 940 C.M.R. ' 3.17, in violation of G.L. c. 93A, ' 2 and 940 C.M.R. ' 3.16(3).

107. At all times material to this Amended Complaint, defendants were

engaged in trade or commerce, and acting in a business context. Defendants knew or

should have known that their conduct was unfair or deceptive in violation of G.L. c. 93A,

' 2.

COUNT II: Violation of c. 93A Through Violations of the Massachusetts Consumer

Credit Cost Disclosure Act, G.L. c. 140D, and Federal Truth-In-Lending Laws 15 U.S.C. '' 1635, 1638

Against: All Defendants 108. The allegations contained in paragraphs 1 - 107 of the Amended

Complaint are re-alleged and incorporated herein by reference.

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109. Pursuant to 940 C.M.R. ' 3.16(3) & (4), respectively, an act or practice

violates G.L. c. 93A, ' 2, if it (a) fails to comply with existing Massachusetts statutes,

rules, regulations or laws meant for the protection of the public=s health, safety or

welfare, intended to provide protection to Massachusetts consumers; or (b) violates the

Federal Trade Commission Act, the Federal Consumer credit Protection Act or other

Federal consumer protection statues within the purview of chapter 93A.

110. Because Sohmer, together with the other defendants, held out his

foreclosure rescue transactions as replacement financing and structured his

transactions to provide de facto replacement financing, the foreclosure rescue

transactions arranged by Sohmer constitute consumer credit transactions within the

purview of G.L. c. 140D. Sohmer is a creditor as defined by chapter 140D.

111. Sohmer and all defendants have violated G.L. c. 140D by:

a. failing to disclose to borrowers the information required by G.L. c. 140D, ' 12, including failing to disclose, inter alia, the amount financed, all finance charges, total payments, and late payment charges; and

b failing to provide, and failing to clearly and conspicuously disclose, the

three day right of rescission applicable to the transactions arranged by Sohmer, as required by G.L. c. 140D, ' 10.

112. Sohmer=s foreclosure rescue transactions also are subject to federal

Truth-in-Lending laws, 15 U.S.C. §§ 1635, 1638. Sohmer and all defendants violated

those laws by:

a. failing to disclose to borrowers the information required by 15 U.S.C. '

1638, including failing to disclose, inter alia, the amount financed, all finance charges, total payments, and late payment charges; and

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b. failing to provide, and failing to clearly and conspicuously disclose, the three day right of rescission applicable to the transactions arranged by Sohmer, as required by 15 U.S.C. ' 1635.

113. Defendants= violations of chapter 140D and federal Truth-In-Lending laws

comprise unfair or deceptive acts in violation of G.L. c. 93A, ' 2, pursuant to 940 C.M.R.

' 3.16(3) & (4).

114. All defendants worked in concert with Sohmer and collectively with him

violated the laws and regulations delineated in this Count II.

COUNT III:

Violation of c. 93A Through Violations of Massachusetts and Federal Law Applicable to High Cost Mortgage Loans, G.L. c. 183, ' 28C, G.L. c. 183C,

209 C.M.R. '' 32.32 & 32.34, and 15 U.S.C. ' 1639 Against: All Defendants 115. The allegations contained in paragraphs 1 - 114 of the Amended

Complaint are re-alleged and incorporated herein by reference.

116. Massachusetts law provides protection to consumers by placing

restrictions on certain high cost mortgage loans, pursuant to G.L. c. 183C and G.L. c.

183, ' 28C. Further, the Division of Banks has promulgated regulations, at 209 C.M.R.

'' 32.32 & 32.34, that require certain protections for borrowers in high cost mortgage

loans, as defined in Section 32.32.

117. The foreclosure rescue transactions structured and arranged by Sohmer

essentially comprise replacement mortgage financing, and defendants held them out as

replacement mortgage financing. Properly viewed as replacement mortgage loans,

Sohmer=s foreclosure rescue transactions call for monthly payments for between 24 and

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36 months followed by a very large balloon payment to Sohmer in order to reacquire the

home. The effective costs of the loan, in light of the 24-36 month duration, is

exceedingly high.

118. Sohmer=s foreclosure rescue transactions constitute consumer mortgage

loan transactions subject to chapter 183C and the Division of Banks regulations, 209

C.M.R. '' 32.32 & 32.34, as the effective interest rates exceeded the yield on Treasury

securities having comparable periods of maturity by more than eight percentage points.

Sohmer constitutes a creditor under that statue and those regulations.

119. Defendants’ conduct with respect to certain of the foreclosure rescue

transactions alleged above violated chapter 183C and applicable Division of Banks

regulations, including, without limitation, by:

a. making a high cost home loan that Sohmer, and all defendants, at the time of the loan, could not reasonably have believed the homeowner would be able to pay, in violation of c. 183C, ' 4 and 209 C.M.R. ' 32.34(1)(c); b. making a high-cost home loan without first receiving certification from a

counselor approved by the US Dept. of Housing & Urban Development or other approved entity, in violation of c. 183C, ' 3 and 209 C.M.R. ' 32.34(1)(d);

c. making a loan with unconscionable rates or terms, in violation of 209

C.M.R. ' 32.34(2)(e); d. making a high cost home loan that included a balloon payment, in

violation of c. 183C, ' 8 and 209 C.M.R. ' 32.32(4)(a); e. failing to make required disclosures in connection with a high cost home

loan, in violation of 209 C.M.R. ' 32.32(3); and

f. making a loan to refinance an existing debt within sixty months of the prior financing, where the refinancing loan is not in the borrower=s interest, in

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violation of c. 183, ' 28C(a).

120. Congress also has enacted statutes providing certain protections to

borrowers in connection with high cost mortgage loans, 15 U.S.C. ' 1639. Sohmer=s

foreclosure rescue transactions are subject to 15 U.S.C. ' 1639. Defendants have

violated that statute by:

a. making a high cost home loan without regard for the borrower=s ability to pay, in violation of Section 1639(h);

b. making a high cost home loan that included a balloon payment, in

violation of Section 1639(e); and c. failing to make required disclosures in connection with a high cost home

loan, in violation of Section 1639(a).

121. Defendants= violations of c. 183C, the Division of Banks= regulations and

federal statutes applicable to high cost mortgage loans comprise unfair or deceptive

acts in violation of G.L. c. 93A, ' 2, pursuant to 940 C.M.R. '' 3.16(3) & (4).

122. All other defendants in this action worked in concert with Sohmer and

collectively with him violated the laws and regulations delineated above.

COUNT IV:

Usury Against: All Defendants 123. The allegations contained in paragraphs 1 - 122 of the Amended

Complaint are re-alleged and incorporated herein by reference.

124. The Massachusetts usury statute, G.L. c. 271, ' 49(a) prohibits creditors

from charging interest or expenses exceeding 20% per annum, unless the creditor is

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registered with the Attorney General.

125. Sohmer is not registered with the Attorney General under G.L. c. 271, '

49(c).

126. The foreclosure rescue transactions arranged and structured by Sohmer

comprise replacement mortgage loans, with a large balloon payment, and result in an

effective interest rate exceeding 20%. Defendants, working in concert with Sohmer,

thus have violated the Massachusetts usury law.

COUNT V: Fraud

Against Sohmer and Palmer 127. The allegations contained in paragraphs 1 - 126 of the Complaint are re-

alleged and incorporated herein by reference.

128. Sohmer induced homeowners to participate in foreclosure rescue

transactions by making statements that were false or misleading and by failing to

disclose material information concerning the transactions he arranged.

129. Palmer induced homeowners to participate in foreclosure rescue

transactions by making statements that were false or misleading before, during and

after the closing, and by failing to disclose material information concerning the

transactions he closed. Sohmer and Palmer knew that their statements to homeowners

were false and/or misleading.

130. In reliance on Sohmer and Palmer’s false and/or misleading statements,

homeowners transferred money and/or property to sohmer and Palmer. Had the

homeowners known of truthful, accurate and complete information concerning the

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transactions Sohmer arranged and Palmer closed, they would not have participated in

these transactions and would not have transferred money or property to Sohmer and

Palmer.

COUNT VI Objection to Discharge Pursuant to 11 U.S.C. § 727 Against: Alec Sohmer

131. The allegations contained in paragraphs 1 - 130 of the Amended

Complaint are re-alleged and incorporated herein by reference.

132. Sohmer has concealed, destroyed, mutilated, falsified, or failed to keep or

preserve recorded information, including books, documents, records, and papers, from

which the Sohmer’s financial condition or business transactions might be ascertained.

Sohmer has also, with intent to hinder, delay, or defraud a creditor, transferred,

removed, destroyed, mutilated, or concealed his property within one year of his filing

bankruptcy.

133. Sohmer has knowingly and fraudulently, in or in connection with his

foreclosure rescue scheme at issue in this case, made a false oath or account; and/or,

presented or used a false claim.

134. Sohmer has failed to explain satisfactorily, before determination of denial

of discharge, any loss of assets or deficiency of assets to meet the Sohmer’s liabilities.

135. Sohmer should be denied a discharge pursuant to 11 U.S.C. § 727(a)(2),

(3), (4), (5), and (7).

COUNT VII Exception to Discharge Pursuant to 11 U.S.C. § 523

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Against: Alec Sohmer

136. The allegations contained in paragraphs 1 - 135 of the Amended

Complaint are re-alleged and incorporated herein by reference.

137. Sohmer’s mortgage foreclosure rescue scheme was unfair and deceptive,

in violation of G. L. c. 93A, and violated numerous other state and federal statutes and

regulations, as detailed above.

138. Sohmer’s debt to the Commonwealth and to Sohmer’s homeowner victims

arising out of his foreclosure rescue transactions should be excepted from any

discharge because Sohmer obtained money, property, services, and/or an extension,

renewal or refinancing of credit by means of false pretenses, false representations,

actual fraud, and/or materially false written statement(s) respecting financial condition

made with the intent to deceive.

139. Sohmer’s debt to the Commonwealth and to Sohmer’s homeowner victims

arising out of his foreclosure rescue transactions should be excepted from any discharge as

a debt arising out of Sohmer’s fraud, defalcation while acting in a fiduciary capacity,

embezzlement, and/or larceny.

140. Sohmer committed willful and malicious injury to another entity or to the

property of another entity.

141. Any judgment, including restitution, penalties and costs, entered as a result of

this Adversary Proceeding against Sohmer should be excepted from any discharge

pursuant to 11 U.S.C. § 523(a)(2), (4), (6), and (7).

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PRAYER FOR RELIEF

WHEREFORE, the Commonwealth requests that this Court:

1. After trial on the merits, enter judgment in favor of the

Commonwealth including permanent injunctive relief, restitution to consumers injured by

defendants= unfair or deceptive acts or practices, civil penalties of $5,000 for each

violation of chapter 93A, attorneys fees, costs and other remedial relief under chapter

93A and other applicable statutes.

2. Enter permanent injunctive relief necessary to prohibit foreclosure

rescue transactions in the future such as those designed and orchestrated by Sohmer.

3. Deny Sohmer’s discharge pursuant to 11 U.S.C. § 727(a).

4. In the event that Sohmer’s discharge is not denied pursuant to 11

U.S.C. § 727(a), extend the time in which creditors, including the Commonwealth, must

file claims to except their specific debts from discharge until sixty (60) days after entry of

the Order determining that Sohmer is entitled to his discharge.

5. In the event that Sohmer’s discharge is not denied pursuant to

11 U.S.C. § 727(a), enter an Order that the Commonwealth’s claim for civil penalties,

restitution, attorneys’ fees and costs against Sohmer, and any claims by Sohmer’s

homeowner victims, arising out of the foreclosure rescue transactions described herein,

are excepted from discharge pursuant to 11 U.S.C. §523(a)(2), (4), (6) and (7).

6. Enter such other relief as the Court deems just.

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COMMONWEALTH OF MASSACHUSETTS

MARTHA COAKLEY ATTORNEY GENERAL

By:______________________________

Jacqueline A. Welch, BBO #554111 Christopher K. Barry Smith, BBO #565698 Assistant Attorneys General Office of the Attorney General Consumer Protection Antitrust Division One Ashburton Place Boston, MA 02108-1698 (617) 727-2200

September 17, 2007