It is important to keep track of the bad guys, and here is one operating in Baltimore City.

I just obtained a $31,000 judgment against a fellow who has been "title squatting" in Baltimore City. Take a look at the complaint that was filed in the circuit court and you'll see a very simple scheme, particularly in an economy where so many properties are being abandoned by their record owners. Another lawyer has been chasing him for the same conduct, and so I share the facts of my case and an outline of the scheme to alert those of you handling claims in Baltimore City to this type of fraud.

Here's the scheme, step-by-step:

• True owner of the property, "Good Realty LLC" allows its charter to lapse with the Maryland State Department of Assessments and Taxation.
• Mr. Kutchera, the title squatter, identifies the property and forms a new entity, called "Good Realty, LLC."  Notice the slight change in the name, by adding a comma after "Realty."
• Mr. Kutchera entices a settlement company to assist in the transfer of title to the property from "Good Realty" into his other entity, Acuity Real Estate Investments, LLC.
• Mr. Kutchera and Acuity then sell the property to an unsuspecting purchaser, who intends to renovate the property and place it on the rental market.
• Mr. Kutchera and Acuity take back owner financing for all but closing costs and the purchaser's deposit.
• True owner wakes up and sues buyer, alleging that she bought nothing from a thief. And he's right.

It's a close call on whether the settlement company should have caught this scheme on the sale from Mr. Kutchera to the innocent buyer.  Because he had already conducted a sham transaction to transfer title into his longstanding Acuity entity, it was not expected that the settlement company would go back to a prior transaction to investigate the bona fides of the limited liability company.

What was particularly galling about this case was Mr. Kutchera's early demands for payment under the owner financed deed of trust, and his threats of foreclosure. It didn't take much to demonstrate the true fraud to Mr. Kutchera's lawyer, who then withdrew from the engagement.

I suspect that this form of fraud is not limited to this case, and the one being handled by another lawyer.  And if Mr. Kutchera is doing it, then there are surely others engaged in the same scheme.

Be vigilant.