Grounded Vulture

[December 31st, 2008]

Larry Jason Somera did something a week before Christmas that rarely happens in Multnomah County Circuit Court—he pleaded guilty to a mortgage-related crime.

Normally, mortgage scams land in federal court or go to state regulatory agencies. But Portland Police Detective Liz Cruthers and Multnomah County Deputy District Attorney Dennis Shen have been investigating Somera’s activities for a couple of years (see “Rescue Me,” WW, Jan. 30, 2008), and they’re hoping their investigation might prompt victims of illegal mortgage dealings in the area to come forward (Det. Cruthers’ number is 823-0400).

“We know the cases are out there, but for whatever reason people are reluctant to report mortgage crimes at the local level,” says Shen.

Somera, a 35-year-old former mortgage broker, first attracted the attention of law enforcement after two 2006 home purchases from the elderly and disabled. In one deal, he and a partner bought the 1,300-square-foot Northeast Portland home of Evelyn Allen, a 73-year-old blind woman who faced foreclosure. They made a gross profit of $155,000, most of which they paid to Allen only after Allen’s family sued. (Read the PDF of a letter to the court from Allen’s daughter-in-law.)

That same year, Somera and a partner bought the St. Johns home of an 80-year-old Portland man suffering from dementia. They paid $125,000, $45,000 less than it was worth, according to court records. After the man’s financial adviser challenged the purchase in court, Somera and his partner gave the home back.

Shen ultimately charged Somera with first-degree forgery, a Class C felony, for concocting a bogus rental agreement as collateral for the loan on a third property.

The purpose of the charges, Shen told the court Dec. 18, was to render Somera’s mortgage activities “dead in the water.”

Somera agreed to plead guilty and was prohibited by Judge Michael McShane from engaging in speculative real estate transactions.

Allen’s attorney, Erin Olson, said the charge against Somera represented “the tip of the iceberg,” and argued against leniency. Cruthers echoed Olson.

“There were potentially eight to 10 felonies involving mortgage fraud and forgery that we could have pursued,” Cruthers told the court.

Michael Staropoli, Somera’s attorney, called such claims an attempt to “smear” his client. “What Mr. Somera did,” Staropoli said, “was buy properties, fix them up and sell them for a profit.”

Because Somera is now employed by the Oregon National Guard, a felony conviction would have cost him his job. Staropoli thus asked Judge McShane to reduce the forgery charge to a misdemeanor.

McShane agreed. But the judge placed Somera on probation for five years, rather than the 18 months originally proposed, fined him $1,500, and ordered him to perform 200 hours of community service.

Somera, whose pitch in 2006 to Allen was rescue from foreclosure, now also faces the loss of his home. In September, records show the lender on his West Linn residence gave notice of default on his $836,000 mortgage and said the property would be auctioned Jan. 16.

A chastened Somera told McShane he’s trying to sell the house.

“I took some shortcuts and made some mistakes,” Somera said after pleading guilty. “I’m sorry for all the mistakes I’ve made.”