Officers ordered to pay $450,000 for fraudulent mortgage deals

by Michael Ferraresi - Dec. 9, 2010 12:00 AM

The Arizona Republic

Two Phoenix police lieutenants who ran an off-duty real-estate business have been ordered to pay more than $450,000 in civil penalties and restitution for fraudulent mortgage deals in which they are accused of bilking 148 homeowners facing foreclosure.

Lts. Mark Tallman and Lee Brent Shaw have been involved in the off-duty, sale-leaseback deals since 2003, according to a civil judgment announced Wednesday by the Arizona Attorney General's Office.

Tallman, a supervisor known for his work in the Ahwatukee Foothills area, and Shaw conducted their deals through limited-liability companies that worked with solicitors to identify homeowners at risk of defaulting on their home loans.

The solicitors would persuade residents to transfer title of their home to the businesses at prices well below market value, investigators discovered. The investigation revealed that owners then were allowed to continue to live in their homes as renters with the option to repurchase their properties within one year for additional fees.

"If the owner-turned-renter violated any of the conditions, such as by making a late rental payment or being evicted, the option to repurchase the home became void and the individual was subject to immediate eviction," the Attorney General's Office announced in a statement.

The lieutenants' Better Choice LLC focused between 2002 and 2006 on buying distressed homes where owners were on the brink of foreclosure. Another company, Taken Care of Investments, identified the at-risk homeowners and worked with the lieutenants - who are accused of charging exorbitant fees to manage the properties in various trusts.

Tallman and Shaw were placed on paid administrative leave after the Attorney General's Office announcement as police detectives review the case internally, Phoenix Sgt. Trent Crump wrote in a prepared statement. The Attorney General's Office did not confirm whether Tallman and Shaw would be investigated criminally.

Tallman, who covered Ahwatukee out of South Mountain Precinct, was one of several supervisors recently reassigned to new posts as part of a leadership shakeup at the department as it struggles through multiple investigations in which officers have been charged with or accused of felony crimes.