West Virginia Record

Wednesday, October 16, 2019

Judge dismisses foreclosure fraud complaint against Sovereign Bank

By John O'Brien | Feb 11, 2013

MARTINSBURG – A federal judge has dismissed a lawsuit brought by a Charles Town businessman who claimed his business was the subject of a fraudulent foreclosure.

U.S. District Judge Gina Groh, of the Northern District of West Virginia, granted Sovereign Bank’s motion to dismiss Alex Rahmi’s lawsuit on Feb. 1.

Rahmi claimed Sovereign Bank wrongfully assessed the fair market value of Universal Enterprises of West Virginia in order to obtain a $1.358 million deficiency judgment.

“In this case, Plaintiff Rahmi has wholly failed to allege facts stating a claim for foreclosure fraud,” Groh wrote.

“Plaintiff summarily states that he was ‘devastated financially and emotionally by the defendant’s abusive, fraudulent, deceptive and unfair scheme to obtain possession and title of Plaintiff’s place of business in foreclosure proceedings.’

“Plaintiff merely alleges legal conclusions, and he fails to state facts with particularity regarding Defendant’s alleged fraudulent act, that the act was material and false and that Plaintiff justifiably relied upon it.”

Rahmi claimed the alleged scheme was designed to produce a lower buyback price and to strategically create a low bid for artificially inflating the deficiency judgment.

Rahmi said his company’s fair market value was assessed at $3.318 million, and Sovereign Bank foreclosed on it for $1.6 million. This led to a $1.358 million deficiency judgment, Rahmi said.

Rahmi claimed a $1.2 million loss in real estate equity, a $1.1 million loss of clients and a $1 million loss in business assets.

He also claimed his constitutional rights were violated.

“First, Plaintiff entirely failed to state what, if any, violations occurred of his constitutional rights under state law,” Groh wrote.

“There are simply no facts alleged that imply a violation of Plaintiff’s state constitutional rights.”

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.

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