CHICAGO (AP) – The Illinois Attorney General’s office sued the owner of a Chicago remodeling company almost 30 years ago, accusing him of taking money from property owners for work that was either shoddy or never done. Without admitting wrongdoing, Mark Diamond agreed to change his ways.
But authorities say Diamond merely changed up his scheme, continuing what amounted to a nearly three-decade career of scamming hundreds of people — primarily poor, older and African-American — with home repair and mortgage-related frauds.
They accuse him of stripping millions of dollars in equity from homeowners, even as state regulators took away his business license, the Federal Trade Commission and two consecutive attorneys general sued and dozens of homeowners filed lawsuits.
Federal investigators last week executed a search warrant on Diamond’s Chicago office, an FBI spokeswoman confirmed, but no criminal charges have been filed. He’s scheduled to appear at a hearing Monday on a 2009 state lawsuit against him.
How Diamond has managed to remain in business is a frustrating indictment of consumer protection laws and a civil justice system that moves too slowly, both prosecutors and consumer advocates say. If determined enough, they say, unethical business people can change corporate entities, reappear with different names and continue the same crimes.
“That’s exactly what’s going on here,” said Illinois Attorney Gen. Lisa Madigan, in an interview with The Associated Press. “This is hands-down one of the most horrific cases that I’ve had to contend with.”
Michelle Weinberg, a lawyer at Chicago’s Legal Assistance Foundation, said she’s seen roughly a half-dozen “repeat players” in consumer fraud schemes over the last 20 years. She agreed it’s not unusual for it to take a decade or more to stop them.
“It’s very sad, and it’s very frustrating,” said Weinberg, who has represented multiple clients against Diamond.
Madigan said in addition to the civil case and possible criminal charges, her office is working with the Illinois Legislature to pass a bill aimed at better protecting consumers who consider reverse mortgages.
Diamond didn’t answer repeated phone calls from The Associated Press, and his office appeared closed when the AP tried to visit last week. His attorney, Dennis Both, also did not respond to multiple emails and phone messages.
The 58-year-old Diamond owns several Chicago properties, including condos overlooking Millennium Park, according to property records. He’s faced foreclosure on some of his own real estate, court records show, and has been repeatedly sued by his condominium association for not paying fees.
Two lawsuits, Madigan’s and one from 2002 filed by then-Attorney General Jim Ryan and the FTC, accuse Diamond of using high-pressure sales techniques, falsifying closing documents and taking equity for repair work that’s sometimes never done.
People who say they’re his victims and prosecutors allege Diamond, who is white, has employed at least one African-American woman identified only as “Cynthia” whose job it is to approach homeowners on Chicago’s South and West sides.
Robert Rash says he first met Diamond in 2006. Shortly after his wife died, the college security guard started getting unsolicited phone calls from a woman asking if he needed any home repairs. He eventually told the woman — Cynthia — he wanted to install a bathroom in the basement, but that he couldn’t pay for it.
Cynthia said the company she worked for could refinance his home, take cash out to pay for the new bathroom and do the work. Rash agreed, thinking he was getting a lower house payment and a $5,000 cash payout. But Diamond — who Rash says took $17,000 to put in the small bathroom — never completed the work.
Rash tried for years to get Diamond to finish and had to enroll in a state program to help people facing foreclosure before a free legal service helped him file a lawsuit against Diamond, which was settled for $7,000.
“These have been some miserable years,” the 68-year-old said. He describes Diamond as a master manipulator. “If there were an Oscar for being a crook, he would win,” Rash said.
At the time Rash met Diamond, he was still subject to a three-year consent decree as part of an agreement to resolve the 2002 case. It set several requirements, including that Diamond not mislead consumers.
By 2009, authorities say, Diamond had moved on to hawking reverse mortgages, in which homeowners take equity out of their property to live on. Authorities said he sent women into Chicago neighborhoods with offers of home repairs presented as a free city program for seniors.
Lillie Williams, an 88-year-old who bought her Chicago home in 1974, was among those who signed up. She said “Cynthia” drove her to Diamond’s office to sign paperwork, and agreed to put in a new kitchen and bathroom.
But only some of the work was done before Williams started getting notices that she was delinquent on her house insurance. Her kids realized their mother had signed a reverse mortgage and had given Diamond access to the equity in her home.
She’s currently facing foreclosure.
“It meant the world to me,” Williams said. “I thought I’d be here until I leave.”
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