Residents Of Two Newark Apartments To Receive Funds As A Result Of DOJ Consumer Fraud Action

Payments Part of Resolution of Case against Autumn Park and Hidden Creek Apartment Complexes

Residents of two apartment complexes in Newark are eligible to receive some funds as a result of an action by the Delaware Department of Justice Consumer Protection Unit alleging the apartments were advertised to have amenities that they did not have or which were not operational. The owners and property manager of Hidden Creek are also prohibited in the future from renting residential apartment units anywhere in the state suffering the same types of issues.

The Consumer Protection Unit last week settled its suit, which was filed in March 2017, against Metrodev Newark, LLC, the owners of the former Autumn Park Apartments on Winterhaven Drive, Water Polo IV, L.P. the owners of Hidden Creek Commons on Hobart Drive, and the Metropolitan Management Group, Inc., the entity hired as property manager for the two complexes.

Anyone who was a tenant at Autumn Park between March 13, 2012 and June 30, 2017, or a tenant of Hidden Creek between March 13, 2012 and the present can complete a claim form at https://attorneygeneral.delaware.gov/fraud/cpu/aptset/ to receive funds as a result of the action. Tenants can also contact the Consumer Protection Unit at (302) 577-8600 or via email at consumer.protection@delaware.gov.

Prompting the consumer suit were over 80 consumer complaints filed by tenants with DOJ complaining of lack of HVAC services, faulty appliances, plumbing issues, health and safety concerns, and a lack of responsive maintenance. Both complexes had numerous code violations. Despite all this, advertising for the complexes consistently promised amenities such as free heat and hot water, air conditioning, fully equipped kitchens, and 24-hour emergency repair. The Consumer Protection Unit alleged that the failure to provide the promised amenities and services, after having repeatedly advertised their availability, were misrepresentations, false promises and omissions in violation of Delaware consumer fraud laws.

As a part of the settlement, the defendants are prohibited from renting residential apartment units in Delaware that suffer from open code or municipal health, safety, or welfare violations that were active at the time of renting a unit to a tenant. Defendants may not rent units that lack facilities or amenities as advertised or promised to the public, and are prohibited from using false or misleading advertisements. The only property currently under defendants’ ownership or control in Delaware is the Hidden Creek Commons community.

As a part of the settlement, the defendants will provide training to their staff to ensure they are knowledgeable of the requirements of the Delaware Residential Landlord Tenant Code, New Castle County Tenants and Rental Code, and state and federal fair housing laws. The defendants will also institute training for tenants to ensure that tenants are aware of their rights under the Delaware Residential Landlord Tenant Code and the New Castle County Tenants and Rental Code.

Finally, the defendants will pay a civil penalty in the amount of $400,000. These funds will be used to make payments to affected tenant consumers who complete the claim form and provide supporting documentation. Remaining funds will go to the state’s Consumer Protection Fund to repay the costs of the investigation and to fund other consumer protection activities in Delaware.

“This case was a priority of former Attorney General Matt Denn because tenants were living in conditions that were unacceptable,” Attorney General Kathy Jennings said. “I am proud of the work that DOJ has done to send the message that such misleading conduct should not be tolerated.”

This case was handled for the Consumer Protection Unit by CPU Assistant Director Gillian Andrews, Deputy Attorney General Gina Schoenberg, Special Investigators Robert Schreiber, Bruce Pinkett, and LaVincent Harris, and Paralegal Angela Williams.


Delaware Part Of Proposed Environmental And Consumer Protection Penalty Settlements With Fiat Chrysler And Auto Supplier Robert Bosch For Allegedly Undermining Auto Emissions Regulations And Harming Consumers By Adding Unlawful “Defeat Devices” To Diesel Vehicles

Fiat Chrysler Required to Fix Vehicles, Provide Restitution and Address Environmental Harms; State Attorneys General Obtain $72.5 Million in Nationwide Civil Penalties from Fiat Chrysler and Another $98.7 Million from Bosch for its Role in Supplying and Programming the Software Used by Fiat Chrysler and Earlier Violator Volkswagen

Attorney General Kathleen Jennings and Department of Natural Resources and Environmental Control Secretary Shawn Garvin today announced that Delaware has negotiated settlements in two matters: The first settlement, when finalized, will provide for hundreds of thousands of dollars in compensation for Delaware consumers who purchased or leased Fiat Chrysler vehicles allegedly containing illegal emissions defeat devices. The second will settle claims that as a supplier of auto components, parts maker Robert Bosch allegedly supplied and helped program the illegal emissions “defeat device” software used by both Fiat Chrysler and by Volkswagen in their diesel vehicles.

“Fiat Chrysler betrayed the trust of its customers regarding the emissions of its vehicles and Bosch enabled Fiat Chrysler and Volkswagen to do so,” Attorney General Jennings said. “Consumers are being compensated through these and other settlements directly and the financial penalties being paid to the states serve as punishment and warning for companies not to engage in deceptive consumer practices.”

“With this settlement, we are holding these companies accountable for causing very real and detrimental impacts – vehicle emissions being a large part of our air quality problems,” said DNREC Secretary Shawn M. Garvin. “These settlement dollars will be used to invest in improvements in Delaware’s air quality.”

Fiat Chrysler

Following a nearly two-year investigation, Delaware and other states allege that Fiat Chrysler Automobiles N.V., its U.S. subsidiary FCA US, LLC, its Italian affiliate V.M. Motori S.p.A. and V.M. North America, Inc. (collectively, “Fiat Chrysler”) installed unlawful defeat device software and undisclosed Auxiliary Emissions Control Devices (“AECDs”) in 181 Model Year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold in Delaware. Delaware alleges that Fiat Chrysler cheated on federal and state emissions tests by calibrating the vehicles’ software to conceal that the vehicles emitted higher than permitted levels of harmful nitrogen oxides (NOx) in real-world driving conditions, and misled consumers by falsely claiming the “Eco-Diesel”-branded Jeep SUVs and Ram 1500 trucks were environmentally friendly and compliant with the law in all 50 states.

Delaware’s settlement will prohibit Fiat Chrysler from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers, and require Fiat Chrysler to carry out its obligations under a series of related settlement agreements in the Multidistrict Litigation (“MDL Settlements”) pending in the U.S. District Court for the Northern District of California. The MDL Settlements, once approved by the MDL court, will resolve claims brought by a national class of affected consumers, the United States Department of Justice and Environmental Protection Agency, and the California Air Resources Board and the State of California. The MDL Settlements require Fiat Chrysler to: eliminate the defeat device features from the relevant software through a software “flash fix”; provide eligible owners and lessors extended warranties; and, together with co-defendant Bosch, pay eligible owners who take their vehicle to an authorized dealer for the software repair an average restitution of approximately $2,908 and lessees and former owners who do so restitution of $990. They also require Fiat Chrysler to make available 200,000 upgraded catalytic converters to mitigate air pollution across the country when installed by Fiat Chrysler vehicle owners as replacements to their existing catalytic converters.

Fiat Chrysler will be required to pay Delaware more than $250,000 in civil penalties, including more than $140,000 under Delaware environmental laws for equipping, offering, selling and leasing the environmentally non-compliant vehicles, and more than $110,000 under Delaware consumer protection laws for deceptively and unfairly marketing, selling and leasing the vehicles to consumers. Nationwide, excluding the separate penalties the company will be required to pay to the federal government and California, the multistate agreement is expected to result in civil penalties totaling $72.5 million to 49 states, Puerto Rico, the District of Columbia and Guam.

If all owners and lessors nationwide participate, this will result in total available restitution of approximately $307 million, including approximately $500,000 to the 181 affected owners and lessors in Delaware.

Bosch

Bosch is a multinational engineering company well known for its consumer products. It is also a major supplier to the global automotive industry. Among the products Bosch supplies to its auto manufacturing customers are the electronic control units (“ECUs”) that house the complex software that controls nearly all aspects of an engine’s performance, including emissions systems. When Volkswagen, a Bosch customer, was revealed to have systematically utilized defeat device software in its diesel vehicles, several states, including Delaware, commenced a separate investigation into the role played by Bosch in enabling its customers to potentially violate federal and state emissions regulations. Today, after another Bosch customer, Fiat Chrysler, has settled claims that it too employed illegal defeat devices, Delaware is able to announce the conclusion of that separate investigation into Bosch’s conduct.

Delaware alleges that Bosch facilitated the implementation of the defeat device software in more than 600,000 Volkswagen and Fiat Chrysler vehicles over a period that spanned more than a decade. Notwithstanding concerns about the illegality of the devices raised internally, to management, and externally, to Volkswagen and Fiat Chrysler, Delaware alleges that Bosch continued to assist these customers as they implemented the defeat devices and concealed their misconduct from regulators and the public.

Under the terms of the proposed settlement with Delaware, Bosch will pay Delaware more than $340,000 to settle the State’s consumer and environmental claims. The agreement also includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.

Under a multistate agreement involving Delaware and 49 other jurisdictions—including Puerto Rico, the District of Columbia, Guam and all states other than California, Texas and West Virginia—Bosch will pay a total of $98.7 million in civil penalties under the jurisdictions’ consumer protection and environmental laws and make a separate $5 million payment to the National Association of Attorneys General (NAAG) for training and future enforcement purposes. Under the related MDL Settlements, Bosch will also pay approximately $27.5 million to consumers who purchased or leased the affected Fiat Chrysler vehicles. Bosch earlier paid more than $275 million to consumers who purchased or leased the affected Volkswagen vehicles.

These matters were handled for Delaware by state Department of Justice Director of Consumer Protection Christian Douglas Wright and Deputy Attorney General Valerie Edge.


Wells Fargo Customers Will Have Chance to Be Compensated Under 50 State Settlement That Includes Delaware

Agreement resolves state consumer protection claims for alleged unfair and deceptive trade practices involving millions of accounts

Under a settlement filed December 28, 2018 with all 50 states and the District of Columbia over violations of state consumer protection laws, Wells Fargo Bank N.A. will create a consumer redress review program through which consumers who have not been made whole through other restitution programs already in place can seek review of their inquiry or complaint by a bank escalation team for possible relief.

The settlement resolves allegations by Delaware and other state attorney general offices that Wells Fargo violated state consumer protection laws by (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance products, and (5) incorrectly charging customers for mortgage rate lock extension fees.

The Delaware Department of Justice Consumer Protection Unit, which joined in the investigation and settlement, said any Delawarean who was or currently is a customer of Wells Fargo and experienced any of the above issues, will be able to utilize a dedicated website that will go live in late February 2019 to take steps to be compensated. Delaware DOJ will provide an update for consumers once more information concerning consumer redress is made available. The consumer redress process will be overseen by the federal Office of the Comptroller of the Currency and the federal Consumer Financial Protection Bureau.

The Dec. 28 settlement represents the most significant engagement involving a national bank by state attorneys general acting without a federal law enforcement partner. In addition to the consumer restitution, as part of the settlement, Wells Fargo will pay a total of $575 million to the states and D.C.

In addition to the settlement with the states, Wells Fargo previously entered consent orders with federal authorities, which include restitution to consumers in excess of $600 million. Further, the bank settled a related consumer class-action lawsuit, and will pay over $1 billion in civil penalties to the federal government. Additionally, under an order from the Federal Reserve, the bank is required to strengthen its corporate governance and controls, and is currently restricted from exceeding its total asset size.

Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, and debit cards were issued without the customers’ knowledge or consent. The bank has also identified 528,000 online bill pay enrollments nationwide that may have resulted from improper sales practices at the bank. In addition, Wells Fargo improperly submitted more than 6,500 renters insurance and/or simplified term life insurance policy applications and payments from customer accounts without the customers’ knowledge or consent. The states alleged that Wells Fargo imposed aggressive and unrealistic sales goals on bank employees that created an impetus for employees to engage in improper sales practices.

The states also alleged that Wells Fargo improperly charged premiums, interest, and fees for force-placed collateral protection insurance to more than two million auto financing customers, despite evidence that the customers’ regular auto insurance policy was in effect. Additionally, the states alleged that Wells Fargo failed to ensure that customers received proper refunds of unearned portions of optional Guaranteed Asset/Auto Protection (GAP) products sold as part of motor vehicle financing agreements.
Finally, the states alleged that Wells Fargo improperly charged residential mortgage loan consumers for rate lock extension fees even when the delay was caused by Wells Fargo, a practice contrary to the bank’s policy.

Beyond the direct consumer relief, Delaware’s share of the $575 million Wells Fargo will pay to the states and DC as part of the settlement is just over $2 million, which will go to the state’s Consumer Protection Fund. The Fund pays the investigative costs, consumer outreach activities and operations of Delaware DOJ’s Consumer Protection Unit, with excess amounts returned to the state’s General Fund for allocation by the state legislature and Governor through the normal process.

Please click here to view the states’ agreement with Wells Fargo.


Child Rape Could Mean Life In Prison

OMB gang member pleads guilty; other defendants face prison on drug, weapons, manslaughter, and fraud charges.

A 67-year-old Wilmington man could be sentenced to life in prison for the rape of a child that occurred in 2000. Deputy Attorney General Kelly Sheridan secured no contest plea from Santos Viruet to Rape First Degree. In January 2017, a woman called police to say Viruet had sexually assaulted a child in his care years earlier, prompting an investigation. Viruet faces between 15 years and life in prison when sentenced by a Superior Court judge in February 2019. Officers from the Wilmington Police Department investigated the case, with DOJ social worker Claudia Melton assisting with the prosecution.

A 20-year-old Only My Brothers (OMB) gang member will serve a prison term after a guilty plea. Oliver Henry of Dover pled guilty to four counts of Criminal Contempt in connection with gang activity. In March through June of 2018, Henry met with other OMB members at various locations in and around the City of Wilmington, despite being ordered not to have any contact with his codefendants from a 2015 case in which he pleaded guilty to Illegal Gang participation and Conspiracy Second Degree, and in his subsequent sentences for violations of probation. A Superior Court judge sentenced Henry to 360 days straight jail with no good time credit or suspension for each count, followed by one year of probation. Deputy Attorney General Mark Denney prosecuted the case, along with Deputy Attorneys General Albert J. Roop and Allison Abessinio.

A 36-year-old Newport man faces at least 15 years in prison on drug and weapons charges. Deputy Attorneys General Zachary Rosen and Anna Currier secured a guilty plea from Johnny Dorazio to Drug Dealing of Heroin, Possession of a Firearm by a Person Prohibited, and Resisting Arrest. In January 2018, police executing a search warrant in the home where Dorazio was staying in the 200 block of West Ayre Street found approximately 200 bags of heroin and a .45 caliber handgun. Dorazio is barred from having a gun because of previous felony convictions on weapons and carjacking charges. Sentencing by a Superior Court judge is currently scheduled for February, with Dorazio facing a minimum 15 years in prison. DOJ paralegal Meredith Parkinson assisted with the case.

A 2016 fatal car crash led to a prison sentence for a Wilmington man. Deputy Attorneys General Danielle Brennan and William Leonard secured the sentence for Ternell Henderson, 33. In August 2016, Henderson was driving his vehicle over 80 m.p.h. in a 25 m.p.h. hour zone along Pennsylvania Avenue in Wilmington, and ran multiple red lights before crashing into Brian James’ vehicle, killing James. After the collision, Henderson got into another vehicle near the scene and fled. Henderson pled guilty to Manslaughter in June 2018. He was sentenced by a Superior Court judge to 12 years and 6 months in prison, followed by 6 months of home confinement, then 2 years of probation. Tavis Miller and James Peiffer of the Wilmington Police Department were the detectives on the case, and DOJ social worker Kristen Fluharty-Emory assisted with the prosecution.

A contractor who took a down payment from a client then never returned to do the paid-for work was sentenced in Superior Court. Deputy Attorney General Michael Undorf of the DOJ Consumer Protection Unit secured the sentence for John Carpenter III, 48, of Wilmington. In September 2016, Carpenter took a $1,800 deposit from a woman in the Sparrow Run neighborhood for home improvements, including roof and gutter reinstallations. Carpenter cashed the check the same day but never made the repairs. In May 2018, Carpenter pled guilty to felony Home Improvement Fraud. A Superior Court judge sentenced Carpenter to one year of probation, and ordered any advances or deposits received, directly or indirectly, for any future home improvement contracts shall be used solely to purchase materials for the job. Carpenter paid full restitution to multiple victims as part of the plea deal. The case was prosecuted with the assistance of DOJ special investigator Robert Schreiber, and officers from the Delaware State Police and New Castle County Police Department.


Delaware Students Can Join Consumer Literacy Competition

Delaware Department of Justice sponsors LifeSmarts in its 25th year

The Delaware Department of Justice is sponsoring the 2018-2019 season of LifeSmarts, a national scholarship competition and educational program for middle school and high school students that tests knowledge of real-life consumer issues and aims to create a future generation of consumer-savvy adults. Coaches can register and create teams, and students may register and compete online.

LifeSmarts is a program of the National Consumers League (NCL), the nation’s pioneering consumer advocacy organization, and operated at the state level by volunteer coordinators, led in Delaware by Deputy Attorney General Gillian Andrews of the DOJ’s Consumer Protection Unit.

This year, the program, now live online at LifeSmarts.org., celebrates its 25th anniversary season.

“We are thrilled that Delaware is part of LifeSmarts’ 25th year of bringing invaluable consumer literacy lessons and scholarship opportunities to teens in our state,” said DAG Andrews. “I am consistently impressed with the level of knowledge and information the competitors gain, as well as the resounding sportsmanship of the students.”

LifeSmarts focuses on five main content areas: consumer rights and responsibilities, personal finance, technology, health and safety, and the environment, with students quizzed on their knowledge of these subject areas during the online competition, which runs through February 16, 2019. Top-performing state teams then advance to the National LifeSmarts Championship taking place in 2019 from April 13-16 in Orlando, Florida. Winning team members receive scholarships and other prizes.

Last year, students answered more than 3.5 million consumer questions about credit reports, recycling, nutrition, social media, state lemon laws, and everything in between, including:

  • What is the proper way to dispose of used motor oil?
  • Your creditor may say you are in arrears if you fail to do what?
  • What holiday is celebrated on the third Monday in January, and honors one of America’s greatest civil rights leaders?

In addition to online, state, and national competitions, LifeSmarts recognition and awards occur throughout the program year:

  • Teams of students vie for cash prizes in the online TeamSmarts quiz, which focuses on a specific LifeSmarts content area each month through January.
  • Classroom mentor programs: Throughout the year, ten $1,000 scholarships are awarded to winning LifeSmarts students who become Safety Smart Ambassadors, using LifeSmarts content to present safety messages to younger children in their communities.
  • Partnering with FBLA (Future Business Leaders of America) and FCCLA (Family, Career, and Community Leaders of America), LifeSmarts offers special competitive events for student members of both student leadership organizations. FBLA and FCCLA team members have the opportunity to compete for cash prizes, trophies, and other honors.

LifeSmarts is active in all states and the District of Columbia, where NCL is headquartered.

For more information, and to learn how to register, visit LifeSmarts.org.