Woman upends $1.1M in liens her ex put on house through fraud
By Alan Cooper
Published: April 20, 2010
Tags: Domestic Relations, Judge Craig D. Johnston, Prince William Circuit Court
A Northern Virginia judge has given a woman ownership of her house, free of any of the $1.1 million in liens fraudulently racked up by her ex-husband before he disappeared.
In the case, there was no question who the bad guy was. But Daniel S. Wilkes was not around to hear testimony about how he had conned his wife and a series of banks.
He disappeared in the middle of last year rather than face criminal charges for bouncing a check at a Las Vegas casino and forging documents in Prince William County that netted him $1.1 million in loans secured by a house that was worth less than half that amount.
Wilkes’ wife, Alisha Wilson Wilkes, contended that the house was hers, unencumbered by any of the loans because she and her husband had owned it outright as tenants by the entirety before the fraud started.
Prince William Circuit Judge Craig D. Johnston believed the wife’s testimony that she was the innocent victim of her husband’s machinations and rejected the banks’ claim that it is inequitable to allow the wife to retain the property lien-free and leave them with the entire loss.
Wilkes’ “schemes not only defrauded his lenders, they defrauded Mrs. Wilkes as well,” Johnston wrote.
“She is left with large joint credit card debts which he incurred, as well undoubtedly with large legal bills. She is also is left without the husband and the father she thought she had for her child.”
According to Johnston’s opinion in Wilkes v. First Settlement LLC and the wife’s attorney, John C. Bazaz of Fairfax, the Wilkeses bought the house in July 2005 for $574,000 and took out a $459,800 mortgage on it.
Wilkes paid off the mortgage less than four months later. The source of that money was not clear to Johnston or Bazaz, but Wilkes was working at the time as an online day trader and there was no indication that the money for the payoff was obtained improperly.
The impropriety started in July 2006 when Wilkes forged his wife’s signature to obtain a $400,000 loan from the Bank of New York.
Seven months later, he received $150,000 from a line of credit loan from Bank of America. In April 20007, he received $130,000 from another line of credit, this one from SunTrust Bank, which gave him $54,800 from an additional line of credit in October 2007.
In each of the three line-of-credit loans, Wilkes signed an affidavit that he was the sole owner of the property, and – because the loans were relatively small – the banks did not conduct a title search to verify the affidavit.
Finally, in April 2008, Wilkes duped a notary into signing an affidavit that she had seen the wife sign a promissory note from Fannie Mae for $368,000.
Wilkes asked the notary to meet him at a hospital because his son was very ill. He told her that his son was near death and the wife refused to leave his bedside.
The notary allowed him to take the documents inside the hospital, and he returned with what he purported to be his wife’s signature on the note.
Johnston found that neither the wife nor the child were ever at the hospital.
The wife did not know anything about the loans until October 2008, when she received a call from a creditor.
Wilkes told her that he had been the victim of identity theft, and the wife at first believed him.
Another call prompted her to run a credit report and a title examination which, Johnston wrote, “gave her some idea of the enormity of what he had done. Searches of the house and his computer yielded other information, including pictures of him and women with whom had had apparently been associating.”
Johnston said it is not known what Wilkes did with the money, but some of it apparently went into his online trading and another large portion went to Las Vegas casinos.
Bank of America and SunTrust abandoned their claims on the house once they learned that it was held as tenants by the entirety and not by Wilkes individually.
Bazaz said the Bank of New York has filed a notice of appeal with the Supreme Court of Virginia.
Among its contentions are that Wilkes fraudulently conveyed the house to the wife after she filed for divorce.
Johnston said the conveyance did not put the bank in any worse position because the house was held as tenants by the entirety before the transfer, a status that protected her from claims by individual creditors of her husband.
Bazaz said Mrs. Wilkes has moved to West Virginia to be closer to family and is working as a school counselor.
The house is being rented and is on the market for $375,000. With the collapse of the Northern Virginia housing market, the word from those who have expressed an interest in the dwelling is that the price is too high, Bazaz said.