By JOSH SALMAN
To his clients and business partners, Paul Pysczynski was a hard-working lawyer with a penchant for helping struggling homeowners to avoid foreclosure and bankruptcy.
But police reports now contend that the 46-year-old attorney was embezzling funds from those he was hired to help.
Paul Pysczynski (Provided by Sarasota County Sheriff's Office)
Pysczynski is accused of stealing from nearly a dozen clients in the greater Tampa Bay area through a scheme that mirrors those surfacing nationwide.
In May, he was arrested in St. Louis for practicing law with a suspended license. He also faces more than a half dozen felony charges tied to his Southwest Florida foreclosure and loan rescue efforts.
“It appears he was operating an illegal foreclosure rescue and bankruptcy scheme,” Assistant State Attorney Daniel Yuter said. “It’s a relatively complex and unique case.”
Pysczynski could not be reached for comment, but Derek Byrd, his criminal defense attorney, acknowledges the allegations against his client are fairly accurate. He said Pysczynski’s family has pooled together funds to pay restitution to those impacted.
Although he has not yet officially pleaded, Byrd said Pysczynski is expected to ultimately enter a guilty plea for the majority of the charges against him.
“We have already paid back several victims, and we intend to pay the others,” Byrd said. “It’s not a guilty or innocent situation. It’s a damage-control situation.
“The facts are the facts. It’s pretty clear he made some grave mistakes, and we’re just doing what we can to make it right.”
Attorneys are big players
Bogus foreclosure rescues have become commonplace since the Great Recession, and attorneys like Pysczynski are often their masterminds.
Some appear to commit outright theft by accepting upfront payments for foreclosure rescue services they never perform. Others tie up the foreclosure process by getting distraught homeowners to transfer deeds to their properties into trusts or limited liability companies, and then file for bankruptcy protection.
Attorneys are playing a larger role in scams, authorities say
In many cases, owners lose their homes — and lifelong savings, while attorneys profit.
“At heart, these are confidence scams,” said Lawrance Evans, director of Financial Markets for the Government Accountability Office, which studies foreclosure rescue fraud for Congress. “These schemes more than ever are involving attorneys. Attorneys sort of bring that air of legitimacy, and unfortunately, they’re still duping folks.
“It all sounds good until the music stops.”
Building a practice
Originally from Buffalo, New York, Pysczynski moved to Sarasota after graduating with a law degree from the University of Richmond in Virginia.
In 1997, he began working as an associate attorney at the Sarasota law firm of Lancaster & Eure. A decade later, he opened his own practice.
Pysczynski is married to the step-daughter of fellow attorney Stephen Voigt, who once closed real estate deals for flipping fraud mastermind Craig Adams and his associates. Adams was sentenced to three years prison in 2012. Although Voigt was implicated by Adams in open court, Voigt has denied doing anything unethical and was never charged with any crimes.
Pysczynski rented an office from Voigt for roughly five years, and used the Bee Ridge Road building to meet with clients even after relocating to Missouri, according to police records and victim interviews.
PART 1: Selling hope to homeowners who have none
Voigt, who told authorities that he had no knowledge of Pysczynski’s legal practice, did not return several calls seeking comment.
Pysczynski’s firm initially focused on debt resolution and social security disability cases.
By 2011, he was engaged in a complex debt reorganization scheme. At least six clients reported losses of a combined $100,000, according to police and Florida Bar records.
Pysczynski allegedly took money from Realtors, other attorneys and a surgeon. Police say he forged documents, routinely lied about bank cooperation and misled clients.
Unhappy clients
Mark Lotz — a childhood friend of Pysczynski’s — was among the attorney’s first victims, police reports indicate.
The 44-year-old Sarasota man fell behind on $602,100 in mortgage loans from Capital One that were used to finance his purchase of a 1,826-square-foot home on Waldemere Street in Sarasota.
Lotz bought the house for $669,000 in 2006, when area real estate prices were at their highest, according to property records.
When Lotz could not pay the mortgage, he turned to his longtime friend, meeting Pysczynski at the lawyer’s small office in December 2011 to work out a loan modification.
That same month, Lotz wired $10,000 into Pysczynski’s Bank of America account. The lawyer told Lotz that the funds would be kept in a trust account until a payment was made to Capital One, police documents show.
Nearly a year later, Pysczynski presented Lotz with what appeared to be a bank loan modification offer.
The deal would trim Lotz’s principal to $480,000. After a one-time payment of $48,500, his monthly mortgage bill would drop to $2,848. Pysczynski told Lotz the initial $10,000 wire transfer would apply toward that hefty payment, police say.
Eager to save his family’s home, Lotz wired $38,000 to Pysczynski. His wife then hand-delivered four additional monthly payment checks to Pysczynski’s firm.
But the checks were never sent to Capital One, police records show.
Lotz later discovered another attorney in Pysczynski’s office filed for Chapter 13 bankruptcy on behalf of Lotz and his wife — without their consent — in an apparent attempt to stall the pending foreclosure.
The couple told police they never intended to file for bankruptcy. The case was ultimately dismissed by the court, according to probable cause affidavits.
When a foreclosure auction was scheduled, another bankruptcy was filed without the couple’s knowledge. That filing was made by a Tampa attorney who police also have linked to Pysczynski.
That case was similarly dismissed.
Capital One said it did not have any evidence that a possible loan modification for Lotz was being worked on, police records show.
Lotz declined several requests for interviews.
“During different times in 2013, the Lotzs would receive telephone calls from Capital One asking what they wanted to do with this house,” attorney Greg Linehan wrote in a Florida Bar complaint.
“Mr. Lotz did not understand the reason for the calls given the modification agreement that was allegedly in place,” according to Linehan, who once worked with Pysczynski and is a mutual friend of Lotz. “Sometime in November or December 2013, Mr. Lotz was informed by Mr. Pysczynski that he was able to work out a settlement agreement with Capital One, in which Capital One would return his lump sum of $48,500 as a settlement for the continued harassment.”
Police records show the money was never returned.
Another tale
Kimberlie MacDonald was another homeowner who says she was deceived by Pysczynski.
MacDonald and her husband fell into financial trouble after buying a $5,500 water filtration system in 2010 from a door-to-door salesman, financing the product through Everbank USA.
A Realtor, MacDonald saw her commissions dry up during the region’s prolonged housing slump. Her husband, a homebuilder, also saw his work significantly drop. Toward the end of 2010, the couple had spent all of their savings trying to stay in their home.
PART 2: Strategy, or mortgage violation?
They ultimately fell behind on their mortgage and other monthly bills. When MacDonald stopped paying the installments on the water system, collections agents began to hound her for what now totaled $11,000 in principal, late fees and attorney costs.
A fellow Coldwell Banker Realtor referred MacDonald to Pysczynski, saying the lawyer could help ease her debt burden.
“He was a super nice guy,” MacDonald said. “I had no reason to feel uncomfortable or doubt his word. He had a paralegal, legitimate office space and impressive credentials.”
MacDonald said she immediately sent Pysczynski a $2,500 retainer. Months passed with sporadic communication between the two, before Pysczynski returned with an offer to settle the debt for another $2,800.
Pysczynski sent her an unrecorded satisfaction of judgment, essentially releasing her from the financial obligation, according to copies MacDonald provided to the newspaper.
But the attorney soon began confusing basic details: one day telling her he sent a check but saying later that he wired the funds. He even began jumbling which debts he was hired to settle, according to a string of e-mails between the two that MacDonald provided to the Herald-Tribune.
By the time MacDonald spoke to the water filtration financing company directly, she realized she had been conned.
The judgment eventually prevented her from short selling an area rental property that she ultimately lost to foreclosure.
“The whole thing is just bogus,” MacDonald said. “It just went on and on, and the sad part is, there are others out there in a worse position than us.”
Supreme Court action
Pysczynski’s law license was suspended by the Florida Bar in August 2012 for failing to complete continuing education.
A ruling by the Florida Supreme Court that year said Pysczynski caused “great public harm” by obtaining more than $100,000 from six clients, then failing to repay the money after no legitimate legal services were rendered, the record states.
One instance involved a Sarasota couple, who sought Pysczynski’s help for a pending foreclosure on a loan from GTE Federal Credit Union.
The pair sent Pysczynski a $1,500 check in 2012 to begin the settlement, then wired another $7,000 into an escrow account, according to their Bar complaint.
In September 2013, they sent modification material to St. Louis, where Pysczynski told them he was visiting a sister. The 22-page package included bank account information, social security numbers and tax forms, records show.
But GTE continued to call, and said it did not have any information pertaining to the attorney representing the borrowers. Pysczynski blamed the bank for delays.
The homeowners never received any money back when the modification fell apart, state records show.
Even a local doctor, who reached out to Pysczynski for help with student loans, lost $25,000 to the attorney.
“It’s horrible, what this guy has done,” said foot and ankle surgeon Daniel Howard.
“It’s very similar to when people put faith in a physician. When you go to them, you have to trust them. It’s one thing if they make a mistake,” Howard said. “But for someone in a position of power to do this is unthinkable.
“It’s really no different than if he where to put a gun up to your head and rob you.”
Facing charges
Pysczynski’s family apparently knew little of his law practice, or the troubles surrounding it.
After moving to St. Louis, Pysczynski continued to practice law in Florida.
But money was scarce: His wife often had to struggle to buy groceries, said Jay Royce, Pysczynski’s father-in-law.
Royce fears Pysczynski fabricated much of his life to friends and family.
Pysczynski faces seven felony charges related to his alleged loan modification schemes.
In June, the Florida Supreme Court granted an emergency suspension of Pysczynski’s license, adding to his other disciplinary action.
“I guess lawyers are taught how to manipulate, and he’s terrific at it,” Royce told the Herald-Tribune. “It’s unfortunate. You just can’t believe this would happen.”