Polk Law Blog

Chuck Welch over at lakelandlocal.com did great job of describing the transaction history of Lakeland City Commission candidate James Goetz’s home. I thought I would expand on his work and provide a more detailed legal analysis of the transactions. Please go read Chuck’s post first. (I hope he doesn’t mind if I call him Chuck.) His post is very good and I am going to start where he left off. Unless otherwise noted, all quotes in this post are to his post.

Initially, one may ask why I spent so much time putting this together. Well, I relish a nice, complex legal disaster. I personally experience a sense of enjoyment trying to untangle a mess like this. At first I just wanted to know what was going on, but as I dug deeper the challenge of the exercise took over, one thing led to another, and nearly 4000 words got written. I hope someone besides me finds it interesting. With that out of the way, onward we go!

I will elaborate on each transaction listed by Chuck separately and fill in some gaps. If you want to look at the deeds themselves, clicking on a link will not take you there. You have to click  on “Public Search” after you click one of the links to get a cookie. Then go back on your browser and click the link again.

The Initial Purchase and Sale to Daise

01/30/2004 James Goetz purchases the property

He reportedly paid about $88,500 for the house, based on the amount of doc stamps paid. Simultaneously, a mortgage was recorded for $87,500 (Lender: First Franklin). Nothing appears unusual about this transaction.

03/03/2004 Using a Quit Claim Deed, James Goetz sells the property to Alfred Daise of Loxahatchee, FL

We’ll find out later that Mr. Daise really only bought a 1/2 interest in the property, but Goetz deeded him the whole thing. The deed reports that doc stamps were paid on a sales price of $43,500.

This transaction looks funny (why would you sell a 1/2 interest in your house?), but it isn’t necessarily inappropriate.  Most mortgages require you to retain title to your property, so it was probably a breach of the mortgage. But back then banks did not to get too worked up about things like this as long as the mortgage was paid each month. Mr. Goetz signed this deed as “Jim” instead of “James.” This created a minor title problem that will need fixing later and may have confused a subsequent title company. At this point, Mr. Daise owns the property and First Franklin has a mortgage.

Exercises in Nonsense

Here’s where some really weird stuff happens.

On 6/23/2004, James Goetz signed a second mortgage on his property (probably a line of credit) for $65,460 (Lender: AmSouth). In most normal situations, this should not have happened, because James Goetz did not own the property. Mr. Daise did. Mr. Goetz cannot mortgage property he does not own. The title company may have missed the Daise deed by mistake, it is hard to tell. It’s a moot point because, as we shall see, the AmSouth loan was eventually paid in full.

Sometime around 7/8/2004, James Goetz signs and records three very bizarre documents. One is a Power of Attorney. Typically a Power of Attorney is used to allow someone else to act as your agent. The elderly and disabled often use them to allow a family member to help them with things. The weird thing with this power of attorney is that it is signed by “James A. Goetz, Debtor” who appoints “James Arthur Goetz, Secured Party” as his agent. He is naming himself as his own power of attorney, an exercise in nonsense. It’s as if James A. Goetz and James Arthur Goetz are two different legal entities. The other two documents continue the theme.

The second bizarre document is a UCC Financing Statement. A UCC Financing Statement is required when you have a secured interest in property other than real estate and vehicles, which are handled by mortgages and liens. A UCC Statement is kind of like a mortgage on personal property. For example, a business might get a line of credit secured by stock in the company, accounts receivable, and equipment. The lender would file a UCC Financing Statement to put the world on notice that the lender has a right to foreclose on those assets if the debt is not paid.

Mr. Goetz’s UCC Financing Statement does nothing of the sort. First of all, you typically would not record it in the county’s public records, it would be filed with a different office (which he did do). Second of all, take a look at the debtor name on the statement: “Goetz, James Arthur, Organization/Tradename/Trade Mark-Debtor.” It’s as if Mr. Goetz is trying to establish an alter ego of himself as an “Organization” or corporation and declare that the organization James Arthur Goetz owes money to the individual James A. Goetz. Or something like that.

The third bizarre document, which really takes the taco, is a “Copyright Notice.” This appears to be an attempt to place us on notice that “James Arthur Goetz©” claims a copyright on his name, which cannot be used without a written authorization from James Arthur Goetz (in red ink no less!). The document reads as if someone took a book of legal clauses for contracts and mixed them all together without understanding what they meant. It is truly remarkable in its peculiarity and enigmatic in its purpose.

These three documents were all recorded on 7/13/2004. Let’s see what happened next.

House Deeded Back To Goetz for a Re-Fi

09/22/2004 Using a Quit Claim Deed Alfred Daise sells the property to James Goetz

09/22/2004 Using a Quit Claim Deed James Goetz sells the home to Alfred Daise and James Goetz

First of all, these may not be “sales” as there is nothing to indicate that the property was “sold” in either of these transactions. The deeds only indicate minimal consideration was paid, if any. Thus, these deeds are more accurately described as gifts or conveyances instead of sales.

Second, they are listed backwards – they were actually recorded in the opposite order and it makes more sense that way.

Third, the first deed recorded (the second one listed above) is actually a corrective deed attempting to correct the 3/3/2004 deed.

So, what they were trying to do was (1) fix the first deed to make it clear that Goetz was only selling half of the property to Daise (which makes sense given what Daise apparently paid), and (2) have Daise deed his 1/2 interest back to Goetz. It is not apparent whether Goetz paid Daise his money back (or whether Goetz was ever paid by Daise in the first place). After these two deeds were recorded, Goetz owned the land again, and AmSouth had a mortgage whose validity was a bit shaky.

On 12/22/2004, Goetz again mortgaged his property, this time using Chase as his lender. This one looks like a complete re-finance. It is in the amount of $217,800 and is a textbook example of the housing bubble at work. This mortgage was recorded on 1/10/2005. This is great news for AmSouth and their shaky mortgage, because they got paid in full when Chase made its loan.  (The original loan was also paid off.) Doing the math, it looks like approximately $150,000 in equity had been pulled out of the home at this point, including the $65,000 or so pulled out June, 2004. Fees and costs would have eaten into this, and it might be that some of the money was put back into the home as improvements.

One little bit of oddness: Goetz signed his name as “By: (signature)” instead of just writing his name. It’s almost as if he tried to sign on behalf of the corporate/business entity known as himself he seemed to be trying to establish earlier.

The Debt Elimination Scam

01/14/2005 Using a Quit Claim Deed James Goetz transfers the property to the Goetz Family Trust (D. Scott Heineman and Kurt F. Johnson trustees)

OK, there is a huge red flag here, pointed out by Chuck, in that the property was placed in a trust with two sketchy characters as trustees. This is a bad, bad, bad sign. Goetz again signs “By: (signature)” instead of just writing his name.

More weird stuff happens.

On 3/7/2005 a “Notice of Intent to Correct Title” is recorded by the trustee, Heineman. This document is an attempt to notify Chase that their mortgage will go away as a result of a nonsense legal argument. This is exactly the scam that Heineman and Johnson were convicted of running.

On 3/25/2005, Heineman recorded a “Discharge of Mortgage” purporting to release the Chase mortgage. It is signed by Heineman as “Attorney-in-fact” for Chase. This document is a complete and total fraud. It is otherwise inexplicable. It looks very much like a document that properly releases a mortgage, but I would bet that the crook Heineman had no authority whatsoever to sign it on behalf of Chase Manhattan –just a hunch. This document is pretty nasty. A title company could very easily gloss over this document, thinking it was the real thing.

On 4/8/2005 Goetz gets a judgment recorded against him for $1,356.96 from a credit card company, Monogram Credit Card Bank. It appears to be unrelated to the real estate, but things are going to get weirder. Keep reading.

Then, on 4/12/2005 a “Mortgage Note Rider” is recorded by Goetz that purports to have some effect on the Chase bank mortgage. In reality, it doesn’t affect it at all. I read it, and, like some of the documents noted above, it makes no legal sense. It is not quite gibberish but it is pretty darn close.  Again, Goetz inexplicably signs his name as “By: (signature)”. The same document is recorded again with the original Mortgage attached on 4/13/2005, and again without the Mortgage attached on 6/28/2005. It is unclear why it was recorded three times.

05/05/2005 The Goetz Family Trust transfers the property to James Arthur Goetz (The Quit Claim Deed isn’t recorded in Polk County until the 05/10/2005)

Note that a delay of a few days for recording is nothing to be alarmed about. As a potential victim on the Heineman/Johnson scam, Goetz may have thought his debt to Chase was eliminated. It wasn’t.

At this point, James Goetz owns the property, subject to some title problems (like the Jim/James thing) and Chase has a mortgage for $217,800. It is not known whether Goetz thought the mortgage was gone at this point or not.

Fun and Games With Trusts and Foundations

05/20/2005 James Goetz transfers the property to the Green Family Group of Loxhatchee, Florida (The Quit Claim Deed isn’t recorded in Polk County until 06/13/2005)

This deed has some problems. First of all, it doesn’t identify who the Green Family Group is: a corporation? A trust? An unregistered partnership? Second, it says the property is granted “as tenants in common,” which is a term that you use when multiple people own property together. It makes no sense to use it when the recipient of the property is a single entity or person.  Also, Goetz is still doing the weird “By:” thing with his signature.

At this point, it is not clear at all who owns the property and Goetz has created further title problems.

A curious aside concerning the credit card judgment.

On 2/10/2006, a Satisfaction of the Monogram judgment from 4/8/2005 was filed. But take a close look at how it is signed. It is executed by Chante’a Keown, a Lakeland notary public whose name will come up again, below.  She is currently Goetz’s wife. She signs as “Attorney-in-fact” for Monogram, exactly like Heineman signed the fradulent mortgage satisfaction. This is very strange. It would be extremely unusual for a valid satisfaction to be signed this way.

But let’s get back to the property:

04/03/2006 Maryanne Goetz, beneficiary of the Goetz Family Trust grants property rights through Warranty Deed to James Goetz, trustee of the Green Family Group (Not recorded in Polk County until 04/19/2006)

04/03/2006A Corrective Quit Claim Deed is filed to correct information given in the 05/20/2005 Quit Claim Deed (This deed isn’t recorded in Polk County until 04/19/2006)

04/07/2006 Through Warranty Deed Chanta’e Keowan (Goetz Family Trust), James A. Goetz (Green Family Trust), James A. Goetz (Jersey Shore Group Trust), and James A. Goetz (Goetz Family Trust) grant the property to Cavilyn Dail Keown (Not recorded in Polk County until 04/19/2006

OK, this isn’t as confusing as it looks. There were actually six separate documents recorded on the same day, three deeds and three affidavits. A title company is involved now (thank goodness) and it looks like they are trying to clean up the mess. In order of recording, here is what was recorded on 4/19/2006:

• A Corrective Quit Claim Deed fixing the 5/20/05 deed and clarifying that the Green Family Group is actually the “Green Family Group Trust No. 3038″, with James Goetz as the trustee. This deed also fixes the James/Jim problem.
• A  Warranty Deed from Maryann Goetz, in her capacity as beneficiary of the Goetz Family Trust (the scam trust) to the Green Family Group Trust No. 3038. It is perplexing that this deed is a warranty deed, as it appears to be an effort to resolve any lingering title issues associated with the Goetz Family Trust. Normally that kind of thing would be resolved by Quit Claim Deed, not Warranty Deed. It may be that Chante’a Keown, who is listed as preparing this deed, used her own form instead of what the title company would have used.
• A Warranty Deed from Goetz and Keown, individually and as trustees and beneficiaries of ALL the trusts involved, conveying the property to Cavilyn Dail Keown. This appears to be a sale for about $255,000 and doc stamps were paid.
• Three Affidavits, each one clarifying who and what is involved for each of the Goetz Family Trust, the Green Family Group Trust No. 3038, and the Jersey Shore Group Trust. If you want to read the terms of the actual trusts, click these links. If you are confused by the inclusion of the Jersey Shore Group Trust, it is a beneficiary of the Green Family Group Trust No. 3038.

Goetz is still doing his “By: (signature)” thing.  At this point in the process, it looks like Cavilyn Dail Keown is the owner of the property and the title is cleaner thanks to the title company. I do not know what, if any, relationship Cavilyn Keown has to Chante’a Keown. Cavilyn Keown gets two mortgages from Allstate (looks like an 80/20 loan) totaling the purchase price of $255,000. Presumably the Chase loan, the one that was supposedly extinguished earlier, is paid off, and Chase records a legitimate satisfaction on 4/24/2006.  In theory, Goetz pulled another $25,000-$35,000 in equity out of the home with this transaction, but a good hunk of that may have been eaten in fees and costs.

If you are wondering what the deal is with these two trusts, you are as confused as I am. I reviewed all three trusts at issue. We know that the Goetz Family Trust was part of the debt elimination scam. But the other two are unknowns at this point. Reading them does not really tell us much about their purpose.

04/08/2006 Through Quit Claim Deed Cavilyn Keown grants the property to Loxahatchee Group “a Florida 501(c) (3) non-profit corporation. (Not recorded in Polk County until 05/26/2006)

Loxahatchee Group is a ficticious name for the Goetz Foundation of Florida, Inc. According to the IRS database, The Goetz Foundation is, in fact, a 501(c)(3) organization. It has a web site and is a Florida Non-Profit Corporation. However, it is not authorized to solicit donations in the state of Florida and its form 990 filings are not available online. Goetz claims on his own campaign blog that the Loxahatchee Group is a legitimate charity, but legitimate charities usually file their paperwork with the state. Search the database for some of your local favorites and you will see what I mean.

Other Legal Dealings

The public records tell us more about Mr. Goetz’s legal dealings after 4/8/2006.

On 9/19/2006, Monogram Credit Card Bank filed a legitimate satisfaction of the judgment it got back in 2005, the one that Chante’a Keown purported to have already satisfied of record. Evidently he paid them the money or they worked something else out.

Simultaneously, one of the most amusing documents I have ever seen is recorded, an Affidavit of Non-Corporate Status. In it, Goetz finally acknowledges that he is not a corporation. And he signs his name without putting “By:” in front of it. In the court files for Monogram’s case against Goetz, he made some allusions to his alleged corporate status. I’m guessing the bank made him file this as a condition of satisfying the judgment, but that is speculation on my part. I was pleased to see a document signed by Goetz that made sense.

But the sanity of the affidavit does not last. On 12/20/2006, Goetz recorded another bizarre document, a “Notice of Surety Act and Bond” that, again, makes no sense whatsoever, and, again, includes the mysterious “By:” in front of his signature. I can’t wait to hear an explanation of what all these nonsense documents are supposed to do.

On 4/2/2009, Goetz got another credit card judgment recorded against him. This time it is from MBNA and FIA for $6,276.42.

And here lies what may be the most interesting document of all, the Fact Information Sheet that Goetz filed in 2009 as part of that lawsuit. A Fact Information Sheet is a form that the Defendant Debtor must fill out and give to the Plaintiff Creditor after a judgment is entered. You are supposed to disclose your assets on it. In his Fact Information Sheet, Goetz claims to have ABSOLUTELY NOTHING. No real estate. No motor vehicles. No job. No savings. No money owed to him by anyone. No cash. Nothing. He even answers “N/A” to questions about his spouse. A copy is not publicly available online, but you can get it at the courthouse¹ This is interesting coming from someone who was able to pay all the back taxes on his property, who says publicly that he is married, who has pulled somewhere in the neighborhood of  $150,000-$180,000 in equity out of his home over several years, who supposedly runs a charitable foundation, and who claims on his facebook page² to be employed as a researcher by “Optimal Human Performance.”

Connecting the Dots

Is there an explanation for all of this?

What follows is PURELY speculation on my part. I’m connecting the data points I have available to me. It is quite possible I am wrong and I would welcome more information coming to light that would make it so. With that said, and in light of the recent raid on his home, take a look at these tax scams that have been identified as common by the  IRS. Consider the similarities between these and the actions of Mr. Goetz:

Here are some common abusive domestic trust schemes: [...]

• Family residence trust
  Taxpayers transfer family residences and furnishings to a trust, which sometimes rents the residence back to the taxpayer. The trust deducts depreciation and the expenses of maintaining and operating the residence including gardening, pool service and utilities. The courts have consistently collapsed these types of trusts, taxing income to the taxpayer and disallowing personal expenses.
• Charitable trust
  Taxpayers transfer assets or income to a trust claiming to be a charitable organization. The trust or organization pays for personal, education or recreation expenses on behalf of the taxpayer or family members. The trust then claims the payments as charitable deductions on its tax returns. These alleged charitable organizations often are not qualified and have no IRS exemption letter; hence, contributions are not deductible. Charitable deductions are not allowed when the donor receives personal benefit from the alleged gift.
• Asset protection trust
  These trusts are promoted as a means of avoiding liability for judgments against an individual or business. However, beware of any asset protection trust marketed as part of a package to reduce federal income or employment taxes. The courts can ignore such trusts and order the taxpayer’s property sold to satisfy the outstanding liabilities.

Source: IRS web site

Typically you can read a trust document and figure out what it is for (estate planning, charitable gift planning, care of a disabled loved one, real estate investment, asset protection, etc…) But Goetz’s trust documents are perplexingly vague. A vague trust of this type is exactly the type of thing someone might want to use to pursue one of these schemes. It would also explain why Goetz claims to have no assets whatsoever – everything could be hidden away in the trusts or charitable foundation.

Another abusive tax shelter, according to the IRS, is known as a “Corporation Sole”:

Scheme promoters typically exploit legitimate laws to establish sham one-person, nonprofit religious corporations. Participants in the scam apply for incorporation under the pretext of being a “bishop” or “overseer” of the phony religious organization or society. The idea promoted is that the arrangement entitles the individual to exemption from federal income taxes as an organization described in Section 501(c)(3) laws.

Source: IRS web site

This would lend some explanation to Goetz’s strange “Dr.” title – he claims to have a doctorate in “metaphysics” from the “University of Sedona” and to have become a “Naturopathic Doctor” at “Athenian University.”  (You owe it to yourself to go check out their websites. It scares me that people buy into this stuff.) It also might explain why Goetz recorded the nonsense documents that imply he is a corporate entity.

My take, which is nothing more than a hypothesis based on limited information, is that Goetz has been experimenting with similar income tax avoidance scams for the past several years. At a minimum, Mr. Goetz’s actions indicate someone who is (or was) either deluded or extremely gullible. I can think of no other explanation for the strange things he has been filing in the official records of Polk County.

So there you have it. A lawyer’s look through most everything in the Polk County Official Records concerning Mr. Goetz. Believe it or not, I have not been very thorough. If I were involved in a case involving Mr. Goetz, I would spend many times longer carefully reviewing these documents and applicable law. My conclusions might be different.

Whether Goetz is guilty of some sort of crime is something that will have to be decided by a more thorough analysis by a judge and/or jury if it ever comes to that. Whether he is fit for public office is something that the citizens of Lakeland must decide right now. To me, that seems like an easy decision.

If you made it this far and have questions about my take on this, fire away. I will do my best to answer them.

UPDATE 10/11/2009

The Ledger ran an article this morning about Goetz’s foundation records. In it, we learn why Geotz did not file a form 990: the foundation receives too little in donations to have to file one. However, he should still be filing a Form 990N and he still should be registered with the state.

UPDATE 10/14/2009

Mr. Goetz left the commission race.

1. I have electronic access as an attorney. [↩]
2. link updated 10/14/2009 [↩]