A tip from a Watchdog reader has helped Iowa Legal Aid recover more than $180,000 for a couple that a court found had been cheated out of their home by a Des Moines real-estate flipper.
The tipster told Watchdog that Danial Howe, who said he left the country after Muniba and Hasan Toric sued him in June 2020, was marketing himself online as a cryptocurrency expert.
After Watchdog inquired with Iowa Legal Aid, which had represented the Torics in court, the nonprofit agency was able to confirm the tip. It subpoenaed Howe’s bank accounts and financial records and learned he was making big money with cryptocurrency investments.
Using a provision of Iowa law that dated from long before the Bitcoin era, it was able to force Howe this month to cash in his cryptocurrency to pay back the Torics.
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“It’s definitely a feel-good story. Our clients were in dire straits, and they had really been just scraping by,” said Alex Kornya, litigation director for Iowa Legal Aid.
Kornya said the case could be useful for other lawyers in Iowa pursuing payment of court judgments.
How 1945 case forced scammer to cash in cryptocurrency
Iowa’s law providing for the collection of judgments is dated and didn’t account for new kinds of assets like cryptocurrency. But Iowa Legal Aid used a 1945 case to argue it should be able to collect from defendants who defrauded others but hid their assets in a new form of property. In that case, the alternative asset was war bonds, he said.
“We had to come up with something, and it worked,” he said. “The court allowed him to sell the cryptocurrency and he did that.”
How scammer tricked couple out of their Des Moines home
A Watchdog probe in September 2020 recounted how Howe had offered to rescue the Torics from foreclosure after they suffered financial hardships caused by health problems.
Howe, owner of a custom motorcycle and parts business that had racked up 20 consumer complaints with the Iowa Attorney General’s Office, was shifting his career at the time to real estate.
In videos, he dubbed himself dean of “Power Profits University” and pitched his deal-making skills to would-be subscribers on YouTube. A self-described veteran in flipping houses and buying foreclosed properties, he claimed he had no trouble finding people who were willing to hand over the keys to their homes if he could help them dig out of deep debt.
What Howe actually did, Iowa Legal Aid lawyers argued successfully in court, was to trick the Torics into signing over the deed to their home, then strip away what equity they still had.
The Bosnian couple were among at least 14 homeowners across Des Moines, West Des Moines, Urbandale and Altoona who signed over their deeds to Howe in 2017 and 2018, according to court documents filed by Iowa Legal Aid. And the Torics had had the misfortune of losing their first home during the Bosnian War.
Iowa Legal Aid attorneys became involved with the Torics after Howe tried to have them evicted from their home of 15 years in early 2018.
Through an interpreter, Muniba Toric told Watchdog in 2020 that the experience was so stressful that she was hospitalized and wound up in a coma for 15 days.
“I stayed four months in the hospital,” she said. “When I woke up, I couldn’t walk with my own feet. And to this day, I still can’t walk properly.”
Later that year, a judge found Howe had “willingly and wantonly” violated a part of Iowa code aimed at protecting homeowners in foreclosure against fraud, misrepresentation and false promises.
But Howe never showed up in court. Attorneys said he disappeared before the judge levied damages against him.
The Tourics were forced to sell their house. Securing the January judgment will help get them back on their financial feet.
“The full payoff was just over $180,000. Now they can buy a new house,” Kornya said.
Lee Rood’s Reader’s Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at firstname.lastname@example.org, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.
This article originally appeared on Des Moines Register: Iowa man forced to cash in cryptocurrency in real estate scam case