Feds: Homeownership program director for Detroit nonprofit stole 30 properties in scheme

The director of homeownership programs for a Detroit nonprofit was arrested Wednesday, accused of conspiring with others to steal more than 30 properties across Wayne County, most of them in Detroit, in a scheme targeting low-income people facing potential tax foreclosure, federal prosecutors announced.

Zina Thomas, 60, of Detroit, was charged in a criminal complaint unsealed Wednesday in U.S. District Court. According to the complaint, Thomas lives in one of the properties involved in the scheme.

A news release from U.S. Attorney Dawn Ison's Office said leaders of the nonprofit United Community Housing Coalition, which provides housing assistance to Detroit's low-income residents, cooperated with the investigation.

"While it's deeply troubling that these individuals are alleged to have misused our company emails and computers, the charges confirm that the integrity of UCHC's programs are not being called into question," the nonprofit's executive director, Ted Phillips, said in a statement emailed to the Free Press.

"We take this matter very seriously," the statement added. "The individuals identified in the complaint have been suspended, we are cooperating fully with the investigation and we are also conducting an internal review. Meanwhile, the United Community Housing Coalition will continue its unwavering advocacy work for Detroiters as it has done for the last 50 years.”

Three others named but not charged

The complaint lists three other unnamed people: a property tax prevention counselor at the nonprofit who is a public notary; an employee at the Wayne County Treasurer's Office, and a person who has been identified as recording deeds notarized by the nonprofit's property tax prevention counselor and/or Thomas, but who was not an employee of the nonprofit.

Gina Balaya, spokeswoman for Ison's office, said the investigation is continuing.

Thomas made an initial appearance Wednesday in federal court on charges of wire fraud, conspiracy to commit wire fraud, money laundering and aggravated identity theft. She was released on a $10,000 unsecured bond. A preliminary exam is set for March 20.

She was appointed an attorney, but was ordered to make $200 payments monthly, beginning April 1, toward her representation. Among her bond conditions is that she must refrain from acting as a real estate agent or a notary. She also must not buy or sell property and must not record deeds.

Court records state she can reside at an address on Mansfield in Detroit for two weeks, but must move elsewhere in Detroit thereafter. The residence on Mansfield is a property that prosecutors allege was fraudulently transferred.

How the alleged scheme stole people's houses

The criminal complaint alleges Thomas and others filed multiple fraudulent quitclaim deeds, transferring the properties from the victim-owners to fictitious "interim owners" before ultimately selling the properties to unwitting third parties, according to the release from Ison's office.

The fraudulent deeds were falsely notarized by Thomas or another person, it states, which made them appear legitimate and enabled them to be filed with the Register of Deeds.

The complaint also alleges Thomas emailed a county treasurer's office employee fake driver's licenses and other documents, which were uploaded into the treasurer's property tax administration system to halt pending foreclosures, per the release.

It states Thomas received payment for at least some of the properties via wire transfer into a bank account in the name of her realty company. She then transferred proceeds from that account to her personal bank account, according to the release.

"This scheme targeted some of our most financially vulnerable citizens and was perpetrated by an individual whose job it was to help those very people avoid losing their homes to foreclosure," Ison said in the release. "This arrest is the result of a multiagency, cooperative investigation involving both federal and state law enforcement, and is reflective of our ongoing efforts to identify and disrupt fraud schemes like this as quickly as possible."

How authorities became aware of the scheme

The 28-page criminal complaint states the alleged crimes occurred from April 22, 2022, through the present and indicates Thomas also is known as Zina Morgan.

Wayne County Register of Deeds' Bernard Youngblood said in the release a "rash of incoming complaints to my Deed Fraud Task Force, followed with methodical investigative teamwork" culminated in Wednesday's announcement.

"Wayne County is the national leader in combating this new crime wave," he added, "and we are proud to partner with local, state and federal law enforcement to protect the property rights of our citizens."

According to an affidavit filed with the criminal complaint, the register of deeds' mortgage and deed fraud unit contacted the FBI in November, reporting it discovered a deed fraud scheme involving multiple people and victims in the Detroit area.

"The victims reported that the ownership interest in their homes was transferred to unknown persons, without their authority, by way of quitclaim deeds that the victims did not sign," per the affidavit.

"(The deed fraud unit) discovered the victims owned homes that were listed and published in the 2023 Wayne County Treasurer Notice of Foreclosure List. Based on the investigation, it does not appear that these properties were foreclosed upon; rather, Thomas and others working with her intervened, fraudulently taking control of the properties and selling them to interested buyers for personal gain."

In one example in the complaint, one victim on the day of an eviction hearing indicated Thomas and one of the other unnamed people in the complaint met him outside a courtroom, and it appears the hearing was then dismissed. A new deed was recorded, showing conveyance from the person who appeared with Thomas to the victim's wife, who told investigators she acquired the property in 2012 and said she never signed a deed to transfer it.

Balaya said prosecutors are unaware of victims having been removed from the houses in question.

Thomas joined the nonprofit in 2021 as a tax-foreclosure prevention counselor, according to her biography on the nonprofit's website. It states that she has more than 25 years of housing experience as a real estate agent, housing inspector and mortgage broker.

"Zina is dedicated to helping others, and her family has always been active in fighting for the rights of others," according to her biography on the nonprofit's website.

Nonprofit had a city contract

The nonprofit states on its website that it has worked to keep people in their homes and to secure affordable housing for those in need since 1973.

The city of Detroit announced in November 2022 that it was planning to enter a contract with United Community Housing Coalition to manage attaining eviction defense lawyers for qualified city residents.

Contracting with the nonprofit was to be the first major step the city was taking to establish the Office of Eviction Defense as required under a Right To Counsel ordinance approved by Detroit City Council in May 2022, according to a release from the city in November 2022.

The next month, the city announced in a release who would be the executive director and project manager to lead the Office of Eviction Defense. In that release, it stated details of the contract with United Community Housing Coalition were being finalized and once approved, the nonprofit would subcontract with several other organizations.

Contact Christina Hall: chall@freepress.com. Follow her on X, formerly Twitter: @challreporter.

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This article originally appeared on Detroit Free Press: Feds: Homeownership program director for nonprofit stole 30 properties