State rep loses appeal in case involving alleged sham loan

Kyle Barnett Aug. 8, 2012, 12:00am

Sherman Mack (R-Livingston) and Hansel Harlan

GRETNA - A Louisiana state representative has lost an appeal in a case in which he is serving as defense counsel for family members accused of a concocting a sham transaction.

Sherman Mack (R-Livingston) lost an appeal against Ameriquest in his representation of his uncle and aunt Frederick Strickland and Carol Strickland in the Fifth Circuit Court of Appeal on July 18.

Mack is a first year legislator representing the 95th District, and an attorney working out of Livingston Parish. He was perhaps most well-known in the 2012 legislative session for sponsoring an unsuccessful bill that would have required welfare recipients to submit to random drug screenings.

Mack has called the lawsuit frivolous and before the appeals court decision came down said he was confident he would win the appeal and that as soon as he did he would sue Ameriquest's counsel Hansel Harlan.

"I think we are going to win it. As soon as we do I am going to sue him (Harlan) and anyone who prints anything about it," Mack said.

The case in question deals with a mortgage default by Mack's cousin on a property that was improperly identified in mortgage paperwork.

The property for which Ameriquest believed it had provided the loan was Stephen Strickland's (Mack's cousin's) home, however, the description in the mortgage was that of another piece of property owned by Frederick Strickland, Stephen's father. Upon requesting that Stephen Strickland sign an amended mortgage agreement identifying the correct property Ameriquest claims Stephen ceased payment on the loan and later declared bankruptcy after transferring the property to his father Frederick for supposed payment for what Stephen's ex-wife, Mary Ellen Strickland, called a "sham loan" in a sworn statement.

"I will tell you this litigation stems from someone on the other side of the case not doing the proper title and for Ameriquest mortgaging a piece of property that they had no right to mortgage. None," Mack said. "I did nothing. I had nothing to do with the original transaction–all I did was represent a client."

Mary Ellen Strickland has accused Mack of devising a scheme by which she and her then husband could default on the property's mortgage while transferring its possession to Stephen's parents.

Mack said Mary Ellen Strickland concocted the story due to her divorce from Stephen Strickland and that he has not been able to locate her for examination.

"She has been secluded from us the entire time," Mack said. "It stems from a divorce that went bad, from her remarks and her statement."

Harlan said, in contrast to Mack's statement, he was easily able to find Mary Ellen Strickland.

"I got a private investigator and I tracked her down and served her and a few days later she called me and said she wanted to spill the beans because she had no part of this that was going on," Harlan said.

The case has been twice dismissed by the local 21st Judicial District Court–decisions that have subsequently been overturned by the Fifth District Appeals Court.

While the case has been ongoing both Harlan and Mack have lodged Louisiana State Bar complaints against one another, both of which were dismissed.

"If I have evidence that another lawyer is doing something wrong I have to turn him in and if I don't turn him (in) then I am guilty of an offense," Harlan said. "So every once in a while in my particular line of work I see these lawyers trying to get away with these scams. So I don't like having to turn them in, but I have to turn them in because it is the law. So when I did that he turned around and turned me in saying I did all sorts of things wrong."

Mary Ellen Strickland has claimed in her statement that to initiate a paper trail Mack himself provided $50,000 to Frederick who then deposited it into his account while Stephen Strickland executed a promissory note denoting his responsibility to repay the loan in the amount of $50,000 to his father Frederick Strickland.

Frederick Strickland then allegedly wrote a check to Stephen Strickland for $50,000 that he deposited into his bank account before immediately returning it to Mack. It is further alleged that Stephen Strickland pretended to default on the alleged sham loan provided by his parents and instead donated the home and lot to Frederick Strickland.

In the case handled by the 21st Judicial District Court, Mack admitted to giving the $50,000 to Frederick Strickland, for which he claims he wrote off and never received repayment. After Ameriquest filed a motion for Mack's bank records in an attempt to identify the $50,000 allegedly repaid to Mack by Stephen Strickland, Mack claimed that any information about money transfers and himself were irrelevant to the case.

Division F Judge Elizabeth P. Wolfe in the 21st Judicial District Court agreed with Mack upholding the motion to quash the request for discovery via examination of Mack's finances and dismissed the case for a second time.

Upon that dismissal the case was again brought before the Fifth Circuit Court of Appeals.

"One of the three judges said he was disturbed that the case had become so personal," Harlan said. "I said this was a very unusual case. I don't enjoy being in a case involving an attorney who was accused of doing what he has been doing. I've tried to make absolutely sure that everything I say in my pleadings is backed up by sworn statements by a third party. I said you may not like what I'm saying, but it is part of my case."

The appellate court upheld Mack's motion to exempt his financial records from the trial, however, they concluded that the case should not have been dismissed and remanded it to the 21st Judicial District Court.

The case has been assigned for a third time to Division F Judge Elizabeth P. Wolfe in the 21st Judicial District Court.

Case no. 114109.

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