PHOENIX - Former Democratic mayoral candidate Marshall Home got a double dose of bad legal news Friday.
In Tucson, Home, 81, was arrested on two federal charges of making false claims in bankruptcy following an investigation by the FBI and the Federal Housing Finance Agency Office of Inspector General.
Meanwhile, in Phoenix the Arizona Supreme Court rejected his appeal to have fellow Democrat Jonathan Rothschild's name removed from the city primary election ballot. The court found the mere fact someone is an attorney does not disqualify that person from becoming mayor or a member of a city council, as Home asserted.
Home operated the Individual Rights Party; Mortgage Rescue Service.
According to the criminal complaint, he would charge individuals in foreclosure proceedings $500, purportedly to make the foreclosure process stop, claiming the property of individuals who used his service would become part of his "larger overall bankruptcy liquidation."
On March 16, 2011, in U.S. Bankruptcy Court in Tucson, Home filed an involuntary petition in bankruptcy attempting to place the United States into bankruptcy.
The complaint alleges Home falsely told the Bankruptcy Court he had a financial claim of more than $3 billion against the United States, and that he subsequently filed or caused to be filed 173 false claims against the U.S. in the Bankruptcy Court relating to individuals participating in his Mortgage Rescue Service.
Many of the false bankruptcy claims involve loans guaranteed by Freddie Mac and Fannie Mae. The criminal complaint alleges that these claims totaled more than $2.5 trillion. The specific charges in the two counts of the criminal complaint involve claims of $2.5 billion and $50 million.
A conviction for making false claims in bankruptcy carries a maximum penalty of five years in prison, a $250,000 fine or both.
In his political case, Home, who was disqualified from running for mayor last month because he doesn't live in the city, argued that as a lawyer Rothschild is part of the judicial branch of government, which means he cannot constitutionally serve as a member of the legislative branch.
But Chief Justice Rebecca Berch said the fact lawyers have to answer to her court's authority "does not invest an attorney with judicial power." She said judicial power includes the ability to decide disputes and pronounce judgments and carry them out, something a mere lawyer does not have.
Home's challenge is going to cost him. The high court ordered Home, who represented himself, to pay the legal fees of Rothschild and the Pima County Democratic Party, which he also had sued.