California Real Estate Fraud Report

You have just entered the #1 private-sector resource on the Internet for real estate fraud. In doing so, you have voluntarily left the dimension of the conventional real estate world and crossed over to the Dark Side, the realm where greed, dishonesty and evil are the order of the day. Sign up for a free subscription to this comprehensive news resource and receive weekly, timely news reports about real estate fraud, mortgage fraud, short sale fraud, REO fraud, title fraud, loan fraud, appraisal fraud, affinity fraud, loan modification scams, securities fraud and elder financial fraud.

Bay Area Man Sentenced to 15 Prison in Short Sale Fraud Scam

August 18th, 2017 at 10:24am

Mahendra Prasad, 55, pleaded guilty on May 22, to one count of mail fraud affecting a financial institution in connection with a fraudulent short sale (short sale fraud), according to a Justice Department press release. On August 14, U.S. District Judge Lawrence J. O’Neill sentenced him to 15 months in prison and ordered him to pay $328,000 in restitution to the lending institution that was defrauded.

According to court documents, in 2006, Prasad allegedly submitted falsified documentation to a lender so that he could purchase a property in Sacramento. Following the purchase, he rented the property as Section 8 housing.

In 2013, Prasad completed a short sale of the property to another person, claiming that the sale was “arm’s length, which was a requirement of the lender.

His co-defendants Jyoteshna Karan, Praveen Singh, Sunita Singh and Nani Isaac are going to trial in U.S. District Court in Fresno, on Dec. 11.

Read the original article in News India Times.

Nevada Men Indicted in Fraudulent Short Sale

August 18th, 2017 at 9:55am

Acting U.S. Attorney Steve Myhre for the District of Nevada announced that two men have been indicted in connection with the sale of one man’s property to a family member of his friend (short sale fraud).

The indictment alleges that Dustin Lewis (Henderson, NV) and Brian Sorensen (Las Vegas, NV) conspired to defraud OneWest Bank when Lewis submitted a fraudulent short sale application to the bank to sell the home to a relative of Sorensen. The plan was to prevent a foreclosure so that Lewis could keep possession of the 5,331-square foot, five-bedroom home in Henderson. It is further alleged that Lewis did not disclose to the bank that he and Sorensen had an agreement that Lewis would remain on the property and that later it would be sold back to him.

The case was investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigation (IRS-CID) and the U.S. Department of Interior-Office of the Inspector General. Assistant U.S. Attorney Patrick Burns is the prosecutor.

Read the original article in Mortgage Professional America.

Wells Fargo Pays Out Again, This Time For Fraudulent Anti-Veteran Lending Practices

August 18th, 2017 at 9:08am

Banking giant Wells Fargo must pay over $100 million to settle allegations of fraud that included overcharging military veterans using the VA Home Loan to refinance their mortgages. The victims were not only veterans but U.S. taxpayers.

Brokers Victor Bibby and Brian Donnelly were the two whistleblowers in the lawsuit who sought to recover the losses that the federal government suffered when the loans it guaranteed loans defaulted. The two men sued Wells Fargo and seven other lenders to recoup losses; notably the federal government declined to join the qui tam lawsuit, which was filed under the federal False Claims Act, aka Lincoln’s Law (31 USC §§ 3729-3733.

The other banks are Bank of America Corp (BAC.N), Citigroup Inc (C.N), First Tennessee, JPMorgan Chase & Co (JPM.N), PNC Financial Services Group Inc (PNC.N) and SunTrust Banks Inc (STI.N). The total pay-out is $161.7 million.

Depending on whether the federal government offers to assist, the private person can receive a portion of the recovered damages, from 10% to 30%. If the government intervenes, the person bringing the lawsuit, the “relator”, receives between 15%-25%. If the government does not, the relator receives between 25%-30%. If the government intervenes and most of the information is already public, the relator is only entitled to 10%.

Read the full article, including Wells Fargo’s boilerplate “apology,” in DisabledVeterans.org

NY Cop and His Friend in Hot Water over Alleged Short Sale Fraud

August 18th, 2017 at 8:50am

Retired NYPD police officer Michael Rizzi and his friend Edward Monahan have been charged with bank fraud and conspiracy to commit bank fraud with an allegedly fraudulent short sale the two men committed.

Rizzi and Monahan are accused of submitting false documentation to Rizzi’s bank in order to do a short sale of a multi-family building on Lafayette Avenue in New Brighton, for which Monahan was the buyer.

The men, both 45 years old, signed affidavits affirming that they had no business, personal or family relationships with each other. But the criminal complaint alleges that Rizzi withdrew $17,500 from his bank accounts and altered one of his bank statements to make it look like the money came from Monahan’s bank account.

In addition, Rizzi was paid $10,000 in relocation assistance money from the Home Affordable Foreclosure Alternatives (HAFA) federal program.

The bank lost $250,000 as a result of the transaction.

In the meantime, Michael Rizzi is serving a 15-month federal prison sentence for laundering the proceeds from a multimillion-dollar prostitution ring.

Read the press release from the Office of the U.S. Attorney for the Southern District of New York (U.S. Attorney for Manhattan) and SI Live.

 

 

Criminals Hacking into Real Estate Agents’ Emails, Stealing Down-Payments, Closing Funds

August 4th, 2017 at 10:33am

If you’re purchasing a home, watch out for this latest real estate fraud scam by hackers.

Criminals are hacking into the email accounts of real estate agents, escrow and title companies. They pose as legitimate parties to the real estate sale and have convinced many unsuspecting buyers to wire their down-payments or closing funds to accounts controlled by the hackers. As a result, a number of home buyers have lost their life’s saving, which are usually not recoverable.

In one case, attorney Matt Borden’s is suing a real estate company on behalf of his client who lost $500,000 due to a similar fraudulent email from her real estate agent’s email account.

“She was crushed. This was her life savings,” said Borden.

The National Association of Realtors and the FBI have issued warnings about these sophisticated email scams targeting the real estate industry.

Read the original article in CBS Local.

Attorney General Becerra Urges US Senate to Keep Rule That Holds Corporations Accountable

July 28th, 2017 at 8:55am

The following is a press release:

SACRAMENTO California Attorney General Xavier Becerra today urged the U.S. Senate to support a rule that allows people to pursue justice against financial services companies. The rule — known as the Arbitration Rule — was issued by the Consumer Financial Protection Bureau on July 10, but is already under attack in Congress. Specifically, Senate Republicans have filed a Joint Resolution for Disapproval in order to repeal the Arbitration Rule. In a letter to U.S. Senate leaders, Attorney General Becerra and 19 attorneys general underscored that the Arbitration Rule would provide relief to hardworking Americans who were previously prohibited from joining class action lawsuits or even going to court at all. As opposed to costly individual arbitrations, class action lawsuits are often the only realistic way for consumers to hold these companies accountable.

“The Arbitration Rule is one tool that helps protect consumers and hold corporations accountable,” said Attorney General Becerra. “It allows people to seek justice when financial services companies break the law. But some in Congress continue to do the bidding of Wall Street instead of Main Street and want to gut this rule. Senators should stand up for consumers instead of corporate interests.”

In recent years, when opening a bank account or obtaining a credit card, consumers have been forced to agree that they will not bring or join a class action lawsuit. In short, this means that they could only hold these corporations accountable through individual arbitration, which is a costly endeavor. Thanks to the Arbitration Rule, that is no longer the case.

“While the financial services industry promotes arbitration, the truth is that most of their consumers can’t afford it. When financial services companies require their customers to use individual arbitration to address their complaints or disputes, most consumers simply lack the time and resources to arbitrate a dispute on their own or to hire an attorney to file a claim on their behalf. This is especially true where consumers have been defrauded out of small amounts of money. In the words of Judge Richard Posner of the Seventh Circuit Court of Appeals, ‘only a lunatic or a fanatic sues for $30.’ If consumers cannot join class actions, the result is “not 17 million individual suits, but zero individual suits.’” write the attorneys general in the letter. 

A copy of the letter is attached to the electronic version of this release at oag.ca.gov/news.

Three Men in Bakersfield Sentenced for Running Foreclosure Rescue Scam

July 25th, 2017 at 9:58am

A federal judge in Fresno sentenced three men to prison for operating a foreclosure rescue scam in Bakersfield and two other California cities.

Norwalk resident Martin Calzada, 30, received nine years; Juan Curiel, 38, of Visalia, received three years and five months; and Santiago Palacios-Hernandez, 48, of Salinas was sentenced to two years and nine months.

In addition, all three were ordered to pay over $1.1 million in restitution to their victims and federal mortgage lenders Fannie Mae and Freddie Mac.

Read the entire article in the Kern Golden Empire.

Lafayette Real Estate Agent Pleads Guilty to Wire Fraud, Money Laundering

July 25th, 2017 at 9:42am

Real estate agent Robert Jacobsen, 69, pleaded guilty Wednesday to federal charges related to a complex scheme in which he fraudulently obtained the title to homes (title fraud) and then resold them at market prices.

Federal prosecutors said that Jacobsen pleaded guilty to one count of wire fraud and one count of money laundering by setting up “sham companies” and lawsuits to falsely make it appear that mortgage liens connected to two homes were invalidated.

“Jacobsen admitted that two homes that were the subjects of such lawsuits were in Danville, Calif., and San Francisco, Calif.  Jacobsen admitted that, after obtaining fraudulent judgments, he sold the Danville home for $540,000 and the San Francisco home for $1.2 million.  Jacobsen admitted that in both cases, his representations regarding the fraudulent court judgments had a natural tendency to influence the buyers to purchase the homes.”

Read the press release by the U.S. Attorney’s Office for the Northern District of California.

Mortgage Modification Fraud Gets Long Prison Sentences for 3 Orange County Residents

July 25th, 2017 at 9:27am

Three Orange County residents received long prison sentences for conning over 3,000 homeowners nationwide in an $11 million mortgage modification scam.

Sammy Araya, 41, the mastermind, received 20 years, while his co-defendants Michael Henderson, 49, received 12 years, and Jen Seko, 36, got 7 years.

“For Sammy Araya, Michael Henderson and Jen Seko, the financial struggles of more than 3,000 homeowners were an opportunity for theft,” said Christy Goldsmith Romero, the Special Inspector General for SIGTARP, in a statement.

Nine other Orange County and Las Vegas residents previously pleaded guilty for their participation in this mortgage modification fraud and also were sentenced to stiff prison terms.

Crime Didn’t Pay for This Short Sale Fraud in Florida

July 20th, 2017 at 4:04pm

Casey Padula, a Charlotte County businessman, received a sentence of nearly five years in prison on charges of conspiring to commit tax and bank fraud.

In addition to transferring almost $2.5 million from Demandblox Inc., his marketing business to offshore accounts in Belize, Padula, 48, committed short sale fraud. He sent a letter to his lender Bank of America saying he could no longer afford his $1.5-million Port Charlotte home. Investigators say Padula gave Robert Robinson, 43, money from Padula’s Belize accounts to “buy” Padula’s home in a short sale at the sweet price of $625,000. Two months after the short sale closed, Robinson transferred title back to Padula for $1.

Lucky Robert Robinson only received five years of probation for his role in defrauding Bank of America.

Casey Padula was ordered to pay a $100,000 fine, restitution of $728,609 to the IRS and $739,459.90 to Bank of America.

Read the original article in NBC2 News.

© Copyright 2007-2017 Monique Bryher

Legal Disclaimer.

The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

ALL RIGHTS RESERVED. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the author, except for the inclusion of BRIEF QUOTATIONS in a review.

BLOG POWERED BY SHARP BIZ IMAGE

Copy Protected by Chetan's WP-Copyprotect.