California Real Estate Fraud Report

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Yorba Linda Chiropractor Sentenced to Four Years in Real Estate Fraud, Ponzi-Scheme Case

June 17th, 2016 at 9:36am

Yorba Linda chiropractor Bobby Hamby has received a sentence of four years in prison for stealing over $2 million from investors.

Hamby, 56, who pleaded guilty in 2015 to two counts of wire fraud, must also pay more than $1.2 million in restitution to his victims.

Hamby’s business was called B+E Family Investments LLC. According to prosecutors, he solicited money from his victims, promising them he would buy and improve properties and resell them at a profit. Instead, he used the victims’ monies to pay his mortgage,  dues at the Yorba Linda Country Club dues, car payments, attorney fees, medical and dental bills and other personal expenses.

Read the original article in the OC Register.

FTC Halts California Based Mortgage Relief Scam

June 17th, 2016 at 9:28am

The following is a press release from the Federal Trade Commission (FTC):

The Federal Trade Commission has charged the operators of a mortgage relief scam with bilking millions of dollars from homeowners by falsely telling them they could join a so-called “mass joinder” lawsuit that would save them from foreclosure and provide additional financial awards.

“Preying on homeowners who already are financially distressed and struggling to pay their mortgages is appalling,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “That’s why stopping phony mortgage relief operations, like this one, is a priority at the FTC.”

At the FTC’s request, a federal court temporarily halted the scheme, and the agency seeks to permanently stop the alleged illegal practices and obtain refunds for consumers.

According to the FTC’s complaint, Damian Kutzner and four attorneys using a set of law firms under the names Brookstone Law and Advantis Law, claimed they would bring lawsuits against lenders for mortgage fraud and void consumers’ mortgage notes “to give you your home free and clear, and/or to award you relief and monetary damages.”

According to the FTC, the promise of a mass joinder lawsuit is a ruse used by some mortgage relief scams. Unlike class-action lawsuits, in the event of trial each plaintiff would have to prove his or her case separately. Although the defendant attorneys have sued several well-known banks, the FTC has alleged that they have not won any cases and that most were dismissed because they never pursued them. According to the FTC’s complaint, the defendants’ operation did not have attorneys who could litigate hundreds or thousands of cases.

According to the complaint, the defendants mailed marketing materials to consumers with the homeowner’s name, loan amount and property identification number, with statements such as, “Your home will be sold at Auction unless you take immediate action.” People who responded to the advertising were told they could join a lawsuit by paying $895 or more in advance for a “legal analysis,” and that they were likely or certain to prevail in a lawsuit against their lender; some consumers were told they would recover at least $75,000. After claiming the analysis showed that a consumer had a good case, the defendants charged thousands of dollars in recurring monthly fees through the law firms and failed to deposit the fees in client trust accounts as required by law.

The defendants falsely promised some clients that they would add them as plaintiffs in lawsuits; they told others they would add them soon but did so only months later. Clients’ requests for information were ignored. In addition, the defendants did not tell people when their lawsuits had been dismissed and kept collecting fees from those clients. Clients’ requests for refunds were refused.

One of the defendants, Vito Torchia, was disbarred by the California bar for misconduct. During his ethics trial, he conceded that Brookstone failed to provide the most basic elements of legal representation

The defendants are Damian Kutzner; Vito Torchia, Jr.; Jonathan Tarkowski; R. Geoffrey Broderick; Charles T. Marshall; Brookstone Law P.C., doing business as Brookstone Law Group, a California corporation; Brookstone Law P.C., doing business as Brookstone Law Group, a Nevada corporation; Advantis Law P.C.; and Advantis Law Group P.C. They are charged with violating the FTC Act and the FTC’s Mortgage Assistance Relief Services Rule (MARS Rule) and Regulation O.

To learn more, read Home Loans.

The Commission vote approving the complaint was 3-0. The U.S. District Court for the Central District of California entered a temporary restraining order against the defendants on June 1, 2016.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

Sacramento Man Sentenced to 18 Years for Foreclosure Fraud, Loan Modification Fraud

June 14th, 2016 at 3:11pm

Richard Henri Fecteau, 52, the former operator of a foreclosure rescue company called Team Fecteau, has been sentenced to 18 years in state prison.

In April, Fecteau was convicted by a Sacramento County jury of 23 felony real estate fraud charges related to grand theft, recording false documents and illegally acting as a foreclosure consultant. Sacramento Superior Court Judge Majorie Koller handed down his sentence and ordered ordered Fecteau to pay more than $35,000 in restitution to the many victims he defrauded.

Fecteau’s foreclosure rescue company ran a scheme whereby  he directed homeowners to deed their properties properties to a trust. The trusts were held by people who had recently filed bankruptcy and Fecteau was a co-trustee, which placed an automatic stay against foreclosure of the properties. The duped homeowners were told to make no more payments to their lenders and instead to make monthly payments to Fecteau.

Read the original article in the Sacramento Bee.

 

Defunct First Mortgage Corp. Settles Case with SEC for Selling Good Loans as Bad

June 14th, 2016 at 3:00pm

Most banks that have been prosecuted during the mortgage crisis had been repackaging bad loans and telling investors they were good.

Not First Mortgage Corp., a now-defunct Ontario mortgage lender. First Mortgage did the opposite: selling good loans as bad.

As a result of a civil fraud case initiated by the Securities and Exchange Commission, First Mortgage agreed to pay $12.7 million to settle

What First Mortgage did was tell its investors that some borrowers had not paid their mortgages for months when the company had indeed received the payments, but did not deposit them. This allowed First Mortgage to repurchase those so-called bad loans at a discount, after which they deposited the payments and resold the loans at full price to other investors.

According to the SEC, First Mortgage and its executives made profits of $7.5 million by playing this charade with hundreds of mortgages between 2011 and 2015.

The company and six executives, including its president Clement Ziroli Jr. and his father, Chief Executive Clement Ziroli Sr., agreed to pay to settle the case, but they did not admit wrongdoing.

Read the original article in the Los Angeles Times.

 

 

 

 

Man Posing as Attorney Arrested in Loan Modification Scheme

June 3rd, 2016 at 9:11am

Kevin Frank Rasher, is being held on $1 million bail pending arraignment today, accused of operating a loan modification scheme from June 2011 through April 2016.

According to the Orange County District Attorney’s Office, Rasher, 44, allegedly told his victims he was an attorney for the U.S. Department of Housing and Urban Development. Instead of helping the 380 victims, he spent the $2 million he took in by renting a $10,000 per month home in Coto de Caza and other expenses.

Rasher has never held a law license in California.

The charges against Kevin Rasher include 46 counts of grand theft and one count each of second- degree burglary and aiding a false or fraudulent tax return, all felonies, with a sentence-enhancing allegation for property damage or losses of more than $65,000.

Read the original article in the Orange County Register.

Nationstar, Celink Sued for Fraud in Reverse Mortgage Inspections

June 2nd, 2016 at 12:26pm

Champion Mortgage Co., also known as Nationstar Mortgage, LLC, is the target of a class-action lawsuit accusing it of ordering excessive home inspections for elderly homeowners.

While home inspections are allowed as much as every 30 days, the plaintiffs’ attorneys allege that Champion Mortgage used automated software (blame the computer) to order its subcontractor, Celink, to perform home inspections several times a week and even more than once in the same day. The homeowner is charged for these inspections. Celink, also known as Compu-Link Corp., is based in Michigan and is also named as a defendant.

The lawsuit was filed in the U.S. District Court for the District of Columbia by Tycko & Zavareei, the National Consumer Law Center and AARP‘s Legal Counsel for the Elderly.

Read the original article in the Chicago Tribune.

 

Beware: Defective Termite Inspections are Biting Home Buyers

May 27th, 2016 at 11:09am

If you are considering purchasing a home, my article about termite inspections on LinkedIn is a must-read.

Don’t get burned!

The Hustle Continues: Why the Feds Haven’t Nailed the Big Banks

May 26th, 2016 at 10:54am

For an excellent analysis of the history of the “Hustle” program at Countrywide / BofA and what went wrong, I recommend you read David Dayen‘s article in the New Republic.

BofA $1.3 Billion ‘Hustle’ Judgment Tossed by Appeals Court

May 26th, 2016 at 10:47am

Manhattan U.S. Attorney Preet Bharara suffered a stunning loss as the Second Circuit Court of Appeals reversed a jury’s finding that a unit of Bank of America committed fraud by selling lower-quality mortgages on government-sponsored Fannie Mae and Freddie Mac to investors.

The upshot of Bush appointee Circuit Court Judge Richard Wesley‘s ruling is that the 2013 jury verdict holding BofA liable and the imposition of a $1.27 billion penalty has been tossed. So has the $1 million penalty against BofA  executive Rebecca Mairone, who oversaw the creation of the “Hustle” program, which sped up loan processing. Bharara had alleged that the “Hustle,” an acronym for the “High Speed Swim Lane” program, had been generated by Countrywide out of defective loans that were re-sold to unwitting investors.

The reasoning of both the judge and the defense attorneys was that the government had at most proved breach of contract and not fraud.

The case is U.S. v. Countrywide Home Loans Inc., 15-496, U.S. Court of Appeals for the 2nd Circuit (New York).

Read the original articles in Bloomberg and the New York Post.

Two Men Plead Guilty to Defrauding Lenders of $33.6 Million in Novel Scheme

May 20th, 2016 at 10:14am

Coronado businessman Courtland Gettel and Arizona attorney Jeffrey Greenberg have pleaded guilty to raking in over $33.6 million by taking out fraudulent loans on expensive homes in Del Mar and La Jolla, according to federal prosecutors.

According to the U.S. Attorney’s office in San Diego, Gettel, 42, and Greenberg, 66,  took out loans against as many as eight homes by then pretending previous loans had been paid off in order to secure more loans from new lenders. The new lenders were tricked by forged loan reconveyances that indicated that the homes were lien-free and then recorded the fraudulent documents  at the San Diego County Recorder’s Office (title fraud).  Because title was clouded as a result, when the men defaulted on the loans, there was confusion as to the secured interests of the lenders in the properties.

The names of the firms run by Courtland Gettel were Conix, Inc. and Variant Commercial Real Estate — VCRE.

Read the original article in the Coronado Patch.

 

 

 

© Copyright 2007-2016 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.

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