California Real Estate Fraud Report

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Fremont real estate agent sentenced in short sale fraud

February 25th, 2015 at 6:10pm

The following is a press release from the U.S. Attorney’s Office for the Eastern District of California:

FRESNO, Calif. —Minerva Sanchez, 48, of Fremont, was sentenced today by Senior U.S. District Judge Anthony W. Ishii to 21 months in prison for conspiring to commit bank fraud, United States Attorney Benjamin B. Wagner announced.  Sanchez also was ordered to pay restitution to financial institutions in the amount of $421,372.

According to court documents, Sanchez was a licensed real estate agent who, beginning in or around March 2010, represented the seller of a home in Patterson, California.  Sanchez recommended that the seller undertake a short-sale of his home using Sanchez’s son as the straw buyer.  The seller, acting on Sanchez’s advice, submitted to Tri Counties Bank and Freddie Mac false and fraudulent short-sale applications, and caused these financial institutions to approve the charge-off of funds for the short-sale of the seller’s home.

With Sanchez’s knowledge, the seller provided the straw buyer with the full purchase price of the home ($355,000).  Sanchez provided the seller with a “hardship letter” for him to use in connection with the short-sale application, which misrepresented the seller’s inability to make his monthly mortgage payments.  In fact, Sanchez knew that the seller could make his monthly mortgage payments with proceeds from a pending sale of other real property he owned.

Sanchez, along with the seller and straw buyer, made other misrepresentations to the financial institutions in connection with the short-sale, including false statements that the transaction was “arm’s length,” and false statements concerning the parties’ hidden agreement that the seller would provide the straw buyer with the purchase money for the short-sale and ultimately regain ownership of his home following the short-sale.  In her plea agreement, Sanchez admitted that her criminal conduct caused the financial institutions to lose more than $316,000.

This case was the product of an investigation by the Federal Housing Finance Agency-Office of Inspector General and the Internal Revenue Service-Criminal Investigation.  Assistant United States Attorney Christopher Baker prosecuted the case.

On June 10, 2013, the seller of the Patterson property, Agustin Simon, 52, of Gustine, pleaded guilty to conspiring to commit bank fraud in connection with this scheme.  He is scheduled to be sentenced on February 23, 2015, before U.S. District Judge Lawrence J. O’Neill.

Seal Beach woman sentenced to prison for real estate fraud – and it’s not her first conviction

February 23rd, 2015 at 11:10am

Karen Hanover, 48, of Seal Beach, has been sentenced to almost three years in prison for tricking people to invest in a commercial real estate scheme she ran, according to Thom Mrozek, public affairs officer for the United States Attorney’s Office for the Central District of California.

The investors turned over $19,000 to $29,000 in exchange for Hanover’s promise  guaranteeing them a 100% return or a 100% refund if they didn’t have a commercial property within a year. The investments were pitched at real estate seminars held in Southern California, Las Vegas and Dallas using two Long Beach companies, Commercial Investment Education LLC and Kharmic Life Strategies Inc.

Karen Hanover received a six month sentence and a $5,000 fine in 2011 for impersonating an FBI agent in order to threaten clients who complained about a prior real estate scheme.

Read the original article in the OC Register and the Los Alamitos-Seal Beach Patch.

The main reason why elder financial abuse will continue to grow . . . the reason will surprise you

February 23rd, 2015 at 10:53am

The theft of homes, financial assets and material items from seniors (elder financial abuse) is growing. You might suppose this has to do with the large numbers of Baby Boomers who are aging, creating a large, vulnerable population.

This is certainly true. But do you want to know the real reason this crime, which is a shame to our entire society, is going through the roof?

Here it is folks: elder financial abuse is rampant because there are very few investigations by law enforcement and even fewer by prosecutors.

The reason? it’s not a high priority crime and even when the abuse is egregious, law enforcement considers there is no victim unless the victim files a complaint. Kind of hard when the victim has dementia or is subject to undue influence by a too-friendly neighbor or adult children who are too impatient to wait for their relative to die.

In the case below, Linda Magel found that her father, John Magel, lost a $105,000 certificate of deposit and possibly cash from withdrawals made using forged signatures. John Magel lost that money to a Chase Bank employee, yet Chase Bank didn’t refund the money “without putting up a fight,” according to Linda.

In Magel’s case, Alameda County Superior Court Judge Christine Moruza blocked a plea deal agreed to by Alameda County Deputy District Attorney Jerry Herman and the attorney for former personal banker Alex Ojeda, 28, that would have dropped a felony charge of financial elder abuse, a ruling that pleased John Magel‘s family. Ojeda is due back in court on March 2.

Read the original article, including the attempts by Chase Bank to avoid reimbursing the family until after the family threatened legal action.

Wells Fargo lending manager pleads guilty to loan fraud

February 20th, 2015 at 11:26am

Sharon Lynn Shaw, 67, a San Jose woman, pleaded guilty to four counts of defrauding a bank and two counts of theft by a bank officer.

Shaw, who was employed by Wells Fargo, admitted she used her own parents’ names and social security numbers in order to submit and approve loan applications that were fraudulent. According to U.S. Attorney Melinda Haag, Shaw used the proceeds to pay off the mortgage on her house.

Shaw will be sentenced to U.S. District Judge Beth Freeman in San Jose in May and could receive a maximum possible sentence of 30 years in federal prison.
Read the original article in the San Jose Mercury News.

Joshua Clymer last defendant sentenced in Diamond Hill Financial mortgage fraud case

February 20th, 2015 at 11:15am

Joshua Clymer, 28, was sentenced to two years in prison for conspiracy to commit mail fraud in connection with a mortgage fraud scheme in which he an his co-defendants helped straw buyers purchase homes by submitting fraudulent loan applications containing lies about the purchasers’ income, assets, employment and intent to occupy the homes.

Clymer, the last of 14 defendants to be sentenced, pleaded guilty to what FBI news release stated was a “loan origination and property flipping mortgage fraud scheme” using the companies Diamond Hill Financial and Bay Area Real Estate Holdings.

Clymer’s co-defendants, who have already been sentenced in this and related cases include Leonard Williams, 87 months; Garret Gililland, 94 months; Niche Fortune, 57 months; Kesha Haynie, 46 months; Eric Clawson, 37 months; Anthony Symmes, 35 months; Carlos Chamorro, 27 months; Shane Burreson, 23 months; Christopher M. Chiavola, 22 months; William E. Baker, 18 months; Nicole Magpusao, 535 days; Brandon Resendez, nine months; and Remy Heng, six months home detention. Twelve of the defendants pleaded guilty, including Clymer. Juries convicted the two defendants who went to trial, Haynie and Williams.

The case resulted from an investigation by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; and the Butte County District Attorney’s Office’s Major Crimes Unit.

Read the original article in the Sacramento Bee.

Iowa Realtor®, Attorney convicted in short sale fraud case

February 19th, 2015 at 1:38pm

Below is the press release from the office of the United States Attorney’s Office for the Southern District of Iowa:

A Des Moines area attorney and real estate agent were both convicted of bank fraud after an eight-day jury trial, announced United States Attorney Nicholas A. Klinefeldt. Attorney Jason Springer was convicted of seven counts of bank fraud, and real estate agent Rick Makohoniuk was convicted of one count of bank fraud, in connection with a property flipping scheme. Bank fraud carries a maximum penalty of up to 30 years in prison, a fine not to exceed $1,000,000, or both. The court also will be authorized to impose orders of restitution. United States District Judge John A. Jarvey will schedule a sentencing date at a later time.

Springer, Makohoniuk, and three other men were charged with engaging in a scheme to defraud financial institutions from approximately March 2009 to March 2011, involving approximately eighteen homes in and around Des Moines, Iowa, and a loss of approximately $400,000. Two of the other men, Nathan Smith and Patrick Steven, with the assistance of Springer and others, negotiated short sales with lenders on behalf of homeowners. Smith and Steven also purchased the homes in the short sales while deceiving the lenders into believing that the price Smith and Steven paid in the short sale was the fair market value. In fact, Smith and Steven resold the homes for a higher price the same day they purchased the home in the short sale or soon after, all without the lenders’ knowledge. Springer furthered the scheme by conducting many of the fraudulent real estate closings, including signing and submitting false HUD-1 settlement statements that stated that Smith and Steven paid cash at closing for the short sales. In some cases, Smith and Steven brought no money to closing, whereas in other cases, Smith and Steven provided checks, but there were not sufficient funds in Smith and Steven’s bank account to cover the checks they brought to closings. Springer used the proceeds of the resale to fund the short sale. Makohoniuk, a realtor, is alleged to have submitted false documents to a lender with respect to one of the homes involved in the scheme.

The three following defendants charged in the indictment each entered guilty pleas; and are scheduled to be sentenced on May 14, 2015:

Nathan Smith and Patrick Steven both pleaded guilty to one count of bank fraud; and

Jerod Hogan, a Des Moines area mortgage broker, pleaded guilty to one count of conspiracy to make a false statement to a financial institution.

This case was investigated by the Federal Bureau of Investigation and the United States Department of Housing and Urban Development-Office of Inspector General, and was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.

Attorney David Biderman explains rights of borrowers in California

February 18th, 2015 at 8:41am

In this interview in DSNews, attorney David Biderman, a partner in Perkins Coieexplains the expanded role of loan servicers in the banking industry, Dodd-Frank, and the growing role of the Consumer Financial Protection Bureau (CFPB) in protecting the rights of borrowers.

Significant is this paragraph under the second bold-face section of the article:

“In California, we have our own state rules providing, essentially, rights to borrowers. The other thing is, virtually all of these regulations that were enacted after Dodd-Frank, all of them provide for private rights of action. So if there’s a violation under any kind of notices that are required, an individual borrower can sue. So there are a lot of technical violations for which a borrower has a right to bring a claim – notice of errors, information requests, payoff requests, those kinds of things. There can be problems, and then borrowers have a right to bring a claim.”

AG Eric Holder considers bankers may have responsibility in mortgage crisis

February 18th, 2015 at 8:21am

Outgoing U.S. Attorney General Eric Holder – known for his opposition to prosecuting bankers for their prominent roles in the mortgage crisis – is finally giving lip service to the notion of personal responsibility. He’s given his AGs only 90 days to determine whether to charge individuals whose firms sold toxic mortgage-backed securities to investors.

Holder has been resistant to the point of indifferent to protecting consumers, who have suffered deeply from predatory banking practices. I’m not holding my breath. My bet is that as soon as he leaves office, he goes to work either for a mega-bank or a law firm that represents banks.

California has yet to indict any bankers, whether it is from the U.S. Attorneys’ offices or the office of California Attorney General Kamala Harris.

Read the full article in DSNews.

Three deputy sheriff brothers acquitted by judge in mortgage fraud case

February 13th, 2015 at 3:18pm

In an article from the Los Angeles Times, U.S. District Judge Manuel Real acquitted brothers Billy, Benny and Johnny Khounthavong of conspiracy and fraud charges after the prosecution rested its case.

Judge Real’s ruling was that no reasonable jury would convict the brothers because the prosecution had not shown enough evidence to prove the three had intended to defraud banks.

The prosecution does not have the right to appeal the judge’s ruling.

Hopefully, the men will be taken off leave and go back to work soon.

 

 

What Americans can learn from the German and Swiss banking systems

February 12th, 2015 at 4:05pm

This article is not at all off topic: the nation’s banking system and how President Obama and banking interests are trying to make it impossible for consumers to bring public banking to America. Yep, when it comes to big money, Obama is no liberal: he is the hand-maiden to his masters, the big banks.

If you don’t like this, then stop complaining, pull your money out of Wells Fargo, BofA, etc. and put it into a credit union.

The difference between a bank and a credit union is simple: banks work for their investors/stockholders and their profits are often sent overseas. Credit unions work for their members (you) who are the “stockholders”) and their money is recirculated back into the local community. Again, that’s you.

Read the original article by Ellen Brown, author of Web of Debt, in Alternet.

 

© Copyright 2007-2015 Monique Bryher

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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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