California Real Estate Fraud Report

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Five Year-Old Investigation Results in Six Arrests in Stanislaus County

July 22nd, 2016 at 5:23am

An investigation in Stanislaus County that started five years by state and federal authorities has resulted in the arrests of six people charged in a mortgage fraud scheme that spanned the state of California.

San Bernardino County residents Jacob Orona and Aide Orona, the alleged masterminds, face 90-year prison terms if convicted.

The scheme was discovered in 2011 by investigators with the Stanislaus County District Attorney Office’s real estate fraud unit by District Attorney’s Office investigator Glenn Gulley. Gulley found that Blas Arreola and Nancy Arreola of Turlock tried to prevent foreclosure of their home and a rental home they owned by filing false documents with the county recorder. Another Arreloa used the same strategy with their home in the area and a second one in Half Moon Bay. From there, the investigation became statewide.

Others arrested were John Contreras, Prakashumar Bhakta, Marcus Robinson and David Boyd, all believed to live in Southern California. All six were indicted by a grand jury on a combined 135 felony charges including grand theft, conspiracy, filing forged documents and identity theft.

Read the original article in the Modesto Bee.

 

Aliso Viejo Man Pleads Guilty in Scheme to Rip Off Struggling Homeowners

July 22nd, 2016 at 5:07am

The U.S. Department of Justice announced that Orange County, California, resident Charles Wayne Farris has pleaded guilty in U.S. District Court in Santa Ana, California, for his role as the sales manager of a multi-million dollar fraudulent mortgage modification scheme.

Farris, 55, of Aliso Viejo, California, pleaded guilty before U.S. District Court Judge David O. Carter for the Central District of California to one count of conspiracy to commit mail and wire fraud for his crimes, which occurred between October 2008 and June 2009.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said “This defendant supervised dozens of telemarketers who used lies and false promises to take money from struggling homeowners for a worthless service. We will continue to prosecute all kinds of mass-marketing and telemarketing fraud schemes, especially those that prey on vulnerable victims.”

Added U.S. Attorney Eileen Decker of the Central District of California, “This defendant managed an entire team of people whose sole job was to lure struggling home owners into the fraud scheme. It is because of Mr. Farris that so many people were victimized for so much money.”

Farris acknowledged that he participated in a scheme that sought to convince homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group (RLG) and a successor entity, America’s Law Group (ALG).  RLG and ALG

Fannie Mae Warns about a New Type of Occupancy Fraud: Fake Investors

July 22nd, 2016 at 4:56am

Lenders report they are seeing more attempts at reverse occupancy mortgage fraud, which occurs when borrowers pretend that their primary residences are investment properties. This is typical especially with multiplex units, such as duplexes, in which the borrower claims to have all the units already rented but intends to live in one of them.

Last January, Fannie Mae warned lenders to watch for this scheme, under which the first-time buyer has a large cash down-payment but usually low income and little or no credit.

Read the original article in National Mortgage News.

California Attorney General Issues Fraud Alert on Rental, Moving Scams

July 6th, 2016 at 1:33pm

California Attorney General Kamala Harris has issued a press release warning consumers of rental and moving scams. The press release includes not only tips and cautions but also resources so that you can protect yourself.

 

Fair Oaks Developer Sentenced for Mortgage Fraud

July 1st, 2016 at 11:28am

Fair Oaks home developer Mark Allen has been sentenced to 18 months in prison for a prosecution involving mortgage fraud.

Allen, 51, enticed people to buy houses he was building by paying them money. He and his company, Allen Development LLC, did not disclose the payments to the lenders. The prices of the homes were based on artificially high sales prices and the lending institutions ultimately lost over $1 million.

Read the original article in the Sacramento Business Journal.

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.

© Copyright 2007-2016 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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