February 5th, 2010 at 10:36am
Pitbull New York Attorney General Andrew Cuomo has done what the toothless Securities and Exchange Commission has refused to do: hunt down individuals he feels have committed white-collar crimes.
Under the Martin Act, a New York securities law that allows civil AND criminal penalties, AG Cuomo has sued both former Bank of America CEO Kenneth Lewis and former CFO Joe Price for defrauding investors and taxpayers (ok, the “government”) when B of A bough Merrill Lynch & Co. Bank of America settled its suit with U.S. regulators by agreeing to pay a $150 million fine, a sum which has yet to be approved by U.S. District Court Judge Jed Rakoff.
Bank of America was criticized for allegedly keeping both the government and the public in the dark about the losses attributed to Merrill Lynch as well as the generous bonuses given to executives such as Ken Lewis and Joe Price. Bank of America received billions from the Troubled Asset Relief Program, aka TARP, in order to help stabilize both Bank of America and facilitate the Merrill Lynch takeover.
Read articles about this story in Bloomberg, the Huffington Post and BusinessWeek.
February 5th, 2010 at 10:04am
Judy Yeung, aka Miu Wan Yeung, is facing up to 30 years in prison and a $1 million fine after being convicted in federal court of eight counts of wire fraud, one count of conspiracy to commit wire fraud, and three counts of witness tampering. The two mortgage brokers who participated in the conspiracy in which five people who were paid to “loan” their good credit to the credit unworthy Yeung in exchange for money were also convicted and are awaiting their sentences, courtesy of the U.S. Attorney’s Office.
Yeung found enough of these dumb credit lenders to obtain more than $6.5 million in loans between December 2004 and January 2007.
Read the full article in the San Jose Mercury News and the FBI’s website.
February 5th, 2010 at 9:53am
With the spotlight now shining brightly on crimes such as loan modification scams and mortgage modification fraud, the California Department of Real Estate (DRE) is taking action.
As of this writing, more than 775 licenses have either been revoked by the DRE or the licensees surrendered their licenses in the face of investigations. DRE Commissioner Jeff Davi notes that consumers who don’t check to see if their loan officer is licensed (just go to www.dre.ca.gov and do a license check) have less of a chance of receiving any restitution for loan modification fraud, since the criminal is unlikely to be carrying errors and omissions insurance.
Here are some quick statistics: in 2009, 672 licenses were revoked (up 50%) and 105 licenses were surrendered (up 80%). Over 180 Desist-and-Refrain order were issued by the DRE to almost 400 individuals or firms engaged in the loan modification business and they initiated over 2,000 investigations.
Read the Full Article in the Real Estate Channel and the message by Commissioner Jeff Davi on the DRE’s website. Also on the DRE’s website is a list of companies and individuals against which action has been taken.
January 29th, 2010 at 6:52pm
Lila Rizk, an appraiser who was part of a ring of real estate professionals that fleeced Lehman Brothers and other lending institutions, was sentenced to three years in federal prison.
Ms. Rizk was also ordered to repay an undefined portion of the $46 million in restitution that has been ordered by the federal judge hearing the trial. In all, the losses to Bank of America Corp., Royal Bank of Canada (RBC) and other lenders were thought to have totaled $142 million, according to Assistant U.S. Attorney Jeremy Matz.
The case, worthy of a Hollywood movie, included the participation and cooperation of real estate professionals at all levels and resulted in 11 convictions. Some of those yet to be sentenced are fellow appraiser L. Scott Robinson, bird-dog Jamieson Matykowski, who found the houses used in the scheme and Timothy Holland, an escrow officer.
According to prosecutors, properties in expensive Westside neighborhoods such as Beverly Hills, Santa Monica and Pacific Palisades, were bought and sold using straw buyers, inflated appraisals and mortgage underwriting that caused massive losses to the institutions that funded them.
To see earlier articles on this story, please search the California Real Estate Fraud Report using the term “Beverly Hills”.
Read the Full Article on ABC News, the Los Angeles Times, and the Orange County Register.
January 29th, 2010 at 11:37am
Mojgan Cox, a formerly licensed real estate broker in Rancho Cucamonga, pleaded guilty on January 27 to felony charges in relation to a conspiracy and which she and other co-defendants were charged with money laundering from an escrow account. Originally charged with conspiracy, grand theft, forgery and money laundering, Cox received a sentence of five years in state prison.
Read the full article in the San Bernardino Sun.
January 29th, 2010 at 11:19am
Kahram Zamani, a licensed real estate broker and president of Infinity Group Services, was arraigned on January 28 for defrauding 165 distressed homeowners out of $177,000 by illegally charging them upfront fees to modify their home loans. Zamani is charged with 165 counts of grand theft with additional sentencing possible for aggravated white collar crime and could face up to 113 years in prison if he is convicted. The period for which he is charged was February 2008 through December 2009.
Zamani found his clients-victims by running radio ads to find homeowners in distress. In a ploy to convince homeowners his company had something to do with the Bush Administration’s “hope to Homeowners” program, Infinity Group Services was previously called “Hope to Homeowners”. Distressed homeowners were made false promises that Infinity Group Services could obtain loan modifications or even loan forgiveness for a fee of $995, paid upfront.
The investigation was a result of a collaboration between the Orange County District Attorney’s Office, the California Department of Real Estate (DRE) and the Federal Trade Commission (FTC). Although both the FTC and the DRE have filed actions against Zamani, the DRE’s website shows no action regarding Zamani’s real estate license as of today.
Zamani and Infinity Group Services have also been profiled in RipOffReport.
Read more at the website for the Orange County District Attorney’s Office.
Consumers: remember that upfront or advance fees for loan modification services are illegal in California.
January 26th, 2010 at 11:48pm
In a story reported last year in the California Real Estate Fraud Report, Milton Retana, a citizen of Salvador, was convicted in federal court on six counts of mail fraud one one additional count of making false statements to investigators. His attorney William S. Harris says he will appeal the verdict, which, if upheld, could send Mr. Retana to prison for a couple of lifetimes: 125 years.
Los Angeles U.S. Attorney spokesman Jim Bowman said that Retana operated a Ponzi scheme that targeted Spanish-speaking individuals. In Retana’s case, he was found guilty of fleecing his investor-victims out of more than $62 million. He was charged after U.S. postal inspectors found $3 million in cash while raiding the Libreria del Exito Mundo Spanish-language bookstore owned by Mrs. Retana, Lydia Campos. The bookstore is located next to Milton Retana’s real estate brokerage and mortgage firm, called Best Diamond Funding Corp. Ms. Campos has not been charged with any crimes related to her husband’s case.
Read the Full Article in the Los Angeles Times.
January 25th, 2010 at 9:37pm
The next time you see a home for rent in Craigslist at a price that looks too good to be true, think twice: it might be.
Both prospective renters and property owners wanting to rent their homes are finding themselves victimized by con artists, who troll Craigslist for vacant properties and post their own ads in the hopes of scamming a few hundred or thousand dollars by “renting” a house.
Some of the frauds are caught by the tenants, who see multiple ads for the same property but at different monthly rents. And one ad posted recently by a property owner boldly stated that her property was being fraudulently “listed” by a person she named outright.
According to Laura Upland of the Solano County District Attorney’s Office, many of the suspects are Nigerian, having honed their careers previously in credit card fraud.
In one instance in Vallejo, a woman seeking to rent a house called the number in the ad after her rental application was approved in 20 minutes without her providing her social security number or bank account numbers. She was uncomfortable about sending her deposit via Western Union. When she asked the so-called owner to describe where Vallejo was, he hung up the phone.
Renters: one way to protect yourselves is to ask a Realtor to run a title report to see if the name of the owner on title matches that of the caller. It’s not a perfect system but could help the renter lose his or her money to a thief.
Read the Full Article in the Vallejo Times Herald.
January 25th, 2010 at 9:21pm
In yet another case of ethnic-based crime, a former felon and two real esate brokers have been indicted and charged with 54 felony counts that include foreclosure consultant fraud, grand theft and securities fraud. The crimes were exposed in March 2009 by the San Diego Tribune.
Prosecutors from the San Diego District Attorney’s Office charge that Edmundo Rubi operated a scheme while he was in prison, opening a bank account under Amerisian Trust. He, Joseph Encarnacion, and co-defendants Benjamin Hebron and Gloria Hebron set themselves up as consultants, using a sales pitch on their now-closed website that encouraged “American and Asian brothers and sisters” to “let your estate work for you”. Many of the victims were Filipinos struggling to pay their mortgages after the interest rates accelerated but none of them obtained loan modifications as a result of their working with the defendants.
It is illegal in California to charge upfront fees for loan modification consulting. Read here to be linked to the California Attorney General’s Office.
Read the Full Article in the San Diego Union Tribune.
January 25th, 2010 at 8:44pm
Appraiser Kirksey J. “Mark” Newton Jr. recently faced and administrative law judge who could decide whether Newton gets to keep his appraiser’s license.
Newton, who performed appraisals regularly for defunct Crisp and Cole in Bakersfield, was accused by California Deputy Attorney General Gillian E. Friedman of being “an integral part of a real estate fraud that continued from 2005 to 2007″. Newton’s defense attorney in turn accused fellow appraisers Gary Crabtree and his son-in-law James Henderson of turning his client in to the FBI in order to remove him as a competitor.
The Office of Real Estate Appraisers (OREA), the licensing agency for appraisers in Californa, is conducting itw own investigation of Newton and his company, San Joaquin Appraisals.
Read the Full Article in the Bakersfield Californian.
