California Real Estate Fraud Report

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21
Sep

Central Coast’s Cedar Funding a Contentious Bankruptcy

Cedar Funding was a Central Coast real estate investment firm that the bankruptcy trustee says was run like a Ponzi scheme. Now some of its creditors are objecting to the large amount fees some of the trustee’s attorneys are seeking in the proposed settlement.

About $950,000 of a proposed $2.85 million settlement with the Salinas accounting firm of Hayashi & Wayland Accounting would go to two law firms for Cedar Funding, which has been in Chapter 11 since May 2008. 

Cedar Funding has been in Chapter 11 proceedings since May 2008 after the company owned by mortgage broker David Nilson imploded and left about 1,600 investors in the lurch. Investors, many of them Central Coast residents, had sunk an estimated $160 million into Cedar Funding real estate investments. James Hicks, a Pebble Beach resident, referred to the proposed settlement as “a sweetheart, back-room deal” for the attorneys and Aron Oliner, the attorney for the creditors committee, said that the two firms should receive only $296,000 for their work.

Mortgage broker David Nilsen is charged with 31 counts of fraud and conspiracy in a federal criminal case that saw 1,600 Central Coast investors lose close to $160 million from 2003 to 2008.

Read the full article in the Silicon Valley Mercury News.

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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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