The FBI (Federal Bureau of Investigation) has entered an investigation involving real estate fraud in Murrieta, possibly forstalling a number of civil lawsuits filed against the individuals, including several real estate agents. Up to 100 homes were lost to foreclosure since 2006, according to investigators.
After obtaining a warrant, the FBI raided the homes of James Duncan and Hendrix Montecastro, as well as Maurice McLeod on Feb. 22. In civil lawsuits filed by several dozen ex-clients of the trio, they are accused of selling homes to the plaintiffs at inflated prices and receiving excess commissions as a result. Montecastro’s mortgage brokerage, Stonewood Consulting, Inc., was also searched for financial records.
Montecastro and his father, Bob “Bayani” Montecastro, are also being investigated by the Securities and Exchange Commission and the Riverside County district attorney’s office. Both men surrendered their real estate licenses in July 2007 after they were accused by the California Department of Real Estate (DRE) of “arranging inflated appraisals, failing to account for clients’ money and concealing brokerage fees that were as high as three times the industry standards.”
Criminal charges have not been filed as of this date against any of the men.
In a scenario that has eery parallels to the Beverly Hills real estate fraud written about extensively in The F Word (see The F Word’s archives for January 16, 2008 and December 31, 2007 for details), Stonewood’s real estate agents and mortgage brokers are accused by the DRE and SEC of partnering with crooked real estate appraisers, loan officers and investment advisers to convince
The lawsuits and the civil accusations filed by the Department of Real Estate and the SEC describe a vast operation in which Stonewood’s real estate agents and mortgage brokers allegedly conspired with bogus investment advisers, at least one rogue loan officer for a national lender, and one or more appraisers to convince investors to purchase as many as 128 homes in the area. Most were later lost to foreclosure.
Other businesses allegedly operated by Duncan, Montecastro and McLeod that were covered by the FBI’s warrant included Ridgeline Investments, Sunburst Financial Systems, Palm Valley Advisers and Pacific Wealth Management LLC, a Nevada-registered outfit that is unrelated to a San Diego company of the same name.
Read the Full Article in the Californian.