Robert Farrace, 51, a Modesto real estate attorney, has been indicted by a federal grand jury for allegedly completing a short sale fraud of one of his properties by setting up an LLC to purchase it.
Farrace has been charged with three counts of wire fraud, according the U.S. Attorney’s Office for the Eastern District of California. Federal prosecutors say he created Dignitas LLC but used a friend’s name as the LLC’s registered agent in order to hide his interest and control. The alleged purpose was to launder his higher mortgage through the company via a short sale in order to obtain a lower one. This could only be accomplished by misleading the lenders.
Prosecutors say that after defaulting on the mortgage payments to his two properties, Farrace created Dignitas LLC, which served as a straw buyer to purchase the home. The lenders did not know that Farrace controlled Dignitas LLC. The first short sale, of his Roseburg property, was approved; however the short sale for the Scenic Drive home was halted after law enforcement became aware of the alleged scheme and notified the lenders.
Read the original article in the Modesto Bee.