California Real Estate Fraud Report

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18
Sep

Indictments in $100 Million Hard Money Loan Fraud

A pair of Monterey businessmen have been indicted by a federal grand jury on charges of conspiracy to commit mail and wire fraud, mail fraud, wire fraud and securities fraud.

David Arthur Nilsen, 58, surrendered to authorities in San Jose, but Manoel Antonio Errico, 55,  is currently a fugitive. They are accused of defrauding up to 1,000 investors in loans secured by deeds of trust, as well as a fund that invested in those same loans.

The indictment further alleges that the men defrauded investors in fractional interests in loans secured by deeds of trusts, and in Cedar Funding Mortgage Fund, LLC, by making materially false statements, failing to disclose material facts, and creating a materially deceptive and misleading scheme, plan and artifice to defraud.

The scheme consisted of two parts: in part one, Nilsen and Errico created a false impression that Cedar Funding was safely placing investors’ funds secured real estate loans, which they claimed offered high returns and safety of principal.

In part two, as the borrowers began defaulting on their loans, Nilsen and Errico extended the maturity dates of the loans and continued to lend more of the investors’ funds. And like a Ponzi scheme, some of the interest used to pay existing investors came not from profits but from the funds of newer investors.

Read the Full Article in the Californian. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

© Copyright 2007-2017 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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