California Real Estate Fraud Report

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10
May

Guilty Plea in Beverly Hills Real Estate Fraud

The real estate developer at the center of an extensive mortgage fraud scheme that has played out in Southern California newspapers pleaded guilty Friday to conspiracy to commit bank fraud and loan fraud, running a continuing financial crimes enterprise, money laundering, obstruction of justice and three counts of bank fraud. Charles Elliott Fitzgerald, 47, who had been convicted of fraud for previous crimes, could face up to life in prison when he is sentenced August 18.

Working with Beverly Hills agent Joseph Aram Babajian, real estate broker to such stars as Warren Beatty, Ryan Seacrest and Harrison Ford; his partner Kyle Grasso; several appraisers and mortgage brokers, Fitzgerald and his business partner, Mark Alan Abrams, bought homes in pricey neighborhoods such as Beverly Hills, Santa Monica and Pacific Palisades. The appraisers over-valued the properties, which were then resold at the inflated amounts to phony buyers who purchased the properties with loans, prosecutors said.

Fitzgerald and Abrams recruited the borrowers, repeatedly lied about the homes’ value and ran escrow companies to promote the scheme, said Assistant U.S. Attorney Jeremy Matz.

According to Assistant U.A. Attorney Jeremy Matz, over a three year period, Lehman Brothers Bank funded 80 loans totaling $137 million—$50 million of which was the inflated values. Inflating the loans led to millions of dollars in commissions and other fees that was shared among the conspirators.

Lehman Brothers eventually sued Fitzgerald, but not before resisting attempts by real estate professionals, such as Christian Stevens of Keller Williams in Beverly Hills and real estate appraiser Gary Crabtree of Bakersfield, to inform them of suspicious transactions.

Seven other people have already pleaded guilty in the ongoing case; charges are pending against three other individuals.

Somebody is going to make a movie out of this . . .

Read the Full Article in The Silicon Valley Mercury News

© 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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