March 5th, 2010 at 1:03pm
A real estate agent and her father are accused of money laundering, conspiracy and grand theft in Bakersfield and are wanted on outstanding arrest warrants of $1 million each.
Augustine Ramirez applied for loans for five homes in less than two months, indicating on each loan application that the homes were to be his principal residence, according to prosecutors in the District Attorney’s Office. The sellers paid Ramirez kickbacks for purchasing the homes at inflated rates, which he then allowed to go into foreclosure without ever making a payment. One of the homes Ramirez purchased was originally bought by ex-Realtor Carl Cole and his wife Rebecca for $361,500 in September 2004. The Coles sold the home to Crisp and Cole Real Estate within a few months, then to Crisp and Cole agent Justin Eddleman, who re-sold it to Ramirez for $949,000 in December 2006.
As should be obvious, the buy-and-flip schemes that Ramirez and others accused in real estate fraud and mortgage fraud were made possible by questionable property value appraisals.
Although only Augustine Ramirez’ name appears on loan documents, it is alleged his daughter was present at the time the loan documents were submitted and they both received the proceeds.
Read the full article in KGET TV 17, Bakersfield Now and the Bakersfield Californian.
March 5th, 2010 at 12:28pm
Despite evidence to the contrary, appraiser Kirksey J. “Mark” Newton Jr. will not lose his appraiser’s license as the result of complaints against him to the California Office of Real Estate Appraisers (OREA).
Newton had been an appraiser for the now-defunct Crisp and Cole real estate brokerage in Bakersfield and their mortgage brokerage business, Tower Lending. Crisp and Cole is still under federal investigation for possible mortgage fraud, and both David Crisp and Carl Cole had their real estate licenses revoked by the California Department of Real Estate (DRE) in 2008.
Appraisers Gary Crabtree and his son-in-law James Henderson had filed complaints against Newton with OREA, citing multiple instances of appraisals in which Newton had ignored close comparable sales in favor of ones farther away from the subject property, allegedly to be able to manipulate the valuations. The two whistleblowing appraisers indicated disappointment that Administrative Law Judge Samuel Reyes allowed Newton to keep his license even though Real indicated there were “multiple violations of USPAP (Uniform Standards for Professional Appraisal Practice) rules and requirements, including repeated violation of some of the provisions.”
Per Crabtree: “The judge ruled there were multiple violations … including competency, ethics and multiple violations of standards, and in spite of the fact that the respondent has been appraising for over 16 years,” he must learn the “very basics” of real estate appraisal”.
Anyone new to this story can read more on the California Real Estate Fraud Report by searching for “Crisp” or “Cole” in the search box.
Read the full article in the Bakersfield Californian.
March 2nd, 2010 at 1:24pm
Two men operating a real estate fraud scam together may have lost everything with one being charged with murdering the other.
Reginald Robinson is accused of murdering his business partner, mortgage lender Kasmir Billon, in order to avoid having to split the spoils of their combined real estate fraud and mortgage fraud. Prosecutors allege that Billon and Robinson schemed to over-appraise townhouses that would be sold to straw buyers using loans written by Kasmir Billon. Billon was found shot to death, a bullet in his heart, in his BMW 745 in April 2008.
Read the full article in the Silicon Valley Mercury News.
March 2nd, 2010 at 12:04pm
Kyle Grasso, a central figure in the Beverly Hills real estate fraud and mortgage fraud conspiracy that captured headlines and temporarily resulted in his enrichment at the expense of Westside property owners as well as contributing to the fall of Lehman Brothers Bank, received a sentence of only a year and a day in jail. Grasso was also ordered to repay a portion of the $13 million restitution that was determined to be the losses for the crimes he and his co-conspirators committed. Grasso was convicted of conspiracy, bank fraud, loan fraud and money laundering.
U.S. District Judge Dean D. Pregerson imposed the sentence. Inexplicable to me is how Judge Pregerson could refer to the sentencing as “difficult” because “Mr. Grasso is fundamentally a decent person. Sometimes people make stupid decisions.” Yes, Judge, but fundamentally decent persons don’t conspire to steal $13 million. It is only logical to assume that Grasso and his mortgage fraud gang would have stolen more if they hadn’t gotten caught.
No wonder there is so much real estate fraud and mortgage fraud: judges feel badly about sentencing criminals but not for the havoc their crimes wreaked on the local real estate market.
** Now for a truly macabre twist: Syd Leibovitch, owner of Los Angeles-based Rodeo Realty, sent out an announcement to Realtors two days ago that he has hired Joseph Babajian, the former partner and real estate agent who was also charged in the Beverly Hills mortgage fraud but was the only one who was acquitted of the approximately dozen charged. Why anyone would want to brag about hiring Babajian or even think it is a good idea has many of us who have remained scandal-free scratching our heads.
Read the full article on CBS News.
February 19th, 2010 at 3:59pm
Sentencing is scheduled next week for former real estate agent Kyle Grasso, who was convicted for his role in a massive multi-million dollar fraud, much of which has been documented in earlier postings on the California Real Estate Fraud Report.
Grasso was convicted of criminal conspiracy, bank fraud, multiple counts of loan fraud and money laundering. Inexplicable, the U.S. District Attorney’s Office in Los Angeles is only recommending three years in prison, according, to its spokesman Thom Mrozek.
One of Lyle Grasso’s partners in crime was former appraiser Lila Rizk, who recently received a 3 year sentence.
Read the full article in the Beverly Hills Courier.
January 29th, 2010 at 6:52pm
Lila Rizk, an appraiser who was part of a ring of real estate professionals that fleeced Lehman Brothers and other lending institutions, was sentenced to three years in federal prison.
Ms. Rizk was also ordered to repay an undefined portion of the $46 million in restitution that has been ordered by the federal judge hearing the trial. In all, the losses to Bank of America Corp., Royal Bank of Canada (RBC) and other lenders were thought to have totaled $142 million, according to Assistant U.S. Attorney Jeremy Matz.
The case, worthy of a Hollywood movie, included the participation and cooperation of real estate professionals at all levels and resulted in 11 convictions. Some of those yet to be sentenced are fellow appraiser L. Scott Robinson, bird-dog Jamieson Matykowski, who found the houses used in the scheme and Timothy Holland, an escrow officer.
According to prosecutors, properties in expensive Westside neighborhoods such as Beverly Hills, Santa Monica and Pacific Palisades, were bought and sold using straw buyers, inflated appraisals and mortgage underwriting that caused massive losses to the institutions that funded them.
To see earlier articles on this story, please search the California Real Estate Fraud Report using the term “Beverly Hills”.
Read the Full Article on ABC News, the Los Angeles Times, and the Orange County Register.
January 25th, 2010 at 8:44pm
Appraiser Kirksey J. “Mark” Newton Jr. recently faced and administrative law judge who could decide whether Newton gets to keep his appraiser’s license.
Newton, who performed appraisals regularly for defunct Crisp and Cole in Bakersfield, was accused by California Deputy Attorney General Gillian E. Friedman of being “an integral part of a real estate fraud that continued from 2005 to 2007″. Newton’s defense attorney in turn accused fellow appraisers Gary Crabtree and his son-in-law James Henderson of turning his client in to the FBI in order to remove him as a competitor.
The Office of Real Estate Appraisers (OREA), the licensing agency for appraisers in Californa, is conducting itw own investigation of Newton and his company, San Joaquin Appraisals.
Read the Full Article in the Bakersfield Californian.
January 8th, 2010 at 2:39pm
John Sweetland, 28, a Yorba Linda real estate investor, was charged with 33 counts of larceny, 11 counts of making or publishing false or exaggerated statements and 3 counts of attempting to make or publish a false or exaggerated statement, according to prosecutors in Massachusetts.
Read the Full Article by the Mortgage Insider in the Orange County Register.
January 8th, 2010 at 2:13pm
A father and son team of appraisers who worked closely with subprime lender Quick Loan Funding in Costa Mesa have been charged with appraisal fraud by the Orange County District Attorney’s Office. the California Office of Real Estate Appraisers also participated in the investigation.
Landmark Equities Group owner James Meritt Eaton, 60, and his son Brian Changler Eaton, 28, have been charge with more than 20 felony counts of grand theft, conspiracy and fraud. The two men, along with their associate Michael John Bell, are accused of overstating the prices of properties they appraised for Quick Loan Funding, where they had an office. Shockingly, Eaton Sr. is alleged to have gone so far as to fly to his branch office in Dublin, California, where he personally fired an employee for refusing to give him the passwords of other employees so that he could access and change the values of appraisals those employees had performed.
Read the Full Article in the Orange County Register.
December 11th, 2009 at 11:11am
Joseph Babijian, a Beverly Hills Realtor prosecuted by the U.S. Attorney’s office for being part of a mortgage fraud conspiracy group that saw Lehman Brothers Bank and others ripped off of tens of millions of dollars, has escaped prison, something his colleagues Kyle Grasso and Lila Rizk, have not.
Detailed in articles published in earlier postings of the California Real Estate Fraud Report and other news publications, the allegations were that a sophisticated and tight-knit group of real estate agents (Babijian and Grasso), mortgage brokers and developers and business partners Mark Alan Abrams and Charles Elliott Fitzgerald bought properties in high-priced zip codes of West Los Angeles using straw buyers and then obtained financing from Lehman Brothers for inflated property appraisals, courtesy of appraiser Lila Rizk.
Pleading guilty for their roles in the conspiracy were Nicole LaViolette, 37, a loan processor from Palm Springs; Jamieson Matykowski, 33, a real estate worker (what’s that?) from Laguna Niguel; and Timothy Holland, 35, an escrow officer from Santa Ana; and Richard Maize, 54, a mortgage banker who co-founded Americorp Funding.
Read the Full Article in the Beverly Hills Courier. A detailing of Richard Maize’s role in the conspiracy can be found in in this FBI press release.
