California Real Estate Fraud Report

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Archive for the 'Bank Fraud' Category

Husband And Wife Convicted in Fraudulent Short Sale of Property Later Sold to Sacred Heart Academy

April 6th, 2017 at 1:58pm

On March 30, Joseph Atias and Sofia Atias were convicted of bank fraud, conspiracy to commit bank fraud and Medicaid fraud by a jury in federal court in Central Islip, New York.

According to a press release by the U.S. Attorney for Eastern District of New York,

The fraud was designed to, and did, defraud Bank of America of over half a million dollars.  The defendants face penalties of up to 35 years’ imprisonment, the forfeiture of $560,000, and restitution of over $700,000.  After the verdicts, Joseph Atias was remanded to custody pending sentencing by United States District Judge Denis R. Hurley.

The convictions were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

“Through a web of lies and false documentation, these defendants stole more than half a million dollars from Bank of America and from Medicaid, which they used to line their own pockets,” stated Acting United States Attorney Rohde.  “The fine work of the FBI to bring these defendants to account for these crimes sends a clear message to anyone who contemplates engaging in mortgage fraud or Medicaid fraud: Do not even attempt it, because you will be caught and held responsible.”  Ms. Rohde extended her grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation.

The defendants were convicted of bank fraud and conspiracy to commit bank fraud in connection with the sale of property adjacent to Sacred Heart Academy for $925,000, after the defendants had sold the property in a short sale for $480,000 to discharge their mortgage debt.  In the short sale process, the defendants and a co-conspirator, an attorney who pleaded guilty and testified against the defendants at trial, concealed the offer from Sacred Heart Academy from the Bank of America.  In the short sale process, the defendants submitted a fraudulent contract of sale and other documents with false statements to Bank of America, and obtained approval of a short sale, wherein the proceeds from the sale of the property were less than the total amount of the mortgages on the property.  The defendants submitted these documents to Bank of America, falsely representing that there were no funds to pay the mortgages when, in fact, the defendants knew that Sacred Heart Academy, a high school in Hempstead, New York, had offered to buy the property for an amount sufficient to cover the mortgages on the property.  To accomplish the fraudulent short sale scheme, the defendants used a relative as a straw buyer of the property to create the appearance of an arms-length sale.  Shortly after that sale, the defendant’s straw buyer sold the property to Sacred Heart Academy for approximately half a million dollars in profit.

CFPB’s Richard Cordray Discusses Dodd-Frank

March 31st, 2017 at 7:24am

The CFPB (Consumer Financial Protection Bureau) exists to protect us. This is why banks and loan servicing companies are trying to kill it.

Read the full article and interview with Richard Cordray in DSNews.

Citrus Heights Real Estate Agent Sentenced to Prison in Mortgage Fraud Case

March 30th, 2017 at 3:35pm

Dianna Woods has received a three-year sentence in federal prison after being convicted of four counts of making false statements on loan applications. She was sentenced in Sacramento by Senior U.S. District Judge William B. Shubb.

Woods, 60, was a licensed real estate salesperson for a brokerage called VLD Realty, dba Trade House USA. VLD built and sold houses in residential developments in the Sacramento, Carmichael and Copperopolis areas. When the real estate market started to decline in 2006, VLD tried to sell some of its properties by making the down-payments for buyers and giving them money after the sale closed. Woods was accused of purchasing two of the houses without disclosing the kickbacks and also allegedly submitted loan applications and supporting documentation containing untrue information regarding the purchase terms, as well as her income, employment and assets.

The prosecution grew after the circumstances were investigated by the Federal Bureau of Investigation (FBI) and Internal Revenue Service Criminal Investigation. The case was prosecuted by the U.S. Attorney for the Eastern District of California.

Read the original article in the Sacramento Bee.

Two Plead Guilty in Massachusetts Short Sale Fraud

March 30th, 2017 at 3:17pm

Four persons are facing the justice system for their involvement in a short sale fraud scheme that occurred in Essex County in Massachusetts.

Jasmin Polanco, 37, a real estate closing attorney, and Vanessa Ricci, 40, a mortgage loan officer, each pleaded guilty yesterday to one count of conspiracy to commit bank fraud. Both women have not yet been sentenced.

In the same alleged scheme, Methuen real estate broker Greisy Jimenez, 49,  was indicted this week on two counts of bank fraud and one count of conspiracy to commit bank fraud.

On March 22, 2017, U.S. District Court Judge Rya W. Zobel sentenced a fourth person, Hyacinth Bellerose, 51, a real estate closing attorney from Dunstable, to time served and one year of supervised release to be served in home detention.

Jimenez, Polanco, Ricci, Bellerose and others allegedly submitted materially false and misleading documents to different banks so that the lenders would approve short sales. Approved short sales are required to be arms-length transactions where the seller and buyer are not acquainted through familial, business or other pre-existing relationships with one another. Also, the seller/borrower is almost always required to move out of the property following the sale.

Read the original article in The Patch.

Judge Sends a Signal as Former Executive Gets Prison in Seeno Mortgage Fraud Case

March 28th, 2017 at 11:26am

Pray that you are not a white-collar criminal whose sentence is up to Judge Yvonne Gonzalez Rogers.

The Oakland judge sentenced Ayman Shahid, 41, of Rancho Santa Fe, to 46 months in federal prison. Shahid had pleaded guilty in 2015 to conspiracy to commit bank fraud and had cooperated with federal authorities in their efforts to build a case against  the Discovery Sales corporation, which is the sales arm of the Seeno homebuilding empire. Federal prosecutors had asked for a lesser sentence for Shahid.

Judge Gonzalez Rogers said she wanted to make an example out of white-collar criminals because she believes federal financial rules appeared to be going in the direction of deregulation of the mortgage industry.

This is a case that dates back over seven years, which was when federal agents raided the Concord headquarters of the Senno family.

Read the original article in the Mercury News. There are also earlier postings in the California Real Estate Fraud Report about this case which you can search and read.

 

 

Fraud on the Rise in 2017 Mortgage Applications

March 28th, 2017 at 10:49am

Fraud and misrepresentation in mortgage applications (mortgage fraud) is on the increase again, according to new data from First American’s Loan Application Defect Index.

The overall Index reveals that the frequency of defects, fraud and misrepresentation in mortgage applications was up 4.1% from January to February in 2017. It was also up 1.3% the same month in 2016. The peak was in October 2013.

Split apart, the Defect Index for (new) purchase transactions was up 2.4% for both month over month and year over year and the refinance defect index grew 3.4% month over month in February, but decreased 6.4% from February of 2016.

Mark Fleming, the chief economist at First American, believes that the recent Fed interest-rate hike, which caused lenders to raise their rates, sent a signal to prospective buyers, some of whom may have submitted loan applications with false or fraudulent information.

“Defect, fraud and misrepresentation risk continues to respond to the shift in market composition. Rising mortgage rates continue to increase the share of higher risk purchase loan applications, but they are also incenting more borrowers to apply for ARMs,” Fleming said. “The savings for the consumer can be significant, but ARM loan applications have historically had higher defect, misrepresentation and fraud risk,” said Fleming. “The increasing popularity of adjustable rate mortgages is something to keep an eye on as the spring home buying season warms up.”

Read the original article in  Mortgage Professional America.

Former Roseville Real Estate Agent Sentenced to Prison for Forging Documents

March 2nd, 2017 at 10:54am

Alla Samchuk, 45, who was previously a licensed real estate agent, has been sentenced to nine years and six months in federal prison for mortgage fraud, identity theft and obstruction of justice. She was convicted last August.

According to prosecutors, from 2006 through 2008, Samchuk concocted a mortgage fraud involving two homes in Roseville and one in El Dorado Hills. Because she was unable to qualify for the loans, so she found straw buyers to apply for the loans in their own names. The applications contained false statements regarding income, employment and assets, including falsely representing that the straw buyers would occupy the homes.

Judge Garland Burrell Jr. of the U.S. District Court for the Eastern District of California in Sacramento was the trial judge. He imposed the longer sentence because Samchuk had threatened a witness not to report her crimes.

You can read more about the history of the case by going to the U.S. Government Publishing Office.

Read the original article in the Sacramento Business Journal.

San Diego Woman Pleads Guilty to Defrauding Two Lenders after Witch Creek Fire

February 3rd, 2017 at 10:48am

The out-building adjacent to the home Deborah and Douglas Tumlinson owned in Ramona was destroyed in the Witch Creek fire that occurred in San Diego County’s back-country in October 2007.

Unlike the other victims who filed claims against San Diego Gas & Electric, which acknowledged that the fire stemmed from sparks from some of its equipment during high winds, the Tumlinsons took a different approach.

Deborah Tumlinson convinced the Tumlinson’s family friend and trust attorney, Carter Johnston, to write a letter to New Jersey-based lender, U.S. Claims, advising the lender that they would be receiving a $2.49 million settlement from the wildfire and would be paid within 30 days. Johnston, who was disbarred for his false representations to U.S. Claims, also stated falsely that he had represented the Tumlinsons in the settlement. As a result, U.S. Claims and its president Darryl Levine made a loan to them for over $700,000 to buy a new house.

The Tumlinsons failed to repay the loan and failed to repay a second loan they received from Seaside Funding, a Carlsbad mortgage broker, for the new home they falsely claimed would be a rental property.

Deborah Tumlinson pleaded guilty in May 2016 to aiding and abetting in a wire fraud scheme and was sentenced by U.S. District Judge Janis Sammartino  to a year and a day in prison. The judge noted how her actions had caused great suffering to others, namely Darryl Levine, who was forced to sell his business in 2014.

Douglas Tumlinson, who actually signed many of the documents, entered into a deferred prosecution agreement with the U.S. Attorney’s Office, which dismissed the charges against him after his wife was sentenced.

Judge Sammartino ordered the couple to pay $1.8 million in restitution to U.S. Claims, although there is already a civil judgment against them, according to U.S. Claims attorney Pat Swan. Seaside Funding was made whole at the foreclosure auction.

Read the full article in the San Diego Tribune.

Read the press release of this case from the U.S. Attorney for the Southern District of California. The case was prosecuted by Assistant U.S. Attorney Christopher P. Tenorio.

Last Defendant in Central Valley Mortgage Fraud Case Pleads Guilty

January 27th, 2017 at 10:14am

Arthur Menefee, 56, a Stockton-based real estate agent, has pleaded guilty to wire fraud in a mortgage fraud scheme that involved at least 31 properties.

Menefee, who surrendered his real estate license to the California Bureau of Real Estate in 2013, was accused of recruiting friends and fellow church-goers to purchase properties. The lure was that Menefee took care of the mortgage payments or down-payments; the loan applications he prepared indicated the persons worked at a business that didn’t exist.

Five of Arthur Menefee‘s co-defendants have already pleaded guilty and have been sentenced as follows:

Jannice Riddick, 34, of Sacramento (two years and 11 months in prison);

Florence Francisco, 65, of Houston, Texas (one year in prison);

Adil Qayyum, 34, of Rosele, Illinois (three years of probation);

Elsie Pamela Fuller, 41, of Richmond (one year and nine months in prison); and,

Leona Yeargin, 49, of San Pablo (18 months in prison).

Two other defendants await sentencing after pleading guilty: Valeriy Vasilevitsky, and Ruth Willis

Read the original article in the Central Valley Business Times.

CoreLogic Report Details New “Reverse Occupancy Scam”

January 20th, 2017 at 11:01am

A report from CoreLogic warns lenders that people committing mortgage fraud have reversed their traditional approach to one of a common scam: that of claiming they intend to take occupancy of a property in order to obtain a lower interest rate with lower fees and lower down-payment.

Under the new “reverse occupancy scheme”, the prospective home buyers tell lenders they’ll be renting out the home, though their actual intention is to occupy the property as their own home.

Willa Wei, an analyst at CoreLogic, said the buyers  are able to claim their “expected” rental income in order to satisfy the debt to income requirement of their mortgage application. The scheme is most common in cities where home prices and rents have appreciated. Leading the way is New York City, which has the highest reverse occupancy risk, followed by Los Angeles, Chicago, Dallas and Houston.

CoreLogic has created a map of the cities that have the highest risk of reverse occupancy fraud. Click on this link to see the map.

© 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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