California Real Estate Fraud Report

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Archive for the 'Escrow Fraud' Category

Federal Jury Convicts Real Estate Agent and Escrow Officer in $16 Million Mortgage Fraud Case

January 20th, 2016 at 9:05pm

A federal jury Friday has convicted Vera Kuzmenko, 45, of Loomis, and Rachel Siders, 40, of Roseville, of multiple counts of mail and wire fraud for their roles in a mortgage fraud scheme that caused losses to financial institutions exceeding $16 million, United States Attorney Benjamin B. Wagner announced.

Vera Kuzmenko was additionally found guilty of witness tampering and money laundering.

Prosecutors presented evidence during the trial that, from late 2006 through early 2008, the defendants ran a mortgage fraud scheme in the Sacramento area involving at least 30 properties. Vera Kuzmenko was a licensed real estate agent who helped straw buyers by creating fraudulent loan applications that contained false information regarding their income, jobs, assets and their intent to reside in the properties.

Rachel Siders operated the escrow company used for most of the transactions. She funneled millions of dollars to Kuzmenko and other defendants, a fact which was not disclosed to the lenders (escrow fraud).

“Vera Kuzmenko was a major figure in a network of fraudsters responsible for a wave of mortgage fraud that hit the Sacramento area,” said U.S. Attorney Benjamin B. Wagner. “As the guilty verdicts in this case demonstrate, mortgage fraudsters who believe they can escape accountability for their crime by blaming others and offering false alibis are mistaken.”

Read the original article in the Imperial Valley News.

Sacramento-area Women Convicted in $16 Million Mortgage Fraud Case

December 11th, 2015 at 12:30pm

A federal grand jury has convicted two women for operating a mortgage fraud scheme in the Sacramento area during 2006-2008.

Vera Kuzmenko, 45, of Loomis, and Rachel Siders, 40, of Roseville were found guilty of multiple counts of mail and wire fraud; Kuzmenko also was found guilty of witness tampering and money laundering.

Kuzmenko was a real estate agent during part of the time the scheme was operating. According to prosecutors, she created fraudulent loan applications for the straw buyers. Siders ran the Rocklin office of the escrow company used to close many of the transactions.

“Vera Kuzmenko was a major figure in a network of fraudsters responsible for a wave of mortgage fraud that hit the Sacramento area,” U.S. Attorney Benjamin B. Wagner said in a written statement.

Read the original article in the Sacramento Bee.

Fair Oaks man convicted in fraudulent sale of his investment properties

June 23rd, 2015 at 9:28am

Tony Salcedo, a Fair Oaks mortgage broker and licensed real estate salesperson, has been found guilty of one count of conspiracy to commit mail fraud and four counts of mail fraud, according to the U.S. Attorney for the Eastern District of California.

In a unique form of mortgage fraud, in 2005 and 2006 Salcedo hired licensed mortgage broker Sean McClendon, 49, of Fair Oaks, and Anthony Williams, 47, previously of Memphis, Tennessee, to find buyers for Salcedo’s properties. He paid kickbacks to McClendon and the buyers outside of escrow (escrow fraud), meaning these payments were not disclosed to the lenders as part of the purchase and sale contracts.  Fraudulent documentation was submitted to the lenders in order to obtain loans for the buyers.

As a result of the scheme, the lenders granted loans over the actual value of the properties. Two or more of the buyers declared bankruptcy and lost not only the investment properties they purchased from Salcedo, but their own homes. Tony Salcedo and his family, though, released themselves from $1.6 million in mortgage loan debt.

Sean McClendon pleaded guilty in October 2013 and is still waiting to be sentenced. Anthony Williams, who also pleaded guilty, is serving a prison sentence of two years and nine months.

Read the original article in the Sacramento Bee.

 

Two plead guilty to short sale fraud in Virginia

May 28th, 2015 at 9:06am

The following is a press release from the FBI:

WASHINGTON—An Ashburn, Virginia resident was convicted today by a federal jury on 13 charges related to mortgage fraud, passing fictitious financial instruments, and tax fraud, the Department of Justice announced.

Charise Stone, 46, was indicted on April 15, 2014. According to court records and evidence at trial, Stone targeted distressed homeowners from 2007 to 2010 who owed more on their mortgage loan than the market value of the home with false promises of financial recovery. Stone acquired distressed homeowners’ properties in her own name or under entities she controlled, made false representations to mortgage lenders in order to induce approval of the short sales, and then re-sold the properties—often the same day or the next—to new buyers at a price above the short sale amount, in violation of agreements made with mortgage lenders.

Jose Marinay http://www.justice.gov/usao-edva/pr/head-annandale-settlement-company-pleads-guilty-over-2-million-short-sale-mortgage owned a settlement company that closed every short sale transaction for Stone. Marinay pleaded guilty to wire-fraud conspiracy on May 27, 2014. At his and Stone’s direction, fraudulent HUD-1 settlement statements were prepared to facilitate the transactions. Marinay destroyed some of the incriminating documents after closings. Financial institutions suffered losses of at least $2.2 million from the scheme. Stone profited more than $700,000 from these transactions but failed to file individual income tax returns. She also sent fictitious bonds to the IRS in an attempt to pay off her tax liability, and she sent fake international promissory notes to creditors purporting to satisfy her credit card debt as well as her mortgage loan.

Stone faces a maximum penalty of 20 years in prison for each of the wire fraud and wire-fraud conspiracy charges, 30 years in prison for the charges of false statements to a bank, 25 years in prison for the fictitious obligation charges, three years for the charge of corruptly impeding the internal revenue laws, and one year for each count of willful failure to file a tax return at her Aug. 14 sentencing.

Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente, of the Eastern District of Virginia, Assistant Director in Charge Andrew G. McCabe of the FBI’S Washington Field Office and Special Agent in Charge Thomas J. Kelly, of the Internal Revenue Service -Criminal Investigation (IRS-CI) Washington, D.C. Field Office, made the announcement after the verdict was accepted by U.S. District Judge Claude M. Hilton.

This case was investigated by the FBI’s Washington Field Office and IRS-C I. Assistant U.S. Attorney Uzo Asonye and Assistant Chief Todd Ellinwood of the Tax Division are prosecuting the case.

Related court documents and information may be found on the website of the District Courthttp://www.vaed.uscourts.gov for the Eastern District of Virginia or on PACERhttps://pcl.uscourts.gov by searching for Case No. 1:14-CR-127.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website http://www.justice.gov/tax/.

Sacramento developer, escrow officer indicted

April 24th, 2015 at 6:01am

U.S. District Attorney Benjamin Wagner announced that his office has indicted Sacramento-area developer Abolghasseni “Abe” Alizadeh and escrow officer Mary Sue Weaver on multiple counts of fraud for a scheme that caused losses to three banks of at least $20 million.

Alizadeh, owner of Kobra Properties, and Placer Title Company senior escrow officer Weaver have each been charged with six counts of wire fraud, nine counts of mail fraud, three counts of bank fraud and three counts of making a false statement to a federally insured institution.

The allegations in the indictment are that between June 2004 and April 2008, Alizadeh made agreements to purchase commercial properties at lower prices than he indicated to the lenders where he was applying for loans. He wrote checks to Placer Title Company for the down-payments, but Weaver is accused of not depositing the checks until after close of escrow, at which time she disbursed money from Placer’s escrow accounts to Kobra. Kobra used those funds to cover its checks, which Weaver then deposited.

U.S. Magistrate Judge Allison Claire has ordered both defendants held without bail pending their first court appearance.

Read the original article in News10.net and the Sacramento Bee.

Attorney in Kelly Gearhart / Jay Miller Civil Trial Accuses Escrow Companies

October 4th, 2013 at 11:46am

David Noonan, an attorney for eight of the investors who lost everything by putting their faith and savings into builder Kelly Gearhart and lender Jay Miller argued last week in court that the three escrow companies were essential to the men’s real estate investment fraud scheme.

In referring to Cuesta Title, Stewart Title and Stewart Title Guaranty, Noonan said, “They are joined at the hip. They were all mutually interested in maximizing their returns.”

Gerard Kelly, the attorney representing Stewart Title of California, said his clients did nothing except to close escrows as they always had done and that “There wasn’t a single trace of a paper trail to suggest any misconduct in this case.”

Mack Staton, Cuesta’s attorney, pointed the finger of blame to Gearhart and Miller as being the sole individuals who committed the fraud. Gearhart and Miller have declared bankruptcy and are neither parties nor witnesses to this $3.9 million trial.

Jay Miller, the former principal of Hurst Financial, has been convicted of fraud. Kelly Gearhart has pleaded not guilty to the federal fraud charges against him and has not yet been tried.

Read the original article in the San Luis Obispo Tribune.  There are also numerous articles about Kelly Gearhart, Jay Miller and Hurst Financial that can be found by searching the California Real Estate Fraud Report.

Los Angeles Broker Pleads Guilty in Theft of Escrow Funds

September 25th, 2013 at 8:23am

Steve Kessedjian, 50, from the Los Angeles community of Tarzana, pleaded guilty in Fresno U.S. District Court to committing mail fraud.

According to the plea agreement he signed, Kessedjian used his two businesses Amerilend and Targa Escrow to defraud his clients of funds they were due from escrow (escrow fraud).

In December 2007, a Tuolumne County couple used Amerilend to apply for a loan to refinance their home and pay their credit card debt. The HUD-1 settlement statement would normally have instructions to the escrow officer to, in this case, pay off the credit cards. But Kessedjian instead modified the HUD-1 so that no funds were allocated by Targa Escrow to the pay-off; instead, he used the money for himself. Six months later, he wrote checks to repay those escrow funds but they bounced.

Sadly, Steve Kessedjian’s crimes, which he admitted in his plea agreement, caused the couple to have to file bankruptcy. The plea agreement also requires Kessedjian to repay the victims over $66,000.

U.S. District Judge Lawrence O’Neill will sentence Kessedjian in December, at which time the could get up to 20 years in federal prison and a fine of $250,000.

The Bureau of Real Estate revoked Steve Kessedjian’s broker’s license.

Read the original article in the Central Valley Business Times.

Owner of eLender Escrow Pleads Guilty to Running Ponzi Scheme

August 15th, 2013 at 5:22pm

An Orange County man who was accused by the U.S. Attorney’s Office of running an unlicensed escrow company that diverted loans to himself (escrow fraud) and to operating a Ponzi scheme has admitted his crimes and pleaded guilty.

Russell Samuel Biszantz stood before U.S. District Court Judge David O. Carter and along with the guilty plea, agreed to provide restitution to the victims in answer to the judge’s question.  Assistant United States Attorney Greg Staples said the Ponzi scheme caused losses of over $2.44 million from the victims and that Biszantz, the owner of eLender Escrow, Inc. of Lake Forest, had continued to operate his business after losing his license in 2008.

Sentencing for Russell Biszantz is set for December 2013.

Read the original article in the OCWeekly.

Multi-Agency Task Force Arrests Five in Orange County Condo Real Estate Fraud

January 18th, 2013 at 11:51am

Special agents with the FBI, the Federal Housing Finance Agency’s Office of Inspector General (HUD-OIG), and IRS-Criminal Investigation arrested five people who were alleged to have orchestrated a “builder bailout” scam involving over 100 condominium properties around the country after a federal indictment charged them with various counts of bank fraud and wire fraud.

According to an FBI press release, the scheme, which was operated out of Excel Investments and related companies that were based in Irvine and then Santa Ana, allegedly targeted new condominium developments which the defendants identified the builders as having trouble selling the units. The defendants entered into agreements with the builders, whose project were located in California, Arizona and Florida, and agreed to buy the units in exchange for large commissions. They recruited the straw buyers and fabricated the loan applications (loan fraud, mortgage fraud) by submitting altered or fraudulent W-2 forms, income and asset statements. The lenders were not aware of the excessive commissions because they were disguised as “marketing fees” which were concealed in the form of false HUD-1 Settlement statements by the defendants.

The five defendants who were arrested and taken into custody are as follows:

  • Aref Abaji, 31, of Aliso Viejo, a real estate agent
  • Maher Obagi, 26, of Huntington Beach, the brother of Aref Abaji
  • Jacqueline Burchell, 52, of Orange, an escrow agent
  • Mohamed Salah, 37, of Mission Viejo
  • Mohamed El Tahir, 35, of Glen Burnie, Maryland

Many of the loans obviously went into default and there were subsequent foreclosures. The taxpayer is the ultimate loser because of the $6.2 million in losses suffered, $2.37 million were loans backed by Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).

Defendant Jackie Burchell was named in a previous post on the California Real Estate Fraud Report in June 2012 in which the FBI was investigating cases of short sale fraud in Los Angeles and Orange Counties.

San Diego Escrow Officer Acquitted in $11 Million Mortgage Fraud

October 22nd, 2012 at 10:39am

A unique mortgage fraud case that was tried in federal court has come to an end with the only defendant of 24 to be acquitted.

Escrow officer Billie Bishop, 52, of La Mesa, unlike most of the other defendants, did not plead guilty and instead elected to go to trial. Bishop had been charged with wire fraud and making a false statement to a bank; her case was the first time the racketeering law was used in a mortgage fraud case.

Prosecutors had accused her of processing 77 transactions in a scheme where the other defendants received more than the listed price for homes, with the remainder going to an account earmarked for construction upgrades. This special account was managed by Darnell Bell, a Lincoln Park gang member. The homes were purchased in the days of Ninja loans (No Income No Job or Assets) and most were foreclosed after the straw buyers walked away, with Bell and his co-defendants pocketing the loan money (loan fraud, mortgage fraud).

Billie Bishop was tried before U.S. District Court Judge Larry A. Burns. The attorneys who represented her were Gastone Bebi and Jonathan Jordan.

After the trial, Bebi stated that prosecutors had been unable to prove that Bishop had any awareness that the construction work was being performed or that the sales were fraudulent (real estate fraud, escrow fraud).

Read the original article in U-T San Diego (San Diego Union Tribune).

© 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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