California Real Estate Fraud Report

Henrik Sardariani, 44, of Glendale has pleaded guilty to three counts of wire fraud, one of conspiracy and one of money laundering for defrauding several private lenders out of $5 million.

Beginning in 2007, Sardariani created forged documents to obtain loans from Foremost Investment Properties,  Bith LLC, and Money USA. He used almost $2 million of the funds to pay his horse racing debts through escrow officer Wanda Tenney, 65, who has pleaded guilty for her role and who is yet-to-be sentenced (escrow fraud). The rest of the money went to himself and his relatives.

Sardariani faces up to 75 years in federal prison when he is sentenced. His brother Hamlet Sardariani, 42, has been charged and is awaiting trial.

Read the original article in the Glendale News Press.

Barry Winnett, 49, the man who operated Countour Escrow Services for co-conspirator Royce Newcomb, has been sentenced to prison for three years and two months.

Winnett, who is unlicensed and therefore ran an illegal escrow company (escrow fraud), was convicted of wire fraud for his role in Newcomb’s Ponzi scheme. Newcomb solicited money from investors to purchase foreclosed homes but in reality laundered the money through Contour Escrow Services and returned portions of it to earlier investors (real estate fraud). The sum lost to the 22 investors was nearly $3 million.

Newcomb began serving a five year two month sentence in fall 2011.

You can find earlier posts about Royce Newcomb and Barry Winnett by searching this blog.

Read the original article in the Roseville Press Tribune.

A Tarzana man with a history of administrative actions by the California Department of Real Estate (DRE) against him has been indicted by a federal grand jury for mail fraud and arrested.

According to U.S. Attorney Benjamin Wagner, Steve Zaven Kessedjian, 48, owned a company in Woodland Hills called Amerilend Inc., which purported to help homeowners refinance their properties. When a couple used Amerilend to refinance their home and take out equity to pay off their credit card debts, Kessedjian was supposed to disburse those funds to the credit card companies through his escrow company called Targa Escrow. Instead, Kessedjian is accused of keeping the $57,343 (escrow fraud).

The couple lost their home to foreclosure after the credit card companies pursued them for the debts and they were unable to pay them along with their new mortgage.

Read the original article in the Central Valley Business Times and also the website for U.S. Attorney for the Eastern District of California.

Hubert Rotteveel, a 49-year old man who was sentenced to prison last year for bank robbery, has been charged with two counts of mail fraud related to a mortgage fraud conspiracy.

In the latest case against Rotteveel, prosecutors allege that he conspired with loan officers to over-value properties which he wanted to purchase using straw buyers (appraisal fraud, loan fraud). He then had the escrow officer of Windmill Properties, his own firm, distribute the excess proceeds totaling $700,000. All 13 of the properties he purchased later went into foreclosure, costing the lenders over $3 million.

Hubert Rotteveel’s real estate license was revoked in June 2011.

Read the original article in the Davis Enterprise.

A Roseville man who has been sentenced to prison admitted in his plea agreement that his real estate fraud was little more than a Ponzi scheme which required the services of an escrow company to distribute the ill-gotten gains (escrow fraud).

Royce Lee Newcomb, 49, will have to serve five years and 10 months in prison for soliciting several dozen investors to give him almost $3,000,000 which he told them he was using to invest in foreclosed properties. Instead, he instructed Barry Winnett of Contour Escrow Services to disburse those monies to himself, Winnett and earlier investors. Winnett does not have a license to carry out escrow services.

Barry Winnett pleaded guilty to wire fraud in January but is still awaiting sentencing.

Read more about Royce Newcomb in the Roseville Press Tribune.

The FBI has released a comprehensive report detailing the state of mortgage fraud in the country. According to their research, the states most affected by mortgage fraud and other real estate crimes are the same states where housing prices escalated rapidly during the mid-2000s: California, Florida, Michigan, Nevada, Arizona, Texas, New York, Illinois, Georgia and New Jersey.

The most prevalent mortgage fraud schemes reported by law enforcement agencies and private industry during fiscal year 2010 included loan fraud in the origination process, mortgage rescue fraud, real estate investment fraud, equity skimming, short sale fraud, illegal property flipping, title fraud, escrow fraud (incl. settlement), commercial loan fraud, builder bailout schemes, loan modification fraud and reverse mortgage fraud.

The FBI notes that short sale fraud has become so prevalent that organized crime committed by Asian, Armenian, Balkan, Eurasian, Russian and La Costra Nostra groups has infiltrated lending institutions in order to have access to financial information, mortgage origination software, notary seals and licensure information.

In other words, all forms of real estate fraud are alive and well and it is being committed by both licensed real estate professionals and unlicensed individuals and criminal organizations. Law enforcement is bailing water out of a ship that needs enormous reinforcements just to stay afloate.

This is an excellent report with a lot of detail and is well-worth reading.

Click here to read the report on the FBI’s website. There is also an excellent synopsis on Inman News.

William E. Baker, owner of Baker & Baker Construction, has pleaded guilty in federal court to one count of mail fraud for his part in a multimillion dollar scheme to defraud banks (loan fraud, mortgage fraud).

Baker, 65, confessed to conspiring with Garret Griffith Gililland III, 30 to inflate the prices of homes he built (appraisal fraud) by, among other things, lying about improvements. After escrow closed, he would rebate some of the profit from the fraud to companies owned by Gililland.

Garret Gililland has already pleaded guilty in this complex real estate fraud case. You can read about him in earlier articles in the California Real Estate Fraud Report by entering his name in the search box.

Read the original article in the Sacramento Bee and the Chico Enterprise Record.

Brothers Henrik Sardariani, 43, and Hamlet Sardariani, 41,  and Wanda Kenney, 65, also known as Lavana Hamer, have pleaded not guilty to multiple counts of wire fraud, identity theft, conspiracy and unlawful monetary transactions in connection with an alleged $6 million loan fraud.

The Sardarianis are accused of creating fraudulent deeds of trusts to properties they did not own, along with forged corporate and financial documents, according to the federal indictment. They did this in order to show equity in the properties so that they could obtain large loans from the lenders. Wanda Kenney and Axcess Escrow are accused of processing the paperwork (escrow fraud). The stamps of the notaries public were phony (notary fraud).

Once the monies were received from the banks, at least several million was allegedly transferred to an account in Hong Kong by Henrik Sardariani.

U.S. District Judge Jacqueline H. Nguyen will hear the case on September 20.

Read the original article in the Los Angeles Daily News and the Beverly Hills Courier.

Six residents of Los Angeles County have been charged in a $4 million mortgage fraud scam. The accused include two now-former employees of banks, a mortgage broker, a now-former escrow officer and a loan officer. In total, the lenders lost approximately $4 million due to the mortgage fraud.

Anthony Lewis, 38, of the San Fernando Valley, is alleged to have been in charge of finding homes for sale and submitting false loan applications (loan fraud) on behalf of straw buyers.

Lewis is alleged to have submitted the phony loan applications to Deon Jackson, 36, a mortgage broker from Gardena, and Jennifer Le, 29, a loan processor from the South Bay. Jackson and Le in turn are alleged to have reviewed the loan applications to make sure they would pass muster and then submitted them to Matthew Balsz, a 31-year-old former U.S. Bank employee and 34-year-old Freddy Lentz, a former Bank of America employee.

Balsz and Lentz have been charged with taking bribes.

Once the loans were underwritten, the loan money was wired to Diamond Clear Escrow in Granada Hills, where defendant Maria Arriaza disbursed the funds according to Lewis’ instructions after allegedly constructing false HUD-1 settlement statements (escrow fraud).

Read more in the Patch, the Beverly Hills Courier and the press release by the US Attorney’s Office.