California Real Estate Fraud Report

One of two brothers who committed $6 million worth of foreclosure fraud by stealing the identities of notaries (notary fraud) and forging scores of grant deeds (title fraud) is going to prison for 12 years.

John Zepeda, 60, pleaded guilty to rent skimming, forgery, identity theft and conspiracy to commit grand theft. Zepeda apparently did not spend all his ill-gotten gains, as he has agreed to pay restitution to his victims.

An unnamed employee in the Stanislaus County Recorder’s Office is the hero in discovering an alleged foreclosure rescue fraud perpetrated on up to 1,000 victims.

Suspicious fillings to a company called Pacifica Group 49-II caused the Recorder’s Office to contact the Stanislaus County District Attorney’s Office. Investigator Glenn Gulley says that possibly 30 victims have been found in Stanislaus County but further digging found victims outside of the area.

The indictees include  Brent Medearis, 45, the CEO of Modesto-based VIP Financial Services; Jewell L. Hinkles, 61, aka Cydney Sanchez; Bernadette Guidry, 43; Jesse Wheeler, 34; and Cynthia Corn, 58. All five defendants have been charged with multiple counts of bankruptcy fraud; two are also facing mail fraud charges.

The 2 1/2 year investigation was undertaken cooperatively by the FBI, the U.S. Postal Service and other federal agencies, in addition to the Stanislaus County District Attorney’s Office.

Read the original article in the Modesto Bee.

Twin sisters and one of their associates have been arrested on multiple counts of operating a loan modification scam in Stockton.

Magdalena Salas, 42, the owner of Legacy Home Loans, her twin sister Angelina Mireles, 42, and Julissa Garcia, 36, were charged with 13 felonies and two misdemeanor, including conspiracy, grand theft and false advertising. The three are accused of circulating flyers in English and Spanish that guarantee to save the homes of distressed borrowers and promising a refund if the homeowner did not receive a loan modification. Homeowners were charged $5,000 upfront for these services, which is illegal in California.

The case was a cooperative investigation between the California Office of the Attorney General, the San Joaquin District Attorney’s Office, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the California Department of Real Estate (DRE) and the Stockton Police Department. According to California AG Kamala Harris,

“These scam artists preyed on innocent homeowners who were simply trying to protect their homes and families from foreclosure. The mortgage crisis has caused tremendous damage to our state and to California families. There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”

Salas operated not only Legacy Home Loans but also Salas Properties, Salas Estates, Peace and Freedom Legal Services and Divinity Legal Services. Magadalena Salas’ license to practice real estate was revoked in 2008, according to DRE records. Mireles and Garcia have real estate licenses but no broker affiliations, meaning they may not engage in services which require a license from the DRE.

Read the original press release by the California Office of the Attorney General.

Defaulting homeowners who thought they were out of options thought Stephen Easterly and Emanuel Percival were the answer to their dreams. Easterly,  who was employed by Fidelity Group Realty in Fontana, approached the homeowners in church and told them the banks had to prove they hadn’t done anything fraudulent with respect to the loans. He even paid up their back property taxes and other debts.

But Easterly and Percival were also charging the homeowners for their time. Charging upfront fees to help with loan modification or other mortgage assistance is illegal in California. They also gave the homeowners the impression that the banks had written down the principal, which would lower the homeowners’ monthly payments.

According to Lance Cantos lf San Bernardino County District Attorney’s Office, both Easterly and Percival are being held on bails of $1 million bail and $500,000 respectively.

Read the original article in KABC-TV Los Angeles.

Two Bay Area men who were convicted of one count of foreclosure consultant fraud are going to jail for 90 days each. They have already paid restitution of $40,000 to the 14 victims they scammed.

Cary Jay Silberman, 53,  and Robert Francis Childs, 44, ran a tag-team loan modification scam. Childs ran seminars for real estate agents in Santa Clara County and Contra Costa County in order to receive referrals for homeowners in distress. He then referred them to Silberman, who operated the loan modification business.

Silberman, who resigned from the California State Bar in 1997, was also convicted of one count of practicing law without a license, as he represented that he was a licensed attorney.

Read the original article in the San Jose Mercury News.

If you’re a criminal engaged in loan modification fraud, don’t do it in Santa Clara County. The Santa Clara District Attorney’s Office will make you pay dearly for scamming people.

Amir Rashidifar, 28, and Mary Margaret Delvecchio, 30, have been convicted of two felony counts of Foreclosure Consultant Fraud. The pair were each sentenced to three years, eight months in prison and order to pay restitution of $312,450 to their 80 victims.

Rashidifar and Delvecchio operated Legal Support Services until complaints by former employees and victims were reported to and investigated by the San Jose Police Department. They were charging upfront fees of $3,100 to help people but providing no services. According to Civil Code Section 2945.4(g), they were practicing Foreclosure Consultant Fraud (loan modification fraud).

Read the press release by the Santa Clara County District Attorney’s Office.

Firing her shot across the bow, California Attorney General Kamala Harris announced today that she is creating a mortgage fraud task force to deal with the ongoing causes and effects of the financial calamity causing by irresponsible lending practices.

The task force will consist of 17 attorneys and eight special agents from the California Department of Justice and focus on these three areas:

(1) Corporate fraud in the bundling of mortgages into securities where lenders knew the securities were toxic. Harris indicated she may use the California False Claims Act to prosecute wrongdoing;

(2) Loan modification scams (foreclosure fraud), in which attorneys and so-called “foreclosure consultants” took upfront fees, promising homeowners in distress they would negotiate loan modifications but did little or nothing.

(3) Lending practices that Harris termed fraudulent in terms of how the loan product was presented to prospective borrowers (loan fraud).

What I found especially heartening, was AG Harris’ promise that “no case will be too big or too small to pursue” if the evidence to prosecute exists.

Read the full article in the Los Angeles Times.

Albert Carazolez, the owner of Quick Action Paralegal Services in Porterville, has  pleaded no contest to 21 individual charges having to do with violating the prohibition from collecting fees as a “foreclosure consultant” with respect to offering loan modification services. One or more of those charges is also for the unauthorized practice of law.

Carazolez, 49, is out on bail while awaiting sentencing of one year in County jail by the Tulare County Superior Court this May. He has also been ordered to pay restitution of $19,875 to his victims, many of whom are fellow Hispanics who trusted Carazolez.

One of Albert Carazolez’ victims is Porterville resident Joaquin Uriostegui, who paid Carazolez $1,000 in upfront costs (illegal) to help modify the loan to Uriostegui’s home. An investigator with the Tulare County District Attorney’s Office told Uriostegui that he was Carazolez’ 89th fraud victim.

For his part, Carazolez has come out swinging, threatening to sue Uriostegui and others for defamation and slander. Uriostegui is quoted in the Porterville Recorder as saying that he believes the sentence and restitution against Carazolez are insufficient.

Read the original article in the Porterville Recorder.

Four people have been charged with felonies by Ventura County prosecutors for allegedly operating a fraudulent home foreclosure rescue program from an Oxnard business called USA Home Recovery Service. USA Home Recovery Service has received a grade of “F” by the Better Business Bureau.

Maria Victoria Santos, 55, of Ventura, Felipe Carlos Segovia Castro, 67, of Moreno Valley; Laura Cecilia Carlson, 64, of Hacienda Heights; and Margie Joanna Vargas, 22, of Orange, are accused of targeting predominantly monolingual Spanish-speaking clients facing foreclosure on their homes and charging them thousands of dollars in upfront fees (mortgage rescue scams, mortgage rescue fraud, foreclosure fraud).

Laura Carlson is a licensed real estate sales agent but as of this writing shows no disciplinary action by the California Department of Real Estate (DRE).

If you believe you are a victim of these suspects, please contact the Ventura County District Attorney’s Office Real Estate Fraud Unit at 662-1750.

Read the full article in the Ventura County Star.

After several years of complaints, according to one frustrated investor, the FBI has raided the Rancho Bernardo offices of Investors Finance, Inc., owned by Michael Monaco. Investors Finance, Inc. purported to provide assistance to homeowners who were behind in their mortgages, charging them about $1,400 but allegedly failing to do so.

According to previous reports in the San Diego Tribune, Michael Monaco has had prior civil judgments for breach of contract and fraud lawsuits and as a result has been ordered to pay millions.

There is also an earlier article in the California Real Estate Fraud Report about Investors Finance, Inc. and Michael Monaco.

Read the full article in the San Diego Union Tribune.