California Real Estate Fraud Report

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Archive for the 'Foreclosure fraud' Category

FTC Halts California Based Mortgage Relief Scam

June 17th, 2016 at 9:28am

The following is a press release from the Federal Trade Commission (FTC):

The Federal Trade Commission has charged the operators of a mortgage relief scam with bilking millions of dollars from homeowners by falsely telling them they could join a so-called “mass joinder” lawsuit that would save them from foreclosure and provide additional financial awards.

“Preying on homeowners who already are financially distressed and struggling to pay their mortgages is appalling,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “That’s why stopping phony mortgage relief operations, like this one, is a priority at the FTC.”

At the FTC’s request, a federal court temporarily halted the scheme, and the agency seeks to permanently stop the alleged illegal practices and obtain refunds for consumers.

According to the FTC’s complaint, Damian Kutzner and four attorneys using a set of law firms under the names Brookstone Law and Advantis Law, claimed they would bring lawsuits against lenders for mortgage fraud and void consumers’ mortgage notes “to give you your home free and clear, and/or to award you relief and monetary damages.”

According to the FTC, the promise of a mass joinder lawsuit is a ruse used by some mortgage relief scams. Unlike class-action lawsuits, in the event of trial each plaintiff would have to prove his or her case separately. Although the defendant attorneys have sued several well-known banks, the FTC has alleged that they have not won any cases and that most were dismissed because they never pursued them. According to the FTC’s complaint, the defendants’ operation did not have attorneys who could litigate hundreds or thousands of cases.

According to the complaint, the defendants mailed marketing materials to consumers with the homeowner’s name, loan amount and property identification number, with statements such as, “Your home will be sold at Auction unless you take immediate action.” People who responded to the advertising were told they could join a lawsuit by paying $895 or more in advance for a “legal analysis,” and that they were likely or certain to prevail in a lawsuit against their lender; some consumers were told they would recover at least $75,000. After claiming the analysis showed that a consumer had a good case, the defendants charged thousands of dollars in recurring monthly fees through the law firms and failed to deposit the fees in client trust accounts as required by law.

The defendants falsely promised some clients that they would add them as plaintiffs in lawsuits; they told others they would add them soon but did so only months later. Clients’ requests for information were ignored. In addition, the defendants did not tell people when their lawsuits had been dismissed and kept collecting fees from those clients. Clients’ requests for refunds were refused.

One of the defendants, Vito Torchia, was disbarred by the California bar for misconduct. During his ethics trial, he conceded that Brookstone failed to provide the most basic elements of legal representation

The defendants are Damian Kutzner; Vito Torchia, Jr.; Jonathan Tarkowski; R. Geoffrey Broderick; Charles T. Marshall; Brookstone Law P.C., doing business as Brookstone Law Group, a California corporation; Brookstone Law P.C., doing business as Brookstone Law Group, a Nevada corporation; Advantis Law P.C.; and Advantis Law Group P.C. They are charged with violating the FTC Act and the FTC’s Mortgage Assistance Relief Services Rule (MARS Rule) and Regulation O.

To learn more, read Home Loans.

The Commission vote approving the complaint was 3-0. The U.S. District Court for the Central District of California entered a temporary restraining order against the defendants on June 1, 2016.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

Sacramento Man Sentenced to 18 Years for Foreclosure Fraud, Loan Modification Fraud

June 14th, 2016 at 3:11pm

Richard Henri Fecteau, 52, the former operator of a foreclosure rescue company called Team Fecteau, has been sentenced to 18 years in state prison.

In April, Fecteau was convicted by a Sacramento County jury of 23 felony real estate fraud charges related to grand theft, recording false documents and illegally acting as a foreclosure consultant. Sacramento Superior Court Judge Majorie Koller handed down his sentence and ordered ordered Fecteau to pay more than $35,000 in restitution to the many victims he defrauded.

Fecteau’s foreclosure rescue company ran a scheme whereby  he directed homeowners to deed their properties properties to a trust. The trusts were held by people who had recently filed bankruptcy and Fecteau was a co-trustee, which placed an automatic stay against foreclosure of the properties. The duped homeowners were told to make no more payments to their lenders and instead to make monthly payments to Fecteau.

Read the original article in the Sacramento Bee.

 

Mortgage Broker Pleads Guilty in Foreclosure Fraud Case

May 12th, 2016 at 10:38am

Ventura County District Attorney Gregory D. Totten announced that Gregoria Mendoza, a former mortgage broker, has pleaded guilty to multiple counts of felony grand theft and foreclosure consultant fraud.

Prosecutors said that Mendoza, 60, created six separate real estate investment schemes and stole about $470,000 from victims in Ventura, Los Angeles and Tulare counties. She had told the victims their money would be invested in real estate projects but instead she spent the money on herself.

Mendoza also illegally charged one of the victims upfront/advance fees for a mortgage loan modification.

Read the original article in the Ventura County Star.

Assistant Coach Bandit’ Faces New Charges in Loan Modification Fraud

May 6th, 2016 at 5:01am

Former youth coach James Allen Ramsdell, 51, has been arrested on suspicion of several fraud charges, including a felony count of grand theft by false pretense, the Orange County District Attorney’s Office said.

Prosecutors allege that Ramsdell, a Huntington Beach resident, offered to provide loan-modification services for a woman who had received a notice of default on her mortgage from her bank. Ramsdell took an upfront fee and cashed several checks totaling $10,000 from the woman, according to prosecutors, but did not perform any services. The woman subsequently submitted a fraud report to the Orange District Attorney’s Office.

In 2009, Ramsdell, who worked as a sub-prime mortgage broker while also coaching youth baseball and soccer,  pleaded guilty to robbing banks in Anaheim, Costa Mesa, Huntingon Beach and San Diego County. FBI officials referred to him as the “Assistant Coach Bandit.”

Read the original article in the Orange County Register.

Sacramento Owner of Foreclosure Rescue Company Convicted of Multiple Real Estate Fraud Charges

April 29th, 2016 at 1:00pm

A Sacramento County jury has found 52-year-old Richard Henri Fecteau guilty of 23 felony real estate fraud charges involving grand theft, recording false documents and illegally acting as a foreclosure consultant, according to a Sacramento County District Attorney’s Office press release. The jury also found an enhancement for a white-collar crime.

Fecteau ran a foreclosure rescue company called Team Fecteau between 2011 and 2014 . Homeowners were told to deed their properties to a trust in which the co-trustees were Fecteau and people who had recently filed for bankruptcy. After an automatic stay against foreclosure on the property was granted under federal bankruptcy laws, Fecteau told the homeowners to make monthly payments to him and have no further contact with their lenders.

After most of his clients were foreclosed on, Fecteau and one of his employees filed phony mechanic’s liens against the properties in order to extract settlements by the lenders before they resold the homes.

 

 

Realtor-Funded “Reverse Mortgage” for Elderly Woman Now a Lawsuit

April 27th, 2016 at 7:55am

Barulich Dugoni Law Group is representing an elderly Menlo Park woman in a lawsuit against a Realtor®.

Alexandra Banis, an attorney with the firm, says Robert Leitao  gained an interest in the home of Gunhild B. Bogue after he took advantage of her when she was facing foreclosure last year.

San Mateo has an Elder and Dependent Adult Protection Team that consists of representatives from the county’s Health System, District Attorney’s Office, County Counsel and private law firms, such as Barulich Dugoni.

Bogue is an 89-year-old whose estate is now under the conservatorship of the San Mateo County Public Guardian. The lawsuit alleges Leitao contacted Bogue after the property was listed as in foreclosure. He allegedly drafted several documents  such as a will, deed of trust and loan agreement and offered to pay her mortgage while allowing her to remain in the home until she died in exchange for her to deed him the property worth an estimated $1.4 million. According to Banis, Bogue signed the documents under duress.

Leitao denies the allegations and said he saved Bogue’s property, which was just days away from foreclosure and had amassed almost $800,000 worth of debt and a mortgage that hadn’t been paid in years.

Read the original article in the San Mateo Daily Journal.

Three Charged in Ventura for Soliciting Latinos in Foreclosure Fraud Case

April 14th, 2016 at 3:49pm

Roberto Sanchez, 67; his wife, Rosalva Sanchez, 62, of Oxnard; and Patrick Iturra, 45, of Canyon Lake have been arraigned in Ventura County Superior Court.

Senior Deputy District Attorney Tony Wold said the three defendants solicited homeowners who were trying to avoid foreclosure. They operated a fraudulent business called Mercury Business Group and charged $100,000 from 11 victims.

“All of the victims were Spanish-speaking homeowners who were less sophisticated in matters involving real estate,” Wold said. “Several of them had already lost legal ownership of their homes through the foreclosure process prior to having contact with the defendants. No reputable business would take your money under those circumstances.”

Read the original article in the Ventura County Star.

Foreclosure Rescue Con Artist Who Targeted Hispanics Sentenced to Prison

April 14th, 2016 at 3:41pm

Ligia Sandoval Spafford (Sandoval), 48, a Roseville resident, was sentenced to two years and three months in prison by U.S. District Judge Troy L. Nunley for operating a scheme that defrauded distressed homeowners, United States Attorney Benjamin B. Wagner announced.

According to authorities, from 2008 to 2010, Sandoval and her former husband Martin Wayne Flanders, 51, charged their victims advance fees for a variety of “services,” including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings, and a program to sell homes to “investors” with a rent-to-own option.

Ligia Sandoval paid the full amount of $115,065.00 in restitution to the victims. Flanders was sentenced last years to six years and five months in prison.

Read the original article in the Imperial Valley News.

Five California Residents Plead Guilty To Defrauding Homeowners in Nationwide Home Loan Modification Scam

March 31st, 2016 at 3:58pm

The following is a Press Release from SIGTARP:

Defendants Used US Treasury Seals and Fake TARP Information to Deceive

WASHINGTON DC — Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program, and Dana Boente, U.S. Attorney for the Eastern District of Virginia announced today that five California men have pleaded guilty for their roles in a nationwide home loan modification scam that defrauded over 400 homeowners out of over $3.8 million.

Roscoe Umali, 38; Jefferson Maniscan, 34; Raymund Dacanay, 47; Isaac Perez, 33; and Joshua Johnson, 36, all resided in the greater Los Angeles area.

“Roscoe Ortega Umali, ringleader of a nationwide mortgage scam ring, and four of his co-conspirators pled guilty to swindling hundreds of desperate homeowners and will now face federal prison time and pay at least $1.2 million in restitution and forfeitures to their victims,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “Umali and his cohorts made false claims of operating a non-profit company, brazenly used the U.S. Treasury seal on fabricated documents, and invented fictitious HAMP benefits. Victim-homeowners paid thousands of dollars in reinstatement fees and trial mortgage payments that never went to their respective lenders; instead Umali and his co-conspirators pocketed over $3.8 million. The U.S. Government’s Home Affordable Mortgage Program (HAMP) is designed to aid struggling homeowners, and like other federal government housing programs, the HAMP application and assistance is free. SIGTARP remains committed to safeguarding victims from TARP-related crimes.”

According to statements of facts filed with their plea agreements, from at least October 2012 through September 2014, the defendants and their co-conspirators targeted struggling homeowners and made a series of misrepresentations to induce those homeowners to make payments of thousands of dollars in exchange for supposed home loan modification assistance. Operating under the names of fictional companies like “Equity Restoration Group,” the defendants falsely held themselves out as a non-profit organization or as affiliated with a real government program, the “Home Affordable Modification Program” (HAMP), designed to help homeowners at risk of foreclosure. Through mass mailings, phone calls, faxes, and emails with their victims, the defendants convinced homeowners to send them “reinstatement fees” and to make several monthly “trial mortgage payments” to the conspiracy, rather than to the homeowners’ lenders. The defendants then did nothing to help modify any mortgages.

Instead, they used the victims’ payments for their own personal benefit and to further the fraud scheme.

This scam victimized over 400 individuals and families nationwide, resulting in a total loss of over $3.8 million. It also resulted in many victims losing their homes, despite the victims’ efforts to modify their mortgages and continue to make payments on their loans.

The defendants were indicted on Oct. 22, 2015, and each faces a maximum penalty of 20 years in prison.

Umali, Maniscan, and Dacanay will be sentenced on June 23, while Perez and Johnson will be sentenced on July 7. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Samantha P. Bateman and James P. Gillis are prosecuting the case.

A copy of this press release may be found on the SIGTARP website. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15cr301.

About SIGTARP
The Office of the Special Inspector General for the Troubled Asset Relief Program was created as an independent law enforcement agency to investigate fraud, waste, and abuse related to the TARP bailout. To date, SIGTARP investigations have resulted in the recovery of over $5.17 billion to the Government and 146 defendants sentenced to prison.

To report a suspected crime related to TARP, call SIGTARP’s Crime Tip Hotline: 1-877-SIG-2009 (1-877-744-2009).

To receive alerts about reports, audits, media releases, and other SIGTARP news, sign up at www.SIGTARP.gov/pages/press.aspx. Follow SIGTARP on Twitter @SIGTARP.

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Media Inquiries: 202-927-8940
Twitter: @SIGTARP
Web: www.SIGTARP.gov

 

71-Year-Old Man Sentenced to Long Prison Term for Operating Mortgage Elimination Scheme

March 11th, 2016 at 11:22am

Lonnie Glenn Schmidt, 71, who was convicted of real estate fraud relating to foreclosure consulting, has been sentenced to more than 24 years in prison,  according to the the Sacramento County District Attorney’s Office. He was found guilty of 30 felony charges involving foreclosure consultant fraud, recording false documents, unauthorized use of personal identifying information, second-degree burglary, perjury, grand theft and attempted grand theft. Jurors also found that Schmidt was subject to out-on-bail, white-collar crime and property loss enhancements.

Prosecutors said that between 2009 and 2013, Schmidt promised homeowners in distress that he would eliminate their mortgages. The homeowners who signed up with Schmidt gave him control over their properties, which he then tried to use those properties as collateral for personal loans. He even attempted to sell them outright for his own profit, yet charged his victims rent to continue to remain in what they thought were their homes.

Read the original article published by the  Sacramento Count District Attorney’s Office.

© Copyright 2007-2016 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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