California Real Estate Fraud Report

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Archive for the 'Foreclosure fraud' Category

Garden Grove Man Charged with Operating Fraudulent Loan Modification Company

August 15th, 2014 at 10:56am

Duy Khac Nguyen, 34, Garden Grove, has been charged with 37 felony counts of grand theft, five felony counts of theft from elder, including a sentencing enhancement for property loss over $65,000. The charges involve 42 alleged victims and $92,000 of their money in a loan modification fraud case.

The scheme Nguyen is alleged to have run operated only between February and July 2010. His loan modification company was called HAMP Resources, which he is accused of claiming falsely of having an association with the federal government’s HAMP program. Instead of offering loan modification services, prosecutors allege that Nguyen deposited the money from homeowners into his personal bank account and then moving out of the area.

He was apprehended  by the Riverside County Sheriff’s Department with assistance from the Garden Grove Police Department after United States Postal Inspection Service (USPIS) received complaints. USPIS along with the Special Inspector General for the Troubled Asset Relief Program (SIG-TARP) conducted the investigation.

“Nguyen is charged on 42 counts with swindling struggling homeowners, including the elderly, by falsely claiming that his company ‘HAMP Resources’ was part of the federal government,” said Christy Romero, Special Inspector General for SIGTARP. “He allegedly sold a money-backed guaranteed service to lower homeowners’ mortgage payments and interest rates under TARP’s housing program known as HAMP. He is alleged to have taken the money from his victims, without providing any service, then disconnecting his phone and shutting down his mailbox, website, and bank account while some of his victims lost their homes to foreclosure. SIGTARP and our law enforcement partners will aggressively investigate allegations of crime related to TARP.”

Loan modification scams are proliferating at a rapid pace,” said B. Bernard Ferguson, Inspector in Charge of the USPIS – Los Angeles Division. “The U.S. Postal Inspection Service is continuing to investigate and will pursue such criminal activity when the nation’s mail system is used for illegal or dangerous use.”

Senior Deputy District Attorney Pete Pierce of the Orange County District Attorney’s Major Fraud Unit is prosecuting this case.

Read the Press Release for this case.

Guilty Pleas in Santa Barbara County Loan Modification Prosecution

August 15th, 2014 at 10:39am

Santa Barbara County District Attorney Joyce E. Dudley announced guilty pleas in a case where the defendants promised to obtain loan modifications for struggling homeowners.

Ismael Cancinos, age 56, of Palmdale, CA pleaded guilty to 34 felony counts that included charges of first degree residential burglary, grand theft and fraudulent practices of a foreclosure consultant. Mercedes Alvarez, age 48 of Palmdale, CA, pleaded guilty to 7 felony charges that included fraudulent practices of a foreclosure consultant. She also admitted the special allegation of committing an aggravated white collar crime. They were ordered to pay full restitution to their victims and Mercedes Alvarez has been ordered to surrender her real estate license.

Read the original article in Santa Barbar Edhat.

Three People Charged in SoCal Short Sale Fraud Case

August 15th, 2014 at 10:28am

A common short sale scheme with a twist may land three people in a lot of trouble.

Prosecutors said Nelly Luz Rubiano, 57, of Ojai, and Orange County residents Sergio Sanchez Santibanez, 32, and Alejandra Rodriguez, 31, allegedly operated a foreclosure rescue program that may have incorporated short sale fraud into the business model.

The three worked for Foreclosure Legal Services in the city of Orange and were arrested on allegations they charged homeowners in distress upfront fees, which are illegal in California. They were alleged to have promised the homeowners to save their homes by offering to buy the homes in a short sale and then re-selling the properties to those homeowners at a discounted market value, courtesy of the lenders.

Prosecutors said that from 2011 to 2012, Rubiano, Santibanez and Rodriguez lured struggling homeowners in Ventura County with a promise to save their homes that were undergoing foreclosure. The three allegedly promised to buy the distressed properties in a short sale and said they would then sell the properties back to the homeowners at a reduced market value, prosecutors said.

Read the original article in the Ventura County Star.

“Keeping My Property” Owner Charged with Defrauding Contra Costa Homeowners

June 20th, 2014 at 8:37am

Marc Stanley Cooper, 60, has been charged by the Contra Costa District Attorney’s Office with 21 counts of elder financial abuse, foreclosure fraud and grand theft.

Prosecutors said Cooper solicited homeowners in distress for money to negotiate a reduction in their mortgages but did not do so, instead defrauding the 15 homeowners.

“He is an experienced con man who promised individuals who were suffering with overly large mortgages that he could reduce their mortgages as well as modify their loans,” said Deputy District Attorney Ken McCormick, of the District Attorney’s real estate fraud unit. “In reality, he was embezzling and defrauding them.”

Read the original article in the Mercury News.

Wells Fargo “Smoking Gun” Foreclosure Manual Going on Trial

May 9th, 2014 at 7:38am

A plaintiff suing Wells Fargo has achieved an important pre-trial ruling that could affect other homeowners seeking to sue the banking behemoth for how it treats its borrowers in foreclosure.

U.S. Judge Allan Gropper of New York ruled that Wells Fargo’s Home Mortgage Foreclosure Attorney Procedure Manual will be allowed into court after attorney Linda Tirelli argued the 150-page manual was relevant to the bankruptcy case of Mota v. Wells Fargo because the bank was using the manual to “falsely create evidence of ownership” in the note. Just as interesting, the manual allegedly instructs the bank’s attorneys on how to proceed with a foreclosure, even when the bank is missing critical documents.

“(Wells Fargo) can no longer deny having procedures for endorsing notes or provide witnesses who lack knowledge about the procedures, which is what they have consistently done in the past,” Tirelli told HousingWire on Monday. “The procedure manual is raising a lot of eyebrows and rightfully so. I attended the National Association of Consumer Bankruptcy Attorneys convention April 11-13 … during which I spoke with many consumer attorneys from across the country who have run into the same problem of witnesses being provided by Wells Fargo who simply lack knowledge of the process or deny there is a process for obtaining endorsements on notes and creating assignments or affidavits of lost note.”

In a different bankruptcy case - Cynthia Franklin v. Wells Fargo - Tirelli has filed a motion to re-open discovery post-trial because she only discovered the foreclosure manual just after the trial.

Read the original article in HousingWire.

Three Men Convicted of Operating Fraudulent Mortgage Rescue Service

December 5th, 2013 at 8:45pm

Three Southern California men have been found guilty of conspiracy to commit mail fraud by a federal jury. The case was tried by the office of U.S. Attorney Benjamin Wagner.

Charles Head, 36; Benjamin Budoff, 46; and Domonic McCarns, 39, were accused by prosecutors of operating a large-scale foreclosure rescue scam. Head was convicted of three additional charges of mail fraud.

Prosecutors presented evidence that Charles Head led the scam under the entities Head Financial Services and Creative Loans. The firms operated from Orange County between March 2005 and June 2006 and received more than $5.7 million from distressed homeowners by promising them they could save their homes.

Read the original article in the Central Valley Business Times to learn how the foreclosure rescue scam operated.

Two Men Sentenced to Federal Prison for National Mortgage Rescue Fraud Scheme

September 18th, 2013 at 4:46pm

Two men who operated a nationwide network of businesses that purported to help distressed homeowners but were simply mortgage rescue frauds have been sentenced to federal prison.

Mark S. Farhood, formerly of San Diego, California, and Jason S. Sant of Lecanto, Fla., were sentenced to 11 years and six years, respectively, in addition to terms of supervised released. Each man was also ordered by United States District Judge Anthony J. Trenga to forfeit approximately $2 million to the federal government.

Farhood and Sant co-owned and operated Home Advocate Trustees, which also went by the names Walk Away Today, First Equity Trustees, Home Security Consultants, Sell Fast USA, Short Sale Buyer, USA Sell House Fast, and USA Rental Housing.

The remainder of this post is taken from the press release by the U.S. Attorney for the Eastern District of Virginia’s website.

Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement today after sentencing by United States District Judge Anthony J. Trenga. Farhood and Sant each pleaded guilty to conspiracy charges on May 10, 2013.

“Farhood should spend the next 11 years in prison thinking about how he preyed on and cheated 389 distressed homeowners out of their homes by ‘buying’ their homes in fake sales for $10 per property and then renting out the homes for $4 million, which he used to fund construction on his $1 million home in Costa Rica,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Farhood and his co-conspirator Sant, who was sentenced to six years in prison, hid their identities, stole identities of people whose pictures they found on the Internet, and exploited TARP’s housing program by submitting phony applications to stall foreclosures while they rented out the properties. When caught by SIGTARP and our law enforcement partners, Farhood tried to hide the proceeds of his crime, including the Costa Rica house and bags of silver coins, and tried have computer evidence of his crime deleted. SIGTARP will bring to justice all those who commit crimes exploiting the TARP bailout.”

According to court records, Farhood and Sant co-owned Home Advocate Trustees, which also went by the names Walk Away Today, First Equity Trustees, Home Security Consultants, Sell Fast USA, Short Sale Buyer, USA Sell House Fast, and USA Rental Housing. They marketed the businesses nationwide as purchasers of distressed real estate and a means by which vulnerable homeowners could avoid foreclosure and the accompanying negative effects on their credit. The companies told homeowners they were in the business of negotiating with lenders to purchase mortgage notes at a discount and falsely claimed to have been in business for seventeen years, to have experienced a 90 percent success rate in purchasing such notes, and to be the nation’s largest volume buyer of short sale and over-leveraged real estate.

As Sant and Farhood admitted in connection with their pleas, the businesses were a fraud, no such negotiations with lenders ever took place, and the scheme was merely a way for them to take possession of hundreds of residential properties, including homes within the Eastern District of Virginia, at virtually no cost and then reap millions of dollars in profits by renting the homes to unsuspecting tenants.

Farhood and Sant further admitted that as part of the scheme, they submitted fraudulent loan modification applications to mortgage lenders under the Treasury Department’s Making Home Affordable Program in the name of homeowners, without the homeowners’ knowledge or consent. Farhood and Sant used the fraudulent applications to stall foreclosures on the properties under their control and for which no mortgage payments were being made and to maximize the time period during which they could collect rental income.

The homes purportedly sold to Home Advocate Trustees and its related entities ended in foreclosure, harming the participating homeowners and commonly resulting in eviction of the tenants.

This case was investigated by SIGTARP and the FBI’s Washington Field Office. Assistant United States Attorney Paul J. Nathanson prosecuted the case on behalf of the United States.

Illinois Attorney General Lisa Madigan Sues Safeguard Properties, Contractor to Banks

September 12th, 2013 at 9:16pm

An article published in the New York Times paints a disturbing picture of how the major banks may be using “property preservation” companies to bully homeowners in distress, damage their properties and even chase them out of their homes.

Lisa Madigan, the Illinois Attorney General, is the first AG to take on property management companies hired by JP Morgan Chase, Bank of America, Citibank and other lenders. On September 10, she sued Cleveland-based Safeguard Properties, charging that the firm “unlawfully dispossessed legal residents of their homes by breaking into occupied houses, locking the occupants out of their homes, removing the occupants’ personal property, and shutting off the utilities in the home, often in the face of clear evidence that the property remains legally occupied.”  In stating that her office had received over 400 complaints about Safeguard Properties, Madigan’s complaint said that “Safeguard has misrepresented to homeowners and tenants that they are no longer entitled to live in their homes, when, in fact, the occupants are entitled to remain in their homes.”

In one example cited by the New York Times, homeowner Barry Tatum arrived at his house last December, only to find that both his front and back doors had been literally torn from their hinges, leaving his home and personal property exposed to the freezing temperatures. Tatum’s lender was Bank of America and Safeguard Properties was the management firm hired to “preserve” his property. Safeguard eventually replaced Mr. Tatum’s doors.

Illinois is not the only state where complaints about Safeguard have been reported; legal aid firms in California, Nevada, Florida, Michigan, North Carolina, Pennsylvania and New York echo those filed with the Illinois Attorney General’s Office. Some homeowners have filed their own lawsuits against Safeguard, accusing the company of trying to forcibly drive them out of their homes by damaging their possessions, changing locks and shutting off electricity.

Attorneys for homeowners in foreclosure, such as Adam Taub, say there is a financial incentive for property management firms to declare properties vacant because they make more money.

The core of the $26 billion National Mortgage Settlement by the attorneys general for 49 states was that the banks employed outside law firms to “robosign” foreclosures against homeowners without vetting the documentation. Under the settlment, banks are now required to police their third-party vendors and subcontractors.

Citing the 400 complaints her office has received, AG Madigan responded that the banks have “failed to supervise these firms.”

Read another article about Safeguard’s alleged business practices in the Plain Dealer.

Ripoff Report contains 38 complaints against Safeguard Properties across numerous states.

OneWest Bank Coughs Out 7-Figure Settlement for Dual-Tracking in San Luis Obispo Foreclosure Lawsuit

September 12th, 2013 at 4:27pm

A San Luis Obispo County couple who sued OneWest Bank, IndyMac Mortgage Services, U.S. Bank and GSR Loan Mortgage Trust has received a million-dollar-plus settlement and title to two of their houses that were foreclosed.

The case brought by Greg Rigali and Irene Rigali of Shell Beach could embolden other homeowners who have lost their homes to foreclosure to sue banks for the common practice of “dual tracking.” Dual tracking occurs when banks pursue foreclosure against homeowners in default while at the same time giving those homeowners the false belief they are working with them.

At the time their two homes were foreclosed the Rigalis thought they were negotiating with OneWest Bank to obtain mortgage modifications.

Rik Tozzi, an Alabama attorney, arrived in San Luis Obispo last May for a hearing on a motion to grant summary judgment to OneWest Bank. Instead of walking away with a win for his client, he listened as San Luis Obispo Superior Court Judge Charles S. Crandall said that the Rigalis had shown enough evidence to substantiate their claims of fraud, wrongful foreclosure, unfair business practices, quiet title, and intentional infliction of emotional distress to allow their case to go before a jury trial.

OneWest, which quickly settled, had picked up the original loan modification negotiations begun by IndyMac before it collapsed and was acquired by Steve Mnuchin and his investors for a steal at $1.55 billion. IndyMac had invited the Rigalis to modify the mortgages on both homes, including suspending or reducing their payments. OneWest sent a letter that included the following solicitation:

“Because you are a valued customer, we want to help you stay in your home. Reduce your monthly payment of principal and interest and bring your loan current.”  And “we propose to permanently modify your mortgage, bring past-due payments current, and provide you with an affordable monthly payment.”

But while the Rigalis were making payments in accordance with a June 2009 agreement with OneWest Bank, another division in the bank was beginning foreclosure, hence the dual tracking.

In July 2009, OneWest Bank assigned the Rigali’s trust deed to U.S. Bank, which foreclosed on their beach house property two months later, in September. The Rigalis then sued.

Greg and Irene Rigali were represented by attorneys Maria L. Hutkin and Jude J. Basile.

Read the original article in CalCoastNews.

Riverside County Proactive in Fight against Foreclosure Fraud

August 29th, 2013 at 7:43pm

Riverside County officials are taking extra steps to ensure that homeowners in default do not become the victims of real estate fraud.

The offices of District Attorney Paul Zellerbach and Assessor-County Clerk-Recorder Larry Ward will send out advisory letters to homeowners who are receiving a Notice of Default (NOD). The letters will be a further notification that the NOD was recorded and to warn homeowners to watch out for loan modification scammers, especially those that demand payment in advance, a practice that was outlawed in 2009.

Read the full article in the Press Enterprise.

© Copyright 2007-2014 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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