November 21st, 2012 at 1:21pm
The San Luis Obispo County District Attorney’s Office announced that on November 6, Linda Ann Kennedy, who was president of 21st Century Financial Resources, Inc., pleaded no contest in a hard money loan fraud case.
Kennedy, 49, was originally charged with four felony counts and 10 special allegations related to fraudulent practices involving hard money loans and sale of securities. The Honorable Judge Barry T. LaBarbera accepted her plea, which has the effect in criminal cases as a guilty plea. The losses to her investors/victims occurred between 2006-2007 and totaled over $1.3 million.
Judge Barry LaBarbera will sentence Kennedy on December 3, which will likely result in a prison stretch for five years. In the meantime, her assets have been frozen.
Read the press release on this prosecution at the SLO D.A.’s website.
October 19th, 2012 at 11:09am
Edward G. Locker, 37, one of the defendants in the JSW Financial Inc. real estate fraud prosecution, was sentenced to 30 months in prison for his role in defrauding investors.
Co-defendants Richard F. Tipton, 62, was sentenced last month to 18 months in prison and James W. Ward, the principal defendant, got 5 years.
David Lin, 44, the only person charged who went to trial, was found guilty on 17 counts by a jury and sentenced to 28 months in prison.
Mountain View-based JSW Financial (formerly known as Jim Ward & Associates Inc. (JWA)) was a hard money lender that solicited money from people to purchase fractional interests in loans they made to borrowers to build residential homes. Investors were also given the “opportunity” to invest in the Blue Chip Realty Fund LLC (Blue Chip) and Shoreline Investment Fund LLC (Shoreline).
All the defendants had been charged with 18 counts alleging conspiracy to commit mail and wire fraud, mail fraud, and wire fraud, in violation of 18 U.S.C. §§ 1349, 1341, and 1343. For the three that had entered guilty please, they admitted that their representations to investors that JWA and JSW generated claiming that Blue Chip and Shoreline wrote and invested in loans that were secured by deeds of trust on real property were completely false.
Read the press release on the FBI.gov.
September 6th, 2012 at 9:54pm
Robert Rosenau, a Redding-area man who ran Rosenau Investments Inc., pleaded guilty in Sacramento federal court to one count of mail fraud.
Rosenau Investments Inc., was a hard money lender that made short-term loans for the purpose of rehabbing residential real estate. It pooled money from its investors using the properties as collateral and told the investors that it had a first-position lien on the properties. According to prosecutors, Rosenau Investments did not always have liens on the properties and in some cases was soliciting money from the investors on properties it had already foreclosed on due to the borrower failing to make loan obligations (hard money loan fraud). One of the loans was even for a property Robert Rosenau owned through another company and which was highly over-leveraged. None of these facts was disclosed to the investors (real estate investment fraud).
U.S. District Judge William B. Shubb will be sentencing Robert Rosenau in December.
Read the original article in the Sacramento Bee.
September 6th, 2012 at 9:42pm
In a novel and very creative form of real estate fraud, a woman out on bail for felony charges who was wearing an electronic monitoring anklet was arrested a second time on charges of elder theft, forgery of deed documents, recording false instruments and grand theft.
Mai Vu, 53, was arraigned today after a Campbell police investigator traced her following a report by an elderly couple that somebody had forged real estate documents (probably a grant deed) that transferred title out of their names (title fraud). In the meantime, investigators with a different agency – the Santa Clara County District Attorney’s Office - found an elderly Milpitas couple had also had their property transferred to Vu. She defrauded an investor out of $250,000 (loan fraud) when she used the Milpitas home as collateral in order to secure the loan, then transferred title back to the lawful owners (title fraud).
Mai Vu’s first run-in with the law occurred in August 2011, when she was charged with defrauding four victims and had her bail set at $10 million.
Investigators may be reached at 408-808-3787.
Read the original article in the Mercury News.
August 31st, 2012 at 10:55am
Linda Kennedy, 49, of Paso Robles woman, has been charged with four felonies in connection with an alleged real estate investment fraud that involved hard money loans in the amount of $1.3 million. She has pleaded not guilty.
Kennedy was arrested this past July. She was president of 21st Century Financial Resources Inc., which pooled investors’ monies into securites collateralized by real estate deeds. Her firm has been under investigation by state agencies since 2005, when an audit by the California Department of Real Estate found accounting discrepancies.
Linda Kennedy’s real estate broker’s license was revoked by the DRE in 2006.
Read the original article in the San Luis Obispo Tribune.
December 18th, 2011 at 11:59am
Mark Alan Helsing, an Orange County-based hard money lender, has been sentenced to 15 years in state prison and three years of probation. Helsing, 53, confessed earlier to ripping of $6.9 million from investors by operating a combined Ponzi scheme and real estate fraud scheme.
Helsing operated multiple companies: Sea View Investments, HLHS Financial Services, Inc., Foothill Realty, and Sea View Mortgage. He took investor money intended for use as hard money loans and embezzled most of the funds, using just enough to make interest payment to the investors, some of whom were his friends.
According to the OC Weekly, Helsing pleaded guilty to “55 felony counts of grand theft, seven felony counts of filing false recorded documents, six felony counts of elder financial exploitation, and sentencing enhancements for white collar crime over $500,000 and excessive taking over $1 million and $1.3 million.” He will also have to pay restitution to his victims.
October 6th, 2011 at 10:23am
A Tustin real estate broker who specialized in hard money lending has been convicted in by prosecutors in the Orange County District Attorney’s office of over four dozen counts of grand theft, filing false recorded documents and other felonies.
Mark Alan Helsing, 53, pleaded guilty to the above charges. Helsing operated several hard money businesses, which lend money for short terms at higher interest rates than the banks. Borrowers typically either need the funds for a “bridge loan” for construction or have bad credit. The victims were investors, whose money should have been used to pay off earlier investors instead of being used to make the loans, which indicates a Ponzi scheme, real estate investment fraud and hard money fraud.
The names of Helsing’s companies were Sea View Investments, HLHS Financial Services, Inc., Foothill Realty, and Sea View Mortgage.
Read the original article in the Los Angeles Times and OC Weekly.
August 26th, 2011 at 6:34am
James Hurst Miller, 63, president of defunct hard money lender Hurst Financial Inc., has been charged by the U.S. attorney in Los Angeles with federal fraud and money laundering.
The allegations are with respect to several projects Hurst and developer Kelly Gearhart proposed to build, into a large golf course. The 1,200 Central Coast people who put money into the project in what prosecutors claim was a $100 million real estate investment fraud. Specifically, Hurst is facing four counts of wire fraud, mail fraud, money laundering, making a false statement to a bank and assisting Kelly Gearhart in fraudulently obtaining funding for his construction project. Prosecutors allege that the investment money was diverted to pay for prior loans his business made (hard money loan fraud).
Miller used Cuesta Title, also no longer in business, to clear title on some of the projects by stating falsely that the loans had been repaid (title fraud). He would then take out subsequent loans using his investors’ money
The projects for which Miller solicited investors were in the Beacon Road and Vista Del Hombre real estate development projects in Paso Robles and the Salinas River real estate development project in Templeton.
Many of James Miller’s investors, including elderly investors (elder financial fraud) have lost their life’s savings and homes. One is a 68 year old Cambria woman who suffers from multiple sclerosis and now lives in an assisted care facility because she was unable to keep her home because of her investments with Miller.
Read the full article in the CalCoastNews.
July 15th, 2011 at 8:40am
Scott Stober, a Nevada County mortgage broker whose California real estate broker’s license was revoked by the DRE in 2010, is now a subject in two prosecutions involving hard money loans.
Stober procured investors Richard and Minta Cramer for Robert St. Germain’s Granite Hill Court project. A civil suit by the Cramers against St. Germain and Stober alleges that Stober knew that the project was underfunded and that contractors and subcontractors were not paid. In addition, the Nevada County District Attorney’s Office has refiled a previous charge of misappropriating funds against Robert St. Germain.
In a second hard money loan case, Scott Stober was the broker who found investors for Leo Wheeler, a contractor who has been charged in a federal fraud case in Lake County. Investors for Wheeler’s residential development project claim $1.5 million in losses.
No criminal charges have been filed against Scott Stober to date.
Read the original article in the Union of Grass Valley.
May 25th, 2010 at 6:00pm
Mary Elaine Perkins, owner of Carlton Financial Enterprises, Inc., has pleaded guilty to mail fraud after brazenly defrauding 90 investors out of $7 million in a real estate investment fraud scheme that was bound to be detected by authorities.
Perkins’ fraud was that she promised investors returns of 12% – 15% by using their money to make hard money loans to homeowners, using their properties as collateral instead of the homeowners’ credit scores. Instead, Perkins foreclosed on the borrowers’ homes in some cases and either sold their property to a company she owned or to members of her family. Apparently some of the early investors were repaid with monies she obtained from later investors, classic Ponzi scheme tactics.
Read the full article in the Los Angeles Times (LA Times).