California Real Estate Fraud Report

You have just entered the #1 private-sector resource on the Internet for real estate fraud. In doing so, you have voluntarily left the dimension of the conventional real estate world and crossed over to the Dark Side, the realm where greed, dishonesty and evil are the order of the day. Sign up for a free subscription to this comprehensive news resource and receive weekly, timely news reports about real estate fraud, mortgage fraud, short sale fraud, REO fraud, title fraud, loan fraud, appraisal fraud, affinity fraud, loan modification scams, securities fraud and elder financial fraud.

Archive for the 'Loan Fraud' Category

San Diego Woman Pleads Guilty to Defrauding Two Lenders after Witch Creek Fire

February 3rd, 2017 at 10:48am

The out-building adjacent to the home Deborah and Douglas Tumlinson owned in Ramona was destroyed in the Witch Creek fire that occurred in San Diego County’s back-country in October 2007.

Unlike the other victims who filed claims against San Diego Gas & Electric, which acknowledged that the fire stemmed from sparks from some of its equipment during high winds, the Tumlinsons took a different approach.

Deborah Tumlinson convinced the Tumlinson’s family friend and trust attorney, Carter Johnston, to write a letter to New Jersey-based lender, U.S. Claims, advising the lender that they would be receiving a $2.49 million settlement from the wildfire and would be paid within 30 days. Johnston, who was disbarred for his false representations to U.S. Claims, also stated falsely that he had represented the Tumlinsons in the settlement. As a result, U.S. Claims and its president Darryl Levine made a loan to them for over $700,000 to buy a new house.

The Tumlinsons failed to repay the loan and failed to repay a second loan they received from Seaside Funding, a Carlsbad mortgage broker, for the new home they falsely claimed would be a rental property.

Deborah Tumlinson pleaded guilty in May 2016 to aiding and abetting in a wire fraud scheme and was sentenced by U.S. District Judge Janis Sammartino  to a year and a day in prison. The judge noted how her actions had caused great suffering to others, namely Darryl Levine, who was forced to sell his business in 2014.

Douglas Tumlinson, who actually signed many of the documents, entered into a deferred prosecution agreement with the U.S. Attorney’s Office, which dismissed the charges against him after his wife was sentenced.

Judge Sammartino ordered the couple to pay $1.8 million in restitution to U.S. Claims, although there is already a civil judgment against them, according to U.S. Claims attorney Pat Swan. Seaside Funding was made whole at the foreclosure auction.

Read the full article in the San Diego Tribune.

Read the press release of this case from the U.S. Attorney for the Southern District of California. The case was prosecuted by Assistant U.S. Attorney Christopher P. Tenorio.

Last Defendant in Central Valley Mortgage Fraud Case Pleads Guilty

January 27th, 2017 at 10:14am

Arthur Menefee, 56, a Stockton-based real estate agent, has pleaded guilty to wire fraud in a mortgage fraud scheme that involved at least 31 properties.

Menefee, who surrendered his real estate license to the California Bureau of Real Estate in 2013, was accused of recruiting friends and fellow church-goers to purchase properties. The lure was that Menefee took care of the mortgage payments or down-payments; the loan applications he prepared indicated the persons worked at a business that didn’t exist.

Five of Arthur Menefee‘s co-defendants have already pleaded guilty and have been sentenced as follows:

Jannice Riddick, 34, of Sacramento (two years and 11 months in prison);

Florence Francisco, 65, of Houston, Texas (one year in prison);

Adil Qayyum, 34, of Rosele, Illinois (three years of probation);

Elsie Pamela Fuller, 41, of Richmond (one year and nine months in prison); and,

Leona Yeargin, 49, of San Pablo (18 months in prison).

Two other defendants await sentencing after pleading guilty: Valeriy Vasilevitsky, and Ruth Willis

Read the original article in the Central Valley Business Times.

CoreLogic Report Details New “Reverse Occupancy Scam”

January 20th, 2017 at 11:01am

A report from CoreLogic warns lenders that people committing mortgage fraud have reversed their traditional approach to one of a common scam: that of claiming they intend to take occupancy of a property in order to obtain a lower interest rate with lower fees and lower down-payment.

Under the new “reverse occupancy scheme”, the prospective home buyers tell lenders they’ll be renting out the home, though their actual intention is to occupy the property as their own home.

Willa Wei, an analyst at CoreLogic, said the buyers  are able to claim their “expected” rental income in order to satisfy the debt to income requirement of their mortgage application. The scheme is most common in cities where home prices and rents have appreciated. Leading the way is New York City, which has the highest reverse occupancy risk, followed by Los Angeles, Chicago, Dallas and Houston.

CoreLogic has created a map of the cities that have the highest risk of reverse occupancy fraud. Click on this link to see the map.

Rocklin Man Pleads Guilty in Mortgage Fraud Involving 31 Properties

November 18th, 2016 at 10:01am

Aleksandr Kovalev, 53, has pleaded guilty in federal court to wire fraud involving financial institutions.

Kovalev, a developer was in the Sacramento, Fairfield and Stockton areas, had been accused of making incentive payments to home buyers through “down payment assistance.” This was done outside of escrow and was not disclosed to the lenders, who were not aware that the effect was to substantially reduce the actual sales price.

Already, five of Aleksandr Kovalev’s co-defendants have pleaded guilty and have been sentenced. They are Jannice Riddick, 34, of Sacramento, two years and 11 months in prison; Florence Francisco, 65, of Houston, one year in prison; Adil Qayyum, 34, of Rosele Ill., three years of probation; Elsie Pamela Fuller, 41, of Richmond, one year and nine months in prison; and Leona Yeargin, 49, of San Pablo, 18 months in prison.

Valeriy Vasilevitsky and Ruth Willis have also pleaded guilty and await sentencing.

The case resulted from an investigation by the FBI and the Internal Revenue Service.

Read the original article in the Sacramento Bee.

Loan Officers Sentenced to Prison for Mortgage Fraud Involving Los Angeles African-American Churches

November 11th, 2016 at 11:35am

Two men who operated a mortgage fraud scheme that targeted mostly African-American churches in the Los Angeles area have been sentenced to federal prison and fined.

Paul Ryan, a former mortgage loan officer with Broadway Federal Bank, and mortgage broker Chester Peggese received sentences of 18 months and one year and one day, respectively. Paul Ryan was ordered to pay $353,925 in restitution to Broadway Federal Bank and Chester Peggese was ordered to pay the bank $4.2 million. Ryan had pleaded guilty to one count of receiving bribes and rewards as a bank employee two years ago.

Peggese acted as a “consultant,” targeting Los Angeles churches to either acquire new property or to refinance their mortgages. At the time Broadway Federal Bank was paying rebates to brokers who brought them loan business; Ryan had been accused of demanding that all or part of the rebate money be paid to him in exchange for processing and approving the bank loans. The scheme ran from 2007 until March 2010.

The case was the result of a multi-agency investigation of the following federal agencies: Federal Bureau of Investigation (FBI), Internal Revenue Service’s Criminal Investigation Division, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and Federal Deposit Insurance Corporation’s Office of Inspector General.

Read the original article in The Scanner.

 

California man gets prison in Las Vegas mortgage fraud scam

October 28th, 2016 at 6:14am

Franklin Marquez, 52, has been sentenced to 4 to 12 years in prison for his involvement in a mortgage fraud scheme. He was convicted on one count of pattern of mortgage lending fraud, a category “B” felony.

Marquez and his co-defendants – Maria Lorena Anzu, Jose Ben Rodriguez and Gilberto Navidad , were alleged to have operated a criminal enterprise in Las Vegas called Majestic Group, LLC. Their pitch to distressed homeowners was that they could sell their homes to Majestic Group at market value and then the company would sell their homes back to them at lower, more affordable prices. The victims were charged upfront fees along with monthly payments.

Read the original article in News3LV.

October 13th, 2016 at 9:32am

Nancy Russell Kempis, 64, of Santa Clara, has been sentenced for more than six-months in jail for scamming a family out of their home and defrauding four banks.

The former real estate agent  convinced the family to sell her their home at a “dramatically reduced price” in order to avoid foreclosure. She rented them the home and promised to return it. Instead, she secured a number of fraudulent mortgages, sucking all the equity out of the house and defaulting between 2006 and 2009. The home was then lost to foreclosure and the family evicted.

Kempis’ scam cost lenders $750,000.

Kempis eventually fled to New York, went into hiding under the false name Morpheus Daw Pud Ko and helped run a women’s ministry.

“Ms. Kempis scammed hundreds of thousands of dollars and drove a family into homelessness,” Santa Clara County Deputy District Attorney Charles Huang said in a statement.

Read the original article in KRON4.com

Woodland Hills Man Charged in Mortgage Fraud, Identity Theft Case

October 13th, 2016 at 9:20am

According to an article in the Daily News, seven people have been found guilty of running a large-scale international identity theft scheme that laundered more than $14 million in fraudulently obtained tax refunds by using bogus Republic of Armenia passports.

Forfeiture notices have been filed by both the Attorney’s Office and U.S. Special agents with the IRS Criminal Investigation against properties in  Woodland Hills and Van Nuys that were allegedly purchased with illegally obtained money, according to Thom Mrozek of the U.S. Attorney’s Office for the Central District of California.

Woodland Hills resident Aramais Airapetian, 24, was indicted by a federal grand jury in Santa Ana last month as part of the same investigation with using fraudulent documents, including fake pay stubs and altered bank statements, in order to obtain a mortgage from loanDepot.com

“Stolen identity refund fraud schemes have become a significant, nationwide problem that victimize the United States government, individuals who are identity theft victims and all taxpayers who end up paying for these fraudulent schemes,” said U.S. Attorney Eileen Decker.

 

CoreLogic: Mortgage Fraud Risk Increased 3.9% in 2nd Quarter of 2016

September 30th, 2016 at 7:33am

The risk of fraud in applications for mortgages increased in the second quarter – and the trend will likely continue as credit loosens and purchases increase, CoreLogic says in its latest Mortgage Fraud Risk report.

Read the full article on MortgageOrb.

Roseville Woman Sentenced to 14.5 Years in Prison for Mortgage Fraud and Identity Theft

September 21st, 2016 at 8:20am

The following is a press release from the United States Attorney’s Office for the Eastern District of California:

SACRAMENTO, Calif. — U.S. District Judge John A. Mendez sentenced Rachel Siders, 41, of Roseville, to 14 and a half years in prison for her involvement in mortgage fraud schemes that cost financial institutions over $17 million, Acting U.S. Attorney Phillip A. Talbert announced.

Federal juries returned verdicts in two trials, in March 2015 and December 2015 finding her guilty of multiple counts of bank fraud, wire fraud, mail fraud, making a false loan application, and committing aggravated identity theft.

According to evidence presented at the first trial, in 2008 Siders and co-defendant Theo Adams, 50, of Roseville, applied for a home equity line of credit using his relative’s name on an underwater Roseville property owned by Adams. They submitted false tax returns in the relative’s name with significantly inflated income along with mortgage application documents with forged signatures. Siders, a notary public, falsely notarized the loan application documents, which were sent to Washington Mutual Bank. The bank relied upon the false documents to provide a $250,000 line of credit. Siders received $170,000 of the proceeds. After making minimal payments, the defendants defaulted on the loan.

According to evidence presented at the second trial, from mid-2006 through early 2008, Siders and Vera Kuzmenko, 46, of Loomis, and other defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. They secured more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. Records introduced at trial showed that Vera Kuzmenko received millions of dollars, and that Rachel Siders received hundreds of thousands of dollars.

Vera Kuzmenko, was a licensed real estate agent for part of the scheme, and Rachel Siders ran the Rocklin office of the escrow company used on the majority of the transactions. She helped funnel millions of dollars to her co-defendants, which was not disclosed to the lenders.

“The sentence today reflects the seriousness of Siders’ crimes, which included participation in two separate mortgage fraud schemes. Over the course of two years, Siders oversaw and participated in numerous fraudulent loans and diverted money into shell accounts for her own benefit. She abused her position as an escrow officer and as a notary public to make this criminal enterprise succeed,” said Acting U.S. Attorney Talbert. “The sentence imposed is a significant reminder that those who engage in such conduct will be held accountable.”

“Today’s sentence sends a clear message; anyone profits from fraudulent mortgage transactions—whether by creating the scheme or facilitating it—will not escape justice,” said Supervisory Special Agent Dan Bryant at the FBI Sacramento field office. “The FBI aggressively pursues those involved in such large-scale, complex financial fraud matters to seek justice for the victims and protect the regional economy.”

“Rachel Siders was driven by greed in her participation in this mortgage fraud which targeted the Sacramento area,” said Michael T. Batdorf, Special Agent in Charge, IRS‑Criminal Investigation. “Today’s sentencing is a reminder how serious our courts consider this criminal activity and our commitment in providing financial expertise to our federal partners in these types of crimes.”

This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Lee S. Bickley, Michael D. Anderson, and Matthew D. Segal prosecuted the case.

On March 15, 2016, Judge Mendez sentenced Vera Kuzmenko to 14 years in prison. She was found guilty of multiple counts of mail and wire fraud, money laundering and witness tampering. On April 19, 2016, Theo Adams, 50, of Roseville, was sentenced to two years in prison. Previously, Judge Mendez sentenced co-defendants Peter Kuzmenko, 38, of West Sacramento, to 19 years in prison; Aaron New, 42, of Sacramento, to 11 years and three months in prison; Nadia Kuzmenko, 37, formerly of Loomis, to eight years in prison; and Edward Shevtsov, 52, of North Highlands, to eight years in prison. They were found guilty on February 13, 2015, after a 21-day trial, of multiple counts of mail and wire fraud associated with the mortgage fraud scheme. In addition, Peter Kuzmenko, Edward Shevtsov, and Aaron New were found guilty of money laundering associated with the scheme, and Nadia Kuzmenko was found guilty of witness tampering.

 

© Copyright 2007-2017 Monique Bryher

Legal Disclaimer.

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.

ALL RIGHTS RESERVED. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the author, except for the inclusion of BRIEF QUOTATIONS in a review.

BLOG POWERED BY SHARP BIZ IMAGE

Copy Protected by Chetan's WP-Copyprotect.