California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

3 Men Sent to Prison in Santa Maria Mortgage Fraud Scheme

December 21st, 2012 at 11:00am

According to a press release from the FBI, three men who thought they could get away with mortgage fraud didn’t and are now on their way to prison, thanks to the Santa Maria Resident Agency of the Federal Bureau of Investigation.

Brian Armet, 36, who owned and operated Custom House Home Loans (CHHL), a Santa Maria real estate mortgage company, pleaded guilty in July 2001 to conspiracy to defraud lenders and was sentenced to one year and one day in prison.

Rigoberto Hernandez, 37, and Julio Tamayo, 42, both from Santa Maria pleaded guilty to mortgage fraud charges and were sentenced to eight months and six months in prison respectively.

The three men must pay $2.4 million in restitution to the lenders they defrauded, per United States District Judge John F. Walter, who also sentenced them. The lending institutions were Homecoming Financial, Freddie Mac, Bank of America, and Carrington Mortgage Company.

FBI Arrests Two Men for Accepting Bribes on Fraudulent Loan Applications

December 17th, 2012 at 10:31am
Swift work by FBI agents in Southern California has resulted in the arrests of Tony Phan of Little Saigon and Troy Chattariyangkul of Los Angeles County for accepting bribes on falsified loan applications (loan fraud) while they were employed at Homecomings Financial in 2007-2008.

Phan, 35, works as a senior underwriter at Stearns Lending, Inc. in Santa Ana. Chattariyangkul, 34, is a USC graduate who worked first at Homecomings Financial, where Phan once worked. Another alleged co-conspirator, Chang Park, was a co-worker of Phan and Chattariyangkul, where the latter two are allged to have taken bribes to overlook fraudulent loan applicaitons.
According to court filings, Park eventually joined George Zevada, who owned and operated Silverline Mortgage Pasadena, where they are alleged to have targeted the Seeno Homes and Discovery Homes in Northern California.
Park was arrested last August and explained how the scheme worked to the FBI agent, including providing supporting documentation. Among other information he provided was that George Zevada allegedly used a CPA named Miguel Arenas Sr. and his Miro Accounting firm to forge pay stubs of prospective buyers.
All four men appear to have ignored the common-sense rule to not conduct allegedly illegal business via email, which helped the FBI build its case against them and spur the arrests.
Read the original article in the OC Weekly.

Wisconsin Man Indicted for Mortgage Fraud, Short Sale Fraud

December 17th, 2012 at 9:41am

If anybody is wondering why the California Real Estate Fraud Report is publishing arrests and indictments in other states that involve short sale fraud, it is because I believe that in California, where short sale fraud is rampant, prosecutors are for the most part too timid to jump into this fray. The result is that the crime of short sale fraud is even more pervasive, thanks to prosecutorial timidity reluctance. I cannot leave out the resistance by bankers to report this crime for prosecution, which is a large part of the problem. This only emboldens the commission of this crime that threatens neighbors’ equity, the property tax base, the IRS and our economy-at-large.

Randez Long, a Milwaukee, Wisconsin man, has been indicted for his role in an alleged mortgage fraudshort sale fraud scheme, which included his mother and sister.

From 2005 until April 2008, Long is alleged to have used his multiple businesses to con banks and other lenders into approving loans that contained false, fraudulent information from the prospective borrowers (loan fraud, mortgage fraud). Long’s businesses included LM Management, LLC; RL & DL Properties, LLC; RA & BB Properties, LLC; SC & Long Properties, LLC; R & B Mortgage, LLC; Long and Reed Property Management, LLC; and Long Management, LLC. See a copy of the indictment. Two of the named banks were Countrywide Bank and Southport Bank .

The purchasers are alleged to have made few payments, pushing the properties very quickly into foreclosure. Randez Long then arranged with the lenders to do short sales but instead sold the properties to new buyers than the approved short sale listing prices by the lenders. In the meantime, he managed to receive new loans from different lenders, again using false documents, and skimmed the profits, earning a tidy $1 million for himself.

The prosecuting agency is the U.S. Attorney’s Office for the Eastern District of Wisconsin, headed by James. L. Santelle.

Here are the properties alleged to be part of his scam;

3132 North 25th Street, Milwaukee, Wisconsin;

3442 North 12th Street, Milwaukee, Wisconsin;

2310 West Keefe Avenue, Milwaukee, Wisconsin.

Read the original article in the Mortgage Fraud Blog.

San Francisco Man Sentenced to 12 Years for Mortgage Fraud

December 17th, 2012 at 9:16am

Sergio Gutierrez, a 49-year-old San Francisco businessman, has been setenced by U.S. District Judge Jeffrey White to 12 years in federal prison for a mortgage fraud scam that targeted Spanish-speaking borrowers (affinity fraud, ethnic fraud).

Gutierrez sought our Latinos in 2008 and 2009 and promised them that in exchange for a fee he could write-up documents that would prove their mortgages were invalid and that they did not have to pay off their loans. Predictably, most of the persons who signed up for Gutierrez’ service lost their homes. Apparently, none of these people was able to reason that if their mortgages were invalid, so was their right to stay in a home that they couldn’t possibly own. Dumb meets crooked.

 U.S. District Judge Jeffrey White sentenced Gutierrez to a longer term than that requested by prosecutors and ordered him to pay restitution to his “victims.”

 Read the original article in the San Francisco Chronicle / SFGate.

So-Called Mastermind Testifies in Hendrix Montecastro Mortgage Fraud Trial

December 6th, 2012 at 9:16pm

Prosecutors in the $142 million Ponzi scheme trial of Hendrix Montecastro and his mother, Helen Pedrino examined their first witness, James B. Duncan.

Duncan, the apparent ringleader of the mortgage fraud and securities fraud scheme that was operated in Riverside County, explained how the co-conspirators met each other and devised ways to profit out of the hot real estate market of the early- to mid-2000s. Wearing an orange, prison-issued jumpsuit, Duncan testified that he was introduced to Hendrix Montecastro by Anthony Contreras and that the three decided to form a three-way partnership to buy and profit from real estate.

According to Duncan, at first Montecastro, his former wife, Duncan and his wife and Contreras bought properties. They realized that with property prices skyrocketing during the early 2000s that they could easily refinance the homes after one year and use the excess to purchase more properties.

Once the market downturn began, they then made purchases by getting properties over-appraised (appraisal fraud) with the cooperation of the sellers and keeping the excess. They also brought in Helen Pedrino, said Duncan, to bring in investors in order to fund their Ponzi scheme because she had a wide circle of trusted friends.

Hendrix Montecastro and Helen Pedrino are facing 317 charges and prosecutors claim they defrauded 28 persons or couples out of almost $30 million.

The case is being heard in front of Riverside County Superior Judge Jeffrey Prevost and is being prosecuted by San Bernardino County Chief Deputy Prosecutor Vicki Hightower.

Read the original article in the Press Enterprise.

San Diego Loan Officer Gets Prison for Mortgage Fraud

December 6th, 2012 at 6:21pm

Simon Saeid Koli, a former loan officer in San Diego, is going to spend 2 1/2 years in federal prison. In July 2012, Koli, 41, to conspiring to commit mail fraud, wire fraud and money laundering according to the U.S. Attorney’s Office said.

Koli’s co-defendant, Kian Ashkanizadeh, also pleaded guilty in a mortgage fraud scheme that authorities say netted the men $1 million.

In a brazen scheme that was bound to fail, Koli and Ashkanizadeh, who worked at Southern California Finance, used “friends and family” to act as straw buyers so that the men could purchase four homes in the high-end Northern San Diego community of Carlsbad. They falsified job information, income and assets (loan fraud) in order to obtain million dollar mortgages on each homes, somehow gave themselves $200,000 consulting fees for each and manufactured construction fees for work that (drum roll) was never performed.

Simon Koli will face a federal judge on January 25, 2013 for a restitution hearing and his partner-in-crime Kian Ashkanizadeh will appear 3 days later to find out his sentence.

Read the original article in

Interthinx Releases 2012 3rd Quarter Report on Mortgage Fraud Trends

November 30th, 2012 at 9:47am

Interthinx, a provider of risk-management data for the mortgage industry, has released it Mortgage Fraud Risk Report for data collected during the 3rd quarter of 2012.

Of note is that Florida has now surpassed Nevada as the riskiest state in the country in which to sell mortgages.

California is ranked #5; however, it represents “six of 10 riskiest MSAs” (Metropolitan Statistical Areas, a U.S. Census Bureau designation). Noteworthy to lending institutions, California has five of the 10 riskiest MSAs for Property Valuation Fraud Risk (appraisal fraud), and eight of the 10 riskiest MSAs for Employment/Income Fraud Risk (loan fraud). This, of course, is not good news for honest property owners in the neighborhoods in which these frauds are occurring.

The report also sites Merced, in central California, as “the riskiest metro in the nation.”


Orange County Woman Pleads Guilty in Mortgage Fraud after Withdrawing Earlier Guilty Plea

November 30th, 2012 at 9:29am

Having trouble making up your mind? So did Safieh Fard.

The former former owner of Belvedere Fine Jewelry on Via Oporto in Newport Beach  did something her sister and two of her sons did in 2011: she pleaded guilty in Santa Ana federal court to charges related to her family-operated mortgage fraud business. The 50-year old had previously withdrawn a guilty plea before sentencing by U.S. District Court Judge Cormac Carney.

In the end, Safieh Fard was convicted by a federal grand jury of one count of conspiracy to defraud the Internal Revenue Service (IRS) and one count of conspiracy to launder the proceeds of bank fraud obtained after submitting fraudulent mortgage applications.

According to a collaborative investigation by the U.S. Justice Department, IRS Criminal Investigation Division (IRS-CID) and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations of Orange County, Fard, her sister Sedigheh Bahramian and Fard’s sons Mohsen Kikalaye andAhmad Kikalaye submitted fraudulent loan applications to banks in order to receive money to purchase beach-area properties which they would buy and flip. What was so brazen was that Safieh Fard claimed to earn over $40,000 per month while at the same time claiming no taxable income to the IRS.

Is anyone questioning why did the lenders failed to perform due diligence for eight years on somebody claiming to earn $40,000 a month?

The quartet further failed to report capital gains on the over $3.7 million they earned from selling the properties. Ahmad Kikalaye was the ultimate recipient of the funds and according to prosecutors made withdrawals under the federal $10,000 reporting requirement in order to escape scrutiny.

Sentencing for Safieh Fard is set for April 8, 2013 before Judge Carney.

Read the original article in OC Weekly.

US Attorney’s Office Gets Guilty Plea from Kaveh Vahedi in Mortgage Fraud Case

November 28th, 2012 at 11:37pm

The U.S. Attorney’s Office for the Central District of California has scored a victory in the fight against mortgage fraud and real estate investment fraud by obtaining guilty pleas from defendant Kaveh Vahedi, a former licensed mortgage broker and self-described real estate investor.

On November 26, the United States Attorney filed allegations, that from 1999 through 2008, Vahedi, 51, submitted more than 250 fraudulent loan applications to Countrywide Bank through his mortgage brokering firm KGV Investments, Inc., based in Glendale in Los Angeles County. Prosecutors alleged that Vahedia conspired to submit these applications to “Co-Schemer 1”, an employee at Countrywide, and paid cash for the services of “Co-Schemer 2”, a bookkeeper, to create fraudulent employement and other financial documents. Many of the loan applicants were instructed to sign blank loan applications, which were filled out by Kaveh Vahedi before being presented to “Co-Schemer 1.”

Among his victims was his own father: Vahedi posed as his father, without his father’s knowledge or permission, in order to take out a $493,000 home equity line of credit (HELOC) against the latter’s home. That’s in addition to the more than $200,000 he stole from his parents’ bank account.

The second count of the allegations charges that Kaveh Vahedi solicited people to invest their money with KGV Investments from 2005 through 2009 in what was found to be a Ponzi scheme. He told the investors their money would be used to purchase development projects in San Diego, China and Dubai, all of which was false. He gave them promissory notes guaranteeing a 50% rate of return within nine months. In fact, he paid his initial investors with money from earlier investors  and diverted much of the funds for his personal use, which included paying his mortgage, his leases on luxury cars, his son’s private school tuition. The 31 investor victims lost a total of approximately $8 million as a result.

Faced with the evidence presented in the United States Attorney’s allegation, Kaveh Vahedi signed a plea agreement on November 26 (the same date), agreeing to plead guilty to one count of bank fraud, one count of wire fraud and one count of conspiracy. He could face up to 55 years in prison and fines totaling $1.5 million when he is sentenced, although the U.S. Attorney, in exchange for the guilty pleas, is expected to seek imprisonment of 121 months, full restitution to the victims and other parties yet to be identified. United States District Judge Dean D. Pregerson will hear the guilty pleas.

Several of the investor-victims have sued Kaveh Vahedi in state court and won civil judgments against him.

No word on the fates of Co-Schemers 1 and 2, who have not been identified, or the persons who applied for loans knowing they were unqualified.

You can read a summary of the plea agreement on the U.S. Attorney’s Office Central District California website. The FBI and the Secret Service were the investigating agencies.

Owner of Paramount Group Found Guilty in Brazen Mortgage Fraud

November 23rd, 2012 at 9:11am

Brandon Hanly, 32, of Redding, who was indicted as part of a conspiracy to defraud banks (mortgage fraud, loan fraud) in order to skim equity using inflated appraisals (appraisal fraud) has been found guilty by a federal jury. The jury convicted Hanly, a formerly licensed real estate broker and principal of Paramount Group, of wire fraud, mail fraud and money laundering.

According to the US Attorney’s Office, which prosecuted the case, Hanly conspired with Douglas Heald, 32, and Jerald Maggi, during a 7-month period in 2005-2006 to defraud lending institutions. The indictment against the three accused them of altering appraisals and title documents so that they could receive $5 million in mortgage loans and an additional $1.5 million in cash out.

Douglas Heald and Jerald Maggi pleaded guilty before going to trial but Brandon Hanly took his chances and offered a defense of being a victim. Prosecutors proved to the jury that, however, that Hanly received $300,000 in proceeds, not much money if he receives the maximum sentence of 30 years in federal prison and $500,000 in penalties when he is sentenced in 2013.

The fourth participant was a Redding-based mortgage broker named Joshua Gervolstad, who in 2010 was sentenced to three years in prison and order to provide restitution of $1.4 million for controlling a shell company called TPG Investments Inc., which he used to distribute the ill-gotten proceeds.

Read the original article in the Redding publication Record Searchlight.

© Copyright 2007-2015 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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