July 12th, 2012 at 6:14am
A 20-something Hasidic Jew who played a central role in a dual mortgage fraud – short sale fraud conspiracy in New Haven, Connecticut, has pleaded guilty before U.S. District Court in Bridgeport to charges of mail fraud, wire fraud and bank fraud.
Menachem Joseph “Yossi” Levitin faces up to 30 years in jail and $20 million in fines for helping arrange to bilk lenders out of $10 million while leaving a trail of rundown New Haven properties. Charles Lesser, 30, a New Haven Realtor®, pleaded guilty to the same crimes a few days earlier.
According to prosecutors, Levitin’s scam had two parts:
In Part 1, he approached homeowners in distress and offered to buy their properties. He got appraisers to over-value properties (appraisal fraud), drew up sale documents, then facilitated the sale to a buyer at the fair-market value, pocketing the difference for himself and his co-conspirators.
When the properties went into default – in short positions – Yossi Levitin implemented Part 2: offering to buy the properties from the banks at discounted prices (short sale fraud). The banks were never aware that Levitin had orchestrated the original mortgage fraud and that he had been the cause of the foreclosures.
Prosecutors said that the crimes committed by Levitin, Lesser and others contributed to the urban decay that is plaguing New Haven.
Readers of the California Real Estate Fraud Report will recall that the first successful prosecution for short sale fraud also occurred in Connecticut, where Realtor® Anna McElaney and her co-conspirator Sergio Natero were both sentenced to prison for ripping off Regions Bank.
Read the original article in the New Haven Independent.
July 6th, 2012 at 10:59am
Developer Kelly Gearhart has been indicted by a criminal grand jury on federal fraud and money laundering charges in connection to monies he solicited from investors for real estate projects (real estate investment fraud).
The eight-page indictment charges that the 50-year old businessman, dubbed the “Citizen of the Year” in 2005 by the Atascadero Chamber of Commerce swindled millions from investors he duped by telling them the loans were secured by his own real estate investments. Instead, according to the indictment, he sold the same lots over and over to multiple buyers and did not own the land he claimed to own. The grand jury alleged that he used the funds he received to furnish a “lavish” lifestyle; some of which is bound to come out during the hearings for his $110 million bankruptcy.
Gearhart, who faces up to 300 years in prison if convicted of all the charges, also used pooled funds from bankrupt Hurst Financial Corp. Its former president James Hurst Miller has already pleaded guilty to four counts of fraud and money laundering charges in 2011.
Read the original article in the San Luis Obispo Tribune.
June 29th, 2012 at 8:58am
Los Gatos developer Muhammad Safadi, his nephew Scott Safadi and real estate broker Raquel Ramirez are in hot water: all three have been indicted by a federal grand jury for bank fraud, conspiracy and making false statements to lenders, ultimately defrauding them of $5.5 million.
The charges are the result of an IRS investigation, accuses the Safadis, who owned Focus Construction, of building homes and then selling them to buyers who they knew were not qualified. In order to facilitate the loans, they submitted phony income and other documents to the lenders. The two men made over $4.5 million on their transactions, while Ramirez earned $230,000.
Read the original article in the San Jose Mercury News.
June 29th, 2012 at 8:16am
One of seven criminals who defrauded lenders in order to acquire properties for the purpose of growing marijuana has been ordered to prison.
Jenny Chi Ha, aka Phuong A. Ha, 44, of Fresno, was sentenced to 21 months and five years of supervised release for her participation in the acquisition of two of the homes, according to U.S. Attorney Benjamin Wagner. U.S. District Judge Lawrence O’Neill, who pronounced the sentence, also ordered Ms. Ha to make financial restitution to the lender. Ha was a card dealer who submitted false information to the lenders (loan fraud, mortgage fraud) so that she could acquire the loans.
Law enforcement seized 3,600 pounds of marijuana during their investigation.
The six other defendants already pleaded guilty. They are Xi A. “Andy” Lieng, 43; brothers Tony Lieng, 38, and Richard Lieng, 29; Lynn Truong, 40; and Shirley Wong, 40. Monique Le Nguyen, aka Monique Dzung Le, 62, was the mortgage broker for five properties and she surrendered her real estate license in addition to having already served her prison sentence.
All in all, a good day for law enforcement: 7 convictions, 7 prison sentences and restitution to the banks.
Read the original article in the Central Valley Business Times.
June 19th, 2012 at 1:45pm
SACRAMENTO — Attorney General Kamala D. Harris today announced the Assembly Public Safety Committee passed an important piece of the California Homeowner Bill of Rights that aims to protect California homeowners from fraud and scams.
Senate Bill 1474 (Senator Loni Hancock, D-Berkeley) would allow Attorney General Harris to convene a special grand jury to investigate and indict the perpetrators of financial crimes involving victims in more than one county, as well as crimes conducted by a single defendant or multiple defendants who worked together. The bill passed unanimously with bipartisan support.
Under current law, fraud in which the victims are located across the state require separate grand juries and charges must be filed in every county where the defendant committed a crime. This legislation would provide for the option of a special grand jury that can produce indictments for financial crimes beyond the scope of single-county grand juries.
“Scammers continue to prey on vulnerable Californians who simply want to stay in their homes,” Attorney General Harris said. “This legislation will create a more cohesive legal process to prosecute those who prey on Californians across county lines.”
“The Attorney General is currently engaged in the investigation of significant crimes,” Senator Hancock said. “Unfortunately, county-by-county grand juries do not work well in dealing with large-scale wrongdoing in multiple jurisdictions. With this bill, the Attorney General can investigate multijurisdictional crimes – it will provide protection when Californians need it the most.”
The Mortgage Fraud Strike Force, established by Attorney General Harris, investigates and prosecutes crimes related to mortgages, foreclosures and real estate. In recent weeks, the Strike Force has secured the conviction of perpetrators of scams in the Fresno and Sacramento areas.
SB 1474 will be heard next in the Assembly Appropriations Committee.
For more information on the California Homeowner Bill of Rights, go to www.oag.ca.gov.
June 15th, 2012 at 9:53am
Hamlet Sardariani, a 45-year old Sylmar man, has pleaded guilty to federal conspiracy and tax evasion charges in U.S. District Court in front of United States District Judge Virginia A. Phillips. Sardariani admitted that he conspired with others to procure four loans with a value over over $5 million by using houses he did not own as collateral. In addition, he confessed to forging documents and falsifying notary stamps (notary fraud).
Hamlet Sardariani’s brother, Henrik Sardariani, 44, of Glendale, pleaded guilty last January; Wanda Tenney, 66, of South Los Angeles, a former escrow officer, pleaded guilty on December 5; Christopher J. Woods, 53, of Beverly Hills, pleaded guilty on November 8. All three are awaiting their sentences.
This case was investigated by the FBI and IRS Criminal Investigation (CID).
Read the original article in the Imperial Valley News.
June 15th, 2012 at 7:50am
Kern County District Attorney Lisa Harris has announced the formation of a special task force between her office and local Realtors® to combat real estate fraud and mortgage fraud.
DA Harris’ group is patterned after the same group formed in 2006 by the Ventura County Coastal Association of Realtors. That group, the Ventura County Real Estate Fraud Advisory Team (REFAT), connected investigators from the Ventura County District Attorney’s Real Estate Fraud Unit and local real estate agents, , brokers, lenders, escrow and title companies. Representatives meet regularly to share information about suspicious activity in the local housing market. They also produce and disseminate educational materials and consumer alerts via a website: http://refat.org/.
The task force will be an invaluable tool to homeowners and consumers because Bakersfield is one of the country’s hot spots for mortgage fraud and real estate fraud. According to DA Lisa Harris, the most common real estate crime is still loan modification fraud, whereby crooks promise to help homeowners in distress avoid foreclosure in exchange for a fee. Advance fees have been illegal for this type of service since 2009 in California.
Read the original article in the Bakersfield Californian.
June 7th, 2012 at 10:31pm
Is more misleading of consumers part of the 50 state Attorney General agreement?
GMAC, which is in the throes of bankruptcy, apparently thinks the ink is not yet dried on its settlement with California’s Attorney General as well as the AGs for the 49 other states. Borrowers who are trying to refinance their homes under the terms of the U.S. Treasury Department’s HARP 2.0 program, which is designed to help lower the interest on mortgages where the borrower is either underwater or living on reduced income, are complaining about high-pressure sales tactics.
GMAC loan processors are alleged to be sweet-talking and luring consumers who simply call to inquire about refinancing with tales of how easy it is to qualify for a refinance under HARP 2.0. After being promised that answering a mere 12 questions will enable the loan processor to email the consumer several loan options, e.g, 15 year, 20 year, 30 year, the loan processor launches into high gear in order to close the sale. Borrowers who want to refinance to 20 year loans are subjected to merciless lobbying to flip them into the 30 year products and even told that if they have a HELOC, that they will certainly default if they don’t pay it down with the savings from 30 years loans. The borrowers are also pressured to make an immediate decision and told they are not permitted to take a day or two (or more) to think about the refinance because “federal laws” require the loan applications to be processed.
Does anybody at Treasury or the California Office of the Attorney General know that these sales tactics are occurring at Ally / GMAC and that consumers are still being misled and lied to?
May 31st, 2012 at 9:55pm
A real estate salesman who admitted lying about his income in order to build a mansion on land he had purchased (loan fraud, mortgage fraud), was sentenced to 18 months in prison for wire fraud and money laundering. The sentence was imposed by U.S. District Judge Jeffrey White in San Francisco.
In a novel plea for mercy, Abraham Valentino, a Tiburon resident who is originally from Iran, told the court he had already suffered due to the loss of his reputation, his pride (=ego) and his right to vote. He also claimed that he might not survive prison at his age (53).
Valentino’s attorney, Jay Weill, while conceding his client lied in order to obtain $5.6 million, nevertheless blamed Valentino’s account and mortgage broker for the fraud.
Abraham Valentino’s real estate license is still active with the California Department of Real Estate (DRE).
Read the original article in the Marin Independent Journal.
May 31st, 2012 at 9:29pm
Justin Batemon, 34, one of the defendants in a $15 million mortgage fraud case that included members of the Hell’s Angels motorcycle club, was sentenced to three years in prison.
Bateman, a resident of Hayward, conned lenders by submitting loan documentation (loan fraud) that falsely claimed he owned a company and altered bank statements to show he earned more income that he did. He also referred some of his friends who were Hell’s Angels members to the loan officer, co-defendant Jacob Moynihan.
According to U.S. District Attorney Melinda Haag, Batemon pleaded guilty to all counts of wire fraud and conspiracy to commit bank and wire fraud. But that didn’t stop Judge William Alsup from slapping him with an enhanced sentence for obstruction of justice after prosecutors discovered he had forged a letter with respect to drug tests that had been ordered by the court.
The FBI and the IRS Criminal Investigations division performed the investigation.
Justin Batemon was also ordered to pay restitution after he has served his prison sentence.
Read the original article in the Silicon Valley Mercury News.