California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

Carlsbad Mother and Attorney Son Sent to Jail for Mortgage Fraud

April 25th, 2012 at 9:02am

A Carlsbad woman who is a real estate agent and her son, an attorney, are sitting in jail, awaiting sentencing after they were convicted by a jury of stealing $8 million from lenders.

Aida Agusti Castro, 67, and Stephen Kenneth Chrysler, 46, of Orange County, were both convicted of multiple counts of wire fraud in the sale of 16 homes in Oceanside, Escondido, San Marcos.

Stephen Chrysler was the owner and CEO of SKC Real Estate in Carlsbad. Aida Castro was an officer of SKC and sold real estate. Chrysler’s real estate license with the California Department of Real Estate is expired; I could find no record of Castro possessing a real estate license.

According to the U.S. Attorney’s Office, through various means of falsifying loan statements and applications (loan fraud, mortgage fraud), the pair obtained up to $350,000 in real estate commissions and loan fees in the sales of properties. Considering they both receive 20 year prison sentences and $250,000 in fines, the so-called earned fees seem inadequate.

 Read the original article in Courthouse News Service.

East L.A. Residents Charged in Real Estate Fraud Ring

April 25th, 2012 at 8:47am

Gerard Bueno, 35, of La Habra Heights, and Jesus Vega Jr., 28, of Hacienda Heights, have been arrested and charged with operating a mortgage fraud ring that resulted in $2.3 million in losses to CitiMortage and MetLife Bank.

Bueno ran Pres Mex Inc., and Vega operated JVJ Inc.
 
Los Angeles County sheriff’s Detective Christopher Derry said that the two men obtained title to six properties in Los Angeles County fraudulently by “various means.” They then sold the properties to themselves at above-market prices (appraisal fraud) by using friends and relatives as straw buyers, submitting false loan application information (loan fraud, mortgage fraud). All the homes subsequently went into default.There have been six other arrests in this real estate scam, including George Kent, 66, of La Mirada.Read the original article in the Whittier Daily News.

Antioch Builder Seeno Homes Investigated for Builder Bailout

April 25th, 2012 at 8:31am

Builder Bailout is a term used to describe how developers save their businesses in a falling market by inventing creative means of selling their new home inventory at higher-than-market prices.

The FBI is investigating the possibility of a builder buyout in the case of Seeno Homes, based in the Bay Area.

In mid-2006, as the real estate market was beginning its slow but steady course towards a financial Niagara Falls, letters were being sent by Seeno Homes to prospective home owners. These letters allegedly enticed the recipients with a $100,000 incentive toward the purchase of their dream home – as long as the recipients kept the offer confidential, meaning, hiding the deal from their lender and appraiser (mortgage fraud).

The point of such sales tactics is to keep home values high and appease the builders’ own lenders.

Seeno sales executive Carey Hendrickson has been arrested, but not charged, following a still-ongoing FBI investigation into allegations that Seeno Homes, the largest developer in the East Bay, used their incentive program to artificially inflate home prices (real estate fraud, appraisal fraud) and to conceal that information from their own lending sources (loan fraud).

Read the original article in the Contra Costa Times.

Four Real Estate Professionals Go to Prison for Reverse Mortgage Fraud

April 25th, 2012 at 8:07am

Four real estate professionals in Florida and Pennsylvania are serving prison terms after pleading guilty to wire fraud by scamming elderly home owners (elder financial abuse, elder financial fraud).

Marcos Echevarria, Louis Gendason, John Incandela were loan officers with 1st Continental Mortgage  who originated reverse mortgages  for seniors in seven states after identifying the victims as vulnerable. Home Equity Conversion Mortgages (HECM) are insured by the Federal Housing Administration (FHA). They also purportedly altered the home’s values (appraisal fraud) in order to negotiate fake short sales (short sale fraud). The losses to the lenders, in addition to the elderly homeowners, were $2.5 million.

The fourth defendant, Kimberly Mackey, owned Real Estate One Land Services, Inc. in Pittsburgh and performed title services. She had created fraudulent HUD-1 statements to show the mortgages had been paid off, when in fact they had not (title fraud, escrow fraud).

When all four get out of prison, they will have to find a new line of work, as they have been permanently barred from doing business with the federal government.

Read the original article in Lender Hookup.

10 Charged in El Cajon Mortgage Fraud Case

April 18th, 2012 at 2:22pm

Ten people have been indicted,  charged with conspiracy, wire fraud and money laundering in a scheme in which lenders may have been defrauded out of more than $10 million ( mortgage fraud).

The named defendants are Dana Merritt, aka Dana Hayden, Stacey Jones, Abigail Gonzalez, Leticia Miffleton, Sharlo Burris, Kendrick Green, Johnese Zeigler, Andre Simon, Gordon Simon and Catherine Wheeler.

Stacey Jones and Abigail Gonzalez ran two companies called BYW Construction and Advanced Partnership Properties. They allegedly falsified loan applications (loan fraud, mortgage fraud) on behalf of the other defendants so that the latter could purchase properties in Southern California. The defendants then filed false claims for construction work that was never done, liens and other unsecured loans.

Read the original article in San Diego 6.

Anthony Symmes Sentenced to Prison for Real Estate Fraud

April 18th, 2012 at 2:11pm

Tony Symmes, 61, once one of the largest home building operators in Chico, has been sentenced to 2 years 11 months in prison for conspiring to commit fraud and for money laundering. He must also pay restitution of$4 million dollars.

Symmes conspired with Garret G. Gililland III and other defendants to sell 62 homes to Gililland’s straw buyers for inflated prices (appraisal fraud) between 2006 and 2008. After escrow closed, the overage was returned to Gililland’s storefront companies and disbursed among the defendants. Of course, the lenders who financed the loans were unaware of this real estate fraud scheme.

Garret G. Gililland III, Shane Burreson, William Baker, Niche S. Fortune and others have already pleaded guilty for their roles in defrauding the lenders (loan fraud, mortgage fraud).  Kesha Danine Fortune Haynie, who is Niche Fortune’s sister did not plead out and was convicted of mail fraud in March 2012.

The investigation and prosecution were a cooperative effort by the FBI, IRS Criminal Investigation Division and the Butte County District Attorney’s Office.

Read the original article in KRCRTV.com.

 

Hells Angel Sentenced for Mortgage Fraud

April 6th, 2012 at 8:31am

The second of seven Hells Angels defendants charged in September 2011 with conspiracy to defraud banks by submitting fraudulent loan applications (mortgage fraud, loan fraud) has received a one-year sentence.

Josh Leo Johnson, 36, of Santa Rosa, is (was?) the vice-president of the Sonoma chapter of the Hells Angeles. He pleaded guilty back in December to lying about his income in order to get a loan from Sun Trust Mortgage. U.S. District Judge William Alsup also ordered Johnson to pay $130,000 in restitution to the lender.

The first defendant to plead guilty in the case, Raymond Foakes, did so to charges of fraud and money-laundering. Foakes, the former president of the same chapter as Johnson, received almost six years in prison by Judge Alsup.

Read the original article in the San Francisco Chronicle.

Bank of America Employee Gets Off Light in Mortgage Fraud

April 6th, 2012 at 8:17am

Freddy Lentz, 35, the first of six Southern California defendants in a mortgage fraud conspiracy case, has been sentenced to three years of probation after pleading guilty to accepting a $1,000 bribe. Lentz formerly worked for Bank of America.

Anthony Lewis, 39, a San Fernando Valley resident, has also pleaded guilty and is awaiting his sentence. Lewis found homes for the fraud ring to purchase and directed Maria Arriaza, 34,  an escrow officer at Diamond Clear Escrow in Granada Hills, on how to disburse the ill-gotten gains.

Deon Jackson, 37, a mortgage broker from Gardena and Jennifer Le, 30, a former loan processor from the South Bay, submitted fraudulent loan applications on behalf of straw buyers.

Last but not least is Matthew Balsz, 32, a U.S. Bank employee from the South Bay. Balsz was charged with accepting bribes

The six were prosecuted by the U.S. Attorney’s Office in Los Angeles.

Read the original article in the Contra Costa Times.

Chico Mortgage Broker Convicted in Home Purchase Kickback Scheme

March 29th, 2012 at 9:32pm

The operator of Empire Mortgage in Chico, has been found guilty of two counts of mail fraud as a result of a mortgage fraud conspiracy in which she participated.

Kesha Danine Fortune Haynie, 41, was the loan originator and generated phony loan applications in an illegal kickback scheme connected to the purchase of new homes.

Haynie received $41,000 from the homebuilder (unnamed in this article) after the close of escrow for the home sales. The buyers were paid $29,000 and then Haynie would share in the remaining monies with her co-conspirators. Neither the lender, escrow or title companies were aware of the fraud.

Evidence showed that she promised homebuyers kickbacks from a Chico homebuilder in exchange for purchasing homes. The day after the close of escrow, the homebuilder would write checks averaging $41,000 to the conspirators.

Kesha Haynie’s real estate license is still in good standing with the California Department of Real Estate (DRE). Let’s see how long it takes for the DRE to act now that she has been convicted.

Note:

Kesha’s sister Niche Savon Fortune, 39, of Chico, was sentenced to 57 months for brokering kickbacks to buyers in the scheme and falsifying loan documents (loan fraud).

Read the original article in the Central Valley Business Times.

AG Harris Proposes a Homeowners Bill of Rights

March 29th, 2012 at 8:42pm

California Attorney General Kamala Harris, who played a key role in the settlement agreement between the attorneys general for all 50 states and Bank of America, Wells Fargo, GMAC/Ally, JP Morgan Chase and CitiMortgage for the fraudulent “robo-signing” the banking giants used to expedite foreclosure against homeowners, has now devised a Bill of Rights.

Although currently referred to as a Homeowners Bill of Rights, the proposed legislation would provide protection to legal tenants as well. It seeks to redress ongoing bad faith (in my opinion) business practices employed by not only the above banks but other lending institutions as well.

Here are some of the highlights:

(1) An end, or at least moderation, of the practice of dual-tracking. Thousands of homeowners thought they were working with their bank on a loan modification and then found out the bank was pursuing and completing foreclosure against them.

(2) Evicting tenants who have valid leases on houses that were foreclosed will cease.

(3) Believe it or not, robo-signing is still happening and which lender actually owns the promissory note to the property is obscured through the use of the Mortgage Electronic Registration System (MERS). MERS is the conduit by which the banks avoided paying city and county transfer taxes, which is required when there is a sale and makes it impossible for a homeowner wanting to contact his or her lender to know who it is.

(4) A new concept: proposal of a multi-jurisdictional grand jury for complex cases that cross county lines.

AG Harris also proposes a $25 fee to be paid by lenders or their trustees, upon filing a Notice of Default (NOD) against a borrower. The revenue generated would help fund law enforcement actions against lenders that fail to comply.

Read the original article in the Orange County Register.

© 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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