July 29th, 2013 at 9:59am
A California man who operated what authorities said was a double-escrow fraud scheme has been sentenced to 5 1/2 years in federal prison after pleading guilty to commit wire fraud.
George Anderson, 55, of Copperopolis, California, admitted he sold his Henderson and Las Vegas properties to straw buyers and recruited a co-defendant Andrew Swan to buy the houses back in exchange for a kick-back.
U.S. Attorney Daniel Bogden said that loan applications to Anderson Financial Group and Swan’s firm Creative Capital Group contained deliberately false information in order to receive funding for the loans (mortgage fraud).
Swan, 38, pleaded guilty in January 2013 to wire fraud and conspiracy and was sentenced this June to 2 1/2 years in prison.
Anderson and Swan were ordered by U.S. District Judge Roger Hunt to provide resitution ot $3.5 million to the lenders they defrauded.
Read the original article in Businessweek.
July 25th, 2013 at 11:15am
Only two years old now, the Consumer Financial Protection Bureau (CFPB) is already very active in bank regulating. With Richard Cordray being confirmed on July 16 as its director, many expect CFPB to become more aggressive on behalf of consumers by keeping an eagle-eye on the practices of banks and mortgage-related businesses.
High on the CFPB’s list is to simplify the current mind-boggling mortgage disclosures home borrowers must sign and to plow through and implement more provisions in the Dodd-Frank Act.
According to Alan Kaplinsky, chief of the consumer financial services group at Ballard Spahr, “There’s a lot going on with the CFPB’s enforcement but about 95% of it has been behind the scenes. “Now with Cordray’s position being secure, I expect we will see a lot more enforcement activity.”
Long overdue is the Qualified Mortgage rule (QM) that shockingly requires that lenders actually analyze a borrower’s ability to pay their mortgages. When QM goes into effect, the compliant lenders will get safe harbor protection in exchange for meeting certain benchmark standards, including a maximum debt-to-income (DTI) ratio of 43% or less.
Regarding simplification of mortgage disclosures, real estate agents and their brokers should take particular note that the CFPB intends to consolidate redundancy between the Truth in Lending Act and the Real Estate Settlement Procedures (RESPA).
Read the full article in National Mortgage News.
July 12th, 2013 at 8:30am
Better late than never . . .
Since Freddie Mac added a new chapter to its Seller / Servicer Guide about two and a half years ago, reports from lender about potential mortgage fraud are up significantly.
Joan Ferenczy,Vice President, Financial Instrument Fraud Officer at Freddie Mac says that the new Chapter 7 of the Guide is entitled “Mortgage Fraud Detection, Prevention and Reporting.” Providing regular fraud reports to the agency is now a contractual obligation of the lenders. One of the requirements, which is a red flag for mortgage fraud, is reporting instances where the first payment was not made – a default from the start.
The hotline number to report mortgage fraud on a Freddie Mac-backed loan is 1-800-4FRAUD-8.
Read the original article on Executive Perspectives Blog.
June 14th, 2013 at 10:54am
Mortgage fraud risk increased slightly in the first quarter of 2013, according to the latest quarterly Mortgage Fraud Risk Report published by Interthinx.
Interthinx prepares its reports using an internal team of fraud experts who analyze more than 12 million loan applications.
California was the riskiest state in the nation, but essentially tied with Nevada and Florida. Its mortgage fraud risk index is 125. Additionally, California has four of the top 10 riskiest ZIP codes and five of the top 10 riskiest metropolitan statistical areas (MSAs)—including Santa Barbara-Santa Maria-Goleta.
Read the original article in DSNews.
June 11th, 2013 at 2:44pm
United States Attorney Benjamin B. Wagner announced that Eric Ray Hernandez, 37, and his wife Monica Marie Hernandez, 32, have pleaded guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud.
According to court documents, between October 2005 and May 2007, the Bakersfield couple conspired with three other defendants to defraud lenders by submitting false and fraudulent loan applications to the lenders in order to obtain mortgages, ultimately causing losses of approximately $6,037,541. Eric Hernandez was employed at a mortgage brokerage during the period when the crimes occurred.
Both defendants face length prison terms when they are sentenced this fall – up to 30 years in prison, a $1 million fine, and five years of supervised release.
One of their co-defendants, Patricia King, has already pleaded guilty to three counts of mail fraud and been sentenced to three years and one month in prison. The remaining co-defendants Evelyn Sanchez and Darling Montalvo have pleaded not guilty and are awaiting their trials on August 13, 2013.
Read the original article in KERO-TV 23 and the Central Valley Business Times.
May 24th, 2013 at 11:18am
The sales manager for Discovery Sales, Inc. for the period of 2006-2009 has pleaded guilty in federal court in San Francisco today to paying bribes to a Bank of America loan officer for approving loans for unqualified home buyers.
According to United States Attorney Melinda Haag, Jason Sterlino, 34, was managed home sales for the Monte Vista Estates and Monte Vista Villas residential developments in Oakland. As part of his plea agreement, Sterlino confessed that he had an arrangement to pay kick-backs to a mortgage broker who facilitated loan referrals to the Bank of America loan officer, who received part of the kick-back money, as did Sterlino. Under the federal Real Estate Settlement Practices Act (RESPA), kick-backs and/or undisclosed referral fees are illegal – not that this doesn’t happen every day in real estate. Sterlino admitted that he personally received about $100,000 in cash as a result of this conspiracy, for which Bank of America funded approximately 20 loans.
Jason Sterlino was charged with one count of bank bribery in violation of 18 U.S.C. § 215(a) to which he pleaded guilty. He will be sentenced by Judge Jeffrey White in San Francisco on October 24, 2013, at which time his cooperation in the FBI’s ongoing investigation will be taken into consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Read the original article in LoanSafe.
May 24th, 2013 at 9:35am
Safieh Fard, 52, of Escondido, has an upcoming five year engagement in federal prison as a result of being convicted for conspiring with her family to commit bank fraud and tax fraud.
Fard, her sister Sedigheh Bahramian and her sons Mohsen Kikalaye and Ahmad Kikalaye began their elaborate and profitable mortgage fraud scheme starting in 1997, when they were given loans after overstating their income and assets to lenders (loan fraud, mortgage fraud). They leveraged the monies to buy homes in Newport Beach, which they at first sold back-and-forth to each other and then eventually to third-parties, pocketing almost $4 million in profits. They might not have been caught had they not wired money to and from their accounts and if they had reported and paid taxes on their gains.
The U.S. District judge in Los Angeles who sentenced Safieh Fard also ordered her to pay $549,000 to the IRS for unpaid taxes. No word if the California Franchise Tax Board feels it is owed taxes too.
The investigating agencies were the IRS and U.S. Department of Homeland Security. The case was prosecutd by the U.S. Attorney’s Office in Santa Ana.
Read the original article in the San Diego Union Tribune.
You can read an earlier article in the California Real Estate Fraud Report about Safieh Fard, Sedigheh Bahramian, Mohsen Kikalaye and Ahmad Kikalaye by clicking here.
May 9th, 2013 at 6:32pm
An Orangevale man has been indicted by a federal grand jury on five counts having to do with mortgage fraud and loan fraud.
Valeri Kalyuzhnyy, 41, is charged with making false statements on a loan and credit application and money laundering. The charges date back to the days of Washington Mutual Bank, Countrywide Bank, Bank of America and US Bank, when Kalyuzhnyy worked to prepare and then submit loan applications to the four lenders. According to the indictment, he originated close to $4 million in mortgages by falsifying the income, assets and employment status of the prospective borrowers as as the (non-) fact that they intended to occupy the loans.
The case will be prosecuted by Assistant U.S. Attorneys Stephen Lapham and Lee Bickley and was investigated jointly by the FBI and IRS.
Read the original article in the Sacramento Business Journal.
May 7th, 2013 at 9:09am
Ricardo Fabian Salinas, 34, a Los Angeles man who was one of nine people named in an indictment in July 2012, has pleaded guilty to bank fraud in relation to a mortgage fraud scheme that was perpetrated in Bakersfield.
Salinas’ co-defendants are Eliseo Jara Jr., Sergio Jara, Antonio Perez Marcial, Lucia Yolanda Chavez, Arlene Jeanette Jara, Candace Shantel Gonzales, Joseph Shawn Chavez Jr. and Melissa Rochelle Jara.
Prosecutors allege that from 2007 to 2010 Salinas and his co-defendants deceived mortage lenders by preparing and submitting fraudulent loan applications and selling properties to hand-picked buyers. They charge that the false statements included inflating the borrowers’ income, employment and financial assets and that the intent of the purchasers was to use the homes as primary residences.
Ricardo Salinas could get up to 30 years in federal prison when he is sentenced by the judge for his crimes.
Read the original article in Bakersfield Now.
May 3rd, 2013 at 11:58am
I love the justice system in Florida – this would NEVER happen in California.
John W. Lebron, 33, already on probation for possession with intent to sell GHB, an illegal steroid with strong sedative properties, has been sentenced to 26 years in prison for committing short sale fraud and foreclosure fraud.
Lebron, a formerly licensed real estate agent, opened a business called EZ Investments with his wife in 2005. Their first sale was consummated when John Lebron helped his sister Cynthia Lebron to buy a home that was in foreclosure. He not only collected both sides of the commission (dual agency), he got the mortgage broker’s commission after placing the name of another loan officer (loan fraud, mortgage fraud) on the paperwork to conceal his plan.
Emboldened by a successful and very profitable transaction, John Lebron next set up a short sale to his brother-in-law and at the same time arranged a second sale to a straw buyer (“flopping”). Since the straw buyer happened to be unemployed, Lebron submitted phony pay stubs on behalf of the buyer. As with the previous sale to his sister, Lebron received both sides of the real estate sale from both sales as well as the commissions from the loans. The straw buyers earned $5,000 for their troubles.
John Lebron’s fortunes reversed when he defaulted on loans valued at $1.4 million. He was arrested in 2011, lost his real estate license and has been ordered by the trial judge to return $1.5 million.
Read the original article in the Tampa Bay Times.