California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

Garret Gililland and Co-Conspirator Sentenced to Prison for Mortgage Fraud

August 17th, 2012 at 7:41am

The man at the center of a mortgage fraud conspiracy in which $21 million in fraudulent loans were underwritten is going to prison, along with one of his co-conspirators.  

Garret Griffith Gililland, 31, formerly of Chico and Paradise, who is believed to have caused lenders more than $4 million in losses, was sentenced to seven years and 10 months, with three years supervised release for mail fraud and money laundering in United States District Court in Sacramento. Shane Burreson, 39, of Orland received a sentence of 23 months in prison and three years supervised release.

According to a press release from the Department of Justice, from 2006-2008 Garret Gililland operated a mortgage fraud scam that included using straw buyers with falsified income and employment information, to purchase 46 homes in Chico subdivisions. Homebuilders kicked back $40,000-$60,000 kickbacks per property after close of escrow to store-fronts run by Gililland and Burreson.

Builder Tony Symmes was sentenced several months ago to two years and 11 months in federal prison for money laundering and he forfeited $4 million. He became an informant and helped prosecutors ensnare the other defendants.

Chico developer William Baker, 66, who received three years of supervised release after pleading guilty to mail fraud.

Kesha Danine Fortune Haynie, 41, a Chico loan broker who facilitated the processing of fraudulent loans, was convicted of mail fraud and remains to be sentenced. As of this posting, her license with the California Department of Real Estate is still in good standing.

There are numerous articles on these defendants and their conspiracy that can be found on the California Real Estate Fraud Report by using the search feature on the left-side panel.

Read the original article in the Chico Enterprise Record.

Mom and Daughters Plead Guilty in Massive Mortgage Fraud in Orange County

August 2nd, 2012 at 5:08pm

A woman and her daughters are going to serve hard time for defrauding lenders in a mortgage fraud scheme according to the Orange County District Attorney.

Sushama Devi Lohia, 74, of Newport Beach, pleaded guilty last December to tax evasion, conspiracy and other fraud crimes (70 felonies) and received an eight year sentence.

Now daughter Suniti Shah, 51, of Newport Coast, has received eight years for 40 similar counts. Number One daughter Supriti Soni, 52, of Corona del Mar, will serve 10 years after pleading guilty to 40 counts as well.

Suniti Shah’s husband, Dinesh Valjeebhai Shah, 62, is awaiting trial for his role in the conspiracy.

What did the three criminals and one remaining defendant allegedly do?

They procured 15 loans from Washington Mutual (WAMU), all through the use of straw buyers and their credit (loan fraud). The straw buyers’ incomes were inflated, their bank statements altered and employment information was falsified. Oh, and their signatures were forged. The loss due to the mortgage fraud was $16 million.

Read the original article in the OC Register.

Three Elk Grove Brothers Plead Guilty to Mortgage Fraud

July 26th, 2012 at 11:31am

U.S. Attorney Benjamin B. Wagner announced that brothers Ali Khalil, 32, Amanullah Khalil, 39, and Wahidullah Khalil, 27, have all pleaded guilty to various financial crimes related to mortgage fraud.

Ironically (or not), Ali Khalil was formerly a police officer in Elk Grove and earned a bachelor’s degree in criminal justice. He pleaded guilty to wire fraud and structuring financial transactions to evade currency transaction reporting requirements (the $10,000 limit that triggers reporting requirements.

Amanullah Khalil  pleaded guilty to making false statements on a loan application (loan fraud, mortgage fraud).

Wahidullah Khalil was previously in banking and holds a bachelor degree in criminal justice. He pleaded guilty to structuring financial transactions to evade currency transaction reporting requirements, like Ali did.

Apparently all three defendants embarked on parallel paths of loan fraud and mortgage fraud in order to obtain loans. Each submitted loan applications with false information in order to each purchase or refinance homes. Each took the proceeds and made deposits of less than $10,000 on consecutive days in order to evade the bank reporting requirements. And each got caught.

U.S. District Judge Garland E. Burrell will pronounce their sentences in November.

Read the original article in the Sacramento Bee.

San Fernando Valley Man Gets 57 Months in Prison in Mortgage Fraud Conspiracy

July 20th, 2012 at 10:16am

San Fernando Valley resident Anthony Lewis, 39, is going to have a new address, as he has been sentenced by U.S. District Judge Philip S. Gutierrez to 57 months in federal prison for his part in a $4 million mortgage fraud conspiracy. Judge Gutierrez also ordered Lewis to pay restitution of approximately $4.1 million.

Lewis was apparently the bird-dog who found houses for sale and gave phony loan applications to loan processors Jennifer Le, Matthew Balsz (formerly of US Bank) and Freddy Lentz (formerly of Bank of America). Balsz and Lentz were charged with accepting bribes to push the loan approval through underwriting. Deon Jackson, a mortgage broker from Gardena, helped Lewis correct loan applications so that they would qualify for funding.

Escrow officer Maria Arriaza of Diamond Clear Escrow in Granada Hills, has already been convicted for diverting funds intended for the home purchasers to the various conspirators.

The case was prosecuted by Assistant U.S. Attorney Stephen Goorvitch.

Read the original article in the Daily News.

Ramona Realtor Pleads Guilty in Mortgage Fraud Conspiracy

July 20th, 2012 at 9:59am

Ramona real estate agent Teresa Rose has pleaded guilty to conspiracy to commit wire fraud and to launder money in an elaborate mortgage fraud that cost lenders at least $5 million.

Rose, loan broker Mary Armstrong and Armstrong’s assistant William Fountain were indicted for recruiting so-called investors via newspaper and online solicitations to purchase Ramona and other local properties. The investors turned out to be no more than straw buyers who sold the use of their credit for $10,000.

Loan applications were falsified in order to qualify for the maximum loan amounts (mortgage fraud, loan fraud). Prosecutors allege that the defendants made the majority of their illegal gains by convincing the property sellers to inflate the value of their homes, purportedly justified because they were going to be improved by construction that never occurred. In addition, the defendants earned commissions and other escrow-related fees. Because Teresa Rose was representing both the sellers and buyers, she was able to collect the full commission (dual agency) on all of her sales.

Teresa Rose’s real estate license shows no disciplinary action the California Department of Real Estate.

Read the original article in the Ramona Patch.

Loan Officers Plead Guilty to Mortgage Fraud in Carlsbad

July 16th, 2012 at 9:40am

Simon Saeid Koli, 41, of San Diego, and Kian Ashkanizadeh, 49, of Laguna Niguel have entered guilty pleas in a mortgage fraud case involving four expensive homes in the Carlsbad neighborhood of Aviara.

The two admitted criminals, who co-owned Southern California Finance, pleaded out to conspiracy to commit mail fraud, wire fraud and money laundering, according to U.S. Attorney Stephen Clark. They invented consulting fees and construction fees and then diverted them from escrow for their own use.

No word yet as to whether the straw buyer friends and family will be prosecuted.

Read the original article in North County Times.

Whistleblower Finally Receives His Reward for Reporting Countrywide Appraisal Fraud

July 16th, 2012 at 9:26am

Kyle Lagow is a hero and now, after suffering for his integrity, he’s about to be rewarded for it.

Lagow was formerly an appraiser for subprime mortgage lender Countrywide Financial. He had reported two areas where he was sure there was appraisal fraud:

First, LandSafe, Inc., a subsidiary of Bank of America, had been pressuring both in-house and independent contractor appraisers to inflate the values of properties, not only to ensure that sales closed, but to increase commissions for loan officers.

Second, Lagow was certain that homebuilder KB Home, which was in a joint venture with Bank of America, cherry-picked appraisers who would cooperate with inflating home values, also appraisal fraud.

Lagow emailed former Countrywide CEO Angelo Mozilo after his supervisors failed to address his concerns. Mozilo assigned Countrywide’s COO, Jack Schakett, and its chief compliance officer, Richard Wentz to look into the matter but they replied there was no basis for Lagow’s complaint after “investigating” it.

Six months after being fired in November 2008, Kyle Lagow heard about a False Claims lawsuit against KB Home being filed on behalf of home buyers by the Seattle-based law firm of Hagens Berman. He found out he had a whistleblower‘s case, filed his own lawsuit and later was interviewed by prosecutors in the U.S. Attorney’s Office in the Eastern District of New York. Investigators not only verified there had been appraisal fraud but also that Countrywide had had issues in its underwriting of FHA loans (loan which allow consumers to purchase a home with only 3.5% down-payment).

Lagow’s share of the settlement of the whistleblower case against Bank of America, which purchased Countrywide in 2008, is $14.5 million before taxes and legal fees. After being blacklisted as an appraiser and suffering severe financial repurcussions, he certainly deserves it.

Bank of America must pay $500 million to the Federal Housing Administration (that’s YOU, the taxpayer) as restitution and fund a loan modification program for Countrywide borrowers whose loan balances exceed the worth of their properties.

Read the original article on the Linesch Law Firm website.

All Fund Mortgage’s Manager Goes to Prison for Mortgage Fraud

July 13th, 2012 at 10:33am

The former manager of All Fund Mortgage of Murrieta and Anaheim Hills has been sentenced to 12 years in prison and three years of supervised release after pleading guilty to wire fraud and tax evasion in a mortgage fraud conspiracy.

Gregory Flores was also ordered by U.S. District Judge J. Virginia Phillips to repay over $1 million in restitution to the homeowners he ripped off and another $98,000 to the Internal Revenue Service.

All Fund, Advantage 2000, Crown and Associates, Ichthommol Trust, B Owned and Right Way, companies with which Gregory Flores was affiliated, convinced the homeowners that they could hold on to their properties by adding straw buyers to the homes’ title in order to improve the homeowners’ credit. Lenders were then solicited to refinance the homes. According to the U.S. Attorney’s Office, title was not transferred back to the homeowners nor were the banks paid their mortgages (loan fraud, mortgage fraud).

Read the original article in the Press Enterprise.


Hasidic Scammer Pleads Guilty in Massive Short Sale Fraud

July 12th, 2012 at 6:14am

A 20-something Hasidic Jew who played a central role in a dual mortgage fraudshort 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.

Atascadero Developer Kelly Gearhart Indicted for Real Estate Investment Fraud

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.

© 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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