California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

Santa Paula Man Indicted in Mortgage Fraud That Allegedly Targeted Latino Community

September 27th, 2013 at 3:54am

An investigation into a mortgage fraud conspiracy that is alleged to have targeted both Spanish-speaking persons (affinity fraud, ethnic fraud) and lenders has resulted in the arrest of eight people by the FBI, seven of whom are Ventura County residents.

Just arrested is Cesar Rodriguez Azamar, 36, of Santa Paula. The scheme was led allegedly by Jose “Joe” Garcia, 36, of Camarillo via Oxnard-based New Concepts Home Loans. Jose Garcia is a broker who also owned Century 21 Premier Realty, which still has a license to operate by the Bureau of Real Estate.

Besides Cesar Azamar and Joe Garcia, the others indicted are Lucy Ann Garcia, 46, (wife of Joe Garcia), Fernando Murguia, 47, of Oxnard; Jose Garcia’s sister, Sesilia Garcia, 30, of Oxnard; Lili Ayala Hernandez, 41, of Oxnard; Gregg Scott Quinn, 40, of Camarillo; and Lidubina “Lido” Mendoza Perez, 41, of Moreno Valley, who worked at New Concepts Home Loans office in  Bakersfield.

According to the indictment, New Concepts employees allegedly prepared mortgage applications that contained false information about borrowers’ income, employment and assets.

Ventura County Chief Deputy District Attorney Miles Weiss said fraudulent loans were written “for more than 100 homes, a conservative safe number,” and losses to the lender exceeded $11 million.

FBI Assistant Director in Charge Bill L. Lewis said that Joe Garcia “allegedly directed his workforce, including unlicensed individuals acting as Realtors, to peddle the dream of home ownership in the poorest neighborhoods of Oxnard, where they easily found people eager to buy.” If this is true, it could be concluded that the defendants used non-licensees because they knew that their victims would be unaware that a license is required to sell real estate in California.

The victim-banks were Washington Mutual, Wells Fargo, Countrywide, IndyMac, SunTrust, World Savings Bank and JPMorgan Chase.

Read the original article in the Santa Paula Times.

U.S. Attorney’s Lawsuit against Bank of America Goes to Trial in New York

September 25th, 2013 at 9:54am

Attorneys for the U.S. Attorney’s Office in Manhattan are squaring off against Bank of America’s lawyers in a massive lawsuit in which the banking behemoth’s Countrywide predecessor is accused of underwriting and selling toxic mortgages to Fannie Mae and Freddie Mac.

Pierre Armand is an attorney in the civil division of the U.S. Attorney’s Office in Manhattan. Armand calls Countrywide’s business model one in which quality suffered under profiteering and which resulted in massive fraud that cost the two former government-sponsored entities dearly while making Countryside $165 million selling the loans.

“Hustle was not about quality,” Armand said. “It was about speed. It was about volume. It was about profits.”

Countrywide’s loan program, implemented in 2007, went under various names: the “High Speed Swim Lane,”  “HSSL” or “Hustle.” HSSL was overseen by Rebecca Mairone, a former chief operating officer of Countrywide’s Full Spectrum Lending division. Mairone is a co-defendant in the lawsuit who currently works at JPMorgan Chase & Co. and is being defended by Bracewell & Giuliani.

The government’s lawsuit was filed under the Financial Institutions Reform, Recovery, and Enforcement Act, which was passed following savings-and-loan frauds and scandals that occurred during the early 1980s. It blames Countrywide (now Bank of America) for the losses borne by Fannie Mae and Freddie Mac on thousands of supposedly prime mortgages that later defaulted, causing losses of $131 million to Fannie Mae and Freddie Mac.

Bank of America’s attorney is Brendan Sullivan, who countered that Countrywide had quality control in place as well as systems to prevent fraud. “No fraud,” he said. “Two words. That’s the heart and soul and body of the defense. No fraud. And that’s what the evidence will show.”

The case is U.S. ex rel. O’Donnell v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 12-01422. It is being heard in front of U.S. District Judge Jed Rakoff.

Read the original article in the Chicago Tribune.

Los Angeles Broker Pleads Guilty in Theft of Escrow Funds

September 25th, 2013 at 8:23am

Steve Kessedjian, 50, from the Los Angeles community of Tarzana, pleaded guilty in Fresno U.S. District Court to committing mail fraud.

According to the plea agreement he signed, Kessedjian used his two businesses Amerilend and Targa Escrow to defraud his clients of funds they were due from escrow (escrow fraud).

In December 2007, a Tuolumne County couple used Amerilend to apply for a loan to refinance their home and pay their credit card debt. The HUD-1 settlement statement would normally have instructions to the escrow officer to, in this case, pay off the credit cards. But Kessedjian instead modified the HUD-1 so that no funds were allocated by Targa Escrow to the pay-off; instead, he used the money for himself. Six months later, he wrote checks to repay those escrow funds but they bounced.

Sadly, Steve Kessedjian’s crimes, which he admitted in his plea agreement, caused the couple to have to file bankruptcy. The plea agreement also requires Kessedjian to repay the victims over $66,000.

U.S. District Judge Lawrence O’Neill will sentence Kessedjian in December, at which time the could get up to 20 years in federal prison and a fine of $250,000.

The Bureau of Real Estate revoked Steve Kessedjian’s broker’s license.

Read the original article in the Central Valley Business Times.

$100 Million Mortgage Fraud Costs Laguna Hills Man Only One Year of Prison Time

September 18th, 2013 at 4:27pm

The OC Weekly blog reports that John Allen, an unlicensed mortgage loan processor from Laguna Hills, was sentenced to one year in federal prison for his role in a $100 million mortgage fraud scam.

Allen pleaded guilty earlier to wire fraud, money laundering and conspiracy and was sentenced on September 16 in San Diego.

Four other people were sentenced for their roles in the same mortgage fraud, which entailed recruiting straw buyers, creating phony loan and other supporting financial documents in order to obtain mortgages. Most of the properties were later foreclosed, but only after the conspirators “earned” $15 million due to their crimes.

One year in prison in exchange for a piece of $15 million. Some might consider that a cost-effective crime.

The original indictments were reported in 2012 in the California Real Estate Fraud Report.

Bakersfield Man Gets 10-Year Sentence for Mortgage Fraud

September 18th, 2013 at 4:07pm

Eric Ray Hernandez, 37, of Bakersfield, has been sentenced to federal prison for 10 years and 10 months after admitting the role he played in a mortgage fraud that cost lenders over $6 million.

U.S. Attorney Benjamin Wagner of the Eastern District of California said that Hernandez and others conspired to submit loan applications and supporting financial documentation to lenders containing false information (loan fraud, mortgage fraud). The results of his efforts led lenders to underwrite the loans causing the losses.

The judge, United States District Judge Anthony W. Ishii, ordered Eric Ray Hernandez to pay restitution of $6,087,541 to the victims of his crimes along with a forfeiture judgment of $6,037,541 to the United States.

The original information can be found in the press release for the US Attorney’s Office.

 

Former Modesto Real Estate Agent Pleads No Contest in Newman Case

September 12th, 2013 at 3:57pm

A Modesto real estate agent has avoided prosecution on felony charges of grand theft, forgery and attempted perjury by pleading no contest to a misdemeanor count of making false or misleading statements to a family who thought they were buying a home in Newman.

Prosecutors alleged that defendant Erica Burdg told Carlos Gonzales that he and his family were purchasing a three-bedroom, two-bathroom house in Newman, California and took money from them. What occurred instead was that her husband purchased the home and counted the monthly payments from Gonzales as rental payments.

Although the prosecutors dropped all of the felony charges, Carlos Gonzales said he opposed the plea deal and told the judge he preferred the case by tried before a jury.

“(Burdg) has said nothing but lies. They falsified my signature seven times, and yet they still tried to call me a liar.”

After being sentenced, Burdg called the allegations against her “lies” in the courtroom hallway.

In the courtroom, Michael Linn, who is representing the Gonzales family in a civil case against Erica Burdg, told the judge that Burdg had written two phony contracts to commit loan fraud and caused $200,000 in losses for the Gonzales family. He further alleged that she forged Gonzales’ signature on documents, including purchase and rental agreements.

Read the original article in the Modesto Bee.

You can also find three earlier postings on the California Real Estate Fraud Report about the dispute between Erica Burdg and the Gonzales family.

Elk Grove Real Estate Broker Sentenced to 10 Years for Mortgage Fraud

August 16th, 2013 at 9:20am

Hoda Samuel, a California licensed real estate broker, was sentenced today to 10 years in prison in Sacramento federal court for operating a mortgage fraud scheme that caused the victims/lenders over $5.5 million in losses.

U.S. Attorney Benjamin B. Wagner made the announcement and said the following in a press release:

“Taking fraudsters out of the residential real estate industry and sending them to prison has been one of this office’s top priorities. Today’s sentence is another success in our fight against the mortgage fraud schemes perpetrated by Hoda Samuel and her co-defendants that wreaked havoc in this region.”

Comments by other law enforcement officials regarding Samuels’ crimes are below:

“Greed-based crimes such as these can undermine the stability of our financial institutions and the economy, resulting in devastating consequences for homeowners, businesses, and communities in which the properties are located,” said Special Agent in Charge Monica M. Miller of the Sacramento Division of the FBI. “The FBI continues to be committed to identifying and investigating mortgage fraud schemes, such as those committed by Hoda Samuel and her associates.”

“Today’s sentencing of Ms. Samuel is a warning to those who abuse their position of trust to unjustly enrich themselves, the consequences can be severe,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “Mortgage fraud has hurt so many people and so many of our communities. This sentencing highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”

At trial, evidence was presented by prosecutors Assistant U.S. Attorneys Philip A. Ferrari and Todd A. Pickles that Samuel, 62, owned and operated real estate agency Liberty Real Estate & Investment Company and Liberty Mortgage Company. The prosecutors showed that between April 5, 2006 and February 26, 2007 there were 30 real estate transactions for which Samuel was the real estate agent for the buyer in 29 of the home sales and also represented the seller in 15 of those sales (dual agency). Income statements for the borrowers were falsified in order to convince the lenders that said borrowers were qualified to make the home purchases (loan fraud, mortgage fraud). As a result, all of the properties were foreclosed eventually.

Read the original article in Mortgage Daily.

Owner of eLender Escrow Pleads Guilty to Running Ponzi Scheme

August 15th, 2013 at 5:22pm

An Orange County man who was accused by the U.S. Attorney’s Office of running an unlicensed escrow company that diverted loans to himself (escrow fraud) and to operating a Ponzi scheme has admitted his crimes and pleaded guilty.

Russell Samuel Biszantz stood before U.S. District Court Judge David O. Carter and along with the guilty plea, agreed to provide restitution to the victims in answer to the judge’s question.  Assistant United States Attorney Greg Staples said the Ponzi scheme caused losses of over $2.44 million from the victims and that Biszantz, the owner of eLender Escrow, Inc. of Lake Forest, had continued to operate his business after losing his license in 2008.

Sentencing for Russell Biszantz is set for December 2013.

Read the original article in the OCWeekly.

Inland Empire Man Discovers Acquaintance May Have Bought House in His Name

August 14th, 2013 at 3:20pm

An unnamed man is the victim of a “friend” who allegedly befriended him in 2007, offered to help him qualify for a home loan and then according to authorities used the victim’s information to buy a home for himself (loan fraud, real estate fraud).

Ruben Oscar Palagonia, a 67-year-old San Bernardino resident, has been arrested and charged with identity theft, forgery and recording false documents.

According to Investigator Ed Nyberg with the San Bernardino County District Attorney’s Office, the investigation by the Real Estate Fraud Unit began when the victim filed a real estate fraud complaint against Palagonia.

In a press release, Nyberg said, “About two years later the victim tried to purchase a home and discovered he already owned one. When the victim was advised of the location of the home, he went by the location and discovered that Palagonia was living in the residence.”

Read the original article in the Press Enterprise.

Ohio Man Indicted for Short Sale Fraud

August 5th, 2013 at 4:18pm

Donald P. Landers, 42, aka Dante Brickman, has been named in a 24-count indictment that was sealed by a Franklin County judge, then unsealed after Landers/Brickman was arrested on a warrant in Las Vegas.  The charges he is facing include engaging in a pattern of corrupt activity, one count of theft, 11 counts of money laundering and 11 counts of receiving stolen property.

According to the indictment, Donald Landers skillfully negotiated short sales with lenders of properties that were in foreclosure. He allegedly acquired those properties at below-market rates by telling the lenders they were in poor condition or were located in bad locations (short sale fraud).

Once he acquired the properties and put them in his business Great American LLC, Landers then recruited straw buyers to purchase the properties at inflated values by falsifying their incomes and assets (loan fraud, mortgage fraud). Franklin County prosecutor Ron O’Brien said the scheme included 11 Franklin County properties, including two that belonged to Landers himself. It was the inflated bank loans that funded the kickbacks to the straw buyers and the down-payments for the properties they purchased, with the difference going to Great American LLC.

My question: where were the bank appraisals that should have been ordered and reviewed before approving the short sales and before approving the loans to the straw buyers, each of which would probably have shown the sales were not legitimate. Were the banks asleep at the wheel (again), lazy, apathetic or ???

Read the original article in the Columbus Dispatch.

© Copyright 2007-2017 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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