California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

California City PD Detectives Work Hard, Get 2 Convictions for Mortgage Fraud

October 30th, 2012 at 3:33pm

In a conclusion to a previous posting on the California Real Estate Fraud Report, two defendants in a $2.7 million mortgage fraud scam centered in Kern County have pleaded guilty, joining three co-conspirators who were previously convicted. This case had it all: loan fraud/mortgage fraud, notary fraud, real estate fraud, identity theft.

The press release from the California City Police Department follows:

Two defendants charged in connection with an elaborate mortgage fraud scheme to obtain over $2.7 million dollars on sham sales of newly constructed California City homes pled guilty to mortgage fraud charges this week in Kern County Superior Court.

Real estate broker Jay Edward Langner, 52 of San Juan Capistrano had been charged with nine felony counts of conspiracy, grand theft and identity theft. Langner pled guilty to conspiracy to commit grand theft on Thursday. The remaining charges were dismissed in exchange for his plea. Court documents allege Langner, doing business as Pacific Hills Realty, participated in a conspiracy to arrange sham sales of newly constructed homes and submit loan applications containing forged documents and fraudulent misrepresentations. Langner is expected to be sentenced to four years of incarceration and forfeiture of his real estate license at a sentencing hearing scheduled for November 27, 2012. [note: as of Oct. 30, 2012 Langner’s DRE license was still in good standing.]

Angie Cachu, 45 of Orange, had been charged with nine felony counts of conspiracy, grand theft and identity theft. Cachu pled no contest today to conspiracy to commit identity theft. The remaining charges were dismissed in exchange for her plea. Court documents allege Cachu was paid by co-conspirators to recruit straw borrowers and offer them money for the use of their identities. Cachu is expected to be sentenced to 12 months of incarceration followed by five years of felony probation at a sentencing hearing on December 6, 2012.

The investigation began in late 2008 when California City Detectives received an identity theft report from an Orange County man who claimed his identity had been used for a mortgage loan on a California City property. The investigation that ensued identified dozens of properties also linked to the scheme. California City PD Detectives traveled extensively throughout Southern California and Nevada over the course of the 2½ year investigation, served search warrants at 43 locations, and examined thousands of documents.

The guilty pleas follow the convictions of three other co-conspirators also charged in the case.

Khalid Malik Abdul Ali, 61, of California City had been charged with nine felony counts of conspiracy, grand theft and identity theft. Court documents allege Ali received kickback payments at loan closing for conspiring to arrange sham sales of newly constructed homes. Ali pled no contest to conspiracy in February of this year and was sentenced to five years of incarceration.

Appraiser Nathaniel Acree, 66 of Long Beach had been charged with four felony counts of conspiracy and grand theft. Court documents alleged Acree conspired to provide falsely inflated appraisals in support fraudulent mortgage applications. Acree pled no contest to grand theft in December 2011 and was sentenced to two years of incarceration and loss of his appraiser’s license.

Notary Elizabeth Torres, 29 of Santa Ana had been charged with two felony counts of fraudulent notarial acts. Court documents allege Torres knowingly notarized false or forged deeds of trust. Torres pled no contest to accessory to a felony in March of this year and was sentenced to 10 days incarceration, three years’ probation and loss of her notary commission.

The case was investigated by California City Police Department Detectives with the assistance of the Orange County District Attorney’s office Bureau of Investigation and US Postal Inspection Service. The case was prosecuted by the Kern County District Attorney’s office.

The California City Police Department is grateful to retired Los Angeles County Sheriff’s Detective Chris L. Christopher for his invaluable assistance during this investigation. Chris was a nationally recognized expert in real estate fraud investigation and had come out of retirement to assist California City Police Department with the investigation and pass down his legendary detective skills to a new generation of investigators. Chris died in a traffic accident last year. This was his last investigation.

Multi-State Mortgage Fraud Ring Broken Up

October 29th, 2012 at 2:03pm

Laura Duffy,  the U.S. Attorney for the Southern District of California, has announced indictments in a mortgage fraud case that involved $100 million in real estate in California and Washington state.

Laguna Hills loan processor John Allen, 54, was charged last month by a federal grand jury for submitting fraudulent loan applications to lenders using straw buyers. The straw buyers were promised $10,000 in exchange for their participation in the scheme.

Los Angeles accountant Audrey Yeboah, 54, has already admitted her role by creating phony financial statements such as pay stubs and W-2 forms on behalf of the straw buyers. According to her guilty plea, Yeboah also admitted to reviewing financial statements that totaled over $14.5 million in kickbacks from the scheme.

Others who have been charged in this case are Mary Armstrong, an unlicensed mortgage broker; Armstrong’s assistant, William Fountain; Ramona real estate agent Teresa Rose; and a Seattle-area businessman named Justin Mensen.

Read the original articles in San Diego 6 and the Imperial Valley News.

US DOJ Sues Bank of America for $1 Billion in Losses Due to Mortgage Fraud

October 24th, 2012 at 10:32am

Ramping up an aggressive stance against mega-banks whose lending practices caused billions of dollars of losses to the taxpayer through Fannie Mae and Freddie Mac, the US Department of Justice has filed suit against Bank of America for $1 billion due to mortgage fraud. Fannie Mae and Freddie Mac are large financial institutions, backed by the federal government, that purchase loans from banks in the secondary market.

The U.S. Attorney for the Southern District of New York filed the suit. Its target is the “Hustle” loan program that originated with Countrywide Financial but was taken over when Bank of America purchased Countrywide in 2008. “Hustle” loans were named for Countrywide’s “High-Speed Swim Lane” (HSSL) program that was created ostensibly to streamline loans. U.S. Attorney Preet Bharara’s office charges that HSSL was “intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans.”

Read more about this landmark lawsuit on CNN and the press release for the U.S. Attorney for the Southern District of New York website.

San Diego Escrow Officer Acquitted in $11 Million Mortgage Fraud

October 22nd, 2012 at 10:39am

A unique mortgage fraud case that was tried in federal court has come to an end with the only defendant of 24 to be acquitted.

Escrow officer Billie Bishop, 52, of La Mesa, unlike most of the other defendants, did not plead guilty and instead elected to go to trial. Bishop had been charged with wire fraud and making a false statement to a bank; her case was the first time the racketeering law was used in a mortgage fraud case.

Prosecutors had accused her of processing 77 transactions in a scheme where the other defendants received more than the listed price for homes, with the remainder going to an account earmarked for construction upgrades. This special account was managed by Darnell Bell, a Lincoln Park gang member. The homes were purchased in the days of Ninja loans (No Income No Job or Assets) and most were foreclosed after the straw buyers walked away, with Bell and his co-defendants pocketing the loan money (loan fraud, mortgage fraud).

Billie Bishop was tried before U.S. District Court Judge Larry A. Burns. The attorneys who represented her were Gastone Bebi and Jonathan Jordan.

After the trial, Bebi stated that prosecutors had been unable to prove that Bishop had any awareness that the construction work was being performed or that the sales were fraudulent (real estate fraud, escrow fraud).

Read the original article in U-T San Diego (San Diego Union Tribune).

Two Westwood Men Charged in Distressed Homeowner Initiative Sting

October 22nd, 2012 at 9:24am

Two men who were managers at Westwood-based Direct Money Source (DMS) have been indicted as part of a nationwide investigation dubbed “Distressed Homeowner Initiative” by the U.S. Department of Justice.  The purpose of the nationwide opeation was to target businesses that lured distressed homeowners by promising “foreclosure avoidance” but which allgedly skimmed equity from many of the same homeowners. Over 500 people have been criminally charge in 285 cases filed by the Department of Justice across the country. The DOJ identified a staggering 73,000 homeowners as victims and losses to them and to lenders (loan fraud, mortgage fraud) as exceeding $1 billion.

David Singui, 49, the owner of Direct Money Source, and Aziz Meghji, 35, a DMS manager, were arrested last month and charged with conspiracy, wire fraud, loan fraud, aggravated identity theft and money laundering. Two other locals, Kiet Truong, 27, of Hawthorne, and Starr Smith, 31, face charges all of the same charges in the 42-count indictment except for money laundering.

Commenting on the arrests, United States Attorney André Birotte Jr. said “Shameless con artists seeking to prey on homeowners in financial distress need to know that law enforcement is hot on their trail. The results of this initiative demonstrate that the combined resources of federal, state and local authorities will be brought to the table in a concerted effort to bring fraudsters to justice and protect the nation’s homeowners.”

Read the original article in the Century City Patch and DSNews (Default Servicing News).


Sacramento Man Pleads Guilty to Mortgage Fraud

October 19th, 2012 at 11:17am

Sean McClendon, 46, a West Sacramento man, pleaded guilty in federal court for his role in committing mortgage fraud. 

McClendon was allegedly paid by his co-defendant Anthony Salcedo for falsifying documents in the loan origination process (loan fraud). Another co-defendant, Anthony Williams, is alleged to have helped Salcedo find buyers for four properties either owned or associated with Salcedo. In violation of the law, none of the back door payments were disclosed to the lenders in any of the real estate contracts. In the end, the lenders suffered losses of over $1 million.

The case was investigated by the FBI and the IRS.

Read the original article in the Sacramento Bee

Is There a Special Prison for Related Criminals?

October 11th, 2012 at 5:28pm

There has been more than one posting on the California Real Estate Fraud Report about real estate fraud and mortgage fraud crimes committed by familial relatives.

In this latest case, Stephen Kenneth Chrysler, 46, and his mother, Aida Agusti Castro, are going to prison for 37 months and 33 months respectivelyafter being convicted last April of multiple wire fraud charges.

Stephen Chrysler, a licensed real estate broker in Encinitas, and Castro, a licensed real estate broker in Carlsbad (I could not locate a record of her license), falsified 30 loan applications and supporting documents in order to get over $8 million in loans for buyers of 16 homes who were not only unqualified, but in many cases didn’t even understand enough English to have properly signed the documents. SKC Real Estate, Stephen Chrysler’s brokerage, “earned” $350,000 in commissions; the borrowers did not understand what they were signing and most of the properties were lost to foreclosure.

Stephen Kenneth Chrysler was also a licensed attorney in the state of California, but according to the State Bar of California, his license was given an interim suspension and he may not practice law as a result of his conviction.

Read the original article in Courthouse News.

3 in SoCal Arrested in Short Sale Fraud against Bank of America

October 11th, 2012 at 5:14pm

Finally, prosecuting short sale fraud has come to Southern California.

Three persons, including two licensed real estate agents, have been arrested after allegedly getting caught in a creative real estate fraud scheme that cost an unnamed lender $1.5 million. The investigating agencies were the Los Angeles County Sheriff’s Department Real Estate Fraud Team and the FBI.

Saliya DeSilva, 49, of Northridge, Nora Yefima, 50, of Santa Clarita and Vahe Hayrapetian, 45, of Burbank were indicted by a federal grand jury on multiple counts of wire fraud and bank fraud.

According to news wire service reports, Bank of America foreclosed on a property in the community of La Cañada Flintridge, on which the owner defaulted in July 2009. Before BofA could list the property, Sal DeSilva, then a Realtor® with USA Realty and Loans (he allowed his DRE license to expire in May 2011), posed as the homeowner and gave BofA counterfeit bank documents and convinced it the foreclosure was not valid. Bank of America then rescinded its sale. All this was unbeknownst to the true homeowner.

Here’s where the plot thickened: authorities allege that DeSilva then sold the multimillion dollar home in a short sale for $250,000 after providing the title company with counterfeit documents, included a forged short sale approval letter from Bank of America. The unnamed buyer then got a $1.5 million loan from Vahe Hayrapetian, who allegedly forged loan documents that were sent to the lender, which wired the funds to Oshana Escrow, Nora Yefima’s business in Encino. Note: Nora Yefima also holds a real estate sales person’s license and sells real estate under the brokerage of Interstate Mortgage Lenders Inc., also in Encino.

Yefima allegedly prepared false escrow documents and wire transferred a small amount of the loan proceeds to the title company and then disbursed the remaining more than $1 million to parties not related to the sale.  The “buyer” then defaulted on the loan.

Fidelity National Title Company may be stuck with having to pay the unidentified lender because Bank of America states that it never authorized the short sale, which, if the allegations are true, was fraudulent.  

Read the original article in the La Cañada Flintridge Patch and the Encino Patch.


US Dept. of Justice Sues Wells Fargo for Mortgage Fraud

October 9th, 2012 at 2:31pm

On behalf of taxpayers, Manhattan U.S. Attorney Preet Bharara has brought a civil action against Wells Fargo, accusing the lending giant of lying and concealing the poor quality of loans it certified for backing by the FHA. FHA loans that fail (foreclose) are the responsibility of the U.S. Department of Housing and Urban Development to reimburse the bank. In other words, there is no downside to writing a bad loan, which in this lawsuits, Bharara assets involved 6,320 mortgages.

According to the complaint that was filed in Manhattan federal district court, from January 2002 through December 2010, Wells Fargo deliberately concealed the findings of its own risk department that the FHA loans were “seriously deficient.” One of Wells’ own employee determined there was a “a dirty underbelly of bad loan officers.” The lawsuit further alleges that the bonus “incentive” plan that Wells Fargo had set up, was a prescription for disaster because it rewarded employees based on the volume of loans they produced without regard for the quality.

The purpose of FHA government-backed loans is to make home loans available to moderate and lower-income borrowers who would be able to qualify without the programs.

Citigroup, Flagstar Bank, Bank of America, Deutsche Bank and FBC have already reimbursed the FHA $1 billion after their own similar legal settlements.

Read the original article in the Huffington Post.

Tujunga Man Sentenced to Prison for Getting 4 HELOCS on the Same House

October 4th, 2012 at 2:46pm

A  man from the San Fernando Valley community of Tujunga is going to prison for more than 3 years for lying to banks in order to obtain home equity lines of credit (HELOC) on his home’s mortgage.

David Han, aka Young He Kim, pleaded guilty to four counts of bank fraud. He brazenly had filed four loan applications to four different banks on his only property.

United States District Judge Manuel L. Real ordered Han, 50, to pay $1.1 million in restitution to the victims/banks.

Read the original article in the Sacramento Bee

© 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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