May 17th, 2012 at 11:05pm
Ronald Nelson, 76, and his wife Edith Nelson, 53, both of Pleasant Hill, are going to prison for a unique scam: the couple have pleaded guilty to defrauding banks out of $20 million in order to purchase residential care facilities using straw buyers. Both Nelsons entered guilty please to charges of bank fraud, money laundering and tax charges.
The Nelsons’ scheme involved paying/bribing the straw buyers from $5,000 to $10,000 to submit fraudulent loan applications (loan fraud, mortgage fraud) to purchase residential housing, which they converted to so-called residential care facilities. Edith Nelson was sentenced to three years and 1 month in federal prison by U.S. District Judge Lowell Jensen and Ronald Nelson received 2 years and 8 months. They were ordered to pay restitution of $5.2 million.
Co-conspirators Nelda Asuncion, co-owner of Realty World Pacific West, 2 1/2 years in prison, and Cristeta Lagarejos, owner of Legacy Financing, received an 18 month sentence.
Read the original article in the San Francisco Chronicle.
May 4th, 2012 at 9:56am
James McConville, once a successful developer, was sentenced to eight years and nine months in federal prison for money laundering and conspiracy to commitmail and wire fraud. While in business, McConville referred to himself as “the West Coast Donald Trump.”
McConville purchased over 300 properties using straw buyers, falsifying loan documents and charging excessive “marketing fees,” a fact he hid from lenders (loan fraud, mortgage fraud). All told, he is said to have collected $12 million in his enterprise, which involved stealing from his own business partners.
IRS investigator Mary Williams and prosecutors are concerned that McConville has not disclosed where he has hidden all his ill-gotten gains. They believe he has hidden the money in Puerto Rico, Switzerland, Sweden and Cyprus, as well as the small Caribbean island of Nevis. They also believe he laundered some of the money through his family.
Read the original article in ABC 7 News.
April 26th, 2012 at 6:00pm
A woman who operated a Bakersfield tax preparing firm has admitted to participating in preparing and filing a fraudulent tax return to the IRS on behalf of a client. Her poor judgment is costing her dearly, as she has just been sentenced to three years and one month in prison for mortgage fraud by Chief United States District Judge Anthony W. Ishii.
Patricia Ann King, 57, owned The Tax Kings and as a tax preparer assisted taxpayers (who became co-defendants) in submitting false loan application documentation so that they could obtain loans from mortgage lenders (loan fraud, mortgage fraud). She also claimed to be a CPA (Certified Public Accountant) when in fact she was not.
King must also pay $530,300 in restitution to the lenders that were defrauded and $174,002 in restitution to the IRS.
The Patricia Ann King case was the result of a cooperative investigation by the FBI, the IRS-CID (Criminal Investigation Division) and a mortgage fraud task force based in Fresno assembled by the FBI and U.S. Attorney’s Office. Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III were the prosecutors for the mortgage fraud case.
Read the original article in KERO 23.
April 26th, 2012 at 5:10pm
Scott Dority, 54, a San Marino man who pleaded guilty in March 2011 to stealing $9 million from lenders by using straw buyers to purchase properties with falsified loan documents (loan fraud, mortgage fraud), has been sentenced to 121 months in federal prison. Dority used much of us ill-gotten gains to buy houses and splurge on Ferraris and Lamborghinis.
United States District Judge R. Gary Klausner imposed the sentence after Dority pleaded guilty wire fraud, conspiracy, aggravated identity theft and two counts of tax evasion. He was also required to allocute that the fraud he perpetrated resulted at least $4 million in losses to mortgage lending institutions (mortgage fraud) and $5 million to lenders who specialized in loans for cars (Ferrari fraud?).
The Scott Dority case was investigated jointly by the FBI, the IRS – Criminal Investigation Division (IRS-CID) and the United States Secret Service.
Read the original article in the Pasadena Star News.
April 26th, 2012 at 4:42pm
A mortgage broker who was accused of participating in a sophisticated mortgage fraud conspiracy with three other members of her family has received a stiff sentence by the judge.
Sushama Devi Lohia, 74, of Newport Beach, in December pleaded guilty to about 60 felony counts, including conspiracy, forgery, grand theft, identification theft and false recording of a deed (title fraud). She also pleaded guilty to 10 counts of tax evasion, according to Deputy District Attorney Douglas Brannan.
Lohia was accused of stealing more than $16 million from lenders by using straw buyers (people who “rent” their good credit out) to purchase properties on behalf of others. Loan applications were falsified, including inflating the income and assets of the applicants.
Lohia’s two daughters are awaiting their trials, as is a third relative.
Sushama Lohia’s real estate broker’s license is still active as of this date with the California Department of Real Estate (DRE).
Read the original article in the OC Register.
April 25th, 2012 at 9:13am
Gerald L. Wolfe, 41, an Irvine attorney and former real estate broker, is going to prison for 46 months after being convicted of wire fraud in a mortgage fraud scam. He also must provide $7.5 million in restitution to the banks from which he stole the funds.
Wolfe and his alleged co-conspirators purchase 30 homes in Orange and Riverside counties between 2005 and 2006 by using straw buyers, then falsifying loan applications (loan fraud, mortgage fraud). According to Assistant U.S. Attorney Brett Sagel, Wolfe received $25 million in property that was funded by the lenders, with none of his own money, and received $2.2 million back in cash.
Read the original article in the OC Register.
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.
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.
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.
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.