California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

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

Linden Man Indicted for Being Straw Buyer in Mortgage Fraud

September 27th, 2012 at 7:12pm

A Linden-area man named Kory Schmidli, 34, has been indicted along with eight other people by a federal grand jury  in a local mortgage fraud scheme.

Schmidli is alleged to have acted as a straw buyer, along with friends, family and employees of brothers Volodymyr Dubinsky and Leonid Doubinski. The brother were developers who used their associates, such as Schmidli, to purchase up to 19 residential properties for them. In addition to using the straw buyers’ good credit, their financial assets were embellished in order to obtain the loans (loan fraud).

Read the original article in RecordNet.com.

Premiere One Lending Owner Sentenced, Order to Pay Restitution in $30 Million Mortgage Fraud

September 26th, 2012 at 9:24am

The owner of a Pasadena mortgage brokerage firm was sentenced to nine years in prison by U.S. District Court Judge David O. Carter for operating an ambitious mortgage fraud scheme that victimized both lenders and borrowers.

According to U.S. Attorney Andre Birotte Jr., Eduardo Ruiz, 33, and his co-defendants, sister Gilma Ruiz, 36, and 26-year-old brother Francisco Ruiz, submitted fraudulent loan applications on behalf of borrowers, many of whom did not speak English. At least 20 of the borrowers subsequently lost their homes to foreclosure, homes they never could have purchased if the applications had been submitted containing truthful information. Gilma and Francisco each received 18 month sentences, but that’s not much considering up to $30 million of the loans were fraudulent and the restitution ordered by the court against Eduardo is $5.7 million.

Eduardo Ruiz and his employees in 2005 and 2006 falsely inflated the income of more than 100 borrowers seeking home loans, officials said. Many of them did not speak English and were unaware of the fraud.

According to Leslie P. DeMarco, Special Agent in Charge of the IRS – Criminal Investigations Los Angeles Office, “Eduardo Ruiz and his cohorts knew the borrowers never had a prayer of making their mortgage payments and that many of the loans would go into foreclosure. Mortgage fraud crimes drive buyers into foreclosure, leave lenders burdened with bad loans and leave neighborhoods with abandoned and deteriorating properties.”

Read the original article in the Pasadena Star News.

Granite Bay Man Indicted in $3 Million Mortgage Fraud

September 25th, 2012 at 9:59pm

A Granite Bay man has been charged with six counts of mail fraud, wire fraud and bank fraud for lying to lending institutions in order to buy expensive homes and a World War II airplane.

According to U.S. Attorney Benjamin Wagner, Ryan William Costo, 37, submitted fraudulent loan applications (loan fraud, mortgage fraud) to CitiMortgage Inc., Washington Mutual, and Bank of America for $1.95 million, $3 million and $1.35 million respectively. The first two loans were for homes in Granite Bay and the last was for a 1945 North American P-51 D Mustang. The fraud allegedly occurred when Mr. Costo “enhanced” his assets and income and produced fraudulent tax returns and other accounting statements in order to obtain loan approval.

Read the original article in the Central Valley Business Times.

© 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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