April 18th, 2012 at 2:11pm
Tony Symmes, 61, once one of the largest home building operators in Chico, has been sentenced to 2 years 11 months in prison for conspiring to commit fraud and for money laundering. He must also pay restitution of$4 million dollars.
Symmes conspired with Garret G. Gililland III and other defendants to sell 62 homes to Gililland’s straw buyers for inflated prices (appraisal fraud) between 2006 and 2008. After escrow closed, the overage was returned to Gililland’s storefront companies and disbursed among the defendants. Of course, the lenders who financed the loans were unaware of this real estate fraud scheme.
Garret G. Gililland III, Shane Burreson, William Baker, Niche S. Fortune and others have already pleaded guilty for their roles in defrauding the lenders (loan fraud, mortgage fraud). Kesha Danine Fortune Haynie, who is Niche Fortune’s sister did not plead out and was convicted of mail fraud in March 2012.
The investigation and prosecution were a cooperative effort by the FBI, IRS Criminal Investigation Division and the Butte County District Attorney’s Office.
Read the original article in KRCRTV.com.
April 6th, 2012 at 8:31am
The second of seven Hells Angels defendants charged in September 2011 with conspiracy to defraud banks by submitting fraudulent loan applications (mortgage fraud, loan fraud) has received a one-year sentence.
Josh Leo Johnson, 36, of Santa Rosa, is (was?) the vice-president of the Sonoma chapter of the Hells Angeles. He pleaded guilty back in December to lying about his income in order to get a loan from Sun Trust Mortgage. U.S. District Judge William Alsup also ordered Johnson to pay $130,000 in restitution to the lender.
The first defendant to plead guilty in the case, Raymond Foakes, did so to charges of fraud and money-laundering. Foakes, the former president of the same chapter as Johnson, received almost six years in prison by Judge Alsup.
Read the original article in the San Francisco Chronicle.
April 6th, 2012 at 8:17am
Freddy Lentz, 35, the first of six Southern California defendants in a mortgage fraud conspiracy case, has been sentenced to three years of probation after pleading guilty to accepting a $1,000 bribe. Lentz formerly worked for Bank of America.
Anthony Lewis, 39, a San Fernando Valley resident, has also pleaded guilty and is awaiting his sentence. Lewis found homes for the fraud ring to purchase and directed Maria Arriaza, 34, an escrow officer at Diamond Clear Escrow in Granada Hills, on how to disburse the ill-gotten gains.
Deon Jackson, 37, a mortgage broker from Gardena and Jennifer Le, 30, a former loan processor from the South Bay, submitted fraudulent loan applications on behalf of straw buyers.
Last but not least is Matthew Balsz, 32, a U.S. Bank employee from the South Bay. Balsz was charged with accepting bribes
The six were prosecuted by the U.S. Attorney’s Office in Los Angeles.
Read the original article in the Contra Costa Times.
March 29th, 2012 at 9:32pm
The operator of Empire Mortgage in Chico, has been found guilty of two counts of mail fraud as a result of a mortgage fraud conspiracy in which she participated.
Kesha Danine Fortune Haynie, 41, was the loan originator and generated phony loan applications in an illegal kickback scheme connected to the purchase of new homes.
Haynie received $41,000 from the homebuilder (unnamed in this article) after the close of escrow for the home sales. The buyers were paid $29,000 and then Haynie would share in the remaining monies with her co-conspirators. Neither the lender, escrow or title companies were aware of the fraud.
Evidence showed that she promised homebuyers kickbacks from a Chico homebuilder in exchange for purchasing homes. The day after the close of escrow, the homebuilder would write checks averaging $41,000 to the conspirators.
Kesha Haynie’s real estate license is still in good standing with the California Department of Real Estate (DRE). Let’s see how long it takes for the DRE to act now that she has been convicted.
Note:
Kesha’s sister Niche Savon Fortune, 39, of Chico, was sentenced to 57 months for brokering kickbacks to buyers in the scheme and falsifying loan documents (loan fraud).
Read the original article in the Central Valley Business Times.
March 29th, 2012 at 8:42pm
California Attorney General Kamala Harris, who played a key role in the settlement agreement between the attorneys general for all 50 states and Bank of America, Wells Fargo, GMAC/Ally, JP Morgan Chase and CitiMortgage for the fraudulent “robo-signing” the banking giants used to expedite foreclosure against homeowners, has now devised a Bill of Rights.
Although currently referred to as a Homeowners Bill of Rights, the proposed legislation would provide protection to legal tenants as well. It seeks to redress ongoing bad faith (in my opinion) business practices employed by not only the above banks but other lending institutions as well.
Here are some of the highlights:
(1) An end, or at least moderation, of the practice of dual-tracking. Thousands of homeowners thought they were working with their bank on a loan modification and then found out the bank was pursuing and completing foreclosure against them.
(2) Evicting tenants who have valid leases on houses that were foreclosed will cease.
(3) Believe it or not, robo-signing is still happening and which lender actually owns the promissory note to the property is obscured through the use of the Mortgage Electronic Registration System (MERS). MERS is the conduit by which the banks avoided paying city and county transfer taxes, which is required when there is a sale and makes it impossible for a homeowner wanting to contact his or her lender to know who it is.
(4) A new concept: proposal of a multi-jurisdictional grand jury for complex cases that cross county lines.
AG Harris also proposes a $25 fee to be paid by lenders or their trustees, upon filing a Notice of Default (NOD) against a borrower. The revenue generated would help fund law enforcement actions against lenders that fail to comply.
Read the original article in the Orange County Register.
March 22nd, 2012 at 11:27pm
Larry Otting, 66, a co-defendant in a case involving the purchase of a business called Healthy Family Farms, admitted during testimony that he allowed his fellow defendant Sharon Palmer use both his name and good credit (straw buyer) in order to secure financing for the farm (loan fraud, mortgage fraud).
Sharon Palmer and James Stewart, 64, bought the farm in Santa Paula after Otting received a loan for $1.1 million from Rabobank.
Palmer and Stewart are charged with multiple felonies related to the solicitation of investors for the farm purchase and fraud involving a bank in a real estate transaction (mortgage fraud, real estate fraud). In addition, Palmer is charged with stealing the loan money from the bank and another $450,000 from investors, at least one of whom is elderly (elder financial fraud).
Read the original article in the Ventura County Star.
March 15th, 2012 at 6:57pm
Five people, including two married couples, have pleaded guilty for their roles in a large-scale mortgage fraud case that has resulted in 26 indictments thus far.
The first couple is Al and Leila Siapno. They pleaded guilty to wire fraud when they lied on their loan application to refinance their home. Al Siapno, 35, is a Border Patrol agent with U.S. Customs and Border Protection (CBP) in San Diego.
Co-conspirator, Matthew McIntyre, 40, is (was?) a licensed real estate appraiser. He pleaded guilty to lying on an application in order to get a loan by creatively including another person’s assets as his own.
The second couple to plead guilty is David Berkenfield, 32, and Kristin Berkenfield, 31. They admitted to overstating their income in order to get a loan.
Read the original article in Mortgage Daily.
March 8th, 2012 at 10:07pm
In a dubious but not surprising statistic, California is the leader in suspicious home loans (possible mortgage fraud or loan fraud), according to FinCen, the Treasury Department’s Financial Crimes Enforcement Network.
San Jose, Riverside and Los Angeles were the top three cities in terms of the suspicious activity reports (SARs) filed by banks for the period July 2011 – September 2011. The reports exceeded Miami and Las Vegas, which were ranked fourth and fifth.
According to the filings by the lending institutions, approximately 46% of the SARs were related to homeowner debt removal or refinancing. The statistic I found most astonishing is that 15% of the loan applications involved discrepancies in the social security numbers.
Mortgage fraud and its close relative, short sale fraud, have created a significant negative impact on property tax valuations and collection, a point underscored repeated in my ebook “How to Commit Short Sale Fraud . . . and Get Away with It.” California Attorney General Kamala Harris has recognized this fact and noted that “We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state. There is a direct connection” between mortgage fraud “and the issue that we are challenged with in terms of our state budget crisis.”
Read the original article in the North County Times.
February 29th, 2012 at 10:12am
Leonard Williams, 49, and Joshua Clymers, 25 have been indicted for mail fraud for using straw buyers to purchase homes at inflated values (appraisal fraud), which they then flipped.
Williams is an associate of Garret Griffith Gililland III. Gililland, the subject of a number of posts on the California Real Estate Fraud Report, pleaded guilty in May 2011 to defrauding lenders (mortgage fraud, loan fraud) out of millions of dollars.
Leonard Williams was a licensed real estate agent whose license was revoked by the California Department of Real Estate in January 2012. The indictment charges that once acquiring the properties, Williams and Clymers sent the fraudulent deeds of trust through the postal service, which is what generated the mail fraud counts. Diamond Hill Financial, Inc., one of Gililland’s former companies, handled the escrow proceeds (escrow fraud).
Two developers who were also charged in Gililland’s real estate fraud scheme, Tony Symmes and William Baker, entered pleas and Symmes has returned about $4 million to the lender-victims.
Read the original article in the Chico Enterprise Record.
February 23rd, 2012 at 5:04pm
A long-time Mira Mesa real estate agent, his wife and seven of their associates have been charged in a 12-page indictment alleging mortgage fraud in which lenders lost up to $15 million.
The charges facing Eric Elegado and his wife Charmagne Elegado include conspiracy to commit mail and wire fraud, wire fraud, conspiracy to commit money laundering.
The defendants are collectively accused of falsifying more than 100 loan applications (loan fraud, mortgage fraud) between 2002 and 2007, most often targeting low-income Latinos (affinity fraud, ethnic fraud), according to Assistant U.S. Attorney Joseph Orabona. Orabona said that Charmagne Elegado had “defrauded her own parents” and called her “the most culpable person in this criminal enterprise.”
Charmagne Elegado, 47, was an account executive at New Century Mortgage during the period the mortgage fraud occurred. New Century Mortgage was the first of the subprime lenders to go bankrupty when the California real estate market reversed its steep growth and nearly crashed.
The following defendants worked for E Real Estate & Loans, Inc.: Theodore Cohen, 54, (Chief Financial Advisor); loan officers Minh Nguyen,28, of San Marcos; Alexander V. Garcia, 38, of San Diego; Roman Macabulos, 38, of San Diego; Ramin Lotfi, 36, of San Diego and Roderick Huerto, 34, of San Diego; and also Regidor Pacal, 51, of San Diego.
