California Real Estate Fraud Report

The Federal Trade Commission is trying to show consumers there’s no such thing as a free ride. If something is too good to be true, it almost always is.

The FTC’s Division of Consumer and Business Education recently set up a web site called Esteemed Lending Services, a fictitious lending company, that trumpets to borrowers that “We guarantee a loan to fit every situation.” In just 60 days, Esteemed Lending Services received 3,500 hits on its website. Apparently, there are still a lot of consumers who think that there are financial services companies that can bail them out from deep debt.

Read the full article in the Los Angeles Times, written by Lew Sichelman.

Randall Guerra heads a non-profit group funded by the government to help distressed homeowners in the Fresno area. He said 8 to 10 homeowners are walking in to his office each walk for help after being ripped off either by foreclosure consultants, loan modification firms or the banks.

Loan modification firms charged upfront fees (now illegal) to borrowers for assistance in negotiating loan modifications. Either the company did nothing for the borrower or took his or her money knowing that the borrower could not qualify for a loan modification.

Sydney Ricks, an attorney who heads the Real Estate Fraud Division of the Fresno County District Attorney’s Office says “There’s a lot of desperation out there and the scam artists are targeting those people knowing there is a lot of anxiety.” Yet, while there is a backload of cases to process, the unit has only one attorney and one investigator.

Read the full article on ABC.

In a press release issued today, California Attorney General Edmund G. Brown announced that 9 men have been charged with operating a boiler room foreclosure fraud operation. The scam is reported to have fleeced some 1,500 homeowners out of more than $2.3 million by promising the desperate victims they would receive loan work-outs and modifications.

Four of the the men are already in custody: Gregg Scott Quinn, 37, of Camarillo, the ring’s sales manager; Juan Pierre Washington, 40, of Winnetka, a supervisor; Gary Arnold Eisenberg, 71, of Westwood, a top-performing telemarketer with the company; and Ira Itskowitz, 58, a sales manager. Eisenberg and Itskowitz have distinguished themselves by each having spent more than five years in federal prison for their previous fraud convictions.

Still missing are the four principal owners of the business: Niv Iskin, 30, of Reseda; Reviv Karpman, 38, of Tarzana; Tomer Kogman, 29, of Reseda; and Avraham Yechizkia, 34, of Encino; as well as a sales manager, Barel Iskin, 23, of Woodland Hills.

AG Brown’s office responsed to numerous consumer complaints against the defendants’ and their Canoga Park businesses at 8236 Remmet Avenue, Mason Capital Group, LLC and Gretchen Fox and Associates. Agents found a Las Vegas-style sales floor with casino-themed decor such as craps, poker and black jack tables fashioned into computer workstations. Top producing telemarketers received bonuses by spinning a roulette wheel.

As with all loan modification scams, this one preyed upon borrowers desperate to save their homes, who were enticed into relying upon false statements by the telemarketers that they had a “highly successful loan negotiation staff with over 20 years experience”, as well as paying upfront fees, a practice that is illegal unless performed by an attorney. Although Mason Capital Group and Gretchen Fox and Associates promised a guaranteed refund, in practice they refused almost all requests by dissatisfied clients to receive their money back.

The defendants have been charged with 97 criminal counts that include collecting advance fees for foreclosure consultant services, making false and misleading statements to induce homeowners to pay in excess of $400 for loan modification services, failure to remit business income tax returns, remitting false personal income tax returns and committing two or more felonies with White-Collar Crime Enhancement and Excessive Taking Enhancement.

Read the California Attorney General’s press release and the Declaration in Support of Arrest Warrants.

A mother-daughter team is sitting in Kern County jail after being unable to post bail of $1 million each.

Dawn Marie Kantin, 37, and her 69 year-old mother Alice Kantin, have been charged with dozens of counts of conspiracy, embezzlement, theft, notary fraud and forgery. The charges arise from a real estate fraud scheme in which at least 32 people were cheated out of $2.3 million from 18 homes that went into foreclosure.

Alice Kantin is the owner of Desert Air Real Estate Investments, Inc. in Bakersfield, a company that is not registered with the California Secretary of State.

The Kantins purportedly contracted with homeowners in default to take over their mortgage payments; instead all the homes were lost to foreclosure. In addition, 14 tenants with options to purchase the homes also lost their investments due to the foreclosures.

While mother Alice allegedly put the deeds of the distressed homeowners in her name or that of Desert Air Real Estate Investments while she searched for a renter to purchase the home, daughter Dawn Kantin allegedly busied herself with committing notary fraud. Dawn Kantin is not only not a licensed notary public in California; her application to become one was denied the California Secretary of State’s office because of “substantial and material misstatement or omission in the application” according to by Gordon Isen, Deputy District Attorney of the Kern County District Attorney’s Real Estate Fraud Unit.

Read the full article in the Bakersfield Californian.

Mary Alice Yraceburu, 46, of Riverdale and Marianne Curtis, 68, of Costa Mesa have just pleaded guilty to 71 counts of illegally taking upfront fees for loan modification services that they never provided and related crimes. The two were investigated by the California Attorney General’s Office and prosecuted in Orange County Superior Court.

Neither woman possessed real estate licenses, legal expertise or experience in the mortgage industry but they were already convicted felons whose latest business enterprise was called Foreclosure Freedom.

Read the full article in the Orange County Register, aka OC Register.

Two San Diego men have been indicted by federal prosecutors have indicted for loan modification fraud.

Glenn Rosofsky and Michael Trap not only set up their business, Nations Housing Modification Center, to deceive distressed homeowners into thinking they were located near the White House, but they brazenly sent out their solicitation letters using the seal of the U.S. Congress. Trap has already pleaded guilty to conspiracy and money laundering.

Read the full article on ABC News.

The United Law Group’s offices in Irvine were the subject of a raid last week, as agents from the U.S. Postal Inspection, the FBI, U.S. Immigration and Customs Enforcement, the Orange County District Attorney’s Office, the Irvine Police Department and the Special Inspector General for the Troubled Asset Relief Program conducted a joint search of the law firm’s office in connection with a possible loan modification fraud scam.

According to the affidavit for the search warrant, Interviews with homeowners and former employees revealed that United Law Group charged upfront retainers ranging from $1,500 to $12,000 (!!!), yet investigators were unaware of any loan modifications that had actually been completed, save for the examples used in the firm’s advertising.

The California State Bar is also looking into at least one of the firm’s attorneys, Sean Rutledge, and have filed disciplinary charges against him for taking money from a homeowner but not making any effort to obtain a loan modification on the homeowner’s behalf.

Read the full article on the Orange County Register, aka OC Register.

Attorneys with the Asian Pacific American Legal Center are accusing a Los Angeles law firm of defrauding several dozen Korean immigrants by promising to help them save their homes from foreclosure.

The Center has filed a lawsuit against Trinity Law Associates, Inc. and attorney Timothy D. Thurman. The complaint alleges that Thurman used Korean-speaking real estate agents to find homeowners in distress, after which Thurman and his associates charged retainers in the $7,000 range for services that were not rendered, according to the legal complaint. The Center’s attorney, Yungsuhn Park, said that most of the victims did not speak well and counted on the assistance of Trinity Law Associates to help them save their homes.

Read the full article in the Los Angeles Times.

Merced County District Attorney Larry Morse has been running a real estate fraud unit since 2009. They are also working with a joint team comprised of real estate fraud investigators from federal, state and local investigators that was also created in 2009 by the FBI to combat fraud in the Central Valley. Fraud cases that span multiple counties are prosecuted by the U.S. Attorney’s Office; those that are restricted to Merced County are prosecuted by Morse’s office.

DA Morse notes that “While our local economy wrestles with the financial fallout from a real estate depression and thousands of homeowners are wracked with worry about losing everything, others have seized on an opportunity. Those of us in law enforcement know all too well that in every tragedy there are criminal profiteers that will seek to exploit the misery of others.”

Merced, like the rest of the country, is battling crimes from the real estate fall-out ranging from vandalism, squatting, tagging and metal stripping/theft as well as ongoing loan modification fraud and scams.

Read the full article in the Merced Sun Star.