California Real Estate Fraud Report

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Archive for the 'Real Estate Crimes' Category

Real Estate Auctioneer Sentenced for Fraud

September 19th, 2014 at 7:16am

A short-lived scheme has resulted in a Huntington Beach woman being sentenced to state prison after she admitted to defrauding banks at real estate auctions she held.

Reyna Peinado, 48, and an associate ran auctions for Reliable Posting and Publishing (RPP) and conducted real estate auctions at the Orange County courthouse. According to an FBI investigation, Peinado contacted some of the winning bidders at her auctions and offered to reduce the sale price of the properties they had purchased from between $15,000 and $57,000 if they would pay her a $5,000 bribe.

The banks that held title to the foreclosed properties lost about $261,500 as a result of her crimes.

Read the original article in the Orange County Register the FBI’s press release.

 

Sentences Handed Out for $36 Million Ponzi Scheme in Sacramento

September 19th, 2014 at 6:43am

Three men have received heavy prison sentences for their roles in the Ponzi scheme they ran under the company known as Diversified Management Consultants (DMC).

After hearing victims’ testimonies and an FBI forensic accountant, U.S. States District Judge Troy Nunley sentenced Christopher Jackson, 46, of Elk Grove,  to 30 years in prison; Michael Bolden, 60, of Sacramento, to 20 years in prison; and Victor Alvarado, 53, of Sacramento, to 10 years in prison.

According to prosecutors from U.S. Attorney Benjamin Wagner‘s office, DMC ran various investment clubs between 2003 and 2009, convincing at least 240 people, including their own families, to invest with them. Very little of the money was actuall invested, going instead to pay phony returns to previous investors (the Ponzi scheme) and to buy jewelry, expensive clothes and trips and the requisite Lamborghini, Rolls Royce, BMW, and Range Rover.

Three more DMC principals await sentencing: Garry Bradford, Nicholo Arceo and Erica Arceo. Erica was the in-house-attorney but lost her law license with the California State Bar as a result of her involvement and guilty plea.

Read the original article in the Central Valley Business Times.

Short Sale Fraud Comes to Iowa

September 12th, 2014 at 12:33pm

An 11-page indictment from the U.S. Attorney for the Southern District of Iowa alleges that four men, including an attorney, defrauded financial institutions in the area in or around Des Moines, causing losses to the lenders of approximately $400,000.

The four defendants, who have been charged with bank fraud,  are attorney Jason Springer, property flippers Nathan Smith and Patrick Steven, real estate agent Rick Makohoniuk and mortgage broker Jerod Hogan.

The indictment charges that Smith and Steven negotiated short sales with the lenders on the behalf of the selling homeowners. Lenders require the purchasers of such properties to be arm’s-length buyers in order to ensure that the properties are sold at fair-market value and are not simply a ruse for the sellers to get their properties back at a reduced mortgage.  However, prosecutors allege that Smith and Steven purchased the homes without disclosing this to the lenders and that further, the selling prices were not fair-market value (short sale fraud). Note: Dear Banks: where were your appraisers when this happened?

Following the purchases, which involved 18 properties, Smith and Steven resold the homes for a profit, i.e., their true fair-market values. Attorney Springer is alleged to have participated by conducting the closings. Makohuniuk is alleged to have submitted false documents to a lender and Hogan alleged provided Smith and Steven with false documents they used to deceive the lenders.

The allged crimes occurred from approximately March 2009 to March 2011 and were investigated by both the FBI and the Office of Inspector General for the Department of Housing and Urban Development (HUD-OIG).

Publisher’s note: it is my observation that California has proportionately done less to investigate and prosecute short sale fraud than any other state, which probably explains why short sale fraud is as common as identity theft here.

Read the original article in the Algona Upper Des Moines.

To learn more about short sale fraud, read my book “How to Commit Short Sale Fraud . . . and Get Away with It.”

Unlicensed Real Estate Agent Arrested for Selling Home

September 12th, 2014 at 11:23am

An article in the OC Register tells the case of Costa Mesa resident Daniel Gallimore, who was arrested by Huntington Beach police and accused of the fraudulent sale of a house in Huntington Beach.

Somehow, Gallimore, 52, managed to convince the buyers that he was the real estate agent for the property. However, according to the police, he is not licensed as a real estate agent and had neither a connection to the property nor the authority to sell it.

Authorities aren’t speaking, but the Huntington Beach police Bunco/Forgery Unit, along with the Orange County District Attorney’s Office Major Fraud/Real Estate Unit and the United States Secret Service also executed a search warrant in Costa Mesa related to the case that turned up additional evidence.

 

Owner of Head Financial Service Get 35 YEARS in Prison

September 12th, 2014 at 11:15am

Charles Head, 40, the former CEO of Head Financial Services, Creative Loans and other brokerage and financial companies, was sentenced by U.S. District Judge Kimberly J. Mueller to 35 years in prison for operating foreclosure rescue scams.

Instead of helping homeowners who came to him for help in avoiding foreclosure of their homes, Head substituted straw buyers on the victims’ property titles without their knowledge (title fraud). straw buyers then applied for mortgages and sucked out whatever equity existed. The victims lost their homes and suffered damage to their credit ratings.

According to prosecutors, Charles Head‘s foreclosure fraud began in Los Angeles and Orange Counties and then expanded to a nationwide operation. In all, he and his co-conspirators obtained over $90 million in loans, caused losses of over $50 million and stole the title to more than 300 homes. He was caught only because one of his victims in Sacramento contacted an FBI economic crimes agent on a complaint line.

Read the original article in the Sacramento Bee.

Modesto Man Charged in Real Estate Investment Fraud Case

August 8th, 2014 at 7:02am

A Modesto man was arrested Tuesday on allegations he mislead victims into putting funds into what they believed were legitimate real estate investments.

Xue Heu, 37, of Modesto has been arrested and charged with eight counts of wire fraud for allegedly taking over $360,000 from investors, who thought their money was being used to purchase real estate investments. Instead, Heu is being accused by the U.S. Attorney, Eastern District of California of using the money for his own purposes.

Read the original article in News10.net.

 

Petaluma Real Estate Agent Sentenced to Prison for Orchestrating Ponzi Scheme

July 11th, 2014 at 10:41am

Aldo Baccala, 73, a former real estate agent who pleaded no contents to a 141-count of criminal charges for a Ponzi scheme, was sentenced to 20 years in prison by Judge Gary Medvigy. Judge Medvigy also ordered Baccala to pay a $6.4 million fine for the havoc he wrecked on his investors, most of whom were financially ruined. Some of his victims were said to be close friends.

Prosecutors and Probation Department officials had recommended 137 years and four months in prison for the crimes, which included counts of securities fraud and grand theft with enhancements for elder financial abuse and white-collar crime. The crimes occurred from 2004 to 2008

Prior to sentencing, many victims testified how their life’s savings of over 40 years were wiped out by Baccala, who blamed the losses on the economic downturn. Baccala’s statements were countered by prosecutors, who said Baccala knowingly defrauded investors by issuing promissory notes backed by properties he didn’t own and that he used the monies he received to pay earlier investors, make risky stock market investments of course treat himself to a lavish lifestyle.

Read the original article in the Press Democrat.

San Jose Woman Charged with Grand Theft for Fraudulent Renting on Craigslist

May 16th, 2014 at 8:16am

Monique Morris, 47, was charged with three counts of grand theft  by the Santa Clara County District Attorney’s Office after its Real Estate Fraud unit investigated her for rent fraud.

In March and April of this year, Morris is alleged to have posted her condo or rooms in her condo for rent on Craigslist. According to the DA’s office, she showed three couples her property, located at 928 Catkin Court in San Jose, then had them sign leases and collected deposits from them.

Read the original article in the Mercury News.

Jeriel Salinas, Crisp & Cole Defendant, Sentenced

May 16th, 2014 at 8:02am

Jeriel Salinas, one of the defendants in the massive Crisp and Cole real estate fraud and mortgage fraud prosecution, has been sentenced to 19 months in prison. He  pleaded guilty in fall 2013 to one count of conspiracy to commit mail fraud, wire fraud and bank fraud.

Salinas admitted purchasing at least six properties in Bakersfield and Shaver Lake, posing as a straw buyer. He was also a real estate agent  licensed through the California Bureau of Real Estate, which meant he was paid commissions on some of the fraudulent sales.

Read the original article in Bakersfield Now.

Indicted Mill Valley Developer Found Dead in Car Wreck

May 9th, 2014 at 8:27am

Bijan Madjlessi, 58, a developer from the rural community of Strawberry, was found dead in a car wreck on Mount Tamalpais.

Madjlessi was facing federal and state fraud charges with respect to his Santa Rosa project known as Park Lane Villas East. He had defaulted on his $30 million loan but in April was arrested and charged with conspiring with others to re-purchase his loan through the use of a straw buyer.

In addition to Bijan Madjlessi, three other men were indicted: David Lonich, 59, a Santa Rosa lawyer; and two former executives at Sonoma Valley Bank, Sean Cutting, 44, from Sonoma; and Brian Melland, 45, from Santa Rosa.

Read the original article in the Marin Independent Journal.

© Copyright 2007-2014 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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