October 23rd, 2014 at 10:24pm
65-year-old Dinesh Valjeebhai Shah of Newport Beach pleaded guilty Friday to five felony counts of conspiracy to commit a crime, 13 felony counts of forgery, and other charges including identify theft and grand theft, said spokespersons with the Orange County District Attorney’s Office. He has now been sentenced to seven years in what prosecutors said was a conspiracy with his family member to commit real estate fraud by buying homes using straw buyers and submitting forged loan documents.
This all occurred between June 2006 and October 2009. Washington Mutual Bank approved all the loans and the total amount of the fraud was over $16 million.
The Shah family owned and operated New Age Realty, First Property Escrow, City First Realty, and Associates Investments Group, which were all at 13821 Newport Ave. in Tustin. One member owned and operated Vason Development, located at 1520 Warner Ave. in Santa Ana, which processed home loan applications.
Read the original article in the OC Register.
October 16th, 2014 at 8:37am
Real estate investor Grant McCollough, 38, and his 36-year-old wife, Marisa, pleaded guilty to conspiracy to commit wire fraud and defrauding the United States.
The McColloughs recruited investors to act as straw buyers and, according to the U.S. Attorney’s Office, arranged for erroneous information to be submitted to lenders to approve their loan applications. They also inflated the value of the homes (appraisal fraud) and disguised the source of the down payments in order to skim funds from the fraudulent transfer of property among their co-conspirators. And they hid their skimmed profits from the IRS.
Their associate, Donald Totten, was a mortgage loan officer and broker operating out of Rancho Santa Fe who specialized in negative amortization loans. Totten pleaded guilty in February to mortgage fraud, bankruptcy fraud and filing a false tax return that failed to report more than $3 million in taxable income.
Grant McCollough and Marisa McCollough will be sentenced in January 2015 by U.S. District Judge Michael Anello.
Read the original article in Fox 5 San Diego.
October 8th, 2014 at 9:58am
David Lazarus of the Los Angeles Times has written a thought-provoking essay: do consumers have the right to know that the person with whom they are about to invest their money has previous convictions for white-collar crimes?
Lazarus’ article is about Lloyd Segal, 66, a former Los Angeles lawyer, who was convicted in state and federal courts of real estate-related fraud. Segal used the social security numbers of two strangers to lease properties in Bel-Air and Marina del Rey, but, according to prosecutors, never paid the rent. When the landlords began eviction proceedings, prosecutors said he filed for bankruptcy using the same stolen identities. For this, he was sentenced in L.A. Superior Court to over two years, which he served concurrently with a federal sentence of 18 months for filing false bankruptcy petitions.
At least one unhappy consumer has registered his/her thoughts about Lloyd Segal on RipoffReport.com.
Lloyd Segal resigned his attorney’s license with the California State Bar in 2003.
Read the original, illuminating article in the Los Angeles Times.
September 30th, 2014 at 8:27am
Crisp & Cole defendant Julie Farmer felt the full weight of the judicial system this past Monday.
Farmer, who was the Chief Operations Officer for the firm, was sentenced by United States District Judge Lawrence J. O’Neill to three years in prison, to be followed by five years of supervised release. Showing just how profitable mortgage fraud was for Farmer and the company, Judge O’Neill further ordered her to pay $2,914,331 in restitution and to forfeit $15 million. That’s not bad income for a scheme that ran for less than four years and saw lenders defrauded out of millions when she and principals David Crisp and Carl Cole used straw buyers to buy and sell residential properties at inflated prices, skimming non-existing equity to line their pockets. All the properties ultimately were foreclosed.
Farmer’s harsh punishment, according to the judge, resulted from her supervising some of her co-defendants in the mortgage fraud conspiracy and for testifying falsely at the trial.
Benjamin Wagner, U.S. Attorney for the Eastern District of California, announced that “Today’s sentencing is the result of a culture of greed and opportunism that saturated a Bakersfield real estate company.”
Read the original article in KERO-TV.
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.
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.
** Update: meanwhile, some of the investors/victims sued Stewart Title of Placer and Stone Canyon Mortgage, to try to recover some of their losses. According to the Sacramento Bee, the case was settled on Sept. 24 for $900,000.
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.”
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.
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.
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.