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.
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.
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.
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.
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.
May 9th, 2014 at 8:16am
Ronald Russell, a former California real estate broker from Sacramento, has been ordered to serve 13 years and four months in prison for participating in a “rent-to-own” fraud.
Given that he is already 73 years old, Russell may not outlive his sentence.
Russell owned Summer Hills Realty. He had been accused of convincing victims to pay him $2,900 each to join his program, which would first rent homes to the victims Russell had purchased with investor money and then eventually sell the homes to the renters. Prosecutors say the losses to the 51 victims was $139,200 and he was convicted in March 2014 by a Sacramento County jury of 49 counts of grand theft and two misdemeanor counts of petty theft.
Read the original article in the Sacramento Bee.
April 25th, 2014 at 7:52am
The only defendant to take a chance at trial in the long-running Crisp & Cole prosecution has been found guilty on seven counts related to her activities at the firm.
Julie Farmer was originally a bookkeeper and eventually became their operations manager. The jury found her guilty on single counts of conspiracy to commit wire fraud, mail fraud and bank fraud and two counts each of committing wire fraud and conspiracy to launder money. Farmer had maintained her innocence before and during the trial and said she was only following orders.
The jury acquitted Farmerr on single counts of wire fraud, mail fraud and conspiracy to launder money.
The remaining 15 defendants, including owners David Crisp and Carl Cole, all took plea deals, avoiding trials.
Read the original article in Bakersfield Now.
April 18th, 2014 at 5:32am
Four men have been indicted by the office of U.S. Attorney Melinda Haag for loan fraud involving failed Sonoma Valley Bank.
Bijan Madjlessi, 58, of Mill Valley; attorney David Lonich, 59, of Santa Rosa; former Sonoma Valley Bank President Sean Cutting, 44, of Sonoma; and former Chief Loan Officer Brian Melland, 45, of Santa Rosa were arrested and later freed on $250,000 bond each.
Madjlessi is a real estate developer who defaulted on a $30 million loan he obtained from a different financial institution for his development called Park Lane Villas East in Santa Rosa. After defaulting, he and Lonich are alleged to have applied for a loan with Sonoma Valley Bank under a false name. According to the indictment, Cutting and Melland knew the loan was being submitted using a straw buyer name and still urged SVB’s loan committee to approve the loan, the purpose of which was for Madjlessi to buy back his defaulted loan.
The four men are charged with 22 counts, including one count of conspiracy to commit wire and bank fraud, one count of bank fraud, six counts of wire fraud, one count of conspiring to make false statements to a bank, one count of conspiring to launder money and 12 counts of money laundering. U.S. District Judge Susan Illston will be the trial judge.
Read the original article in CBS Local.
March 20th, 2014 at 9:36pm
Any person who pays attention to the real estate market knows that fraud in the assignment of foreclosed “REO” properties and short sales is much too common.
Last Friday, one of the few prosecutions for REO fraud closed as Armando Granillo, a former employee of Fannie Mae, was convicting of soliciting kickbacks from a real estate broker. His offer to broker Angus “Gus” Maughan, which was to steer foreclosed home listings to Maughan in exchange for 20% of the sales commission, failed simply because Maughan is honest and called federal agents to report Granillo.
Granillo, who was convicted by a jury in less than two hours of three counts of fraud, offered the defense that he was only intending to cheat the real estate agent (Maughan), not Fannie Mae.
During a sting at a Mexican restaurant in Tucson, Arizona, in which Gus Maughan was wearing a button camcorder, Granillo claimed that he could help the broker “put other Realtors in Tucson out of business.” He also suggested that kickbacks were common at Fannie Mae and that he needed the extra money to pay for treatment for his daughter’s autism. Referring to his colleagues at Fannie Mae, he said “I think they’re a bunch of crooks.”
Whether or not kickbacks and dishonesty at Fannie Mae are common may come out in litigation between Fannie Mae and Karen Frisone, a real estate broker in Colorado. Information on that case can be found be clicking on this link.
Armando Granillo was prosecuted by Asst. U.S. Atty. Stephen I. Goorvitch.
Read the original story in the Los Angeles Times.
March 19th, 2014 at 6:01pm
A Petaluma man was pleading no contest in Sonoma County Superior Court Wednesday morning to bilking dozens of investors of $20 million through a Ponzi scheme.
Aldo Baccala, 73, a former real estate agent, has pleaded no contest to 141 charges of making false statements to sell securities, grand theft, and elder financial abuse and dependent financial abuse. He entered his plea in front of Sonoma County Superior Court Judge Gary Medvigy, who indicated he would sentence Baccala to 20 years or less of prison time in exchange for making his plea.
Baccala was charged with defrauding over 50 investors, many of them elderly, of over $20 million in a Ponzi scheme that promised returns for investing in assisted living facilities, a car wash and other businesses in California, South Carolina and other states. His company was called Baccala Realty and was based in Petaluma.
Instead of investing his victims’ money as promised he spent it on risky stock market investments, including covering margin calls.
Read the original article in KTVU.com