California Real Estate Fraud Report

Two men operating a real estate fraud scam together may have lost everything with one being charged with murdering the other.

Reginald Robinson is accused of murdering his business partner, mortgage lender Kasmir Billon, in order to avoid having to split the spoils of their combined real estate fraud and mortgage fraud. Prosecutors allege that Billon and Robinson schemed to over-appraise townhouses that would be sold to straw buyers using loans written by Kasmir Billon. Billon was found shot to death, a bullet in his heart, in his BMW 745 in April 2008.

Read the full article in the Silicon Valley Mercury News.

A 3-year old fee imposed on real estate transactions in Kern County has resulted in a jail sentence to 37 year-old Primo Feliciano Jacquez, who pleaded no contest to one count of grand theft by pretense.

Here’s the kicker: two articles below in this blog, Kyle Grasso, convicted of helping to defraud Lehman Brothers Bank and others of $13 million, was sentenced to one year and a day in prison. Jacquez, who was accused of scamming seven investors out of $385,000 in 2007, will be sentenced next month to two years and four months in prison in addition to having to pay restitution.

Read the full article in the Bakersfield Californian.

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.

The Orange County District Attorney’s Office reports that real estate losses reported to its special real estate fraud unit amount to $100 million, with over 1,000 victims. The unit, formed only last year, has had 346 referrals to it for mortgage fraud (and presumably, loan modification scams) and real estate fraud both from victims and real estate professionals.

The numbers so far:

Referrals to the DA of suspected real estate fraud: 346 +

Referrals from county Clerk-Recorder: 16

Investigations received from law enforcement agencies: 17

Filed criminal cases: 29

Cases rejected for filing: 30

Cases referred to other state or federal agencies: 12

Convictions: 14

Real estate crimes by white-collar criminals show no sign of abating. Please get multiple, independent references before giving your money to someone you do not know.

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

U.S. District Judge George H. King sentenced five people convicted in a foreclosure fraud scheme that victimized homeowners in foreclosure who were seeking assistance.

Judge King meted out the harshest sentence and criticism to Edward Seung Ok, who received 15 years in prison for his crimes. According to the judge, Ok fell “far short in the full acceptance of responsibility”. Among other things, Ok used the $4.6 million he stole to buy drugs and alcohol and a Lamborghini Gallardo. He violated his plea agreement by trying to hide from investigators the $1.6 million he transferred to the Bank of Nevis on the Caribbean island of St. Kitts.

Ringleader Martha Rodriguez was sentenced to 10 years and agreed to forfeit $900,000 in cash seized by the feds (see, crime does pay), interest in five homes and a truck. She spearheaded the scheme for which she was convicted while being free on bond after being charged with other real estate crimes.

Ok, Rodriguez and fellow convicted defendants Maria G. Juarez, Vladimir Stefanovic and Cynthia Valenzuela (she worked on the escrow fraud side) preyed upon homeowners in default and promised they could help save their homes by selling their homes to buyers provided by the defendants. In realty, the buyers were “straw buyers” who had no intention of purchasing the distressed properties.

Read the full article on Southern California Public Radio. More recent articles appeared in the Orange County Register and the National Mortgage Professional.

* Hot off the press *

Kevin and Leslie Sluga, the father and mother-in-law of former Realtor David Crisp, have signed plea agreements with federal prosecutors in which they admitted they were guilty of wire fraud and other charges. Their guilty plea is dependant upon a similar guilty plea from Megan Balod, their daughter but does not include their other daughter, Jennifer Crisp. Jennifer Crisp is married to David Crisp but has not been charged with any crimes.

The Slugas were allged by federal prosecutors of having created fraudulent employment and other documents so that borrowers could obtain mortgage loans. For their crimes, they could each receive up to 20 years in prison and financial penalties of up to $250,000.

Note: after this original article was posted, Megan Balod was formally charged by the U.S. Attorney’s Office in Fresno on four counts of wire fraud and aiding and abetting.

Read the Full Article in the Bakersfield Californian.

Kevin and Leslie Sluga, reported to be relatives of defrocked Realtor David Crisp, are facing multiple counts of wire fraud and aiding abetting in a fraud case that brought down the powerhouse brokerage of Crisp and Cole in Bakersfield, California.

David Crisp and his partner Carl Cole are being investigated on suspicion that they defrauded mortgage companies and federally insured (FDIC) institutions by submitting fraudulent documents and information that amounted to up to $11 million in loans, all of which later defaulted. While both men have lost their real estate licenses, neither has been charged criminally.

Jerald Texeira admitted to processing fraudulents loans for Crisp and Cole and accepted a plea arrangement in September 2009.

Kevin Sluga, a CPA, was a co-owner of his own business; he and Leslie Sluga are accused of creating false documents. Sluga operated his firm under two different names: California Business Solutions first and then later Comprehensive Business Solutions.

Read the Full Article in BakersfieldNow.com

Joseph Babijian, a Beverly Hills Realtor prosecuted by the U.S. Attorney’s office for being part of a mortgage fraud conspiracy group that saw Lehman Brothers Bank and others ripped off of tens of millions of dollars, has escaped prison, something his colleagues Kyle Grasso and Lila Rizk, have not.

Detailed in articles published in earlier postings of the California Real Estate Fraud Report and other news publications, the allegations were that a sophisticated and tight-knit group of real estate agents (Babijian and Grasso), mortgage brokers and developers and business partners Mark Alan Abrams and Charles Elliott Fitzgerald bought properties in high-priced zip codes of West Los Angeles using straw buyers and then obtained financing from Lehman Brothers for inflated property appraisals, courtesy of appraiser Lila Rizk.

Pleading guilty for their roles in the conspiracy were Nicole LaViolette, 37, a loan processor from Palm Springs; Jamieson Matykowski, 33, a real estate worker (what’s that?) from Laguna Niguel; and Timothy Holland, 35, an escrow officer from Santa Ana; and Richard Maize, 54, a mortgage banker who co-founded Americorp Funding.

Read the Full Article in the Beverly Hills Courier. A detailing of Richard Maize’s role in the conspiracy can be found in in this FBI press release.

Bad news for those who commit real estate fraud and mortgage fraud in Ventura County: the Ventura County District Attorney’s Office has just received almost $1.7 million in federal stimulus money to fight real estate crimes.

As a result of this good use of taxpayers’ dollars, the D.A.’s office will add one prosecutor, two investigators and an assistant to its team assigned to fighting real estate fraud according to Ventura County District Attorney Greg Totten.

If you live in Ventura County and believe you are the victim of a real estate fraud, click here for the Ventura County District Attorney’s Office to find complaint forms.

Read the Full Article in the Ventura County Star. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

In a case that is symbolic of the unbridled greed of the real estate and mortgage industries in the past 10 years, former Beverly Hills real estate agent Kyle Grasso and real estate appraiser Lila Rizk were convicted on multiple federal charges of bank fraud and conspiracy. They now face sentences of up to 515 years and 425 years respectively when they are formally sentenced next January.

In a clear surprise to prosecutors, the lead defendant, Joseph Babajian, was acquitted of 13 criminal charges, with the jury failing to reach a verdict on 8 additional charges. Prosecutors are evaluating to retry Babajian, despite skepticism from U.S. District Judge Dean D. Pregerson that Babajian could be convicted.

The fraud group’s ringleaders were developers Mark Alan Abrams and Charles Elliott Fitzgerald, who were convicted earlier in the year for their part in a scheme that cost Lehman Brothers Bank and other lenders up to $40 million in losses. According to earlier published reports in the California Real Estate Report and other media, the extent of the losses occurred because Lehman Brothers brushed off reports that they were being ripped-off when contacted by alert real estate agents such as Christian Stevens of Keller Williams Realty.

At its height, the conspiracy ring consisted of the developers, appraisers, mortgage brokers and real estate agents. Lower-end properties in high-priced Westside neighborhoods were purchased by “straw buyers” (non-legitimate borrowers working in the ring). The properties were then refinanced after being appraised at inflated prices and the proceeds distributed to members of the ring, who then defaulted on the loans. Eighty-one of these transactions were performed, with the conspirators borrowing a total of $142 million from Lehman Brothers.

Read the Full Article in the Los Angeles Times.

Also search this blog for “Beverly Hills” to read earlier articles.