California Real Estate Fraud Report

You have just entered the #1 private-sector resource on the Internet for real estate fraud. In doing so, you have voluntarily left the dimension of the conventional real estate world and crossed over to the Dark Side, the realm where greed, dishonesty and evil are the order of the day. Sign up for a free subscription to this comprehensive news resource and receive weekly, timely news reports about real estate fraud, mortgage fraud, short sale fraud, REO fraud, title fraud, loan fraud, appraisal fraud, affinity fraud, loan modification scams, securities fraud and elder financial fraud.

Archive for the 'Real Estate Crimes' Category

Short sale fraud of his Florida ranch earns man a prison sentence

November 20th, 2015 at 10:12am

Jaime Olaya, 53, thought he outsmarted his bank in the short sale of his 10-acre property.

Olaya bought the property in 2005 and in 2008, quit-claimed half of it to a company he controlled. He later completed a short sale on the half that was retained in his name, selling the home to a straw buyer relative using his Olaya’s own funds from Colombia.

How he was caught remains a mystery. On top of the 2 1/2 years in federal prison he’s going to serve, he agreed to forfeit the entire property.

Read the original article in the Sun Sentinel.


Methuen Executive Convicted in Short Sale Fraud Conspiracy

November 20th, 2015 at 9:55am

The following is a press release from the United States Attorney’s Office for the District of Massachusetts:

BOSTON – A Methuen business executive pleaded guilty today to participating in a conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in the Merrimack Valley of Massachusetts.

Dahianara Moran, 40, pleaded guilty to one count of conspiracy to commit bank fraud.  U.S. District Court Judge Rya W. Zobel scheduled sentencing for Feb. 17, 2016.

Moran conspired with others – including a Methuen loan officer and a Haverhill real estate agent who were not identified in the charging document – to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen.  A short sale is a sale of real estate for less than the value of any mortgage debt on the property.  Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender, and that generally result in the lender absorbing a loss on the loan and releasing the borrower from the unpaid balance.  By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.

The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath.  Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater,” with their homes worth less than the mortgage debt they owed.  As part of the scheme, Moran and her co-conspirators submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales – and thereby to release the purported sellers from their unpaid mortgage debts – while simultaneously inducing the purported buyers’ banks to provide financing for the deals.  In fact, the purported sellers simply stayed in the homes, with their debt substantially reduced.  In some cases, the conspirators then re-sold the properties in genuine arms-length transactions for a profit.  Meanwhile, the short-selling banks lost millions of dollars.

As part of the conspiracy:

  • The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties, when in fact, the transactions were not arms-length, and the sellers retained control of (and frequently continued to live in) the properties after the sale. For example, Moran purported to sell two properties she owned to third parties who were, in fact, her close relatives, while actually maintaining control of both properties.
  • The conspirators submitted phony earnings statements that Moran prepared in support of loan applications that they submitted to banks in order to obtain financing for the purported sales.
  • The conspirators submitted phony HUD-1 Settlement Statements to banks, as well as to the Federal Housing Administration, that did not accurately reflect the disbursement of funds in the transactions. (A HUD-1 Settlement Statement is a standard form, developed by the U.S. Department of Housing and Urban Development, that is used to document the flow of funds in real estate transactions.HUD-1 Settlement Statements are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)

Hayacinth Bellerose, a real estate attorney from Dunstable, Mass., pleaded guilty last month to the same charge and is scheduled to be sentenced on Feb. 4, 2016.

The charge of conspiracy to commit bank fraud provides for a sentence of no greater than 30 years in prison, three years of supervised release and a fine of $1 million.  Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, the Special Inspector General of the Troubled Asset Relief Program, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.

Convicted in real estate investment fraud, man arrested again

November 13th, 2015 at 11:54am

Xue Heu, who already had been sentenced to over five years for running a Modesto-based real estate investment scam, is in trouble again.

While awaiting his sentenced, Heu, aka Michael Chan, was arrested by local authorities for stealing from new victims.

Heu and co-defendant Thomas Dickey Price, 73, also of Modesto, falsely posed as agents of Fannie Mae and Freddie Mac to sell distressed properties, all of which had already been sold. Their company was called Liquid Assets & Land Investments Inc. and Capital Land Investments LLC.

A third defendant, Mark Steven Thompson, 37, of Oakdale built the websites for Heu to lure investors and set-up email and bank accounts.

Read the original article in the Modesto Bee.

Federal judge lets five convicted in mortgage fraud case go free

November 13th, 2015 at 11:36am

U.S. District Judge John A. Mendez stunned federal prosecutors and defense attorneys by ordering five defendants convicted in a multimillion-dollar mortgage fraud scheme last May to go free. Instead, the judge declared that none would go to prison and sentenced them to probation and months of wearing electronic ankle monitors as they return to their daily lives.

Set free were Daniil Markevich, his sister-in-law Irina; his brothers Alex Markevich and Anatoliy Markevich; and Marina Pukhkan, Irina Markevich’s mother. The five had spent the money they were paid for acting as straw buyers on luxury items, such as a Lincoln Navigator and a limousine.

They had faced lengthy prison sentences for their participation as straw buyers for homes they had purchased by submitting fraudulent documents in order to obtain loans.

The judge’s decision is a huge loss for the Office of the U.S. Attorney for the  Eastern District of California, which has made mortgage fraud prosecutions a priority.

Read the original article in the Sacramento Bee.


New team formed to battle real estate fraud in Santa Cruz, Monterey and San Benito counties

November 13th, 2015 at 11:19am

WATSONVILLE — A group of district attorneys, real estate professionals and law enforcement officials from three counties have formed a new coalition to battle real estate fraud and protect residents.

The newly created Tri-County Real Estate Fraud Advisory Team is a collaboration of Santa Cruz, Monterey and San Benito counties.

Monterey County District Attorney Dean Flippo launched the effort after visiting a similar program in Ventura.

Massachusetts attorney pleads guilty in short sale fraud conspiracy

November 11th, 2015 at 10:08am

Hyacinth Bellerose, 50, a Dunstable, Massachusetts real estate attorney, pleaded guilty to one count of conspiracy to commit bank fraud in federal court.

Bellerose, who was prosecuted by the office of United States Attorney Carmen M. Ortiz, colluded with a Methuen loan officer and a Haverhill real estate agent to defraud lenders from 2007-2010 by orchestrating a number of phony short sales. Bellerose and her co-conspirators submitted false and misleading documents to the banks to convince them to permit the short sales while at the same time inducing the buyers’ banks to finance purchases. The home sellers, though, stayed in their homes with their mortgages “substantially reduced” (mortgage laundering) while the conspirators made money from the transactions. Some of the homeowners then later sold their homes at a profit.

Read the original press release on the website of the U.S. Attorney for the District of Massachusetts.

Two women plead guilty to conning victims in phony real estate investment scheme

November 6th, 2015 at 8:13am

Loan Thituong Nguyen, 46, of Westminster and Lynn Eichenberger, 45, of Chatsworth, have accepted deals from Orange County Superior Court Judge Kazuharu Makino.

According to Deputy District Attorney Pete Pierce, sentencing is scheduled for February 19 so that probation officers can prepare their findings on the women and to find out if they have paid any restitution. Nguyen has paid $150,000 and her insurance company has paid $300,000 but Eichenberger has made no payments. Given that they were accused of cheating their victims out of $3,000,000 that’s not much restitution.

The two ran a scheme in which Lynn Eichenberger recruited investors to give her and Nguyen money to purchase foreclosed properties, none of which ever occurred. Loan Thituong Nguyen was a licensed real estate broker who managed Suncoast Mortgage Corp. and Suncoast Investment Realty. She surrendered her license in 2013; documents surrounding the investigation of her activities can be found on the California Bureau of Real Estate website.

Read the original article in the Northridge-Chatsworth Patch.


Dixon real estate agent goes to prison for mortgage fraud

October 22nd, 2015 at 3:28pm

Hubert Rotteveel, 52, a real estate salesman whose license has been revoked, was sentenced by Senior U.S. District Judge William B. Shubb to three years and four months in prison for one count of mail fraud, according to the U.S. Attorney’s Office for the Eastern District of California.

A federal jury convicted Rotteveel of one count of mail fraud in September 2014. Rotteveel was the real estate agent for 13 properties in Dixon and worked with loan officers to provide fraudulent loan application information to the lenders regarding the financial positions of the buyers. He is said to have made over $300,000 from the scheme but the lenders lost over $3 million when every one of the properties was foreclosed.

Read the original article in the Sacramento Bee.


Bakersfield residents sentenced for mortgage fraud

October 22nd, 2015 at 3:18pm

Two Bakersfield residents received federal prison sentences for their participation in a mortgage fraud scheme.

According to the U.S. Attorney’s Office in Fresno, Lucia Yolanda Chavez, 37, and Joseph Chavez, 41,  paid straw buyers to submit fraudulent loan applications to purchase real estate.

Ms. Chavez received four years in prison for conspiracy to commit bank fraud, mail fraud and wire fraud and ordered to pay $1.8 million in restitution. Mr. Chavez  was sentenced to three years in prison for conspiracy to commit bank fraud, mail fraud and wire fraud and must pay $1.44 million in restitution.

The Chavez’ co-defendants Eliseo Jara, Sergio Jara, Melissa Jara, Antonio Perez-Marcial and Arlene Jeanette Mojardin already received prison sentences.

Read the original article in Bakersfield Now.


Lender for Kelly Gearhart gets 7 years for role in the Ponzi scheme

October 22nd, 2015 at 3:10pm

James Hurst Miller, 67, a North County lender who was a middleman for developer Kelly Gearhart, has been sentenced to seven years in federal prison for his participation in the Ponzi scheme that defrauded hundreds of area investors, according to the U.S. Attorney’s Office for the Central District of California.

Miller had agreed to testify against Gearhart, who was sentenced to 14 years in federal prison last July.

Gearhart was a prominent developer and former Atascadero Citizen of the Year who began committing fraud in 2004, according to the U.S. Attorney’s Office. Miller helped Gearhart raise money from investors with his firm, Hurst Financial Corp. for large developments, such as Vista Del Hombre, a Paso Robles golf course. Eventually, both men misused the investors’ money, spending it on themselves.

Read the original article in the San Luis Obispo Tribune.

There are many earlier postings about this case that you can find by searching the California Real Estate Fraud Report.


© Copyright 2007-2015 Monique Bryher

Legal Disclaimer.

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.

ALL RIGHTS RESERVED. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the author, except for the inclusion of BRIEF QUOTATIONS in a review.


Copy Protected by Chetan's WP-Copyprotect.