California Real Estate Fraud Report

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Archive for the 'Real Estate Crimes' Category

Newport Beach Man Convicted in Real Estate Fraud Ponzi Scheme

January 29th, 2016 at 11:42am

Thomas Franklin Tarbutton, 56, of Newport Beach, has been convicted of almost 40 felony counts, after being tried for grand theft and securities fraud. The 11 victims lost over $3 million, according to Senior Deputy District Attorney Pete Pierce of the Orange County District Attorney’s Office.

Tarbutton operated Irvine-based Villa Capital Inc. from 2004-2010 and funded private loans using monies he received from investors. He fled to Panama but was extradited to Orange County in December 2013.

Read the original article in The Patch.

Tony Huy Havens Sentenced in Separate Mortgage Fraud Schemes

January 20th, 2016 at 8:37pm

Modesto resident Tony Huy Havens, 42, was sentenced Monday by United States District Judge Lawrence J. O’Neill for his role in two mortgage fraud schemes.

The sentence of three years and five months was announced by United States Attorney Benjamin B. Wagner.

In the first case, Havens sought out individuals in at least eight states whose construction projects were in danger of foreclosing and extracted advance fees after showing them fraudulent documents indicating a lender would make them loans.

In the second scheme, Havens used two relatives as straw buyers to obtain a loan that exceeded the actual selling price of a residential property. The excess was returned to him, which he used to purchase the property.

The cases were the product of investigations by the Federal Bureau of Investigation, the Stanislaus County District Attorney’s Office, and the Federal Housing Financing Agency, Office of Inspector General.

Read the original Press Release.


Woman Arrested on Christmas Day, Charged with Real Estate Fraud

January 1st, 2016 at 12:14pm

Forty-two year-old Michele Lynne Stewart was arrested on Christmay Day and charged with over two dozen felony counts of forgery and theft, to which she pleaded not guilty.

Stewart stands accused of taking 28 fraudulent checks for a total of $240,880 from a manager of the Irvine office of  First Team from September 2011 through April 2012. She is just one of nine defendants who have already been charged but are considered fugitives. They are Brian Vancleave, Robert Morken, Jennifer Vancleave, Joe Chang, Joon Kim, Rebecca Kim, Tomy Lam, Bryce Jacot and Jimmy Lam.

Brian Vancleave ran First Team‘s risk management division for that office. He has been accused of writing 228 fraudulent checks for more than $1.4 million to friends and relatives, according to court records.

Read the original article in the OC Register.

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.


© Copyright 2007-2016 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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