March 29th, 2012 at 8:42pm
California Attorney General Kamala Harris, who played a key role in the settlement agreement between the attorneys general for all 50 states and Bank of America, Wells Fargo, GMAC/Ally, JP Morgan Chase and CitiMortgage for the fraudulent “robo-signing” the banking giants used to expedite foreclosure against homeowners, has now devised a Bill of Rights.
Although currently referred to as a Homeowners Bill of Rights, the proposed legislation would provide protection to legal tenants as well. It seeks to redress ongoing bad faith (in my opinion) business practices employed by not only the above banks but other lending institutions as well.
Here are some of the highlights:
(1) An end, or at least moderation, of the practice of dual-tracking. Thousands of homeowners thought they were working with their bank on a loan modification and then found out the bank was pursuing and completing foreclosure against them.
(2) Evicting tenants who have valid leases on houses that were foreclosed will cease.
(3) Believe it or not, robo-signing is still happening and which lender actually owns the promissory note to the property is obscured through the use of the Mortgage Electronic Registration System (MERS). MERS is the conduit by which the banks avoided paying city and county transfer taxes, which is required when there is a sale and makes it impossible for a homeowner wanting to contact his or her lender to know who it is.
(4) A new concept: proposal of a multi-jurisdictional grand jury for complex cases that cross county lines.
AG Harris also proposes a $25 fee to be paid by lenders or their trustees, upon filing a Notice of Default (NOD) against a borrower. The revenue generated would help fund law enforcement actions against lenders that fail to comply.
Read the original article in the Orange County Register.
March 22nd, 2012 at 11:10pm
John Wesley Martynec, 36, of Long Beach has been convicted today of stealing approximately $302,000 from his real estate investors by falsely promising to profitably resell foreclosed properties. He pleaded guilty to two counts of grand theft, one count of statements in connection with a purchase or sale of securities and the use of a scheme to defraud, one count of financial exploitation of an elder, and a sentencing enhancement for property loss exceeding $200,000. All are felonies.
Two of Martynec’s victims are elderly. Martynec promised them he would invest in foreclosed properties, which he would then re-sell at a profit. Although he took the investors’ funds, he never made any purchases.
Martynec faces a maximum of three years in state prison when he is sentenced this June. Whether he gets to keep his broker’s license will be up to the California Department of Real Estate.
Read the original article in the Orange County Breeze.
March 8th, 2012 at 10:07pm
In a dubious but not surprising statistic, California is the leader in suspicious home loans (possible mortgage fraud or loan fraud), according to FinCen, the Treasury Department’s Financial Crimes Enforcement Network.
San Jose, Riverside and Los Angeles were the top three cities in terms of the suspicious activity reports (SARs) filed by banks for the period July 2011 – September 2011. The reports exceeded Miami and Las Vegas, which were ranked fourth and fifth.
According to the filings by the lending institutions, approximately 46% of the SARs were related to homeowner debt removal or refinancing. The statistic I found most astonishing is that 15% of the loan applications involved discrepancies in the social security numbers.
Mortgage fraud and its close relative, short sale fraud, have created a significant negative impact on property tax valuations and collection, a point underscored repeated in my ebook “How to Commit Short Sale Fraud . . . and Get Away with It.” California Attorney General Kamala Harris has recognized this fact and noted that “We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state. There is a direct connection” between mortgage fraud “and the issue that we are challenged with in terms of our state budget crisis.”
Read the original article in the North County Times.
March 8th, 2012 at 9:28pm
Time share properties are rarely a good investment. In bad economic times, they are nearly impossible to sell.
In a scheme reminiscent of the advance-fee fraud scams perfected by Nigerian con artists, fraudsters have been calling owners of time shares in Mexico and making them tantalizing offers: the so-called buyer will purchase the time share either at or above market value, as long as the seller pays the 10 percent tax to the Mexican Tourism Department upfront. The seller is promised a return of the money after escrow.
The painful truth is that those sellers who paid those upfront fees lost all of their money to this new, deceptive form of real estate fraud.
The fraudsters have apparently stolen the identities and real estate licenses of ERA Property Movers agents in order to convince the property owners they were legitimate. Interestingly, they say they are from the Fresno office of ERA, but the chain owns no offices in that city.
Read the original article in the Orange County Register.
February 29th, 2012 at 9:53am
John Terzakis, formerly the majority owner of Vesta Strategies LLC in San Jose, has pleaded guilty to wire fraud, conspiracy to commit wire fraud and money laundering in connection with a $25 million Ponzi scheme that he orchestrated.
Vesta was a qualified intermediary that, if legitimate, would have helped investors avoid paying taxes on capital gains by holding the proceeds from their real estate sales for up to 180 days.
According to Melinda Haag, U.S. attorney for the Northern District of California, the investors’ money could not be returned because Terzakis, former Vesta CEO Robert Estupinian and former executive Peter Ye misappropriated the funds for their own use. Esupinian and Ye have already pleaded guilty and like Terzakis, will be sentenced by U.S. District Judge D. Lowell Jensen
Read the original article in the Silicon Valley Business Journal.
February 29th, 2012 at 9:22am
Wiley Chandler, 47, a Lodi real estate investor who was indicted for bid rigging and mail fraud in a real estate fraud scheme, has pleaded guilty to conpiracy with a group of speculators, which had agreed not to bid against one another at public auctions of foreclosed homes.
The U.S. attorney’s office in Sacramento reports that four of Chandler’s indicted co-conspirators, are Andrew B. Katakis, president of California Equity Management; Donald M. Parker; Anthony Joachim; and W. Theodore Longley. Longley, an auctioneer, was charged with aiding an abetting.
Nine others have already pleaded guilty according to U.S. Attorney Benjamin Wagner.
The defendants allegedly ran their conspiracy by having one “investor” bid for the targeted foreclosed properties that were sold at San Joaquin County auctions. Afterward, they would hold a private auction and the property would be re-sold to the highest bidder in the group. The difference between the original and resale numbers would be counted as profit and divided among the participants.
Read the original article in the Modesto Bee.
February 24th, 2012 at 8:56am
This is “Affinity Fraud Week” at the California Real Estate Fraud Report. By that, I mean that in the past week, almost all of the news that I have reported has been where the alleged perpetrator(s) and victim(s) have belonged to the same ethnic group (ethnic fraud). Now on to this latest story of affinity fraud.
The Orange County District Attorney’s Office has announced that two have have been charged in connection with a real estate fraud scheme that targeted the Vietnamese-American community.
Loan Thituong Nguyen, 43, of Westminster, is a licensed real estate broker who operated Suncoast Mortgage and Suncoast Investment Realty. She and her alleged accomplice, Lynn Eichenberger, 42, of Chatsworth, have both been arrested and charged with 15 felony counts of grand theft, two felony counts of money laundering, and one felony count of conspiracy to commit grand theft with sentencing enhancements for property loss of more than $1.3 million, aggravated white collar crime over $500,000, and money laundering of more than $1 million.
Operating a book-end style scheme, Nguyen is alleged to have approached homeowners in foreclosure and promised to solve their problem in return for substantial amounts of cash (foreclosure fraud). She then made promises to investors to help them acquire foreclosed properties for a 50% upfront fee toward the purchase (real estate investment fraud). The monies she collected were then deposited into an account set up by Lynn Eichenberger.
Orange County District Attorney Tony Rackauckas believes there are more victims than the 17 Vietnamese investors who claim to have been defrauded.
Read the original article in the Orange County Register.
February 23rd, 2012 at 4:38pm
In one of the most unusual stories to cross my desk, a woman is accusing the City of San Diego and many of its employees of charging the public to use land that belongs to her family.
Merrilee Miller of Goleta says that her family has owned the land adjacent to Lake Murray for generations. Despite that, for 48 years, San Diego has been charging people access fees to walk the trails and mountains and further, that City employees have filed fraudulent deeds and other documents (title fraud) to hide the fact that the land is privately owned.
If what she alleges is true, this could be one of the largest real estate frauds ever committed by a municipal agency.
Read the letter Ms. Miller has written, along with the document she provide, to the La Mesa Patch.
February 23rd, 2012 at 4:29pm
A man already convicted twice for residential burglary in 1997 is now facing a life sentence under the California 3-strikes law.
Timothy Barnett, 49, is accused of approaching South Los Angeles homeowners in distress and offering to buy their homes at a steep discount and rent them back to him. The Los Angeles County District Attorney’s Office has filed 23 charges against him.
According to an article in the Los Angeles Times, in California, “a person can be convicted of residential burglary for entering someone’s house with the intent to commit a felony, even if he or she enters with the homeowner’s permission. Burglary is one of the dozens of serious or violent crimes considered strikes under the law.”
Barnett’s prior burgary charges, for which he spent almost five years in prison, have to do with this form of non-violent burglary. He would appear on the victims’ doorsteps and then have them sign long documents. The victims took him at his word after he told them he was a Christian trying to help people (affinity fraud).
From the article, I’m gathering Barnett then flipped the homes to third parties who were the parties ultimately leasing back the homes. While his attorney, Amy Konstantelos, defends her client’s right to make a profit, the victims argue that this is not what he told them.
Jury selection is ongoing. This should be a very interesting case, one in which Barnett might go to prison under 3 strikes for being a serial white-collar offender.
February 10th, 2012 at 8:41am
Obdulia Julie Leon, 44, aka Julie Ochoa, of Visalia, was indicted along with others for stealing more $1.5 million in a make-believe in a real estate investment fraud of Arizona properties that was nothing more than a Ponzi scheme.
Leon has been charged with 18 counts that include conspiracy, mail fraud and wire fraud. Her alleged partner-in-crime is Bonnie Lynn Recinos, 51, aka Bonnie Farr, a Mesa, Arizona resident.
The two women, who worked in the financial services field, solicited funds from the investors and promised 3-5% per month in returns (that should have been the hint that this was fraud!). Instead of investing the money, they used it on themselves and to pay the earlier investors.
Read the original article in the Fresno Bee.
