April 25th, 2012 at 8:07am
Four real estate professionals in Florida and Pennsylvania are serving prison terms after pleading guilty to wire fraud by scamming elderly home owners (elder financial abuse, elder financial fraud).
Marcos Echevarria, Louis Gendason, John Incandela were loan officers with 1st Continental Mortgage who originated reverse mortgages for seniors in seven states after identifying the victims as vulnerable. Home Equity Conversion Mortgages (HECM) are insured by the Federal Housing Administration (FHA). They also purportedly altered the home’s values (appraisal fraud) in order to negotiate fake short sales (short sale fraud). The losses to the lenders, in addition to the elderly homeowners, were $2.5 million.
The fourth defendant, Kimberly Mackey, owned Real Estate One Land Services, Inc. in Pittsburgh and performed title services. She had created fraudulent HUD-1 statements to show the mortgages had been paid off, when in fact they had not (title fraud, escrow fraud).
When all four get out of prison, they will have to find a new line of work, as they have been permanently barred from doing business with the federal government.
Read the original article in Lender Hookup.
April 18th, 2012 at 2:37pm
In a tentative positive step, seven bills proposed by Attorney General Kamala D. Harris to protect homeowners from unscrupulous business practices by lenders have advanced out of their legislative committees.
In summary, the bills seek to protect tenants during the foreclosure process, address the blight caused by vacant, lender-owned properties (REOs) and give the California Office of the Attorney General extended power to investigate and prosecute mortgage fraud and related real estate fraud crimes.
AB 2314 and SB 1472 would provide local jurisdictions with additional tools to fight blight from abandoned homes, including increasing penalties against the owners of blighted properties and, if necessary, taking control of the properties.
AB 2610 and SB 1473 would extend federal law protections of tenants to California. Existing leases must now be honored and tenants must be given 90 days notice by the new owners before bring eviction actions.
AB 1950 would extend the statute of limitations on mortgage-related crimes, including loan modification scams and the unlicensed sale of real estate and pay for enforcement by charging servicers $25 when they record a Notice of Default (NOD) against a borrower.
AB 1763 and SB 1474 would give the Attorney General’s Office the power to convene a special grand jury to investigate and indict the perpetrators of financial crimes involving victims across (multiple) jurisdictions.
Read the Attorney General’s full press release.
April 18th, 2012 at 2:11pm
Tony Symmes, 61, once one of the largest home building operators in Chico, has been sentenced to 2 years 11 months in prison for conspiring to commit fraud and for money laundering. He must also pay restitution of$4 million dollars.
Symmes conspired with Garret G. Gililland III and other defendants to sell 62 homes to Gililland’s straw buyers for inflated prices (appraisal fraud) between 2006 and 2008. After escrow closed, the overage was returned to Gililland’s storefront companies and disbursed among the defendants. Of course, the lenders who financed the loans were unaware of this real estate fraud scheme.
Garret G. Gililland III, Shane Burreson, William Baker, Niche S. Fortune and others have already pleaded guilty for their roles in defrauding the lenders (loan fraud, mortgage fraud). Kesha Danine Fortune Haynie, who is Niche Fortune’s sister did not plead out and was convicted of mail fraud in March 2012.
The investigation and prosecution were a cooperative effort by the FBI, IRS Criminal Investigation Division and the Butte County District Attorney’s Office.
Read the original article in KRCRTV.com.
April 18th, 2012 at 1:58pm
A Murrieta man who is on trial for ripping off friends and investors out of $142 million in a real estate investment fraud scheme has challenged them in court to show a paper trail between them and him, as well as his mother, who is also on trial. The victims include fellow church-goers, kung-fu classmates, an animal control officer, retirees, a security guard and a mortgage broker.
Hendrix Montecastro, 39, and his mother, Helen Moreno Pedrino, 60, were charged in 2009 with 249 felony charges of securities fraud, grand theft, elder financial abuse and corporate identity theft.
According to the prosecution’s key witness, district attorney investigator Brent Westwood, proving that paper trail will be difficult.
Five other defendants have already pleaded guilty, but Montecastro and his mother are representing themselves in Riverside County Superior Court.
Read the original article in the Press Enterprise.
April 12th, 2012 at 9:38pm
This was bound to happen but it is a tragedy nevertheless.
As every real estate agent who lists bank-owned properties (REOs) knows, as do Sheriff’s deputies and locksmiths, evictions are dangerous and can pose a serious threat to our safety and to that of others. The fact that it is an occupational hazard makes it no less terrible that two lives have just been lost.
The Huffington Post has reported that 16-year veteran Deputy Robert Paris of the Stanislaus County Sheriff’s Department was killed, along with an as-yet-unidentified civilian, when he tried to serve an eviction notice at the Whispering Woods apartment complex in Modesto.
I am dedicating this week’s blog of the California Real Estate Fraud Report to honor and remember Deputy Paris to his family and his colleagues at the Sheriff’s Department.
April 12th, 2012 at 9:17pm
The first of three persons has pleaded guilty in a real estate fraud case in Ventura County.
Former “Ken & Katie” radio show host Kenneth A. Powell, 58, admitted his guilt in committing 15 felonies according to Ventura County District Attorney Prosecutor Miles Weiss. The crimes include grand theft, theft of an elderly person (elder financial fraud) and multiple aggravated white-collar enhanced crimes.
Powell’s alleged co-conspirators, co-host Kathryn “Katie” Rose, 62, of Woodland Hills, and Paul Charles Lascola, 69, of Thousand Oaks, have also been charged in this real estate investment fraud saga.
The “Ken & Katie” show, which aired on KVTA/1520 AM, was one of three radio infomercials, the other two being “Academy of Real Estate” and ”Money Intelligence.” In all, investors from Ventura, Santa Barbara and Los Angeles counties lost $3 million.
Read the original article in the Ventura County Star.
April 12th, 2012 at 8:41pm
Hendrix Moreno Montecastro, a 39-year old Murrieta man accused of playing a critical role in an alleged $142 million mortgage fraud, has benefited from numerous delays in his case.
Montecastro was arrested and charged in November 2009 with grand theft, securities fraud, elder abuse and corporate ID theft in the case that caused more than 200 foreclosures in Riverside County as well as the above dollar losses for the investors. His alleged co-conspirator and mastermind, James Benjamin Duncan, also of Murrieta, has already pleaded guilty to corporate ID theft and six counts of securities fraud.
The latest delay was due to Montecastro firing his attorney. Both he and his mother, co-defendant Helen Moreno Pedrino, are now representing themselves.
Read the original article in the Press Enterprise.
April 12th, 2012 at 8:27pm
This story underscores a central them of my ebook: that short sale fraud is an incredibly profitable white-collar crime that is, at least for now, 100% risk-free for the participants.
Having said that, this post is about the two unluckiest real estate agents: both got prison for being greedy and getting caught committing short sale fraud.
Anna McElaney was the listing agent for a property in Bridgeport, Connecticut that was a short sale in which Regions Bank owned two mortgages. In December 2007 she received two offers. The first bidder offered $132,500. Sergio Natera, another real estate agent, offered $102,375 through his company BOS Asset Management. McElaney submitted Natera’s offer and told Regions Bank was the only offer, a fact on which the lender relied when they accepted his offer and released the liens.
McElaney and Natera performed a double-escrow (back-to-back escrow) so that on the same day McElaney closed escrow with Natera, the two of them sold the property to the higher bidder and pocketed the difference.
It is unknown how the two crooked agents were caught, but for committing bank fraud, Anna McElaney received an eight month prison sentence and six months of home confinement in July 2011. Sergio Natera was sentenced last week to two months in prison and three years of supervised release, the first six months being house arrest.
The first two people convicted in a short sale fraud case were prosecuted by United States Attorney Ann M. Nevins of the U.S. Attorney’s Office in Connecticut and sentenced by United States District Judge Janet C. Hall.
Read the original article in the Bridgeport News.
You can read more about Anna McAlaney and Sergio Natera in my ebook “How to Commit Short Sale Fraud . . . and Get Away with It.”
April 6th, 2012 at 8:02am
The former owner of Monterey-based Cedar Funding, David Nilsen, 61, has been sentenced to eight years in prison for defrauding investors in a $100 million real estate investment fraud. As part of his sentence, Nilsen, a mortgage broker, has also been ordered to repay $70 million to his jilted investors.
Nilsen is seen by many in his profession, law enforcement and his investors as a once-honest professional who made bad decisions once the real estate melt-down began. His victims, many of whom had known Nilsen during better times, trusted him and sank their entire life’s savings into his mortgage fund. Some of them have forgiven him, believe the prison sentence is fair and moved on while others believe he should have received 25 years behind bars.
Manoel Errico, Cedar Funding’s loan manager, has fled the United States and is a fugitive from justice.
David Nilsen’s real estate license has been revoked by the California Department of Real Estate (DRE).
Read the original article in the Silicon Valley Mercury News.
March 29th, 2012 at 9:21pm
In an update to a previous article in the California Real Estate Fraud Report, the Solano County Superior Court judge hearing the criminal case against Richard D. Lamphere, 48, for various charges related to real estate fraud, has ordered the attorneys for both sides back to her court next month to present their arguments.
Richard Lamphere has been charged with grand theft, selling unregistered securities and making false statements and/or omissions in relation to monies he received from Ronald Nicoli. Nicoli, who won almost $2 million in a civil lawsuit against Lamphere, contended that Lamphere diverted Nicoli’s original investment into Lamphere’s own projects (real estate investment fraud).
Read the original article in the Vacaville Reporter.
