October 16th, 2014 at 8:37am
Real estate investor Grant McCollough, 38, and his 36-year-old wife, Marisa, pleaded guilty to conspiracy to commit wire fraud and defrauding the United States.
The McColloughs recruited investors to act as straw buyers and, according to the U.S. Attorney’s Office, arranged for erroneous information to be submitted to lenders to approve their loan applications. They also inflated the value of the homes (appraisal fraud) and disguised the source of the down payments in order to skim funds from the fraudulent transfer of property among their co-conspirators. And they hid their skimmed profits from the IRS.
Their associate, Donald Totten, was a mortgage loan officer and broker operating out of Rancho Santa Fe who specialized in negative amortization loans. Totten pleaded guilty in February to mortgage fraud, bankruptcy fraud and filing a false tax return that failed to report more than $3 million in taxable income.
Grant McCollough and Marisa McCollough will be sentenced in January 2015 by U.S. District Judge Michael Anello.
Read the original article in Fox 5 San Diego.
September 19th, 2014 at 6:43am
Three men have received heavy prison sentences for their roles in the Ponzi scheme they ran under the company known as Diversified Management Consultants (DMC).
After hearing victims’ testimonies and an FBI forensic accountant, U.S. States District Judge Troy Nunley sentenced Christopher Jackson, 46, of Elk Grove, to 30 years in prison; Michael Bolden, 60, of Sacramento, to 20 years in prison; and Victor Alvarado, 53, of Sacramento, to 10 years in prison.
According to prosecutors from U.S. Attorney Benjamin Wagner‘s office, DMC ran various investment clubs between 2003 and 2009, convincing at least 240 people, including their own families, to invest with them. Very little of the money was actuall invested, going instead to pay phony returns to previous investors (the Ponzi scheme) and to buy jewelry, expensive clothes and trips and the requisite Lamborghini, Rolls Royce, BMW, and Range Rover.
Three more DMC principals await sentencing: Garry Bradford, Nicholo Arceo and Erica Arceo. Erica was the in-house-attorney but lost her law license with the California State Bar as a result of her involvement and guilty plea.
Read the original article in the Central Valley Business Times.
** Update: meanwhile, some of the investors/victims sued Stewart Title of Placer and Stone Canyon Mortgage, to try to recover some of their losses. According to the Sacramento Bee, the case was settled on Sept. 24 for $900,000.
August 8th, 2014 at 7:21am
In 2012, Attorney General Kamala Harris arrested and charged four people from a Grass Valley real estate company with securities fraud, conspiracy and elder abuse for their alleged involvement in a scam that cost investors over $2.3 million.
Philip Lester, 66, and his sister Susan Laferte, 60, claimed they were broke and were provided public defenders by Nevada County. Lester’s wife, Ellen Lester, and Jonathan Blinder, later had the charges against them dropped.
Nevada County officials, claiming that the legal fees for Lester and Laferte, who ran Gold Country Lenders, will cost upwards of $600,000, want the state to pick up the costs of the pair’s defense since it was Harris who brought charges and whose office is prosecuting the case. Nevada County is small – just 100,000 residents – and says the money could be spent on either law enforcement or restoring public employee jobs that were cut.
Read the original article in SFGate.
August 8th, 2014 at 7:02am
A Modesto man was arrested Tuesday on allegations he mislead victims into putting funds into what they believed were legitimate real estate investments.
Xue Heu, 37, of Modesto has been arrested and charged with eight counts of wire fraud for allegedly taking over $360,000 from investors, who thought their money was being used to purchase real estate investments. Instead, Heu is being accused by the U.S. Attorney, Eastern District of California of using the money for his own purposes.
Read the original article in News10.net.
July 11th, 2014 at 10:41am
Aldo Baccala, 73, a former real estate agent who pleaded no contents to a 141-count of criminal charges for a Ponzi scheme, was sentenced to 20 years in prison by Judge Gary Medvigy. Judge Medvigy also ordered Baccala to pay a $6.4 million fine for the havoc he wrecked on his investors, most of whom were financially ruined. Some of his victims were said to be close friends.
Prosecutors and Probation Department officials had recommended 137 years and four months in prison for the crimes, which included counts of securities fraud and grand theft with enhancements for elder financial abuse and white-collar crime. The crimes occurred from 2004 to 2008
Prior to sentencing, many victims testified how their life’s savings of over 40 years were wiped out by Baccala, who blamed the losses on the economic downturn. Baccala’s statements were countered by prosecutors, who said Baccala knowingly defrauded investors by issuing promissory notes backed by properties he didn’t own and that he used the monies he received to pay earlier investors, make risky stock market investments of course treat himself to a lavish lifestyle.
Read the original article in the Press Democrat.
April 4th, 2014 at 8:50am
Benny Chetcuti Jr. was indicted last week by a federal grand jury on two counts of wire fraud, according to the office for U.S. Attorney for Northern California Melinda Haag.
Chetcuti’s business, which began in 1998, was buyer, renovating and reselling homes. He financed his business by obtaining private loans from investors. According to prosecutors, however, he defrauded the investors by overstating how much debt was secured by the properties. He also in some cases did not record deeds of trust on the properties, which would have protected the interests of the investors in those properties.
Read the original article in the San Ramon Express.
March 19th, 2014 at 6:01pm
A Petaluma man was pleading no contest in Sonoma County Superior Court Wednesday morning to bilking dozens of investors of $20 million through a Ponzi scheme.
Aldo Baccala, 73, a former real estate agent, has pleaded no contest to 141 charges of making false statements to sell securities, grand theft, and elder financial abuse and dependent financial abuse. He entered his plea in front of Sonoma County Superior Court Judge Gary Medvigy, who indicated he would sentence Baccala to 20 years or less of prison time in exchange for making his plea.
Baccala was charged with defrauding over 50 investors, many of them elderly, of over $20 million in a Ponzi scheme that promised returns for investing in assisted living facilities, a car wash and other businesses in California, South Carolina and other states. His company was called Baccala Realty and was based in Petaluma.
Instead of investing his victims’ money as promised he spent it on risky stock market investments, including covering margin calls.
Read the original article in KTVU.com
March 19th, 2014 at 5:32pm
An Orange County woman who was found guilty in November 2012 of cheating a group of San Diego nuns out of $285,000 has been sentenced to three years in federal prison and ordered to repay the nuns.
Linda Rose Gagnon, 59, of Tustin had approached the nuns from the U.S. Province of the Religious of Jesus and Mary Inc. about purchasing the retirement home in San Diego. After she convinced them to give her the $285,000 she spent the money on herself instead of making the purchase.
Assistant U.S. Attorney Rob Keenan said Gagnon does not possess either a real estate salesperson’s or broker’s license.
Gagnon must surrender on or before June 13 to begin serving her 37-month sentence.
There are two earlier postings on the California Real Estate Fraud Report about this case, which you can find by using the Search feature on the left side of the blog.
Read the original article in San Diego 6.
February 6th, 2014 at 8:09am
Two men who once owned a company called Pacific Property Assets were charged with mail fraud, bank fraud and bankruptcy fraud in an a 16-count indictment that prosecutors allege was a $110 million Ponzi scheme.
John Packard, 63, Long Beach, and Michael Stewart, 66, Phoenix, Arizona, are alleged to have refinanced the apartment buildings they owned multiple times, using the proceeds for themselves, company expenses and to pay back earlier investors and lenders. When the real estate market began collapsing in 2007, the men at first allegedly lied about its financial status in order to get more loans, then went bankrupt in 2009.
The losses were $100 million to the lenders and another $91 million to the investors. Only $25 million has been recovered thus far by the banks but there has been no recovery for the investors, who numbered approximately 647.
The case against Packard and Stewart was filed by the U.S. Attorney’s Office in Los Angeles and reported in its press release.
Read the original article in UPI.
February 5th, 2014 at 9:33am
Ilona Winegardner, 61, who owns New Life Financial Real Estate and New Life Construction, has been charged by the San Bernardino County District Attorney’s office with a variety securities-related charges. Prosecutors allege that in the space of two years, Winegardner duped investors in a real estate investment fraud.
Winegardner was arrested January 8 and is scheduled for arraignment on February 26 in Victorville.
Read the original article in the Press Enterprise.