September 22nd, 2015 at 8:17am
Sixty-three-year-old Ralph Leyva has been sentenced to four years in prison after pleading no contest to charges related to conducting a real estate scam.
According to prosecutors in the Stanislaus County District Attorney’s Office, Leyva defrauded his investors by promising them he would sell them bulk REO (foreclosed) properties from Fannie Mae and Freddie Mac at a 30% discount, when in fact he was transferring the money from his phony businesses to a personal account. As a result, the court ordered him to pay restitution to his victims.
Ralph Leyva’s case was investigated by the Stanislaus County District Attorney’s Office real estate fraud unit and the Federal Housing Finance Agency-Office of Inspector General.
Read the original article in the Modesto Bee.
September 17th, 2015 at 10:15am
Ken Sarna, 50, the director of operations for Heaven Investments Holding Corp., has been sentenced by U.S. District Judge Troy Nunley to two years and six months in prison for a count of selling unregistered securities.
Heaven Investments Holding Corp. was based in Carmichael and raised up to $30 million through its website and investor forums. The investment money was supposed to be placed into a real estate exchange program but the company did not have a license to sell the investments.
Heaven Investments was family-owned and operated by Akbar Bhamani, and his sons Zain Bhamani and Aly Bhamani, both of whom were vice presidents. For their roles, the Bhamanis also received prison sentences.
The case was investigated by the FBI and the Internal Revenue Service-Criminal Investigation; the prosecutor was Assistant United States Attorney Michele Beckwith from the U.S. Attorney’s Office for the Eastern District of California.
Read the original article in the Sacramento Business Journal.
September 17th, 2015 at 9:54am
Paul Ricky Mata, David Kayatta and Mario Pincheira are on the receiving end of civil fraud charges by the Securities and Exchange Commission (SEC), which accuses the men of diverting money given to them for investments for their own personal use and for unrelated business ventures. The SEC has obtained an asset freeze and a preliminary injunction against the trio as part of its action.
In a separate action, the California Department of Business Oversight filed a $20 million securities lawsuit in state courts.
The SEC claims that Paul Mata ran the scam through his companies Secured Capital Investments, Logos Wealth Advisors, Lifetime Enterprises and Logos Real Estate Holdings. Solicitations by Mata, Kayata and Pincheira are alleged to have raised $14 million for two unregistered real estate funds by posting videos to YouTube channel with titles such as “Finances God’s Way” and “Indestructible Wealth.”
Mata, previously a financial advisor for Ameriprise Financial, has an “extensive disciplinary history,” according to the SEC.
Read the original article in Financial Advisor Magazine.
August 28th, 2015 at 9:18am
William Yotty, a self-proclaimed real estate investor of foreclosed homes that he “flipped” has pleaded guilty to mail fraud and wire fraud, both federal felonies.
Yotty lured his 240 investors by promising, through his former company Fortuno Inc., insane profits. A brochure distributed by Fortuno claimed it could show the investors “how to take $400 and turn it into $25,000 in the next 30 days.” The investors, who in total lost $14 million, said instead that Yotty purchased the foreclosed homes by himself and resold them to the investors at inflated prices.
The case was prosecuted the U.S. Attorney’s Office for the Central District of California.
Read the press release on the U.S. Attorney’s website.
August 17th, 2015 at 10:02am
The jury hearing the prosecution of the co-owner of a former real estate firm was convicted of operating a Ponzi scheme that cost the investors up to $169 million.
Michael J. Stewart, 68, the partner of co-defendant John Packard, was found guilty of 11 counts of mail fraud. U.S. District Judge Cormac Carney granted a motion by federal prosecutors to dismiss charges related to bank and bankruptcy fraud.
John Packard pleaded guilty in the same case in November 2014 and is awaiting his sentence.
Stewart and Packard ran Pacific Property Assets, which had offices in Long Beach and Irvine. Their business model, called the Opportunity Fund, was buying and flipping distressed apartment buildings. They lured investors by telling them they could earn 15-30% interest per month when former homeowners needed to rent apartments after their houses were foreclosed.
The case was prosecuted by Assistant U.S. Attorney Joshua Robbins.
Read the original article in the Press-Telegram.
July 29th, 2015 at 5:19pm
Just a few short months after soliciting investors by mail, the CEO of Pacific Property Assets (PPA) in Irvine filed bankruptcy.
Now, Michael J. Stewart is standing trial on 11 counts of fraud after his “Opportunity Fund,” which took in $91 million from 650 investors collapsed. Investors were lured in by mailers telling them their money would be used to acquire apartment buildings a bit over half their replacement costs.
Stewart, 68, argued that PPA failed as a result of the housing and economic recession, but prosecutors say otherwise, saying PPA made money from the appreciation of the 50 apartment buildings it owned in Long Beach, Riverside and Arizona, which it refinanced. When the economy stalled in 2008, lenders stopped refinancing and, according to U.S. Attorney Joshua Robbins, the company turned to funding by individual investors, whose money was used to pay back previous investors, as well as salaries and expenses for Stewart and John J. Packard, 65, his partner.
The lenders lost about $24 million when the apartment buildings defaulted on the mortgages.
Read the original article in the Orange County Register.
July 9th, 2015 at 9:47am
Beverly McFarland, the trustee handling the bankruptcy of IMG, Inc., is suing two of the local real estate developers who lost money in the Ponzi scheme for which IMG’s principal Deepal Wannakuwatte was imprisoned.
McFarland’s view is contrary to authorities, who say Jack Sweigart and Larry Carter were among the 100 investors who lost $150 million in the fraud by Wannakuwatte, who is serving 20 years in prison. She claims that Sweigart and Carter “knew or at least should have known” of the fraud and is seeking a court order forcing them to return some of the monies they received from IMG, whose business was selling surgical gloves to the U.S. government.
July 9th, 2015 at 8:44am
Inexplicably, a jury that awarded ex-fighting champ Chuck Liddell and Usman Iqbal and Umer Iqbal damages against Cuesta Title, Stewart Title of California and Stewart Title Guaranty for their roles in the Kelly Gearhart Ponzi scheme, refused to award damages against five other plaintiffs.
Kelly Gearhart was a developer who raised millions for his projects in the Central Coast but who also diverted millions for his private use and to repay previous investors. Although he pleaded guilty to money laundering and wire fraud and received a sentence of 14 years in prison, he has now decided to appeal his guilty plea, according to CalCoastNews.
The jury apparently made its decision based on the close relationship between Kelly Gearhart, his wife and Melanie Schneider, an escrow officer of Cuesta Title. Schneider was not only friends with the Gearharts and traveled with them, she lived in their guest house and dated Gearhart’s brother. The jury said that the Iqbal brothers had introduced Chuck Liddell to Gearhart and that an unnamed Cuesta Title employee helped Gearhart commit fraud against the Iqbals. They jury saw no such connection with respect to the remaining five plaintiffs.
Read the original article in the Tribune.
July 3rd, 2015 at 5:13am
Once honored as an Atascadero “Citizen of the Year,” real estate developer Kelly Gearhart, 53, was sentenced to the maximum 14 years in prison for defrauding investors who lost over $15 million on his development projects.
Federal Los Angeles Judge Otis Wright imposed a harsher sentence than the government had requested for Gearhart, who pleaded guilty last year to wire fraud and money laundering. The judge noted that many were elderly investors who had lost everything due to Gearhart’s “sheer greed.”
In his plea agreement with prosecutors, Gearhart admitted selling the same lots to multiple investors doing the same to get bank financing.
Read the original story in the San Luis Obispo Tribune.
May 22nd, 2015 at 8:54am
A Modesto who pleaded guilty to stealing over $1 million from investors in California and Texas has been arrested and charged with two felony counts of grand theft.
In the newest case, Xue Heu, 37, is accused of using the same tactics to scam another victim out of $6,000.
“Xue Heu defies the court order and continues to defraud victims,” wrote Glenn Gulley, an investigator with the district attorney’s real estate fraud unit in a document filed in Stanislaus Superior Court.