April 1st, 2011 at 8:43am
A real estate broker in Thousand Oaks has chosen to plead guilty to wire fraud and mail fraud in a real estate investment fraud scheme that ripped off over 100 investors for $18.9 million.
Louis “Jim” Borstelmann, 68, has admitted that he was running nothing more than a Ponzi scheme when he solicited money from his neighbors and a number of investors in Oregon. One Oregon woman lost $900,000 as a result of being defrauded by Borstelmann.
If Borstelmann’s sentence is at least 108 months, the Ventura County District Attorney’s Office will not prosecute him for the local crimes, according to Miles Weiss, a senior deputy district attorney for the D.A.’s Real Estate Fraud Unit. It was the IRS and FBI that conducted most of the investigation against Borstelmann.
Louis Borstelmann’s real estate license with the DRE currently shows no disciplinary action.
Read the original article in the Ventura County Star.
March 25th, 2011 at 8:51am
Tara Denis Bonelli, 31, has been arrested by the FBI and charged by a federal grand jury of 18 counts of wire fraud, one count of mail fraud, and three counts of money laundering.
Bonelli owned and operated up to 10 firms that constituted a one-stop shop in real estate: everything from investing to foreclosure assistance. According to the indictment, she used several properties she owned as collateral to solicit investors for non-existent real estate property purchases. Just as noxious, she hired persons to door-knock homeowners in distress and amazingly convinced some of them to sign blank real estate contracts.
Read the original article in RealEstateRama.
March 25th, 2011 at 8:39am
The Securities and Exchange Commission (SEC) has filed charges against Mountain View-based JSW and five of its officers. The officers are accused in a $17 million real estate investment fraud scam in which investors’ monies were diverted to fund the officers’ own real estate investments.
The named firms are JSW and its predecessor, Jim Ward & Associates, Blue Chip Realty Fund and Shoreline Investment Fund.
The defendants are JSW founder James Ward, 64, of Delaware, Ohio; former Jim Ward & Associates president David Lee 53, (Los Altos); former JSW president Edward Locker, 35 (Highland Heights, Ohio); former JSW vice president Richard Tipton, 60 (Palo Alto); and JSW general counsel David Lin, 42 (Los Altos).
May of the victims-investors are seniors (elder financial fraud).
Read the original article in the Silicon Valley Mercury News.
March 18th, 2011 at 10:36am
A real estate broker who was formerly a member of the Irvine Planning Commission is being sued by a married couple, a high school friend and a father and son who say he solicited money from them for real estate investments he never made.
David R. Sparks, 50, is a long-time broker and owns Irvine-based firm Sparks Realty & Investment Inc. The couple, Marc Vaccaro and Astrid Vanzon, say Sparks flew out to Wisconsin to meet them and “talked about his religious faith, and shared values in a Christian tradition, which added to (their) belief in defendant’s trustworthiness,” according to their federal lawsuit, which accuses Sparks of forging bank and government documents and using nonexistent escrow companies to commit fraud. They are claiming $1.6 million in damages.
Robert Edwin Anslow of Santa Ana is the now-former friend who is suing David Sparks. Gary Schultz and his father Gerhard Schultz have also filed suit against Sparks. All the parties claim that Sparks solicited money from them for real estate investments that were not made (real estate investment fraud).
Here is David Spark’s website for Sparks Realty & Investments, Inc.
Note: the California Department of Real Estate (DRE) does not show any actions taken against David Spark’s real estate license.
Read the original article in the OCRegister / Orange County Register.
March 15th, 2011 at 11:22pm
A lawsuit filed by a Westlake Village attorney against another Westlake Village attorney and his Agoura Hills partner alleges the two men perpetrated a multi-state real estate loan scam.
Attorney Anne Singer is representing Gerard Kennedy, who paid 27 year old Nicolaus Skultety, owner of the now defunct American Paramount Financial, and his attorney Lloyd Michaelson of Lloyd Michaelson Law Offices a $300,000 deposit in order to obtain a $15 million loan that never materialized. Kennedy, owner of the Virginia-based Attiva Corporation, Inc. lost his deposit. Kennedy’s lawsuit charges Skultety and Michaelson with fraud, breach of contract and negligent representation.
According to an article in the Acorn, Skultety and Michaelson are accused of promising clients they could obtain funding for land and construction projects - considered risk investments - in exchange for “a percentage of the loan amount, generally a 2% cut.” The cash fees were paid through Skultety’s firm but the loans were never made.
Interestingly, Singer read on a blog that Michaelson and Skultety had allegedly defrauded many victims and reported them to the FBI and other federal agencies. “I’m willing to put money down that (Skultety and Michaelson) will be indicted,” Singer said.
Read the original article in the Thousand Oaks Acorn.
March 15th, 2011 at 10:54pm
Stewart Title has settled a lawsuit filed by investors of bankrupt North County developer Kelly Gearhart. Stewart Title was sued by 300 of Gearhart’s investors by the law firm of Kirby, Noonan, Lance and Hoge, which accused it of conspiring with Gearhart and Hurst Financial, Inc. to defraud the investors in a real estate investment fraud scheme. The plaintiffs will receive approximately 27% of their investments.
Kelly Gearhart, who no longer lives in California, is the subject of a federal investigation into racketeering, money laundering and mail fraud, as is Jay Miller, the president of Hurst Financial. According to Cal Coast News, more than 1,200 investors, many of them elderly, invested more than $100 million with Hurst Financial that cannot be found.
Read the original article in the Cal Coast News. You can also read more details in earlier postings of the California Real Estate Fraud Report.
December 23rd, 2010 at 1:27pm
Guadalupe Valencia, 46, has pleaded guilty to two counts (each) of mail fraud, wire fraud and tax fraud according to the U.S. Attorney’s Office.
Valencia purportedly stole almost $7 million from 150 victims by running a real estate investment fraud that was nothing more than a Ponzi scheme. She told investors that their money was full secured with deeds of trust and even issued promissory notes. The profits she promised – which should have raised red flags to any investor – were 8-20% in 45 days.
Valencia’s companies were in Downey and called Real Estate & Loan Consultants and R.E. Equity Group, Inc.
Read the full article in the Pasadena Star News.
December 3rd, 2010 at 9:16am
An article in the Los Angeles Times states that Jesse Alvin Cripps, 57, has been arrested in a real estate scam. According to the FBI, Cripps is thought to have stolen $2 million from persons he met through his church and other avenues by telling them they would earn 10% each month by investing in his real estate investment trust when he used the money for personal use instead.
The State of California Department of Corporations has also issued a cease-and-desist order against Jesse Alvin Cripps and his business Horizon Financial Services, Inc. because he “misrepresented to investors during the offer or sale of securities that investors would receive a profitable return on their investments.”
Read the cease-and-desist order here.
November 19th, 2010 at 9:07am
A Sacramento-area man has been charged with wire fraud for allegedly scamming investors out of $11 million.
According to U.S. Attorney Benjamin Wagner, Christopher Jackson, 43, solicited people to invest in real estate between 2005 and 2009 under his company name Genesis Innovations. Jackson is accused of investing less than $2.5 million of the funds and using the rest to buy himself a BMW, lease a Lamborghini and Range Rover and fund his lavish tastes in food, hotels and jewelry.
Read the full article in the Central Valley Business Times.
October 3rd, 2010 at 5:47pm
The owner of Diversified Lending Group, Inc. was arrested September 13 in Cannes, France for operating a $225 million Ponzi scheme, according to U.S. Attorney Andre Birotte Jr.
Bruce Fred Friedman, 60, is accused of a real estate fraud scheme in which he promised investors annualized returnes of from 9 to 12 percent, when in fact he used the investors’ monies for his other business ventures. Friedman told the investors, whom the FBI estimates lost a collective $191 million, that their money would be used to purchase, rehabilitate and re-sell residential housing.
Read the full article in Bloomberg News.