California Real Estate Fraud Report

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Archive for the 'Real Estate Investment Fraud' Category

“Ken and Katie” Radio Hosts Arrested in Real Estate Fraud

September 2nd, 2011 at 9:43am

Kenneth Powell, 58, Kathryn Rose, 62, the former California radio hosts the “The Ken & Katie Shows”, a weekend series of radio infomercial shows hosted by Ventura radio station KVTA, are having their own money problems.

Powell, Rose and Paul Charles Lascola, 68, are all being held on $1 million bail after being accused of running a Ponzi scheme in a number of land deals. Investors were solicited at real estate investment seminars and promised returns of 12-14% if they placed their money in the construction of vacant lots in the city of Taft in the Central Valley. No building ever occurred and in fact there were either liens or the lots had been sold to other investors (real estate investment fraud).

Read the original articles in the Ventura County Star and the Silicon Valley Mercury News.

IRS Catches Roseville Contractor in Real Estate Fraud

September 1st, 2011 at 11:47am

An interview with an IRS agent has resulted in a Roseville man pleading guilty to real estate investment fraud after the man admitted he faked invoices.

Leo Wheeler, 56, pleaded guilty to one count of mail fraud in U.S. District Court. He had solicited investors to build a subdivision called Creekside Oaks Estates near Middletown by presenting 85 phony invoices for construction work he claimed he had done. Wheeler promised an 11% return and six months of prepaid interest to the investors but ran his operation using three non-existent businesses called Kenneth Gutman Trucking, SNC Solutions and California Maintenance.

The case was heard before United States District Judge Garland E. Burrell Jr.  and prosecuted by United States Attorney Benjamin B. Wagner.

Read the original article in the Lake County News.

Hurst Financial President Charged with Real Estate Investment Fraud by Feds

August 26th, 2011 at 6:34am

James Hurst Miller, 63, president of defunct hard money lender Hurst Financial Inc., has been charged by the U.S. attorney in Los Angeles with federal fraud and money laundering.

The allegations are with respect to several projects Hurst and developer Kelly Gearhart  proposed to build, into a large golf course. The 1,200 Central Coast people who put money into the project in what prosecutors claim was a $100 million real estate investment fraud. Specifically, Hurst is facing four counts of wire fraud, mail fraud, money laundering, making a false statement to a bank and assisting Kelly Gearhart in fraudulently obtaining funding for his construction project. Prosecutors allege that the investment money was diverted to pay for prior loans his business made (hard money loan fraud).

Miller used Cuesta Title, also no longer in business, to clear title on some of the projects by stating falsely that the loans had been repaid (title fraud). He would then take out subsequent loans using his investors’ money

The projects for which Miller solicited investors were in the Beacon Road and Vista Del Hombre real estate development projects in Paso Robles and the Salinas River real estate development project in Templeton.

Many of James Miller’s investors, including elderly investors (elder financial fraud) have lost their life’s savings and homes. One is a 68 year old Cambria woman who suffers from multiple sclerosis and now lives in an assisted care facility because she was unable to keep her home because of her investments with Miller.

Read the full article in the CalCoastNews.

FBI Release 2010 Retrospective Mortgage Fraud Report

August 18th, 2011 at 7:53pm

The FBI has released a comprehensive report detailing the state of mortgage fraud in the country. According to their research, the states most affected by mortgage fraud and other real estate crimes are the same states where housing prices escalated rapidly during the mid-2000s: California, Florida, Michigan, Nevada, Arizona, Texas, New York, Illinois, Georgia and New Jersey.

The most prevalent mortgage fraud schemes reported by law enforcement agencies and private industry during fiscal year 2010 included loan fraud in the origination process, mortgage rescue fraud, real estate investment fraud, equity skimming, short sale fraud, illegal property flipping, title fraud, escrow fraud (incl. settlement), commercial loan fraud, builder bailout schemes, loan modification fraud and reverse mortgage fraud.

The FBI notes that short sale fraud has become so prevalent that organized crime committed by Asian, Armenian, Balkan, Eurasian, Russian and La Costra Nostra groups has infiltrated lending institutions in order to have access to financial information, mortgage origination software, notary seals and licensure information.

In other words, all forms of real estate fraud are alive and well and it is being committed by both licensed real estate professionals and unlicensed individuals and criminal organizations. Law enforcement is bailing water out of a ship that needs enormous reinforcements just to stay afloate.

This is an excellent report with a lot of detail and is well-worth reading.

Click here to read the report on the FBI’s website. There is also an excellent synopsis on Inman News.

President of Real Estate Investment Club Pleads Guilty to Ponzi Scheme

August 18th, 2011 at 5:22pm

The president of a real estate investment “club” that took in $2.2 million from investors has pleaded guilty to running a Ponzi scheme.

Garry Bradford, 62, ran the  Millenium Capital Group in the Sacramento area between 2004 and 2008, purportedly to invest in commercial real estate. He admitted that the money he took in from investors was used to repay earlier investors. Many of the victims had pulled equity from their homes or cashed in their retirement plans in order to invest with Bradford, who promised 18% returns.

The case was prosecuted by the office of U.S. Attorney Benjamin Wagner and heard by U.S. District Judge Garland Burrell Jr.

Bradford could receive 20 years for each of the four counts of federal wire fraud for which he pleaded guilty and a $250,000 fine.

Read the original article in the Sacramento Bee.

Cupertino Man Gets 5 Years for Real Estate Fraud

August 4th, 2011 at 9:29am

Gary Mountain, a Cupertino-based real estate agent, is going to prison for five years for a real estate fraud in which he cheated investors out of $1.2 million.

The Santa Clara County District Attorney’s Office prosecuted Mountain, 61, who pleaded no content to five charge of securities fraud, all felonies. Prosecutor David Ezgar said the DA will ask the court to require Mountain to pay restitution to his victims.

Gary Mountain is alleged to have gained title to properties that were either in very poor structural condition or that had large balloon payments. He then convinced people to invest in the properties without disclosing these conditions.

Among those Mountain ripped off was Sheila Hagey, 68, and now deceased. After meeting him in church, Mountain convinced Ms. Hagey that her home was worth significantly less than it was (elder financial fraud) and to sell it to him at a steep discount, including real estate commission fees. He then talked her into investing $200,000 into one of his phony property “investments.”

Read the original article in the San Jose Mercury News.

Ezri Namvar Convicted in Real Estate Investment Fraud

May 20th, 2011 at 10:04am

Los Angeles real estate investor Ezri Namvar was convicted by a federal jury on four charges of wire fraud  related to his company, Namco Financial Exchange Corp.  Namco’s business was to hold the proceeds from real estate sales until the investors were ready to purchase, shielding them from capital gains taxes.

Namvar, 59, formerly owned high-profile properties as the Marriott Hotel in downtown Los Angeles and the Cal Neva Hotel and Casino near Lake Tahoe. His conviction stems from charges that he diverted money from four of his clients without their permission. Most of Namvar’s clients were Iranian immigrants who wanted to invest with a member of their own community.

Ezri Namvar and his assistant Hamid Tabatabai, who was also convicted on the same charges, are scheduled to be sentenced August 22. Namvar’s attorney Marc Harris has promised an appeal. 

Read the full article in the Los Angeles Times. There are also two previous articles in the California Real Estate Fraud Report about Ezri Namvar. Click here and here to retrieve them.

Developer Romo Indicted in Real Estate Investment Fraud

May 20th, 2011 at 9:03am

Folsom developer David Romo, 42, has been indicted by a federal grand jury in an alleged real estate investment fraud that may have cost investors $2.5 million.

Romo promised his investors that their money would be placed in developing real estate projects. Prosecutors alleged that he diverted at least some of the funds for his own use.

The indictment states that, instead, Romo pocketed some of the funds and used some of the balance to pay unrelated prior business expenses. Further, Romo failed to inform investors that he had been convicted for bank fraud in 2002 and served time in prison as a result.

Read the original article in the Sacramento Bee.

Visalia Man Pleads Guilty in Real Estate Fraud Case

May 20th, 2011 at 8:52am

Jesse Alvin Cripps Sr., 57, a financial adviser based in Visalia, has pleaded guilty to 15 counts of mail fraud and two counts of money laundering.

According the U.S. Attorney’s Office, Cripps defrauded investors by promising them dividends of 10%-12% per month by investing their money in REITs (real estate investment trusts. Instead, he diverted the money for his personal use, causing losses of approximately $2 million.

Read the original article in the Fresno Bee.

LAPD Detective Charged in Real Estate Fraud

May 13th, 2011 at 9:43am

Here’s a case where routine screening by a law enforcement agency failed to catch a bad apple.

Darcey Greenfield, 39, joined the LAPD since 1994. Along with working her way into becoming a detective, Greenfield started a sideline with real estate investments that crossed over into real estate fraud, according to investigators with the San Bernardino County District Attorney’s real estate fraud unit.

The DA’s office has charged her with 10 felonies, which include the serious charges of sale of false investment securities, the sale of securities without a license and grand theft. According to the prosecutor, the charges have to do with three individuals living in San Bernardo who invested with Darcey Greenfield. But, said to say, 13 LAPD personnel also invested with her and several have had to file bankruptcy as a result of the alleged real estate investment scam.

When members of a group are taken in by a scam, whether they are of the same ethnicity, attend the same church or, in this case, belong to a trusted group such as the LAPD, that is called affinity fraud.

Darcey Greenfield is in custody at the Rancho Cucamonga detention center, unable so far to make her $1 million bail.

Read the original article in the Los Angeles Times.

© Copyright 2007-2015 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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