October 28th, 2011 at 8:35am
Eight Bay Area men have pleaded guilty to rigging bids at auctions for foreclosed properties. The guilty pleas to mail fraud result from a long-running investigation by the Department of Justice and occurred because the defendants used both the US Postal Service and Federal Express to send each other the Trustee’s Deeds.
The men, in various transactions with one another, agreed not to bid against each other in the auctions. Lowered bids cause less money to be returned to the lenders and creditors, causing deeper losses. It also damages the value of properties in the local real estate market where the sold homes are located.
Pleaded guilty were Troy Kent (San Mateo), Henry Pesah (Burlingame), James Doherty (Hillsborough), Laith Salma (San Francisco), Gary Anderson (Saratoga), Patrick Campion (San Francisco), Keith Goodman (San Francisco)and Craig Lipton (San Francisco).
Read the original article in the San Mateo Daily Journal.
October 27th, 2011 at 11:31am
Guadalupe Valencia, a 47-year old West Covina woman who pleaded guilty in 2011 to charges related to operating a real estate Ponzi scheme, has been sentenced to nine years in prison.
Valencia operated two companies in Downey called Real Estate & Loan Consultants and R.E. Equity Group, Inc. Through these firms, she solicited investors to fund two pools: one for providing short-term capital to businesses and the second for real estate loans.
The U.S. Attorney’s Office said Valencia took in $6.9 million in investor funds (real estate investment fraud) from 150 persons and made returns of approximately $1.7 million. In addition to the sentence meted out by U.S. District Judge S. James Otero, she was ordered to repay her victims $5.2 million.
Read the original article in the San Gabriel Valley Tribune.
October 27th, 2011 at 11:16am
David Nilsen, the owner of now-defunct Cedar Funding, located in the Central Coast, has pleaded guilty to conspiracy to commit wire and mail fraud, a federal charge.
Prosecutors with the U.S. Attorneys office accused Nilsen of running a Ponzi scheme – bringing in new investors to cover the previous investments that were failing. The losses to investors may total up to $100 million in this real estate investment fraud case.
Cedar Funding was forced into bankruptcy in 2008. It was the bankruptcy trustee who characterized the operations of the business as a Ponzi scheme going on for several years.
David Nilsen agreed to restitution to the investors, many of whom lost their life’s savings, of $69.8 million. It is unclear if he can realistically repay those funds, which would still amount to only 5-10 cents on the dollar to the investors.
Manoel Errico, a loan manager at Cedar Funding who was also indicted in the case, is a fugitive.
Read the original article in the Monterey Herald.
October 19th, 2011 at 10:18pm
Assistant U.S. Attorney Russell Carlberg and defense attorney McGregor Scott thought they had pounded out a deal in which Scott’s client would serve less than three years for his real estate investment fraud.
Instead, U.S. District Judge John A. Mendez rejected the deal and sentenced Collins Max “Collie” Christensen Sr. to five years in prison for bilking between 14 and 30 investors out of almost $1 million. Judge Mendez, in refusing to allow Christensen to spend Christmas with his family, noted that the victims, many of whom lost their homes and face financial devastation, are unlikely to enjoy their holidays.
Christensen, who solicited the investors for real estate developments, “made a conscious decision in 2007 to begin diverting investors’ money.” Judge Mendez said Christensen continued siphoning off the investors’ money in 2008 and 2009.
Read the original article in the Sacramento Bee.
October 13th, 2011 at 1:49pm
Ezri Namvar, once a well-known investor in the Los Angeles Iranian community, has been sentenced to seven years in federal prison after being convicted of wire fraud.
Namvar owned a company called Namco Financial Exchange Corp., the purpose of which was to hold the monies from commercial real property sales until his clients could reinvest the money, saving them from pay taxes on the sales.
The prosecution and an attorney representing many of the investors charged that Namvar diverted millions of those funds to pay creditors of another company he owned. Namvar’s attorney, Marc S. Harris, countered that the investors knew how their funds were being used and approved.
Namco Capital Group Inc., one of Ezri Namvar’s other businesses, is the focus of claims by other investors, whose voices are being heard in U.S. Bankruptcy Court.
Read the original article in the Los Angeles Times.
October 6th, 2011 at 10:23am
A Tustin real estate broker who specialized in hard money lending has been convicted in by prosecutors in the Orange County District Attorney’s office of over four dozen counts of grand theft, filing false recorded documents and other felonies.
Mark Alan Helsing, 53, pleaded guilty to the above charges. Helsing operated several hard money businesses, which lend money for short terms at higher interest rates than the banks. Borrowers typically either need the funds for a “bridge loan” for construction or have bad credit. The victims were investors, whose money should have been used to pay off earlier investors instead of being used to make the loans, which indicates a Ponzi scheme, real estate investment fraud and hard money fraud.
The names of Helsing’s companies were Sea View Investments, HLHS Financial Services, Inc., Foothill Realty, and Sea View Mortgage.
Read the original article in the Los Angeles Times and OC Weekly.
October 6th, 2011 at 8:46am
A Roseville man who has been sentenced to prison admitted in his plea agreement that his real estate fraud was little more than a Ponzi scheme which required the services of an escrow company to distribute the ill-gotten gains (escrow fraud).
Royce Lee Newcomb, 49, will have to serve five years and 10 months in prison for soliciting several dozen investors to give him almost $3,000,000 which he told them he was using to invest in foreclosed properties. Instead, he instructed Barry Winnett of Contour Escrow Services to disburse those monies to himself, Winnett and earlier investors. Winnett does not have a license to carry out escrow services.
Barry Winnett pleaded guilty to wire fraud in January but is still awaiting sentencing.
Read more about Royce Newcomb in the Roseville Press Tribune.
September 20th, 2011 at 1:52pm
Five Sacramento-area residents have been charged by a federal grand jury for ripping off 180 investors to the tune of $26 million in what appears to be a Ponzi scheme.
Alleged ringleader, Michael Bolden, 57, is no stranger to law enforcement. Back in 1994, the former air traffic controller was sentenced to 21 months for falsifying tax documents in order to qualify for home loans (loan fraud).
Bolden ran Diversified Management Consultants Inc., or DMC, a firm that acted as an umbrella organization over half a dozen investment clubs. Many of the investors pulled equity out of their homes and some have had to file bankruptcy. Much of the investment money was used, according to the grand jury, by Bolden to buy luxury cars and pay for improvements to his home.
The other defendants are Christopher Jackson, 43; Victor Alvarado, 50; and Nicholo Arceo, 38, and his wife Erica Arceo, 43. Gary Bradford, 62, a sixth defendant who ran one of the investment clubs, has already pleaded guilty to six counts of fraud and will be sentenced in April 2012.
Read the original article in the Sacramento Bee.
September 9th, 2011 at 9:03am
Real estate agent John Wesley Martynec is awaiting trial after been charged by the Orange County District Attorney’s Office on 34 counts that include elder abuse and grand theft.
Martynec is accused of operating a real estate investment fraud business in which he solicited money from investors and promised them profits from purchasing foreclosed homes and flipping them.
Read the original article in the Downey Patriot and the OC Register.
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.