January 27th, 2012 at 9:43am
James Delbert McConville, the subject of many posts in the California Real Estate Fraud Report, has pleaded guilty in Oakland federal court to money laundering and conspiracy to commit wire and mail fraud.
McConville was accused by prosecutors of setting up an elaborate network including a Citibank employee, an escrow officer, a Realtor and a notary public. He also convinced dozens of people to act as straw buyers, using their good credit and a bribe of $10,000 to encourage their participation.
The properties McConville purchased were located all across California. San Diego appraiser Todd Lackner referred to the schemes as “sterotypic mortgage fraud.”
Although he has promised to pay restitution, McConville’s attorney, Sara Rief, claims her client is broke. This is most likely due to the large amount of money his crimes afforded him to spend on himself.
Read the original article in KGTV San Diego.
January 12th, 2012 at 11:59am
Keith Wilson, 55, of Stockton has been arrested and charged with securities fraud, money laundering, grand theft and elder abuse.
The 22-month long investigation by police into his businesses Tribeca Properties, LLC, and Lone Cedar Corporation led authorities to believe Wilson defraud seven people in the Bay Area out of over $300,000. The real estate fraud scheme was unraveled when the purported victims found out that Wilson had not purchased the foreclosed properties he had claimed to have bought.
Read the original article in the San Francisco Appeal.
January 12th, 2012 at 9:53am
Barry Winnett, 49, the man who operated Countour Escrow Services for co-conspirator Royce Newcomb, has been sentenced to prison for three years and two months.
Winnett, who is unlicensed and therefore ran an illegal escrow company (escrow fraud), was convicted of wire fraud for his role in Newcomb’s Ponzi scheme. Newcomb solicited money from investors to purchase foreclosed homes but in reality laundered the money through Contour Escrow Services and returned portions of it to earlier investors (real estate fraud). The sum lost to the 22 investors was nearly $3 million.
Newcomb began serving a five year two month sentence in fall 2011.
You can find earlier posts about Royce Newcomb and Barry Winnett by searching this blog.
Read the original article in the Roseville Press Tribune.
December 23rd, 2011 at 10:04am
A Southern California man who prosecutors say fleeced investors out of $228 million in a real estate investment fraud, including many in Los Angeles, is fighting extradition from France, where he fled after his scheme unraveled.
Bruce Fred Friedman, 61, operated Diversified Lending Group out of swanky offices in Sherman Oaks until the Securities and Exchange Commission (SEC) shut his business down through a court order. Friedman then fled to Cannes, France.
A federal grand jury indicted Friedman on 23 charges related to what prosecutors for the U.S. attorney’s office in Los Angeles called a Ponzi scheme arising out of real estate loans (real estate fraud, real estate investment fraud). Prosecutors say that Friedman’s scheme worked because it was believable – he offered reasonable returns to his investors, many of whom moved their retirement funds into his fund.
Although the French courts have authorized his extradition, the final decision to do so is in the hands of the French government.
Read the original article in the Los Angeles Times.
December 18th, 2011 at 10:55am
An indictment handed down by a federal grand jury in Sacramento charges four individuals, including an auctioneer, with conspiring to rig bids a real estate foreclosure auctions held in San Joaquin County.
The auctioneer, or crier, is Theodore Longley of Roseville. Four real estate investors have been charged with conspiring with Longley. They are Wiley Chandler of Lodi; Andrew Katakis of Danville; Donald Parker of Valley Springs and Anthony Joachim of Stockton.
Sharis Pozen, the acting Assistant Attorney General of the Department of Justice’s Antitrust Division, commented that the indictments reflect the determination of her division to stop criminal activity that stifles competition at real estate auctions. U.S. Attorney Benjamin Wagner noted that real estate fraud arising from auction conspiracies have the effect of driving down home prices in neighborhoods in which the auctioned properties are located.
Read the original articles in the Central Valley Business Times and the Sacramento Bee.
December 13th, 2011 at 7:36am
Three men have pleaded guilty in San Francisco federal court to conspiracy to commit wire fraud and mail fraud in a real estate investment fraud scheme.
According to United States Attorney Melinda Haag, Stanley Ward, Edward George Locker, and Richard Ferguson Tipton, confessing that they deceived private money lender Jim Ward & Associates, Inc. and its successor, JSW Financial, Inc. They had promised the investors that they would service loans made to borrowers building single family homes. In addition, the investors were provided documentation that showed that the loans were secured by real estate deeds of trust in the Blue Chip Realty Fund, LLC and Shoreline Investment Fund, LLC, which was not true.
Read the original article in Real Estate Rama.
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.