June 7th, 2012 at 9:22pm
In a step towards the prosecution of a large-scale, multi-state real estate fraud and Ponzi scheme, Johnny Eugene “Jay” Grivette, Jr., has pleaded guilty to two charges of mail fraud and money laundering. Grivette, 37, has agreed to cooperate by testifying in the case prosecutors are building against his associate Lawrence Leland “Lee” Loomis, 55.
Loomis, formerly of Granite Bay, was on the circuit of real estate investors who promoted his product, Loomis Wealth Solutions, at hotel seminars seminars in California, Washington and Illinois. Although not charged with a crime to date, Loomis convinced more than 100 private investors to trust their money with him by promising 12% annual returns. The safety of their money was guaranteed through his NARAS Fund, of which Grivette was the signer as manager of Advantage Financial Partners, another Loomis-controlled company.
Read the original article in News10.net.
May 31st, 2012 at 11:15pm
Three men who lured investors, including elderly ones (elder financial abuse), into placing their funds with their firm on the fraudulent claim that their real estate developments benefitted charities, have been charged with conspiracy and fraud.
The investors to S3 Partners, which had offices in San Jose, Campbell, Palo Alto and North Carolina, may lose $21 million by the time the dust settles.
The three partners are Michael Sims, 58, of Gilroy, Sam Stafford, 56, of Campbell, and Melvin Russell “Rusty” Shields, 42, of Granite Falls, N.C. Federal prosecutors are accusing the men of promising rates of return between 10 and 16 percent for their developments in Arizona, Texas and Florida. While presenting themselves as experienced professionals, Shields has a conviction for felony larceny and Michael Sims’ real estate license was “suspended indefinitely” in 1978 by the California Department of Real Estate (DRE).
Sam Stafford has pleaded not guilty and Michael Sims has yet to enter a plea. No word yet as to the pleading status of Rusty Shields.
Read the original article in the Silicon Valley Mercury News.
May 17th, 2012 at 9:55am
The SEC has charged three men with running afoul of antifraud and securities registration provisions by running a real estate investment firm that promised annual returns of 60%.
Michael Stewart, John Packard and Randall Smith opened Apartments America LLC shortly after they closed Pacific Property Assets due to bankruptcy. The alleged purpose of both businesses was to pool investors’ funds from unregistered offerings of securities and use the money to purchase multi-family housing in Southern California and Arizona. Pacific Property Assets had defaulted on $91.6 million in promissory notes held by 647 investors and was being managed by a bankruptcy receiver and Apartments America LLC had no assets (real estate investment fraud). Investors to that failed venture had been promised rates of return of between 24% to 30%.
Read the original article in National Mortgage News.
May 10th, 2012 at 3:44pm
David Richard Sparks, once a talented real estate investor and former Irvine Planning Commissioner who was prosecuted for bilking his friends and family, is going to prison.
Sparks brought investors into his business by promising to buy, rehabilitate and sell foreclosed or distressed homes, something he never did (real estate investment fraud). Instead, according to evidence presented, he used the money he obtained, sometimes from life-long friends, to cover his own speculative real estate losses in Utah and forged documents, created phony escrow companies (escrow fraud) and fabricated accountings. The victims testified at his sentencing that David Sparks’ criminal conduct cost them their marriages, retirement funds, savings, credit scores and homes.
Although his plea agreement with prosecutors called for less time, Judge Cormac J. Carney added “aggravating points” when sentencing Sparks by noting he had abused his position of trust and manipulated real estate documentation and transactions. Sparks’ sentence: six and a half years in federal prison.
David Sparks was also ordered by the court to repay $4.3 million to his victims.
Read the original article in the OC Register.
May 4th, 2012 at 9:37am
Kathryn “Katie” Rose, 62, who ran a local radio show in Ventura with co-host Kenneth A. Powell, pleaded guilty in one of the largest real estate fraud cases prosecuted by the Ventura County District Attorney. She faces a sentence of 12 years for her crimes.
Kenneth Powell, 58, has already pleaded guilty to 15 similar white-collar felony counts and awaits a sentence of up to 18 years.
Ventura County Prosecutor Dominic Kardum said that Powell, Rose and Paul Charles Lascola, 69, ripped off 15 investors for more than $3 million. Kardum and co-prosecutor Miles Weiss say the money they stole has completely vanished.
Kenneth Powell and Katie Rose hosted the “Ken and Katie” radio program that featured infomercials such as “Academy of Real Estate” and “Money Intelligence” on KVTA-AM 1520. This is where they attracted the investors who ultimately became victims.
Read the original article on the Ventura County Star.
April 26th, 2012 at 6:16pm
Six people – three from Orange County – have been indicted in a so-called property flipping scheme that involved REO (Real Estate Owned) properties.
The defendants are Sylvia Melkonian, 48, of Laguna Beach, Andrew Wardein, 38, of Irvine, Craig Shults, 41, of Huntington Beach, Sheridan Snyder, 65, of Turtletown, Tennessee, Paul LiCausi, 47, of Fort Pierce, Florida and Joseph Haymore, 31, of Port St. Lucie, Florida.
In each case, the investors (victims) were told the REO/bank-owned properties for up to $45,000 and told that the properties had clean titles, property management contracts and guaranteed renters for three months. They also were told by the defendants that they could resell the properties back at end of a year for $60,000 None of this was true, and in fact title could not be acquired with some of the properties (title fraud) and others were encumbered by tax or other liens, were uninhabitable, condemned or had building permit or code issues. The properties had been purchased by the defendants for $10,000 each.
Read the original article in the Orange County Breeze.
April 18th, 2012 at 1:58pm
A Murrieta man who is on trial for ripping off friends and investors out of $142 million in a real estate investment fraud scheme has challenged them in court to show a paper trail between them and him, as well as his mother, who is also on trial. The victims include fellow church-goers, kung-fu classmates, an animal control officer, retirees, a security guard and a mortgage broker.
Hendrix Montecastro, 39, and his mother, Helen Moreno Pedrino, 60, were charged in 2009 with 249 felony charges of securities fraud, grand theft, elder financial abuse and corporate identity theft.
According to the prosecution’s key witness, district attorney investigator Brent Westwood, proving that paper trail will be difficult.
Five other defendants have already pleaded guilty, but Montecastro and his mother are representing themselves in Riverside County Superior Court.
Read the original article in the Press Enterprise.
April 12th, 2012 at 9:17pm
The first of three persons has pleaded guilty in a real estate fraud case in Ventura County.
Former “Ken & Katie” radio show host Kenneth A. Powell, 58, admitted his guilt in committing 15 felonies according to Ventura County District Attorney Prosecutor Miles Weiss. The crimes include grand theft, theft of an elderly person (elder financial fraud) and multiple aggravated white-collar enhanced crimes.
Powell’s alleged co-conspirators, co-host Kathryn “Katie” Rose, 62, of Woodland Hills, and Paul Charles Lascola, 69, of Thousand Oaks, have also been charged in this real estate investment fraud saga.
The “Ken & Katie” show, which aired on KVTA/1520 AM, was one of three radio infomercials, the other two being “Academy of Real Estate” and “Money Intelligence.” In all, investors from Ventura, Santa Barbara and Los Angeles counties lost $3 million.
Read the original article in the Ventura County Star.
April 12th, 2012 at 8:41pm
Hendrix Moreno Montecastro, a 39-year old Murrieta man accused of playing a critical role in an alleged $142 million mortgage fraud, has benefited from numerous delays in his case.
Montecastro was arrested and charged in November 2009 with grand theft, securities fraud, elder abuse and corporate ID theft in the case that caused more than 200 foreclosures in Riverside County as well as the above dollar losses for the investors. His alleged co-conspirator and mastermind, James Benjamin Duncan, also of Murrieta, has already pleaded guilty to corporate ID theft and six counts of securities fraud.
The latest delay was due to Montecastro firing his attorney. Both he and his mother, co-defendant Helen Moreno Pedrino, are now representing themselves.
Read the original article in the Press Enterprise.