California Real Estate Fraud Report

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Archive for the 'Real Estate Investment Fraud' Category

North Hills Realtor Charged in Real Estate Fraud / Ponzi Scheme

July 13th, 2012 at 10:49am

Celia Gallardo, 42, a Realtor® from the North Hills community of the San Fernando Valley, was arrested and charged with running a multi-million dollar Ponzi scheme in the  Santa Clarita Valley.

The Department of Justice, in its indictment, accused Gallardo of stealing from investor who trusted her with her real estate investment program, which turned out to be nothing more than a Ponzi scheme. Amazing, she promised them returns of 100% in 30 days. Gallardo used most of the money to finace travel, purchasing a residence and keeping a lot of cash in her wallet.

Read the full article in the Daily News.

Jury Selection in Hendrix Montecastro Mortgage Fraud Trial Begins

July 6th, 2012 at 11:09am

A man and his mother who are on trial in an alleged $142 million mortgage fraud and securities fraud prosecution are taking turns with the prosecution, conducting their own voir dire as part of their self-representation, having fired all of their attorneys.

Hendrix Montecastro, 39, of Murrieta, and his mother, Helen Moreno Pedrino, are charged with grand theft, securities fraud, corporate identity theft and elder abuse (elder financial abuse). They are among seven people who were arrested in 2009 for scamming small-time investors and being responsible for the foreclosure of more than 100 homes in Riverside County. The ringleader James Duncan and the other five defendants have already pleaded guilty for their roles.

Read the original article in the Press Enterprise.

Atascadero Developer Kelly Gearhart Indicted for Real Estate Investment Fraud

July 6th, 2012 at 10:59am

Developer Kelly Gearhart has been indicted by a criminal grand jury on federal fraud and money laundering charges in connection to monies he solicited from investors for real estate projects (real estate investment fraud).

The eight-page indictment charges that the 50-year old businessman, dubbed the “Citizen of the Year” in 2005 by the Atascadero Chamber of Commerce swindled millions from investors he duped by telling them the loans were secured by his own real estate investments. Instead, according to the indictment, he sold the same lots over and over to multiple buyers and did not own the land he claimed to own. The grand jury alleged that he used the funds he received to furnish a “lavish” lifestyle; some of which is bound to come out during the hearings for his $110 million bankruptcy.

Gearhart, who faces up to 300 years in prison if convicted of all the charges, also used pooled funds from bankrupt Hurst Financial Corp. Its former president James Hurst Miller has already pleaded guilty to four counts of fraud and money laundering charges in 2011.

Read the original article in the San Luis Obispo Tribune.

Authorities Seek Victims in Real Estate Fraud

June 22nd, 2012 at 9:04am

The Placer County Sheriff’s Department is looking for victims of a Meadow Vista man they have arrested in a real estate fraud matter.

William Frank Lordier, 54, was arrested earlier this week on suspicion of felony grand theft. Victims told detectives that he advertised timeshares on Craig’s List and convinced them to give him their bank account information, which he used to withdraw money for his own use. Lordier once was a licensed real estate salesperson with the California Department of Real Estate but his license expired in 2011.

The alleged victims live in Los Angeles and Nevada counties and also in Oregon and Washington state.

If you feel you have been victimized by Lordier, please call Detective Jason Doolittle at (530) 889-7844.

Read the original article in the Sacramento Bee.

Three Indicted in Los Angeles for Short Sale Fraud Scheme Using Phony Bank Approvals

June 21st, 2012 at 2:56pm

Dear Readers,

There have been a number of articles in the media in the past week about three people who have been arrested for running a conspiracy to defraud banks and investors by engaging in a unique form of short sale fraud. Unfortunately, while the articles have shown the photos of the defendants and some of their alleged ill-gotten gains, they do not adequately describe the wrongdoing of which the defendants are accused.

So . . . here it is, my own abstract, prepared especially for law enforcement who are working real estate fraud cases outside the jurisdiction of this one and would like to catch up on current crime patterns.

Ahmed Tariq Asghari, 32, of Sherman Oaks; Kenneth Moore, 49, of Tustin; and Atiqullah Nabizada, 29, of Coto de Caza have been indicted for running a short sale fraud operation that may have defrauded the victims of as much as $10 million. According to the FBI Press Release, Nabizada and Moore were charged with conspiracy to commit wire fraud and aggravated identity theft and Asghari, has been charged with attempted bank fraud, aggravated identity theft and causing an act to be done. If convicted, the men could each face lengthy prison sentences.

The schemes were carried out in Los Angeles County and to date involved at least six residential properties.

Search warrants were executed last week at locations in Orange County and Los Angeles County.

Here is how the crimes were committed, according to the search warrants:

Nabizada told a witness (referred to in the search warrants as the “Cooperator”) that he had an inside contact at Bank of America who, in exchange for a bribe, would approve short sales for well-below fair-market value. The Cooperator then told Asghari of the scheme and offered to bring him into it if Asghari would find investors or even straw buyers who would pay fair-market value for the properties.

Nabizada apparently had no such insider willing to approve short sales for below-market value at Bank of America; instead, he merely produced forged documents himself. These documents would be presented to escrow, which in many cases, was handled by Jackie Burchell, who worked at Point Break Escrow (PBE) in Costa Mesa. The title company would wire the funds, issue and record the new title policy and escrow would be closed. The property, which had clear title, would then be resold to an unsuspecting buyer. In the meantime, Bank of America would return the wired funds, stating it had not approved the short sale. The buyer would be left holding title to a property for which the original liens by Bank of America and perhaps a subordinate lien holder were still in place and in force.

According to the search warrant, Burchell has acknowledged being aware that she was working on behalf of Nabizada and Asghari by “concealing documents and producing and/or knowingly transmitting fraudulent documents,” that she concealed payments to both men and produced fraudulent HUD-1 statements.

This complicated case was investigated jointly by the FBI, the Secret Service, the Los Angeles County Sheriff’s Office, the Department of Motor Vehicles (DMV).  André Birotte Jr, the United States Attorney in Los Angeles, announced that his office will be prosecuting the defendants; the lead prosecutor is Ariel Neuman.

Tariq Asghari’s office, where one of the search warrants was executed, is located at 18850 Ventura Blvd, Tarzana, California.

Click here to get the search warrant for Tarzana, and click here to read the Orange County search warrant.

Update:

On January 9, 2013, Jackie Burchell was arrested and charged in connection with another real estate fraud scheme, according to an FBI Press Release. She was barred from any employment in an escrow agency as a result of an administrative enforcment action taken by the California Department of Business Oversight (formerly California Department of Corporations) in November 2012.

Latinos Charged in Ripping Off Latinos in Real Estate Fraud Ponzi Scheme

June 15th, 2012 at 7:20am

Two  men have been charged with running a$1.3 million real estate fraud Ponzi scheme that targeted Latino investors, in what appears to be a case of affiinity fraud (ethnic fraud), since the defendants are also Latinos. 

California Attorney General Kamala Harris announce that Edwin Salazar, 34, of Downey and 41-year-old Michael Zuniga of Fullerton have been charged with multiple counts of grand theft, elder financial abuse, burglary and conspiracy and that 18 victims have been identified. The two who apparently were insurance agents, convinced their victims to refinance their homes in order to participate in “risk-free” (that’s a hint) investments with guaranteed returns of 15% with their firm Omega Investment Group. The so-called investment was nothing more than a Ponzi scheme, with the defendants helping themselves to $700,000 for their own use.

Read the original article in the Diamond Bar Patch.

Lee Loomis Associate Pleads Guilty in Real Estate Investment Fraud

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.

Petaluma Agent Arrested for Ponzi Scheme in Real Estate Investment Fraud

June 7th, 2012 at 9:08pm

Petaluma real estate agent Aldo Baccala has been arrested and charged with  167 felony counts of grand theft, securities fraud and elder abuse. The charges came after complaints were filed with the Sonoma County District Attorney’s Office and the Office of the California Attorney General. If the charges are true, Baccala may have stolen more than $20 million from investors – many of them elderly (elder financial fraud, elder financial abuse) in a Ponzi scheme.

Baccala, 71, raised millions of dollars by promising investors he was purchasing nursing homes and could pay 12% dividends. Most of the investors, who referred Baccala, his wife Karen Baccala and his brokerage Baccala Realty to their friends, have lost all of their money.

In 2009, he settled with 75 investors for $21 million settlement having to do with purported investments of nursing homes on the East Coast (real estate investment fraud).

Aldo Baccala is currently a resident of the Sonoma County Jail under bail of $2 million, according Sonoma County District Attorney Jill Ravitch.  His real estate license expired in April 2010.

Read the original article in the Santa Rosa Press Democrat.

 

Three Bay Area Men Indicted for Real Estate Investment Fraud

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.

Apartments America LLC Principals Charged with Fraud by SEC

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.

© Copyright 2007-2017 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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