March 8th, 2012 at 8:53pm
Kenneth Doolittle, 52, is off to state prison for 13 years after his appeal for a 2009 conviction was denied.
Doolittle was convicted in 2009 for fraud, elder financial abuse and failure to register a securities transaction in relation to a mobile home investment business that went south. He had promised his investor, all of whom were 65 years of age or older, that they would receive returns of 13 percent from his remodeling and flipping the homes (real estate fraud).
Doolittle is due in court this week, at which time the restitution to his victims will be determined.
Read the original article in the Mercury News.
February 29th, 2012 at 9:53am
John Terzakis, formerly the majority owner of Vesta Strategies LLC in San Jose, has pleaded guilty to wire fraud, conspiracy to commit wire fraud and money laundering in connection with a $25 million Ponzi scheme that he orchestrated.
Vesta was a qualified intermediary that, if legitimate, would have helped investors avoid paying taxes on capital gains by holding the proceeds from their real estate sales for up to 180 days.
According to Melinda Haag, U.S. attorney for the Northern District of California, the investors’ money could not be returned because Terzakis, former Vesta CEO Robert Estupinian and former executive Peter Ye misappropriated the funds for their own use. Esupinian and Ye have already pleaded guilty and like Terzakis, will be sentenced by U.S. District Judge D. Lowell Jensen
Read the original article in the Silicon Valley Business Journal.
February 24th, 2012 at 8:56am
This is “Affinity Fraud Week” at the California Real Estate Fraud Report. By that, I mean that in the past week, almost all of the news that I have reported has been where the alleged perpetrator(s) and victim(s) have belonged to the same ethnic group (ethnic fraud). Now on to this latest story of affinity fraud.
The Orange County District Attorney’s Office has announced that two have have been charged in connection with a real estate fraud scheme that targeted the Vietnamese-American community.
Loan Thituong Nguyen, 43, of Westminster, is a licensed real estate broker who operated Suncoast Mortgage and Suncoast Investment Realty. She and her alleged accomplice, Lynn Eichenberger, 42, of Chatsworth, have both been arrested and charged with 15 felony counts of grand theft, two felony counts of money laundering, and one felony count of conspiracy to commit grand theft with sentencing enhancements for property loss of more than $1.3 million, aggravated white collar crime over $500,000, and money laundering of more than $1 million.
Operating a book-end style scheme, Nguyen is alleged to have approached homeowners in foreclosure and promised to solve their problem in return for substantial amounts of cash (foreclosure fraud). She then made promises to investors to help them acquire foreclosed properties for a 50% upfront fee toward the purchase (real estate investment fraud). The monies she collected were then deposited into an account set up by Lynn Eichenberger.
Orange County District Attorney Tony Rackauckas believes there are more victims than the 17 Vietnamese investors who claim to have been defrauded.
Read the original article in the Orange County Register.
February 10th, 2012 at 8:41am
Obdulia Julie Leon, 44, aka Julie Ochoa, of Visalia, was indicted along with others for stealing more $1.5 million in a make-believe in a real estate investment fraud of Arizona properties that was nothing more than a Ponzi scheme.
Leon has been charged with 18 counts that include conspiracy, mail fraud and wire fraud. Her alleged partner-in-crime is Bonnie Lynn Recinos, 51, aka Bonnie Farr, a Mesa, Arizona resident.
The two women, who worked in the financial services field, solicited funds from the investors and promised 3-5% per month in returns (that should have been the hint that this was fraud!). Instead of investing the money, they used it on themselves and to pay the earlier investors.
Read the original article in the Fresno Bee.
February 8th, 2012 at 9:28pm
Banking giant Wells Fargo and international law firm Greenberg Traurig are defendants in a lawsuit by an investor who claims the two firms concocted a scheme to hide the shaky financial status of a loan brokerage.
Investor David Nolan claims in his lawsuit, filed in Alameda County, that the loan broker – RE Loans, LLC, failed to disclose its poor liquidity status. Greenberg Traurig, RE Loans’ outside counsel, is accused of conspiring with Wells Fargo to conceal its shortage of capital by getting Wells to extend the broker $50 million worth of credit. This is despite the fact that both firms knew that RE Loans was forbidden in its investor agreements from taking on third party debt.
As a result of the deception, Nolan alleges that he lost about $665,000 that he had invested with RE Loans. His causes of action against Greenberg Traurig include aiding and abetting breach of fiduciary duty, fraud by misrepresentation, fraud by concealment, and secondary liability for securities fraud.
Read the original article in American Lawyer.
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.
