California Real Estate Fraud Report

Donna Demello, 44, of San Jose, has pleaded guilty to one count of conspiracy to commit wire and mail fraud in connection with a conspiracy allegedly run by James Delbert McConville, who is awaiting trial. Demello was an escrow officer at Stewart Title in Milpitas and will be sentenced by U.S. District Judge Phyllis Hamilton on December 8 for concealing exorbitant marketing fees on the escrow settlement statements.

James Delbert McConville was purportedly at the center of a conspiracy in which straw buyers were paid $5,000 - $10,000 for the use of their names and credit in order for McConville and his associates to obtain loans on condominium properties in the San Diego area. Prosecutors state in their filings against McConville that he took out $20 million in loans for 80 condos and that his “marketing fees” amounted to approximately $11 million.

You can read more about this story in previous article on this blog.

Mark Alan Abrams, 49, one of the central players in the Beverly Hills mortgage fraud conspiracy that consisted of real estate agents, appraisers, straw buyers, mortgage brokers and probably more, pleaded guilty to conspiracy, bank fraud and other loan fraud-related charges.

For the tens of millions that Abrams helped to steal, prosecutors are seeking a seven year (at most) sentence from U.S. District Judge Dean D. Pregerson. Assuming Abrams behaves himself, he could end up serving about half that time. Taxpayers, on the other hand, will be paying back his thievery and that of his eight fellow-convicted conspirators, for years via TARP (Troubled Assets Relief Program).

Lehman Brother Bank was misled by Abrams and his co-conspirators to fund over 80 loans in expensive Westside neighborhoods. As part of their sentences, the guilty have been ordered to pay their share of the $46 million restitution.

Read the full article in the Los Angeles Daily News. You can search the California Real Estate Fraud Report for earlier articles about the Beverly Hills mortgage fraud gang.

Rollo Richard “Rick” Norton II was sentenced by U.S. District Court Judge Marilyn L. Huff to 24 months in prison for his role in a San Diego mortgage fraud case in which a condominium complex was used in a series of sales and resales to remove equity. Norton, the subject of several posts in the California Real Estate Fraud Report, must also pay restitution.

According to the prosecution, Norton was the investment advisor in Ramona who initially purchased an apartment complex located on Crown Point Drive in San Diego, intending to convert it to condominiums. The project ran awry due to mismanagement, the use of straw buyers, with investors and lending institutions being defrauded by the deceptions of Norton and his co-conspirators, two of whom, Scott Greer and Todd Johnson are awaiting their sentences from U.S. District Judge Huff.

Read the full article in National Mortgage Professional Magazine.

James Delbert McConville, indicted along with five co-conspirators in May as ringleader in a real estate fraud at several condominium complexes, was arrested in Valley Acres, southwest of Bakersfield. The condos were located in Escondido, San Marcos and a 300-unit complex in Ridgecrest, north of the Antelope Valley. The indictment originated out of the East (San Francisco) Bay because McConville’s offices were located in Fremont.

McConville not only found straw buyers who were stupid enough to rent their good credit ratings to purchase the condos, he charged “marketing” fees that ranged upward of half the purchase price of the properties, all of which he later ceased making payments on and allowed to fall into foreclosure.

Read the full article in the San Diego Union Tribune.

Prosecutors in Ventura County are busy after arresting 13 people last week for their alleged involvment in mortgage fraud conspiracies in which unqualified borrowers submitted loan applications that were doctored by the defendants in order to obtain millions in loans. Many of the homes fell into foreclosure afterward, causing large-scale losses for the banks while the real estate professionals pocketed commissions that were truly unearned.

According to Ventura County District Attorney Greg Totten, “The criminal conduct that is the basis of today’s federal indictments is our own Ventura County example of the greed, avarice and fraud that drove much of this nation’s real estate meltdown.”

And from said U.S. Attorney André Birotte Jr., “The perpetrators range from professionals in the industry— people like real estate agents and mortgage brokers—to individual borrowers who wrongly thought they could game the system”

The first indictment targeted Oxnard-based Mortech Financial. Employees there are alleged to have falsified loan applications, resulting in losses to the lenders totaling $25 million.  Now facing charges for their roles are Rosa Amelia “Rosie” Fernandez, 34, / Mortech Financial; Raul Rocha, 37, Fernandez’s brother / Century 21 Premier Hills and Estates; Luis Ramos, 40; Patricia Vega, 43; Rogelio Vega, 43, of Oxnard; Leticia Hernandez, 38, of Santa Paula; Eduardo Magdaleno, 62, of Ventura; Richard Ceniseroz, 57, of Oxnard; Lilibell Meza, 34, of Fillmore; and Eduardo Reyes, 33, of Oxnard.

The second indictment is against Platinum Power Mortgage, also in Oxnard, for the same crimes. Charged in that case are Miriam Sukey Estrada, 32 / Platinum Power and Premier Tax Service in Oxnard; Adela Naranjo, 50 / co-operator of Platinum Power; Maria Del Rocio Partida, 45 / a real estate agent at Century 21 Premier Real Estate in Oxnard; and Juan Manuel Banales Venegas, also known as “Chicken Little,” 23.

Read the full article in the Acorn.

Sisters Ralondria Stafford, 36, and Necole Ward, 31, who operated a real estate office called RN Realty in Vallejo, have pleaded guilty to bank fraud in front of United States District Judge Morrison C. England, Jr .

The sisters ran a mortgage fraud scheme in which they recruited straw buyers at $5,000 each for the use of their names and credit histories, which were used to purchases homes that were over-valued. They promised the straw buyers that they would re-purchase the properties within a year. In fact, they did not re-purchase any of the properties, and as a result, each property was foreclosed upon and sold at auction.

Stafford and Ward will be sented by Judge England in August, at which time they could receive up to 30 years in prison and a $1 million fine.

Read the full article in 7thSpace Interactive.

Six people have been charged with conspiracy to commit wire fraud and wire fraud in a federal indictment.

Brian Andrew La Porte, Daniel John Schuetz, Michael Wayne Wickware, Roxanne Yvette Hempstead, Darryl Anthony Wallace and Terrence Smith are alleged to have submitted false loan applications to OwnIt Mortgage Solutions Inc., WMC Mortgage Corp., Argent Mortgage Company, Countrywide Home Loans and First Franklin, resulting in the loss of almost $21 million to the lenders. The defendants used straw buyers with good credit histories to obtain the loans, then paid themselves and the straw buyers with the escrow proceeds.

Read the full article in San Diego 6 and LoanSafe.

Sacramento homebuilder Anthony Symmes, 59, has agreed to plead guilty in a wide-ranging mortgage fraud scheme in which he conspired with others to raise the listed prices on homes he built and used some of the proceeds to repay straw buyers, himself and his co-conspirators.

Symmes alleged partner-in-crime is unlicensed mortgage broker Garret Griffith Gililland, who allegedly approached Symmes with the scheme. Gililland, who had fled to Spain, was arrested and now awaits his own Judgement Day.

The lenders that were victimized have foreclosed on 38 of the homes and are disposing of 10 more in short sales. Prosecutors believe that Symmes and Gililland may have involved as many as 500 residential homes and condominiums in California and other states in their crime spree. Symmes has already provided restitution of $4 million as part of his plea agreement. His prison sentence could range range from 10 to 20 years.

Read the full article in the Silcon Valley Mercury News.

James Delbert McConville has been indicted by a federal grand jury on fraud and money-laundering charges. He is accused of using the identities and credit records of straw buyers to purchase 80 condominium units in Escondido and San Marcos. The straw buyers were paid $5,000 to $10,000 for renting their credit histories to McConville.

Also named as co-conspirators in the indictment were real estate agent Laura Margery Caton, Jason Piette, Rasul Rasuli, Donna Demello (an escrow officer) and Araks Davoudi (a personal banker). All have been ordered to appear before the court in June.

McConville has a prior conviction for grand theft in 1998, for which he was ordered to pay restitution for committing insurance fraud. His whereabouts are currently unknown, according to the San Jose Mercury News.

Read the full article in the San Diego Union Tribune.

The U.S. Attorney’s office has announced sentencing for two Fontana women, who used the proceeds from a mortgage fraud scheme to buy luxury cars for themselves and to cover gambling debts.

US District Judge Florence-Marie Cooper sentenced Angela Cotton, 38, to five years in the federal penitentiary for operating the title company involved in the mortgage fraud conspiracy. Cotton found the properties used in the scheme and then used the credit of straw buyers such as Lisa Lievanos to secure loans and purchase the properties. For her part in the crimes, Lisa Lievanos, 45, received a sentence of a year and a day in prison.

Two others convicted in ripping off the banks were Terral Toole, 42, and Miles Davis, 47, a loan processor formerly from Reseda. Davis was sentenced to three years of probation, including six months of home detention, by Judge Cooper. Toole was sentenced to 85 months in prison by U.S. District Judge John F. Walter.

Both judges ordered restitution to the banks.

Read the original sentencing press release by the U.S. Attorney’s Office and a recent article in the San Bernardino Sun.