California Real Estate Fraud Report

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Archive for the 'Title Fraud' Category

Archbishop of Nevada City Spiritual Organization and Six Others Indicted in $8 Million Mortgage Fraud Conspiracy

September 25th, 2015 at 9:01am

The following is a press release from the U.S. Attorney’s Office for the Eastern District of California:

SACRAMENTO, Calif. — Three persons were arrested today on felony charges contained in a 42-count indictment returned by a federal grand jury in Sacramento on September 10, 2015, United States Attorney Benjamin B. Wagner announced.

The indictment, unsealed today, charges John Michael DiChiara, 57, of Nevada City; James C. Castle, 51, formerly of Santa Rosa; Remus A. Kirkpatrick, 58, formerly of Oceanside; George B. Larsen, 54, formerly of San Rafael; Laura Pezzi, 59, of Roseville; Larry Todt, 63, formerly of Malibu; and Michael Romano, 68, of Benicia, charging them with conspiracy, bank fraud, false making of documents, and money laundering. Tisha Trites, 49, and Todd Smith, 44, both of San Diego, pleaded guilty to related charges before U.S. District Judge Garland E. Burrell Jr. on September 4, 2015.

DiChiara was arrested today in Cool, and Pezzi and Romano were arrested at their homes. The other four defendants listed in the indictment have yet to be arrested.

According to the indictment, DiChiara held himself out as the Archbishop of a spiritual organization named Shon-te-East-a, Walks With Spirit, the mission of which was to help individuals spiritually by alleviating them of their home mortgages. DiChiara and Castle (along with Trites who pleaded guilty to a related charge) are alleged to have orchestrated a mortgage-elimination program that fraudulently altered the chain of title on residential properties, selling the properties, and receiving the sales proceeds. Kirkpatrick, Larsen, Todt, Romano, and others allegedly recruited homeowners into the program with the promise of relief from foreclosure and a share of the sales proceeds. DiChiara and others used Shon-te-East to control the sale of the properties.

The indictment alleges that, once the homeowners were enrolled in the program, Pezzi and others created fictitious deeds of trust, a falsely made deed of reconveyance, and, where necessary, a falsely made notice of rescission of notice of default. The fictitious deed of trust was recorded at the county recorder’s office, and gave the appearance that the homeowner had refinanced the mortgage with a new lender. Todd Smith (who pleaded guilty to one count of conspiracy) or an entity controlled by the defendants was listed as the new lender, ensuring that when the properties were sold, the defendants would receive the sales proceeds. The defendants then caused to be recorded at the county recorder’s office a falsely made deed of reconveyance, indicating that the mortgage debt had been repaid to the financial institution holding the mortgage and reconveying title back to the homeowner. With these fraudulent documents on file at the county recorder’s office, a title search on the property would give the impression that the homeowner had refinanced, and no other debt was owing on the property. When the defendants caused the sale of these properties, they were able to divert the sale proceeds away from the lending institutions to their own benefit.

The defendants are alleged to have sold 37 properties through the mortgage elimination program, and attempted to sell at least an additional 97 properties, obtaining profits in excess of $8 million. They attempted to extinguish in excess of $60 million in legitimate mortgage loans.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Audrey Hemesath is prosecuting the case.

If convicted of the conspiracy count, the defendants face a maximum penalty of five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years and a $1 million fine. The maximum penalty for false making of documents is 10 years and a $250,000 fine. The maximum penalty for money laundering is 10 years and an additional fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Victims in San Diego foreclosure fraud case get $800,000

July 9th, 2015 at 10:43am

The San Diego County District Attorney’s Office announced that it has obtained more than $800,000 in restitution for 121 victims of a foreclosure fraud operated by William Hutchings.

The case, which was prosecuted in 2009, consisted of 10 defendants. Hutchings was convicted of 160 felony charges and the remaining defendants pleaded guilty to conspiracy and theft-related charges.

The defendants acquired over 400 grant deeds to residences in foreclosure by telling their victims that their “federal land grant program” would keep lenders from foreclosing. In addition to getting title, the defendants also charged the homeowners a $10,000 payment to participate in their program.

Read the original article in San Diego 6.

Woman pleads guilty in Oxnard title fraud case

June 2nd, 2015 at 9:17am

Gina Marie Hernandez, 37, has pleaded guilty to recording a false document in order to help a friend make bail.

According to the Ventura County District Attorney’s Office, recording a fraudulent document that encumbered an Oxnard residence as collateral for her friend Hayser Scarlett Lopez, 46. Lopez fled the country once she was granted bail but returned later.

Peggy Ann Soto, 55, was recruited by Hernandez to execute a phony power of attorney and to impersonate the Oxnard homeowner at Lopez’ bail hearing in Kern County Superior Court.

Read the original article in the Ventura County Star.


New program by Solano County District Attorney to make stealing homes more difficult

May 27th, 2015 at 8:41am

The Solano County District Attorney’s Office has developed a new programr that seeks to prevent theft of a person’s home by fraudsters (title fraud).

The Real Estate Fraud Notification will electronically scan documents in the Assessor/Recorder’s Office that would transfer title in any manner, then mail a letter to the person paying the property taxes with a copy of the recorded document to alert them. If that person is unaware of the transaction resulting in the recorded document, they should contact the District Attorney’s Office.

Read the original article in The Reporter.

Detroit homes at risk from tax liens – homeowners fight back

April 8th, 2015 at 9:07am

Although this story originates in Detroit, it is instructive as to this kind of potential real estate actions against homes occurring in every state.

Oakland County Treasurer Andy Meisner says “It’s theft,” in describing how operators set up corporate names and find homes that are behind on tax payments. They pay some of the past-due property taxes, then foreclose and put the homes up for auction. So far, at least 50 homes have had their ownership status put into jeopardy by these actions.

Meisner further said that this is a repeat of a scam that occurred in Wayne County 10 years ago. “Our system of property rights in this country is a very basic underpinning of our society,” he said. “Senior citizens, people with disabilities, some of the more vulnerable are really, really at risk.”

One military veteran managed to save his home that Consolidated Brokers’ Pool was trying to take title to through the court system.  He was fortunate in that Oakland County Clerk and Register of Deeds Lisa Brown and other County officials persuaded Oakland County Circuit Judge Nanci Grant to rule against Consolidated. Lisa Brown was quoted as saying “They are stealing homes. They’re committing a fraud on the court.” (Photo: Ryan Garza/Detroit Free Press) And “Consolidated Brokers’ Pool LLC accrued NO legal interest in the subject property.”

Consolidated Brokers’ Pool is owned by Sherman Pegross, a 45-year old Detroit man who has  served time in federal prison and has a criminal record of arrests and convictions for theft, credit card fraud and other offenses.

Other homeowners are fighting the liens placed against their homes, many by Consolidated or other entities operated by Pegross. Yet to date, nobody has been charged with a crime.

For his part, Pegross says, “The treasurer likes to make me out to be the monster simply because he doesn’t want me to do what I’m doing because sometimes I help myself, sometimes I help the (homeowner). But when I help myself or that person, it means he didn’t sell it at auction. He’s mad about that.”

In the meantime, Michigan Attorney General Bill Schuette published an opinion last year that anyone paying taxes on a property he or she doesn’t own is simply making a gift and earns no rights to the property.

Read the original article in the Detroit Free Press.

Modesto resident Xue Heu pleads guilty to elaborate distressed real estate fraud

March 31st, 2015 at 3:27pm

According to an article in the Modesto Bee, Xue Heu, 38, who conned over $1.26 million from investors in California and Texas, pleaded guilty on Monday to two counts of wire fraud.

Heu and Thomas Dickey Price, 72,  posed as representatives of Fannie Mae and Freddie Mac who were selling foreclosed homes through their companies Liquid Assets & Land Investments Inc. and Capital Land Investments LLC. The homes had already been sold but the pair used forged deeds (title fraud) and other fraudulent documents in order to fool their victims.

Heu used the alias Michael Chan and Price used the names Albert Martin and Matt Taylor.

A third conspirator, Carla Lee Miller, signed a plea arrangement earlier this month.

Xue Heu will be sentenced in June in Fresno. If he pays restitution to his victims of $403,469 he could receive less than the 20 year sentence for which he is eligible.

The case was investigated by the FBI and the ace team at the Stanislaus County District Attorney’s Office real estate fraud unit.

Read a copy of the plea agreement Xue Heu made with the Office of U.S. Attorney Benjamin Wagner.

Man pleads guilty in title fraud, property flipping case

March 26th, 2015 at 7:43am

According to U.S. Attorney Laura Duffy, Daniel Deaibes has pleaded guilty for his role in a scheme to flip houses by first stealing the title to homes in Southern California.

In his plea agreement, Deaibes admitted that between September 2012 and November 2014 he and two alleged co-conspirators fraudulently sold or attempted to sell at least 10 homes for more than $2.3 million. Deaibes admitted that he and the alleged co-conspirators, one of whom owned several real estate businesses, would record fraudulent grant deeds at the county recorders’ offices and then immediately attempt to sell the properties to unsuspecting buyers.

The scheme unraveled when Fannie Mae, the owner of one of the properties, discovered the fraud and attempted to regain title. In response, Deaibes and the others created a fake “Withdrawal of Lis Pendens” in an effort to proceed with the fraudulent sale. Even after Fannie Mae won a court judgment, the co-conspirators recorded a fraudulent “Satisfaction of Judgment”.

Read the full article in

Ranch Cucamonga Pair Charged for Selling Home They Didn’t Own

January 8th, 2015 at 8:48am

According to the San Bernardino County District Attorney’s Office, Emma Adel, 45, and Mazen Fazah, 39,  are facing 22 felong charges for selling a home they fraudulently acquired to an unsuspecting buyer.

The defendants, who own Upland-based business, Smart Edge Auto, forged both the name of the owner (title fraud) and a notary public (notary fraud) on a vacant house, transferred the property into a trust, then re-sold the home to the victims, according to Senior Investigator John Vega.


Owner of Head Financial Service Get 35 YEARS in Prison

September 12th, 2014 at 11:15am

Charles Head, 40, the former CEO of Head Financial Services, Creative Loans and other brokerage and financial companies, was sentenced by U.S. District Judge Kimberly J. Mueller to 35 years in prison for operating foreclosure rescue scams.

Instead of helping homeowners who came to him for help in avoiding foreclosure of their homes, Head substituted straw buyers on the victims’ property titles without their knowledge (title fraud). straw buyers then applied for mortgages and sucked out whatever equity existed. The victims lost their homes and suffered damage to their credit ratings.

According to prosecutors, Charles Head‘s foreclosure fraud began in Los Angeles and Orange Counties and then expanded to a nationwide operation. In all, he and his co-conspirators obtained over $90 million in loans, caused losses of over $50 million and stole the title to more than 300 homes. He was caught only because one of his victims in Sacramento contacted an FBI economic crimes agent on a complaint line.

Read the original article in the Sacramento Bee.

Oakland and Macomb Counties Launch Super Index to Detect Real Estate Fraud

May 16th, 2014 at 7:54am

The pro-active counties of Oakland and Macomb are the first and only counties in the nation to add a Super Index to their property record searches, making it easier to both prevent and detect real estate fraud.

The Super Index is powered by Google and Xerox and contains up to 12 million pages of optically-scanned property records going back as far as 1964. It allows the user to search records using a homeowner’s name, an address or by name of the notary. The latter is important because some fraudulent deeds have been filed with the cooperation of either a dishonest notary (notary fraud) or one who was duped by the person filing the deed (title fraud).

Some homes are stolen through County Clerks’ offices by people who pay a portion of back taxes on a property with delinquent taxes. The person then places a lien on the property, files a phony deed and then either rents it out or sells it, all without the knowledge of the lawful owner.

Read the original article in the Daily Tribune.

© Copyright 2007-2015 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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