California Real Estate Fraud Report

An 89-year old woman who paid off her home of 40 years in the late 1990s is probably going to lose it to foreclosure (mortgage fraud, elder financial abuse), thanks to a fraud allegedly involving an ex-LAPD officer and a self-annoited Bishop.

Vistula David was conned by Leroy Dowd, 74, a so-called charismatic leader of a South Los Angeles church named the Triumph Church of God. Not only did the elderly woman give Dowd money, she unwittingly signed over the deed to her house (title fraud, real estate fraud). Keta Davis, Vistula’s daughter, says her mother did not know what she was signing.

Dowd took out three loans against the property (all of which I have independently confirmed). To their credit, Wells Fargo and Bank of America cancelled the loans they held after their investigations determined the loans were fraudulent (loan fraud, mortgage fraud). IndyMac, however, is refusing to do so and proceeding with foreclosure, saying that they are merely servicing the loan for the investor.

Claremont Detective David DeMetz, who knows Dowd from another case, calls him “a smooth con artist.” Other detectives believe Dowd was in cahoots with former LAPD officer Darcey Greenfield, who operated a real estate business and whose business Greenfield and McCall took title to Mrs. Graham’s home at one point.

Greenfield is no longer with the LAPD, surrendered her real estate license in October 2011 and has been charged with ten felony counts, all related to real estate fraud, according to San Bernardino deputy district attorney Vance Welch.

Read the original article in NBC Los Angeles.

An unemployed real estate agent in Clayton has been one of the first bad guys to get caught by a new computer system in Contra Costa County designed to catch those who forge grant deeds to properties (title fraud).

Walter Roberts, 63, forged the signatures to a grant deed to his elderly parents’  home (elder financial abuse, elder financial fraud). In just two weeks, the newly-implemented computer system in Contra Costa County mailed a notification, which Roberts’ five siblings read, causing them to contact authorities. As a result, the 92- and 85-year old parents still own their property.

Ken McCormick, the deputy DA who heads the Contra Costa County District Attorney’s Real Estate Fraud Unit was quoted as saying,  ”Quite frankly, we would never have caught (the suspect) under the old system.”

Read the original article in the San Jose Mercury News.

One of two brothers who committed $6 million worth of foreclosure fraud by stealing the identities of notaries (notary fraud) and forging scores of grant deeds (title fraud) is going to prison for 12 years.

John Zepeda, 60, pleaded guilty to rent skimming, forgery, identity theft and conspiracy to commit grand theft. Zepeda apparently did not spend all his ill-gotten gains, as he has agreed to pay restitution to his victims.

A woman who tried to fraudulently erase the mortgage (title fraud) owned by her parents has been caught and is expected to be returned to face charges.

Monica Lynne Whitten, 44, fled the United States to Central America after she was arrested in July 2009. When she tried to re-enter the country, her flight to Atlanta was detected by U.S. marshals and she was arrested by the local police.

Whitten as originally arrested after an eagle-eye employee in the county recorder’s office called a fraud investigor to report the suspicious filing.

Read the original article in the Modesto Bee.

Two men have been arrested and charged with 45 counts related to an alleged foreclosure rescue scam which prosecutors say cost $17 million in losses.

Stephan Andrew Easterly and Emanuel Percival were arrested at the offices of Fidelity Group Realty in Fontana. Fidelity has operated under dozens of DBAs according to the DRE‘s website. According to Deputy District Attorney Michael Fermin, most of the victims were in foreclosure and paid between $3,500 and $7,000 (loan modification fraud) to get either get their loans paid off (??) or monthly payments reduced.

Easterly and Percival are accused of holding themselves out as “authorized” bank representatives and signing and filing documents indicating the mortgages were paid off (title fraud). In addition, prosecutors said that Easterly made up his own checks to show the homeowners the loans were paid off.

Read the original article in National Mortgage News.

A Glendale man who still holds a valid real estate license from the California Department of Real Estate (DRE) is serving a 2-year prison sentence after pleading no contest to two counts of forgery.

Gregor Tevan had helped his brother purchase several rental properties. Because of that, Tevan had all of the paperwork to the properties. When he couldn’t pay off his gambling debts, he forged several documents to show he was the owner of one of the properties (title fraud), used a notarized stamp (notary fraud) and sold the property to another man.

Tevan’s brother was able to regain possession of his property but the title company lost money on the deal.

James Hurst Miller, 63, president of defunct hard money lender Hurst Financial Inc., has been charged by the U.S. attorney in Los Angeles with federal fraud and money laundering.

The allegations are with respect to several projects Hurst and developer Kelly Gearhart  proposed to build, into a large golf course. The 1,200 Central Coast people who put money into the project in what prosecutors claim was a $100 million real estate investment fraud. Specifically, Hurst is facing four counts of wire fraud, mail fraud, money laundering, making a false statement to a bank and assisting Kelly Gearhart in fraudulently obtaining funding for his construction project. Prosecutors allege that the investment money was diverted to pay for prior loans his business made (hard money loan fraud).

Miller used Cuesta Title, also no longer in business, to clear title on some of the projects by stating falsely that the loans had been repaid (title fraud). He would then take out subsequent loans using his investors’ money

The projects for which Miller solicited investors were in the Beacon Road and Vista Del Hombre real estate development projects in Paso Robles and the Salinas River real estate development project in Templeton.

Many of James Miller’s investors, including elderly investors (elder financial fraud) have lost their life’s savings and homes. One is a 68 year old Cambria woman who suffers from multiple sclerosis and now lives in an assisted care facility because she was unable to keep her home because of her investments with Miller.

Read the full article in the CalCoastNews.

The FBI has released a comprehensive report detailing the state of mortgage fraud in the country. According to their research, the states most affected by mortgage fraud and other real estate crimes are the same states where housing prices escalated rapidly during the mid-2000s: California, Florida, Michigan, Nevada, Arizona, Texas, New York, Illinois, Georgia and New Jersey.

The most prevalent mortgage fraud schemes reported by law enforcement agencies and private industry during fiscal year 2010 included loan fraud in the origination process, mortgage rescue fraud, real estate investment fraud, equity skimming, short sale fraud, illegal property flipping, title fraud, escrow fraud (incl. settlement), commercial loan fraud, builder bailout schemes, loan modification fraud and reverse mortgage fraud.

The FBI notes that short sale fraud has become so prevalent that organized crime committed by Asian, Armenian, Balkan, Eurasian, Russian and La Costra Nostra groups has infiltrated lending institutions in order to have access to financial information, mortgage origination software, notary seals and licensure information.

In other words, all forms of real estate fraud are alive and well and it is being committed by both licensed real estate professionals and unlicensed individuals and criminal organizations. Law enforcement is bailing water out of a ship that needs enormous reinforcements just to stay afloate.

This is an excellent report with a lot of detail and is well-worth reading.

Click here to read the report on the FBI’s website. There is also an excellent synopsis on Inman News.

A developer in Stanislaus County with an ambitious plan to build a “lifestyle center” replete with movie theaters, Sheraton Hotel, restaurants and shops near a Kaiser hospital is being sued by lenders for loan fraud.

Aruna Chopra and her family of real estate developers are accused by the lenders of concealing that Chopra owed the previous owner of her property $6.4 million. She then leveraged the land in order to obtain $2.5 million from a lender. The accusations are that a forged document was recorded to show a partial reconveyance of the property. The attorney for one of the lenders says that another forged document was recorded that rescinded the first forged document (title fraud, if proven).

In addition to the civil action, the lenders notified the Sheriff’s Department and the FBI.

Read the original article in the Modesto Bee.