California Real Estate Fraud Report

County prosecutors issued an arrest warrant last week for a man accused of bilking an 89-year-old Pacifica woman out of nearly $600,000.

Fetuu Tupoufutuna has fled the country in the face of allegations he conned an 89 year-old woman in Pacifica out of almot $600,000. Tupoufutunas has been charged with nine counts that include elder fraud by a caretaker, forgery and a great taking allegation, according to San Mateo County Deputy District Attorney Melissa McKowan.

The victim, Pauline Reade, was tricked into signing loan documents for $312,000 by Tupoufutuna, who met her while doing minor repair work on her home. The home, in which Mrs. Reade lived since 1951, was going to be foreclosed upon as a result. Reade was a widow who had no close contacts, which made her an attractive target by criminals. visually impaired.

Read the full article in the San Mateo Daily Journal.

U.S. District Judge George H. King sentenced five people convicted in a foreclosure fraud scheme that victimized homeowners in foreclosure who were seeking assistance.

Judge King meted out the harshest sentence and criticism to Edward Seung Ok, who received 15 years in prison for his crimes. According to the judge, Ok fell “far short in the full acceptance of responsibility”. Among other things, Ok used the $4.6 million he stole to buy drugs and alcohol and a Lamborghini Gallardo. He violated his plea agreement by trying to hide from investigators the $1.6 million he transferred to the Bank of Nevis on the Caribbean island of St. Kitts.

Ringleader Martha Rodriguez was sentenced to 10 years and agreed to forfeit $900,000 in cash seized by the feds (see, crime does pay), interest in five homes and a truck. She spearheaded the scheme for which she was convicted while being free on bond after being charged with other real estate crimes.

Ok, Rodriguez and fellow convicted defendants Maria G. Juarez, Vladimir Stefanovic and Cynthia Valenzuela (she worked on the escrow fraud side) preyed upon homeowners in default and promised they could help save their homes by selling their homes to buyers provided by the defendants. In realty, the buyers were “straw buyers” who had no intention of purchasing the distressed properties.

Read the full article on Southern California Public Radio. More recent articles appeared in the Orange County Register and the National Mortgage Professional.

Bad news for those who commit real estate fraud and mortgage fraud in Ventura County: the Ventura County District Attorney’s Office has just received almost $1.7 million in federal stimulus money to fight real estate crimes.

As a result of this good use of taxpayers’ dollars, the D.A.’s office will add one prosecutor, two investigators and an assistant to its team assigned to fighting real estate fraud according to Ventura County District Attorney Greg Totten.

If you live in Ventura County and believe you are the victim of a real estate fraud, click here for the Ventura County District Attorney’s Office to find complaint forms.

Read the Full Article in the Ventura County Star. This article is also reprinted in Examiner.com by the L.A. Fraud Examiner.

New York State Attorney General Andrew Cuomo made headlines last year when he began an investigation into now-defunct Washington Mutual Bank’s - aka WaMu - unholy relationship with eAppraiseIT. eAppraiseIT is a subsidiary of title company First American Corporation and its primary source of appraisal work was from WaMu. Cuomo alleged that WaMu essentially blackmailed eAppraiseIT by threatening to take its appraisal business away if the appraising firm didn’t pump up appraisal values so that WaMu loan officers could collect higher commissions on subprime loans it underwrote. And WaMu executives in turn were “rewarded” with higher bonuses.

Now Cuomo is letting the very scoundrels he investigated off the hook, and closing his investigation of them, in exchange for getting the FHA (Federal Housing Financing Agency), FNMA (Fannie Mae) and FMAC (Freddie Mac) to agree to changes in the way appraisals are now performed.

Read about how Cuomo might be adding himself to the list of authorities who are hurting consumers more than helping them with this sweetheart deal:

Examiner.com and Philly.com

Read the original article about Cuomo’s lawsuit and a civil lawsuit filed by appraiser Jennifer Wertz and attorney Stephen Danz in the California Real Estate Fraud Report.

In what has to be deserving of the comment “What were you thinking?”, a number of investors in San Diego County traded their good credit for . . . . well, nothing.

The investors attended a presentation given by James McConville. McConville, who worked for Fremont-based Diamond House Development, confessed and was convicted in 1998 of grand theft. In his latest shady dealing, offered to pay the investors $5,000 to $10,000 for every mortgage they took out on the developer’s properties, using no money of their own, just their good credit. The gullible investors, happy to act as “straw buyers”, never received the promised fees and their credit scores went straight south, after all the properties were foreclosed upon.

Read the Full Article in the San Diego Union-Tribune.

A mix-up in the recording of a property’s title has created headaches for the legitimate owner and an arrest for the Santa Cruz man who “sold” it.

Tom Decker and Maria McArthur purchased the Ben Lomond property as a second home. Decker is a real estate agent and placed the property into his Nevada LLC. After being away for several weeks, Decker and McArthur returned to find Daniel Judd living there and claiming to be the rightful owner, having purchased the property from Ray Tate.

Tate, whose father of the same name has had run-ins with the county over other properties he owns, had apparently been watching the Ben Lomond property, which had once belonged to members of his family. After seeing that there was no California Corporation with the same name as the Nevada corporation belonging to Decker and McArthur, Tate registered the new corporation and “sold” the property to Judd.

Tate, who claims he has done nothing wrong, will be charged with four felony crimes, according to the District Attorney’s Office, including attaining property by false pretenses and attempting to record a false document (the deed).

Read the Full Article in the San Jose Mercury News.

Joe Warf, age 51, and his wife Tracy Warf, age 41, were sentenced to a paltry (in my opinion) 250 and 365 days respectively for deceiving a 94-year old man into transferring title of his home into their names.

Both defendants were convicted of charges related to real estate fraud and financial elder abuse.

Read the brief Article in the Bear Valley News.

Cuesta Title is once again in the news, as the woman who served as its North County branch manager and senior escrow officer is accused of conflict of interest and mishandling of funds given to escrow by an investor.

Melanie Schneider is accused in a lawsuit by investor Michael Hawkins of mishandling Hawkins’ money, failing to give him title to a property his money was supposed to purchase in the Vista del Hombre golf course development. Hawkins states that Schneider did not have an arms-length distance from developer Kelly Gearhart, but actually lived on Gearhart’s property in his guesthouse when Schneider separated from her husband.

Read the well-written Full Article in the San Luis Obispo Tribune.

Any Californian who does not want to see more mortgage fraud in the state of California needs to write, email or call their state legislators to vote against two bills our legislature is considering. Click here to find out who your representatives are.

Senate Bill 461 (introduced by Senator Lou Correa / Santa Ana ) and Assembly Bill 442 (introduced by Assembly Member Juan Arambula / Fresno County) both seek to amend the California Civil Code Section 1185 by requiring Notaries Public to accept the Matricula Concular card of Mexico as legal proof of a signer’s identity.

Never mind that the FBI has referred to the Matricula Consular card as “unreliable due to the non-existence of any means of verifying the true identity of the card holder” - our two legislators are more interested in establishing new “rights” for foreign nationals than they are in protecting the rights of California citizens and legal residents against mortgage fraud.

According to the California-based National Notary Association, which vigorously opposes the proposed legislation because it mandates that Notaries accept a document that both the U.S. Department of Justice and the FBI consider untrustworthy:

“Allowing acceptance of the Matricula Consular will compromise the safety and security of California consumers and undermine the credibility of the state’s Notaries Public.”

Timothy S. Reiniger, Executive Director of the National Notary Association further adds:

“In this era of rampant document fraud and identity theft, requirements for establishing proof of identification should be tightened rather than compromised. Senate Bill 461 and Assembly Bill 442 will not accomplish this, and more importantly, will undermine our state’s efforts and recent successes in fighting mortgage fraud.”

and

“The enactment of the legislation requires Notaries to recognize a card of proven unreliability, weakening the California notarial system that protects the public from forged real property deeds and other important documentary transactions and identity crimes. Notaries in this state must not be forced to accept a card that the U.S. Department of Justice and the Federal Bureau of Investigation declare is not a trustworthy identifier.”

Here is what the U.S. Department of Justice and the FBI say about the Matricular Consular card issued by the government of Mexico:

1. The government of Mexico does not have a centralized database to coordinate the issuance of consular ID cards. So multiple cards can be issued under the same name, the same address, or with the same photograph.

2. The government of Mexico issues the card to anyone who can produce a Mexican birth certificate and one other form of identity. Mexican birth certificates have been listed as a large part of the fraudulent foreign document trade and they are easy to forge.

3. If an individual applying for a Matricula Consular cannot produce the above documents, he or she can still be issued a Matricula Consular card by the Mexican consular official if a questionnaire is completed and the individual satisfies the official that the person of his/her identity. [Note: I feel safe already]

4. 90 percent of the estimated 2 million Mexican Matricular Consular cards in circulation are merely laminated cards with no security features.

This legislation could result in more: identity theft, escrow fraud, title fraud, mortgage fraud, loan fraud, real estate fraud - all because real estate transactions rely upon the authenticity of documents attesting to the identity of the individuals who are signing those documents.

Read the Original Article on Virtualization

A former Ramona-based financial planner who is thought to have defrauded his investors out of $20 million has been delayed to May 4 in U.S. District Court in San Diego.

Rollo Richard Norton II, 53, pleaded guilty to mail fraud in August 2007, but his sentencing has been repeatedly delayed in a joint motion by both U.S. attorneys and his defense counsel who cite “an ongoing investigation.”

Norton’s businesses were called Safe Harbor Financial Investments and Norton Financial Limited and sought investors for a condominium project in Pacific Beach, California. Norton not only applied for loans in his investors’ names without their knowledge or consent, he also signed their people’s names on grand deeds and other escrow documents.

Read the Full Article in the Ramona Sentinel.