California Real Estate Fraud Report

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Archive for June, 2008

Countrywide and Mozilo Sued by California, Illinois

June 26th, 2008 at 4:51pm

Two of the U.S.’s more vigilant attorney generals have filed legal actions against both Countrywide Financial Corporation and Angelo Mozilo, its CEO.

In the Cook County Circuit Court, Illinois Attorney General Lisa Madigan (see December 2007 article in The F Word about Madigan) filed a complained alleging that Countrywide “engaged in unfair and deceptive conduct on a large scale in creating, originating, marketing and servicing unnecessarily risky and costly mortgage loans”.

California AG Edmund G. “Jerry” Brown announced his own lawsuit against the lender, alleging that Countrywide “engaged in false advertising and unfair competition in the origination of residential mortgage loans and home-equity lines of credit”. Brown’s lawsuit accuses Countrywide of not only making subprime loans to borrowers who were not qualified to receive loans, but also risky option ARM loans to borrowers with good credit who did not understand the complexities of these adjustable-rate mortgage instruments.

Washington State has filed an administrative action, charging Countrywide engaged in discriminatory lending practices, according to the Wall Street Journal.

Countrywide’s CEO, Angelo Mozilo, is named as a defendant in both the Illinois and California lawsuits. Countrywide President David Sambol is a defendant in the California suit.

On the same day, Countrywide’s shareholders approved its proposed takeover by Bank of America, Bank of America announced the layoff of 7,500 Countrywide employees, to take place over a 2 year period.

Read more in MarketWatch, the Los Angeles Times and Reuters.

“OPM” Equals Bankruptcy for San Diego Radio/TV Jock

June 26th, 2008 at 3:03pm

Like Greek sailors seduced by the Sirens who crashed their ships, thousands of Americans watching late night TV and sponsored cable programs bought the nonsense that they could get something for nothing using “Other People’s Money”, a phrase popularized by Robert Kiyosaki in his “Rich Dad” series of books.

Dan Holbrook, who hosted a morning program on San Diego Fox TV outlet XETV called “Top 6 on Fox 6” and a talk radio show on KCEO (1000 AM) called “Real Money Real Estate” has filed a Chapter 7  bankruptcy, after his business empire collapsed, leaving unpaid investors on the hook. According to the investors’ attorney, Erwin Shustak, who forced Holbrook’s trust deed business Atvantage Group into involuntary Chapter 7, Holbrook had promised 11% annual returns.

After advising people that they could buy real estate with “other people’s money” (the bank), Holbrook is now preaching to losing investors about how to avoid foreclosure by asking banks to accept short sales on their properties.

Read the Full Article by Don Bauder in the San Diego Reader.

Fugitives in San Diego Mortgage Fraud Case Arrested

June 26th, 2008 at 2:48pm

Two television stations report that two loan officers who worked at Creative Financial Solutions in San Diego and were fugitives have been arrested.

Angel Armendariz and Rafael Santiago were arrested in connection with a federal arrest warrant charging that they and other Creative Financial Solutions loan officers schemed to “defraud and to obtain money and property by false and fraudulent means, related to mortgage fraud”. Others who have been arrested are company founders Abner Betech, Said Betech and Aviva Betech; Lucette Montane is still on the lam.

The federal complaint states that the Betechs and others founded the firm in 2005 and almost immediately began charging for and receiving commissions for loans they had failed to fund, obtained loans for unqualified borrowers, submitted false purchase contracts and phony loan applications, used misleading appraisals, and submitted false bank statements and income documents.

Read more here and here.

Feds Bust Bear Stearns Executives and Others

June 20th, 2008 at 8:28am

The Huffington Post and other media sources report that the Justice Department has indicted and arrested two former executives at Bear Stearns in a national investigation of mortgage fraud schemes.

Matthew Tannin and Ralph Cioffi were arrested yesterday in Operation Malicious Mortgage. Thus far the operation has resulted in 144 mortgage fraud cases involving more than 400 defendants. The arrests occurred in every region of the cuntry and in more than 50 judicial districts.

Read the Full Article in The Huffington Post by Tom Hays

San Diego Agent Accused of Misleading Clients

June 16th, 2008 at 8:52am

A man working simultaneously as a real estate agent, insurance dealer, income tax preparer and credit repair specialist that caters to Latino customers has seen more than 75 of the 122 homes he has sold his customers fall into foreclosure since 2004.

 Miguel Romero is an agent of Helping Build Wealth, aka HBW, a Simi Valley firm selling a smorgasbord of financial products. It appears to be built on the networking marketing model (multi-level marketing) that combines selling products with building a “team” under the agent that contributes part of its revenues to the “upline”.

Although not accused of a crime, many of Romero’s clients say the persuasive agent pitched his entire line of insurance and other financial products at weekly seminars and workshops, advising his audience to tap the equity in their homes to purchase second properties as investments. From the numbers above, 69% of the homes he sold have either foreclosed or are in the foreclosure process, compared with 4% of subprime loans in San Diego County.

The office of the California Attorney General and the local District Attorney have not commented on any investigations into the business practices of Romero.

Read the Full Article in the North County Times by Zach Fox and Edward Sifuentes.

WaMu Subsidiary Sales Rep Indicted for Fraud

June 13th, 2008 at 9:03am

A San Ramon man who worked as a sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual, has been indicted by a federal grand jury in Sacramento on one count of conspiring to engage in money laundering and six counts of mail fraud.

Joe Blanford, 40, of San Ramon, was part of a scheme that involved submitting fraudulent suprime loan applications to Long Beach Mortgage. If the allegations are true, Blanford received more than $1 million in commissions for his “efforts”.

Four other men involved in the scheme have already pleaded guity to perjury, mail fraud, and/or money laundering.

Read the Full Article in the Central Valley Business Times.

New Lawsuit against Del Biaggio

June 12th, 2008 at 10:17am

San Jose investor William “Boots” Del Biaggio III has been named in a new lawsuit, filed by Modern Bank of New York, which accuses Del Biaggio of scamming the bank out of $10 million so that he could purchase an interest in the Nashville Predators hockey team.

The lawsuit, also filed in Santa Clara County’s Superior Court (see article below), names Del Biaggio and his wife Kristen, San Francisco investment bank and securities broker Merriman Curhan Ford and one of its managing directors David Scott Caccione as defendants.

As with the previous lawsuit, Del Biaggio is accused of executing the $10 million loan agreement using as collateral an account held at Merriman that he claimed had a balance of $20 million in money market funds. Modern Bank claims that the collateral never belonged to the Del Biaggios and that the loan in fact was procured by fraud.

Read the Full Article by Pete Carey in The San Jose Mercury News

Civil Suit Claims Del Baggio Lied to Get Loans

June 12th, 2008 at 9:47am

A San Jose investment firm that extends loans to businesses has filed a lawsuit against society man and investor William “Boots” Del Biaggio III, accusing him of defauding it out of $3 million in a phony loan transaction.

 The lawsuit, filed in Santa Clara County Superior Court by DGB Investments, accuses Del Baggio, 40, of concocting a loan scam that included fabricating documents and claims, and then refusing to return the money after he was confronted.

Del Biaggio has resigned from Sand Hill Capital, a Silicon Valley lending firm he co-founded in 1997. Before the scandal, he was known as a local philanthropist and owned a minority interest in the San Jose Sharks pro-hockey team.

Read the Full Article  by Howard Mintz and Pete Carey in the San Jose Mercury News

Convicted Real Estate Agent Convicted of Yet More Fraud

June 12th, 2008 at 9:10am

John Shaw, a de-frocked real estate agent in the Bay Area already serving a 14-year sentence for real estate fraud, has been convicted by a jury of entering a false contract into evidence at his 2005 trial.

The Santa Clara County District Attorney’s office announced that Shaw, 49, could be eligible for another 2 years, 8 months in prison on top of his current sentence. Shaw’s 2005 conviction resulted from his assuming the identities of his real estate clients, buying and selling properties in their names without their knowledge and permission, and pocketing the profits.

Read the Full Article in the Milipitas Post

Foreclosure Scamming in Contra Costa County

June 12th, 2008 at 9:00am

A landscaper recently lost his home to foreclosure, but not because he didn’t make his mortgage payments.

Elias Escobedo, 41, was sold a home by Rodney Alonzo Bullard in 2004. Bullard later told Escobedo that his credit was bad (but not bad enough not get the loan!) and that Bullard could clean it up. Bullard’s ideas was to use a straw buyer to “hold” the property and “park” the deed, they would refinance the home and take money out to pay the mortgage.

Bullard, who has been charged two felony counts of forgery and grand theft by the Contra Costa County D.A.’s office, has disconnected all his telephone lines.

According to the FBI, California ranks 4th nationwide in mortgage fraud, trailing Florida, Nevada and Michigan.

Read the Full Article  by Barbara E. Hernandez in The Contra Costa Times

© Copyright 2007-2017 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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