California Real Estate Fraud Report

The U.S. Attorney’s office, through its spokesman Thom Mrozek, has announced that a Glendale man has pleaded guilty to mail fraud charges that victimized investors out of more than $14 million.

Antoine D. Haroutunian solicited people to invest in his firms Luminous Wealth Management and Luminous Management, promising returns of 24% annually. Instead of investing the money in commercial bridge loans and real estate, Haroutunian spent the money himself.

Haroutunian had already pleaded guilty to stealing $450,000 from Bank of America when he was an employee.

Read the Full Article in the Los Angeles Times.

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

Bankrupt Brentwood businessman Ezri Namvar is facing five L.A. Superior Court lawsuits and one bankruptcy lawsuit accusing him of running a Ponzi scheme and stealing money from escrow accounts to keep his various businesses afloat. Several of the suits name several of Namvar’s relatives as defendants as well.

Namvar’s primary firm, Namco Financial, operated Namco Financial as a qualified intermediary, meaning that it facilitated the tax deferred exchange of properties in 1031 exchanges.

Namvar made his fortune in real estate investments by borrowing money from fellow Persian Jews in Beverly Hills, many of whom trusted Namvar and turned over their life savings, without receiving any collateral in return. Those monies are now most likely entirely gone.

Read the Full Article in the Los Angeles Business Journal.

The case of bankrupt financier William “Boots” Del Biaggio has all the earmarks of an episode of Dominick Dunne’s “Power, Privilege and Justice”. Del Biaggio, a wealthy Silicon Valley financier and investor in the San Diego Sharks ice hockey team, lived the high life of expensive homes and hung out at fundraisers for charities and casinos before his illegal activities came to the attention of authorities (see previous articles in the California Real Estate Fraud Report).

Now authorities have filed criminal charges against Del Biaggio’s friend,  fired Merriman Curhan Ford stockbroker David Scott Cacchione, for helping Del Biaggio carry out a scheme to receive more than $48 million worth of loans under false pretenses so that Del Biaggio could buy a Nashville-based professional hockey team.

Caccione is also facing a civil lawsuit by the Securities and Exchange Commission (SEC).

Read the Full Article in the Silicon Valley Mercury News.

As a result of a year and a half investigation by the IRS’ Internal Crime Investigation Division, Renato Gonzales Quiazon of Hayward has pled guilty to one count of wire fraud and four counts of filing tax returns.

Quiazon, formerly of New Century Mortgage, admitted that he concoted a plan to receive loan kick-backs, commissions and other fees fraudulently from the escrow accounts to the tune of more than $500,000. He not only defrauded the borrowers, he defrauded New Century out of mortgage broker’s fees to which he was not entitled, and he defrauded the mortgage broker whose license he used to commit his crimes.

Let’s hope the U.S. Attorney’s office gets Mr. Quiazon the maximum sentence.

Read the Full Article in Identity Theft Daily.