July 29th, 2011 at 10:38am
Matthew “Beau” La Madrid, 44, of San Diego, who was convicted of a Ponzi scheme and various real estate fraud and mortgage fraud related crimes, has received 10 years in federal prison.
La Madrid was ordered to make restitution of $23.5 million to investors in his Plus Money Premium Return Funds, which prosecutors said was a Ponzi scheme.
He received $34 million by filing 94 fraudulent loan applications and another $3 million from his businesses Real Estate Investment Group and E&M Property Management. As with most Ponzi schemes, much of the monies were used to support La Madrid’s tastes for an extravagant lifestyle.
Read the original article in Courthouse News.
July 29th, 2011 at 10:10am
Tony Huy Havens, of Modesto has been indicted by a federal grand jury on Thursday returned a two-count indictment for conspiring to commit mail fraud and mail fraud in a mortgage fraud scheme.
Havens, 37, has already been convicted in 2009 of mortgage-fraud related crimes and is serving a five year sentence in Wasco State Prison. Last month, he was indicted with 30 real estate fraud-related crimes. There are at least four articles detailing his escapades on the California Real Estate Fraud Report.
In the current indictment, Tony Havens is alleged to have devised a “Gift Program” that consisted of him bringing buyers and sellers together who would set the price for a property. They would further agree to “sell” the property for $100,000 or more above that price, after which the purchaser would obtain a loan for the higher amount. The amount in excess would be returned to the buyer, who would use some of it as a down-payment on the property.
How this scheme, which occurred with eight homes in Stanislaus and San Jaoquin Counties, passed muster with appraisers (possible appraisal fraud) and underwriters, remains a mystery. The indictment is the result of a joint investigation between the Stanislaus County District Attorney’s Office and the FBI.
Read the original articles in the Central Valley Business Times and the Modesto Bee.
July 26th, 2011 at 8:58am
Barry Minkow, who went to prison in the 1980s after conning investors in a Ponzi scheme with his ZZZZ Best carpet cleaning company, is going back to prison.
Last week, Minkow, who became “born again” during his first prison stint and reinvented himself as a preacher at Community Bible Church in San Diego, was sentenced to five years in prison. Minkow’s other reinvention was the Fraud Discovery Institute, in which he claimed to have contacts with the FBI and other law enforcement, which were purportedly used to catch criminals.
Minkow pleaded guilty this May to conspiring to essentially ruin the stock shares of builder Lennar in order to force it to the table to settle a legal dispute with another developer in a private golf community in nearby Rancho Sante Fe. He went so far as to characterize Lennar as “a financial crime in progress.” Of course, while he was condemning Lennar, he was also placing bets on its stock.
Barry Minkow’s sentencing by the judge includes an order to pay $583 million in restitution to Lennar.
Read the original article in the Los Angeles Times.
July 21st, 2011 at 8:06pm
In a new twist on mortgage fraud, the owner and six employees of Sacramento-based Delta Homes and Lending, Inc. have been charged with paying their clients money in order to make their loan applications more attractive to the lenders the group was defrauding.
Moctezuma Tovar, 42, is the owner and operator of Delta Homes and Lending, Inc. His alleged co-conspirators are Manuel Herrera, 31, Ruben Rodriguez, 34, Jaime Mayorga, 32 worked as real estate agents. Sandra Hermosillo, 49, was a loan officer and Jun Michael Dirian, 38 and Christian Parada Renteria, 35 were loan processors.
The defendants were charged with falsifying the loan applications of their clients (loan fraud, mortgage fraud) including providing fraudulent information about their clients’ financial status, citizenship status and employment status. They even deposited money into the clients’ bank accounts to enhance their incomes and would reclaim the money after escrow was closed.
The FBI, which investigated this case, believes the losses to lenders totaled $4 million.
Read the original article in the Sacramento Bee and the press release by the FBI.
July 21st, 2011 at 7:53pm
Philip Sotelo, a Modesto-based real estate agent, wanted to save his home from foreclosure. He found an internet website claiming that lenders don’t have the legal right to foreclosure and paid them $197, purportedly to get his loan “eliminated.”
Sotelo deeded his home to his own private corporation and then filed the documents with the county recorder (title fraud). He has been arrested and charged with mortgage fraud.
Philip Sotelo’s real estate license with the California Department of real estate is in good standing.
Read the original article in the Modesto Bee.
July 21st, 2011 at 6:57pm
Almost a year after they were outed for engaging in widespread fraudulent foreclosure document signing practices, known as robo-signing, big banks are still engaging in the practice, along with the contractors.
One registrar of deeds on the East Coast said “My office is a crime scene”, referring to his office still receiving large numbers of documents with suspicious or outright fraudulent signatures.
A county registrar in Michigan has referred Marshall Isaacs, an attorney with foreclosure law firm Orlans Associates, for a criminal investigation for robo-signing. Mr. Isaacs’ name has appeared on foreclosure documents that more than one county’s officials believe have been robo-signed.
Clearly, the settlement that the 14 biggest banks made with federal regulators this past April that promised a cessation of their fraudulent business practices (bank fraud) as well as paying restitution to homeowner on whom they had improperly foreclosed, is a joke.
Read the original article in the Silicon Valley Mercury News.
July 21st, 2011 at 2:36pm
Does your Attorney General work for you, the consumer and taxpayer, or for Wells Fargo, Bank of America, JPMorgan Chase, CitiGroup and Ally Financial?
An article by Scot Paltrow in Reuters yesterday entitled “States Negotiating Immunity for Banks over Foreclosures” seems to indicate that our state attorneys general want to get the Foreclosure Gate scandal of mega-banks’ robo-signing homeowners into foreclosure off their desks. Never mind that some of the activities of the banks may rise to a criminal level.
The “negotiation” undertaken collectively by the attorneys general of all 50 states would let the five banks collectively pay “up to (my emphasis)$25 billion in penalties and commitments to follow new rules,” rules which any ethical institution would have followed in the first place. In exchange, the banks would receive immunity from civil lawsuits by the states.
At the least, this sounds like dismissing serious corruption by sweeping it under the rug for a pittance.
So, $5 billion per bank for massive and willful corporate malfeasance. That’s less than $100 million per state and chump change for the likes of Wells Fargo, Bank of America, JPMorgan Chase, CitiGroup and Ally Financial. And as usual, no crooked C-suite executives lose any time off the golf course in depositions or court proceedings. It’s business as usual.
According to the Reuters article, only New York State Attorney General Eric Schneiderman has objected to this wink to corporate corruption. And some of the senators on the Senate Banking Committee, including Republican Richard Shelby, have criticized banking regulators for failing to adequately investigate the robo-signing and other anti-consumer practices engaged in by the banks and their contractors, which Reuters alleges continue to this day.
Read the original article in Reuters.
Read about public banking.
July 20th, 2011 at 4:06pm
Brothers Henrik Sardariani, 43, and Hamlet Sardariani, 41, and Wanda Kenney, 65, also known as Lavana Hamer, have pleaded not guilty to multiple counts of wire fraud, identity theft, conspiracy and unlawful monetary transactions in connection with an alleged $6 million loan fraud.
The Sardarianis are accused of creating fraudulent deeds of trusts to properties they did not own, along with forged corporate and financial documents, according to the federal indictment. They did this in order to show equity in the properties so that they could obtain large loans from the lenders. Wanda Kenney and Axcess Escrow are accused of processing the paperwork (escrow fraud). The stamps of the notaries public were phony (notary fraud).
Once the monies were received from the banks, at least several million was allegedly transferred to an account in Hong Kong by Henrik Sardariani.
U.S. District Judge Jacqueline H. Nguyen will hear the case on September 20.
Read the original article in the Los Angeles Daily News and the Beverly Hills Courier.
July 17th, 2011 at 1:27pm
A federal district court judge in Chicago has given approval to consolidate eight separate lawsuits against JP Morgan Chase for reducing, freezing or canceling the credit lines of its consumers based on automated appraisal software.
Judge Rebecca Pallmeyer’s ruling rejected the motion by the lending giant to dismiss the case, whose litigants reside California, Minnesota, Illinois, Texas, Arizona and Ohio. If, as expected, other customers of JP Morgan Chase join the litigation, it could develop into a huge class action lawsuit.
The lawsuit will test two (2) important concepts: first, whether the federal Truth in Lending Act applies to home equity lines of credit (HELOC) and whether automated appraisal software is so accurate it may used in place of the traditional human appraiser.
In the past, online real estate company Zillow was sued by homeowners claiming its estimated appraisals were inaccurate. Zillow is now the target of a lawsuit by CoreLogic, which claims CoreLogic holds the patent to “automated valuation software“. And CoreLogic has been sued by the FDIC for “gross negligence, breach of reps and warranties, and other breaches of contract for providing defective and/or inflated appraisals” in its appraisal work for now-defunct Washington Mutual, aka WaMu according to a blog post in the Big Picture.
Read the original article in the Los Angeles Times.
July 15th, 2011 at 8:40am
Scott Stober, a Nevada County mortgage broker whose California real estate broker’s license was revoked by the DRE in 2010, is now a subject in two prosecutions involving hard money loans.
Stober procured investors Richard and Minta Cramer for Robert St. Germain’s Granite Hill Court project. A civil suit by the Cramers against St. Germain and Stober alleges that Stober knew that the project was underfunded and that contractors and subcontractors were not paid. In addition, the Nevada County District Attorney’s Office has refiled a previous charge of misappropriating funds against Robert St. Germain.
In a second hard money loan case, Scott Stober was the broker who found investors for Leo Wheeler, a contractor who has been charged in a federal fraud case in Lake County. Investors for Wheeler’s residential development project claim $1.5 million in losses.
No criminal charges have been filed against Scott Stober to date.
Read the original article in the Union of Grass Valley.