September 29th, 2011 at 4:08pm
A San Francisco mortgage broker whose clients includes several members of the Hells Angels motorcycle gang has been indicted for submitting fraudulent loan appliations totaling more than $10 million.
Jacob Moynihan, 30, owner of Xanadu Global Investments, has been charged with conspiring with five others and Hells Angels members Raymond Foakes, 48, of Rohnert Park and Josh Leo Johnson, 35, of Santa Rosa, of conspiring to defraud the banks by inflating the incomes of the borrowers, their employment histories and stating falsely that the borrowers would live in the properties. Marijuana growing was alleged to have occurred at several of those properties.
In a hint of a creative defense, Foakes’ attorney Anthony Brass said that it “was common practice at that time” for borrowers to overstate their finances.
Read the original article in SF Gate, the San Francisco Chronicle.
September 29th, 2011 at 3:54pm
A Dallas woman could receive a sentence of 30 years in prison as a result of her guilty plea in a reverse mortgage fraud case.
Mary Ann Fulbright obtained a $176,000 HECM (Home Equity Conversion Mortgage) loan on the Rochester, New York home of her deceased parents. Per the Department of Justice and U.S. Attorney Marisa Miller, the loan was based on an application in Fulbright’s father’s name after her mother’s name was removed from title as a result of a quitclaim that was fraudulent (title fraud). Fulbright used the money for herself.
Also participating in the investigation was the Financial Fraud Enforcement Task Force, a federal agency that is part of the US Treasury.
Read the original article in Reverse Mortgage Daily.
September 29th, 2011 at 2:31pm
Richard D. Lamphere, 48, already on the hook for almost $2 million as a result of a civil lawsuit, was arrested after the Solano County District Attorney’s Office filed charges accusing him of “grand theft, selling unregistered securities and making false statements and/or omissions.”
Lamphere, a Vacaville resident, was sued by Ronald L. Nicoli, after a complex real estate contract the two men entered into in 2007 fell apart.
It is currently unknown as to whether the criminal charges are related to Nicoli’s lawsuit.
Read the original article in the The Reporter.
September 29th, 2011 at 10:53am
A Southern California man has pleaded guilty to two counts of mortgage fraud for conning lenders out of millions of dollars.
John J. Borzellino, aka John Ross, a self-styled “real estate consultant,” used straw buyers and offered prices above the sellers’ listed prices in California, Florida and Georgia during 2006-2007, to earn his “commissions.”
According to an article in the San Diego Business Journal, Borzellino admitted to making “numerous false and misleading statements about the properties being his primary residence; the borrowers’ income and employment history; past residence history; and false documents to justify the commissions,” the result of which was to defraud the lenders out of $7.5 million.
There is no word as to whether any of the straw buyers are being prosecuted.
Read the original article in the San Diego Business Journal.
September 23rd, 2011 at 8:55am
Among the number of real estate licensees targeted by the California Department of Real Estate (DRE) is a San Jose-area broker whose license has been revoked for mortgage fraud and fasifying loan applications (loan fraud), according to the Acting Commissioner.
Commissioner Barbara Bigby, in referring to Bic Pho, stated “Bic Pho’s fraudulent activities were egregious and illegal, and he should never be allowed to work in real estate again. The fraud perpetrated by Pho and others contributed to the mortgage meltdown, but the revocation of his license and the issuance of the Bar Order ensures he will not broker another mortgage loan.”
But wait: Bic Pho has been barred from real estate and mortgage activities for only three years. At that time, he could apply to the DRE for reinstatement.
Bic Pho and his businesses (also barred), Mariposa Mortgage and Vision Quest 21, were accused of purchasing properties from sellers in Northern California. Pho would submit offers on behalf of straw buyers whose loan applications he had falsified. The straw buyers never lived in the properties and the lenders never received any mortgage payments.
Read the original article in National Mortgage News.
September 22nd, 2011 at 4:23pm
Homeowners who purchased new homes in subdivisions built by big-name developers got new life breathed into their class-action lawsuit, when U.S. Court of Appeals for the 9th Circuit reversed an earlier decision by a lower court to dismiss their mortgage fraud lawsuit.
Attorneys at McCune Wright, LLP had sued Centex Homes, D.R. Horton Inc., Richmond American Homes, Lennar Corporation, Beazer Homes USA Inc., Shea Homes Inc., and the Ryland Group Inc. They claim the builders failed to disclose to the plaintiffs, all of whom had made 20% down-payments, that they were marketing, financing and selling the homes to unqualified, subprime buyers.
The plaintiffs allege they paid inflated prices as a result and are seeking damages, as well as demanding the builders buy back the properties at the original sales prices.
Read the original article in the Sun.
September 20th, 2011 at 1:52pm
Five Sacramento-area residents have been charged by a federal grand jury for ripping off 180 investors to the tune of $26 million in what appears to be a Ponzi scheme.
Alleged ringleader, Michael Bolden, 57, is no stranger to law enforcement. Back in 1994, the former air traffic controller was sentenced to 21 months for falsifying tax documents in order to qualify for home loans (loan fraud).
Bolden ran Diversified Management Consultants Inc., or DMC, a firm that acted as an umbrella organization over half a dozen investment clubs. Many of the investors pulled equity out of their homes and some have had to file bankruptcy. Much of the investment money was used, according to the grand jury, by Bolden to buy luxury cars and pay for improvements to his home.
The other defendants are Christopher Jackson, 43; Victor Alvarado, 50; and Nicholo Arceo, 38, and his wife Erica Arceo, 43. Gary Bradford, 62, a sixth defendant who ran one of the investment clubs, has already pleaded guilty to six counts of fraud and will be sentenced in April 2012.
Read the original article in the Sacramento Bee.
September 20th, 2011 at 1:43pm
Fired Los Angeles Department of Building and Safety inspector Raoul Germain, who was caught on camera take bribes, has been sentenced to 21 months in prison.
Germain, 60, was one of two inspectors caught after their “supplemental income” activities were reported to the FBI. According to his attorney, German was “remorseful” but uncooperative with the feds, who are still investigating allegations of corruption in Building and Safety. Attorney Steven Cron said Germain’s lack of cooperation was due to fears for his safety, but perhaps another explanation is that Germain didn’t want to bust his buddies.
U.S. District Judge Christina A. Snyder imposed the full sentence, rejecting Germain’s claim for leniency due to his “age.”
In my opinion, if you’re young enough to break the law, you’re young enough to accept the consequences.
Hugo Gonzalez, another L.A. Building and Safety inspector caught taking bribes, has yet to be sentenced.
The federal corruption investigation of this powerful Los Angeles agency is ongoing.
Read the original article in the Los Angeles Times.
September 16th, 2011 at 8:56am
Below is a timely exerpt from my upcoming book on short sale fraud:
Bank of America, which acquired subprime lender Countrywide Financial Corp., has been ordered by the U.S. Department of Labor to reinstate a Countrywide internal investigator it had fired and to pay her $930,000. Eileen Foster had found “egregious fraud spread throughout the entire region” when she was auditing Boston-area branches, which resulted in the closing of most of those branches. An article in the Wall Street Journal reveals that the Department of Labor had concluded that Foster’s investigation found “forgery of loan documents, manipulation of borrowers’ assets and income, manipulation of the company’s automated underwriting system and destruction of valid documents.”
Several Bank of America employees said the whistleblowing Foster had been targeted and that the bank’s own investigators had a “profoundly biased view” against her.
iWatchNews, the publishing arm of the Center for Public Integrity, quotes Assistant Secretary of Labor David Michaels as saying “This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same.”
Bank of America, which says it will appeal the order by Labor, said Foster, who filed for whistleblower protection under the 2002 Sarbanes-Oxley corporate reform act, had shown “inappropriate and unprofessional conduct with your staff and displaying poor judgment as a leader.”
September 15th, 2011 at 3:59pm
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.