October 28th, 2011 at 11:33am
Short sale fraud is the real estate crime of this decade and the amounts involved are staggering. Anybody who has had his or her home equity stripped by a neighbor committing short sale fraud knows this painfully well. So will law enforcement soon, when enough of our asleep-at-the-wheel politicians will wake up and respond to public pressure to prosecute the offenders.
“How to Commit Short Sale Fraud . . . and Get Away with It” is my just-released e-book. It’s the truth, the whole truth and nothing but the truth regarding the social and economic implications of short sale fraud, REO fraud and real estate fraud in general. My book also offers practical, cost-effective strategies to solve these problems NOW.
You can purchase my book here on the California Real Estate Fraud Report for only $9.95. Just click on the red stop sign on the right-hand side of this blog and you will be sent to the information page, where you can download a free sample of the book. Purchasing and download instructions are on the same page.
This ebook is available for saving and reading on your computer in a secured PDF document; it is not printable. It should work fine on both PCs and Macs.
Real estate fraud, and specifically short sale fraud, are enormously profitable white-collar crimes that are contributing to the further erosion of the American way of life. Don’t allow honest people to be “collateral damage” – educate yourself, take action and fight it.
Monique Bryher, Publisher
California Real Estate Fraud Report
October 28th, 2011 at 8:35am
Eight Bay Area men have pleaded guilty to rigging bids at auctions for foreclosed properties. The guilty pleas to mail fraud result from a long-running investigation by the Department of Justice and occurred because the defendants used both the US Postal Service and Federal Express to send each other the Trustee’s Deeds.
The men, in various transactions with one another, agreed not to bid against each other in the auctions. Lowered bids cause less money to be returned to the lenders and creditors, causing deeper losses. It also damages the value of properties in the local real estate market where the sold homes are located.
Pleaded guilty were Troy Kent (San Mateo), Henry Pesah (Burlingame), James Doherty (Hillsborough), Laith Salma (San Francisco), Gary Anderson (Saratoga), Patrick Campion (San Francisco), Keith Goodman (San Francisco)and Craig Lipton (San Francisco).
Read the original article in the San Mateo Daily Journal.
October 27th, 2011 at 11:31am
Guadalupe Valencia, a 47-year old West Covina woman who pleaded guilty in 2011 to charges related to operating a real estate Ponzi scheme, has been sentenced to nine years in prison.
Valencia operated two companies in Downey called Real Estate & Loan Consultants and R.E. Equity Group, Inc. Through these firms, she solicited investors to fund two pools: one for providing short-term capital to businesses and the second for real estate loans.
The U.S. Attorney’s Office said Valencia took in $6.9 million in investor funds (real estate investment fraud) from 150 persons and made returns of approximately $1.7 million. In addition to the sentence meted out by U.S. District Judge S. James Otero, she was ordered to repay her victims $5.2 million.
Read the original article in the San Gabriel Valley Tribune.
October 27th, 2011 at 11:16am
David Nilsen, the owner of now-defunct Cedar Funding, located in the Central Coast, has pleaded guilty to conspiracy to commit wire and mail fraud, a federal charge.
Prosecutors with the U.S. Attorneys office accused Nilsen of running a Ponzi scheme – bringing in new investors to cover the previous investments that were failing. The losses to investors may total up to $100 million in this real estate investment fraud case.
Cedar Funding was forced into bankruptcy in 2008. It was the bankruptcy trustee who characterized the operations of the business as a Ponzi scheme going on for several years.
David Nilsen agreed to restitution to the investors, many of whom lost their life’s savings, of $69.8 million. It is unclear if he can realistically repay those funds, which would still amount to only 5-10 cents on the dollar to the investors.
Manoel Errico, a loan manager at Cedar Funding who was also indicted in the case, is a fugitive.
Read the original article in the Monterey Herald.
October 27th, 2011 at 10:01am
Two well-known Sonoma County developers have been found liable in an elder financial abuse lawsuit that involved redrawing the property lines of a married couple.
The dispute arose out of a disagreement in which the elderly couple, Joseph Bonfigli, 83, and his wife, Helen, 78, accuse Alan Strachan and Michael D. Smith, the President of Argonaut Constructors of taking a portion of their land for one of their developments almost 10 years ago.
Each defendant must pay $300,000 for financial elder abuse, with an additional award by the jury for $48,000 in punitive damages against Alan Strachan. Strachan could also be liable for another $535,000 in damages for “civil fraud by deception, false promises or misrepresentation,” but that claim is in dispute by the two parties.
Read the original article in the Santa Rosa Press Democrat.
October 27th, 2011 at 9:24am
Despite efforts by the California Department of Real Estate (DRE) to stop loan modification fraud – and even prosecutions by the California Office of the Attorney General to do the same – such activity is still occurring, especially in certain communities.
A recent article in California Watch highlights two such cases.
In the first, George Bolanos, who allegedly operates under multiple names and is unlicensed in real estate, was issued a cease-and-refrain letter by the DRE. Bolanos was advertising loan modification services to Spanish language media and requiring upfront fees, which are illegal in California.
Another recipient of a DRE cease-and-refrain letter is the firm JC Ruiz Capital Group, which also goes by the name Maxima Home Loans. The letter dates to 2009 but the owner is still operating his loan business. JC Ruiz drew the DRE’s attention also for charging upfront fees for loan modifications, which he runs through his other business, called First America Financial Consulting. The Better Business Bureau gives JC Ruiz Capital an “F” rating on its website due to the following reasons, which I copied from their information:
∙ BBB concerns with the industry in which this business operates
∙ Length of time business has been operating25 complaint(s) filed
∙ Failure to respond to 13 complaint(s) filed against business
∙ 2 complaint(s) filed against business that were not resolved
∙ 14 serious complaint(s) filed against businessOverall complaint
history with BBB
∙ Government action(s) against business
October 21st, 2011 at 8:27am
This blog usually concerns itself with arrests, prosecutions and convictions for real estate fraud and mortgage fraud.
Today, I’m happy to write that eight investigators with the SEC have been honored with the 2011 Award for Excellence in Investigations by the Council of the Inspectors General on Integrity and Efficiency (CIGIE).
In 2009, Colonial BancGroup Inc. and Taylor, Bean & Whitaker Mortgage Corp. both collapsed due to the fraud committed by former Taylor, Bean & Whitaker chairman Lee B. Farkas and four others. Farkas and his co-conspirators scammed the taxpayers’ via the Troubled Asset Relief Program (TARP) by selling $1 billion of worthless mortgage assets to Colonial, which was later seized by the U.S. government and sold to BB&T Corporation. Farkas was sentenced to 30 years in prison.
Since the original arrests, the former CEO of Taylor, Bean & Whitaker has also been charged, as well as a C-suite executive and supervisor of Colonial.
In addition to the SEC investigators, staff at the following agencies were honored as was the Eastern District Court of Virginia:
Department of Housing and Urban Development (HUD) – Office of Inspector General
Federal Deposit Insurance Corp. (FDIC) – Office of Inspector General
Federal Housing Finance Agency (FHA) – Office of Inspector General
Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)
Federal Bureau of Investigation (FBI)
Department of Justice (DOJ)
Read the original article in LoanSafe.
October 20th, 2011 at 5:38pm
The office of California Attorney General Kamala Harris has served subpoenas to Bank of America regarding the sale of mortgage-backed securities (MBS) to institutions done by Countrywide Financial, which BofA purchased in 2008.
California’s AG, which was in talks with the attorneys general of all 50 states to negotiate settlements with all the large banks (BofA, Wells Fargo, JP Morgan Chase, et. al.) with respect to the banks’ foreclosure practices, left those talks when Harris determined the settlement amounts were insufficient.
Harris’ pursuit of BofA could be costly to the banking giant: under California’s False Claims Act, defrauding the state via any of its institutional investors such as pension or other funds, could result in awards of three times the amount of the claim. If any employees of Bank of America step forward with solid evidence, they could be entitled to a percentage of those damages as a whistleblower.
Read the original article in the Los Angeles Times.
October 20th, 2011 at 5:20pm
A California woman whose real estate license was revoked in 1998 and reinstated in 2004 appears not to have mended her ways.
Karen Washam-Hawkins of Carson pleaded guilty to conspiracy to commit wire fraud and the interstate transportation of money obtained by fraud in front of U.S. Chief District Judge Fernando J. Gaitan for her role in a mortgage fraud case.
Washam-Hawkins was the first in a chain of individuals who conspired to use social security numbers to create fraudulent credit histories in order to acquire bank loans. She acquired the social security numbers, sold or passed them to Anaheim resident Shade Jerome Howard, who then forwarded them to Gerald William Bartlett of Tampa, Florida. Bartlett used his own businesses, South Florida Management Group and Consumer Financial Group, to create positive but false credit and payment information, which he sent to credit reporting agencies. Howard, Ronald E. Brown, Jr., of Gladstone, Missouri, and Daryle A. Edwards of Overland Park, Kansas then used the false credit histories to apply for loans (loan fraud) from several banks (mortgage fraud) to purchase residential properties.
Howard, Brown and Edwards have pleaded guilty for their role and have been sentenced. Bartlett pleaded guilty in March 2011 and is awaiting sentencing.
Washam-Hawkins’ real estate license with the California Department of Real Estate (DRE) is active as of this writing.
Read the original article in the Blue Springs Examiner.
October 19th, 2011 at 10:18pm
Assistant U.S. Attorney Russell Carlberg and defense attorney McGregor Scott thought they had pounded out a deal in which Scott’s client would serve less than three years for his real estate investment fraud.
Instead, U.S. District Judge John A. Mendez rejected the deal and sentenced Collins Max “Collie” Christensen Sr. to five years in prison for bilking between 14 and 30 investors out of almost $1 million. Judge Mendez, in refusing to allow Christensen to spend Christmas with his family, noted that the victims, many of whom lost their homes and face financial devastation, are unlikely to enjoy their holidays.
Christensen, who solicited the investors for real estate developments, “made a conscious decision in 2007 to begin diverting investors’ money.” Judge Mendez said Christensen continued siphoning off the investors’ money in 2008 and 2009.
Read the original article in the Sacramento Bee.