December 30th, 2011 at 9:02am
A man who came from a poor family and rose to serve with the Los Angeles Police Department and then the FBI has seen all his hard work crumble.
Darin McAllister, a church-going, Bible-clutching law enforcement officer, has been sentenced to four years in prison for lying on his loan applications (loan fraud, mortgage fraud).
After the FBI transferred him to Nashville, McAllister and his wife used the profit from selling their Los Angeles home to purchase a new one and to purchase, rehabilitate and rent out duplexes. When the real estate market began its descent, the McAllisters lost tenants and fell behind in the loan payments for the properties. That’s when bank examiners took a closer look at the loan applications he had signed and contacted the FBI as well as the Office of the Inspector General for the Justice Department which charged him with 19 counts of wire fraud, false declarations and other crimes.
Read the original story (a fascinating one) in the Los Angeles Times.
December 23rd, 2011 at 10:04am
A Southern California man who prosecutors say fleeced investors out of $228 million in a real estate investment fraud, including many in Los Angeles, is fighting extradition from France, where he fled after his scheme unraveled.
Bruce Fred Friedman, 61, operated Diversified Lending Group out of swanky offices in Sherman Oaks until the Securities and Exchange Commission (SEC) shut his business down through a court order. Friedman then fled to Cannes, France.
A federal grand jury indicted Friedman on 23 charges related to what prosecutors for the U.S. attorney’s office in Los Angeles called a Ponzi scheme arising out of real estate loans (real estate fraud, real estate investment fraud). Prosecutors say that Friedman’s scheme worked because it was believable – he offered reasonable returns to his investors, many of whom moved their retirement funds into his fund.
Although the French courts have authorized his extradition, the final decision to do so is in the hands of the French government.
Read the original article in the Los Angeles Times.
December 23rd, 2011 at 9:47am
San Bernardino County prosecutors have charge Troy Preston, 41, and Mario McKinley, 31, with forgery, theft from an elder or dependent adult (elder financial fraud) as well as other crimes. They allegedly obtained title to a deceased woman’s home (title fraud) and sell it to a third party.
McKinley was a notary public; he is accused of notarizing the fraudulent documents (notary fraud).
Read the original article in SFGate.
December 18th, 2011 at 11:59am
Mark Alan Helsing, an Orange County-based hard money lender, has been sentenced to 15 years in state prison and three years of probation. Helsing, 53, confessed earlier to ripping of $6.9 million from investors by operating a combined Ponzi scheme and real estate fraud scheme.
Helsing operated multiple companies: Sea View Investments, HLHS Financial Services, Inc., Foothill Realty, and Sea View Mortgage. He took investor money intended for use as hard money loans and embezzled most of the funds, using just enough to make interest payment to the investors, some of whom were his friends.
According to the OC Weekly, Helsing pleaded guilty to “55 felony counts of grand theft, seven felony counts of filing false recorded documents, six felony counts of elder financial exploitation, and sentencing enhancements for white collar crime over $500,000 and excessive taking over $1 million and $1.3 million.” He will also have to pay restitution to his victims.
December 18th, 2011 at 11:45am
Four men associated with 1st American Law Center have pleaded guilty to conspiracy charges in San Diego federal court of fleecing desperate homeowners of more than $11 million in a loan modification fraud.
Gary Michael Bobel, 59, Scott Thomas Spencer, 35, Mark Andrew Spencer, 32, and Travis Corey Iverson, 35, have entered their guilty please. A fifth employee, Roger Trent Jones, pleaded guilty last year and was sentenced to 21 months for his participation.
Gary Bobel opened up the loan modification business in 2008 with business partner Dean Chandler, who paid for the advertising. Homeowners were charged from $1,995 to $4,495 for loan modification “services” and were told, falsely, as it turned out, that a team of attorneys at the firm had a 98% success rate in getting homeowners the loan modifications they needed.
Read the original article in 10News.com. Click here to watch a video recording of the story on 10News.com. If you google “1st American Law Center” you will find many complaints about this business that have been posted.
December 18th, 2011 at 11:25am
One of two brothers who committed $6 million worth of foreclosure fraud by stealing the identities of notaries (notary fraud) and forging scores of grant deeds (title fraud) is going to prison for 12 years.
John Zepeda, 60, pleaded guilty to rent skimming, forgery, identity theft and conspiracy to commit grand theft. Zepeda apparently did not spend all his ill-gotten gains, as he has agreed to pay restitution to his victims.
John Zepeda held seminars in counties across California and in Nevada for distressed homeowners and promised to help them prevent foreclosure (foreclosure consultants). They somehow convinced the homeowners to either sign a quitclaim deed or transfer the properties directly to them. They would then rent out the properties, file bankruptcies to forestall the foreclosures and use the rent monies to provide themselves with exotic cars, jewelry and other expensive items.
David Zepeda, John Zepeda’s brother, has also been charged but is a fugitive.
Read the original article in 10News.com
of San Diego.
December 18th, 2011 at 11:10am
As reported on the California Real Estate Fraud Report last year, fraudsters are using Craigslist to rent properties for which they have no authority to either take deposits or rent.
A new article in the Silicon Valley Mercury News details that this form of rental fraud may be on the increase. With more homes going into foreclosure, many are vacant. Real estate criminals look for properties that are vacant, change the locks and begin advertising the properties for rent. Craigslist is probably the most common advertising location as ads may be posted for free.
Some criminals are now advertising homes that are actually listed for sale and creating their own rental ads, hoping to catch a person desperate to rent – perhaps after losing their own home to foreclosure – and collecting a deposit.
If you are looking for a home to rent, heed the advice of Craigslist on its own website:
“Never wire funds via Western Union, MoneyGram or any other wire service — anyone who asks you to do so is a scammer.”
If you are uncertain that the person with whom you are speaking is the property owner or works for a property management company, ask for their identification.
There is also an excellent article on rent fraud in the Martinez News-Gazette.
December 18th, 2011 at 10:55am
An indictment handed down by a federal grand jury in Sacramento charges four individuals, including an auctioneer, with conspiring to rig bids a real estate foreclosure auctions held in San Joaquin County.
The auctioneer, or crier, is Theodore Longley of Roseville. Four real estate investors have been charged with conspiring with Longley. They are Wiley Chandler of Lodi; Andrew Katakis of Danville; Donald Parker of Valley Springs and Anthony Joachim of Stockton.
Sharis Pozen, the acting Assistant Attorney General of the Department of Justice’s Antitrust Division, commented that the indictments reflect the determination of her division to stop criminal activity that stifles competition at real estate auctions. U.S. Attorney Benjamin Wagner noted that real estate fraud arising from auction conspiracies have the effect of driving down home prices in neighborhoods in which the auctioned properties are located.
Read the original articles in the Central Valley Business Times and the Sacramento Bee.
December 13th, 2011 at 7:55am
Sergey Shchirskiy, Khadzhimurad Babatov and Roman Malakhov are the latest in a group of Russian immigrants who have been charged in a large conspiracy to defraud lenders in theSacramentoarea (loan fraud, mortgage fraud).
Tax preparer Vera Kuzmenko, whose alleged involvement has been noted in earlier posts in the California Real Estate Fraud Report, is accused along with Shchirskiy of recruiting straw buyers to purchase homes, taking out home equity loans against the properties and then allowing them to go into foreclosure. More than 45 people have been indicted so far and the losses to lenders are in excess of $16 million.
Shchirskiy, who has been charged with mail fraud and wire fraud, was convicted of extortion in 2005 after burning a Mercedes Benz stolen from an auto body shop after the owner refused to pay $10,000 for its return.
Assistant U.S. Attorney Steven Lapham is the prosecutor and the case is being heard by U.S. Magistrate Kendall Newman.
Read the original article in the Sacramento Bee.
December 13th, 2011 at 7:36am
Three men have pleaded guilty in San Francisco federal court to conspiracy to commit wire fraud and mail fraud in a real estate investment fraud scheme.
According to United States Attorney Melinda Haag, Stanley Ward, Edward George Locker, and Richard Ferguson Tipton, confessing that they deceived private money lender Jim Ward & Associates, Inc. and its successor, JSW Financial, Inc. They had promised the investors that they would service loans made to borrowers building single family homes. In addition, the investors were provided documentation that showed that the loans were secured by real estate deeds of trust in the Blue Chip Realty Fund, LLC and Shoreline Investment Fund, LLC, which was not true.
Read the original article in Real Estate Rama.