California Real Estate Fraud Report

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Archive for October, 2012

California City PD Detectives Work Hard, Get 2 Convictions for Mortgage Fraud

October 30th, 2012 at 3:33pm

In a conclusion to a previous posting on the California Real Estate Fraud Report, two defendants in a $2.7 million mortgage fraud scam centered in Kern County have pleaded guilty, joining three co-conspirators who were previously convicted. This case had it all: loan fraud/mortgage fraud, notary fraud, real estate fraud, identity theft.

The press release from the California City Police Department follows:

Two defendants charged in connection with an elaborate mortgage fraud scheme to obtain over $2.7 million dollars on sham sales of newly constructed California City homes pled guilty to mortgage fraud charges this week in Kern County Superior Court.

Real estate broker Jay Edward Langner, 52 of San Juan Capistrano had been charged with nine felony counts of conspiracy, grand theft and identity theft. Langner pled guilty to conspiracy to commit grand theft on Thursday. The remaining charges were dismissed in exchange for his plea. Court documents allege Langner, doing business as Pacific Hills Realty, participated in a conspiracy to arrange sham sales of newly constructed homes and submit loan applications containing forged documents and fraudulent misrepresentations. Langner is expected to be sentenced to four years of incarceration and forfeiture of his real estate license at a sentencing hearing scheduled for November 27, 2012. [note: as of Oct. 30, 2012 Langner’s DRE license was still in good standing.]

Angie Cachu, 45 of Orange, had been charged with nine felony counts of conspiracy, grand theft and identity theft. Cachu pled no contest today to conspiracy to commit identity theft. The remaining charges were dismissed in exchange for her plea. Court documents allege Cachu was paid by co-conspirators to recruit straw borrowers and offer them money for the use of their identities. Cachu is expected to be sentenced to 12 months of incarceration followed by five years of felony probation at a sentencing hearing on December 6, 2012.

The investigation began in late 2008 when California City Detectives received an identity theft report from an Orange County man who claimed his identity had been used for a mortgage loan on a California City property. The investigation that ensued identified dozens of properties also linked to the scheme. California City PD Detectives traveled extensively throughout Southern California and Nevada over the course of the 2½ year investigation, served search warrants at 43 locations, and examined thousands of documents.

The guilty pleas follow the convictions of three other co-conspirators also charged in the case.

Khalid Malik Abdul Ali, 61, of California City had been charged with nine felony counts of conspiracy, grand theft and identity theft. Court documents allege Ali received kickback payments at loan closing for conspiring to arrange sham sales of newly constructed homes. Ali pled no contest to conspiracy in February of this year and was sentenced to five years of incarceration.

Appraiser Nathaniel Acree, 66 of Long Beach had been charged with four felony counts of conspiracy and grand theft. Court documents alleged Acree conspired to provide falsely inflated appraisals in support fraudulent mortgage applications. Acree pled no contest to grand theft in December 2011 and was sentenced to two years of incarceration and loss of his appraiser’s license.

Notary Elizabeth Torres, 29 of Santa Ana had been charged with two felony counts of fraudulent notarial acts. Court documents allege Torres knowingly notarized false or forged deeds of trust. Torres pled no contest to accessory to a felony in March of this year and was sentenced to 10 days incarceration, three years’ probation and loss of her notary commission.

The case was investigated by California City Police Department Detectives with the assistance of the Orange County District Attorney’s office Bureau of Investigation and US Postal Inspection Service. The case was prosecuted by the Kern County District Attorney’s office.

The California City Police Department is grateful to retired Los Angeles County Sheriff’s Detective Chris L. Christopher for his invaluable assistance during this investigation. Chris was a nationally recognized expert in real estate fraud investigation and had come out of retirement to assist California City Police Department with the investigation and pass down his legendary detective skills to a new generation of investigators. Chris died in a traffic accident last year. This was his last investigation.

Multi-State Mortgage Fraud Ring Broken Up

October 29th, 2012 at 2:03pm

Laura Duffy,  the U.S. Attorney for the Southern District of California, has announced indictments in a mortgage fraud case that involved $100 million in real estate in California and Washington state.

Laguna Hills loan processor John Allen, 54, was charged last month by a federal grand jury for submitting fraudulent loan applications to lenders using straw buyers. The straw buyers were promised $10,000 in exchange for their participation in the scheme.

Los Angeles accountant Audrey Yeboah, 54, has already admitted her role by creating phony financial statements such as pay stubs and W-2 forms on behalf of the straw buyers. According to her guilty plea, Yeboah also admitted to reviewing financial statements that totaled over $14.5 million in kickbacks from the scheme.

Others who have been charged in this case are Mary Armstrong, an unlicensed mortgage broker; Armstrong’s assistant, William Fountain; Ramona real estate agent Teresa Rose; and a Seattle-area businessman named Justin Mensen.

Read the original articles in San Diego 6 and the Imperial Valley News.

Lawsuit in Real Estate Fraud Complaint of Clovis Horse Ranch Decided by Jury

October 27th, 2012 at 9:59am

This story probably ranks as the strangest case of real estate fraud report on the California Real Estate Fraud Report.

A common woman who changed her name in 1991 and passed herself off as coming from a wealthy European family that had bred horses for “1,000 years” lost the lawsuit brought against her and her physician husband, who admitted fraudulently signing her death certificate.

Dr. Brian Gwartz, an anesthesiologist, and his wife, Cheryl Skigin, an attorney, purchased the 15-acre Parlier ranch belonging to Genevieve de Montremare (real name: Genevieve Sanders) in 2008 for $2.3 million. Besides claiming to be French royalty, de Montremare held herself out to be a genetics expert in the high-end world of Friesen horse breeding and showing. The ranch she shared with her husband, Dr. Michael Weilert, a pathologist who is the director of Pathology & Clinical Laboratories for Community Regional Medical Centers, was often the site for horse shows and gatherings of the very-well-to-do in horse circles.

Weilert admitted during the trial that he had signed the death certificate for his wife in 2007 and writing an obituary, clearly an exercise in creative writing. His attorney Steven Paganetti offered no defense for Weilert’s deception.

The jury awarded Dr. Gwartz and his wife $700,000 in damages for the fraud committed against them by the plaintiffs and is now working on determining punitive damages. Their attorney is Daniel Spitzer.

Read the original article in the Silicon Valley Mercury News.

There is posting in April 2011 of Genevieve de Montremare, Dr. Michael Weilert and their bizarre life in the California Real Estate Fraud Report (click on the link).

 

Real Estate Agent Charged with Stealing from Clients to Pay for Maui Condo

October 24th, 2012 at 10:46am

The Contra Costa District Attorney’s Office has announced the arrest of a former Sacramento real estate agent for allegedly fleecing over $76,000 from a Martinez family in a real estate investment fraud case.

Lawrence Grzelak, 54,  is charged with one count of securities fraud and one count of grand theft by embezzlement, with one enhancement for an excessive loss.

Deputy District Attorney Ken McCormick of the Real Estate Fraud Unit alleged that Grzelak bought a condo in Maui (the island) and convinced his victims to purchase securities funds that were non-existent (securities fraud) in order to get their money so that he could catch up on his late payments.

Read the original article in the Silcon Valley Mercury News.

US DOJ Sues Bank of America for $1 Billion in Losses Due to Mortgage Fraud

October 24th, 2012 at 10:32am

Ramping up an aggressive stance against mega-banks whose lending practices caused billions of dollars of losses to the taxpayer through Fannie Mae and Freddie Mac, the US Department of Justice has filed suit against Bank of America for $1 billion due to mortgage fraud. Fannie Mae and Freddie Mac are large financial institutions, backed by the federal government, that purchase loans from banks in the secondary market.

The U.S. Attorney for the Southern District of New York filed the suit. Its target is the “Hustle” loan program that originated with Countrywide Financial but was taken over when Bank of America purchased Countrywide in 2008. “Hustle” loans were named for Countrywide’s “High-Speed Swim Lane” (HSSL) program that was created ostensibly to streamline loans. U.S. Attorney Preet Bharara’s office charges that HSSL was “intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans.”

Read more about this landmark lawsuit on CNN and the press release for the U.S. Attorney for the Southern District of New York website.

San Diego Escrow Officer Acquitted in $11 Million Mortgage Fraud

October 22nd, 2012 at 10:39am

A unique mortgage fraud case that was tried in federal court has come to an end with the only defendant of 24 to be acquitted.

Escrow officer Billie Bishop, 52, of La Mesa, unlike most of the other defendants, did not plead guilty and instead elected to go to trial. Bishop had been charged with wire fraud and making a false statement to a bank; her case was the first time the racketeering law was used in a mortgage fraud case.

Prosecutors had accused her of processing 77 transactions in a scheme where the other defendants received more than the listed price for homes, with the remainder going to an account earmarked for construction upgrades. This special account was managed by Darnell Bell, a Lincoln Park gang member. The homes were purchased in the days of Ninja loans (No Income No Job or Assets) and most were foreclosed after the straw buyers walked away, with Bell and his co-defendants pocketing the loan money (loan fraud, mortgage fraud).

Billie Bishop was tried before U.S. District Court Judge Larry A. Burns. The attorneys who represented her were Gastone Bebi and Jonathan Jordan.

After the trial, Bebi stated that prosecutors had been unable to prove that Bishop had any awareness that the construction work was being performed or that the sales were fraudulent (real estate fraud, escrow fraud).

Read the original article in U-T San Diego (San Diego Union Tribune).

Two Westwood Men Charged in Distressed Homeowner Initiative Sting

October 22nd, 2012 at 9:24am

Two men who were managers at Westwood-based Direct Money Source (DMS) have been indicted as part of a nationwide investigation dubbed “Distressed Homeowner Initiative” by the U.S. Department of Justice.  The purpose of the nationwide opeation was to target businesses that lured distressed homeowners by promising “foreclosure avoidance” but which allgedly skimmed equity from many of the same homeowners. Over 500 people have been criminally charge in 285 cases filed by the Department of Justice across the country. The DOJ identified a staggering 73,000 homeowners as victims and losses to them and to lenders (loan fraud, mortgage fraud) as exceeding $1 billion.

David Singui, 49, the owner of Direct Money Source, and Aziz Meghji, 35, a DMS manager, were arrested last month and charged with conspiracy, wire fraud, loan fraud, aggravated identity theft and money laundering. Two other locals, Kiet Truong, 27, of Hawthorne, and Starr Smith, 31, face charges all of the same charges in the 42-count indictment except for money laundering.

Commenting on the arrests, United States Attorney André Birotte Jr. said “Shameless con artists seeking to prey on homeowners in financial distress need to know that law enforcement is hot on their trail. The results of this initiative demonstrate that the combined resources of federal, state and local authorities will be brought to the table in a concerted effort to bring fraudsters to justice and protect the nation’s homeowners.”

Read the original article in the Century City Patch and DSNews (Default Servicing News).

 

Sacramento Man Pleads Guilty to Mortgage Fraud

October 19th, 2012 at 11:17am

Sean McClendon, 46, a West Sacramento man, pleaded guilty in federal court for his role in committing mortgage fraud. 

McClendon was allegedly paid by his co-defendant Anthony Salcedo for falsifying documents in the loan origination process (loan fraud). Another co-defendant, Anthony Williams, is alleged to have helped Salcedo find buyers for four properties either owned or associated with Salcedo. In violation of the law, none of the back door payments were disclosed to the lenders in any of the real estate contracts. In the end, the lenders suffered losses of over $1 million.

The case was investigated by the FBI and the IRS.

Read the original article in the Sacramento Bee

JSW Financial Defendant Sentenced to Prison for Real Estate Investment Fraud

October 19th, 2012 at 11:09am

Edward G. Locker, 37, one of the defendants in the JSW Financial Inc. real estate fraud prosecution, was sentenced to 30 months in prison for his role in defrauding investors.

Co-defendants Richard F. Tipton, 62, was sentenced last month to 18 months in prison and James W. Ward, the principal defendant, got 5 years.

David Lin, 44, the only person charged who went to trial, was found guilty on 17 counts by a jury and sentenced to 28 months in prison.

Mountain View-based JSW Financial (formerly known as Jim Ward & Associates Inc. (JWA)) was a hard money lender that solicited money from people to purchase fractional interests in loans they made to borrowers to build residential homes. Investors were also given the “opportunity” to invest in the Blue Chip Realty Fund LLC (Blue Chip) and Shoreline Investment Fund LLC (Shoreline).

All the defendants had been charged with 18 counts alleging conspiracy to commit mail and wire fraud, mail fraud, and wire fraud, in violation of 18 U.S.C. §§ 1349, 1341, and 1343. For the three that had entered guilty please, they admitted that their representations to investors that JWA and JSW generated claiming that Blue Chip and Shoreline wrote and invested in loans that were secured by deeds of trust on real property were completely false.

 Read the press release on the FBI.gov.

L.A. County Assessor John Noguez Arrested in Massive Appraisal Fraud Case

October 18th, 2012 at 9:48am

The long-running public corruption investigation into Assessor John Noguez, who runs the L.A. County Assessor’s Office, has culminated in the arrests of Noguez, his head appraiser and a tax consultant for allegedly conspiring to lower tax assessments for expensive commercial and residential properties in exchange for cash and contributions to Noguez’ re-election coffers.

L.A. County District Attorney Steve Cooley announced the arrests and said “Los Angeles County voters and taxpayers deserve honest, hardworking elected and appointed officials who will serve the best interests of the people. Residents must have confidence that their government is not for sale to the highest bidder or the highest briber.”

If the allegations are found to be true, the people of Los Angeles will have been robbed of millions of dollars in lawfully owed property taxes.

The charges are as follows:

John Noguez, 47, (real name: Juan Renaldo Rodriguez): 24 felony counts, including four counts of accepting bribes; five counts of perjury, two counts of conspiracy; and 13 counts of misappropriation by a public officer; he is being held on $1.385 million bail.

Mark McNeil, 54, head of the Major Appraisal Division; held on $1.16 million bail.

Ramin Salari, 49, a tax consultant and campaign contributor to Noguez; held on $1.36 million bail.

Among other criminal acts, Noguez is accused of taking $185,000 in bribes from Salari between February and September, 2010. Soon thereafter, chief appraiser McNeil attended hearings and reduced the assessed value of properties located in Santa Monica, Hermosa Beach, Torrance and Los Angeles, including the Old Spaghetti Factory.

An L.A. County appraiser for the Westside named Scott Schenter, who worked in the Assessor’s Office from 1988 to 2011, has previously been charged with cutting values on expensive businesses, homes and condominiums in Beverly Hills, Brentwood and Pacific Palisades, allegedly receiving campaign contributions for Noguez from the property owners.

I sincerely hope that DA Steve Cooley will pursue recovering back taxes, including interest and penalties, from the property owners, as well as re-assessing their properties to market values.

Santos H. Kreimann is acting as Chief Deputy Assessor and running the Assessor’s Office now that John Noguez is out of the picture.

This public corruption case will be prosecuted by Deputy District Attorneys Susan Schwartz and Michele Gilmer.

Read the original article in WeHo News.

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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