California Real Estate Fraud Report

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Archive for April, 2013

Owner of OF Lending Facing Charges in Real Estate Fraud Case

April 25th, 2013 at 2:36pm

The owner of the shuttered firm OF Lending is facing 12 charges of real estate fraud in the form of grand theft, three counts of criminal conspiracy and one count of perjury for running a business that illegally charged upfront/advance fees to homeowners in distress.

William Hogarty, 49, is also the defendant in a civil lawsuit filed by people who accuse him of defrauding them and costing their homes.

OF Lending claimed to be able to do short-pay refinancing (SPR) for underwater homeowners, which would permit them to negotiate new mortgage terms with their banks. Court documents indicate that Hogarty instructed his employees to sell homeowners on doing SPRs with Wells Fargo Bank, Chase Bank and Bank of America, even though all three lenders did not participate in the program.

The case is being prosecuted by the Alameda County District Attorney’s Office, real estate fraud division and includes co-defendants James Allen Rivera Jr., Gregory Wayne Lomba and James Torpey. The four men face additional prison time under a California enhancement that increases possible sentences for white collar crimes.

The perjury charge stems from Hogarty’s bankruptcy hearing, which he was allowed to withdraw. He is accused of lying under oath to U.S. Bankruptcy Attorney Margaret McGee regarding his financial assets and other holdings. According to the Alameda County court documents, “Defendant Hogarty committed perjury when he testified that he ‘gave out $421,000’ (in) refunds to clients. Based on the foregoing investigation and OFL financial records collected by the U.S. Department of Justice – Office of the United States Trustee from Defendant Hogarty, he did not distribute $421,000 in refunds.”

The court documents also allege that William Hogarty and his co-defendants conspired to defraud people of their property, that they conspired to commit false advertising, and conspired to collect advance fees.

The grand theft charges arise from the taking of over than $69,000 from people who believed that Hogarty could help them save their homes.

One of the investigators from the Alameda County District Attorney’s Office learned that Hogarty allegedly ordered his employees to pay his personal expenses, such as for his yacht or the mortgage on his 12,978-square-foot mansion, from the business, causing the business bank accounts to be “consistently overdrawn.” 

Read the original article in the Pleasanton Weekly News.

Hendrix Montecastro, Helen Pedrino Sentencings Delayed

April 25th, 2013 at 11:25am

Sentencing for Hendrix Montecastro and his mother Helen Pedrino, who were both convicted in what prosecutors said was a massive real estate and securities investment scam and Ponzi scheme that spanned several states, has been delayed until June.

Montecastro, 40, who acted as his own attorney, was convicted of over 100 felony charges, has a new attorney hired by his family to review approximately 8,000 in court documents, obviously looking for a procedural error that could cause the attorney to file a motion for a new trial. If his attorney, Daniel Greenberg, fails, Montecastro could receive a state prison sentence of 124 years.

Helen Pedrino, who was characterized as the recruiter of the victims, who lost their homes, savings and good credit standing, faces 17 years in state prison if her new court-appointed attorney cannot find something in the court transcripts to warrant a new trial.

Chief Deputy District Attorney Vicki Hightower was the prosecutor and the case was heard before Riverside County Superior Court Judge Jeffrey Prevost. Judge Prevost struck down 13 of the guilty verdicts, saying they were not in proper form, which Hightower attributed to clerical errors.

Read the original article in the Press Enterprise.

Gary Armitage Faces Angry Victims as Court Sentences Him for $200 Million Ponzi Scheme

April 17th, 2013 at 1:47pm

Gary Armitage, a man who was accused of cheating North Coast residents out of up to $200 million in a huge real estate Ponzi scheme, is going to prison for 10 years, thanks to the Shasta County Superior Court judge who sentenced him.

Armitage, 62, faced a barrage of angry investors, many of whom were retirees who gave him their life’s savings. Up to 2,000 people were defrauded.

“All of your words and promises turned out to be lies,” said Ron Johnson, of Auburn, a retired insurance company employee. “Not only did you steal the money we worked for our entire lives to save, you destroyed our ability to trust in others and ourselves.”

Gary Armitage, who pleaded no contest in January 2013 to four felony counts of conspiracy and securities fraud, had two accomplices. James Koenig, of Redding, has pleaded not guilty and Jeffrey Guidi, of Santa Rosa, has pleaded guilty to lesser charges.

Read the original article in the Auburn Journal.

Sacramento Brothers Plead Guilty in Mortgage Fraud Case

April 17th, 2013 at 1:27pm

Two men, brothers Andrey Andreyev, 37, of Sacramento, and Vitaliy Andreyev, 30, of Antelope, entered guilty please to wire fraud with respect to a mortgage fraud scheme.

U.S. Attorney Benjamin Wagner said the two were recruited to act as straw buyers by Vera Kuzmenko, the owner of VK Tax Services, to buy properties. Andrey bought one for $850,000 and Vitaliy purchased another for $1.2 million. Kuzmenko allegedly prepared the loan documents and promised the men money for their “services.”

Vera Kuzmenko knew the statements on the loan applications were false because she was their tax preparer. Kuzmenko has been charged with wire fraud, mail fraud, money laundering, and witness tampering in connection but has not been to trial yet.

Read the original article in the Central Valley Business Times.

Another Northern California Investor Pleads Guilty in Bid Rigging of Foreclosure Auctions

April 17th, 2013 at 1:17pm

Below is a press release by the Financial Fraud Enforcement Task Force regarding rigging of bids at public real estate foreclosure auctions:

A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Mohammed Rezaian, of Novato, Calif. Rezaian is the 30th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
 
According to court documents, Rezaian conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco and San Mateo counties, Calif . Rezaian was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others.   According to court documents, a forfeiture allegation was also included in the charges against Rezaian.
 
The department said Rezaian conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as July 2008 and continuing until about January 2011.

 
“As a result of this investigation, the Antitrust Division has thus far filed charges against 30 real estate investors in Northern California for their illegal activity at foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will vigorously pursue the perpetrators of these fraudulent and anticompetitive schemes.”
 
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco and San Mateo County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

 
“Not only is bid rigging at public foreclosure auctions illegal, it also severely undermines the integrity of a fair and competitive marketplace,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI will continue to investigate and pursue those who commit fraudulent anticompetitive practices at foreclosure auctions and work with those who have fallen victim to such selfish crimes.”

 
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660 , visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tip line at 415-553-74 00.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov .

More Hitches in Foreclosure Fraud Settlement to Consumers

April 17th, 2013 at 1:11pm

Consulting firm, Rust Consulting Inc.,  which has been overseeing payments to former homeowners and the paying bank, Huntington National Bank, have made corrections in their systems, which resulted in consumers being unable to cash or deposit their checks due to non-sufficient funds (NSF). The payments to the 4.2 million borrowers were a requirement of the agreement between bank regulators and the 13 largest mortgage servicers.

Originally, Rust Consulting indicated that 1.4 million payments had been sent on April 12, some of which were unable to be cashed, but now says that $3.6 billion is available.

However, consumers were unable to cash or deposit their checks due to insufficient funds.

Rust has since corrected the problem and verified that $3.6 billion is available to be cashed or deposited.

In a press release, James Parks, senior vice president of Rust Consulting, said “We apologize to anyone who experienced problems trying to cash their checks. We are working hard and communicating with the banking regulators, the servicers, and other banks to ensure those issues are not repeated. We want to assure the public that checks we have mailed under the Independent Foreclosure Review Payment Agreement process are valid.”

Read the original article in National Mortgage News.

Northern California Man Charged in Real Estate Investment Fraud Case

April 17th, 2013 at 12:53pm

A man Contra Costa prosecutor Ken McCormick has referred to as a “national expert” in real estate has been charged by the Contra Costa County District Attorney’s Office of ripping off a New York family of over $1 million.

The man, Ken Beasley, 67, is also a resident of New York but but the three felonies with which he has been charged occurred in Danville. Beasley was charged with two felony counts of embezzlement and one enhanced charge accusing him of causing excessive loss.

The New York family gave Beasley, who has published four books about real estate and who has appeared on Fox News Channel as a real estate “guru,” $1,140 million back in 2006 to purchase three investment properties in Las Vegas, Nevada. According to prosecutors, Beasley did not purchase the properties (real estate investment fraud) but gave the victim fraudulent documents  (title fraud) and sent him monthly rental payments to keep the fraud going. The scam was only discovered when several years later, the family attorney did a title search on the properties while setting up a will and saw they were not in the name of his client.

Read the original article in the Silicon Valley Mercury News.

Update: Ken Beasley is quoted in a subsequent article in the Silcon Valley Mercury News as denying the charges.

Van Nuys Woman Charged with Forging, Filing Fraudulent Title Documents

April 9th, 2013 at 6:50pm

The Los Angeles District Attorney’s Office filed 36 felony counts against Anna Moskovyan related to real estate fraud on March 31.

In the complaint, Moskovyan, 30, is accused of forging signatures on grant deeds  (title fraud) to illegally establish ownership of homes she had identified as having tax liens against them by the L.A. County Treasurer and Tax Collector’s Office. In order to receive the excess proceeds from when the properties were auctioned (foreclosed),  Moskovyan then filed claims with the tax agency.

Moskovyan is also accused of two other schemes. The first is that she allegedly recorded fraudulent Mechanic’s Liens against properties which were about to be foreclosed on. Financial institutions then paid her to remove “her” liens so that the properties could be sold.

The last scheme alleged is that Moskovyan transferred two properties to herself by filing fraudulent grant deeds (title fraud).

Read the original article by the L.A. County Department of Consumer Affairs and the Press Advisory from the Los Angeles County Sheriff’s Department.

Note: per the North Hollywood – Toluca Lake Patch, Anna Moskovyan remains in jail in lieu of a $1.24 million bail. The 100 or more properties on which she allegedly recorded fraudulent mechanic’s liens are located in North Hollywood, Valley Village, Altadena, Canoga Park, Canyon Country, Cerritos, Diamond Bar, Downey, Hacienda Heights, La Canada, La Mirada, La Puente, Lakewood, North Hills, Northridge, Monterey Park, and Valencia.

Seven Persons Indicted for Mortgage Fraud Scheme

April 4th, 2013 at 9:41am

Benjamin Wagner, U.S. attorney for the Eastern District of California, announced that a federal grand jury has returned indictments against seven men and women, who have been charged with mail fraud, wire fraud and making false statements involving the purchase of at least 23 homes in a mortgage fraud conspiracy.

Readers of the California Real Estate Fraud Report recognize that Wagner is by far the most aggressive federal prosecutor for his district in California.

The defendants are Jannice Riddick, aka Jannice Frazier, 30, of Sacramento; Aleksandr Kovalev, 50, of Rocklin; Arthur Chang Menefee, 42, of Stockton; Adil Qayyum, 31, of Rosele, Ill.; Elsie Pamela Fuller, 38, of Richmond; Leona Yeargin, 46, of San Pablo; and Florence Francisco, 62, of Houston, Texas.

Elsie Pamela Fuller and Leona Yeargin were additionally charged with aggravated identify theft because they allegedly used stolen identification to purchase one or more of the homes.

Read the original article in the Sacramento Bee.

 

Man Killed in Washington State Stand-off Wanted in Sacramento for Real Estate Fraud

April 4th, 2013 at 9:21am

The Sacramento Bee reported that a local man who was killed in a showdown with Washington State police was the subject of a 2004 warrant from the Sacramento County District Attorney’s Office.

The warrant from the DA’s office charged Sacramento residents Nina and Rick Marlowe of Sacramento with filing a false or forged instrument, theft by false pretenses and identity theft. Although the warrant had been active for eight years, it wasn’t until very recently that the investigation led authorities to a home in Hoquiam, Washington. Authorities arrested a woman but the man showed fraudulent identification. When police returned to arrest the man, whom they believed to be Rick Marlow, he shot Police Sgt. Jeff Salstrom.

The warrant was issued after investigators believe the Marlowe’s forged the name of a woman who co-owned a piece of property (title fraud) so that they could sell it (real estate fraud).

 

 

© 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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