California Real Estate Fraud Report

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Archive for August, 2015

Orange County “home flipper” pleads guilty to defrauding investors

August 28th, 2015 at 9:18am

William Yotty, a self-proclaimed real estate investor of foreclosed homes that he “flipped” has pleaded guilty to mail fraud and wire fraud, both federal felonies.

Yotty lured his 240 investors by promising, through his former company Fortuno Inc., insane profits. A brochure distributed by Fortuno claimed it could show the investors “how to take $400 and turn it into $25,000 in the next 30 days.” The investors, who in total lost $14 million, said instead that Yotty purchased the foreclosed homes by himself and resold them to the investors at inflated prices.

The case was prosecuted the U.S. Attorney’s Office for the Central District of California.

Read the press release on the U.S. Attorney’s website.

Danville executive pleads guilty in mortgage fraud, $75 million in losses

August 28th, 2015 at 9:04am

Ayman Shahid, the former president of Discovery Sales Inc. has pleaded guilty to a mortgage fraud scheme in which he and others convinced lenders to approve loans for unqualified buyers during the height of the mortgage crisis in 2006-2008. The fraudulent loans were issued on over 326 homes in Alameda and Contra Costa counties and totaled over $230 million in mortgage loans.

According to Shadid’s admission in his plea agreement, the value of the homes were inflated and the buyers, who made no down-payments, were offered cash and other incentives. The down-payments were instead made by Discover Sales and it and other builders made the mortgage payments for a brief period so that the straw buyers would not default immediately. None of the financial incentives were disclosed to the underwriters. Shahid also said that the incentive program was known by some of the employees and managers of its preferred/on-site lenders Wells Fargo and J.P. Morgan Chase and that these individuals knew the incentives were not being disclosed.

The case was prosecuted by the U.S. Attorney’s Office for the Northern District of California.

Read the original article in SFGate.

 

 

JPMorgan Chase banker sentenced for financial elder abuse

August 17th, 2015 at 10:13am

Former JPMorgan Chase personal banker Alejandro “Alex” Ojeda is serving a one-year sentence at Santa Rita Jail after pleading guilty to stealing over $100,000 from a Livermore man who had cancer and Alzheimer’s Disease.

Alameda County Superior Court Judge Dan Grimmer imposed the sentence and ordered that Ojeda not work in the banking industry again once he is released.

There are two previous postings in the California Real Estate Fraud Report about Alex Ojeda and his victim, Jack Magel.

Read the original article in the Mercury News.

“Opportunity Fund” co-owner

August 17th, 2015 at 10:02am

The jury hearing the prosecution of the co-owner of a former real estate firm was convicted of operating a Ponzi scheme that cost the investors up to $169 million.

Michael J. Stewart, 68, the partner of co-defendant John Packard, was found guilty of 11 counts of mail fraud. U.S. District Judge Cormac Carney granted a motion by federal prosecutors to dismiss charges related to bank and bankruptcy fraud.

John Packard pleaded guilty in the same case in November 2014 and is awaiting his sentence.

Stewart and Packard ran Pacific Property Assets, which had offices in Long Beach and Irvine. Their business model, called the Opportunity Fund, was buying and flipping distressed apartment buildings. They lured investors by telling them they could earn 15-30% interest per month when former homeowners needed to rent apartments after their houses were foreclosed.

The case was prosecuted by Assistant U.S. Attorney Joshua Robbins.

 

Read the original article in the Press-Telegram.

Virginia woman sentenced to 60 months for short sale fraud

August 17th, 2015 at 9:45am

The following is a press release from the FBI website:

ALEXANDRIA, VA—Charise Stone, 46, of Ashburn, Virginia, was sentenced today to 60 months in prison, followed by three years of supervised release for her role in a real estate short sale scheme that included tax and mortgage fraud, and passing fraudulent financial documents. Stone was also ordered to forfeit $721,552, and ordered to pay restitution of $2,441,174 to the victim financial institutions and the IRS.

Stone was found guilty by a federal jury on May 27, 2015. According to court documents, from 2007 to 2010 Stone targeted distressed homeowners who owed more on their mortgage loan than the market value of the home with false promises of financial recovery. Stone acquired distressed homeowners’ properties in her own name or under entities she controlled, made false representations to mortgage lenders in order to induce approval of the short sales, and then re-sold the properties—often the same day or the next—to new buyers at a price above the short sale amount, in violation of agreements made with mortgage lenders.

Jose Marinay owned a settlement company that closed every short sale transaction for Stone. Marinay pleaded guilty to wire-fraud conspiracy on May 27, 2014. At his and Stone’s direction, fraudulent HUD-1 settlement statements were prepared to facilitate the transactions, and Stone destroyed some of the incriminating documents after closings. Financial institutions suffered losses of at least $2.2 million from the scheme, while Stone profited more than $720,000 from these transactions but failed to file individual income tax returns. She also sent fictitious bonds to the IRS in an attempt to pay off her tax liability, and she sent fake international promissory notes to creditors purporting to satisfy her credit card debt as well as her mortgage loan.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas Jankowski, Special Agent in Charge of IRS-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office, made the announcement after sentencing by U.S. District Judge Claude M. Hilton.

This case was investigated by the FBI’s Washington Field Office and IRS–CI. Assistant U.S. Attorney Uzo Asonye and Assistant Chief Todd Ellinwood of the Justice Department’s Tax Division are prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-127.

New Jersey loan officer gets prison for role in short sale fraud scheme

August 13th, 2015 at 9:44am

Middlesex County resident Delio Coutinho, 73, has been sentenced to 36 months in prison for his part in a mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman said in a news release.

Coutinho, who pleaded guilty before U.S. District Judge Susan D. Wigenton to conspiracy to commit wire fraud, admitted conspiring with others to release liens on properties by conducting fraudulent short sales. Following the short sales, which included submitting false income, loan and closing documents to the lenders, Coutinho and other then submitted new fraudulent loan documents in order to obtain about $2 million in illegal proceeds from subsequent lenders.

Judge Wigenton also ordered Delio Coutinho to serve three years of supervised release and pay more than $1.3 million in restitution.

Read the original article in MyCentralNewJersey.com

Roseville man convicted in mortgage fraud case

August 13th, 2015 at 9:12am

Roseville resident Erik Hermann Green, 33, has been convicted by a federal jury in Sacramento for committing wire fraud for his part in a mortgage fraud scheme.

U.S. District Judge Troy L. Nunley and the jury heard testimony and evidence presented by prosecutors from the U.S. Attorney’s Office from the Eastern District of California that Green was part of a conspiracy to defraud the New Century Mortgage Co. by submitting false documentation of employment, income and assets.  Green was a licensed real estate in November 2006 when he submitted fraudulent loan applications to obtain an $820,000 loan, for which he received $100,000 that was directed to a shell company after escrow closed.

The case resulted from an investigation by the Internal Revenue Service – Criminal Investigation and the Alameda County District Attorney’s Office.

Read the original article in the Sacramento Bee.

Sacramento mortgage company owner, loan officer plead guilty in mortgage fraud scheme

August 13th, 2015 at 8:52am

Moctezuma Tovar, 46, founder and president of Sacramento-based Delta Homes and Lending, Inc.  and his employee Sandra Hermosillo, 53, have pleaded guilty  to conspiring to commit fraud.

According to the U.S. Attorney’s Office for the Eastern District of California, “between October 2004 and May 2007, Tovar and Hermosillo, a loan officer conspired with others to obtain home loans from mortgage lenders based upon false and fraudulent loan applications and supporting documents that falsely represented the borrowers’ assets, income, liabilities and debts and employment status, authorities said. They provided money to borrowers to inflate their bank account balances, and once the loans were secured, the borrowers returned the funds to the defendants.” As a result, the lending institutions lost at least $4 million.

Co-defendants still awaiting trial are licensed real estate agents Jaime Mayorga, 36, and Ruben Rodriguez, 38, both of Sacramento, and Christian Parada Renteria, 39, of Woodland, a former loan officer.

Read the original article in the Sacramento Bee.

CFPB signals end to wink-and-nod kickbacks between lenders, brokerages, title companies

August 4th, 2015 at 9:26am

Thanks to mortgage broker Dan Dobbs for the following important consumer article.

An article in HousingWire reports that due to recent interpretations of the Real Estate Settlement Practices Act (RESPA) by the Consumer Financial Protection Bureau (CFPB), two large lenders have decided to exit the MSA market. The Lenders are Wells Fargo and Prospect Mortgage.

MSAs are Marketing Service Agreements whereby brokerages encourage their agents to use the services of affiliated businesses, such as title companies or lenders, in which the brokerages either have an ownership or other financial arrangement.

The feds believe that many of these MSAs involve kickbacks and fee-splitting between the various companies and are therefore not in the interests of consumers.

Earlier this year, Wells Fargo and JPMorgan Chase were collectively fined $37.5 million for operating an illegal kickback scheme with now-defunct Genuine Title.

Other lenders are expected to join the MSA exodus. The biggest fear is that the CFPB may go back in time and claw-back exchanges of money for referrals it believes are violations of RESPA.

 

 

© 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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