California Real Estate Fraud Report

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Archive for March, 2016

Five California Residents Plead Guilty To Defrauding Homeowners in Nationwide Home Loan Modification Scam

March 31st, 2016 at 3:58pm

The following is a Press Release from SIGTARP:

Defendants Used US Treasury Seals and Fake TARP Information to Deceive

WASHINGTON DC — Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program, and Dana Boente, U.S. Attorney for the Eastern District of Virginia announced today that five California men have pleaded guilty for their roles in a nationwide home loan modification scam that defrauded over 400 homeowners out of over $3.8 million.

Roscoe Umali, 38; Jefferson Maniscan, 34; Raymund Dacanay, 47; Isaac Perez, 33; and Joshua Johnson, 36, all resided in the greater Los Angeles area.

“Roscoe Ortega Umali, ringleader of a nationwide mortgage scam ring, and four of his co-conspirators pled guilty to swindling hundreds of desperate homeowners and will now face federal prison time and pay at least $1.2 million in restitution and forfeitures to their victims,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “Umali and his cohorts made false claims of operating a non-profit company, brazenly used the U.S. Treasury seal on fabricated documents, and invented fictitious HAMP benefits. Victim-homeowners paid thousands of dollars in reinstatement fees and trial mortgage payments that never went to their respective lenders; instead Umali and his co-conspirators pocketed over $3.8 million. The U.S. Government’s Home Affordable Mortgage Program (HAMP) is designed to aid struggling homeowners, and like other federal government housing programs, the HAMP application and assistance is free. SIGTARP remains committed to safeguarding victims from TARP-related crimes.”

According to statements of facts filed with their plea agreements, from at least October 2012 through September 2014, the defendants and their co-conspirators targeted struggling homeowners and made a series of misrepresentations to induce those homeowners to make payments of thousands of dollars in exchange for supposed home loan modification assistance. Operating under the names of fictional companies like “Equity Restoration Group,” the defendants falsely held themselves out as a non-profit organization or as affiliated with a real government program, the “Home Affordable Modification Program” (HAMP), designed to help homeowners at risk of foreclosure. Through mass mailings, phone calls, faxes, and emails with their victims, the defendants convinced homeowners to send them “reinstatement fees” and to make several monthly “trial mortgage payments” to the conspiracy, rather than to the homeowners’ lenders. The defendants then did nothing to help modify any mortgages.

Instead, they used the victims’ payments for their own personal benefit and to further the fraud scheme.

This scam victimized over 400 individuals and families nationwide, resulting in a total loss of over $3.8 million. It also resulted in many victims losing their homes, despite the victims’ efforts to modify their mortgages and continue to make payments on their loans.

The defendants were indicted on Oct. 22, 2015, and each faces a maximum penalty of 20 years in prison.

Umali, Maniscan, and Dacanay will be sentenced on June 23, while Perez and Johnson will be sentenced on July 7. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorneys Samantha P. Bateman and James P. Gillis are prosecuting the case.

A copy of this press release may be found on the SIGTARP website. 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. 1:15cr301.

About SIGTARP
The Office of the Special Inspector General for the Troubled Asset Relief Program was created as an independent law enforcement agency to investigate fraud, waste, and abuse related to the TARP bailout. To date, SIGTARP investigations have resulted in the recovery of over $5.17 billion to the Government and 146 defendants sentenced to prison.

To report a suspected crime related to TARP, call SIGTARP’s Crime Tip Hotline: 1-877-SIG-2009 (1-877-744-2009).

To receive alerts about reports, audits, media releases, and other SIGTARP news, sign up at www.SIGTARP.gov/pages/press.aspx. Follow SIGTARP on Twitter @SIGTARP.

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Media Inquiries: 202-927-8940
Twitter: @SIGTARP
Web: www.SIGTARP.gov

 

Fremont Real Estate Agent Sentenced to Jail for Elder Financial Abuse

March 31st, 2016 at 3:45pm

Jeremiah Bishop, a Fremont real estate agent, has been sentenced to a year in county jail and ordered to pay more than $400,000 in restitution following his guilty plea to charges alleging elder financial abuse and grand theft regarding real estate.

According to the Alameda County District Attorney’s Office, Bishop, 74, who pleaded guilty before his trial commenced, told his victims that he was a commercial real estate investor with a partner beginning in 2006. But there was no partner and the properties for which Bishop sought investors were not for sale.

Read the original article in the San Jose Mercury News.

 

Utah Creates White-Collar Crime Registry to Combat Fraud

March 28th, 2016 at 6:01pm

Utah has taken a unique step to battle financial fraud. It is the first state in the country to establish a white-collar felon registry for financial crimes.

The new registry will list individuals’ names, mugshots, any known aliases, physical descriptions and a list of the crimes for which they were convicted.

To become listed on the registry, the individuals will have to have been convicted of second-degree felony charges of securities fraud, theft by deception, unlawful dealing of property by a fiduciary, insurance fraud, mortgage fraud, communications fraud or money laundering, according to the Salt Lake Tribune. Their information will stay on the list for 10 years after one conviction, and another decade after a second. If someone is convicted three times, their data will remain on the list for their entire lifetime.

Read the original article in RT News.

San Diego Brothers Sentenced to Prison for “Debt Elimination” Scheme, Short Sale Fraud

March 28th, 2016 at 5:53pm

Brothers and former real estate agents Adel and Atef Afkarian were sentenced to prison terms for operating a fraudulent “debt elimination” scheme as well as a complicated short sale fraud that ripped off lenders in the San Diego area.

Adel Afkarian was sentenced  to 18 months by U.S. District Judge John Houston and Atef Afkarian received 13 months. The judge ordered the brothers to pay more than $5.5 million in restitution to their victims. Their licenses had previously been revoked by the California Bureau of Real Estate.

After identifying underwater homeowners (including themselves), the Afkarians recorded fraudulent deeds (title fraud) that showed the loans on the properties had been extinguished. They then sold the properties to unaware buyers. The original mortgage lenders, who did not know about the fraudulent title documents, were not paid. This included their own $1.4 million mortgage.

At the same time, the Afkarians conspired to transact fraudulent short sales for underwater clients through a simultaneous “double escrow” scheme involving the use of straw buyers.

Read the original article in Fox 5 News.

Los Angeles Man Pleads Guilty to his Participation in a Mortgage Fraud Scheme

March 25th, 2016 at 8:45am

NEWS RELEASE
Internal Revenue Service – Criminal Investigation
Los Angeles Field Office
Anthony J. Orlando, Acting Special Agent in Charge

Appearing before United States District Judge Otis D. Wright II, a Los Angeles man pleaded guilty this morning to one felony count arising from his role in a mortgage fraud scheme in which he failed to report the proceeds of the fraud on his income tax return.

Amaziah Yahalom, who also goes by Andre C. Page, 35, pleaded guilty to one count of tax evasion, admitting in court today that the mortgage fraud scheme in which he participated caused losses of $800,000 to WMC Mortgage and $425,000 to PHH Mortgage.

According to documents filed with the court, in 2005, after falling behind on his mortgage payments for his Beachwood Drive home in Los Angeles, co-schemer William Beard was referred to Yahalom and another unidentified co-defendant for assistance in eliminating his mortgage on the property. That scheme involved a series of false documents, including a fraudulent Full Reconveyance purportedly authorized by the lender that was instead signed by Beard’s two roommates.  The purpose of the Reconveyance was to make it appear as if Beard had paid off his mortgage through the false representation that Beard’s roommates were authorized to declare the mortgage satisfied.

In June of 2005, Yahalom obtained an $800,000 loan from WMC Mortgage through providing false information about his income and employment, and purchased Beard’s Los Angeles home.  Beard caused a payoff demand to be sent from the unidentified co-defendant’s company North West Capital for the false loan.  Based on that payoff demand, the escrow company sent $800,000 to North West Capital’s bank account in the state of Washington.  No proceeds were paid to Wells Fargo Mortgage, the true holder of the mortgage lien, because the title company did not recognize the Reconveyance as fraudulent and treated the Wells Fargo Mortgage lien as having been satisfied.  The $800,000 was divided amongst the co-schemers with Yahalom receiving $130,000.

Yahalom filed his 2005 tax return failing to report the $130,000 of scheme proceeds.

In a separate but similar scheme, in 2007, Beard introduced his friend John-Pierre Rivera to Yahalom and the unidentified co-defendant, so that Rivera could eliminate the mortgage on a property he owned on Division Street in Los Angeles.  Through the use of another false Reconveyance, Beard, Rivera, the unidentified co-defendant, and Yahalom caused a title company to believe that the first mortgage on the Division property had been satisfied.  An unsuspecting buyer offered to purchase Rivera’s real property and obtained a loan of at least $414,150 from PHH Mortgage.  The title company did not recognize that the Reconveyance was fraudulent and Rivera’s lender did not receive any proceeds from the sale of the Division property.  Again, the proceeds of the fraudulent loan were distributed amongst the co-defendants, with Yahalom receiving $130,000 in 2008.

The specific count to which Yahalom pleaded guilty today relates to the filing of his 2008 tax return.  Again, the fraudulent proceeds of the loan for the Division property were never reported to the IRS.  Yahalom failed to file his 2008 federal income tax return, thus never reporting the $130,000 of loan proceeds received as income in 2008.

For the 2005 and 2008 tax years, Yahalom evaded the payment of income tax of approximately $45,000.

In June of 2014, Beard received a sentence of 16 months imprisonment and was ordered to pay restitution of over $1.3 million for his role in the scheme.  In 2010, Rivera pleaded guilty to one count of tax evasion and is scheduled to be sentenced on June 6, 2016.

As a result of today’s guilty plea, Yahalom faces a statutory maximum sentence of 5 years in federal prison and fines up to $250,000 when he is sentenced on July 21, 2016.  He may also be ordered to pay restitution.

This investigation was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation, in conjunction with the United States Attorney’s Offices for the Central District of California and Western District of Washington.

Bakersfield Investment Club under Investigation by the SEC

March 25th, 2016 at 6:48am

The Bakersfield Investment Club, located on Stockdale Highway is under investigation by the Securities and Exchange Commission.

The SEC filed a complaint last week against the company, alleging CEO Daniel Nase of running a fraudulent scheme designed to enrich himself. Nase, a former property appraiser for Kern County,  took in over $11 million from 400 people and guaranteed his investors a minimum return of 15 percent.

Los Angeles-area attorney, Scott Vick, who represents Daniel Nase, said he client ” . . . was very transparent and well-intentioned.” The SEC got it wrong. They don’t win every case they bring.”

Read the original article in BakersfieldNow.com

Stiff Prison Sentence for Real Estate Agent Convicted in Mortgage Fraud Case

March 25th, 2016 at 6:11am

A Placer County woman convicted in a multimillion-dollar mortgage fraud scheme has been sentenced to 14 years in prison.

Vera Kuzmenko, 46, of Loomis was sentenced to 14 years in prison by U.S. District Judge John A. Mendez for multiple counts of mail and wire fraud, witness tampering and money laundering for her role  in the scheme that cost financial institutions more than $16 million, according to a U.S. attorney’s office news release.

Kuzmenko and  Rachel Siders, 40, of Roseville were convicted by a federal jury in December 2015. Rachel Siders will be sentenced June 21.

Prosecutors presented evidence that, from late 2006 through early 2008, Kuzmenko and Siders participants in a mortgage fraud scheme involving more than 30 properties in the Sacramento area. The pair were responsible for securing more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. Records introduced during the trial showed Kuzmenko received millions of dollars in payment for creating fraudulent loan applications on behalf of the straw buyers.

In October 2015, Judge Mendez sentenced co-defendants Peter Kuzmenko, 37 of West Sacramento, to 19 years in prison; Aaron New, 41 of Sacramento, to 11 years and three months in prison; Nadia Kuzmenko, 36, formerly of Loomis, to eight years in prison; and Edward Shevtsov, 52, of North Highlands, to eight years in prison. They were previously found guilty of multiple counts of mail and wire fraud associated with the mortgage fraud scheme. In addition, Peter Kuzmenko, Shevtsov and New were found guilty of money laundering associated with the scheme, and Nadia Kuzmenko was found guilty of witness tampering.

The FBI and the IRS-Criminal Investigation investigated the case.

You can find earlier articles related to this case in the California Real Estate Fraud Report.

Read the original article in the Sacramento Bee.

Monterey Woman Sentenced for Financial Elder Abuse

March 11th, 2016 at 12:30pm

A woman entrusted with managing an 82-year-old Pacific Grove man’s properties in addition to his care received 180 day sentence to jail and three years probation.

Ilagene “Jeanie” Quaglia was convicted of felony elder abuse after authorities alleged she had skimmed the man’s rental checks, overcharged for items and services on the rental properties and writing herself checks for unauthorized purposes.

Ilagene “Jeanie” Quaglia was charged with stealing from an 82-year-old Pacific Grove man who she cared for and managed his rental properties.

Read the original article in KSBW.

San Clemente Man Ordered to Repay over $9 million to Investors in Ponzi Scheme

March 11th, 2016 at 11:46am

The former owner of a bankrupt Orange County real estate investment firm was sentenced to 168 months in prison for operating a Ponzi scheme that cost his investors $169 million.

San Clemente-based Michael J. Stewart, 68, was also ordered Monday by U.S. District Judge Cormac J. Carney to pay $9,234,914 restitution to 120 victims in connection with his conviction on 11 counts of mail fraud in August 2015.

Stewart’s firm was Pacific Property Assets. Its business, which had offices in Long Beach and Irvine, raised money by refinancing and selling properties, according to U.S. Attorney Eileen M. Decker.

Stewart and his co-defendant John Packard used new money they raised to pay earlier investors.

Read the original article in MyNewsLA.com.

 

71-Year-Old Man Sentenced to Long Prison Term for Operating Mortgage Elimination Scheme

March 11th, 2016 at 11:22am

Lonnie Glenn Schmidt, 71, who was convicted of real estate fraud relating to foreclosure consulting, has been sentenced to more than 24 years in prison,  according to the the Sacramento County District Attorney’s Office. He was found guilty of 30 felony charges involving foreclosure consultant fraud, recording false documents, unauthorized use of personal identifying information, second-degree burglary, perjury, grand theft and attempted grand theft. Jurors also found that Schmidt was subject to out-on-bail, white-collar crime and property loss enhancements.

Prosecutors said that between 2009 and 2013, Schmidt promised homeowners in distress that he would eliminate their mortgages. The homeowners who signed up with Schmidt gave him control over their properties, which he then tried to use those properties as collateral for personal loans. He even attempted to sell them outright for his own profit, yet charged his victims rent to continue to remain in what they thought were their homes.

Read the original article published by the  Sacramento Count District Attorney’s Office.

© 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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