California Real Estate Fraud Report

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Archive for August, 2017

Bay Area Man Sentenced to 15 Prison in Short Sale Fraud Scam

August 18th, 2017 at 10:24am

Mahendra Prasad, 55, pleaded guilty on May 22, to one count of mail fraud affecting a financial institution in connection with a fraudulent short sale (short sale fraud), according to a Justice Department press release. On August 14, U.S. District Judge Lawrence J. O’Neill sentenced him to 15 months in prison and ordered him to pay $328,000 in restitution to the lending institution that was defrauded.

According to court documents, in 2006, Prasad allegedly submitted falsified documentation to a lender so that he could purchase a property in Sacramento. Following the purchase, he rented the property as Section 8 housing.

In 2013, Prasad completed a short sale of the property to another person, claiming that the sale was “arm’s length, which was a requirement of the lender.

His co-defendants Jyoteshna Karan, Praveen Singh, Sunita Singh and Nani Isaac are going to trial in U.S. District Court in Fresno, on Dec. 11.

Read the original article in News India Times.

Nevada Men Indicted in Fraudulent Short Sale

August 18th, 2017 at 9:55am

Acting U.S. Attorney Steve Myhre for the District of Nevada announced that two men have been indicted in connection with the sale of one man’s property to a family member of his friend (short sale fraud).

The indictment alleges that Dustin Lewis (Henderson, NV) and Brian Sorensen (Las Vegas, NV) conspired to defraud OneWest Bank when Lewis submitted a fraudulent short sale application to the bank to sell the home to a relative of Sorensen. The plan was to prevent a foreclosure so that Lewis could keep possession of the 5,331-square foot, five-bedroom home in Henderson. It is further alleged that Lewis did not disclose to the bank that he and Sorensen had an agreement that Lewis would remain on the property and that later it would be sold back to him.

The case was investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigation (IRS-CID) and the U.S. Department of Interior-Office of the Inspector General. Assistant U.S. Attorney Patrick Burns is the prosecutor.

Read the original article in Mortgage Professional America.

Wells Fargo Pays Out Again, This Time For Fraudulent Anti-Veteran Lending Practices

August 18th, 2017 at 9:08am

Banking giant Wells Fargo must pay over $100 million to settle allegations of fraud that included overcharging military veterans using the VA Home Loan to refinance their mortgages. The victims were not only veterans but U.S. taxpayers.

Brokers Victor Bibby and Brian Donnelly were the two whistleblowers in the lawsuit who sought to recover the losses that the federal government suffered when the loans it guaranteed loans defaulted. The two men sued Wells Fargo and seven other lenders to recoup losses; notably the federal government declined to join the qui tam lawsuit, which was filed under the federal False Claims Act, aka Lincoln’s Law (31 USC §§ 3729-3733.

The other banks are Bank of America Corp (BAC.N), Citigroup Inc (C.N), First Tennessee, JPMorgan Chase & Co (JPM.N), PNC Financial Services Group Inc (PNC.N) and SunTrust Banks Inc (STI.N). The total pay-out is $161.7 million.

Depending on whether the federal government offers to assist, the private person can receive a portion of the recovered damages, from 10% to 30%. If the government intervenes, the person bringing the lawsuit, the “relator”, receives between 15%-25%. If the government does not, the relator receives between 25%-30%. If the government intervenes and most of the information is already public, the relator is only entitled to 10%.

Read the full article, including Wells Fargo’s boilerplate “apology,” in DisabledVeterans.org

NY Cop and His Friend in Hot Water over Alleged Short Sale Fraud

August 18th, 2017 at 8:50am

Retired NYPD police officer Michael Rizzi and his friend Edward Monahan have been charged with bank fraud and conspiracy to commit bank fraud with an allegedly fraudulent short sale the two men committed.

Rizzi and Monahan are accused of submitting false documentation to Rizzi’s bank in order to do a short sale of a multi-family building on Lafayette Avenue in New Brighton, for which Monahan was the buyer.

The men, both 45 years old, signed affidavits affirming that they had no business, personal or family relationships with each other. But the criminal complaint alleges that Rizzi withdrew $17,500 from his bank accounts and altered one of his bank statements to make it look like the money came from Monahan’s bank account.

In addition, Rizzi was paid $10,000 in relocation assistance money from the Home Affordable Foreclosure Alternatives (HAFA) federal program.

The bank lost $250,000 as a result of the transaction.

In the meantime, Michael Rizzi is serving a 15-month federal prison sentence for laundering the proceeds from a multimillion-dollar prostitution ring.

Read the press release from the Office of the U.S. Attorney for the Southern District of New York (U.S. Attorney for Manhattan) and SI Live.

 

 

Criminals Hacking into Real Estate Agents’ Emails, Stealing Down-Payments, Closing Funds

August 4th, 2017 at 10:33am

If you’re purchasing a home, watch out for this latest real estate fraud scam by hackers.

Criminals are hacking into the email accounts of real estate agents, escrow and title companies. They pose as legitimate parties to the real estate sale and have convinced many unsuspecting buyers to wire their down-payments or closing funds to accounts controlled by the hackers. As a result, a number of home buyers have lost their life’s saving, which are usually not recoverable.

In one case, attorney Matt Borden’s is suing a real estate company on behalf of his client who lost $500,000 due to a similar fraudulent email from her real estate agent’s email account.

“She was crushed. This was her life savings,” said Borden.

The National Association of Realtors and the FBI have issued warnings about these sophisticated email scams targeting the real estate industry.

Read the original article in CBS Local.

© 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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