California Real Estate Fraud Report

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James Duncan Sentenced to 19 Years, Restitution for Orchestrating $142 Million Real Estate Fraud

December 16th, 2013 at 9:34am

James Duncan, who both masterminded the $142 million real estate and investment fraud that rocked Riverside County and who then cooperated with prosecutors to obtain convictions against his former colleagues, has had this plea-bargain sentence imposed.

Riverside County Superior Court Judge Michele Levine ordered Duncan to serve 19 years and eight months in state prison after accepting the recommendation of Chief Deputy District Attorney Vicki Hightower.

Duncan must also pay $3.4 million in restitution to 33 victims, who lived in several states.

James Duncan acted as a central witness in the trials of his former business partner Hendrix Montecastro and Montecastro’s mother Helen Pedrino in what prosecutors described was a massive Ponzi scheme. Montecastro and Pedrino have filed motions for new trials following their convictions.

Previous guilty pleas and sentences have been imposed on Maurice McLeod, a top associate, Charlie Sung Choi, Cindi Grace Kelly and Thuan Nhan Du.

Read the original article in the Press Enterprise.

Pakistani Natives Return to U.S. for Sentencing in Mortgage Fraud

December 16th, 2013 at 9:09am

A married couple that evaded prosecution for mortgage fraud voluntarily returned to the United States from their native Pakistan to face sentencing after pleading guilty to bank fraud.

Zahid Ali and Riffat Ali, formerly of San Jose, had been indicted by a federal grand jury in 1996.

The Alis had been accused of falsifying the loan application of a man to whom they sold their home, knowing that the man never would have otherwise qualified for a loan.

According to the indictment, the Alis scammed a bank out of nearly $439,000 by falsifying loan documents in order to sell their Bird Avenue residence to the unqualified buyer.

The straw buyer‘s application was submitted to a relative, Mujeebullah Mujahid Khan, who was a loan officer at Home Savings of America, the bank which was defraud. Khan pleaded guilty to bank fraud in 1997.

“They admitted that they knew that his income and assets would not qualify him for a loan if the loan application had contained a truthful explanation of his circumstances,” reads the FBI news release. “So they filled out a draft of the loan application that contained several falsehoods.”

Home Savings of America was bought by Great Western Savings, which was later acquired by Washington Mutual.

Read the original article in the San Jose Mercury News.

 

Deputies from L.A. County Sheriff Convicted of Mortgage Fraud

December 12th, 2013 at 1:19pm

Two Los Angeles County Sheriff deputies have been convicted of mortgage fraud in the Kansas City area.

According to the U.S. attorney’s office, James Arthur Nash Jr., 43,  and 37-year-old Arman Nshanian were found guilty of multiple felony charges, including conspiracy to commit wire fraud.

The two lawmen are from Corona, and were among nine defendants. Prosecutors said they were part of a mortgage fraud scheme that operated in Missouri and that each man had received $100,000 for their roles, which caused losses of almost $5 million to the lenders.

Read the original article in SFGate.

Eighteen-year Prison Sentence for Glendale Man for Real Estate Investment Fraud, Ponzi Scheme

December 12th, 2013 at 1:11pm

Kaveh Vahedi, the subject of earlier postings on the California Real Estate Fraud Report, was sentenced last week to 18 years in prison for defrauding investors in three separate scams.

U.S. District Judge Dean Pregerson handed down the sentence and described the Ponzi scam that Kaveh Vahedi created “one of the most heartbreaking, vicious fraud schemes” that he has ever seen. He also ordered the 52-year old Vahedi to repay nearly $9.8 million to his victims. Recovery is unlikely as the FBI has been unable to locate any of the $12 million  Vahedi’s victims gave him to invest in his company KGV Investments.

For his part, Kaveh Vahedi told the judge he was merely stupid but not a bad person. The judge, however, trusted the letters he received from the victims, many of whom lost everything and suffered divorces, health problems and difficulties feeding themselves and their families as a result of Vahedi’s actions.

In November 2012, Vahedi pleaded guilty to one count of wire fraud for the Ponzi scheme and one count of conspiracy in connection with committing mortgage fraud.

Read the original article in the Glendale News Press.

Hendrix Montecastro’s Attorneys File for New Trial

December 12th, 2013 at 12:54pm

Daniel Greenberg, the attorney for Hendrix Montecastro and his mother Helen Pedrino, has filed a motion for a new trial eight months the pair were convicted by a Riverside County jury in a $142 million real estate investment fraud and securities scam.

Chief Deputy District Attorney Vicki Hightower is not surprised by the legal maneuver and said she is prepared to have prosecution witnesses available on January 21, when Riverside County Superior Court Judge Jeffrey Prevost said he would hear the motion.

Hendrix Montecastro was convicted of more than 300 felonies in the case, which prosecutors had alleged was a Ponzi scheme that fell apart when the real estate market collapsed. The 26 victims were said to have lost their life savings and homes as a result.

Helen Pedrino, the so-called “master recruiter,” of some of the victims, was convicted of 54 criminal charges, including a white-collar crime enhancement for felony theft or embezzlement.

Read the original article in the Press Enterprise.

RealtyTrac Posts Updates on the National Foreclosure Market

December 12th, 2013 at 12:20pm

Nationally, U.S. foreclosure activity has decreased 23% through October 2013.

The interesting statistic is that in the high-end $5 million and over homes, foreclosures are up a whopping 61% from the same time last year. The markets most affected are Los Angeles-Orange County, two markets in Florida and parts of Atlanta, New York, Long Island and Northern New Jersey.

Note to new agents: this is NOT the time to enroll in courses or “boot camps” on how to sell REOS – there aren’t any.

Read the news release on RealtyTrac.

Orange County Attorney Arrested in Mortgage Modification Case

December 5th, 2013 at 10:19pm

An attorney who resigned from the California State Bar in 2009 has been the third defendant arrested in a federal indictment in which he and other are accused of operating a mortgage modification scam.

Ronald Rodis, 49, of Irvine, surrendered on the charges that he “participated in, and lent his name and the law license he formerly possessed to, the fraudulent operation,” according to the U.S. Attorney’s Office.

Bryan D’Antonio, 47, of Brea, and Charles Wayne Farris, 53, of Aliso Viejo were arrested on December 3.

According to the indictment, Ronald Rodis lent his name to the Rodis Law Group, which later became America’s Law Group. Both firms advertised their loan modification services on radio, with Rodis speaking on some of the commercials.

Further, the indictment alleges that “Farris and D’Antonio hired and trained salespeople who allegedly told homeowners that Rodis Law Group was ‘100% successful,’ ‘routinely lowered monthly payments,’ and obtained reduced principal balances. According to the indictment, once the defendants and their co-conspirators convinced homeowners to pay a fee of several thousand dollars, little to no effort was made to obtain loan modifications. After making their payments, homeowners who tried to get updates on the status of their cases were often unable to contact anyone at either company.”

Worse for D’Antonio is that he is facing these charges after previously being convicted of mail fraud and wire fraud in 2003 and being banned from engaging in telemarketing.

All told, the U.S. Attorney alleges that the homeowners lost $12 million to the defendants and many subsequently lost their homes to foreclosure.

Read the original article in Courthouse News.

Oceanside Telemarketers Sentenced to Prison for Defrauding Homeowners

December 5th, 2013 at 9:33pm

Shelveen Singh, a telemarketer for 1st American Law Center, has been sentenced to nine years in prison after pleading guilty to fraud for his role in an operation that falsely promised to modify home mortgages.

Singh’s co-worker, Johnathon Hearn, 31, of Oceanside, received two years in prison for his role.

Three others who were previously sentenced are Gary Bobel (92 months); Scott Thomas Spencer (43 months); and Travis Iverson (two years).

The business took in more than $11 million from 4,000 vulnerable homeowners.

Mincing no words, U.S. District Judge Roger Benitez called Singh a “dirty businessman,” noting the Corona resident had been required in a previous case to make restitution to victims. He not only failed to do so but went on a spending spree and then filed for bankruptcy protection.

The remaining defendants are Dean Gregory Chandler, the law center’s co-owner and attorney, and its call center manager Michael Eccles. The two faces charges of mail fraud, wire fraud, telemarketing fraud, conspiracy and money laundering when their trial takes place in March 2014.

Read the original article in the San Diego Union Tribune.

Two Northern California Men Sentenced for Loan Fraud

December 5th, 2013 at 9:19pm

Vadim Vilchitsa, 32, of Sacramento,  and Yevgeniy Zazhitskiy, 39, of North Highlands are going to prison for operating a residential buy-fix-flip business that soured.

According to court documents, the U.S. District Attorney for the Eastern District of California alleged that Vadim Vilchitsa and his business partner Anatoliy Azarov solicited funds from investors to run their fix-and-flip business, but when the real estate market declined, they were left holding properties they could not sell. They then used the services of Zazhitskiy, a licensed real estate agent and loan officer, to help them submit phony loan applications for 23 properties.

Vilchitsa was sentenced to 15 months and Zazhitskiy received 20 months. They were sentenced by U.S. District Judge Kimberly Mueller, who has scheduled a restitution hearing for January 2014.

Anatoliy Azarov has not yet been tried and should be presumed innocent.

Read the original article in the Central Valley Business Times.

Realtors Indicted for Operating Mortgage Fraud, Short Sale Fraud Schemes

December 5th, 2013 at 9:04pm

Two Stockton Realtors have been arrested by federal agents and charged with operating a unique mortgage fraudshort sale fraud business,  according to U.S. Attorney Benjamin Wagner.

Lillian Marquez, 38, and Michael Keatts, 56, were charged in a federal grand jury indictment with conspiring to commit mortgage fraud and with nine counts of mail fraud.

According to the indictment, both defendants enjoyed a long run: from February 2006 through August 2012 or later, both Marquez and Keatts submitted loan applications in which fraudulent pay stubs and tax documents were submitted to lenders.

The other side to the defendants’ business was that they allegedly facilitated short sale fraud. In a classic short sale fraud scheme, they would assist the homeowners in default with selling their homes to straw buyers. The “sellers,” however, would remain in their homes at much-reduced mortgages and lowered property taxes. Of course, they would also be relieved of paying taxes on the gains they received by not having to pay either the IRS or Franchise Tax Board (FTB) on their loan foregivenes. Both agencies are completely asleep-at-the-wheel when it comes to short sale fraud, as is most of law enforcement.

Even if these defendants are convicted, I doubt either of the above agencies will lift a finger to prosecute them, the straw buyers or the “sellers,” including putting a lien on the houses. The feds, including the Department of Justice, are too busy pretending to prosecute crooked bankers.

Read the original article in the Central Valley Business Times.

© Copyright 2007-2015 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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