California Real Estate Fraud Report

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Patterson man sentenced in short sale fraud case

March 5th, 2015 at 8:53am

Agustin Simon, 53, was sentenced to 15 months in federal prison after pleading guilty to conspiring to commit bank fraud with his former real estate agent on a short sale fraud of his property five years ago. Minerva Sanchez, the Realtor®, is already in prison serving a 21-month sentence.

The goal of the short sale fraud was for Simon to keep his home. In 2010, Sanchez recommended that Simon sell his home to Sanchez’ son in a short sale transaction. Simon gave the son $355,000 to make the purchase, which they falsely described was “arm’s length” and that Simon would not be regaining ownership. Sanchez wrote the hardship letter on Simon’s behalf, which was submitted to lenders Tri Counties Bank and Freddie Mac, stating falsely that Simon was unable to make his mortgage and concealing Simon’s other assets and real estate.

In addition to his prison sentence, Agustin Simon, was ordered to pay $421,000 in restitution to the two lenders.

Read the original article in the Modesto Bee.

Oakland woman is 9th person sentenced in Liberty Mortgage mortgage fraud

March 5th, 2015 at 8:38am

Dana Faulkner, 48, was sentenced by U.S. District Judge John A. Mendez to one year in prison for conspiring to commit mail fraud and make false statements in loan applications.

Faulkner acted as an unlicensed real estate agent and loan officer for Liberty Mortgage Co. in Elk Grove. Hoda Samuel, the owner and principal operator of that company and Liberty Real Estate and Investment Co., is serving a 10-year prison sentence after being convicted in January 2013.

Samuel, Faulkner and the other defendants submitted fraudulent loan applications for the sellers’ listed prices. They did this in order to enrich themselves and to pay kickbacks to the home purchasers, which they fraudulently described as payments to make the properties compliant with the Americans with Disabilities Act. The financial institutions lost over $5 million as a result of the mortgage fraud scheme.

The case was prosecuted by Assistant United States Attorneys Philip Ferrari and Todd Pickles of the U.S. Attorney’s Office for the Eastern District of California.

Read the original article in the Sacramento Bee.

Roseville woman convicted in mortgage fraud case

March 5th, 2015 at 8:24am

Roseville resident Rachel Siders, 39, was found guilty of bank fraud, making a false loan application and committing aggravated identity theft, according to a press release by the  U.S. Attorney for the Eastern District of California.

Siders and her co-defendant Theo Adams used the identity of a relative of Adams to take out a HELOC (home equity line of credit) on the relative’s property in 2008. Siders and Adams, who pleaded guilty in this case, submitted fraudulent tax returns and income statements to Washington Mutual Bank, which, as a result, extended a $250,000 loan. Siders, as a notary public, also falsely notarized the loan documents (notary fraud). The loan later defaulted.

U.S. District Judge John A. Mendez will be sentencing both Rachel Siders and Theo Adams later this year.

Read the original article in the Sacramento Bee.

Addicted to Fraud: JPMorgan Chase

March 3rd, 2015 at 12:23pm

Still not “getting the message” after being part of the $25 billion national mortgage settlement with the 50 state attorneys general for allegations that it robo-signed foreclosure documents, JPMorgan Chase‘s investors are paying the piper again.

Read the full article in National Mortgage News.

Sacramento Realtor® faces bank fraud charges

March 3rd, 2015 at 8:52am

Gabriela Carter, 43,  a Sacramento Realtor®, has been charged with bank fraud in an eight-count indictment.

An FBI investigation resulted in the case, which, according to prosecutors, began when Carter submitted loan applications containing fraudulent information on behalf of her clients, many of whom did not speak English and were unaware of the false statements. At the time the alleged frauds occurred (2007-2008), she was a salesperson with 1st Synergy Real Estate and a principal with 1st American Pacific, a mortgage brokerage.

Read the original article in the Sacramento Bee, Inman and News10.

Elder financial abuse case of former Chase Bank employee moved

March 3rd, 2015 at 8:31am

The case of Alex Ojeda, a 28-year-old Dublin man, who investigators say stole the life savings of 91-year old John “Jack” Magel is being moved to Alameda County Superior Court in Hayward. Judge Christine Moruza rejected a plea deal last month that would have dropped the felony elder financial abuse charge if the defendant agreed to plead guilty to grand theft and served four months in County jail. The grand theft charge would be reduced to a misdemeanor if Ojeda made full restitution to the victims within three years.

Ojeda first told police that Jack Magel had given him the money while Ojeda was a personal banker for Chase Bank, but later admitted that he forged the elderly man’s signature on withdrawal slips and cashier’s checks, stealing a total of $118,000, including a $105,000 certificate of deposit. Jack Magel suffered from both Alzheimer’s Disease and cancer.

Jack Magel‘s family are strongly opposed to Deputy district Attorney Jerry Herman dropping the charges of financial elder abuse against Alex Ojeda and happy that the judge rejected the plea deal. Said son-in-law John Cuthbertson, “I was happy to see the judge stand her ground with what she felt about the elder abuse. I don’t think the court system should be designed as a rubber stamp for what two lawyers want to do to get on with their next case.”

Read the original article in the Contra Costa Times.

Fremont real estate agent sentenced in short sale fraud

February 25th, 2015 at 6:10pm

The following is a press release from the U.S. Attorney’s Office for the Eastern District of California:

FRESNO, Calif. —Minerva Sanchez, 48, of Fremont, was sentenced today by Senior U.S. District Judge Anthony W. Ishii to 21 months in prison for conspiring to commit bank fraud, United States Attorney Benjamin B. Wagner announced.  Sanchez also was ordered to pay restitution to financial institutions in the amount of $421,372.

According to court documents, Sanchez was a licensed real estate agent who, beginning in or around March 2010, represented the seller of a home in Patterson, California.  Sanchez recommended that the seller undertake a short-sale of his home using Sanchez’s son as the straw buyer.  The seller, acting on Sanchez’s advice, submitted to Tri Counties Bank and Freddie Mac false and fraudulent short-sale applications, and caused these financial institutions to approve the charge-off of funds for the short-sale of the seller’s home.

With Sanchez’s knowledge, the seller provided the straw buyer with the full purchase price of the home ($355,000).  Sanchez provided the seller with a “hardship letter” for him to use in connection with the short-sale application, which misrepresented the seller’s inability to make his monthly mortgage payments.  In fact, Sanchez knew that the seller could make his monthly mortgage payments with proceeds from a pending sale of other real property he owned.

Sanchez, along with the seller and straw buyer, made other misrepresentations to the financial institutions in connection with the short-sale, including false statements that the transaction was “arm’s length,” and false statements concerning the parties’ hidden agreement that the seller would provide the straw buyer with the purchase money for the short-sale and ultimately regain ownership of his home following the short-sale.  In her plea agreement, Sanchez admitted that her criminal conduct caused the financial institutions to lose more than $316,000.

This case was the product of an investigation by the Federal Housing Finance Agency-Office of Inspector General and the Internal Revenue Service-Criminal Investigation.  Assistant United States Attorney Christopher Baker prosecuted the case.

On June 10, 2013, the seller of the Patterson property, Agustin Simon, 52, of Gustine, pleaded guilty to conspiring to commit bank fraud in connection with this scheme.  He is scheduled to be sentenced on February 23, 2015, before U.S. District Judge Lawrence J. O’Neill.

Seal Beach woman sentenced to prison for real estate fraud – and it’s not her first conviction

February 23rd, 2015 at 11:10am

Karen Hanover, 48, of Seal Beach, has been sentenced to almost three years in prison for tricking people to invest in a commercial real estate scheme she ran, according to Thom Mrozek, public affairs officer for the United States Attorney’s Office for the Central District of California.

The investors turned over $19,000 to $29,000 in exchange for Hanover’s promise  guaranteeing them a 100% return or a 100% refund if they didn’t have a commercial property within a year. The investments were pitched at real estate seminars held in Southern California, Las Vegas and Dallas using two Long Beach companies, Commercial Investment Education LLC and Kharmic Life Strategies Inc.

Karen Hanover received a six month sentence and a $5,000 fine in 2011 for impersonating an FBI agent in order to threaten clients who complained about a prior real estate scheme.

Read the original article in the OC Register and the Los Alamitos-Seal Beach Patch.

The main reason why elder financial abuse will continue to grow . . . the reason will surprise you

February 23rd, 2015 at 10:53am

The theft of homes, financial assets and material items from seniors (elder financial abuse) is growing. You might suppose this has to do with the large numbers of Baby Boomers who are aging, creating a large, vulnerable population.

This is certainly true. But do you want to know the real reason this crime, which is a shame to our entire society, is going through the roof?

Here it is folks: elder financial abuse is rampant because there are very few investigations by law enforcement and even fewer by prosecutors.

The reason? it’s not a high priority crime and even when the abuse is egregious, law enforcement considers there is no victim unless the victim files a complaint. Kind of hard when the victim has dementia or is subject to undue influence by a too-friendly neighbor or adult children who are too impatient to wait for their relative to die.

In the case below, Linda Magel found that her father, John Magel, lost a $105,000 certificate of deposit and possibly cash from withdrawals made using forged signatures. John Magel lost that money to a Chase Bank employee, yet Chase Bank didn’t refund the money “without putting up a fight,” according to Linda.

In Magel’s case, Alameda County Superior Court Judge Christine Moruza blocked a plea deal agreed to by Alameda County Deputy District Attorney Jerry Herman and the attorney for former personal banker Alex Ojeda, 28, that would have dropped a felony charge of financial elder abuse, a ruling that pleased John Magel‘s family. Ojeda is due back in court on March 2.

Read the original article, including the attempts by Chase Bank to avoid reimbursing the family until after the family threatened legal action.

Wells Fargo lending manager pleads guilty to loan fraud

February 20th, 2015 at 11:26am

Sharon Lynn Shaw, 67, a San Jose woman, pleaded guilty to four counts of defrauding a bank and two counts of theft by a bank officer.

Shaw, who was employed by Wells Fargo, admitted she used her own parents’ names and social security numbers in order to submit and approve loan applications that were fraudulent. According to U.S. Attorney Melinda Haag, Shaw used the proceeds to pay off the mortgage on her house.

Shaw will be sentenced to U.S. District Judge Beth Freeman in San Jose in May and could receive a maximum possible sentence of 30 years in federal prison.
Read the original article in the San Jose Mercury News.

© 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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