California Real Estate Fraud Report

You have just entered the #1 private-sector resource on the Internet for real estate fraud. In doing so, you have voluntarily left the dimension of the conventional real estate world and crossed over to the Dark Side, the realm where greed, dishonesty and evil are the order of the day. Dare to sign up for a free subscription to this comprehensive news resource and receive weekly, timely news reports about real estate fraud, mortgage fraud, short sale fraud, REO fraud, title fraud, loan fraud, appraisal fraud, affinity fraud, loan modification scams, securities fraud and elder financial fraud.

Another Reason Los Angeles is Broke: Appraisal Fraud Inside the County Assessor’s Office

January 3rd, 2013 at 12:36pm

Assessing property taxes accurately is essential to local municipalities being able to plan their budgets into the future.

Short sale fraud is one means by which government is robbed of revenues to which it is entitled.

Now, public employees whose salaries and generous pensions are paid for by taxpayers have invented another way to steal from taxpayers: appraisal fraud.

Scott Schenter, a property appraiser for the Los Angeles County Appraiser’s Office,  was the lowest man on the totem pole arrested in a large-scale public corruption scandal in that office. He has pleaded not guilty to the 60 felony counts with which he has been charged and is probably hoping for the best by squealing to the L.A. District Attorney’s Office against his former boss County Assessor John Noguez, Deputy Assessor Mark McNeil and private tax consultant Ramin Salari. The three men have all been arrested and charged in the case and all have pleaded not guilty.

The L.A. County D.A.’s Office has charged all four with allegedly shaving hundreds of millions of dollars from high-priced properties owned by clients of Ramin Salari. Court records indicate that Scott Schenter, who performed many of the property appraisals, received at minimum $275,000 for his “work.”

According to an interview with Schenter (assuming it was with the L.A. Times) in 2012 this year, Schenter responded to John Noguez’ request to “look into” expensive Westside properties after the latter had campaign debt to pay off in 2010 after being elected for L.A. County Assessor. Schenter then reduced the values of the homes by a whopping $172 million.

The scheme fell apart when Schenter’s supervisor in the Culver City office of the County Assessor discovered the lowered appraisal values.

The Los Angeles Times reported that its review of Schenter’s County emails from 2004 to 2011 following a public records request, showed that most of those emails were not related to his work for the County. As a taxpayer, I think an audit of how Schenter and possibly other County Assessor employees were spending significant amounts of their time on private business that “somehow” escaped the attention of their supervisors, is in order.

The LA Weekly has followed this story closely and published a number of articles.

Studio City Man Indicted for Real Estate Investment Fraud

January 3rd, 2013 at 12:00pm

David Williams, a San Fernando Valley businessman who operated three businesses in Studio City, was arrested and arraigned on federal charges December 20, 2012 following a 10-count indictment by a grand jury. The charges against Williams, 52, include eight counts of wire fraud, and two counts of tax evasion and are for allegedly running a fraudulent real estate investment program that cost the investors more than $3.75 million.

David Williams is a licensed securities dealer and investment advisor. The names of his three businesses are WFG Holdings, Inc., Williams Financial Group, LLC, and Sherwood Secured Investment Fund, LLC (SSIF). The charges arise out of what federal authorities allege was a private placement offering, in which Williams was to use the investment money via SSIF to purchase real estate primarily and less than 10 percent in non-real estate products.

The indictment charges that instead of investing as promised, David Williams used more than 10 percent of the SSIF funds for non-real estate related business during the period July 2007 and March 2008. These included $896,000 for business expenses incurred by his broker-dealer firm, Morgan Peabody, as well as $569,000 to lease with an option to buy his personal residence; $173,000 for construction and furnishings in his personal residence; $75,000 for clothing and jewelry; $69,000 for family travel; and $35,000 for private school tuition for his children.

Wire fraud charges carry steep sentences if the defendant is convicted – up to 20 years per count – and the penalty for a conviction for tax fraud can be as much as 10 years per count.

Read the original article in the San Fernando Sun.

Sentencing Delayed for Realtor® Teresa Rose in Real Estate Fraud Case

January 3rd, 2013 at 11:45am

A former Coldwell Banker real estate agent from Ramona who pleaded guilty to mortgage fraud in 2012 has had her sentencing delayed until May 20, 2013.

Realtor®

Teresa Rose admitted being part of a scheme to inflate real estate prices (real estate fraud), participated in a mortgage fraud scheme and received over $1.5 million in kickbacks in 2006-2007.  When she is finally sentenced, she could spend up to five years in prison and be fined $250,000.

Although Coldwell Banker Residential Brokerage fired Rose after she was indicted, she is still practicing real estate but under another brokerage. This is because the California Department of Real Estate (DRE) cannot act to suspend or revoke her license until the time for appeal has passed.

Read the original article in U-T San Diego.

Convicted San Gabriel Man Disappears, FBI on the Hunt

December 21st, 2012 at 11:24am

David Kaup, 29, who pleaded guilty to two counts of wire fraud in April 2012 and was scheduled to be sentenced on December 17, appears to be on the lam after failing to appear in court. Now Bill Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office and André Birotte Jr., the United States Attorney in Los Angeles are looking for him.

Kaup admitted to the court in his plea that he had defrauded over 50 families out of at least $11 million by concocting several scams, including a mortgage rescue fraud and a real estate investment fraud scam. He ran Lunden Investments, American Loans and Funding (ALF) and First Mortgage West. The Lunden scam occurred when Kaup conned people into giving him $9 million for use as commercial loans but which he lost by trading on the Foreign Currency Exchange Market instead. Kaup convinced homeowners into paying him money upfront in order to refinance their homes at under-market rates (who would believe this?) using ALF.

Read the original article in CBS Local Media.

Seal Beach Woman Indicted for Real Estate Investment Fraud

December 21st, 2012 at 11:10am

Karen Hanover, 46, a Seal Beach woman who was found guilty in 2011 of impersonating an FBI agent,  has now been indicted on suspicion of operating a real estate investment fraud scheme.

Hanover was indicted by a federal grand jury in Santa Ana for operating two companies in Long Beach that may have defrauded up to 50 victims out of more than $2 million. She held seminars in Southern California, Las Vegas and Dallas that sold investors on buying into ownership of commercial real estate properties.

The conviction of impersonating an FBI agent was related to Hanover using the color-of-authority to threaten by telephone a woman who had turned Hanover’s name to investigators.

Read the original article in the Orange County Register (OC Register).

3 Men Sent to Prison in Santa Maria Mortgage Fraud Scheme

December 21st, 2012 at 11:00am

According to a press release from the FBI, three men who thought they could get away with mortgage fraud didn’t and are now on their way to prison, thanks to the Santa Maria Resident Agency of the Federal Bureau of Investigation.

Brian Armet, 36, who owned and operated Custom House Home Loans (CHHL), a Santa Maria real estate mortgage company, pleaded guilty in July 2001 to conspiracy to defraud lenders and was sentenced to one year and one day in prison.

Rigoberto Hernandez, 37, and Julio Tamayo, 42, both from Santa Maria pleaded guilty to mortgage fraud charges and were sentenced to eight months and six months in prison respectively.

The three men must pay $2.4 million in restitution to the lenders they defrauded, per United States District Judge John F. Walter, who also sentenced them. The lending institutions were Homecoming Financial, Freddie Mac, Bank of America, and Carrington Mortgage Company.

FBI Arrests Two Men for Accepting Bribes on Fraudulent Loan Applications

December 17th, 2012 at 10:31am
Swift work by FBI agents in Southern California has resulted in the arrests of Tony Phan of Little Saigon and Troy Chattariyangkul of Los Angeles County for accepting bribes on falsified loan applications (loan fraud) while they were employed at Homecomings Financial in 2007-2008.

Phan, 35, works as a senior underwriter at Stearns Lending, Inc. in Santa Ana. Chattariyangkul, 34, is a USC graduate who worked first at Homecomings Financial, where Phan once worked. Another alleged co-conspirator, Chang Park, was a co-worker of Phan and Chattariyangkul, where the latter two are allged to have taken bribes to overlook fraudulent loan applicaitons.
 
According to court filings, Park eventually joined George Zevada, who owned and operated Silverline Mortgage Pasadena, where they are alleged to have targeted the Seeno Homes and Discovery Homes in Northern California.
 
Park was arrested last August and explained how the scheme worked to the FBI agent, including providing supporting documentation. Among other information he provided was that George Zevada allegedly used a CPA named Miguel Arenas Sr. and his Miro Accounting firm to forge pay stubs of prospective buyers.
 
All four men appear to have ignored the common-sense rule to not conduct allegedly illegal business via email, which helped the FBI build its case against them and spur the arrests.
 
Read the original article in the OC Weekly.
 

Wisconsin Man Indicted for Mortgage Fraud, Short Sale Fraud

December 17th, 2012 at 9:41am

If anybody is wondering why the California Real Estate Fraud Report is publishing arrests and indictments in other states that involve short sale fraud, it is because I believe that in California, where short sale fraud is rampant, prosecutors are for the most part too timid to jump into this fray. The result is that the crime of short sale fraud is even more pervasive, thanks to prosecutorial timidity reluctance. I cannot leave out the resistance by bankers to report this crime for prosecution, which is a large part of the problem. This only emboldens the commission of this crime that threatens neighbors’ equity, the property tax base, the IRS and our economy-at-large.

Randez Long, a Milwaukee, Wisconsin man, has been indicted for his role in an alleged mortgage fraudshort sale fraud scheme, which included his mother and sister.

From 2005 until April 2008, Long is alleged to have used his multiple businesses to con banks and other lenders into approving loans that contained false, fraudulent information from the prospective borrowers (loan fraud, mortgage fraud). Long’s businesses included LM Management, LLC; RL & DL Properties, LLC; RA & BB Properties, LLC; SC & Long Properties, LLC; R & B Mortgage, LLC; Long and Reed Property Management, LLC; and Long Management, LLC. See a copy of the indictment. Two of the named banks were Countrywide Bank and Southport Bank .

The purchasers are alleged to have made few payments, pushing the properties very quickly into foreclosure. Randez Long then arranged with the lenders to do short sales but instead sold the properties to new buyers than the approved short sale listing prices by the lenders. In the meantime, he managed to receive new loans from different lenders, again using false documents, and skimmed the profits, earning a tidy $1 million for himself.

The prosecuting agency is the U.S. Attorney’s Office for the Eastern District of Wisconsin, headed by James. L. Santelle.

Here are the properties alleged to be part of his scam;

3132 North 25th Street, Milwaukee, Wisconsin;

3442 North 12th Street, Milwaukee, Wisconsin;

2310 West Keefe Avenue, Milwaukee, Wisconsin.

Read the original article in the Mortgage Fraud Blog.

San Francisco Man Sentenced to 12 Years for Mortgage Fraud

December 17th, 2012 at 9:16am

Sergio Gutierrez, a 49-year-old San Francisco businessman, has been setenced by U.S. District Judge Jeffrey White to 12 years in federal prison for a mortgage fraud scam that targeted Spanish-speaking borrowers (affinity fraud, ethnic fraud).

Gutierrez sought our Latinos in 2008 and 2009 and promised them that in exchange for a fee he could write-up documents that would prove their mortgages were invalid and that they did not have to pay off their loans. Predictably, most of the persons who signed up for Gutierrez’ service lost their homes. Apparently, none of these people was able to reason that if their mortgages were invalid, so was their right to stay in a home that they couldn’t possibly own. Dumb meets crooked.

 U.S. District Judge Jeffrey White sentenced Gutierrez to a longer term than that requested by prosecutors and ordered him to pay restitution to his “victims.”

 Read the original article in the San Francisco Chronicle / SFGate.

US Attorney Sues Michigan Supreme Court Justice in Possible Short Sale Fraud Case

December 6th, 2012 at 10:06pm

Hear Ye, Hear Ye, Prosecutors in California!

Finally the feds in other states are turning their prosecutorial sights on matters of short sale fraud.

The office of U.S. Attorney Barbara McQuade has filed a civil complaint against Michigan Supreme Court Justice Diane Hathaway and her husband attorney Michael Kingsley, alleging they deliberately concealed assets in order to obtain permission from their lender, ING Bank, to do a short sale of their home in Grosse Pointe Park.

The feds contend in their complaint that Hathaway and Kingsley transferred their home in Windermere, Florida to Kingsley’s daughter via quit claim before the short sale, along with a second home in Grosse Pointe Park. The allegedly couple did not list the Florida home as an asset before applying for the short sale with ING, which freed them of $600,000 in mortgage obligations without the penalty of paying personal gains per the Mortgage Debt Relief Act. As part of an application to do a short sale, borrowers are required to submit a hardship letter explaining why they are unable to pay their mortgage, enumerate their assets and liabilities and sign an affidavit affirming the truthfulness of their statements.

After the short sale was completed, Hathaway’s step-daughter transferred the homes back to her father and step-mother.

As part of their lawsuit, the U.S. Attorney’s Office for the Eastern District of Michigan is seeking the forfeiture of the Florida home. There is no word as to whether Michael Kingsley’s daughter will face any charges for her alleged participation in the scheme.

The complaint alleges that before submitting a Dec. 10, 2010, hardship letter to the bank in support of their request for a short sale, the couple “systematically and fraudulently transferred property and hid assets in order to support their claim to ING (Bank) that they did not have the financial resources to pay the mortgage on the Michigan property.”

The complaint says Hathaway and Kingsley quit claimed the Florida property to Kingsley’s daughter. The daughter then quit claimed the property back to them after the short sale.

According to the article in the Detroit Free Press, “Hiding assets to justify a short sale can be considered illegal because it is done to defraud the bank or financial institution that holds the mortgage on the property.”

Chief Justice Robert Young Jr. released this statement: “It is a dreadful development to have any sitting judge accused of fraud and money laundering. Justice Hathaway or her lawyer should clear the air and explain these transactions.”

Justice Diane Hathaway has said she will not resign her position.

You can learn why many people commit short sale fraud and fear no consequences of prosecution by reading my ebook “How to Commit Short Sale Fraud . . . and Get Away with It.”

© Copyright 2007-2014 Monique Bryher

Legal Disclaimer.

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.

ALL RIGHTS RESERVED. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the author, except for the inclusion of BRIEF QUOTATIONS in a review.

BLOG POWERED BY SHARP BIZ IMAGE

Copy Protected by Chetans WP-Copyprotect.