September 19th, 2014 at 7:33am
After a one-day bench trial on stipulated facts before U.S. District Judge Troy L. Nunley, Alan David Tikal was convicted on 11 counts of mail fraud and one count of money laundering in a mortgage fraud scheme.
Tikal ran a business called KATN, which promised homeowners in financial distress that he would lower their outstanding mortgage debt by 75%, thereby lowering their monthly mortgage payments. He falsely claimed to his victims that he was “a registered private banker with access to an enormous line of credit and the ability to pay off homeowners’ mortgages in full. Tikal told homeowners that in return for various fees and payments, their existing loans would be paid in full, and the homeowners would then owe new loans to Tikal that would be only 25 percent of the original loan.”
As the reader might suspect, none of the homeowners’ saw their mortgages paid, foregiven or reduced and because they were told to stop making their mortgage payments to their banks, many lost their homes to foreclosure. Of the $5.8 million Tikal collected, almost half went into his or his family’s accounts for their personal use.
Alan David Tikal‘s crimes were considered so extensive that he was prosecuted by both the United States Attorney’s Office for the Eastern District of California and the California Attorney General’s Office. His case was investigated by SIGTARP, the Internal Revenue Service – Criminal Investigation, the California Department of Justice, and the Stanislaus County District Attorney’s Office.
September 19th, 2014 at 7:16am
A short-lived scheme has resulted in a Huntington Beach woman being sentenced to state prison after she admitted to defrauding banks at real estate auctions she held.
Reyna Peinado, 48, and an associate ran auctions for Reliable Posting and Publishing (RPP) and conducted real estate auctions at the Orange County courthouse. According to an FBI investigation, Peinado contacted some of the winning bidders at her auctions and offered to reduce the sale price of the properties they had purchased from between $15,000 and $57,000 if they would pay her a $5,000 bribe.
The banks that held title to the foreclosed properties lost about $261,500 as a result of her crimes.
Read the original article in the Orange County Register the FBI’s press release.
September 19th, 2014 at 6:43am
Three men have received heavy prison sentences for their roles in the Ponzi scheme they ran under the company known as Diversified Management Consultants (DMC).
After hearing victims’ testimonies and an FBI forensic accountant, U.S. States District Judge Troy Nunley sentenced Christopher Jackson, 46, of Elk Grove, to 30 years in prison; Michael Bolden, 60, of Sacramento, to 20 years in prison; and Victor Alvarado, 53, of Sacramento, to 10 years in prison.
According to prosecutors from U.S. Attorney Benjamin Wagner‘s office, DMC ran various investment clubs between 2003 and 2009, convincing at least 240 people, including their own families, to invest with them. Very little of the money was actuall invested, going instead to pay phony returns to previous investors (the Ponzi scheme) and to buy jewelry, expensive clothes and trips and the requisite Lamborghini, Rolls Royce, BMW, and Range Rover.
Three more DMC principals await sentencing: Garry Bradford, Nicholo Arceo and Erica Arceo. Erica was the in-house-attorney but lost her law license with the California State Bar as a result of her involvement and guilty plea.
Read the original article in the Central Valley Business Times.
** Update: meanwhile, some of the investors/victims sued Stewart Title of Placer and Stone Canyon Mortgage, to try to recover some of their losses. According to the Sacramento Bee, the case was settled on Sept. 24 for $900,000.
September 12th, 2014 at 12:33pm
An 11-page indictment from the U.S. Attorney for the Southern District of Iowa alleges that four men, including an attorney, defrauded financial institutions in the area in or around Des Moines, causing losses to the lenders of approximately $400,000.
The four defendants, who have been charged with bank fraud, are attorney Jason Springer, property flippers Nathan Smith and Patrick Steven, real estate agent Rick Makohoniuk and mortgage broker Jerod Hogan.
The indictment charges that Smith and Steven negotiated short sales with the lenders on the behalf of the selling homeowners. Lenders require the purchasers of such properties to be arm’s-length buyers in order to ensure that the properties are sold at fair-market value and are not simply a ruse for the sellers to get their properties back at a reduced mortgage. However, prosecutors allege that Smith and Steven purchased the homes without disclosing this to the lenders and that further, the selling prices were not fair-market value (short sale fraud). Note: Dear Banks: where were your appraisers when this happened?
Following the purchases, which involved 18 properties, Smith and Steven resold the homes for a profit, i.e., their true fair-market values. Attorney Springer is alleged to have participated by conducting the closings. Makohuniuk is alleged to have submitted false documents to a lender and Hogan alleged provided Smith and Steven with false documents they used to deceive the lenders.
The allged crimes occurred from approximately March 2009 to March 2011 and were investigated by both the FBI and the Office of Inspector General for the Department of Housing and Urban Development (HUD-OIG).
Publisher’s note: it is my observation that California has proportionately done less to investigate and prosecute short sale fraud than any other state, which probably explains why short sale fraud is as common as identity theft here.
Read the original article in the Algona Upper Des Moines.
To learn more about short sale fraud, read my book “How to Commit Short Sale Fraud . . . and Get Away with It.”
September 12th, 2014 at 11:46am
The U.S. Attorney’s Office for the District of Nevada has announced that Granada Hills accountant, Carmen Denise Mosley will be reporting to federal prison on November 3, 2014. Mosley was sentenced to 57 months after being convicted by a jury on one count of conspiracy to commit bank and wire fraud and two counts of bank fraud. She was ordered by the court to pay restitution of $1.1 million to the lenders that were victimized.
The evidence presented at trial proved to the jury that Mosley, from November 2006 to November 2007, Mosley, 43 used her position as a certified public accountant (CPA) to assist loan officer Zulfiya Karimova, a Cupertino woman, California, by providing false financial documentation so that buyers could obtain mortgage loans. The misled lending institutions funded three home purchases in Las Vegas but lost over $1 million after the buyers defaulted.
Zulfiya Karimova, 33, avoided trial by pleading guilty to conspiracy to commit bank fraud and wire fraud and to bank fraud. Her sentence is unknown.
Read the original article on the FBI’s website.
September 12th, 2014 at 11:41am
Real estate agents Michael Keatts and Lillian Marquez were indicted in November 2013 by a federal grand jury in Sacramento on charges of conspiring to commit mortgage fraud and mail fraud.
Keatts and Marquez operated Colonial Home and Business Services in Stockton from 2007 through 2012. While their business should have been helping people buy and sell homes, the U.S. Attorney for the Eastern District of California alleged that they used their clients as straw buyers, set the straw buyers up in business controlled by Keatts and Marquez and applied for mortgages by submitting this and other financial information they knew not to be true.
According to this article in the Sacramento Bee, Michael Keatts and Lillian Marquez have been accused of short sale fraud, in that they helped their clients to short sale their homes to straw buyers. The lending institutions were not made aware of this arrangement and that the sellers remained in their homes and received not only the benefits of new loans with reduced mortgages but also received tax forgiveness on the gains by both the Internal Revenue Service and the California Franchise Tax Board.
September 12th, 2014 at 11:23am
An article in the OC Register tells the case of Costa Mesa resident Daniel Gallimore, who was arrested by Huntington Beach police and accused of the fraudulent sale of a house in Huntington Beach.
Somehow, Gallimore, 52, managed to convince the buyers that he was the real estate agent for the property. However, according to the police, he is not licensed as a real estate agent and had neither a connection to the property nor the authority to sell it.
Authorities aren’t speaking, but the Huntington Beach police Bunco/Forgery Unit, along with the Orange County District Attorney’s Office Major Fraud/Real Estate Unit and the United States Secret Service also executed a search warrant in Costa Mesa related to the case that turned up additional evidence.
September 12th, 2014 at 11:15am
Charles Head, 40, the former CEO of Head Financial Services, Creative Loans and other brokerage and financial companies, was sentenced by U.S. District Judge Kimberly J. Mueller to 35 years in prison for operating foreclosure rescue scams.
Instead of helping homeowners who came to him for help in avoiding foreclosure of their homes, Head substituted straw buyers on the victims’ property titles without their knowledge (title fraud). straw buyers then applied for mortgages and sucked out whatever equity existed. The victims lost their homes and suffered damage to their credit ratings.
According to prosecutors, Charles Head‘s foreclosure fraud began in Los Angeles and Orange Counties and then expanded to a nationwide operation. In all, he and his co-conspirators obtained over $90 million in loans, caused losses of over $50 million and stole the title to more than 300 homes. He was caught only because one of his victims in Sacramento contacted an FBI economic crimes agent on a complaint line.
Read the original article in the Sacramento Bee.
September 3rd, 2014 at 5:25pm
Anna Sorokina Kuzmenko, 33, a Sacramento-area woman, was found guilty of two counts of wire fraud related to mortgage fraud scheme in which she was a participant.
According to the court documents and evidence presented during the trial, she acted as a straw buyer for a house in Carmichael, applying for two loans to cover the entire purchase. She falsely claimed she was an orthodontist (she is not) earning $36,000 per month (she does not), had $42,000 in her bank account (she had very little), said she was a U.S. citizen (she is not) and never lived in the house, although she stated she would reside there.
The bank had been told the price of the home was $1 million but the seller accepted $800,000 and gave the overage back to the participants, which included Anna Kuzmenko‘s husband and other family members.
The house was ultimately foreclosed on by the bank after Ms. Kuzmenko defaulted on the mortgage.
No word on what the final (HUD-1) settlement statement looked like from escrow or how the scheme was detected.
Anna Kuzmenko was prosecuted by U.S. Attorney Benjamin B. Wagner’s Office. “Mortgage fraud cases can be very challenging, but this office has developed considerable expertise in prosecuting them,” stated U.S. Attorney Wagner. “We are pleased that the jury held Ms. Kuzmenko accountable for her crime, and we will continue our efforts to hold accountable those who enriched themselves through fraud, and who contributed to the financial meltdown that hit our communities so hard.”
Read the original article in the CelebrityExaminer.
August 29th, 2014 at 11:18am
Four people who were charged in a mortgage fraud case were acquitted at trial after defense attorneys convinced jurors that the lenders were not victims and that the loans would have been approved anyway.
It’s a huge loss for U.S. Attorney Benjamin Wagner, who is not accustomed to losing prosecutions in the U.S. Attorney’s Office for the Eastern District of California.
The defendants – Yevgenity Charikov, Vitaliy Tuzman, Nadia Talybov and Juliet Romanishin – had been accused of using straw buyers to purchase properties and then reselling them to different straw buyers at inflated prices using fraudulent loan documentation. Defense counsel had successfully argued via expert witness William Black that it was the “elite bankers” who were responsible for the mortgage crisis.
Read the original article in the Sacramento Bee.
Addendum to this posting, which I cross-posted on LinkedIn under my account:
There is a lot of “buzz” about the acquittal of 4 people of mortgage fraud in Sacramento. The successful defense was that the banks underwrote loans they knew were probably fraudulent; hence, the banks aren’t victims. This is guaranteed to be a new defense in almost every future prosecution of mortgage fraud. What is left out in this analysis is that almost all of the no doc, subprime loans were sold off to Fannie/Freddie. They banks made their money upfront from points and fees, but the GSEs and taxpayers were left with the losses.