California Real Estate Fraud Report

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Northern California Man Charged in Real Estate Investment Fraud Case

April 17th, 2013 at 12:53pm

A man Contra Costa prosecutor Ken McCormick has referred to as a “national expert” in real estate has been charged by the Contra Costa County District Attorney’s Office of ripping off a New York family of over $1 million.

The man, Ken Beasley, 67, is also a resident of New York but but the three felonies with which he has been charged occurred in Danville. Beasley was charged with two felony counts of embezzlement and one enhanced charge accusing him of causing excessive loss.

The New York family gave Beasley, who has published four books about real estate and who has appeared on Fox News Channel as a real estate “guru,” $1,140 million back in 2006 to purchase three investment properties in Las Vegas, Nevada. According to prosecutors, Beasley did not purchase the properties (real estate investment fraud) but gave the victim fraudulent documents  (title fraud) and sent him monthly rental payments to keep the fraud going. The scam was only discovered when several years later, the family attorney did a title search on the properties while setting up a will and saw they were not in the name of his client.

Read the original article in the Silicon Valley Mercury News.

Update: Ken Beasley is quoted in a subsequent article in the Silcon Valley Mercury News as denying the charges.

Van Nuys Woman Charged with Forging, Filing Fraudulent Title Documents

April 9th, 2013 at 6:50pm

The Los Angeles District Attorney’s Office filed 36 felony counts against Anna Moskovyan related to real estate fraud on March 31.

In the complaint, Moskovyan, 30, is accused of forging signatures on grant deeds  (title fraud) to illegally establish ownership of homes she had identified as having tax liens against them by the L.A. County Treasurer and Tax Collector’s Office. In order to receive the excess proceeds from when the properties were auctioned (foreclosed),  Moskovyan then filed claims with the tax agency.

Moskovyan is also accused of two other schemes. The first is that she allegedly recorded fraudulent Mechanic’s Liens against properties which were about to be foreclosed on. Financial institutions then paid her to remove “her” liens so that the properties could be sold.

The last scheme alleged is that Moskovyan transferred two properties to herself by filing fraudulent grant deeds (title fraud).

Read the original article by the L.A. County Department of Consumer Affairs and the Press Advisory from the Los Angeles County Sheriff’s Department.

Note: per the North Hollywood – Toluca Lake Patch, Anna Moskovyan remains in jail in lieu of a $1.24 million bail. The 100 or more properties on which she allegedly recorded fraudulent mechanic’s liens are located in North Hollywood, Valley Village, Altadena, Canoga Park, Canyon Country, Cerritos, Diamond Bar, Downey, Hacienda Heights, La Canada, La Mirada, La Puente, Lakewood, North Hills, Northridge, Monterey Park, and Valencia.

Seven Persons Indicted for Mortgage Fraud Scheme

April 4th, 2013 at 9:41am

Benjamin Wagner, U.S. attorney for the Eastern District of California, announced that a federal grand jury has returned indictments against seven men and women, who have been charged with mail fraud, wire fraud and making false statements involving the purchase of at least 23 homes in a mortgage fraud conspiracy.

Readers of the California Real Estate Fraud Report recognize that Wagner is by far the most aggressive federal prosecutor for his district in California.

The defendants are Jannice Riddick, aka Jannice Frazier, 30, of Sacramento; Aleksandr Kovalev, 50, of Rocklin; Arthur Chang Menefee, 42, of Stockton; Adil Qayyum, 31, of Rosele, Ill.; Elsie Pamela Fuller, 38, of Richmond; Leona Yeargin, 46, of San Pablo; and Florence Francisco, 62, of Houston, Texas.

Elsie Pamela Fuller and Leona Yeargin were additionally charged with aggravated identify theft because they allegedly used stolen identification to purchase one or more of the homes.

Read the original article in the Sacramento Bee.


Man Killed in Washington State Stand-off Wanted in Sacramento for Real Estate Fraud

April 4th, 2013 at 9:21am

The Sacramento Bee reported that a local man who was killed in a showdown with Washington State police was the subject of a 2004 warrant from the Sacramento County District Attorney’s Office.

The warrant from the DA’s office charged Sacramento residents Nina and Rick Marlowe of Sacramento with filing a false or forged instrument, theft by false pretenses and identity theft. Although the warrant had been active for eight years, it wasn’t until very recently that the investigation led authorities to a home in Hoquiam, Washington. Authorities arrested a woman but the man showed fraudulent identification. When police returned to arrest the man, whom they believed to be Rick Marlow, he shot Police Sgt. Jeff Salstrom.

The warrant was issued after investigators believe the Marlowe’s forged the name of a woman who co-owned a piece of property (title fraud) so that they could sell it (real estate fraud).



Hendrix Montecastro, Helen Pedrino Convicted in $142 Million Ponzi Scheme in Riverside

April 1st, 2013 at 12:30pm

Hendrix Montecastro, 40, of Maryland, was convicted on March 25 of 304 counts in a complex real estate fraud case that prosecutors say cost the victims $142 million in total. According to Riverside County Chief Deputy District Attorney Vicki Hightower, the jury convicted Montecastro on charges that included grand theft, destruction of evidence and felony fraud against 26 of 27 named victims — with asset losses totaling $3.6 millions.

He faces a prison sentence of more than 100 years.

Helen Pedrino, 61, of Murrieta – the mother of Hendrix Montecastro, was found guilty of 54 felonies based on her recruitment of five victim investors. When she is sentenced, she could spend up to 30 years in prison.

James Benjamin Duncan, who orchestrated the fraud, testified against Montecastro and Pedrino after making a deal with prosecutors. He is going to be sentenced for his crimes this month, along with Maurice McLeod, who also played a prominent role. A third man, Christopher Oetting, hanged himself on February 16, 2010 in his home, after admitting he to charges of conspiracy, money laundering and multiple counts of filing fraudulent tax returns.

The remaining defendants: Charlie Choi, Cindy Kelly and Thuan Nhan Du pleaded guilty to selling securities without a license and received probation.

As with all Ponzi schemes, this one worked well because friends and relatives convinced each other that the defendants’ “real estate investment” program was profitable. Good judgment was suspended and people refinanced their homes to draw out equity, cashed in their retirement plants and charged up their credit cards. Almost all of the victims were completely ruined as no monies have been recovered.

In a nutshell, the real estate investment fraud worked by the use of two companies set up by the defendants: Jovane Investments and Stonewood Consulting. The investors placed their money into Jovane, a shell company. The investors paid the seller the asking price or close to it and Jovane Investments funded the loans, but at 20-25% more than the appraised value.

The investors were unaware that Stonewood would locate the properties, also arrange financing and do so also at inflated values.

To understand the depth of this real estate fraud, refer to the article published in the Press Enterprise.

Part of Hendrix Montecastro’s defense was that he was a victim of James Benjamin Duncan too, but Prosecutor Hightower showed that Montecastro was anything but poor, spending $500,000 just before the Ponzi scheme collapsed on a non-profit called the Biocybernaut Institute.

Fannie Mae Sales Associate Indicted for Demanding Kickbacks for REO Referrals

March 27th, 2013 at 4:50pm

A former Fannie Mae employee who demanded kickbacks in exchange for handing out REO listings (REO fraud) got stung when a real estate broker informed the feds and participated in taking down the man.

Armando Granillo, 44, who worked out of Fannie Mae’s Irvine, California office as an REO specialist, has been indicted on three counts of wire fraud. Granillo’s job was to review applications from prospective listing agents for Fannie Mae foreclosures.

The honest broker is located in Tucson, Arizona. Granillo travelled to Phoenix to meet the broker in anticipation of a 20% “referral fee” for himself, which amounted to $11,200 of the broker’s legitimate commissions. During the meeting, which was recorded by the investigators from the Federal Housing Finance Agency’s Office of Inspector General, Granillo is alleged to have stated that the kickbacks were “a natural part of business.”

The U.S. Attorney’s Office for the Central District of California is the prosecuting agency for this case. Armando Granillo is out on bail pending his arraignment. Read a copy of their press release by clicking here.

This prosecution for REO fraud is a first . . . and just the tip of the iceberg for this type of real estate fraud. Any real estate agent who has sold REO properties knows that kickbacks to bank employees occurs. Some of the worst REO listing agents get listing after listing and yet do a poor job of marketing, showing and maintaining bank-owned properties, even ones where their relatives get the trash-out and remodeling contracts from the banks. They rarely, if ever, respond to or return phone calls from buyers’ agents. Ever wonder why that is?

The good news is that REO listings are significantly down  – 67%  according to my research – in certain sections of Los Angeles. So REO fraud is being extinguished as banks have come to the astounding conclusion after seven long years that it makes better business sense to do short sales or provide creative financing terms to keep borrowers in their homes than to foreclose.

Read the original article in Inman News.

Irvine Man Indicted for Mortgage Fraud Using Straw Buyers

March 27th, 2013 at 10:04am

Alexander Romaniolis, 48, of Irvine, was arrested in a mortgage fraud case involving residential properties.

Romaniolis was arrested in Huntington Beach after a federal grand jury in Sacramento returned a three-count indictment for mail fraud. The indictment charges that he recruited five straw buyers to purchase the residential properties in Rocklin, Roseville and San Clemente and used his position as a real estate licensee to help them falsify their income, employment and other financial information to the lenders (loan fraud, mortgage fraud).

The value of the loans was over $5 million and the losses due to the resulting foreclosures amounted to more than $2 million.

The case was jointly investigated by the California Attorney General’s Mortgage Fraud Strike Force and the FBI.

Read the original article in the Sacramento Bee and the Sacramento Business Journal.

Vallejo Woman Convicted of Bank Fraud in Father’s Estate

March 27th, 2013 at 9:51am

Myra Holmes, a 55-year old Vallejo woman, was convicted on March 21 by a federal grand jury of concealing assets from her father’s bankruptcy estate in order to pay off her personal debts, which included gambling and shopping.

Holmes’ case was heard in front of U.S. District Court Judge Edward J. Davila in San Jose. Her convictions were for bankruptcy fraud, bank fraud and making false statements to a bank; she was acquitted on two other charges.

Prosecutors said Holmes’ father had declared bankruptcy but that she had hidden the fact that she had received his half-interest of ownership in the Vallejo property after he died. Without the knowledge or permission of the bankruptcy court, she then refinanced the home, draining the equity of approximately $147,000 – none of which has been repaid.

The judge could sentence Myra Holmes to 35 years in prison and fine her $1 million.

Read the original article in the Times-Herald.

Tracy Man Pleads Guilty in Mortgage Fraud Case

March 27th, 2013 at 9:25am

Reginald Dodson Sr., 42, of Tracy, California, pleaded guily on Mar 18  to mail fraud charges for his role in a mortgage fraud conspiracy.

Dodson was a loan office for W.B. Financial and assisted the real estate agents in getting financing for three properties, for which kickbacks were received without the knowledge of the lending institutions.

According to prosecutors, Sacramento real estate agent Buena Marshall allegedly used Temika Reed, 32 of Bay Point, to act as a straw buyer to purchase seven properties. Another woman, Suisun City real estate agent Deborah Loudermilk, 55, was an agent on two of the real estate sales.

The scheme involved inflating the sale prices of the properties (appraisal fraud), using 100% percent financing (never a bright idea for lenders), with the extra money being allocated supposedly as cash back to the buyer (Reed).

Read the original article in the Stockton Record.

Judge Throws the Book at Defendant Who Was Part of Rincon Hill Gang Real Estate Fraud

March 20th, 2013 at 9:09am

One of the principal defendants in the real estate fraud that almost cost a woman her multi-million dollar condominium in San Francisco, is going to to prison for a long time, thanks to the jury that convicted him and the judge who pronounced his sentence.

Jay Shah, 48, was convicted last September of more than a dozen felony charges, along with former tennis instructor Winston Lum. They and others attempted to steal the luxury condo belonging to Shirley Hwang located at One Rincon Hill. Hwang herself discovered the scam when she was mistakenly sent title and other documents sent to her other address and alerted authorities immediately.

San Francisco Superior Court Judge Charlene Kiesselbach prounounced a sentence of 20 years on Jay Shah and further ordered him to pay $14.1 million – double the amount purportedly stolen.

San Francisco prosecutors, including Assistant District Attorney Sandip Patel, said Shah and Lum conspired with others to create fraudulent real estate documents (title fraud) in order to transfer expensive properties in the names of co-conspirators. They would then drain all of the equity from the properties by taking out loans (loan fraud, mortgage fraud) and deposit it through their shell companies (money laundering).

Another of the co-defendants in this case was Kaushal Niroula, who was convicted in this scam as well as the murder of Clifford Lambert. Both he and defrocked attorney David Replogle are serving life sentences for that crime, after both were convicted.

Read the original article in and the San Francisco Examiner.

There are also many postings on the California Real Estate Fraud Report about the inception of this crime as well as the trials of David Replogle and Kaushal Niroula, which you can locate by using the search tool on the left side of the page.

© Copyright 2007-2014 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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