May 23rd, 2014 at 8:37am
Allen Shay, 55, of Pasadena, an appointed member of Pasadena’s Northwest Commission and a former candidate for the Pasadena City Council, and Eddie Turner, 44, of Altadena have been arrested on suspicion of grand theft, recording false documents and perjury. Turner is a former real estate agent whose license was revoked by the California Department of Real Estate after he was convicted for battery.
Investigators said that in January 2005, Eddie Turner purchased a home on Altadena Drive in Altadena for $1.12 million, borrowing $896,000 from Countrywide Home Loans. In August 2005, detectives allege that Turner borrowed $250,000 more from Countrywide Home Loans, but doing so by falsifying employment, income and financial information, including providing a counterfeit bank statement to obtain the loans, according to Los Angeles County Sheriff’s Detective Christopher Derry.
Further, Derry claims that in March 2007 Allen Shay helped Turner secure two new loans from Countrywide for $1 million and $218,000 in order to pay off the original mortgage. The two loans were used to pay off Turner’s 2005 mortgage, he said. Turner and Shay allegedly falsified the employment, income and financial information, providing yet another counterfeit bank statement for the 2007 loans, said Detective Derry.
Both men have pleaded not guilty.
Read the original article in the Pasadena Star News.
May 23rd, 2014 at 7:52am
Joshua Clymer, pleaded guilty in U.S. District Court in Sacramento to conspiracy to commit mail and wire fraud in connection with mortgage fraud between 2006 and 2008.
Clymer, 28, was indicted in February 2012, after a federal grand jury indicted him on three counts for fraud and money laundering. While house flipping is not illegal per se, Clymer had made side payments to individuals that he did not disclose to lenders and also submitted fraudulent financial documents to lenders on behalf of buyers, many of whom later defaulted.
Clymer’s real estate license with the California Bureau of Real Estate has been in conditional suspension since 2007 for failing to meet continuing education requirements.
The case was investigated by the Butte County District Attorney’s Office, the FBI and the IRS – Criminal Investigation.
Read the original article in the Sacramento Business Journal.
May 23rd, 2014 at 7:39am
Ayman Shahid, 38, the president of Discovery Sales, was arrested and charged with conspiracy to commit bank fraud and 17 individual bank fraud counts.
Shahid, of Danville, is the seventh employee of Seeno Construction to be indicted in the case, which began in 2010 when FBI and IRS agents raided the firms Port Chicago Highway headquarters and removed boxes of evidence.
Discovery Sales is the selling company for Discovery Homes and Seeno Homes. The Seeno family has a long history of construction in the Bay Area and in the past has been fined for “environmental improprieties.”
In Shahid’s case, federal prosecutors allege that, in order to keep sales prices of Seeno homes up during the financial downturn, provided large financial incentives to unqualified homebuyers. Prosecutors further allege that the incentives were concealed from both banks and appraisers (appraisal fraud) so that they loan would be approved (loan fraud, mortgage fraud). Because many of the buyers were unable to afford the loans, more than $154 million in losses was realized by the banks when the homes were either foreclosed or sold as short sales.
Two Discovery Sales employees pleaded guilty in this case last year and have agreed to cooperate with prosecutors.
Read the original article in the Mercury News.
May 16th, 2014 at 9:31am
Jason Hidalgo and Brian Duggan have done the public a great service by the extensive article they recently published in the Reno Gazette Journal concerning short sale fraud and the devastating consequences it has had for homeowners in Las Vegas.
Entitled Sold Short, the writers did an extensive analysis into the short sale market in Las Vegas, establishing not only how a legitimate short sale works but what profiteering real estate agents do to take advantage of the homeowners in distress but also to suck every drop of equity from the property, which should rightfully belong to either the bank, or perhaps, partially to the homeowner.
Note: I am unsympathetic to the notion that banks are victims in short sale fraud. Proper auditing, checks-and-balances and due diligence can stop most short sale fraud in its tracks, making the banks incompetent and guilty of failing to protect their assets and investors but certainly not victims. And that doesn’t take into consideration the banks that knowingly approve fraudulent short sales.
Do I know of such cases? Of course I do – you bank with them.
I also know that law enforcement and prosecutors have completely and utterly failed to protect the public from this pernicious crime. As a result, short sale fraud flourishes, for which I again place the blame on law enforcement and prosecutors. In case anyone is asking, that would be California Attorney General Kamala Harris (who has prosecuted ZERO short sale frauds to my knowledge) and the various U.S. Attorneys General Offices in California, who among them have prosecuted at most three or four such cases. You can read a more in-depth analysis of short sale fraud in my e-book, How to Commit Short Sale Fraud . . . and Get Away with It.
May 16th, 2014 at 8:55am
Kelly Gearhart, 53, once a big-shot real estate developer and an Atascadero Citizen of the Year, has pleaded guilty in federal court in Los Angeles to fraud and money laundering charges after the U.S. Attorney’s Office in Los Angeles accused him of stealing upwards $20 million from his investors. No word where the $20 million is.
Gearhart currently lives in Wadsworth, Ohio. He accepted a plea agreement with prosecutors that required him to plead guilty to two counts of wire fraud and one count of money laundering and will possibly result in him receiving a sentence of 11 years in federal when he is sentenced this December.
Gearhart’s deal gives prosecutors the green light to pursue restitution for the victims/investors of the Vista del Hombre project. But Thom Mrozek, Public Affairs Officer for the U.S. Attorney’s Office says it is unclear whether any of those $20 million will be recovered and returned to the victims.
Another player in this Central Coast real estate investment fraud was Atascadero hard-money lender Jay Hurst Miller, a colleague of Kelly Gearhart‘s. Miller has already pleaded guilty to fraud and money laundering and awaits his sentence, to be imposed in September.
Miller previously pleaded guilty to fraud and money laundering charges and is scheduled for sentencing in September.
Click on Kelly Gearhart plea agreement to read his allocution.
Read the original article in the SLO Tribune.
Note: There are many postings about the Kelly Gearhart – Jay Hurst Miller case that can be found by using the search tool on the left side of the California Real Estate Fraud Report.
May 16th, 2014 at 8:16am
Monique Morris, 47, was charged with three counts of grand theft by the Santa Clara County District Attorney’s Office after its Real Estate Fraud unit investigated her for rent fraud.
In March and April of this year, Morris is alleged to have posted her condo or rooms in her condo for rent on Craigslist. According to the DA’s office, she showed three couples her property, located at 928 Catkin Court in San Jose, then had them sign leases and collected deposits from them.
Read the original article in the Mercury News.
May 16th, 2014 at 8:02am
Jeriel Salinas, one of the defendants in the massive Crisp and Cole real estate fraud and mortgage fraud prosecution, has been sentenced to 19 months in prison. He pleaded guilty in fall 2013 to one count of conspiracy to commit mail fraud, wire fraud and bank fraud.
Salinas admitted purchasing at least six properties in Bakersfield and Shaver Lake, posing as a straw buyer. He was also a real estate agent licensed through the California Bureau of Real Estate, which meant he was paid commissions on some of the fraudulent sales.
Read the original article in Bakersfield Now.
May 16th, 2014 at 7:54am
The pro-active counties of Oakland and Macomb are the first and only counties in the nation to add a Super Index to their property record searches, making it easier to both prevent and detect real estate fraud.
The Super Index is powered by Google and Xerox and contains up to 12 million pages of optically-scanned property records going back as far as 1964. It allows the user to search records using a homeowner’s name, an address or by name of the notary. The latter is important because some fraudulent deeds have been filed with the cooperation of either a dishonest notary (notary fraud) or one who was duped by the person filing the deed (title fraud).
Some homes are stolen through County Clerks’ offices by people who pay a portion of back taxes on a property with delinquent taxes. The person then places a lien on the property, files a phony deed and then either rents it out or sells it, all without the knowledge of the lawful owner.
Read the original article in the Daily Tribune.
May 9th, 2014 at 8:41am
Carmen Denise Mosley, 43, a Granada Hills CPA was convicted of conspiracy to commit bank fraud and wire fraud by a jury, according to Daniel G. Bogden, U.S. Attorney for the District of Nevada.
Prosecutors alleged that beginning in 2006, Mosley and Zulfiya Karimova, a loan officer from Cupertino, provided false information that was entered into the loan applications of home buyers (mortgage fraud). The two women allegedly profited from proceeds they received following the close of the home sales. Karimova, who previously pleaded guilty to bank fraud, conspiracy to commit bank fraud and wire fraud, provided the fraudulent loan information and Mosley created fraudulent tax documents.
Read the original article in the Post-Periodical (Western San Fernando Valley News).
May 9th, 2014 at 8:27am
Bijan Madjlessi, 58, a developer from the rural community of Strawberry, was found dead in a car wreck on Mount Tamalpais.
Madjlessi was facing federal and state fraud charges with respect to his Santa Rosa project known as Park Lane Villas East. He had defaulted on his $30 million loan but in April was arrested and charged with conspiring with others to re-purchase his loan through the use of a straw buyer.
In addition to Bijan Madjlessi, three other men were indicted: David Lonich, 59, a Santa Rosa lawyer; and two former executives at Sonoma Valley Bank, Sean Cutting, 44, from Sonoma; and Brian Melland, 45, from Santa Rosa.
Read the original article in the Marin Independent Journal.