California Real Estate Fraud Report

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$100 Million Mortgage Fraud Costs Laguna Hills Man Only One Year of Prison Time

September 18th, 2013 at 4:27pm

The OC Weekly blog reports that John Allen, an unlicensed mortgage loan processor from Laguna Hills, was sentenced to one year in federal prison for his role in a $100 million mortgage fraud scam.

Allen pleaded guilty earlier to wire fraud, money laundering and conspiracy and was sentenced on September 16 in San Diego.

Four other people were sentenced for their roles in the same mortgage fraud, which entailed recruiting straw buyers, creating phony loan and other supporting financial documents in order to obtain mortgages. Most of the properties were later foreclosed, but only after the conspirators “earned” $15 million due to their crimes.

One year in prison in exchange for a piece of $15 million. Some might consider that a cost-effective crime.

The original indictments were reported in 2012 in the California Real Estate Fraud Report.

Bakersfield Man Gets 10-Year Sentence for Mortgage Fraud

September 18th, 2013 at 4:07pm

Eric Ray Hernandez, 37, of Bakersfield, has been sentenced to federal prison for 10 years and 10 months after admitting the role he played in a mortgage fraud that cost lenders over $6 million.

U.S. Attorney Benjamin Wagner of the Eastern District of California said that Hernandez and others conspired to submit loan applications and supporting financial documentation to lenders containing false information (loan fraud, mortgage fraud). The results of his efforts led lenders to underwrite the loans causing the losses.

The judge, United States District Judge Anthony W. Ishii, ordered Eric Ray Hernandez to pay restitution of $6,087,541 to the victims of his crimes along with a forfeiture judgment of $6,037,541 to the United States.

The original information can be found in the press release for the US Attorney’s Office.

 

Northern California Woman Arrested in Mortgage Rescue Scam

September 18th, 2013 at 3:45pm

The wife of Alan Tikal, a man awaiting trial for running a mortgage rescue fraud scheme, has been arrested for continuing the scam after her husband’s arrest.

Tamara Tikal, of Brentwood (in Northern California) faces charges as a result of evidence seized by authorities from the Las Vegas office of KATN Trust, Alan Tikal’s business. So has another associate, Jan Kornfeld.

Federal prosecutors said Alan Tikal took in over $3 million from his alleged victims, using a program which offered homeowners in distress lower mortgages by (somehow) covering their current, more expensive mortgages.

 Read the original article in Bay Area News. You can also read the more detailed press release of the allegations by the prosecutor, the U.S. Attorney’s Office for the Eastern District of California.

Illinois Attorney General Lisa Madigan Sues Safeguard Properties, Contractor to Banks

September 12th, 2013 at 9:16pm

An article published in the New York Times paints a disturbing picture of how the major banks may be using “property preservation” companies to bully homeowners in distress, damage their properties and even chase them out of their homes.

Lisa Madigan, the Illinois Attorney General, is the first AG to take on property management companies hired by JP Morgan Chase, Bank of America, Citibank and other lenders. On September 10, she sued Cleveland-based Safeguard Properties, charging that the firm “unlawfully dispossessed legal residents of their homes by breaking into occupied houses, locking the occupants out of their homes, removing the occupants’ personal property, and shutting off the utilities in the home, often in the face of clear evidence that the property remains legally occupied.”  In stating that her office had received over 400 complaints about Safeguard Properties, Madigan’s complaint said that “Safeguard has misrepresented to homeowners and tenants that they are no longer entitled to live in their homes, when, in fact, the occupants are entitled to remain in their homes.”

In one example cited by the New York Times, homeowner Barry Tatum arrived at his house last December, only to find that both his front and back doors had been literally torn from their hinges, leaving his home and personal property exposed to the freezing temperatures. Tatum’s lender was Bank of America and Safeguard Properties was the management firm hired to “preserve” his property. Safeguard eventually replaced Mr. Tatum’s doors.

Illinois is not the only state where complaints about Safeguard have been reported; legal aid firms in California, Nevada, Florida, Michigan, North Carolina, Pennsylvania and New York echo those filed with the Illinois Attorney General’s Office. Some homeowners have filed their own lawsuits against Safeguard, accusing the company of trying to forcibly drive them out of their homes by damaging their possessions, changing locks and shutting off electricity.

Attorneys for homeowners in foreclosure, such as Adam Taub, say there is a financial incentive for property management firms to declare properties vacant because they make more money.

The core of the $26 billion National Mortgage Settlement by the attorneys general for 49 states was that the banks employed outside law firms to “robosign” foreclosures against homeowners without vetting the documentation. Under the settlment, banks are now required to police their third-party vendors and subcontractors.

Citing the 400 complaints her office has received, AG Madigan responded that the banks have “failed to supervise these firms.”

Read another article about Safeguard’s alleged business practices in the Plain Dealer.

Ripoff Report contains 38 complaints against Safeguard Properties across numerous states.

Chatsworth Man Convicted in Apartment Complex Fraud

September 12th, 2013 at 8:32pm

Laureano Labasay, 42, of Chatsworth, was convicted on Sept. 11 after being charged with falsely claiming he owned an apartment complex in Oxnard and trying to collect rent from its tenants.

The Ventura County District Attorney’s Office said in a press release that Labasay was convicted on three counts of recording a false document and one count of forgery.

The first count occurred when Labasay record a fraudulent transfer of title for the 32-unit building and then filed it with the office of the Ventura County Clerk and Recorder (title fraud) back in 2011.

Amazingly, after he was arrested and out on bail, Labasay filed another two documents with the Recorder.

Read the original article in the Northridge-Chatsworth Patch

OneWest Bank Coughs Out 7-Figure Settlement for Dual-Tracking in San Luis Obispo Foreclosure Lawsuit

September 12th, 2013 at 4:27pm

A San Luis Obispo County couple who sued OneWest Bank, IndyMac Mortgage Services, U.S. Bank and GSR Loan Mortgage Trust has received a million-dollar-plus settlement and title to two of their houses that were foreclosed.

The case brought by Greg Rigali and Irene Rigali of Shell Beach could embolden other homeowners who have lost their homes to foreclosure to sue banks for the common practice of “dual tracking.” Dual tracking occurs when banks pursue foreclosure against homeowners in default while at the same time giving those homeowners the false belief they are working with them.

At the time their two homes were foreclosed the Rigalis thought they were negotiating with OneWest Bank to obtain mortgage modifications.

Rik Tozzi, an Alabama attorney, arrived in San Luis Obispo last May for a hearing on a motion to grant summary judgment to OneWest Bank. Instead of walking away with a win for his client, he listened as San Luis Obispo Superior Court Judge Charles S. Crandall said that the Rigalis had shown enough evidence to substantiate their claims of fraud, wrongful foreclosure, unfair business practices, quiet title, and intentional infliction of emotional distress to allow their case to go before a jury trial.

OneWest, which quickly settled, had picked up the original loan modification negotiations begun by IndyMac before it collapsed and was acquired by Steve Mnuchin and his investors for a steal at $1.55 billion. IndyMac had invited the Rigalis to modify the mortgages on both homes, including suspending or reducing their payments. OneWest sent a letter that included the following solicitation:

“Because you are a valued customer, we want to help you stay in your home. Reduce your monthly payment of principal and interest and bring your loan current.”  And “we propose to permanently modify your mortgage, bring past-due payments current, and provide you with an affordable monthly payment.”

But while the Rigalis were making payments in accordance with a June 2009 agreement with OneWest Bank, another division in the bank was beginning foreclosure, hence the dual tracking.

In July 2009, OneWest Bank assigned the Rigali’s trust deed to U.S. Bank, which foreclosed on their beach house property two months later, in September. The Rigalis then sued.

Greg and Irene Rigali were represented by attorneys Maria L. Hutkin and Jude J. Basile.

Read the original article in CalCoastNews.

Former Modesto Real Estate Agent Pleads No Contest in Newman Case

September 12th, 2013 at 3:57pm

A Modesto real estate agent has avoided prosecution on felony charges of grand theft, forgery and attempted perjury by pleading no contest to a misdemeanor count of making false or misleading statements to a family who thought they were buying a home in Newman.

Prosecutors alleged that defendant Erica Burdg told Carlos Gonzales that he and his family were purchasing a three-bedroom, two-bathroom house in Newman, California and took money from them. What occurred instead was that her husband purchased the home and counted the monthly payments from Gonzales as rental payments.

Although the prosecutors dropped all of the felony charges, Carlos Gonzales said he opposed the plea deal and told the judge he preferred the case by tried before a jury.

“(Burdg) has said nothing but lies. They falsified my signature seven times, and yet they still tried to call me a liar.”

After being sentenced, Burdg called the allegations against her “lies” in the courtroom hallway.

In the courtroom, Michael Linn, who is representing the Gonzales family in a civil case against Erica Burdg, told the judge that Burdg had written two phony contracts to commit loan fraud and caused $200,000 in losses for the Gonzales family. He further alleged that she forged Gonzales’ signature on documents, including purchase and rental agreements.

Read the original article in the Modesto Bee.

You can also find three earlier postings on the California Real Estate Fraud Report about the dispute between Erica Burdg and the Gonzales family.

Newport Man Resentenced for Defrauding HUD

September 12th, 2013 at 3:40pm

A Newport Coast man who was sentenced in 2010 for mortgage fraud but appealed was resentenced to five years in prison and ordered to pay about $535,000 in restitution to lenders.

Lorenzo Espinoza, 46, originally pleaded guilty in 2006 in U.S. District Court in downtown Los Angeles to conspiracy to defraud the U.S. Department of Housing and Urban Development, bankruptcy fraud, money laundering and tax evasion.  He had been accused of fraudulently obtaining mortgages and causing more the $2.7 million in losses to both HUD and commercial lenders.

Espinoza’s appeal before the appellate panel was unsuccessful, because the panel ordered a new sentence after finding the procedural error in U.S. District Judge Stephen V. Wilson’s calculations were not connected to specific facts in the case. Judge Wilson’s ruling rested on the defendant’s “extreme greed” to justify Espinoza’s prison term, the appelate court determined.

At the resentencing, Judge Wilson indicated his previous calculations had been “incomplete” and tied the new five-year sentence to Espinoza’s role as an “organizer or supervisor” of the mortgage fraud, the length of the fraud and the financial loss to the government.

“Whether he was the top guy or second to the top, he organized and directed others,” the judge said, adding that Espinoza “got the lion’s share of the profits.”

According to prosecutors, Espinoza admitted that he was the puppetmaster in the conspiracy to defraud HUD and the commercial lenders, after previously claiming his business “helped” people buy homes.

More about Lorenzo Espinoza can be found by click on this link for the posting in April 2010 in the California Real Estate Fraud Report.

Read the original article in the Fountain Valley Patch.

Pacific Palisades Man Sentenced for Mortgage Fraud, Investment Fraud

September 12th, 2013 at 3:25pm

The U.S. Attorney’s Office for the Northern District of California has published the following press release:

Robert Hans Schenk was sentenced on September 6, 2013, to four years in prison for wire fraud, United States Attorney Melinda Haag announced.

Schenk pleaded guilty on September 2, 2011, to one count of conspiracy to commit wire fraud and eight counts of wire fraud. In his plea agreement, Schenk admitted that he fraudulently induced numerous individuals to invest millions of dollars in his businesses, Griffin Digital Services and Smartworld Solutions. Schenk admitted to using much of those funds to pay his family’s personal expenses. In addition to this investment fraud scheme, Schenk also admitted to using the identity of one of the investors without his knowledge and fraudulently obtained a $1.7 million mortgage refinancing loan in that investor’s name. The mortgage refinancing loan was used for the home in which Schenk and his family lived in Pacific Palisades, California.

Schenk, 52, was arrested on January 4, 2011, and has been in federal custody since that date. He was indicted by a federal grand jury on January 11, 2011. He was charged in an Indictment with one count of conspiracy to commit wire fraud, eight counts of wire fraud, and two counts of aggravated identity theft.

The sentence was handed down by the Honorable Susan Illston, U.S. District Judge, following a guilty plea to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and eight counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Judge Illston also sentenced the defendant to a three-year period of supervised release and ordered him to pay a total of approximately $4.5 million in restitution to various individual victims and to the mortgage lender that suffered a loss with respect to the $1.7 million mortgage refinancing loan.

Kyle F. Waldinger is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Monterey County Judge Orders Money Returned to Woman in Financial Elder Abuse Case

September 12th, 2013 at 3:17pm

Judge Lydia M. Villarreal, a Monterey County judge who heard the case of an elderly woman who lost her assets due to elder financial abuse by another woman, has ruled that the perpetrator must return more than half a million dollars to the victim.

Renee Travis-Johnson befriended Fujiko Verity, 87, of Seaside in 2006. Travis-Johnson took Verity to several attorneys with the purpose of gaining control of her assets and bank accounts. Within months she had sold Verity’s home to herself for $1,000, which she then used to leverage a number of cash loans, allowing the home to go into foreclosure and leaving the elderly woman without means to care for herself.

In 2008, the Monterey County Public Guardian created a conservatorship for Fujiko Verity and initiated efforts to have her money returned to her.

“Of all the government functions we do, protection of the vulnerable and elderly are at the top of the list,” said Monterey County Deputy County Counsels Cathleen Giovannini and Irv Grant, who were co-counsels in the case. “This decision sends a message that the county is serious about going after those who prey on the elderly in our communities.”

Monterey County recently created the Financial Abuse Specialist Team (FAST), a group of County employees and private experts who can work quickly to respond to complex financial abuse cases. There are FAST teams across the state of California to protect seniors, including one that meets monthly in Ventura County.

For more information about the Public Guardian program, call 831-784-5999.

 

© Copyright 2007-2015 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.

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