California Real Estate Fraud Report

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Two Flee to Israel after Indictment for Loan Fraud

February 5th, 2014 at 9:22am

A good way to look guilty is to flee, especially after being charged for a second time with bank fraud.

Los Angeles residents Aviv Mizrahi, 53, and Aryeh Greenes, 58, have both fled to Israel after being indicted by a federal grand jury in connection with a bank fraud amounting to $33 million. The indictments allege that the pair altered financial records in order to receive very large lines of credit, costing lenders $33 million. They face 34 counts that include bank fraud and making false statements on loan applications (loan fraud, mortgage fraud).

This is Mizrahi’s second time at bat with bank fraud: in 2012 he was charged with the same crime, fled to Israel and changed his name to Aviv Shoham Schwartz.

According to the Jewish Voice, Greenes was also a rabbi.

If they are prosecuted and convicted, both men face prison sentences of biblical proportions: 1,020 years for Mizrahi and 330 years for Greenes.

Read the original articles in the Jewish Voice and  SF Gate.

Modesto Real Estate Broker Sentenced to 10 Years for Mortgage Fraud, Elder Financial Fraud

February 5th, 2014 at 9:08am

A real estate broker who is a senior himself has been sentenced to 10 years in federal prison for operating a unique mortgage fraud business that ran for 11 years and targeted elderly homeowners (elder financial abuse). The sentence was imposed by  Senior U.S. District Judge Anthony W. Ishii.

James Lee Lankford, 74, ran Century 21-Apollo Realty in Modesto.  According to United States Attorney Benjamin B. Wagner, Lankford fraudulent induced the seniors to both sell their homes to him and to provide seller-backed financed. Unknown to the sellers, Lankford then applied to lenders and received financing to purchase the same properties (loan fraud, mortgage fraud). Those lenders didn’t know that the homes had already been seller-financed.

There is much more to this complex scheme, which ultimately cost both the home sellers and lenders almost $10 million.

Jon Vance McDade, 49, aka Jon Vance Lankford, was James Lee Lankford‘s co-defendant. He has already been sentenced to on year of home detention for his role in the mortgage fraud, along with five years of supervised release.

There are previous posts in the California Real Estate Fraud Report about James Lee Lankford.

Read the original article in more detail about Lankford’s crimes and sentencing in this FBI press release.


Elk Grove Man Convicted in Real Estate Investment Fraud

January 30th, 2014 at 6:40pm

The man known as a “closer” among his fellow defendants was found guilty by a federal jury today a real estate investment fraud scheme that cost investors almost $37 million.

Christopher Jackson, 46, was part of a company known as Diversified Management Consultants, or DMC. Court documents indicated that between 2003 and 2009, DMC operated purportedly to help people save their homes from being foreclosed and also was a real estate investment company. Jackson’s company, Genesis Innovations, induced the 80 or so investors it recruited to invest over $10 million, whether from savings, IRAs or cash-out loans against their residential mortgages.

As with many failed real estate investments, some of the money was returned to earlier investors and other money was used to finance expensive cars, vacations and other luxury items. In Jackson’s case, only about 25% was actually spent on developing real estate.

U.S. District Judge Troy L. Nunley ordered Jackson remanded into custody immediately after the jury’s verdict. Jackson is to be sentenced April 10.

Jackson’s co-defendants, Michael Bolden, 60; Victor Alvarado, 52; Nicholo Arceo, 40; Erica Arceo, 45; and Garry Bradford, 65, all of Sacramento, previously pleaded guilty to charges of conspiracy, wire fraud and false statements and are waiting to be sentenced.

Read the original article in the Sacramento Bee.



Irvine Man Pleads Guilty to Mortgage Fraud in Sacramento-area Homes

January 30th, 2014 at 9:41am

An Irvine man faces up to 30 years in federal prison and a $1 million fine after pleading guilty to a federal grand jury indictment accusing him of mortgage fraud.

Alexander Romaniolis, 48, entered his plea to the mail-fraud charges, according to U.S. Attorney Benjamin B. Wagner.

The indictment alleged that Romaniolis provided lenders with false information about the financial status and assets of straw buyers in order to acquire eight homes in Roseville and Rocklin. All the homes were later foreclosed, causing losses to the lenders of over $2 million.

It is not know if the U.S. Attorney prosecuted any of the straw buyers.

Read the original article in the OC Weekly.

Attorneys and Others Arrested in Fresno Adverse Possession Scheme

January 30th, 2014 at 9:30am

According to a press release by the California Department of Justice, five individuals were arrested in mid-January and charged with allegedly running a statewide housing scheme by using adverse possession laws to fraudulently take control of at least 23 homes in nine counties,  Fresno, Kern, Los Angeles, Madera, Merced, Santa Barbara, San Mateo, Sonoma and Tulare.The

Sandra Elaine Barton, 30, Christopher Spencer Barton, 31, Daniel Paul Vedenoff, 29, Sheldon W. Feigel, 50, and Craig Merrill Mortensen, 60, all of Fresno, were arrested and charged with 288 felony counts including perjury, filing false court records and preparing false evidence. A sixth defendant, Cambria Lisa Barton, 21, turned herself in to authorities last week and entered a general time waiver.

Mortensen and Feigel are attorneys. According to the filing by the AG’s office, the non-attorneys were alleged to have identified abandoned homes and then filed for adverse possession with the courts in order to obtain title, after which the property would be sold or rented.

Under California law (Code of Civil Procedure 325), an individual can claim adverse possession of real property if he or she has occupied or claimed it continuously for at least five years and paid property taxes for that period of time, among other requirements.

The scheme unraveled when Nancy Zelepsky, the actual owner of a home in Santa Barbara County, contacted a title company to see if there were any liens against her property before applying for a home equity loan in 2010. The title company informed her that Sandra Barton was listed as the deed holder that same year and that the documents had been filed by Craig Mortensen.

Zelepsky received assistance from the Legal Aid Foundation of Santa Barbara County and her property was restored to her after the court found that Sandra Barton’s claim was fraudulent. The court then contacted the California State Bar regarding Craig Mortensen and the California Attorney General’s office opened its own investigation in June 2011.

If found guilty, the defendants all face long prison sentences.

The Attorney General’s Office was assisted in this case by the State Bar of California, Santa Barbara County District Attorney’s Office, Kern County Sheriff’s Department, Clovis Police Department and Fresno Police Department.

Following his arrest, Sheldon Feigel’s attorney held a press conference denying the charges filed against his client. He has since filed a lawsuit against the State of California seeking $1 million in damages for unreasonable search and seizure, being denied access to his attorney and for emotional distress inflicted on his children.

Read a copy of the felony complaint by clicking here.

Rare Prosecution of Short Sale Fraud in Northern California

January 24th, 2014 at 6:00am

A Fremont real estate agent was arrested this week after being indicted by a federal grand jury in connection with helping a man commit short sale fraud in the sale of his home.

Minerva Sanchez, 47, was arrested and arraigned in San Jose federal court, where she pleaded not guilty to conspiring to commit bank fraud.

In a case dating back to March 2010 in which authorities allege lender Tri Counties Bank and Freddie Mac collectively lost over $350,000 Sanchez represented Agustin Simon, 52, in the short sale of his home located in Patterson. Sanchez is accused of recommending that he use her son as a straw buyer to purchase the home in a short sale. The idea was that Simon would eventually take title back to his home.

Before a lender approves a short sale, the seller must submit a letter detailing financial hardship and both the seller and his agent must sign an “arm’s length” affidavit affirming the sale is to a buyer unrelated to the seller by relation, business or acquaintance. Prosecutors said both Simon and Sanchez fraudulently signed the arm’s-length affidavit and both misrepresented his ownership of other real estate assets. Simon allegedly had enough money that he was able to give $355,000 to Sanchez’ son to effect the purchase. Both lenders ultimately approved the short sale.

In addition to receiving commission for representing Simon, Minerva Sanchez also received 75% of the commission paid to her son’s real estate agent.

It is not known whether Sanchez’ son is being charged in this case.

In June 2013, Agustin Simon pleaded guilty to conspiring to commit bank fraud in connection.

Read the original article in the Modesto Bee.

You can learn everything about short sale fraud by reading my e-book “How to Commit Short Sale Fraud . . . and Get Away with It.”

Realtor Hanky-Panky in New Jersey

December 23rd, 2013 at 7:17pm

A lawsuit by a married couple accuses a Realtor of intentionally overpricing the couple’s home in New Jersey so that buyers would be dissuaded, leaving the home available for his sexual trysts with another Realtor.

Former Coldwell Banker Realtors Robert Lindsay and Jeannemarie Phelan have been sued by Richard and Sandra Weiner of Denville, New Jersey. The Weiners allege  breach of trust and fiduciary duties against  Lindsay, a former president of the Passaic County Board of Realtors, and Phelan, as well as Coldwell Banker of Madison. The Weiners’ security video cameras allegedly caught the agents having sex on the Weiners’ bed at least 10 times.

“Defendants Coldwell and Lindsay were engaged by the Weiners to market and sell their home in Wayne, New Jersey. Instead, Lindsay and Phelan, through Lindsay’s illegal and dishonest acts, used the Weiners’ home as their play pad to have sexual relations in the Weiners’ bedroom, among other places in the home,” the suit states.

The lawsuit accuses Robert Lindsay of making a duplicate key to the house and that he “intentionally listed the house above market value to avoid Realtor traffic in the home while he and Phelan carried on their trysts.”

The Weiners are seeking compensatory damages for invasion of privacy, infliction of emotional distress, breach of contract, trespass of land and other civil counts.

The New Jersey Real Estate Commission is also investigating the Weiners’ accusations.

Coldwell Banker ended its contractual relationship with Lindsay and Phelan upon learning of the situation.


Read the original article in

Ocwen Employee and Contractor Get Prison for Bribery for REO Contracts

December 20th, 2013 at 10:27am

Publisher’s Note: This crime is very common, but rarely addressed by either the banks or law enforcement. In this case, though, the bad guys actually were caught and prosecuted.

Ronald Hurst, a former contractors, must serve two years in prison for conspiring to commit bribery and wire fraud from January 2006 until September 2007, according to the Department of Justice. His co-defendant, Bryant Carbonell, received six months of home confinement for his participation.

Both men were sentenced by Judge Philip Reinhard of the U.S. District Court for the Northern District of Illinois, where the indictments were originally filed.

Hurst and Carbonell had sub-contracts with West Palm Beach, Fla.-based Ocwen Loan Servicing, which managed foreclosed homes under its own contract with the Veterans Administration.

Court documents showed that they paid kickbacks to Ryan Piana, a former residential sales manager at Ocwen, to direct housing maintenance work to companies with which they had relationships. Piana additionally paid other Ocwen employees to participate, again, according to court documents. All are forms of REO fraud.

Ryan Piana was also indicted, ultimately pleaded guilty and was sentenced to 24 months in prison, according to a US DOJ press release.  Judge Reinhard also ordered Piana to re-pay $147,825 to the Veteran’s Administration and the Veterans Affairs Mortgage Guarantee Program, which were the victims of their crimes.

This case is the third prosecution involving Ocwen-managed properties.

No prosecutions for REO fraud in California – ever – to my knowledge.


Hard Money Lender Extradited from Panama for Embezelling, Ponzi Scheme

December 20th, 2013 at 10:12am

Thomas Franklin Tarbutton, 54, A fugitive hard money lender, was plucked by Panamanian authorities as he was trying to enter Costa Rica and extradited to Orange County.

The Orange County District Attorney’s Office had issued a $2 million for Tarbutton’s arrest after charges were filed against him for allegedly keeping money from his investors (title fraud). The investors had allegedly been provided forged property documents by Tarbutton and his company Villa Capital filed with the Orange County Clerk-Recorder Department showing that the investors were lien holders on property deeds, which they were not. Instead, authorities believe he kept their money for his personal use.

After being investigated by both the FBI and the OCDA, Thomas Tarbutton was charged with 29 felony counts, including grand theft and forgery. He was further charged with sentencing enhancements and allegations for loss over $100,000, property loss over $3.2 million, and aggravated white collar crime.

Read the original article in the OC Weekly.


Long Beach Man Sentenced for QuitClaim Fraud

December 17th, 2013 at 10:39am

A Long Beach man whose business model was to determine whether residential properties were vacant so that he could record false quitclaim deeds has been sentenced to four years.

Blair Christopher Hanloh, 50, who owned and operated Blair Hanloh Trustee of Diversified Management Trust (Diversified Management), was convicted in October 2013 of five felony counts of recording false and forged instruments.

Hanloh scouted properties from Orange County to Dana Point and if they were vacant or in foreclosure, he recorded the quitclaims to fraudulently transfer the ownership of the properties from the legal owners to Diversified Management (title fraud). He then changed the locks and rented the properties to unknowing victims-tenants.

“I would like to congratulate Orange County District Attorney Tony Rackauckas and his department on a job well done. Our office has been working closely with the District Attorney’s Real Estate Fraud Unit to find ways to prevent these crimes from happening in the future,” said Orange County Clerk-Recorder Hugh Nguyen.

Senior Deputy District Attorney Pete Pierce of the Major Fraud Unit prosecuted this case.

Read the original article in the Orange County Breeze.


© Copyright 2007-2015 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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