California Real Estate Fraud Report

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Arizona Attorney General Gets Conviction of Real Estate Agent in Short Sale Fraud Scheme

February 14th, 2018 at 9:55am

The following is a press release from the Office of Arizona Attorney General Mark Brnovich:

PHOENIX – Attorney General Mark Brnovich announced a jury found James Thornton, a real estate agent, guilty of Fraudulent Schemes and Theft after defrauding two banks in a short sale home scam.

In 2012, Thornton was the listing real estate agent for the owner of a home who was in default on both mortgages in Mesa, AZ. Thornton sold the property via short sale to his parents’ LLC for $580,000. There had been other offers to purchase the home for hundreds of thousands of dollars more, including offers for $870,000, $707,000, and $650,000. Both banks approved the short sale price to Thornton’s parents not knowing about any of the other offers to purchase the property for significantly more.

Four days after Thornton’s parents purchased the home, Thornton became their listing agent and tried to sell the home “off the market” for $1,100,000. Thornton eventually sold the home to a third party for $1,050,000 cash approximately two months later. Thornton’s parents earned $540,722 in profit on the sale for $1,050,000, only having owned the home for two months.

In the course of his fraud scheme, Thornton made false statements and misrepresentations to bank representatives, potential buyers, and other real estate agents. To discourage buyers on the short sale and devalue the home, Thornton misrepresented the true number of rooms and bathrooms in the home, pointed out a code violation that didn’t exist to an appraiser, and removed all of the high end, custom appliances from the home. Thornton also falsely told the $1,050,000 cash buyer that the reason there was a substantial gap between his parents’ purchase price of $580,000 and the new list price of $1,100,000 was because there had been a “lien paid outside of escrow.”

Sentencing is set for March 16, 2018. Thornton faces 3 to 12.5 years in prison.

The FBI Phoenix Field Office investigated this case.

Assistant Attorney General Maura Quigley and Scott Blake prosecuted this case.

Attorney General Becerra Announces Arrest and Indictments for $2 Million Mortgage Fraud Scheme in Southern California

February 14th, 2018 at 9:46am

The following is a press release from the Office of California Attorney General Xavier Becerra:

SAN DIEGO – California Attorney General Xavier Becerra announced the indictment of four individuals on 194 criminal felony counts for allegedly operating a mortgage fraud scheme throughout Southern California. The scheme resulted in a loss of approximately $2 million for 40 victims who were seeking loans to help pay off their mortgages. Many of the victims lost their homes and life savings.

Andrew Valles, Jemal Lilly, Mark Bellinger and Arnold Millman were indicted by a grand jury in the San Diego Superior Court for grand theft, filing false or forged documents in a public office, conspiracy to commit those offenses, and identity theft, as well as special allegations for aggravated white collar crime. Two of defendants, Jemal Lilly and Mark Bellinger were arrested on January 30, 2018; they pled not guilty at their arraignments on February 2 and February 13, 2018. Defendants Andrew Valles and Arnold Millman have not been arrested and are currently at large and out of custody. The arrests were the product of a joint investigation by the California Department of Justice, the California Department of Insurance, and the Federal Housing Finance Agency Office of the Inspector General (FHFA-OIG). The United States Trustee Program assisted in providing a grand jury witness.

“The perpetrators of this mortgage fraud stole the life savings of decent Californians,” said Attorney General Becerra. “It’s too common a story with all-too-common tactics. I hope today’s arrests and indictments break the stride of those who prey on hard working Americans and betray their trust. This case demonstrates the potency of multi-jurisdictional law enforcement agencies collaborating to fight fraud.”

According to the indictment, between 2012 and 2017, the defendants conspired using a fake insurance company, “SafeCare,” which promised to provide home loan services at a low monthly price to primarily Latino and African American families. During this time, the defendants would delay foreclosures and eviction actions by filing false bankruptcy and other court documents under fictitious names. They would instruct victims to deposit illegal advance fees and other large payments into a bank account controlled by the defendants and, when the promised loan did not come through, would proceed with the fabricated filings. One of the defendants allegedly committed identity theft by posing as an attorney purporting to assist the victims. The victims were charged additional fees for the false “attorney services.” The scheme took place in San Diego, Riverside, Orange, Los Angeles, and San Bernardino counties.

“These individuals are alleged to have played a role in this scheme by promising distressed homeowners new financing only to turn around and deliver bad credit. These actions not only cost the government sponsored enterprises and financial institutions hundreds of thousands of dollars, but they harmed consumers who were trying to do the right thing. FHFA-OIG thanks its law enforcement partners for their efforts,” said Rene Febles, Deputy Inspector General for Investigations for the Federal Housing Finance Agency Office of the Inspector General.

“This case is evidence that insurance fraud is not a victimless crime,” said Insurance Commissioner Dave Jones. “These suspects allegedly deceived dozens of victims to the tune of over $2 million, leaving them uninsured and at great financial risk. Thanks to the hard work of our law enforcement partners, we were able to work together to unravel this case and stop this criminal enterprise.”

Attorney General Becerra is committed to protecting Californians from criminal fraudsters. If you are a homeowner who believes you may have been targeted by SafeCare, please contact the California Department of Justice. For those located in California, please call: 1-800-952-5225. For those located outside of California, please call: 1-916-322-3360.

It is important to note that a criminal indictment contains charges that must be proven in a court of law. Every defendant is presumed innocent until proven guilty.

Roseville Wealth Advisor Lee Loomis Sentenced to 12 Years in Prison for Investment Fraud Scheme

February 8th, 2018 at 8:58pm

The following is a copy of the press release from the U.S. Attorney’s Office for the Eastern District of California. It concerns the prosecution and sentencing of Lee Loomis, whose activities have been documented in a number of articles in the California Real Estate Fraud Report.

SACRAMENTO, Calif. — Lee Loomis, aka Lawrence Leland Loomis, 60, of Granite Bay, was sentenced today by U.S. District Judge John A. Mendez to 12 years in prison for schemes that caused millions of dollars in losses to more than 183 investors, U.S. Attorney McGregor W. Scott announced.

On January 29, 2016, Loomis pleaded guilty to wire fraud. According to court documents, from 2006 through 2008, Loomis was president of Loomis Wealth Solutions, a business operating in California, Illinois, Washington and elsewhere. Through seminars and face-to-face meetings, he induced individuals to invest money in the Naras Funds, which he claimed were liquid savings account-like investments that yielded a 12 percent annual return. He also claimed the investment was secured by a third party that was using the money to make loans secured by residential properties.

In fact, Loomis and his co‑defendants used the funds to pay for ongoing business expenses and to pay previous investors. Loomis took in more than $10 million in investor funds as part of the Naras scheme. He also took in money through other means, including a mortgage fraud scheme. At the time law enforcement executed search warrants at the business, only $4,313 was left in investor accounts.

“Loomis Wealth Solutions was built on a foundation of lies and deceit,” stated U.S. Attorney McGregor W. Scott. “The sentence imposed today helps to ensure that Loomis won’t again be in a position to cause financial harm to others, and represents some measure of justice for the many victims who were lured into trusting Loomis with their hard-earned money.”

“The FBI is committed to working with its partners to ensure people who defraud the American people—often devastating their financial future in the process—face justice,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “Dozens of investors who trusted Lee Loomis suffered significant financial losses. Many of these victims withdrew funds from retirement accounts accrued over the course of decades, forcing then to restart the process of preparing for retirement.”

“Lee Loomis was the leader and architect of a scheme that resulted in millions of dollars of losses to dozens of families,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “He lied to investors, stole their hard earned savings and spent it within months of receipt. His conduct led to ruined credit and home foreclosures. While this sentence cannot reverse the damage caused by Loomis and his co-defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”

This case was the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, the United States Securities and Exchange Commission, and the California Bureau of Real Estate. Assistant U.S. Attorneys Paul Hemesath and Jared Dolan prosecuted the case.

Loomis has been in custody since September 14, 2012. Co-defendants John Hagener, 79, of Granite Bay; Joseph Gekko, 47, of Yorba Linda; Dawn C. Powers, 45, of Lincoln; and Peter Woodard, 47, of Ventura, have previously pleaded guilty and are scheduled to be sentenced on March 13, 2018.

Federal Lawsuit Accuses Rice Ranch Developers of Fraud

February 8th, 2018 at 8:48pm

A federal lawsuit, filed by attorney Faith Devine of Fraud Law Group in Carlsbad, accuses the developers and financial partners behind Rice Ranch Trilogy of fraud, deceit, breach of trust and taking money from an investor who claims she received nothing $200,000 she invested into their venture.

Rice Ranch Trilogy is the largest housing project in Santa Barbara County and has denied all of the allegations in the lawsuit, which was filed on behalf of Susan Brachfeld, of Indio.

Read the original article in the Lompoc Record.

 

Woman Accused of Stealing Identities of her In-laws to buy La Habra Heights House

February 8th, 2018 at 8:39pm

Laurie Wider Uesugi was arrested this week and charged with 12 felonies.

According to Sgt. Alex Gilinets of the Los Angeles County Sheriff’s Fraud & Cyber Crimes Bureau, Uesugi, 45, forged the signatures of her 80-year-old father-in-law and 78-year-old mother-in-law, and applied for a $625,000 mortgage in their names in order to purchase a house in La Habra Heights. The charges she is facing include theft from an elder, grand theft, use of a counterfeit seal, mortgage fraud and procuring and offering a false or forged instrument.

Read the original article in the Whittier Daily News.

Century 21 Agents Sued after Flipping Elderly Client’s House

February 3rd, 2018 at 12:03pm

Two Century 21 agents are on the wrong end of a lawsuit after selling the house of a man who had inherited the property from his late father.

The plaintiff is Rosario Lazcano. He listed his father’s home at 1551 East 76th Place with Edrisi Aussenac of Century 21  in September 2016. After a month Aussenac told Lazcano that he only had one offer and that was for 40% less than the $315,00 listed price. He convinced Lazcano to take the offer and sell the home to Gyn Group LLC, whose president is Jorge D. Acuna, also a Century 21 agent. According to the lawsuit, Aussenac didn’t disclose to Lazcano that he and Acuna were colleagues.

Two months later, Aussenac re-listed the property at $399,000 and sold it for $375,000.

Rosario Lazcano‘s lawsuit claims fraud, breach of fiduciary duty, breach of contract, unjust enrichment, and intentional misrepresentation. Pacific Escrow and its owner, who is alleged to be related to the owners of the Century 21 Allstars franchise.

Read the original article in The Real Deal.

Washington Appeals Court Rules the CFPB Structure is Constitutional

February 1st, 2018 at 8:34pm

In a victory for consumers, a Washington appeals courts has reversed a previous ruling that had declared the Consumer Financial Protection Bureau (CFPB) to be unconstitutional.

The Court of Appeals for the District of Columbia Circuit ruled Wednesday that the CFPB‘s structure is constitutional and that the director of the agency can only be fired by the president for “inefficiency, neglect of duty, or malfeasance in office.”

The case originates to the $109 million in CFPB fines levied against New Jersey-based mortgage company PHH Corp. in 2015, which the mortgage company opposed.

We can expect this ruling to be appealed by both the Trump administration and PHH.

The mission statement of the CFPB is thus: “The Consumer Financial Protection Bureau is a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

Read the original article in DSNews.

Former Fannie Mae Employee Charged in Real Estate Fraud of REO Properties

February 1st, 2018 at 8:25pm

Shirene Hernandez, 45, was one an REO (real estate owned) foreclosure specialist at Fannie Mae (Federal National Mortgage Association). Fannie Mae is a government-sponsored enterprise (GSE), and its task is insuring mortgage loans.

Hernandez has been charged with wire fraud, allegedly for making directing some of the REO properties she oversaw to real estate brokers for cash kickback, gifts and other valuable things in exchange for giving them listings of the REOs. The common term for this is called REO fraud. The government alleges she earned over $1 million from these alleged illegal activities.

No word if any of the real estate brokers and agents who were Hernandez’ partners have been charged or are going to be.

The case is being investigated by the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG).  Agents continue to investigate this case and other allegations of bribes accepted by other Fannie Mae employees.  If you believe you have information relevant to this investigation, please contact FHFA-OIG Senior Special Agent James Shields at 202-730-4013.

The prosecution of Shirene Hernandez is being handled by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.

Click on this press release to read the entire statement by the U.S. Attorney’s Office for the Central District of California.

 

Sacramento Woman Feigns Suicide to Avoid Mortgage Fraud Prison Sentence

January 25th, 2018 at 10:03am

Sacramento resident Maria Santa, 41, had been sentenced in 2014 to 20 months in prison for mortgage fraud. But she fled after her motion for bail pending her appeal failed and left a note indicating she had committed suicide.

Santa’s deception was costly. The U.S. Attorney’s Office for the Eastern District of California reported in a news release that U.S. District Judge Kimberly J. Mueller added an additional one year and one day to Santa’s sentence, to be served after the 20 month sentence has been served. Not only that, but Virgil Santa, Maria Santa‘s husband, has been charged with harboring a fugitive.

Read the original article in the Sacramento Bee.

Methuen Real Estate Broker Pleads Guilty to Role in Short Sale Fraud Conspiracy

January 19th, 2018 at 10:10am

Methuen real estate broker Greisy Jimenez, 50, pleaded guilty to participating in a short sale fraud scheme to defraud banks and mortgage companies.

Jimenez is scheduled to be sentenced by Senior U.S. District Court Judge Mark Wolf April 24.

In March 2017, her co-conspirators Jasmin Polanco, 37, a real estate closing attorney, and Vanessa Ricci, 40, a mortgage loan officer, each pleaded guilty to one count of conspiracy to commit bank fraud; they will also be sentenced in March. Hyacinth Bellerose, 51, a real estate closing attorney, was sentenced last March to time served and one year of supervised release to be served in home detention after she pleaded guilty to conspiracy to commit bank fraud.

The defendants began their conspiracy in August 2007 and it continued through June 2010. They submitted false and misleading documents to the lenders in order to induce their to approve the fraudulent short sales. The short sales were not only not arm’s-length but the straw buyers were frequently related. In most cases, the purported sellers never moved out of their properties and in fact, the short sale fraud was intended to provide them with a large reduction in their mortgages, I scheme I call “mortgage laundering.”

The case was prosecuted by Assistant U.S. Attorney Stephen Frank, chief of the Economic Crimes Unit of the U.S. Attorney’s Office, and Assistant U.S. Attorneys Sara Miron Bloom and Victor Wild.

Read the previous post about Greisy Jimenez in the California Real Estate Fraud Report from March 2017.

© Copyright 2007-2018 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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