California Real Estate Fraud Report

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US-DOJ Sues Former Deutsche Bank Trading Executive Over Role in Mortgage Fraud

September 15th, 2017 at 10:01am

United States Department of Justice is suing the former head of subprime mortgage trading at Deutsche Bank for “systematically and intentionally” lying about the quality of subprime mortgages that backed nearly $1.5 billion in mortgage-backed securities that led to the crisis in the real estate market.

It’s rare for the government to pursue an individual for mortgage fraud; I know of no MBS (mortgage-backed securities) traders who have been prosecuted.

An announcement from the US Department of Justice, Paul Mangione, the former Deutsche Bank head of subprime trading, allegedly “engaged in a fraudulent scheme to misrepresent the characteristics of loans backing two residential mortgage-backed securities that Deutsche Bank sold to investors that resulted in hundreds of millions of dollars in losses.”

Read the original article in Housing Wire.

 

North San Luis Obispo County Lenders Accused of Scamming Investors Headed to Trial

September 15th, 2017 at 8:43am

Two years after Rodney Jarmin and Tammy Jordan, former owners of Real Property Lenders, could have accepted a deal two years ago that would have kept them out of jail and required minimal restitution to the real estate investors they allegedly defrauded.

But Jarmin, 76, and Jordan, 65, rejected the deal and now they’re headed to trial.

Real Property Lenders acted as a middleman between investors who put up their funds to be used as hard money loans to developers. These investors were promised 12% annual interest payments.

Rodney Jarmin and Tammy Jordan were charge in March 2011 by prosecutors who alleged they didn’t disclose to the investors that the builders had defaulted and that earlier investors had not been paid their dividends. This is despite documents filed with the California Department of Corporations that Real Property Lenders had reported over $55 million in outstanding real estate loans in 2007.

Here is the web page prosecutors created to keep the investors notified of developments in the case.

Read the original article in The San Luis Obispo Tribune.

Man Charged with Stealing Identities, Forging Real Estate Documents

September 14th, 2017 at 12:31pm

Vu Hoang Ho has been charged the the L.A. County District Attorney’s Office with stealing the identities of deceased persons or “living elderly victims.” He allegedly forged their names on real estate documents and recorded them with the L.A. County Recorder’s Office so that he could acquire them (title fraud), says the Sheriff’s Information Bureau.

Ho then tried to re-sell the properties to buyers who were unaware of what had transpired.

The case was investigated by the Real Estate Fraud Unit of the Sheriff’s Fraud & Cyber Crimes Bureau.

Read the original article in the San Gabriel Valley Tribune and MyNewsLA.com.

Four Phoenix Family Members Sentenced For Real Estate Fraud and Tax Evasion

September 14th, 2017 at 12:13pm

All in the Family – parents and two sons go to prison for operating large-scale real estate fraud scheme.

“PHOENIX – Yesterday, Senior U.S. District Judge Neil V. Wake sentenced Daphne Iatridis and her husband, Arthur Telles, both 59, to 30 months in prison and ordered the couple to forfeit 26 fraudulently purchased properties to the United States. Both had previously pleaded guilty to conspiracy to commit mail and wire fraud and tax evasion. The couple’s sons, Brendyn Iatridis and Spenser Iatridis, also pleaded guilty to related crimes and were sentenced to 10 months in prison and probation, respectively.”

Read the full press release by the U.S. Attorney for the District of Arizona.

Equifax Data Breach: What can you do to protect yourself?

September 8th, 2017 at 1:18pm

From my colleague Erik Kaplan at THD Credit Consulting

Hey it’s Erik,
This data breach is among the worst ever because of the amount of people affected and the sensitive type of information exposed. With Social Security numbers, names, birth dates, addresses, driver’s licenses and credit card numbers exposed, up to 143 million Americans could be vulnerable to identity fraud.
Here is what you can do today:
  • Fraud Alert: Consider placing a fraud alert on your files for 1 year. This warns creditors that you may be an identity theft victim and they should verify that anyone seeking credit is actually you. You can do this by clicking here.
  • Credit Freeze: Also known as security freeze, this tool lets you restrict access to your credit report, which makes it more difficult for identity thieves to open new accounts in your name. Click here to do this now.
  • Monitor Your Credit: Keep an eye on Hard Credit Inquiries, New Accounts, and Uncharacteristic Transactions. CreditKarma.com offers free credit monitoring of your TransUnion credit report, which means you will receive notifications if something changes.  The service is free to all members. *credit karma scores are not always accurate
  • Check Your Credit Reports: Every year, you can request a free copy of your report from each of the three major credit reporting agencies. This means that you can effectively check your credit free every four months or so.
Have questions?
Reach out to our team of experts at asktheexpert@thdcreditconsulting.com.
Erik Kaplan
THD Credit Consulting

Central Coast Developer Kelly Gearhart Gets New Sentencing, Restitution Hearing

September 8th, 2017 at 8:47am

Developer Kelly Gearhart, sentenced to 14 years in prison in 2015 for wire fraud and money laundering, will receive a new sentencing and restitution hearing after the Ninth U.S. Circuit Court of Appeals ruled that Judge Otis Wright II erred in sentencing Gearhart to 14 years in federal prison. Gearhart pleaded guilty in 2014 to real estate fraud.

The appellate court determined that Judge Wright erred when he sentenced Gearhart to 14 years for money laundering even though the maximum sentence is 10 years according to statute. The appellate court further determined the judge didn’t spend enough time on matters related to enhancements and the restitution amount, which is currently sealed.

Kelly Gearhart failed in his motion to have the rehearing assigned to another judge.

Read the original article in the Cal Coast Times.

Bay Area Man Sentenced to 15 Prison in Short Sale Fraud Scam

August 18th, 2017 at 10:24am

Mahendra Prasad, 55, pleaded guilty on May 22, to one count of mail fraud affecting a financial institution in connection with a fraudulent short sale (short sale fraud), according to a Justice Department press release. On August 14, U.S. District Judge Lawrence J. O’Neill sentenced him to 15 months in prison and ordered him to pay $328,000 in restitution to the lending institution that was defrauded.

According to court documents, in 2006, Prasad allegedly submitted falsified documentation to a lender so that he could purchase a property in Sacramento. Following the purchase, he rented the property as Section 8 housing.

In 2013, Prasad completed a short sale of the property to another person, claiming that the sale was “arm’s length, which was a requirement of the lender.

His co-defendants Jyoteshna Karan, Praveen Singh, Sunita Singh and Nani Isaac are going to trial in U.S. District Court in Fresno, on Dec. 11.

Read the original article in News India Times.

Nevada Men Indicted in Fraudulent Short Sale

August 18th, 2017 at 9:55am

Acting U.S. Attorney Steve Myhre for the District of Nevada announced that two men have been indicted in connection with the sale of one man’s property to a family member of his friend (short sale fraud).

The indictment alleges that Dustin Lewis (Henderson, NV) and Brian Sorensen (Las Vegas, NV) conspired to defraud OneWest Bank when Lewis submitted a fraudulent short sale application to the bank to sell the home to a relative of Sorensen. The plan was to prevent a foreclosure so that Lewis could keep possession of the 5,331-square foot, five-bedroom home in Henderson. It is further alleged that Lewis did not disclose to the bank that he and Sorensen had an agreement that Lewis would remain on the property and that later it would be sold back to him.

The case was investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigation (IRS-CID) and the U.S. Department of Interior-Office of the Inspector General. Assistant U.S. Attorney Patrick Burns is the prosecutor.

Read the original article in Mortgage Professional America.

Wells Fargo Pays Out Again, This Time For Fraudulent Anti-Veteran Lending Practices

August 18th, 2017 at 9:08am

Banking giant Wells Fargo must pay over $100 million to settle allegations of fraud that included overcharging military veterans using the VA Home Loan to refinance their mortgages. The victims were not only veterans but U.S. taxpayers.

Brokers Victor Bibby and Brian Donnelly were the two whistleblowers in the lawsuit who sought to recover the losses that the federal government suffered when the loans it guaranteed loans defaulted. The two men sued Wells Fargo and seven other lenders to recoup losses; notably the federal government declined to join the qui tam lawsuit, which was filed under the federal False Claims Act, aka Lincoln’s Law (31 USC §§ 3729-3733.

The other banks are Bank of America Corp (BAC.N), Citigroup Inc (C.N), First Tennessee, JPMorgan Chase & Co (JPM.N), PNC Financial Services Group Inc (PNC.N) and SunTrust Banks Inc (STI.N). The total pay-out is $161.7 million.

Depending on whether the federal government offers to assist, the private person can receive a portion of the recovered damages, from 10% to 30%. If the government intervenes, the person bringing the lawsuit, the “relator”, receives between 15%-25%. If the government does not, the relator receives between 25%-30%. If the government intervenes and most of the information is already public, the relator is only entitled to 10%.

Read the full article, including Wells Fargo’s boilerplate “apology,” in DisabledVeterans.org

NY Cop and His Friend in Hot Water over Alleged Short Sale Fraud

August 18th, 2017 at 8:50am

Retired NYPD police officer Michael Rizzi and his friend Edward Monahan have been charged with bank fraud and conspiracy to commit bank fraud with an allegedly fraudulent short sale the two men committed.

Rizzi and Monahan are accused of submitting false documentation to Rizzi’s bank in order to do a short sale of a multi-family building on Lafayette Avenue in New Brighton, for which Monahan was the buyer.

The men, both 45 years old, signed affidavits affirming that they had no business, personal or family relationships with each other. But the criminal complaint alleges that Rizzi withdrew $17,500 from his bank accounts and altered one of his bank statements to make it look like the money came from Monahan’s bank account.

In addition, Rizzi was paid $10,000 in relocation assistance money from the Home Affordable Foreclosure Alternatives (HAFA) federal program.

The bank lost $250,000 as a result of the transaction.

In the meantime, Michael Rizzi is serving a 15-month federal prison sentence for laundering the proceeds from a multimillion-dollar prostitution ring.

Read the press release from the Office of the U.S. Attorney for the Southern District of New York (U.S. Attorney for Manhattan) and SI Live.

 

 

© Copyright 2007-2017 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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