California Real Estate Fraud Report

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Owner of Cedar Funding ordered to stand trial for fraud, conspiracy

The owner of Cedar Funding in the Central Coast of California was ordered to stand trial this coming October on fraud and conspiracy charges related to a $160 million business involving 1,600 investors.

Bankruptcy trustee Todd Neilson said that David Nilsen used his business Cedar Funding to operate a Ponzi scheme, paying dividends to his early investors with funds he took from the later ones. Nilsen, who is representing himself at his trial,  has filed for Chapter 11 bankruptcy, but not before assigning the deeds to over a dozen properties to individuals, according to Nilsen. Nilsen also said that many of the loans in Cedar Funding’s portfolio were second, third or fourth deeds of trust, the value of which were mostly lost once the homes for which they had liens went into foreclosure. To date, the bankruptcy trustee has only recovered approximately $1.9 million, although he is still liquidating properties and attempting to set aside assignments of some of the trust deeds.

Warning: DO NOT purchase junior trust deed (2nd, 3rd, etc.) unless you are a very sophisticated investor. If the first trust deed, or one of the junior liens that is senior to yours forecloses, you are likely to lose 100% of your investment.

Read the full article in the Silcon Valley Mercury News.

© Copyright 2007-2018 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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