California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

Chatsworth Father and Daughter Convicted in $30 Million Family-Owned Mortgage Relief Fraud Scheme

December 15th, 2017 at 9:17am

Jamie Matsuba, 33, and Thomas Matsuba, 67, were found guilty in Los Angeles federal court of conspiracy to commit wire fraud, making false statements to federally insured banks and committing identity theft, according to the U.S. Department of Justice. They were also convicted of one count of making false statements to federally insured banks.

Dorothy Matsuba, 66, of Chatsworth, who is the mother of Jamie Matsuba and Thomas Matsuba‘s wife, and their daughter, Jane Matsuba-Garcia, 41, of Camarillo, both previously pleaded guilty. A fifth defendant, Young Park, of Los Angeles, is a fugitive.

Dorothy MatsubaJamie Matsuba, and Jane Matsuba all hold either current or expired licenses with the California Bureau of Real Estate.

The family ran business named Ownership Management Service LLC and Trust Holding Service LLC from January 2005 to August 2014. The companies promised homeowners get help for distressed homeowners by doing short sales with the lenders. The homeowners were told to deed their homes to trust controlled by the Matsubas, who further promised the homeowners they would pay their mortgages during the negotiation period with the banks.

Read the original article in SatPRNews and MyNewsLA.com

 

Venezuelan Fugitive Charged with Defrauding Wells Fargo in $9 Million Mortgage Fraud Scheme

December 8th, 2017 at 9:33am

After eight long years, Napoleon Olarte, a fugitive believed to be in Venezuela has been indicted on nine counts, including one count of conspiracy, six counts of bank fraud, and two counts of making false statements to a financial institution, according to details provided by the Department of Housing and Urban Development’s Office of Inspector General.

Two of Olarte’s co-conspirators, Juan Jose Calle and Nancy Karina Coleman, have already pleaded guilty in the mortgage fraud scheme that cost Wells Fargo approximately $9 million.

Nancy Coleman worked as a mortgage consultant at Wells Fargo and accepted bribes and other favors in exchange for approving the fraudulent loans for Calle and Olarte, who allegedly ran a “rogue brokerage and escrow company” in California called Fast Escrow.

Read the original article in HousingWire.

New Jersey Attorney and Real Estate Agent Charged with Running Short Sale Fraud Ring

December 7th, 2017 at 9:38am

New Jersey attorney Christopher Goodson, 44, and Anthony Garvin, 47, have been charged with one count of conspiracy to commit bank fraud with respect to multiple short sale frauds in a criminal complaint that was filed in U.S. District Court in Newark.

According to an article in Credit Union Times, the pair were thought to have caused over $30 million in losses to the victim financial institutions.

According to the complaint, Goodson, Garvin and others targeted multiple New Jersey properties that were in default. After acquiring the listings, the conspirators convinced the lenders to accept a short sale to a co-conspirator or entity controlled by the group. They did not disclose to the lenders that they were in business with each other or the entities. Once the sales were complete, they allegedly flipped the properties to a second buyer using phony loan applications, bank statements and employment records generated by members of the group.

 

La Jolla Man Ordered to Repay Mortgage Insurance Firm, IRS in Mortgage Fraud Case

November 30th, 2017 at 9:22am

La Jolla resident Mehran Abazary, 66, has been ordered by U.S. District Court Judge John Houston to pay $313,981 to Fidelity National Title Group and the IRS a mortgage insurance firm and the Internal Revenue Service in terms of five years probation in a mortgage fraud case. He was not given any jail time.

Abazary is an Iranian immigrant, had been charged with tax evasion. He had reported he lost the home in a foreclosure, but after the sale of his home in La Jolla, transferred money to bank accounts held in the names of his relatives in Germany.

Adel Afkarian and Atef Afkarian, also Iranian immigrants, operated Better Mortgage Co. For their roles, the brothers were sentenced to federal prison and have since been released.

Assistant U.S. Attorney Emily Allen wrote Abazary made a $250,000 profit “through the fraudulent sale of his heavily underwater $2 million La Jolla home” by “working with a group of crooked real estate professionals.” She further said that Abazary “made it appear that the mortgage did not exist so that he could sell the home to an unsuspecting buyer and collect the purchase money without paying off his lender.”

Read the original article in the San Diego Community News.

Attorney-President of the Stanislaus County Bar Association Convicted in Short Sale Fraud Case

November 17th, 2017 at 9:15am

It is rare in California to see prosecutions for short sale fraud in California. This case was prosecuted successfully, with a quick conviction from the jury, after a novel defense by the defendant’s attorneys.

The following is a press release from the U.S. Attorney’s Office for the Eastern District of California:

FRESNO, Calif. — Robert Farrace, 53, of Modesto, was convicted today of three counts of wire fraud in connection with a fraudulent short-sale scheme, U.S. Attorney Phillip A. Talbert announced.

According to court documents, Farrace, an attorney specializing in real estate law and the current President of the Stanislaus County Bar Association, owned two properties in Modesto with substantial mortgage loans. By early 2010, Farrace was in default and received foreclosure notices for the two properties. In order to keep the properties and avoid foreclosure, Farrace formed an entity called “Dignitas LLC” to purchase the properties. Farrace controlled Dignitas, but listed a friend’s name on the paperwork as a nominal manager because he knew the bank would not sell the property to a related party. Farrace then submitted short sale offers to the bank that serviced the loans on both properties listing Dignitas and the nominee manager as the purchaser. Farrace misrepresented his relationship to Dignitas to induce the bank to approve the short sale. Because the servicing bank did not know of the true relationship, it went forward and completed one of the short sales. The short sale on the second party was stopped after law enforcement informed the bank of Farrace’s scheme.

This case is the product of an investigation by the Federal Housing Finance Agency–Office of Inspector General, the Federal Bureau of Investigation, and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorneys Michael G. Tierney and Shelley D. Weger are prosecuting the case.

Farrace is scheduled to be sentenced on February 12, 2018, by U.S. District Judge Lawrence J. O’Neill. Farrace faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

You can read more details about this case in the Modesto Bee.

 

 

Stockton Real Estate Agent Sentenced to Prison in Mortgage Fraud Case

November 16th, 2017 at 8:33am

Arthur Change Menefee, 46, a real estate agent, has been sentenced to three years in prison for his role in a mortgage fraud scheme.

According to U.S. Attorney Phillip Talbert, Menefee assisted unqualified buyers to prepare fraudulent loan applications. Aleksandr Kovalev, who previously pleaded guilty in this scheme, sold the buyers properties and paid kickbacks to them that were not disclosed lenders.

Also pleading guilty earlier were Jannice Riddick, Florence Francisco, Adil Qayyum, Elsie Pamela Fuller, Valeriy Vasilevitsky, Ruth Willis and Leona Yeargin.

Read the original article in the Central Valley Business Times.

Sonoma Valley Bank Fraud Trial for Former Executives Begins

October 27th, 2017 at 8:59am

Federal prosecutors began presenting their case against two former Sonoma Valley Bank executives and a Santa Rosa attorney, accusing them of “throwing good money after bad” by extending tens of millions of dollars to a now-deceased developer through third parties.

The defendants are former president Sean Cutting, 48, former VP and Chief Loan Officer Brian Melland, 48, and attorney David Lonich, 63. Lonich was the chief counsel to Bijan Madjlessi, a Marin County developer accused of using straw buyers to get $44 million in construction loans.

Cutting, Melland and former CEO and director Mel Switzer settled with the FDIC last year for $5.4 million.

The alleged scheme put the bank out of business and cost 1,000 shareholders steep losses.

Assistant U.S. Attorney Alex Tse is prosecuting the case for the U.S. Attorney’s Office for the Northern District of California.

Read the original article in the Santa Rosa Press Democrat.

Two Men Sentenced to Lengthy Prison Terms for San Diego “Mansion Fraud” Case

October 20th, 2017 at 9:15am

San Diego businessman and a lawyer from Arizona received length sentences for engineering a multi-million real estate loan fraud in San Diego.

U.S. District Court Judge William Q. Hayes sentenced Cortland Gettel, 43 of Coronado to 135 months in prison and Jeffrey Greenberg, 67, of Tucson, Arizona to 81 months.

Gettel owned Conix, real estate investment firm that was also known as Variant Commercial Real Estate. Greenberg was the company’s attorney. Prosecutors had accused the pair of misleading lenders into approving loans for them to purchase four multi-million dollar mansions in La Jolla and Del Mar under the pretext the properties were high-end investment and luxury rentals. What really happened was that Gettel, his business partner Peter Cash Doye and their families lived in the homes.

Read the original article in the San Diego Union Tribune.

 

Atwater Couple Indicted in Federal Mortgage Fraud Probe

October 20th, 2017 at 8:58am

John Ballard, 55, and Judy Calderon Ballard, 54, are two of the four people named in a federal indictment by the U.S. Attorney for the Eastern District of California.  The Ballards are charged with conspiracy, wire fraud and bank fraud with respect to an alleged short-sale scheme, according to U.S. Attorney Phillip Talbert.

The other two defendants are Sherry Herbert, 54, and Andrea Todd, 53.

John and Judy Ballard were licensed real estate salespersons according to prosecutors. When they defaulted on their home in Atwater, they asked their lender to permit them to sell their home to Herbert and Todd but had no intention of actually transferring the property to them.

Read the original article in the Modesto Bee.

Industry Expert Says Mortgage Fraud Characterized by Delayed Discovery

October 6th, 2017 at 8:10am

Bridget Berg, a principal in Industry Solutions and Property Intelligence for CoreLogic, says that mortgage fraud is different than other forms of fraud and is more prevalent than most lender think.

In a 3-part interview in Mortgage News Daily, Ms. Berg outlines five reasons lenders should be wary.

 

 

© 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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