California Real Estate Fraud Report

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Archive for the 'Loan Fraud' Category

DM Financial Mortgage Brokers Indicted for Loan Fraud Scheme

November 21st, 2013 at 9:59am

Two former Marin County mortgage brokers have been indicted in a $2.4 million loan fraud scheme, federal authorities announced Monday.

Paul Sloane Davis and Diane Cobb, mortgage brokers who ran DM Financial, were arrested in Las Vegas after being indicted in a $2.5 million loan fraud.

Davis, 74, and Cobb, 56, both of Marin County, have been accused by prosecutors of finding investors to fund short-term “bridge loans” for home buyers. They allegedly give the investors with the names of the borrowers and the promissory notes and deeds that were to be used to secure the loans. They further are alleged to have given the borrowers no loan money and used the funds they did receive either for their own personal use or to pay-off earlier investors (Ponzi scheme).

Davis and Cobb are each charged with 15 counts of conspiracy, mail fraud and wire fraud. Diane Cobb is further charged with five counts of aggravated identity theft.

Read the original article in the Marin Independent Journal.

Loan Tech Agrees to Settle Case by U.S. Attorney’s Office

November 15th, 2013 at 11:09am

Loan Tech Inc. and its president, Emily Kay-Eddie, have agreed to pay $75,000 to settle an investigation into the firm’s business practices.

The Office of U.S. Attorney Benjamin B. Wagner was seeking both damages and civil penalties against both for losses incurred by the Federal Housing Administration (FHA) for submitting loan applications that contained false information in 2008 and 2009. The prospective borrowers, who were not aware their applications had been altered, who not have received the FHA-insured loans if only the truthful documents had been submitted.

Kaye-Eddie and Loan Tech, which is now defunct, also agreed to a 10-year ban from participating in FHA or HUD originated loans. For the record, both denied liability.

Read the original article in the Sacramento Bee.

Redding Man Sentenced for Mortgage Fraud

November 15th, 2013 at 9:38am

Brandon Hanly, 33, of Redding has been sentenced to four years in federal prison by U.S. District Judge William B. Shubb.

Evidence presented at his trial indicated that Hanly and others defrauded lenders from September 2005 to April 2006 by submitting inflating appraisals (appraisal fraud) and title reports with phony liens (title fraud) in order obtain loans. The title documents were in the name of TPG Investments, Inc., a shell company.

Judge Shubb rejected Hanly’s contention that he was a victim, found that Hanly had committed perjury during his trial and thus increased his prison sentence to “send a message to people who would commit this crime and who would lie about it when they come to court.”

 in federal court in Sacramento and a San Diego County loan processing firm has agreed to a civil settlement in separate mortgage fraud cases.

Read the original article in the Sacramento Bee.

Defendants in Real Estate Fraud Get a Break after Judge Tosses Charges

November 8th, 2013 at 9:33am

A case in which lenders were defrauded of $15.2 million went south when the presiding judge threw out most of the charges because the district attorney filed her case too late.

Fresno County Superior Court Judge Jonathan Conklin noted that the office of Fresno County District Attorney Elizabeth A. Egan had missed the four-year statute of limitations by filing almost one month too late. This resulted in 100 of 140 charges against the defendants being dismissed. There are now just four defendants facing 13 charges; eight of the defendants have no charges remaining against them. They are Paul Isaac Ramirez, Lisa Sanchez, Johnny Marcos Sanchez, and Lorenzo Lopez.

The original complaint accused 12 people of fraudulently obtaining loans to buy 19 homes in Fresno, Clovis, Sanger and Bakersfield between July 2005 and December 2006. The mortgage fraud originally came to authorities’ attention when Henry Milton, the owner of Worldwide First Mortgage, noticed irregularities with the loans and filed a consumer complaint with the Fresno County District Attorney’s Office.

Read the original article in the Fresno Bee.

Crisp & Cole Mortgage Fraud Case Wrapping up with Pleas

November 8th, 2013 at 8:42am

Carl Cole, one of the principals in the Bakersfield firm of Crisp & Cole, is about to enter a guilty plea in the case against him and 14 other defendants in which lenders were defrauded out of millions.

Cole will plead guilty to conspiracy to commit mail fraud, wire fraud and bank fraud. In addition, he will be serving at least eight years in prison and turn over close to $30 million, which he admitted obtaining as a result of the criminal scheme of which he and others were accused.

Pleas were also announced by the U.S. Attorney’s Office for Caleb Lee Cole (Carl Cole’s son), real estate agent Sneha Ramesh Mohammadi, and unlicensed loan officer Jayson Peter Costa.

Julie Farmer, Jeriel Salinas, Michael Munoz and Jennifer Crisp have trial dates in 2014.

Those who have already pleaded guilty are real estate agent Robinson Dinh Nguyen, accountant Kevin Sluga, loan officer Jerald Teixeira, loan officer Christopher Stovall, Megan Balod and Leslie Sluga.

Read the original article in Bakersfield Now.

There are many articles going into more depth about the Crisp and Cole case that can be found be using the search bar in this blog.

Woman Who Operated $100 Million Mortgage Fraud Sentenced to Prison

October 4th, 2013 at 11:26am

The numbers keep getting bigger and bigger.

Mary Armstrong, 52, of Las Vegas has been sentenced in San Diego to nearly 8½ years in federal prison after pleading guilty for masterminding a $100 million mortgage fraud scheme.

My calculator tells me that Armstrong will leave prison a wealthy woman, as the court ordered her to pay only $500,000 to her victims, according to the U.S. Attorney’s Office.

Armstrong, whose boyfriend William Fountain received a 3 1/2 year sentence, was the brains behind a scheme in which straw buyers were recruited to buy homes for inflated prices. The six conspirators divided approximately $15 million for their efforts.

Read the original article in The Republic.

Three Officers from California City Break Up Real Estate Fraud Ring

October 4th, 2013 at 10:57am

Three police officers with more tenacity and hard work than money pulled off busting a real estate fraud ring that involved identity theft and losses of over $1 million.

The California City Police Department has a staff of less than 20. But when Reserve Officers Michael Katz and Chris Christopher (now deceased), and Sgt. Jeff Takeda heard about a case in November 2008 in which an identity theft in Anaheim was used to purchase property in California City, they went to work.

According to Officer Katz, the defendants, who built six houses, did so “in a plummeting market, a market with no buyers. The (suspects) used a combination of what’s called straw buyers and identity theft victims to sell the houses to.” The builders found a cooperating appraiser, who “super-inflated” the valuation for the houses, giving the defendants excess proceeds to skim. The true values were less than half of the appraised amount, which the banks found out during their investigations.

The defendants are appraiser Nathaniel Acree, 65, of Long Beach; broker Jay Langer, 51, of San Juan Capistrano; Khalid Malik Abdul Ali, 60, of California City; Angie Cachu, 44, of Orange; and notary Elizabeth Torres, 28, of Santa Ana. All of them are in custody except Torres and Angie Cachu, whose whereabouts are unknown.

Referring to the three officers, Kern County Deputy District Attorney Gordon Isen noted, “They did an excellent job investigating the case and drafting the report.” Isen is prosecuting the case.

Read the original article in the Bakersfield Californian.

Elk Grove Attorney in Hoda Samuel Case Sentenced to Prison

September 27th, 2013 at 4:07am

An attorney from Elk Grove who pleaded guilty to intentionally verifying inflated income statements made by borrowers to induce lenders to underwrite loans is going to federal prison for 2 1/2 years. His guilty pleas were to conspiracy and make false statements.

Sean Patrick Gjerde, 37, worked for Hoda Samuel, the owner/operator of Liberty Real Estate & Investment Company  and Liberty Mortgage Company. Samuel stood trial, was convicted and received a 10-year sentence in the mortgage fraud case.

Eight other persons have been charged in this case; seven have already pleaded guilty and await their fates . . .

Unrelated to this prosecution is an action by the California State Bar Court in April, 2012, which placed Sean Gjerde on inactive status because of pending cases alleging misconduct on his part.

Federal prosecutors have charged eight others in the mortgage fraud scheme. Seven have entered guilty pleas and await sentencing.

There are a number of postings on the California Real Estate Fraud Report regarding the prosecution of Hoda Samuel that you can find by using the search tool.

Read the original article in News10 ABC.

Santa Paula Man Indicted in Mortgage Fraud That Allegedly Targeted Latino Community

September 27th, 2013 at 3:54am

An investigation into a mortgage fraud conspiracy that is alleged to have targeted both Spanish-speaking persons (affinity fraud, ethnic fraud) and lenders has resulted in the arrest of eight people by the FBI, seven of whom are Ventura County residents.

Just arrested is Cesar Rodriguez Azamar, 36, of Santa Paula. The scheme was led allegedly by Jose “Joe” Garcia, 36, of Camarillo via Oxnard-based New Concepts Home Loans. Jose Garcia is a broker who also owned Century 21 Premier Realty, which still has a license to operate by the Bureau of Real Estate.

Besides Cesar Azamar and Joe Garcia, the others indicted are Lucy Ann Garcia, 46, (wife of Joe Garcia), Fernando Murguia, 47, of Oxnard; Jose Garcia’s sister, Sesilia Garcia, 30, of Oxnard; Lili Ayala Hernandez, 41, of Oxnard; Gregg Scott Quinn, 40, of Camarillo; and Lidubina “Lido” Mendoza Perez, 41, of Moreno Valley, who worked at New Concepts Home Loans office in  Bakersfield.

According to the indictment, New Concepts employees allegedly prepared mortgage applications that contained false information about borrowers’ income, employment and assets.

Ventura County Chief Deputy District Attorney Miles Weiss said fraudulent loans were written “for more than 100 homes, a conservative safe number,” and losses to the lender exceeded $11 million.

FBI Assistant Director in Charge Bill L. Lewis said that Joe Garcia “allegedly directed his workforce, including unlicensed individuals acting as Realtors, to peddle the dream of home ownership in the poorest neighborhoods of Oxnard, where they easily found people eager to buy.” If this is true, it could be concluded that the defendants used non-licensees because they knew that their victims would be unaware that a license is required to sell real estate in California.

The victim-banks were Washington Mutual, Wells Fargo, Countrywide, IndyMac, SunTrust, World Savings Bank and JPMorgan Chase.

Read the original article in the Santa Paula Times.

U.S. Attorney’s Lawsuit against Bank of America Goes to Trial in New York

September 25th, 2013 at 9:54am

Attorneys for the U.S. Attorney’s Office in Manhattan are squaring off against Bank of America’s lawyers in a massive lawsuit in which the banking behemoth’s Countrywide predecessor is accused of underwriting and selling toxic mortgages to Fannie Mae and Freddie Mac.

Pierre Armand is an attorney in the civil division of the U.S. Attorney’s Office in Manhattan. Armand calls Countrywide’s business model one in which quality suffered under profiteering and which resulted in massive fraud that cost the two former government-sponsored entities dearly while making Countryside $165 million selling the loans.

“Hustle was not about quality,” Armand said. “It was about speed. It was about volume. It was about profits.”

Countrywide’s loan program, implemented in 2007, went under various names: the “High Speed Swim Lane,”  “HSSL” or “Hustle.” HSSL was overseen by Rebecca Mairone, a former chief operating officer of Countrywide’s Full Spectrum Lending division. Mairone is a co-defendant in the lawsuit who currently works at JPMorgan Chase & Co. and is being defended by Bracewell & Giuliani.

The government’s lawsuit was filed under the Financial Institutions Reform, Recovery, and Enforcement Act, which was passed following savings-and-loan frauds and scandals that occurred during the early 1980s. It blames Countrywide (now Bank of America) for the losses borne by Fannie Mae and Freddie Mac on thousands of supposedly prime mortgages that later defaulted, causing losses of $131 million to Fannie Mae and Freddie Mac.

Bank of America’s attorney is Brendan Sullivan, who countered that Countrywide had quality control in place as well as systems to prevent fraud. “No fraud,” he said. “Two words. That’s the heart and soul and body of the defense. No fraud. And that’s what the evidence will show.”

The case is U.S. ex rel. O’Donnell v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 12-01422. It is being heard in front of U.S. District Judge Jed Rakoff.

Read the original article in the Chicago Tribune.

© 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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