California Real Estate Fraud Report

You have just entered the #1 private-sector resource on the Internet for real estate fraud. In doing so, you have voluntarily left the dimension of the conventional real estate world and crossed over to the Dark Side, the realm where greed, dishonesty and evil are the order of the day. Sign up for a free subscription to this comprehensive news resource and receive weekly, timely news reports about real estate fraud, mortgage fraud, short sale fraud, REO fraud, title fraud, loan fraud, appraisal fraud, affinity fraud, loan modification scams, securities fraud and elder financial fraud.

Archive for the 'Real Estate Crimes' Category

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.

 

 

Newport Beach Man Gets 34 Years in Real Estate Fraud

November 16th, 2017 at 8:55am

Thomas Tarbutton was extradited to the U.S. in 2013 following his detention in Panama as he attempted to fly from Brazil, where he was living, to Costa Rica.

Fifty-eight-year-old Thomas Tarbutton has been sentenced to over 34 years in prison after being convicted last year for stealing approximately $3 million.

Tarbutton, of Newport Beach, was convicted in 2016 of 40 felony counts, including grand theft and securities fraud, involving 11 victims. He had been extradicted to the United States in 2013 after being detained in Panama.

Read the original article in U.S. News & World Report.

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.

Two Long Beach Men Charged in Real Estate Fraud of Elderly, Deceased Persons

November 15th, 2017 at 8:42am

The Los Angeles Sheriff’s Department (LASD) is seeking other possible victims in an identity theft and real estate fraud scheme after arresting real estate broker Andrew Hutchings, 59, and Ronald Hoch, 60.

The men are charged by the Los Angeles County District Attorney’s Office with identity theft, forgery, procuring and offering a false instrument, grand theft and money laundering involving homes located in the cities of Los Angeles, Lakewood, Hemet and Westlake Village.

LASD-Nixle states “The defendants allegedly impersonated the victims and then sold, or attempted to sell the victims’ homes, or obtained loans using the victims’ homes as collateral,” the release stated. “Proceeds from the fraud were laundered by purchasing gold coins from out of state companies, and shipping the coins to mail boxes in California which were obtained under false names.”

Read the original article in the Long Beach Post.

Visalia Man Sentenced for Craigslist Rental Fraud

November 15th, 2017 at 7:58am

Visalia resident Nicholas Vallez, 29, has been sentenced to one year in  jail plus restitution for real estate fraud by Judge Nathan Leedy.

Vallez pleaded no contest in May to one felony count of grand theft, one felony count of forgery, and one misdemeanor count of petty theft. He had listed a property he did not own in Visalia on Craigslist for rent in August 2016, and collected money from prospective renters.

Read the original article in the Visalia Times-Delta.

The case was prosecuted by the Tulare County District Attorney’s Office.

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.

Navy FCU Hit by Home Equity Loan Fraud (HELOC Fraud)

October 5th, 2017 at 8:16am

Atlanta business owner Thomas Scott Brown, 47 was sentenced to three years in prison last week for operating a home equity loan fraud (HELOC fraud) scheme that cost losses of almost $3 million for the $82 billion Navy Federal Credit Union.

In addition to his prison sentence, U. S. District Judge Claude M. Hilton also ordered Brown to pay $2.7 million in restitution and to serve five years of supervised released. Brown pleaded guilty in May to one felony count of bank fraud and one felony count to making a false statement to a financial institution.

Brown’s scheme – which involved over 50 properties – centered on him purchasing properties with his own money and putting them in the name of straw buyers. Ownership was transferred to the straw buyers, who were then directed to apply for HELOC loans and to pay those proceeds to him. For his efforts, he earned profits of $1.4 million.

Read the original article in Credit Union Times.

 

Appraisal-free mortgages will make closings easier – and create more opportunities for fraud

September 23rd, 2017 at 10:02am

There’s no doubt that decisions by Fannie Mae and Freddie Mac to not require appraisals on certain loan categories will create a shift in residential real estate transactions. The downside is that this creates new opportunities for fraud.

Read the full article in Inman News.

© Copyright 2007-2017 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.

ALL RIGHTS RESERVED. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the author, except for the inclusion of BRIEF QUOTATIONS in a review.

BLOG POWERED BY SHARP BIZ IMAGE

Copy Protected by Chetan's WP-Copyprotect.