California Real Estate Fraud Report

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Archive for November, 2008

5 Plead Guilty in San Diego Mortgage Fraud, Loan Fraud Case

November 24th, 2008 at 12:37pm

Five loan officers from Creative Financial Solutions, Inc. (CF) have pled guilty to wire fire and admitted that CFS, a mortgage brokering company, obtained mortgage loans for unqualified borrowers by submitting false loan applications, false bank statements, and false income documentation. In total, the lenders who funded their loans, may have lost up to $16 million on properties that have been foreclosed or are in the foreclosure process.

Read the Full Article in the Imperial Valley News.

Appraiser in Crisp and Cole Real Estate Case to Fight Appraisal Fraud Charges

November 20th, 2008 at 3:30pm

Kirk “Mark” Newton appraised more than 200 properties for the now-defunct Crisp and Cole real estate team in Bakerskfield. He is being accused by the state Office of Real Estate Appraisers of misstating measurements of the properties and over-appraised many properties that are now in foreclosure, essentially that he committed appraisal fraud. The hearing could strip him of his real estate appraiser’s license. Both David Crisp and Carl Cole have lost their California real estate licenses and the firm is being investigated by the FBI.

Read the Full Article in KGET 17.

Search the California Real Estate Fraud Report for more details on the Crisp and Cole firm and real estate fraud.

San Mateo County Sues Lehman Executives

November 14th, 2008 at 11:55am

The San Mateo County Investment Pool has filed a civil lawsuit against executives for Lehman Brothers Holdings Inc., accusing them of concealing information from investors about the firm’s losses in the real estate market while taking home lucrative bonuses.

The investment pool, which represents public agencies that invested in Lehman, lost more than $150 million when Lehman Brothers went bankrupt. They are suing the executives and the firm’s auditor, Ernst & Young, alleging fraud, negligent misrepresentation and violations of California law and the federal Securities Act.

According to Supervisor Mark Church:

“The theory here is the top management fraudulently represented that the company was financially strong at a time when they were about to declare bankruptcy. What makes this case so outrageous is all the while, they were siphoning off millions of dollars for their personal benefit, leaving good-faith investors holding the bag. It hurts our schoolchildren, our transit projects, and other essential services that we provide.”

Lehman Brothers was also in the news as the source of tens of millions of dollars lent to the Beverly Hills real estate fraud, appraisal fraud and mortgage fraud ring, whose accused members include Mark Alan Abrams, Charles Elliott Fitzgerald, Joseph Babajian and Kyle Grasso. Read earlier articles in the California Real Estate Fraud Report and another in Mortgage Law Central.

Read the Full Article in the San Jose Mercury News.

Real Estate Fraud in Riverside County is a Family Business

November 10th, 2008 at 9:08pm

James B. Duncan and Hendrix Montecastro were two of three principals of a number of companies, two of which, Pacific Wealth Managment and Stonewood Consulting, Inc., are accused by the Securities and Exchange Commission (SEC) of defraud almost 100 investors out of more than $11 million, forcing many of them into foreclosure. Now Dundan’s father and Montecastro’s mother-in-law have been arrested on charges of making false statements on loan applications – mortgage fraud and loan fraud.

Real estate lawsuits filed by the investors accused Pacific Wealth and its affiliates and companies of committing loan fraud by falsifying loan applications. Appraisal fraud was an integral part of the conspiracy by making the properties to be purchased look to be worth more than they were.

As with many other real estate fraud schemes reported in the California Real Estate Fraud Report, Washington Mutual, aka WaMu, was the willing lender. WaMu is itself under investigation by several attorneys general for pressuring appraisers at eAppraiseIT, to inflate appraisals of properties with subprime loans in order to increase profits.

Read the Full Article in the Press Enterprise.

Escrow Fraud at the Heart of Estate Financial Meltdown

November 10th, 2008 at 8:56pm

Former employees of the now-defunct Estate Financial Inc. (EFI) firm in Paso Robles acknowledge witnessing fraudulent behavior on the part of its principals and possible other employees.

Karen Guth and her son Joshua Yaguda were arrested on October 16 at their Pasolivo ranch. They are both in San Luis Obispo County jail on $5 million bail each. EFI’s escrow officer, Shauna Bishop, is also accused of slandering one of the investors who is organizing other investors unhappy with EFI, which made hard money loans.

This is a fascinating story, one well-worth reading the full expose in CalCoast News.

Appraiser Now Target of Crisp and Cole Real Estate Fraud Investigation

November 7th, 2008 at 9:43am

Appraisal fraud is the rarely mentioned, but often essential, ingredient in real estate fraud or mortgage fraud and other real estate crimes. Without an appraisal justifying the listed price of a home, mortgage fraud cannot occur.

In California, one of the most well-publicized stories of real estate fraud and mortgage fraud is taking a turn, as the state regulatory agency responsible for overseeing appraisers wants to revoke or suspend the license of a Bakersfield real estate appraiser who appraised more than a hundred homes for the former Crisp and Cole company. The appraisal fraud part of this real estate fraud investigation is being managed by the FBI.

Read the Full Article on the 32-page accusation complaint filed against Kirk “Mark” Newton by the Office of Real Estate Appraisers (OREA).

The “Big Easy” – the $700 Billion Fraud

November 6th, 2008 at 9:09am

Now that the ferocious and inevitable finger-pointing has begun as to who is to blame for the $700 billion corporate welfare bail-out, it’s time for those with cool heads and common sense to review the simple laws of nature in business – who controls the purse strings – to see how predictable the mortgage crisis was.

Fact: as home prices kept rising and banks and other lenders had lent to everyone who was credit-worthy, the quest began to write loans to anybody with a verifiable pulse. Centuries of underwriting standards were thrown out in the race to write loans. Hence the birth of the NINJA loan: No Income No Jobs or Assets.

Fact: borrower stupidity (and investor greed) aside, it was and still is the lending institution that decides whether the loan should be written or not. These decisions directly led to, and are therefore responsible for, the massive real estate fraud, mortgage fraud, appraisal fraud and other real estate crime such as foreclosure fraud that occurred and are which now occurring in new forms to take advantage of both real estate market chaos and the lack of sufficient law enforcement capabilities to respond.

Fact: Former Fed Chairman Alan Greenspan lied when he stated that he had no idea that large-scale defaults and price re-setting to numbers roughly equivalent to the days leading up to the lending splurge. So did Secretary of the Treasury Henry Paulson of Goldman Sachs. They both knew this was a great opportunity to make a lot of money for their industry, they knew the inevitable fall-out, and they knew that Congress – which had eagerly accepted industry largess for their own campaign coffers – would ride to the rescue with the taxpayer skewered at the end of its lance.

Fact: Congress willingly put no conditions on the bail-out: not on golden parachutes, not on year-end bonuses – some amounting to $600,000 EACH to managers and executives in “failed” lending institutions receiving bail-out money, not on corporate pork. Both political parties are as guilty as Greenspan and the Fed, Paulson and his Treasury (it’s apparently not yours and mine) and the lenders, who have not let up a bit on rewarding themselves for a combination of incompetence and fraud. See the many articles below on WaMu / Washington Mutual in the California Real Estate Fraud Report.

Fact: did you – or Congress – ever ask how Henry Paulson came up with the $700 billion figure for the bail-out? As opposed to $600 billion or $800 billion? This is just the start – there will be more bail-out money demanded by continuing to manipulate public fear and the markets.

Fact: this further leap into enormous deficit spending by the federal government is inevitably leading to the bankruptcy and selling off of the United States. Treasury bills and bonds are being sold to foreign interests because America has not lived within its means and there are few American takers for those financial instruments. Bulk sales of banks’ REOs are also finding primarily foreign purchasers as investors’ confidence in the dollar’s value continues to erode. Don’t be surprised if the next “tsunami” is uncontrolled inflation.

This is the biggest con of the 21st century.

For an excellent write-up on the man-made mortgage crisis, read this article by real estate broker Madeline Zook.

California Attorney General Charges 8 in Mortgage Fraud Scam

November 5th, 2008 at 9:43am

In the latest example of foreclosure fraud, The California Attorney General’s office announced this week that it had filed criminal charges against eight individuals it believed ran a mortgage fraud loan modification ring under the name of First Gov, also called Foreclosure Prevention Services. Homeowner-victims were conned out of more than $700,000 by the scammers, who mailed fliers offering to renegotiate mortgages, reduce monthly payments and transfer delinquent loan amounts to the revised loan.

Many of the group’s fliers — printed on goldenrod paper in yellow envelopes — are still circulating.

Read the Full Article in the Los Angeles Times.

Prison Sentences for Mortgage Fraud in Stockton

November 4th, 2008 at 8:59am

A federal judge has ordered Jose Serrano, 45, to pay more than $219,000 in restitution to Washington Mutual Bank (WaMu) and to serve 15 months in prison for his role in a subprime mortgage fraud scam in Stockton. The real estate fraud ring involved the purchase of 10 homes.

Washington Mutual loan officer John Ngo, ringleader Iftikhar Ahmad, mortgage broker William Bridge,Ā  Bridge’s brother Paul and Manpreet Singh have pleaded guilty and are awaiting sentencing. The sole hold-out in the mortgage fraud ring, Joel Blanford, did not cooperate with prosecutors and awaits trial.

Read the Full Article on ABC News10.

Turlock Broker Arrested in Real Estate Fraud

November 3rd, 2008 at 9:51am

Asian-American investors in Turlock were victimized by real estate broker Bounthavy “Tyler” Manivong, 31, of Livingston, according to investigator Glenn Gully of the Stanislaus County district attorney’s fraud unit. Manivong was arrested on suspicion of defrauding a half-dozen Modesto-area victims out of more than $500,000. Accusations include title fraud, that Manivong provided phony deeds of trusts of properties he did not own to the investors.

Manivong is licensed with Pacific A.R.C. Real Estate, based in Turlock.

Read the Full Article in the Modesto Bee.

© 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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