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Archive for December, 2012

Convicted San Gabriel Man Disappears, FBI on the Hunt

December 21st, 2012 at 11:24am

David Kaup, 29, who pleaded guilty to two counts of wire fraud in April 2012 and was scheduled to be sentenced on December 17, appears to be on the lam after failing to appear in court. Now Bill Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office and André Birotte Jr., the United States Attorney in Los Angeles are looking for him.

Kaup admitted to the court in his plea that he had defrauded over 50 families out of at least $11 million by concocting several scams, including a mortgage rescue fraud and a real estate investment fraud scam. He ran Lunden Investments, American Loans and Funding (ALF) and First Mortgage West. The Lunden scam occurred when Kaup conned people into giving him $9 million for use as commercial loans but which he lost by trading on the Foreign Currency Exchange Market instead. Kaup convinced homeowners into paying him money upfront in order to refinance their homes at under-market rates (who would believe this?) using ALF.

Read the original article in CBS Local Media.

Seal Beach Woman Indicted for Real Estate Investment Fraud

December 21st, 2012 at 11:10am

Karen Hanover, 46, a Seal Beach woman who was found guilty in 2011 of impersonating an FBI agent,  has now been indicted on suspicion of operating a real estate investment fraud scheme.

Hanover was indicted by a federal grand jury in Santa Ana for operating two companies in Long Beach that may have defrauded up to 50 victims out of more than $2 million. She held seminars in Southern California, Las Vegas and Dallas that sold investors on buying into ownership of commercial real estate properties.

The conviction of impersonating an FBI agent was related to Hanover using the color-of-authority to threaten by telephone a woman who had turned Hanover’s name to investigators.

Read the original article in the Orange County Register (OC Register).

3 Men Sent to Prison in Santa Maria Mortgage Fraud Scheme

December 21st, 2012 at 11:00am

According to a press release from the FBI, three men who thought they could get away with mortgage fraud didn’t and are now on their way to prison, thanks to the Santa Maria Resident Agency of the Federal Bureau of Investigation.

Brian Armet, 36, who owned and operated Custom House Home Loans (CHHL), a Santa Maria real estate mortgage company, pleaded guilty in July 2001 to conspiracy to defraud lenders and was sentenced to one year and one day in prison.

Rigoberto Hernandez, 37, and Julio Tamayo, 42, both from Santa Maria pleaded guilty to mortgage fraud charges and were sentenced to eight months and six months in prison respectively.

The three men must pay $2.4 million in restitution to the lenders they defrauded, per United States District Judge John F. Walter, who also sentenced them. The lending institutions were Homecoming Financial, Freddie Mac, Bank of America, and Carrington Mortgage Company.

FBI Arrests Two Men for Accepting Bribes on Fraudulent Loan Applications

December 17th, 2012 at 10:31am
Swift work by FBI agents in Southern California has resulted in the arrests of Tony Phan of Little Saigon and Troy Chattariyangkul of Los Angeles County for accepting bribes on falsified loan applications (loan fraud) while they were employed at Homecomings Financial in 2007-2008.

Phan, 35, works as a senior underwriter at Stearns Lending, Inc. in Santa Ana. Chattariyangkul, 34, is a USC graduate who worked first at Homecomings Financial, where Phan once worked. Another alleged co-conspirator, Chang Park, was a co-worker of Phan and Chattariyangkul, where the latter two are allged to have taken bribes to overlook fraudulent loan applicaitons.
According to court filings, Park eventually joined George Zevada, who owned and operated Silverline Mortgage Pasadena, where they are alleged to have targeted the Seeno Homes and Discovery Homes in Northern California.
Park was arrested last August and explained how the scheme worked to the FBI agent, including providing supporting documentation. Among other information he provided was that George Zevada allegedly used a CPA named Miguel Arenas Sr. and his Miro Accounting firm to forge pay stubs of prospective buyers.
All four men appear to have ignored the common-sense rule to not conduct allegedly illegal business via email, which helped the FBI build its case against them and spur the arrests.
Read the original article in the OC Weekly.

Wisconsin Man Indicted for Mortgage Fraud, Short Sale Fraud

December 17th, 2012 at 9:41am

If anybody is wondering why the California Real Estate Fraud Report is publishing arrests and indictments in other states that involve short sale fraud, it is because I believe that in California, where short sale fraud is rampant, prosecutors are for the most part too timid to jump into this fray. The result is that the crime of short sale fraud is even more pervasive, thanks to prosecutorial timidity reluctance. I cannot leave out the resistance by bankers to report this crime for prosecution, which is a large part of the problem. This only emboldens the commission of this crime that threatens neighbors’ equity, the property tax base, the IRS and our economy-at-large.

Randez Long, a Milwaukee, Wisconsin man, has been indicted for his role in an alleged mortgage fraudshort sale fraud scheme, which included his mother and sister.

From 2005 until April 2008, Long is alleged to have used his multiple businesses to con banks and other lenders into approving loans that contained false, fraudulent information from the prospective borrowers (loan fraud, mortgage fraud). Long’s businesses included LM Management, LLC; RL & DL Properties, LLC; RA & BB Properties, LLC; SC & Long Properties, LLC; R & B Mortgage, LLC; Long and Reed Property Management, LLC; and Long Management, LLC. See a copy of the indictment. Two of the named banks were Countrywide Bank and Southport Bank .

The purchasers are alleged to have made few payments, pushing the properties very quickly into foreclosure. Randez Long then arranged with the lenders to do short sales but instead sold the properties to new buyers than the approved short sale listing prices by the lenders. In the meantime, he managed to receive new loans from different lenders, again using false documents, and skimmed the profits, earning a tidy $1 million for himself.

The prosecuting agency is the U.S. Attorney’s Office for the Eastern District of Wisconsin, headed by James. L. Santelle.

Here are the properties alleged to be part of his scam;

3132 North 25th Street, Milwaukee, Wisconsin;

3442 North 12th Street, Milwaukee, Wisconsin;

2310 West Keefe Avenue, Milwaukee, Wisconsin.

Read the original article in the Mortgage Fraud Blog.

San Francisco Man Sentenced to 12 Years for Mortgage Fraud

December 17th, 2012 at 9:16am

Sergio Gutierrez, a 49-year-old San Francisco businessman, has been setenced by U.S. District Judge Jeffrey White to 12 years in federal prison for a mortgage fraud scam that targeted Spanish-speaking borrowers (affinity fraud, ethnic fraud).

Gutierrez sought our Latinos in 2008 and 2009 and promised them that in exchange for a fee he could write-up documents that would prove their mortgages were invalid and that they did not have to pay off their loans. Predictably, most of the persons who signed up for Gutierrez’ service lost their homes. Apparently, none of these people was able to reason that if their mortgages were invalid, so was their right to stay in a home that they couldn’t possibly own. Dumb meets crooked.

 U.S. District Judge Jeffrey White sentenced Gutierrez to a longer term than that requested by prosecutors and ordered him to pay restitution to his “victims.”

 Read the original article in the San Francisco Chronicle / SFGate.

US Attorney Sues Michigan Supreme Court Justice in Possible Short Sale Fraud Case

December 6th, 2012 at 10:06pm

Hear Ye, Hear Ye, Prosecutors in California!

Finally the feds in other states are turning their prosecutorial sights on matters of short sale fraud.

The office of U.S. Attorney Barbara McQuade has filed a civil complaint against Michigan Supreme Court Justice Diane Hathaway and her husband attorney Michael Kingsley, alleging they deliberately concealed assets in order to obtain permission from their lender, ING Bank, to do a short sale of their home in Grosse Pointe Park.

The feds contend in their complaint that Hathaway and Kingsley transferred their home in Windermere, Florida to Kingsley’s daughter via quit claim before the short sale, along with a second home in Grosse Pointe Park. The allegedly couple did not list the Florida home as an asset before applying for the short sale with ING, which freed them of $600,000 in mortgage obligations without the penalty of paying personal gains per the Mortgage Debt Relief Act. As part of an application to do a short sale, borrowers are required to submit a hardship letter explaining why they are unable to pay their mortgage, enumerate their assets and liabilities and sign an affidavit affirming the truthfulness of their statements.

After the short sale was completed, Hathaway’s step-daughter transferred the homes back to her father and step-mother.

As part of their lawsuit, the U.S. Attorney’s Office for the Eastern District of Michigan is seeking the forfeiture of the Florida home. There is no word as to whether Michael Kingsley’s daughter will face any charges for her alleged participation in the scheme.

The complaint alleges that before submitting a Dec. 10, 2010, hardship letter to the bank in support of their request for a short sale, the couple “systematically and fraudulently transferred property and hid assets in order to support their claim to ING (Bank) that they did not have the financial resources to pay the mortgage on the Michigan property.”

The complaint says Hathaway and Kingsley quit claimed the Florida property to Kingsley’s daughter. The daughter then quit claimed the property back to them after the short sale.

According to the article in the Detroit Free Press, “Hiding assets to justify a short sale can be considered illegal because it is done to defraud the bank or financial institution that holds the mortgage on the property.”

Chief Justice Robert Young Jr. released this statement: “It is a dreadful development to have any sitting judge accused of fraud and money laundering. Justice Hathaway or her lawyer should clear the air and explain these transactions.”

Justice Diane Hathaway has said she will not resign her position.

You can learn why many people commit short sale fraud and fear no consequences of prosecution by reading my ebook “How to Commit Short Sale Fraud . . . and Get Away with It.”

Real Estate Broker in Failed Running Horse Golf and Country Club Sentenced

December 6th, 2012 at 9:34pm

A former Carmel real estate broker who pleaded guilty last July to wire fraud and money laundering charges in relation to the Running Horse Golf and Country Club development in southwest Fresno is going to federal prison.

Thomas J. O’Meara III received a sentence of 6½ years by U.S. District Court Judge Lucy Koh in San Jose after hearing statements by the investor victims presented by the prosecution. Prosecutors had accused that O’Meara had scammed over 50 investors – mostly residents of the Central Coast region – by luring them into the 450-acre development that centered around a golf course designed by Jack Nicklaus. O’Meara, president of Cypress Investment Corp. in Carmel and the late Scott Webb, a Fresno real estate broker, partnered to build the golf course and 78 expensive homes. The project fell apart with just two of the golf course holes in place and none of the homes built.

O’Meara will be required to provide restitution of $7 million as part of his plea agreement.

Read the original article in the Monterey Herald.

So-Called Mastermind Testifies in Hendrix Montecastro Mortgage Fraud Trial

December 6th, 2012 at 9:16pm

Prosecutors in the $142 million Ponzi scheme trial of Hendrix Montecastro and his mother, Helen Pedrino examined their first witness, James B. Duncan.

Duncan, the apparent ringleader of the mortgage fraud and securities fraud scheme that was operated in Riverside County, explained how the co-conspirators met each other and devised ways to profit out of the hot real estate market of the early- to mid-2000s. Wearing an orange, prison-issued jumpsuit, Duncan testified that he was introduced to Hendrix Montecastro by Anthony Contreras and that the three decided to form a three-way partnership to buy and profit from real estate.

According to Duncan, at first Montecastro, his former wife, Duncan and his wife and Contreras bought properties. They realized that with property prices skyrocketing during the early 2000s that they could easily refinance the homes after one year and use the excess to purchase more properties.

Once the market downturn began, they then made purchases by getting properties over-appraised (appraisal fraud) with the cooperation of the sellers and keeping the excess. They also brought in Helen Pedrino, said Duncan, to bring in investors in order to fund their Ponzi scheme because she had a wide circle of trusted friends.

Hendrix Montecastro and Helen Pedrino are facing 317 charges and prosecutors claim they defrauded 28 persons or couples out of almost $30 million.

The case is being heard in front of Riverside County Superior Judge Jeffrey Prevost and is being prosecuted by San Bernardino County Chief Deputy Prosecutor Vicki Hightower.

Read the original article in the Press Enterprise.

San Diego Loan Officer Gets Prison for Mortgage Fraud

December 6th, 2012 at 6:21pm

Simon Saeid Koli, a former loan officer in San Diego, is going to spend 2 1/2 years in federal prison. In July 2012, Koli, 41, to conspiring to commit mail fraud, wire fraud and money laundering according to the U.S. Attorney’s Office said.

Koli’s co-defendant, Kian Ashkanizadeh, also pleaded guilty in a mortgage fraud scheme that authorities say netted the men $1 million.

In a brazen scheme that was bound to fail, Koli and Ashkanizadeh, who worked at Southern California Finance, used “friends and family” to act as straw buyers so that the men could purchase four homes in the high-end Northern San Diego community of Carlsbad. They falsified job information, income and assets (loan fraud) in order to obtain million dollar mortgages on each homes, somehow gave themselves $200,000 consulting fees for each and manufactured construction fees for work that (drum roll) was never performed.

Simon Koli will face a federal judge on January 25, 2013 for a restitution hearing and his partner-in-crime Kian Ashkanizadeh will appear 3 days later to find out his sentence.

Read the original article in

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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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