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Archive for November, 2013

Three More Crisp & Cole Defendants Plead Guilty in Bakersfield Mortgage Fraud Conspiracy

November 29th, 2013 at 12:16pm

The Feds are going to need an entire prison wing to house all the defendants who have either pleaded guilty or been convicted in the Crisp & Cole (CCRE) mortgage fraud case.

In the latest news, Michael Angelo Munoz, 34, pleaded guilty to two counts of mail fraud relating to his role in an extensive mortgage fraud scheme that ran from January 2004 to September 2007. Munoz was employed at CCRE as a licensed real estate agent. According to the California Bureau of Real Estate, Munoz’ license is expired and shows no disciplinary action.

Another CCRE defendant,  Jayson Peter Costa, 40, also pleaded guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud in the case. Costa was an unlicensed loan officer at Tower Lending.

Both men are Bakersfield residents.

Read the original article in 23ABC News.

Jeriel Salinas, 32, has pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, and bank fraud.

Salinas, who was employed at CCRE as a licensed real estate agent. In court documents, he was accused along with others at CCRE and Tower Lending of defrauding lenders out of millions of dollars by using straw buyers to purchase properties at inflated prices. The loans were often 100% loans and were obtained by submitting fraudulent documentation.

Like Michael Munoz, Jeriel Salinas’ license with the California Bureau of Real Estate is in an expired status and there is no record of disciplinary action.

The loan fraud occurred between January 2004 and September 2007.

All the cases were prosecuted by the office of Benjamin Wagner, the U.S. Attorney for the Eastern District of California.

Read the original article in 23ABC News.

Two Plaintiffs’ Lawsuits against MERS Dismissed in Washington State

November 21st, 2013 at 10:34am

In a victory for the practice by large banks of assigning beneficiary status to loans for which the beneficiary does not hold the promissory note, two Washington state courts have dismissed lawsuits by plaintiffs against the practice.

MERS, the Mortgage Electronic Registration System, is a shadowy black box by which banks, among other benefits, sell and re-sell the notes to residential homes without having to pay taxes upon the transfers. When a borrower goes into default, s/he or she often finds in near-impossible to contact the note-holder in order to negotiate a loan modification or other terms. MERS, without being the holder of the note (which is often lost) often stands in the place of the bank and takes the borrower to court in order to effect a foreclosure.

In the first case, Reid v. Countrywide Bank NA, U.S. District Court Judge John Coughenour granted MERS’ motion to dismiss this case, in which the plaintiff claimed Countrywide (the lender), LS Title (trustee) and MERS (the beneficiary) “committed fraud, violated the Washington Consumer Protection Act, were negligent, breached the duty of good faith and fair dealing, placed a cloud on their title, and inflicted emotional distress.” Judge Coughenourfound otherwise, writing “Plaintiffs do not state, for example, that they have attempted to identify who holds the note in order to negotiate a loan modification,” the court document says. “Nor have they directed the court any authority stating that the loss of opportunity to engage in such negotiation is a cognizable injury.”

Judge Marsha Pechman, Chief U.S. District Judge of Washington reached a similar conclusion in the case Ryan Wear filed against Sierra Pacific Mortgage Co., MERS and other defendants. In her ruling, Judge Pechman noted “The only injury identified by plaintiff is the pending foreclosure of his home,” the judge said in her ruling. “Plaintiff does not claim that any action by the defendants caused or induced the plaintiff to default on the loan…therefore, regardless of who the actual beneficiary was…plaintiff’s property would still face foreclosure.”

Read the original article in National Mortgage News.

Two Crisp & Cole Defendants Plead Guilty in Bakersfield Mortgage Fraud Conspiracy

November 21st, 2013 at 10:13am

Two more defendants from the $30 million mortgage fraud case that took place in Bakersfield from January 2004 to September 2007 have pleaded guilty.

Michael Angelo Munoz, 34, of Bakersfield, pleaded guilty to two counts of mail fraud relating to his participation.

Munoz’ co-defendant Jayson Peter Costa, 40, of Bakersfield, pleaded guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud.

Principal Carl Cole pleaded guilty to multiple charges earlier this month, in a long-standing case that was prosecuted by the office of U.S. Attorney Benjamin Wagner. The business entities were Crisp, Cole & Associates, aka Crisp & Cole Real Estate, and Tower Lending, an related mortgage brokerage.

The defendants used straw buyers to purchase properties at inflated values, receiving the loan money from mortgage loan companies and federally insured financial institutions. The loans were 100% financed and much of the loan application documentation was false and fraudulent. Court documents stated that while the properties were held in the names of the straw buyers, they were controlled by the defendants.

To date, I have not heard of prosecutors pursuing any of the straw buyers for their roles in facilitating the fraud. Crime still pays for some, or so it seems.

Read the original article in the Central Valley Business Times.

You can read many previous postings about the Crisp and Cole case in earlier editions of the California Real Estate Fraud Report.

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.

San Diego Man Sentenced for Posing as Real Estate Attorney, Defrauding Investors

November 16th, 2013 at 4:11pm

Timothy Mark Brachmanis, 44, was sentenced to nine years and eight months in prison after pleading guilty to defraud investors, according to the San Diego District Attorney’s Office.

Brachmanis falsely posed as a real estate attorney and solicited investors for properties that would be sold at a profit, investments that were either never made or only partially (real estate investment fraud). He pleaded guilty last August to three counts of grand theft, a tax-code violation and admitted aggravated white collar-crime enhancements.

In addition to sentencing him, Superior Court Judge Frederic L. Link ordered Brachmanis to (re)pay his victims over $3.7 million, which includes fines.

Read the original article in the San Diego Union Tribune.

Tax Write-Offs for Fraud? – JP Morgan Chase Thinks So

November 15th, 2013 at 11:20am

Several U.S. Senators, U.S. PIRG and Americans for Tax Fairness have presented over 160,000 signatures to the Department of Justice, demanding that DOJ prohibit JPMorgan Chase from receiving a multi-billion dollar tax deduction as a result of its settle for fraud in the sale of crisis-era mortgage securities.

If the DOJ allows the $13 billion settlement to be tax deductible, taxpayers – who were the ultimate victims of the bank’s fraudulent practices – would be on the hook for $3 billion.

According to a press release by U.S. PIRG that was published on YubaNet,

“A settlement has to mean something or it won’t have the deterrent effect it’s supposed to have,” said U.S. Sen. Chuck Grassley (R-IA). “Federal agencies should do everything they can in negotiating settlements to limit deductions.”

“Taxpayers should not be subsidizing more than $3 billion of JPMorgan’s penalties at a time when federal priorities like education, clean energy, infrastructure and other job creating investments are facing budget cuts. This settlement has to be meaningful if it is going to deter future abuses. I join the 150,000 people today who are urging Attorney General Holder to stand firm and fight for taxpayers and middle class families,” said Senator Mazie K. Hirono (D-HI), who led an effort in the Senate to ensure the Justice Department reaches a deal with JPMorgan that is fair to taxpayers.

“In its effort to protect consumers from financial crimes, the Justice Department should also protect taxpayers from getting stuck with the costs of JPMorgan’s mortgage misdeeds,” said Francisco Enriquez of the U.S. Public Interest Research Group (U.S.PIRG). “The DOJ should include language in its settlement barring the bank from deducting the cost of the settlement as a tax write off.”

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.

Orange County Woman Convicted of Defrauding Nuns

November 15th, 2013 at 9:29am

An Orange County woman was convicted of defrauding Roman Catholic nuns out of $285,000 which was to be used to buy them a retirement home.

Linda Rose Gagnon, aka Linda Gualtieri-Gagnon, 59, was convicted of three counts of wire fraud by a federal jury.

According to Assistant U.S. Atty. Robert Keenan, Gagnon, who does not hold a real estate license in California, told the nuns she was an expert in “short-sale and foreclosure transactions” and offered to help them buy a home they were currently renting for retired sisters. Instead of helping them, Gagnon spent the entire sum in 64 days on lingerie, leasing an Audi and paying off debts for Rose Enterprise, Inc., her real estate finance company.

Read the original article in the Los Angeles Times and a press release from the FBI.

Florida Mortgage Companies Subject to CFPB Complaints for RESPA Violations

November 8th, 2013 at 11:00am

This article is directly from the California Association of Realtors (CAR) Realegal newsletter.

” . . . on April 4, 2013, the CFPB filed complaints in a federal court in Florida against four national mortgage insurance companies for alleged illegal kickbacks to lenders using captive reinsurance schemes (as explained below). These complaints were the first RESPA enforcement actions taken by the CFPB since it took over enforcement authority from the U.S. Department of Housing and Urban Development (HUD) in July 2011 in accordance with the Dodd-Frank reform law. For this set of lawsuits, the CFPB believed that, for over 10 years, the named mortgage insurers engaged in a prevalent practice of funneling millions of dollars to mortgage lenders in exchange for the referral of business. The mortgage insurers have settled their claims by agreeing to pay $15.4 million and refrain from engaging in these arrangements, but they have admitted no wrongdoing.

The captive reinsurance arrangements alleged in the April 4 complaints involve the mortgage insurance companies issuing mortgage insurance for loans originated by a certain lender, and the lender’s subsidiary company providing reinsurance to cover the mortgage insurer’s risk of loss. Captive reinsurance schemes can also involve settlement service providers other than mortgage insurers and lenders.”

Publisher’s Note: although kickbacks and “referral fees” are common in the real estate and mortgage industries, punishment for violating RESPA provisions is severe.

© 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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