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Archive for July, 2014

In David vs. Goliath, Homeowner Awarded $16 Million in Mortgage Modification Fraud Case

July 31st, 2014 at 1:32pm

Phillip Linza, a Plumas Lakes man who claimed that PHH Mortgage never corrected a mistake in the modification to his home loan, has won a major settlement that is certain to get the attention of attorneys representing similar homeowners.

A Yuba County Superior Court jury awarded Linza $513,902 in damages and $15.7 million in punitive damages against PHH.

United Law Center attorney Andre Chernay said PHH Mortgage, despite repeated attempts by Linza to reach them, never explained why they raised his mortgage to $2,300 per month after first lowering it to $1,530.

“It’s a classic case of David v. Goliath,” according to Jon Oldenburg, Managing Attorney and partner at United Law Center. “No one thought the banks could be beaten. This award is a huge step in the right direction to help us continue to punish the banks for violations against millions of California homeowners.”

Read the original article in

Bay Area FBI Agent Pleads Guilty to Bank Fraud

July 31st, 2014 at 1:14pm

Charles Espinel, a 32-year employee of the FBI, pleaded guilty to bank fraud, per an announcement by United States Attorney Melinda Haag of the United States Attorney’s Office for the Northern District of California.

Charles and his wife Jeannette Espinel, who also pleaded guilty to the same charge, admitted that they defrauded both First California Bank and Wells Fargo Bank by submitting fraudulent loan applications. The misleading statements were with respect to their income and that they intended to occupy the rental properties as their primary residence.

As part of his job with the FBI, Espinel was required to file security financial disclosure form (SFDF) on an annual basis in order to retain his Top Secret clearance. In an additional admission, he acknowledged knowingly filing false statements and making material omissions on at least four years of the SFDFs.

Read the original article the U.S. Attorney’s website.

FBI Investigation Gets Prison Time for Short Sale Fraud for Former BofA Employee

July 31st, 2014 at 12:59pm

A former Bank of America employee who admitted taking over $1.2 million in bribes to approve short sales at below-market values has received a sentence of 30 months in federal prison.

United States District Judge Otis D. Wright II sentenced Kevin Lauricella, 29, of Thousand Oaks,  and also ordered him to repay Bank of America $5.7 million and give up his home, which was purchased with some of Lauricella’s illegal earnings. As part of his plea, Lauricella admitted that he had approved short sales for at minimum nine properties for the low valuations so that the buyers could flip (re-sell) the properties quickly (short sale fraud). The sales, which occurred in 2010 and 2011, were entered at higher/false values in the bank’s computer system with the purpose of making it appear that Bank of America had approved the lower values.

Read the original article on the FBI website.

SunTrust Fined $320 Million for Misleading Consumers

July 18th, 2014 at 1:15pm

According to a recent article in the Spokesman-Review,  SunTrust Mortgage Inc. will pay $320 million to the U.S. government to resolve allegations that it misled customers pursuing their loan modifications options.

U.S. Attorney Timothy Heaphy, who was assigned to this case, said in the settlement documents that SunTrust Mortgage had either misrepresented or omitted information to its borrowers who wanted to take advantage of the federal HAMP program and further, that SunTrust failed to process the borrowers’ applications in the timely manner.

The settlement money will be distributed as follows: $274 million in restitution to harmed borrowers and the remainder to Fannie Mae and Freddie Mac, to law enforcement agencies working on mortgage fraud and to mortgage counseling agencies.

Former GMAC Loan Officer Charged in Mortgage Fraud Case

July 18th, 2014 at 11:01am

Penny O’Malley, a former loan officer with GMAC Mortgage has been charged with conspiracy, grand theft and other crimes after an investigation by the U.S. Department of Housing and Urban Development determined O’Malley conspired with her stepmother, Ellen Flores, to falsify the loan application for an unqualified buyer.

According to Kern County Deputy District Attorney Gordon Isen, both O’Malley and Flores have been charged with a total of 11 felonies, which, after he amended the original complaint, now include perjury and obtaining money by false pretenses.

The charges stem from a loan made to Consuelo Herrera, who wanted to purchase a home in southeast Bakersfield. O’Malley is alleged to have convinced her stepmother to provide information on the loan application stating that Herrera worked at a liquor store owned by the stepmother’s husband. Herrera was unemployed at the time. The loan, made in 2006, defaulted just two years later but wasn’t discovered by HUD investigators until 2010.

Read the original article in the Bakersfield California.


Former Los Angeles Deputy Sheriff Sentenced in $11 Million Mortgage Fraud Case

July 11th, 2014 at 12:40pm

Arman Nshanian, 38, of Corona, California, was convicted in a Missouri courtroom on December 6, 2013 for his role in a mortgage fraud scheme that took place in that state. Last week, Nshanian was sentenced by U.S. District Judge Greg Kays to three years and six months in federal prison without parole and ordered Nshanian to pay $785,926 in restitution.

Tammy Dickinson, United States Attorney for the Western District of Missouri, announced the sentence. She noted that because Nshanian committed perjury at trial when he testified in he own defense, the court gave him an enhanced sentence for obstructing justice.

One of Arman Nshanian’s co-defendants was James Arthur Nash, Jr., 44, who was also a sheriff’s deputy at one time.

Nshanian and Nash are two of nine defendants who operated a mortgage fraud scheme in 2005 and 2006 in various cities in Missouri that involved undisclosed kickbacks to the buyer and caused losses to the lender of almost $5 million. Both men were accused of providing false information about their employment and inflating their incomes in order to purchase one or more properties.

This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI and IRS-Criminal Investigation.

Read the original article in the Imperial Valley News.

Petaluma Real Estate Agent Sentenced to Prison for Orchestrating Ponzi Scheme

July 11th, 2014 at 10:41am

Aldo Baccala, 73, a former real estate agent who pleaded no contents to a 141-count of criminal charges for a Ponzi scheme, was sentenced to 20 years in prison by Judge Gary Medvigy. Judge Medvigy also ordered Baccala to pay a $6.4 million fine for the havoc he wrecked on his investors, most of whom were financially ruined. Some of his victims were said to be close friends.

Prosecutors and Probation Department officials had recommended 137 years and four months in prison for the crimes, which included counts of securities fraud and grand theft with enhancements for elder financial abuse and white-collar crime. The crimes occurred from 2004 to 2008

Prior to sentencing, many victims testified how their life’s savings of over 40 years were wiped out by Baccala, who blamed the losses on the economic downturn. Baccala’s statements were countered by prosecutors, who said Baccala knowingly defrauded investors by issuing promissory notes backed by properties he didn’t own and that he used the monies he received to pay earlier investors, make risky stock market investments of course treat himself to a lavish lifestyle.

Read the original article in the Press Democrat.

© 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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