California Real Estate Fraud Report

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Archive for November, 2015

Short sale fraud of his Florida ranch earns man a prison sentence

November 20th, 2015 at 10:12am

Jaime Olaya, 53, thought he outsmarted his bank in the short sale of his 10-acre property.

Olaya bought the property in 2005 and in 2008, quit-claimed half of it to a company he controlled. He later completed a short sale on the half that was retained in his name, selling the home to a straw buyer relative using his Olaya’s own funds from Colombia.

How he was caught remains a mystery. On top of the 2 1/2 years in federal prison he’s going to serve, he agreed to forfeit the entire property.

Read the original article in the Sun Sentinel.


Australians seek to criminalize elder financial abuse

November 20th, 2015 at 10:04am

Americans aren’t the only people stealing from their parents.

An article on ABC Online says that lawyers are asking the country’s Age Discrimination Commissioner to enact an Elder Justice Law across all the states to protect senior citizens.

Superintendent Rob Critchlow says there is a concept called “inheritance  impatience,” with younger heirs wanting to collect their inheritances sooner rather than wait for their parents or relatives to die on Mother Nature’s timeline.


Methuen Executive Convicted in Short Sale Fraud Conspiracy

November 20th, 2015 at 9:55am

The following is a press release from the United States Attorney’s Office for the District of Massachusetts:

BOSTON – A Methuen business executive pleaded guilty today to participating in a conspiracy to defraud banks and mortgage companies by engaging in sham “short” sales of residential properties in the Merrimack Valley of Massachusetts.

Dahianara Moran, 40, pleaded guilty to one count of conspiracy to commit bank fraud.  U.S. District Court Judge Rya W. Zobel scheduled sentencing for Feb. 17, 2016.

Moran conspired with others – including a Methuen loan officer and a Haverhill real estate agent who were not identified in the charging document – to defraud various banks via bogus short sales of homes in Haverhill, Lawrence and Methuen.  A short sale is a sale of real estate for less than the value of any mortgage debt on the property.  Short sales are an alternative to foreclosure that typically occur only with the consent of the mortgage lender, and that generally result in the lender absorbing a loss on the loan and releasing the borrower from the unpaid balance.  By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.

The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath.  Home values in Massachusetts and across the nation declined precipitously, and many homeowners found themselves suddenly “underwater,” with their homes worth less than the mortgage debt they owed.  As part of the scheme, Moran and her co-conspirators submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales – and thereby to release the purported sellers from their unpaid mortgage debts – while simultaneously inducing the purported buyers’ banks to provide financing for the deals.  In fact, the purported sellers simply stayed in the homes, with their debt substantially reduced.  In some cases, the conspirators then re-sold the properties in genuine arms-length transactions for a profit.  Meanwhile, the short-selling banks lost millions of dollars.

As part of the conspiracy:

  • The conspirators falsely led banks to believe that the sales were arms-length transactions between unrelated parties, when in fact, the transactions were not arms-length, and the sellers retained control of (and frequently continued to live in) the properties after the sale. For example, Moran purported to sell two properties she owned to third parties who were, in fact, her close relatives, while actually maintaining control of both properties.
  • The conspirators submitted phony earnings statements that Moran prepared in support of loan applications that they submitted to banks in order to obtain financing for the purported sales.
  • The conspirators submitted phony HUD-1 Settlement Statements to banks, as well as to the Federal Housing Administration, that did not accurately reflect the disbursement of funds in the transactions. (A HUD-1 Settlement Statement is a standard form, developed by the U.S. Department of Housing and Urban Development, that is used to document the flow of funds in real estate transactions.HUD-1 Settlement Statements are required for all transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.)

Hayacinth Bellerose, a real estate attorney from Dunstable, Mass., pleaded guilty last month to the same charge and is scheduled to be sentenced on Feb. 4, 2016.

The charge of conspiracy to commit bank fraud provides for a sentence of no greater than 30 years in prison, three years of supervised release and a fine of $1 million.  Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, the Special Inspector General of the Troubled Asset Relief Program, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit.

Convicted in real estate investment fraud, man arrested again

November 13th, 2015 at 11:54am

Xue Heu, who already had been sentenced to over five years for running a Modesto-based real estate investment scam, is in trouble again.

While awaiting his sentenced, Heu, aka Michael Chan, was arrested by local authorities for stealing from new victims.

Heu and co-defendant Thomas Dickey Price, 73, also of Modesto, falsely posed as agents of Fannie Mae and Freddie Mac to sell distressed properties, all of which had already been sold. Their company was called Liquid Assets & Land Investments Inc. and Capital Land Investments LLC.

A third defendant, Mark Steven Thompson, 37, of Oakdale built the websites for Heu to lure investors and set-up email and bank accounts.

Read the original article in the Modesto Bee.

Two men convicted for roles as straw buyers in Sacramento-area mortgage fraud

November 13th, 2015 at 11:42am

Two men were found guilty by a U.S. District Court jury in Sacramento for acting as  straw buyers on behalf of developers who had trouble selling their properties.

According to the office of U.S. Attorney Benjamin WagnerEdward Khalfin, 58, of San Mateo, was found guilty of 12 counts of mail fraud and 11 counts of making false statements on loan applications. Robin Dimiceli, 53, of Brentwood, was found guilty of six counts of mail fraud and six counts of making false statements on loan applications.

The properties were located in Copperopolis, Carmichael and Sacramento.

Read the original article in the Central Valley Business Times.

Federal judge lets five convicted in mortgage fraud case go free

November 13th, 2015 at 11:36am

U.S. District Judge John A. Mendez stunned federal prosecutors and defense attorneys by ordering five defendants convicted in a multimillion-dollar mortgage fraud scheme last May to go free. Instead, the judge declared that none would go to prison and sentenced them to probation and months of wearing electronic ankle monitors as they return to their daily lives.

Set free were Daniil Markevich, his sister-in-law Irina; his brothers Alex Markevich and Anatoliy Markevich; and Marina Pukhkan, Irina Markevich’s mother. The five had spent the money they were paid for acting as straw buyers on luxury items, such as a Lincoln Navigator and a limousine.

They had faced lengthy prison sentences for their participation as straw buyers for homes they had purchased by submitting fraudulent documents in order to obtain loans.

The judge’s decision is a huge loss for the Office of the U.S. Attorney for the  Eastern District of California, which has made mortgage fraud prosecutions a priority.

Read the original article in the Sacramento Bee.


New team formed to battle real estate fraud in Santa Cruz, Monterey and San Benito counties

November 13th, 2015 at 11:19am

WATSONVILLE — A group of district attorneys, real estate professionals and law enforcement officials from three counties have formed a new coalition to battle real estate fraud and protect residents.

The newly created Tri-County Real Estate Fraud Advisory Team is a collaboration of Santa Cruz, Monterey and San Benito counties.

Monterey County District Attorney Dean Flippo launched the effort after visiting a similar program in Ventura.

Time runs out for Roseville couple that targeted Hispanic families in loan modification fraud

November 13th, 2015 at 11:14am

A federal judge sentenced Martin Wayne Flanders, 51, to six years and five months in prison after Flanders pleaded guilty to committing mail fraud. His wife, Ligia Sandoval Spafford (Sandoval), 48, also pleaded guilty and will be sentenced in March 2016.

According to the office of U.S. Attorney Benjamin Wagner of the Eastern District of California, the couple ran a company called European Debt Resolution, Inc., that targeted Hispanic families in the Bay Area and Sacramento, charging them illegal advance fees for loan modifications, mortgage loan audits, credit repair, debt relief and bankruptcy filings. They advertised on Spanish language radio, television and magazines in order to find their clients and did not perform the services they promised.

Read the original article in the Roseville and Granite Bay Press Tribune.


Massachusetts attorney pleads guilty in short sale fraud conspiracy

November 11th, 2015 at 10:08am

Hyacinth Bellerose, 50, a Dunstable, Massachusetts real estate attorney, pleaded guilty to one count of conspiracy to commit bank fraud in federal court.

Bellerose, who was prosecuted by the office of United States Attorney Carmen M. Ortiz, colluded with a Methuen loan officer and a Haverhill real estate agent to defraud lenders from 2007-2010 by orchestrating a number of phony short sales. Bellerose and her co-conspirators submitted false and misleading documents to the banks to convince them to permit the short sales while at the same time inducing the buyers’ banks to finance purchases. The home sellers, though, stayed in their homes with their mortgages “substantially reduced” (mortgage laundering) while the conspirators made money from the transactions. Some of the homeowners then later sold their homes at a profit.

Read the original press release on the website of the U.S. Attorney for the District of Massachusetts.

Two Northern California men sentenced in separate mortgage fraud prosecutions

November 6th, 2015 at 9:05am

Case #1

Elk Grove resident Sean McClendon, 49, was sentenced by U.S. District Judge Morrison C. England Jr. to one year and eight months in prison. McClendon, an associate of Anthony Salcedo and Anthony Williams, pleaded guilty in October 2012 to a conspiracy to commit mail fraud, in which McClendon’s role was to recruit straw buyers.

Case #2

Judge England sentenced Citrus Heights resident Valeri Kalyuzhnyy, 44, to two years in prison. Kalyuzhnyy, a mortgage broker pleaded guilty last June to making false statements on a loan application, using a straw buyer to purchase two homes.

Read the original article in the Sacramento 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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