Member Legal Services Tel (213) 739-8200 Fax (213) 480-7724
Scam Watch Get the latest news on scams that affect you. The "Scam Watch" feature provides you with a summary of the latest real estate scams, including short sale and foreclosure scams. Included is a "Scam Resources" feature to provide you with tools to assist your clients in avoiding scams. Check back frequently because this feature is updated on a regular basis.
To go directly to the Scam Resources feature, click here.
REALTORS® Beware of Identity Theft May 29, 2013 Realegal®: C.A.R.'s Member Legal Services has received several reports of REALTORS®'s identities being misused without their knowledge. Unscrupulous people are generally impersonating real estate agents to defraud members of the public into paying money for fake real estate transactions, such as buying or leasing homes or timeshares, either within or outside of California. Because asking for money upfront is a quick tip-off, these fraudsters may hold off asking for money until the fake transaction is almost over. The fraud is generally uncovered when the consumer eventually pays out money, the fraudster severs any further contact, and the consumer, while attempting to locate the fraudster, finds the true agent.
Short Sale Fraud Feb. 21, 2013 (revised) Legal Article: The Short Sale Fraud Q&A has been revised to include a warning that unscrupulous entities may pose as non-profit organizations offering HAFA short sales to unsuspecting homeowners, and even soliciting money from real estate agents for certifications or membership into their organizations in exchange for leads or listings. HAFA was amended in March 2011 to allow loan servicers to approve short sales to non-profit organizations for the purpose of renting or reselling the property to the borrower as specified, but REALTORS® and their clients should carefully investigate the qualifications of these organizations before doing business with them.
Five Arrested in Orange County-Based ‘Mortgage Fraud Scheme Jan. 24, 2013 What's New: Federal authorities have arrested five people allegedly involved in a “builder bailout” real estate scheme that fraudulently purchased more than 100 condominium units around the country with mortgages that mostly went into default, resulting in foreclosures and millions of dollars in losses.
REALTOR Complaints website not affiliated with C.A.R. or NAR Jan. 24, 2013 What's New: A website hosted by a server located in Seychelles (in the Indian Ocean between Somalia and Madagascar) purports to publish consumer complaints about REALTORS® and then offers, for a fee, to remove the complaints or the REALTOR® name from the website.
Citrus Heights Man Charged with Mortgage Fraud Nov. 20, 2012 What's New: Daniel Gherasim, 36, of Citrus Heights, was indicted by a federal grand jury on Thursday for bank fraud, false statements on a loan and credit application, money laundering, and structuring in connection with an alleged scheme to defraud a bank in obtaining a home equity loan.
BofA Sued for Mortgage Fraud Against Fannie & Freddie Oct. 29, 2012 Regulatory News: The United States has filed a civil mortgage fraud lawsuit against Bank of America Corporation (“Bank of America”) and its predecessors Countrywide Financial Corporation and Countrywide Home Loans, Inc. (collectively, “Countrywide”).
Results of Distressed Homeowner Initiative in of California Oct. 22, 2012 What's New: U.S. Attorney Benjamin B. Wagner announced that, as part of the national Distressed Homeowner Initiative described by Attorney General Eric Holder and other federal officials earlier today at a press conference in Washington, D.C., 17 defendants were charged in six criminal cases with felony offenses in the Eastern District of California during the fiscal year that closed September 30, 2012.
Real Estate Agent guilty of real estate Ponzi scheme Oct. 22, 20 What's New: A San Fernando Valley real estate agent and self-described real estate investor, Celia Gallardo, 42, of North Hills, has agreed to plead guilty to running a multi-million dollar Ponzi scheme out of companies based in the Santa Clarita Valley.
Mortgage Brokers Arrested in Scheme Oct. 8, 2012 What's New: The top two managers at a Westwood-based mortgage brokerage company have been arrested on federal charges relating to a foreclosure avoidance and equity-skimming scheme that targeted distressed homeowners.
Granite Bay Man Charged with Multimillion Dollar Loan Fraud Oct. 8, 2012 What's New: A federal grand jury returned a six-count indictment today charging Ryan William Costo, 37, of Granite Bay, with mail, wire, and bank fraud, as well as making false statements to financial institutions, all in connection with various schemes to defraud lenders, United States Attorney Benjamin B. Wagner announced.
Fugitive Indicted in Nationwide Foreclosure Rescue Scam Sept. 5, 2012 A former Los Angeles man, Glen Alan Ward, 47, of Canada, was indicted and charged with aggravated identity theft and having operated a foreclosure-rescue scam in Southern California and elsewhere that promised to postpone foreclosure sales for more than 800 distressed homeowners.
San Diego Agent Helped Drug Traffickers purchase Property Sept. 5, 2012 Marco Manuel Luis, a San Diego real estate agent was sentenced to serve forty-eight (48) months in custody, following his guilty plea to two counts of conspiracy to engage in money transactions in property derived from unlawful activity.
Bank Fraud Defendants Sentenced To 60 And 70 Months Sept. 5, 2012 Michael Ohayon of San Francisco and David Papera of San Rafael were sentenced yesterday to 60 and 70 months in prison, respectively, and ordered to pay more than $10.5 million in restitution for conspiracy to commit bank fraud and money laundering, United States Attorney Melinda Haag announced.
Chico Men Sentenced to Jail for Mortgage Fraud Aug. 20, 2012 Garret Griffith Gililland III, 31, formerly of Chico and Paradise, was sentenced today by United States District Judge Edward J. Garcia to seven years and 10 months in prison and a three-year term of supervised release. Judge Garcia also sentenced Gililland’s business partner, Shane Burreson, 39, of Orland, to 23 months in prison and a three-year term of supervised release. Both defendants pleaded guilty to mail fraud and money laundering.
National Multi-Million Dollar Mortgage Scam July 27, 2012 What's New: Attorney General Kamala D. Harris today announced defendants who ran a national loan modification scam were ordered to pay more than $4 million in penalties and restitution, including $2 million to consumers who were falsely promised modifications of their mortgage loans.
Beware of Phony Short Sale Approval Letters July 24, 2012 What's New: Bank of America has asked those who receive short sale approval letters to verify their authenticity by calling (866) 880-1232, option 1. On June 15, 2012, three men were arrested by the FBI and U.S. Secret Service for allegedly defrauding distressed homeowners which caused more than $10 million in losses. According to the U.S. Attorney in Los Angeles, Atiqullah Nabizada, Kenneth Moore, and Ahmed Tariq Asghari allegedly used various schemes, including phony short sale approval letters issued by a bank. In some cases, the short sale approval letters were entirely fabricated. In another purported scheme, the defendants claimed to have insiders working at the bank who would authorize short sales for far less than fair market value.
Operators of CA-Based Mortgage Modification Scam Sentenced July 24, 2012 What's New: United States District Court Judge Anthony J. Battaglia sentenced Ziad Nabil Mohammed Al Saffar to serve 21 months in federal prison and Sara Beth Bushore Rosengrant to serve 12 months home detention as a part of a three-year term of probation. In their guilty pleas, each admitted that they operated the loan audit and modification scam, located in San Diego, under the names “Compliance Audit Solutions, Inc.” (“CAS”) and “CAS Group, Inc.,” (“CAS Group”).
3 Elk Grove Residents Plead Guilty in Mortgage Fraud Scheme July 24, 2012 What's New: Ali Khalil, 32, Amanullah Khalil, 39, and Wahidullah Khalil, 27, all of Elk Grove, pleaded guilty today to charges arising out of a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced. They submitted fraudulent loan applications in connection with a purchase and subsequent refinance, as well as a loan and home equity line of credit. The applications inflated incomes and assets, falsely stated that the applicants intended to occupy each home as his primary residence, and failed to disclose the existence of the other property.
Four Charged in $11M Loan Origination Scheme July 16, 2012 What's New: The defendants carried out their scheme by recruiting “investors” through advertisements in the Los Angeles Times and online, and encouraging them to purchase homes in Ramona, California, and elsewhere.
Two Loan Officers Admit Fraudulently Obtaining Mortgages and Siphoning Bogus Fees July 16, 2012 What's New: United States Attorney Laura E. Duffy announced that Simon Saeid Koli entered a guilty plea in federal court in San Diego today to Count 1 of an indictment charging him and co-defendant Kian Ashkanizadeh with conspiracy to commit mail fraud, wire fraud, and money laundering in connection with a mortgage fraud scheme involving four expensive homes on Triton Street in Carlsbad, California.
San Fernando Woman Arrested in Real Estate Ponzi Scheme July 16, 2012 What's New: A San Fernando Valley real estate agent and self-described real estate investor charged with running a million dollar-plus Ponzi scheme out companies based in the Santa Clarita Valley has been arrested on federal wire fraud and mail fraud charges.
Los Gatos Developer Indicted For Bank Fraud July 5, 2012 What's New: A federal grand jury in San Jose indicted Muhammad Safadi, Scott Safadi, and Raquel Ramirez with bank fraud, conspiracy to commit bank fraud and making false statements to financial institutions.
Five Defendants Plead Guilty In Mortgage Fraud Case July 3, 2012 What's New: Hasina Safdari, Idriss Safdari, Josue Loayza, Thomas Gomez and Nicolas Munoz have pleaded guilty in federal court in San Francisco to conspiracy to commit wire fraud, wire fraud, and false statements.
Fresno Woman Sentenced For Mortgage Fraud July 2, 2012 What's New: Jenny Chi Ha, aka Phuong A. Ha, 44, of Fresno, was sentenced to 21 months in prison for her role in fraudulently acquiring two residential properties in Fresno that were used for growing marijuana.
FTC Action Halts Alleged "Forensic Audit" Scam June 14, 2012 What's New: At the request of the Federal Trade Commission, a U.S. district court has halted an operation that allegedly preyed on financially vulnerable homeowners, by holding out bogus promises that they could help them avoid foreclosure and renegotiate their mortgages.
S3 Partners Charged In Real Estate Investment Fraud Scheme June 1, 2012 What's New: The three founders of S3 Partners, Melvin Russell “Rusty” Shields, 42, of Granite Falls, N.C.; Michael Sims, 58, of Gilroy, Calif.; and Sam Stafford, 56, of Campbell, Calif., who allegedly defrauded numerous individual investors and banks out of more than $21 million in connection with a real estate investment fraud scheme were arrested and arraigned on 33 counts of conspiracy, wire, mail, bank and securities fraud.
Fraud Alert to the Armed Services Community to Combat HAMP Mortgage Modification Scams June 1, 2012 Whats's New: The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the U.S. Department of the Treasury Treasury) today issued a fraud alert to the Armed Services community to combat scams targeted at homeowners seeking to apply for mortgage assistance through the Home Affordable Modification Program (HAMP) and other federal programs.
H&R Block Sub Agrees to Settle Subprime Mortgage Charges May 3, 2012 The Securities and Exchange Commission today charged H&R Block subsidiary Option One Mortgage Corporation with misleading investors in several offerings of subprime residential mortgage-backed securities (RMBS) by failing to disclose that its financial condition was significantly deteriorating.
Two Charged With Cheating Homeowners In Loan MOD Scams May 3, 2012 Jose Ruiz and Christian Hidalgo were arraigned today on two separate indictments arising from similar loan modification schemes. Each defendant was charged with operating a separate scheme that defrauded a large number of victims.
San Marino Man Sentenced to Prison in $9 Million Mortgage Fraud Scheme May 3, 2012 A San Marino man, Scott Dority, 54, has been sentenced to 121 months in federal prison for defrauding banks and other lenders by using “straw borrowers” and bogus documents to obtain millions of dollars in loans for houses and high-end vehicles that included Ferraris and Lamborghinis.
Six Face Federal Charges in Real Estate ‘Flipping’ Scheme May 3, 2012 Federal prosecutors have charged six people in relation to a multi-million dollar real estate “flipping” scheme in which investors were promised title to homes that could be easily resold, but in fact did not have “clean” titles, were uninhabitable, or were simply worthless.
"U.S. Homeowners Relief" Defendants Barred from Relief Business Apr. 12, 2012 A federal court has imposed a court order with a $3.89 million judgment against defendant Samuel Paul Bain, U.S. Homeowners Relief, Inc., Waypoint Law Group, Inc., and American Lending Review, Inc. for their role in an allegedly fraudulent mortgage modification and foreclosure relief scheme.
Chico Mortgage Defendant Sentenced To 57 Months In Prison Apr. 5, 2012 Niche Savon Fortune, 39, of Chico, was sentenced to four years and nine months in prison, to be followed by three years supervised release for his role in a Chico mortgage fraud scheme in 2007. Fortune’s sister, Kesha Danine Fortune Haynie, 41, of Chico, was convicted of the same crimes on March 28, 2012, after a six-day jury trial before Judge Garcia. Both defendants are in custody.
Southern California Man Pleads Guilty To Running A Foreclosure Rescue Scheme Mar. 12, 2012 John Marcus Desenberg, of Westlake Village, doing business as Creative Lending Solutions, devised a scheme targeted at distressed homeowners. It was part of the scheme that Desenberg would get referrals from individuals who marketed a “Fresh Start” program via the internet, radio, and by advertisements sent through the U.S. mail. The home was sold to the investor, the homeowner would be allowed to stay in their home and would purportedly work on repairing their credit during the specified time period. At the end of the period, the distressed homeowner would be given the option of purchasing their home back from the investor.
Arrests of Three Attorneys in Sacramento-area Loan Modification Scam Mar. 12, 2012 What's New: Gregory Flahive of El Dorado Hills, 39, Cynthia Flahive of Folsom, 41, and Mike Johnson of Elk Grove, 42, were arrested today on 19 felony counts, including grand theft by false pretense, conspiracy and false advertising for taking thousands of dollars in up-front loan modification fees for services that were never performed for homeowners, many of whom ended up losing their homes.
Marketers Asking for Upfront Fees for Class Action Promising Home Mortgage Relief Feb. 24, 2012 What's New: This alert is written to warn consumers about marketing companies, unlicensed entities, lawyers, and so-called attorney-backed, attorney-affiliated, and lawyer referral entities that offer and sell false hope and request the payment of upfront fees for so-called “mass joinder” or class litigation that will supposedly result in extraordinary home mortgage relief.
FTC Ban on Alleged Mortgage Relief Scammers Feb. 14, 2012 The FTC complaint charged U.S. Mortgage Funding, Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, David Mahler, Jamen Lachs, and John Incandela, Jr., also known as Jonathan Incandela, Jr., with violating the FTC Act and the FTC’s Telemarketing Sales Rule. An amended complaint added Louis Gendason as a defendant.
Woodland Man Pleads Guilty To Bid Rigging At San Joaquin Auctions Jan. 30, 2012 Kenneth A. Swanger, 41, of Woodland, pleaded guilty to conspiring with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. According to the court documents, after the conspirators’ designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The difference between the price at the public auction and that at the second auction was the group’s illicit profit. The illicit profit was divided among the conspirators in payoffs. To date, nine individuals, including Swanger, have pleaded guilty in U.S. District Court for the Eastern District of California in connection with the investigation
Five Defendants Admit Stealing more than $11M in Loan Modification Scam Jan. 20, 2012 Gary Bobel, Scott Thomas Spencer (a.k.a. Thomas Cole), Mark Andrew Spencer (a.k.a. Mark Andrews), and Travis Iverson each pled guilty today before Magistrate Judge William McCurine to conspiracy charges related to their commission of wire fraud, money laundering and tax evasion, and criminal forfeiture. According to documents filed in court, Gary Bobel opened up a loan modification business in Northen San Diego County in 2008. Bobel hired telemarketers to sell his services, including defendants Scott Spencer, Mark Spencer, Roger Jones, and dozens of others. Defendant Travis Iverson ran a separate call center in Riverside for Bobel.
Four Sacramento Area Defendants Indicted For Mortgage Fraud Jan. 17, 2012 A federal grand jury returned an indictment today charging four defendants with mail fraud in connection with a mortgage fraud scheme that resulted in losses of at least $710,000 to lenders. Charged are Yevgeniy Charikov, 40, of West Sacramento; Vitaliy Tuzman, 40, of Citrus Heights; Nadia Talybov, 30, of Antelope; and Juliet Romanishin, 30, of West Sacramento.
According to court records, Charikov, a real estate agent, used straw buyers to purchase properties in a declining real estate market and then immediately re-sold the properties to another straw buyer at fraudulently inflated prices. In order to qualify for the mortgage loans, the defendants allegedly prepared and submitted fraudulent loan applications to lenders, falsely stating the straw buyer’s income, liabilities, and/or intent to occupy the home as a primary residence.
Man Pleads Guilty to Foreclosure-Rescue Scheme Jan. 17, 2012 Frederic Alan Gladle, 53, pleaded guilty for his role in operating a foreclosure-rescue scam in Southern California and elsewhere that charged distressed homeowners fees in exchange for fraudulently postponing foreclosure sales.
Gladle, directly or through salespersons, directed homeowners to sign deeds granting fractional interest in their properties to debtors in bankruptcy proceedings whose names Gladle found by searching bankruptcy records. The debtors were unaware that their names and bankruptcy cases were being used by Gladle in his scheme. Gladle then sent the unsuspecting debtors’ bankruptcy petitions, and the deeds that transferred fractional interests to the debtors, to the homeowners’ lenders to stop foreclosure proceedings.
Florida Loan Officer Sentenced in Connection with $2.5M Reverse Mortgage and Loan Modification Scheme Dec. 19, 2011 A Florida loan officer was sentenced today by U.S. District Court Judge William P. Dimitrouleas in Ft. Lauderdale, Fla., for his participation in a nationwide $2.5 million reverse mortgage fraud scheme, the Justice Department announced. John Incandela, 25, of Palm Beach, Fla., was sentenced to 41 months in prison, three years of supervised release and ordered to pay over $1.9 million in restitution.
Working as a loan officer, Incandela, along with co-defendant Marcos Echevarria, 29, of Palm Beach, solicited seniors to refinance their existing mortgages with a reverse mortgage loan financed by Genworth. To qualify the borrowers for these loans, co-defendant Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers’ properties. In fact, however, none of the borrowers had sufficient equity in their properties to qualify for a reverse mortgage. The defendants then submitted the fraudulently inflated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2.5 million in reverse mortgage loans.
The defendants further engaged in a loan modification scheme to conceal the existence of the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unpaid. To this end, Gendason, Incandela and Mackey conspired to create fictitious offers to buy some of the borrowers’ properties, in the form of “short sales.” A short sale is a sale of real estate in which the sale proceeds are less than the balance owed on the loan to the mortgage lender, but avoids foreclosure and related costs. In other instances, to hide the existence of the Genworth reverse mortgage loan from the original lenders, the defendants made monthly mortgage payments to the borrowers’ original lenders.
FTC Settlement Requires "U.S. Homeowners Relief" to Pay Millions Dec. 15, 2011 Six defendants have agreed to settle Federal Trade Commission charges that they participated in a fraudulent mortgage modification and foreclosure relief scheme. The settlements with the U.S. Homeowners Relief defendants are part of the agency’s ongoing crackdown on frauds targeting consumers in financial distress.
Acording to the complaint filed last year by the FTC, the defendants touted a “Government Mortgage Relief Program” that would supposedly reduce mortgage payments as part of the “Obama Act” or the “federal stimulus program,” even though the defendants had no affiliation with the government. Claiming a 90 percent or higher success rate, they charged consumers up to $4,250 and promised to reduce their mortgage payments, their interest rates, and sometimes even their principal loan amounts. The FTC also alleged that although the defendants promised full refunds if they were unsuccessful, once consumers paid the fee, they received nothing, did not get refunds, and the defendants did not respond to their calls or e-mails. According to the complaint, the defendants disconnected their telephones and changed the name of their business while continuing to make promises and take money from other consumers.
National Foreclosure Rescue Scheme Shut Down Dec. 9, 2011 The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and U.S. Attorney for the Central District of California André Birotte Jr. today announced that an Austin, Texas man has been charged with having operated a foreclosure rescue scam in Los Angeles and elsewhere that falsely promised the owners of more than 1,000 distressed properties that they could indefinitely postpone foreclosure sales.
Frederic Alan Gladle, of Austin, Texas, was charged with one count of bankruptcy fraud and one count of aggravated identity theft. He stated in court in Austin that he intends to plead guilty to the charges as part of a plea agreement. As a result of the four-year scheme, which continued through Gladle’s arrest in October of 2011, Gladle and his associates collected more than $1.6 million in fees from distressed homeowners.
According to the charges, Gladle was involved in a scheme that recruited homeowners whose properties were in danger of imminent foreclosure and falsely promised to delay the foreclosures for homeowners for up to six months. Once a homeowner paid a fee of around $750 per month, Gladle, either directly or through salespersons, had the homeowner sign a deed granting a 1/100th interest in the house to a debtor in a bankruptcy whose name Gladle had found by searching bankruptcy records. The debtors had no idea that their names and bankruptcy cases were being used by Gladle in his scheme. Gladle would print out the unsuspecting debtor’s bankruptcy petition, attach the petition to the 1/100th deed in the debtor’s name, and fax the two documents to a homeowner’s lender to stop foreclosure proceedings. Because the filing of a bankruptcy gives rise to an "automatic stay" that protects a debtor’s property, the receipt of the bankruptcy petitions and 1/100th deeds in the debtor’s name forced lenders to cancel foreclosure sales. The lenders – which included banks that received government funds under the Troubled Asset Relief Program (TARP) – could not move forward to collect money that was owed to them until getting permission from the bankruptcy court, thereby repeatedly delaying the lenders’ recovery of their money. When homeowners wanted to void the 1/100th deeds to the unsuspecting debtors, Gladle would forge the debtors’ signatures on papers voiding the 1/100th deeds.
Arrests in $6 Million Loan Modification Scam Dec. 7, 2011 LOS ANGELES--- Attorney General Kamala D. Harris today announced the arrests of two Southern California men who, under the guise of an attorney-backed loan modification company, collected more than $6 million from homeowners nationwide for services that were never performed.
Christopher Fox, 37, of Laguna Niguel and Curtis Melone (AKA Curtis Kubat), 37, of Huntington Beach were arrested Tuesday on 37 felony counts, including conspiracy, grand theft and unlawful collection of advance fees.
Arrest in Stockton, California Foreclosure Scam Dec. 1, 2011 California Attorney General Kamala D. Harris today announced the arrests of three top officers (Magdalena Salas, 42, Angelina Mireles, 42, and Julissa Garcia, 36) of a Stockton, California real estate company (Legacy Home Loans and Real Estate) who took thousands of dollars in up-front loan modification fees and made false promises to lower the mortgage payments of struggling Central Valley homeowners. "This operation was nothing more than a scam," said Christy Romero, Deputy Special Inspector General for SIGTARP. "Salas, Mireles, and Garcia lined their pockets with up-front fees while making false promises to homeowners of lowering their mortgage payments through the ‘Obama Plan’.
Task Force To Combat HAMP Mortgage Modification Scams Dec. 1, 2011 The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the U.S. Department of the Treasury today announced the creation of a joint task force to combat scams targeted at homeowners seeking to apply for the Home Affordable Modification Program (HAMP). The joint task force today issued a consumer fraud alert to protect homeowners from HAMP-related mortgage modification scams. The consumer fraud alert is available below and online at http://www.sigtarp.gov/documents/consumer_fraud_alert.pdf.
5-Year Sentence for Foreclosure Scam Targeting Northern California Nov. 23, 2011 Attorney General Kamala D. Harris announced that Angeline Lisa Lizarrago, 69, of Fremont, was sentenced today to five years for a foreclosure scam in which dozens of struggling Bay Area and Central Valley homeowners paid for foreclosure services that were never delivered.
L.A. Mtg Broker Arrested For Stealing Escrow Funds Nov. 22, 2011 Steve Zaven Kessedjian, 48, of Los Angeles, was arrested after a federal grand jury returned an indictment on July 21, 2011, charging him with mail fraud for a mortgage fraud scheme. According to the indictment, Kessedjian’s company, Amerilend Inc. in Woodland Hills, helped homeowners secure loans to refinance their homes. When a loan was funded, Amerilend would use Targa Escrow, another business owned by Kessedjian, to disperse the escrow funds. The charges are only allegations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sigtarp Shuts Down 85 Online Mortgage Modification Scams Nov. 16, 2011 The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) today announced that it has shut down 85 alleged online mortgage modification scams that prey on vulnerable homeowners through Web banners and other Web advertisements. Google, in cooperation with an ongoing criminal SIGTARP investigation of these scams, has suspended advertising relationships with more than 500 Internet advertisers and agents associated with the 85 alleged online mortgage fraud schemes and related deceptive advertising.
Defendants in "Hope Now" Scheme Settle FTC Charges; Order Puts Them Out of Business Nov. 16, 2011 The settlement with Michael Kwasnik and his law firm is part of the FTC’s ongoing crackdown on scams taking advantage of consumers in financial distress. The settlement order bans Kwasnik and the firm from advertising, marketing, promoting, or selling mortgage assistance relief products or services, or assisting others to do so, and requires them to pay $137,656 to the FTC for consumer redress.
Federal Court Shuts Down Tax Return Preparer Siblings in Southern California Nov. 8, 2011 A federal court has permanently barred Karen Berry, Carla Berry and their tax preparation business, N.C.K. Services Inc., from preparing federal tax returns for others. According to the government complaint, the Berrys, who are sisters from Rialto, Calif., prepared returns claiming false and inflated itemized deductions for mortgage interest.
HUD suspends allied home mortgage corp. and CEO Nov. 3, 2011 The U.S. Department of Housing and Urban Development’s Mortgagee Review Board (MRB) suspended Allied Home Mortgage Corporation, thereby preventing the company from originating and underwriting new mortgages insured by the Federal Housing Administration (FHA). HUD is also suspending the company’s president and chief executive officer, James C. Hodge, and proposing to debar him as well as the company’s executive vice president, Jeanne L. Stell.
The MRB’s and Ginnie Mae’s suspension of Allied comes as the U.S. Attorney in Manhattan filed a lawsuit against the company, Allied Home Mortgage Capital Corporation, Hodge and Stell on multiple charges of mortgage fraud and for violating numerous FHA requirements.
Four Sacramento Area Mortgage Fraud Conspirators Arrested Monday Evening Nov. 2, 2011 Olga Palamarchuk, 41, of Rancho Cordova; Pyotr Bondaruk, 40, of Sacramento; Peter Kuzmenko, 33, of West Sacramento; and Vera Zhiry, 32, of Sacramento, were arrested yesterday for mail fraud and bank fraud in a scheme that resulted in losses of at least $900,000 to lenders. The charges are only allegations and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Company selling leads enters in consent agreement with District Attorney Oct. 17, 2011 Reply! Inc and the Contra County District Attorney office have entered into a settlement agreement and recorded judgment prohibiting Reply! Inc from making certain representations regarding leads provided to real estate licensees. The agreement provides for Reply! Inc to pay $70,000 in fees and costs and to provide reimbursement some real estate licensees who have done business with Reply! Inc in the past.
HUD Suspends Former President of Lend America Oct. 17, 2011 The U.S. Department of Housing and Urban Development (HUD) today announced it is immediately suspending Michael Primeau, former President of Lend America, from doing any business with HUD following his admission that he engaged in a wide-scale mortgage fraud scheme.
San Francisco Real Estate Developer Pleads Guilty to Investment Fraud Scheme Oct. 6, 2011 Maher Talal Muhawieh pleaded guilty in federal court in San Francisco yesterday to wire fraud. Muhawieh admitted that he defrauded investors between approximately January 2006 and March 2009 by promising various individuals that their funds would be used to purchase and to renovate specific residential properties in San Francisco that would then be sold at a profit. In fact, Muhawieh used investors’ funds to pay interest on loans from other investors, and for personal expenses.
At FTC’s Request, Court Shuts Down Deceptive Mortgage and Debt Relief Operation Oct. 4, 2011 At the Federal Trade Commission’s request, a U.S. district court has shut down two related operations as a result of settlements with defendants who allegedly failed to provide promised debt relief services and jeopardized their clients’ privacy by tossing their personal information into unsecured dumpsters. In addition, one of the operations allegedly charged consumers a $1,495 up-front fee based on phony promises that they would get mortgage relief assistance.
Two California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure Auctions Sept. 30, 2011 Two California real estate investors, Eric Larsen of San Leandro, Calif., and Timothy Powers of Alamo, Calif, have agreed to plead guilty today for their roles in a conspiracy to rig bids and to commit mail fraud at public real estate foreclosure auctions in in Contra Costa and Alameda counties, the Department of Justice announced. According to court documents, Larsen and Powers conspired with others not to bid against one another, but instead designate a winning bidder to obtain the title to selected real estate offered at public real estate foreclosure auctions in Contra Costa and Alameda counties.
FTC Settlement Bans Alleged Spammer from Sending Unsolicited Text Messages Sept. 30, 2011 According to the FTC complaint filed in February 2011, the marketer sent a “mind-boggling” number of unsolicited commercial text messages pitching mortgage modification services to consumers, and misrepresented that he was affiliated with a government agency. The agency charged him with violating the FTC Act and the CAN-SPAM Act.
Fraud: Are Your Clients Using Reverse Staging? Sept.7, 2011 One of the types of short sale fraud that Fannie Mae is seeing these days is “reverse staged” houses. In these cases, owners trash their house to knock down the property value. A buyer with whom the owner is colluding then comes in with a low-ball offer, buys it and fixes it back up, then flips it for its real market value.
Calif. AG sued over seizure of files Sept. 7, 2011 Hundreds of homeowners and former homeowners have filed lawsuits in three states alleging that California Attorney General Kamala Harris "acted as the pawn of America's most powerful banks."
The FTC alleges that the defendants in this case falsely promised financially distressed consumers that either they would get loan modifications to make their mortgages much more affordable or the consumers would get a full refund if the defendants were unsuccessful.
Four lawyers and their marketing firms shut down amid fraud accusations Sept. 1, 2011 The State Bar of California and Attorney General Kamala Harris last month shut down the operations of several lawyers and marketing firms that have targeted distressed homeowners, urging them through false advertising to sue their mortgage lenders. The bar and the Department of Justice won court orders either assuming jurisdiction over several lawyers’ practices or imposing temporary injunctions against the marketing companies.
Internet Crime Complaint Center's (IC3) Scam Alerts Sept. 1, 2011 The IC3 has received several complaints from individuals who reported they received a letter stating they were a potential plaintiff in a "Mass Joinder" lawsuit being filed by a law firm located in California, against their mortgage companies. Consumers stated they were requested to pay non-refundable, upfront fees of $2,000 to $5,000. The law firm made a wide variety of claims and sales pitches and offered legal and litigation services, with the goal of taking money from the victim. Lawyers seeking plaintiffs to join a class for a class action lawsuit do not seek up front commission from their class clients. Class action lawyers are typically paid on a contingency basis. In a contingency fee arrangement, an attorney receives approximately 40% of any judgment or settlement amount obtained on the client's behalf. Warnings have been posted on-line regarding "Mass Joinder" by the California Department of Real Estate; the Better Business Bureau; as well as consumers who have been scammed and posted their experiences, insights, and warnings.
Scammers target businesses with fake FTC email Sept. 1, 2011 That email claiming to be from the FTC saying your business has complaints against it? It’s not from us. It’s a malicious hoax that may install malware on your computer if you click on it.
FTC Shuts Down Operators of Deceptive Government Grant Scheme Aug. 25, 2011 The Federal Trade Commission, along with four state attorneys general, has shut down a fraudulent operation that allegedly took advantage of financially distressed consumers by falsely promising them a “guaranteed” $25,000 grant from the federal government. Several defendants have agreed to court orders settling the FTC and state charges, which bar all of them from the alleged deceptive conduct, ban some of them from certain types of marketing, and will result in judgments requiring them to pay hundreds of thousands of dollars in consumer refunds.
CA AG sues law firms engaged in "Mass Joinder" mortgage fraud Aug. 23, 2011 Attorney General Harris sued Philip Kramer, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers, and 14 other defendants who are accused of working together to defraud homeowners across the country through the deceptive marketing of "mass joinder" lawsuits. "Mass joinder" lawsuits are lawsuits with hundreds, or more, individually named plaintiffs. This is the first consumer action by the Attorney General's Mortgage Fraud Strike Force.
AIG sues BofA for $10 billion alleging "massive fraud" Aug. 8, 2011 Bank of America Corp was sued by American International Group Inc for more than $10 billion over an alleged "massive fraud" on mortgage debt, causing the bank's shares to tumble 22.8 percent amid worries it cannot manage a deepening litigation morass.
Modesto man Indicted for mortgage fraud scheme July 28, 2011 United States Attorney Benjamin B. Wagner announced that a federal grand jury returned a two-count indictment today charging Tony Huy Havens, 37, of Modesto, with conspiracy to commit mail fraud and mail fraud in a mortgage fraud scheme. According to the indictment, Havens was a promoter for “The Gift Program,” where real estate buyers and sellers would get together and establish a sales price on a property. They would then agree to set a fictitious sales price of approximately $100,000 to $150,000 above the negotiated fair market value price. The buyer would obtain a loan based on the much higher value, and the loan proceeds that exceeded the sales price would be kicked back to the buyer to use as the down payment on the purchase.
Washington state man sentenced to 25 years for orchestrating foreclosure-rescue scheme July 14, 2011 A Tacoma, Washington man was sentenced today to 25 years in federal prison for running a scheme that defrauded owners of distressed Southern California homes by promising to prevent foreclosure through the paying off of their mortgages, but in reality doing no more than sending their lenders fake notes, totaling $55 million, that were supposedly backed by Treasury bonds.
Group presenting bogus deeds in scams July 11, 2011 Real estate professionals in Virginia and California are being warned about similar incidents of bogus deeds being presented at foreclosed homes there too.
This real-estate scam can land you in jail July 1, 2011 Rarely has a topic elicited as much response as my column (Lew Sichelman, nationally syndicated columnist) about the scam known as flopping, which is the “art” of intentionally misrepresenting the value of a financially strapped borrower’s house in order to buy it at a discounted price from the lender and resell it at its true market value.
Former Placer County man indicted for defrauding real estate investment group June 30, 2011 The indictment alleges that Coulter was the operational manager for a group of investors who owned property in Elverta. Coulter was to prepare 66 acres of approximately 1800 acres to sell to residential and commercial builders. Coulter made “capital calls” for payment of the real estate loans, property taxes, and other legitimate expenses and is alleged to have defrauded the investors of nearly $2 million by inflating the amounts due. According to the indictment, Coulter routed these funds through the investment’s savings and checking accounts for payment of the legitimate expenses, and ultimately to accounts he personally controlled. He used the excess funds to make personal expenditures and purchase personal investments.
FTC stops bogus mortgage loan modification business June 21, 2011 Under a settlement with the Federal Trade Commission, a federal court banned three men and their company from the mortgage modification business and ordered them to pay nearly $19 million for consumer refunds. The defendants allegedly deceived distressed homeowners with phony claims that they would negotiate with lenders to modify their mortgages and make them more affordable.
Results of mortgage fraud prosecutions June 21, 2011 U.S. Attorney Benjamin B. Wagner announced that a grand jury returned a nine-count indictment today against Alonzo Jackson Brown III, 44, of Fairfield, charging him in connection with an investment fraud scheme and a mortgage fraud scheme. Brown is a licensed real estate broker who used that position to perpetrate a mortgage fraud scheme.
California Loan Scam Case in the Recorder and Daily Journal June 10, 2011 This week the Lawyers' Committee filed a complaint in California against an alleged scheme of loan modification scam artists. The case, Ocegueda v. Nathanson, alleges that the defendants enticed vulnerable homeowners into paying as much as $4,995 in upfront fees for the promised loan modification and loan audit services, backed by a 100% money back guarantee if the victims were unable to secure a loan modification through their services, but then completed little to no work for the victims.
Former real estate professionals sentenced for mortgage fraud June 7, 2011 United States District Judge Morrison C. England, Jr. sentenced Ralondria Stafford, 37, of San Francisco, and Necole Ward, 32, of Las Vegas, (both formerly of Vallejo, Calif.) for their roles in a mortgage fraud scheme carried out in Vallejo between 2005 and 2006. Judge England sentenced Stafford to 21 months in prison and Ward to 12 months and a day in prison. The prison sentences are to be followed by three years of supervised release and both defendants were ordered to pay $200,000 in restitution. Stafford and Ward pleaded guilty on June 10, 2010.
New mortgage scam -- has your mortgage really been sold? June 6, 2011 The fraud plays off the frequent sales of mortgages. Banks buy and sell residential mortgages all the time, meaning the bank you sign up with may not be the bank you end up making payments to for the entire term of your loan. Villains know this. The attorney general's office in Nevada says two men set up a business to steal homeowners' mortgage payments by fraudulently claiming the homeowners' bank had sold their mortgage.
Las Vegas man sentenced for a foreclosure-rescue scheme and mortgage fraud June 3, 2011 Eggleston, who did business as Nexxus and Global Legal Associates, admitted he told homeowners in California and elsewhere that he could save homes nearing foreclosure. Through his websites, he falsely and fraudulently represented that his companies used and managed attorneys to file lawsuits against foreclosing lenders for violations of state and federal laws. Eggleston claimed that Nexxus could stop and reverse any pending or completed foreclosure. Victims each paid Eggleston $1,000 per month for his services, and in total Eggleston received more than $100,000 for his fraudulent scheme. Eggleston used the money for his own personal expenditures and not for the benefit of his clients.
CEO sentenced to prison for loan fraud May 25, 2011 Richard Ghilarducci was sentenced to 30 months in prison, and ordered to pay $7 million in restitution for loan fraud United States Attorney Melinda Haag announced.
Six indicted in multi-million mortgage fraud scheme May 25, 2011 The defendants ran a multi-million dollar mortgage fraud scheme, fraudulently inducing banks to extend millions of dollars in loans to unqualified buyers, while the defendants pocketed over one million dollars in real-estate and mortgage commissions for themselves.
Two Fresno men sentenced to prison for mortgage fraud scheme May 25, 2011 United States Attorney Benjamin B. Wagner announced that United States District Judge Lawrence J. O'Neill sentenced Wrenl Burge, 40, of Fresno, to 41 months in prison and Albert Lewis Ellis, 46, also of Fresno, to 33 months in prison for a scheme to falsify mortgage loan documents. Burge was ordered to pay $1,011,524 in restitution, and Ellis was ordered to pay $548,178 in restitution to the mortgage lenders.
Central Coast woman arrested for loan fraud and identity theft May 25, 2011 A Nipomo woman was arrested on charges of orchestrating a tax scheme involving stolen identities, as well as a loan fraud scheme in which she allegedly submitted false income tax returns that overstated her income in an effort to obtain a $1.6 million loan.
Central Coast man sentenced in mortgage fraud scheme May 25, 2011 A Buellton man was sentenced to 21 months in federal prison for defrauding banks by nearly simultaneously seeking home equity lines of credit from four different federally insured financial institutions.
California creating mortgage fraud task force May 23, 2011 The team of 17 lawyers and eight special agents from the state Department of Justice will pursue corporate fraud, scams and fraudulent lending practices, Atty. Gen. Kamala Harris says.
New scam hits at-risk homeowners April 26, 2011 Las Vegas real estate experts are warning about a new form of loan modification scams. The scam finds ways to go around a new federal law preventing home loan modifiers from asking for money up front.
Feds say 'spoofing' covered up real estate scam April 22, 2011 Hanover, 44, a Seal Beach real estate saleswoman, was arrested at Fashion Island in February and was indicted later that month. She faces an August trial on charges of impersonating an FBI agent by using spoofing software, an online service that allows a caller to disguise a number and create false outbound numbers on caller ID to fool people. Federal prosecutors say Hanover used the spoofing service to call Smith and others so she could threaten and intimidate them into staying quiet about her real estate dealings.
Two held in home fraud scheme April 21, 2011 The owner of a now-defunct Granada Hills realty firm and a broker were in custody Thursday on suspicion of stealing nearly $1 million from hopeful homeowners.
Mortgage scam victims receive full refunds April 20, 2011 The Federal Trade Commission (FTC) has mailed 1,410 refund checks to consumers allegedly defrauded by Home Assure LLC, a so-called mortgage foreclosure rescue service. The FTC alleged that the company charged consumers an up-front fee and falsely claimed its special relationships with lenders would enable it to get favorable loan modifications or stop foreclosure.
FTC files contempt charges against marketer of debt relief April 20, 2011 The Federal Trade Commission has filed contempt charges against a promoter of credit repair and debt relief services and three of his companies, alleging that they continued their deceptive marketing practices in violation of a federal court order.
New HUD campaign empowers homeowners to recognize, avoid, and report scams April 18, 2011 The U.S. Department of Housing and Urban Development (HUD) is launching a new campaign in Miami, Chicago, and Los Angeles called Know It. Avoid It. Report It. This campaign has two objectives. First, it aims to direct homeowners facing foreclosure to trusted resources and housing counselors. Second, and more importantly, the campaign wants to solicit the support of homeowners in shutting down scammers who regularly target the elderly, Hispanics, and African Americans. Both objectives will be pursued through education and outreach, anti-scam reporting tools, and close cooperation with federal, state, local, and non-profit partners.
Santa Cruz woman arrested in foreclosure assistance scam Mar. 17, 2011 In order to induce victims to send her money, Bonelli misrepresented the assessed value of the property used as collateral as well as her true interest in those properties. Bonelli caused prior deeds of trust on the collateral properties to remain unrecorded, thereby intentionally creating the appearance of less-encumbered collateral property to potential investors. She also utilized individuals as “door knockers” who solicited owners of properties in mortgage distress for so-called “mortgage assistance.” The door knockers, acting at Bonelli’s instruction, had the owners of distressed properties sign blank real estate sales contracts.
Alleging refi scam, AG sues California entity March 15, 2011 Minnesota Attorney General Lori Swanson is suing Meredian Financial Corp., claiming the California-based mortgage lender and broker scammed Minnesota homeowners into paying refinance fees and then failed to deliver the promised services.
Family members convicted in multi-million dollar mortgage fraud scheme March 9, 2011 The jury found that Anyanwu and Udeh, who are natives and citizens of Nigeria, conspired with Andrew Ashiegbu and his wife Linda Ashiegbu (the sister of Doris Anyanwu), and Ursula Ogamba, a family friend, to obtain loans from various lenders through fraudulent representations on the loan applications. The fraudulent representations included overstated gross monthly income, overstated asset balances, and false claims of United States citizenship. Fraudulent documentation such as verifications of rent, verifications of employment, W-2 forms, and altered bank statements were submitted with the fraudulent loan applications. Other individuals were recruited to assist in providing information to the lenders. Those individuals gave the lenders a false representation of the financial standing of Anyanwu and Udeh.
Court sentences four defendants involved in massive mortgage fraud scheme Feb. 23, 2011 United States Attorney Laura E. Duffy announced the sentencing of four defendants who were convicted in connection with a $55 million mortgage fraud scheme. The four defendants, Maria Echeverria, Ivan Gil, Laneka Chatton, and Jonathan J. Garcia, are among 19 defendants named in a 51-count indictment that alleges wire fraud, mail fraud, and criminal forfeiture.
Don't be scammed by fake IRS communications Feb. 23, 2011 The IRS receives thousands of reports each year from taxpayers who receive suspicious emails, phone calls, faxes or notices claiming to be from the Internal Revenue Service. Many of these scams fraudulently use the Internal Revenue Service name or logo as a lure to make the communication more authentic and enticing.
New Threat: Squatting in foreclosed property Feb. 15, 2011 Couple living in a five-bedroom home on North Euclid Avenue were arrested Tuesday after investigators suspected an illegal case of squatting on the upscale property. Richard and Pamela Scott were arrested by Upland police on suspicion of felony forgery, burglary and filing a false document with the county recorder's office.
$6.5 million settlement of a predatory lending case against former officers of Countrywide Feb. 8, 2011 Attorney General Kamala D. Harris announced a $6.5 million settlement of a predatory lending case against Angelo Mozilo and David Sambol, former officers of Countrywide Financial Corporation. Attorney General Harris announced the settlement money will be used to establish an innovative statewide California Foreclosure Crisis Relief Fund to combat the effects of California's high rates of foreclosure and mortgage delinquency.
Brothers charged in $5 million loan fraud Feb. 1, 2011 Two brothers have been charged with defrauding lenders of $5 million in mortgage proceeds by using falsified documents to support loan transactions. Henrik Sardariani, 42, and Hamlet Sardariani, 40, cheated four lenders in a scheme that operated from April 2007 to January 2009, U.S. Attorney Andre Birotte of the Department of Justice, Central District of California said.
Aceves ruling: Foreclosed homeowner has cause to sue bank for fraud Feb. 1, 2011 A California appeals court ruled that a former homeowner's lawsuit against U.S. Bank (USB) for fraud may continue after the bank allegedly reneged on a promise to negotiate a mortgage modification, opening the door for claims from potentially thousands of similarly situated troubled borrowers in the Golden State. While the court ruled that a case for fraud–which includes claims for damages–could proceed, it also ruled that the homeowner, Claudia Jacqueline Aceves, lacked sufficient cause to get her home back after the foreclosure sale.
Ten persons indicted in major real estate scam Jan. 25, 2011 According to the U.S. Department of Justice, from approximately January 2004 to September 2007, the defendants perpetrated a scheme to defraud mortgage lenders by submitting fraudulent loan applications with material misrepresentations, including misrepresentations concerning the borrower's income, assets, employment status, and intent to use the home as the borrower's primary residence.
10 indicted in CA real estate scheme Jan. 21, 2011 A federal grand jury has indicted 10 people in an alleged real-estate scheme that prosecutors say defrauded mortgage lenders of more than $20 million.
Wells Fargo loses bid to dismiss fraud claims Jan. 7, 2011 Homeowners who say Wells Fargo Bank duped them into loan-modification programs to stave off foreclosure survived a legal challenge to their case in San Francisco federal court.
County couples accuse mortgage lender of fraud Jan. 5, 2011 Joe and Jeanie Luna of Blaine thought they could improve Joe's prospects for an early retirement by refinancing their home through Household Finance Corp. Instead, the Lunas say they found themselves saddled with two high-interest mortgages that have all but crushed their retirement hopes.
Craigslist rental scam Jan. 3, 2011 The Better Business Bureau said Hood's experience is a common one in southern Colorado and is a variation of a scam that has been operating for several years. "They take a picture off another website that the house is for sale," said the Bureau's Carol Odell. "Then they put it on their website and say it's a rental. Then they advertise it on Craigslist."
How to avoid the new year's top scams Jan. 2, 2011 Critics and pundits have already had their say about the Top (and Bottom) Tens and Twenties of 2010 –movies, intriguing people, restaurants, books, songs, TV shows, political moves and so on. All of it is now old news. But lists of 2010's top scams are worth hanging onto since none of them is likely to disappear in 2011. Some are novel, but most are golden oldies — time-tested rip-offs with a new twist that cruelly capitalizes on people's current financial distress.
Mortgage fraud summit reveals both systemic fraud and FBI's seeming blind eye Jan. 1, 2011 To combat mortgage and foreclosure fraud, we first need to understand the nature of the fraud. There are the small-potato schemes -- the loan modification-aid scams, or the scams of fraudsters busting into foreclosed properties and renting them out. Yes, people get burned this way, but going after these frauds is like prosecuting the drug dealer on the corner, if you will.
Scam Resources: How to detect and report scams and other helpful information about short sales and foreclosures.
National Loan Modification Scam Database The Loan Modification Scam Prevention Network (Network or LMSPN) has created the national Loan Modification Scam Database to collect a large amount of complaints to get a clear picture of the loan modification scam crisis nationwide and allow the Network to better assist federal, state, and local law enforcement efforts.
Don't Borrow Trouble Don't Borrow Trouble is a national anti-predatory lending and foreclosure avoidance campaign that combines education and empowerment – teaching consumers to protect their homes and finances.