Friday, October 10, 2008
Los Angeles Mortgage Fraud Mastermind Sentenced
Charles Elliott Fitzgerald, 48, formerly of Newbury Park and Beverly Hills, California, was sentenced to 14 years in federal prison by United States District Judge Dean D. Pregerson, who also ordered Fitzgerald to pay $42,676,269 in restitution to two of the victim banks that he defrauded. Fitzgerald, a former Los Angeles-based real estate developer, admitted playing a key role in a $50 million mortgage fraud scheme that defrauded banks by deceiving them into funding inflated mortgages.
At the sentencing hearing, Judge Pregerson said, “This is not a case about deregulation or exploiting loopholes. This is a case of good old-fashioned lying and cheating.”
A representative of one of the victim banks, RBC Mortgage Company, told Judge Pregerson that the fraud scheme caused not only the direct financial loss, but also millions of dollars of indirect costs and loss of jobs at the bank.
Fitzgerald pleaded guilty in May to one count of conspiracy to commit bank fraud and loan fraud; three counts of bank fraud; one count of organizing, managing, and supervising a continuing financial crimes enterprise; one count of concealment money laundering; and one count of obstruction of justice.
Fitzgerald has been in federal custody since December 2006, when he wasarrested and deported by authorities in the Independent State of Samoa, a Pacific island nation to which he fled in June 2003 after he was sued by the two victim banks.
Fitzgerald was the seventh defendant to plead guilty in the scheme. Previous defendants who pleaded guilty are:
• Mark Alan Abrams, 47, Los Angeles, California, who along with Fitzgerald orchestrated the scheme;
• Nicole LaViolette, 38, Palm Springs, California;
• Jamieson Matykowski, 35, Laguna Niguel, California;
• Timothy Holland, 37, Santa Ana, California;
• Richard Maize, 54, Beverly Hills, California; and
• L. Scott Robinson, 46, Dana Point, California.
Charges are still pending against three other defendants allegedly involved in the scheme. These are real estate agents Joseph Aram Babajian, 55, Beverly Hills, California, and Kyle Grasso, 37, Paso Robles, California; and appraiser Lila Rizk, 41, Trabuco Canyon, California. Trial for those defendants is currently set to begin on October 21, 2008, before Judge Pregerson.
In another development in this investigation, prosecutors on Tuesday filed a criminal information against mortgage banker Thomas R. Schiff, 47, Brentwood, California. Schiff was charged with, and has agreed to plead guilty to, making a false statement on his 2001 federal income tax return. Schiff, along with Maize, was a co-owner of the mortgage brokering company Americorp Funding. In his plea agreement, Schiff admitted that in 2001 he received more than $170,000 in payments from Fitzgerald, Abrams and their companies. He further admitted that he willfully failed to report this income on his 2001 federal income tax return.
The case against Schiff marks the 11th defendant charged, and he will become the 8th defendant to plead guilty.
According to court documents, Fitzgerald and the others were involved in a wide-ranging and sophisticated conspiracy to defraud federally insured mortgage lenders out of tens of millions of dollars. As part of the scam, the co-conspirators obtained inflated mortgage loans on expensive homes in some of California’s most exclusive neighborhoods, including Beverly Hills, Bel Air, Holmby Hills, Malibu, Carmel, Mill Valley, Pebble Beach and La Jolla. The court documents charge that the co-conspirators sent false documentation, including bogus purchase contracts and appraisals, to the victim banks to deceive them into unwittingly funding mortgage loans that were hundreds of thousands of dollars higher than the homes actually cost. Lehman Brothers Bank alone was deceived into funding more than 80 such inflated loans from 2000 into 2003, resulting in tens of millions of dollars in losses.
Lehman Brothers Bank and RBC Mortgage Company sued Fitzgerald, Abrams and others in federal court in Los Angeles in 2003 and obtained a receivership, temporary restraining orders, and preliminary injunctions against them. Judge Pregerson appointed David J. Pasternak as receiver to recover assets acquired with proceeds of the fraud. The receiver, as well as attorneys and forensic accountants employed by him, have cooperated extensively with the government’s ongoing criminal investigation.
The charges against Fitzgerald and the others are part of an ongoing investigation being conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.
mortgage fraud
These persons are organized crime which is worse than all the Italans being prosecuted for mere shakedowns and where were the feds and others for years and a rico only gets 14 yrs Italians get life its all about the money 42 mil restitution yeah good luck with that I guess well file a money judgement against his commeracy
Posted by on 10/10 at 01:12 PM
I say give them all the Electric Chair!
Posted by on 10/10 at 01:12 PM
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Mortgage Fraud: Beware the Wolf (Loan Officer) in Sheep's Clothing
24-7PressRelease.com - USA
US consumers looking to refinance their homes or to secure a home loan to purchase their dream homes would be well advised to educate themselves...
Internet Scammer Sells Cape Coral Residential Lot For $18,000
The News-Press - Fort Myers, FL
Because she had title insurance, Kunda will probably get back her money from the 2007 purchase, but the incident highlights cracks in the real estate market and the risk from international scammers who are growing more sophisticated.
Prosecutors Busy With Fraud Cases
Daytona Beach News-Journal - Daytona Beach, FL
The U.S. Justice Department has formed more than 40 mortgage fraud task forces nationwide as prosecutors and investigators struggle with a flood of mortgage-related criminal cases. The FBI reports that its mortgage-fraud caseload has more than doubled in three years to about 1,600 investigations that have cost lenders at least $4 billion. About 200 FBI agents are assigned to the cases, up from 120 a year ago.
Yanchek may take plea deal
Herald Tribune
Sarasota attorney John Yanchek is expected to plead guilty to mortgage fraud next week, statements from a federal prosecutor and the judge presiding over the high-profile criminal case seem to indicate.
Bear Stearns Execs Trial Slated for September
News Inferno
Two former Bear Stearns hedge fund executives are slated to go to trial in September over charges that they lied to investors about two of the funds they managed
Rockford, Chicago lead state in mortgage fraud
Rockford Register Star
Reported incidents of mortgage fraud grew by 45 percent in the second quarter compared with the year-ago period.
Report Finds Tampa No. 2 In Florida For Iffy Mortgages
Tampa Bay Online
In a state that leads the nation in mortgage fraud, Tampa had the second most cases of suspicious loan activity of any Florida city, according to a report released this morning from the Reston, Va.-based Mortgage Asset Research Institute.
Mortgage Fraud Jumps by 45% on Fewer Loan Applications in U.S., Per... MARI
Cloud Computing Journal
Key findings from the MARI Quarterly Fraud Report include that fraud most often occurs at the beginning of the loan process. More than 65 percent of fraud incidents are attributed to "General Application Misrepresentation"
Seven Are Accused Of Identity Theft And Mortage Fraud
The Star Ledger, New Jersey
Seven people have been arrested in connection with an international identity-theft scheme that targeted home equity lines of credit and siphoned at least $2.5 million away from dozens of banks, including more than 10 in New Jersey, according to documents unsealed today.
Suthers Cracks Down On Mortgage Fraud
Rocky Mountain News - Denver, CO
Suther’s office also indicted 10 individuals last March in an $11 million mortgage fraud ring involving 34 local properties...Several other investigations of mortgage fraud are ongoing.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
U.S. v. Miller, et al.
Thursday, December, 18, 2008
Verdict:
F. Jeffrey Miller Guilty of Conspiracy and Money Laundering
Steven Vanatta Guilty of Conspiracy , Money Laundering and Bank Fraud
Hallie Irvin Guilty of Conspiracy , Money Laundering and Bank Fraud
Sandra Jo Harris Not guilty- all counts
More Trial Coverage
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