Thursday, June 25, 2009
Principal and Firm Sued for Real Estate Investment Scheme
Horizon Property Holdings, L.C. ("Horizon"), Beverly Hills, California, and its principal, Cydney Sanchez, 59, Los Angeles, California, have been sued in the United States District Court for the Central District of California, for investment fraud. The suit alleges that Sanchez and Horizon operated a $6 million real estate investment scheme that primarily targeted the African-American and Hispanic communities.
The SEC's complaint alleges that, in 2006 and 2007, Sanchez and Horizon recruited approximately 150 investors in California and several other states to participate in a purported foreclosure reinstatement program. According to the complaint, Sanchez claimed that investor funds were secured by a promissory note and an interest in real property and would be used to cure defaults on distressed properties. By promising returns of 40% in as little as 30 days, Sanchez raised approximately $6 million.
The complaint alleges, however, that investor money was not secured and was not used to rescue homeowners from foreclosure. The complaint alleges that Sanchez and Horizon were instead operating a Ponzi scheme that used approximately $3.7 million from new investors to pay principal and returns due to earlier investors. The complaint further alleges that Sanchez also misappropriated the remaining investor funds to finance unrelated and undisclosed real estate-related activities and pay her personal expenses (including over $500,000 for, among other things, airline tickets, clothing, jewelry, handbags, electronic equipment, furniture, and cars).
The SEC's complaint alleges that Sanchez and Horizon violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also alleges that Sanchez and Horizon violated the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The SEC seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties.
mortgage fraud
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
