Monday, October 09, 2006

Ten Year Sentence in California Flipping Scheme

The former owner of several Anaheim Hills-based real estate companies was found guilty this morning of federal charges related to an illegal property-flipping and loan fraud scheme in which he and others submitted fraudulent mortgage applications that led to the issuance of more than $6 million in fraudulent loans.

James Davis Bennett, 53, Rancho Santa Fe, California, was sentenced to 121 months in prison and ordered to pay $751,050 in restitution and $12,500 in fines.  In January, he was convicted by a jury of of 11 counts including operating a continuing financial crimes enterprise, four counts of wire fraud and six counts of bank fraud.

The evidence presented at trial showed that Bennett purchased multiple-unit properties in distressed areas of Los Angeles and Long Beach, California for fair market value. Bennett purchased these properties in cash in the name of his mother, his wife and his stepson. Simultaneously, Bennett sold these properties to “straw” buyers for inflated prices, usually approximately $100,000 more than the fair market value.

Bennett and his co-schemers recruited the straw buyers with the promise that they would get the properties without having to make any down payment or deposit. Bennett and his co-schemers prepared mortgage loan applications for the straw buyers that contained false employment, income, down payment and credit information. To qualify for the mortgage loans, lenders require borrowers have a number of qualifications, including sufficient income to cover the mortgage payment, current employment, an acceptable credit history and sufficient assets to cover the down payment for the property. Bennett and his co-schemers prepared fraudulent loan applications for the straw borrowers who could not qualify for the loans, knowing that the lenders and banks would rely on the false information to determine whether to fund and insure the loans. Bennett also prepared fraudulent appraisal reports, concealing his purchases of the properties and the true value of the properties, in order for the lenders to fund loans for approximately $100,000 more than Bennett paid for the properties.

Bennett acted as the escrow officer on the transactions to provide fraudulent information to the lenders to lead the lenders to believe significant down payments were made by the borrowers, when no such down payments existed.

As a result of the scheme, lenders issued more than $6 million in mortgages to unqualified and “straw” purchasers, many of whom fell into foreclosure.

Bennett, a licensed mortgage broker and a licensed appraiser who lived in Yorba Linda, California during the scheme, formerly operated West Belle Mortgage, West Belle Mortgage Escrow, West Belle Realty and Independent Appraisers.

Previously in this case, four others - Bernardo Fernandez, Benny Ibarra, Steven Rogers and Ricardo Garcia - pleaded guilty to wire fraud and bank fraud charges.

mortgage fraud

1. Re:  Your October 9, 2006 Article on James Davis Bennett.  Mr. Bennett’s files were reviewed by the FBI for 2 weeks + and when the FBI did not find anything, they became frustrated and prosecuted him anyway.  He was never indicted by a Grand Jury and the crooked Judge, Alicemarie H. Stotler of Santa Ana, California, committed Jury Fraud resulting in False Imprisonment.  Mr. Bennett has filed a Petition to Impeach Judge Stotler and is appealing his ridiculous miscarriage of justice to the Supreme Court.  In this case, the criminals work for the U.S. Government.  Mr. Bennett has proven, beyond all doubt with Court documents, that he is innocent.  Still, Chief Judge Alex Kozinski of the Ninth Circuit continues to hold Mr. Bennett hostage as if he lived in third world country.
   Ninth Circuit Case No. 06-50580 & 08-50143.

   Posted by  on  10/17  at  03:27 PM