Archives For Arizona

A.G. Files Consumer Fraud Lawsuit for Wrap Mortgage Fraud

Stephanie Abbott —  July 15, 2021 — Leave a comment

Deed and Note Traders, LLC and 881 Home, LLC and the manager, David Kinas, Tucson, Arizona had a consumer lawsuit filed against them today alleging that they deceived consumers in real estate transactions.

The Attorney General’s Office (AGO) lawsuit alleges that Kinas and his companies sold homes under a “wrap mortgage” arrangement and then failed to make payments on the underlying mortgages. Wrap mortgages are arrangements where the primary mortgage holder (the Defendants in this case) makes a second loan to consumers who purchase the home. In these types of real estate transactions, the holder must continue to make payments on their underlying mortgage or risk a foreclosure that causes the consumer to lose their home. The AGO alleges that the Defendants failed to make their loan payments, despite taking thousands of dollars of down payments from consumers and promising to apply consumers’ monthly payments to the underlying mortgage.

In addition, the lawsuit alleges that by failing to provide consumers a title report and a minimum 15-year loan repayment term, the Defendants violated Deed and Note Traders’ 2006 Consent Decree with the State.

Arizona Attorney General Mark Brnovich made the announcement.

“Owning a home is part of the American Dream but, sadly, that didn’t happen in this case,” said Attorney General Mark Brnovich. “Consumers made a down payment and monthly mortgage payments thinking they were getting closer to owning their home. Instead, they got foreclosure notices.”

The AGO’s lawsuit seeks consumer restitution, up to $10,000 in civil penalties for each violation of the Arizona Consumer Fraud Act, $25,000 for each violation of the Consent Decree, injunctive relief, disgorgement, and attorneys’ fees and costs, plus the amount Deed and Note Traders owes on the 2006 Consent Decree.

David Kinas is not a licensed real estate agent nor a mortgage broker. Consumers can protect themselves from mortgage fraud by conducting research before entering into a real estate contract. Contact the Arizona Department of Insurance Financial Institutions to determine whether the loan company is a licensed mortgage lender and whether it has a disciplinary record. Contact the Arizona Department of Real Estate to determine whether a sales person or broker is licensed and has any disciplinary actions against them.

This case is being handled by Assistant Attorney General Jennifer Bonham. Senior Litigation Counsel Rebecca Salisbury, and Senior Litigation Counsel Kristin Schriner.

If you believe you have been the victim of consumer fraud, you can file a consumer complaint by visiting the Attorney General’s website. If you need a complaint form sent to you, you can contact the AGO’s in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at (800) 352-8431.

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A.G. Puts Real Estate Scammers Out of Business

Stephanie Abbott —  March 5, 2020 — 1 Comment

Ruben Diaz and Rodrigo Diaz, who were accused of deceiving dozens of Spanish-speaking consumers in a variety of real estate-related transactions have been put out of business by court order. As a result of the injunctive relief, Ruben and Rodrigo Diaz are banned permanently from advertising, offering, or providing services in connection with the sale, purchase, lease, or financing of real property in Arizona.

The lawsuit filed by the Attorney General’s Office alleged that Ruben and Rodrigo Diaz (father and son team), used several companies, including ProSolutions LLC, to prey upon Spanish-speaking families who wanted to purchase a home. The Defendants promised to find the families homes to purchase and arrange financing. The Defendants then took tens of thousands of dollars in down payments and had Spanish-speaking consumers sign documents in English under false pretenses.

Families who believed they were purchasing a home eventually discovered, sometimes years later, that they were only renters with no equity or ownership rights. In other instances, consumers gave the Defendants thousands of dollars as a down payment for a home, with the promise that it would be returned to them if they did not make a home purchase. In reality, the Defendants spent the down payments and never made the promised refunds.

Ruben and Rodrigo Diaz were not licensed lenders, real estate agents, or mortgage brokers.

In addition, Ruben Diaz owes $425,313 in restitution to consumers, as well as $100,000 in civil penalties to the State.

Attorney General Mark Brnovich made the announcement.

“Buying a home is part of the American dream, but Ruben and Rodrigo Diaz turned that process into a nightmare and robbed dozens of home buyers of that experience,” said Attorney General Mark Brnovich.

Consumers can help protect themselves from real estate and mortgage fraud by working only with licensed professionals and by ensuring that they read and understand contracts before signing them. The public can access the Arizona Department of Real Estate‘s and the Arizona Department of Financial Institutions‘ public databases to determine if a lender or realtor is licensed in the State of Arizona.

Assistant Attorneys General Rebecca Salisbury and Kaitlin Hollywood handled this case.

If you believe you have been the victim of consumer fraud, you can file a consumer complaint by visiting the Attorney General’s website. If you need a complaint form sent to you, you can contact the Attorney General’s Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at (800) 352-8431. Nuestros formularios de quejas están disponibles en inglés o español.

 

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Woman Pleads Guilty in Real Estate Wire Fraud Case

Stephanie Abbott —  November 6, 2019 — 1 Comment

Alysia Franco, formerly known as Martha Orozco, pleaded guilty to participating in a real estate wire fraud scheme.

In September 2015, a Tucson resident contacted the Federal Bureau of Investigation (FBI) Phoenix Field Division’s Tucson Resident Agency to report the theft of closing funds during a real estate transaction. The victim had wired $189,500 in closing funds to a bank account in the name of SkySea Logistics Services after receiving an email indicating the bank account information for the closing had changed.  The victim, believing the email was from a party to the real estate transaction, wired the funds as instructed in the email. However, SkySea Logistics Services was a front business controlled by Franco and was not a legitimate party to the real estate transaction. Franco provided SkySea Logistics Service’s business and account information to others for use in receiving the proceeds of criminal activity between September 2013 and September 2015.

During the investigation, the FBI discovered another Tucson victim who transferred closing funds to the same SkySea Logistics Services’ account. The funds wired by both victims totaled $391,500.

Attorney General Mark Brnovich made the announcement.

The Attorney General’s Office seized the full amount of the funds from the bank account and returned the money to the victims.

“This type of real estate wire fraud is becoming more common as more of these transactions take place electronically,” said Attorney General Mark Brnovich. “Con artists like Franco and her associates use sophisticated and legitimate-looking emails to trick home buyers out of their funds. Before wiring any money in a real estate deal, consumers should call their lender or real estate agent to verify the dollar amount and also that the transaction is legitimate.”

On Tuesday, November 5, 2019, Franco pleaded guilty to one count of attempted Money Laundering in the Second Degree.

Franco faces up to 3.75 years in prison. A sentencing hearing is set for December 16, 2019.

This matter was investigated by the FBI Phoenix Field Division’s Tucson Resident Agency.  Assistant Attorney General Rachel R. Heintz is prosecuting the case.

The Arizona Department of Real Estate issued this wire fraud advisory with more tips for Arizona consumers.

 

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Woman Indicted in Real Estate Wire Theft Case

Stephanie Abbott —  January 4, 2019 — Leave a comment

Alysia Franco, also known as Martha Orozco, was indicted for her alleged involvement in a scheme to steal closing funds during real estate purchase transactions.

In September 2015, the FBI Phoenix Field Division’s Tucson Resident Agency received a report alleging the theft of closing funds in a real estate transaction from a Tucson, Arizona resident.  The alleged victim notified the FBI that they wired their closing funds to a bank account in the name of SkySea Logistics after receiving an email instructing them to do so, purportedly from a party to the real estate closing.  Unbeknownst to the victim, Skysea Logistics Services was not a party to the real estate transaction and was allegedly used as a front business by Franco, who allegedly provided SkySea’s business and account information to others for use in receiving the proceeds of criminal activity between September 2013 and September 2015 as alleged in the indictment.

The resulting investigation by the FBI uncovered another victim in Tucson, Arizona who transferred closing funds to SkySea Logistic Services.  The funds wired by both victims totaled $391,500.00.  The Attorney General’s Office seized the full amount of the funds from SkySea’s bank account and returned the full amount of what was allegedly stolen back to the victims.

The indictment alleges Franco committed two counts of Theft, one count of Money Laundering in the Second Degree, one count of Illegally Conducting an Enterprise, and one count of Conspiracy.

Attorney General Mark Brnovich made the announcement.

This matter was investigated by the FBI Phoenix Field Division’s Tucson Resident Agency.  Assistant Attorney General Rachel R. Heintz is prosecuting the case.

All defendants are presumed innocent until convicted in a court of law.

 

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False Liens Get Man Sentenced

Stephanie Abbott —  December 19, 2018 — Leave a comment

David John Dziedzic, 55, Scottsdale, Arizona, was sentenced on December 17, 2018 to 30 months’ imprisonment for his lead role in criminal activity related to the short sale of distressed mortgages, some of which were federally-insured.

Dziedzic operated the “Housing Angels” program through his company, Real Core Realty, LLC.  He aggressively marketed a program designed to help homeowners stay in their homes following a short sale, through an undisclosed sale-leaseback program with “angel” investors.   Through this program, he typically received commissions from both the buyer and the seller in a short sale transaction. Dziedzic also recorded false secondary liens on more than 100 short sale properties to induce banks holding primary mortgages to pay off the false secondary mortgages, resulting in more than $100,000 in illegal profits as a result of the scheme.

Dziedzic’s wife, Heather Hamilton Dziedzic, 43, pleaded guilty to a related misdemeanor charge, and was also sentenced for her role in the offense.  She will also surrender her real estate license.  She received a two-year term of probation and a deferred disposition on a felony securities charge, which may be dismissed upon successful completion of the probationary term.

Dziedzic had previously pleaded guilty to one count of communication of unregistered securities, and a separate count involving the failure to notify the Treasury Department of his collection of more than $10,000 in cash from a real estate customer.  

As part of the sentence, Dziedzic must give up his real estate license.  He paid $107,280 in restitution for the actual loss caused when 40 banks paid out on the false liens, and he was also ordered to pay a money judgment of $142,000 over time, in order to disgorge additional profits.  As part of the plea agreement, Dziedzic, a Canadian national who naturalized as a U.S. citizen during the investigation, agreed to cooperate in his denaturalization, because he had failed to disclose the existence of the investigation to U.S. Citizenship and Immigration Services during the naturalization process.

The investigation in this case was conducted by Internal Revenue Service – Criminal Investigation; the Department of Housing and Urban Development, Office of Inspector General; the Federal Housing Finance Agency, Office of Inspector General; and the Federal Bureau of Investigation. The prosecution was handled by Gary M. Restaino and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.

 

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Man Pleads Guilty to Using Fake Deeds to Take Out Loans

Stephanie Abbott —  October 11, 2018 — Leave a comment

Daniel Barraza Nevarez, Arizona, has plead guilty to two felony counts of Fraudulent Schemes & Artifices and Money Laundering in connection with an alleged scam designed to defraud homeowners and lenders.

Between November 2017 and February 2018, Nevarez filed a series of fraudulent quit-claim deeds transferring him ownership of single family homes in Paradise Valley, Scottsdale, and Phoenix. Nevarez then attempted to use the victims’ homes as collateral to secure cash loans. Nevarez used a false identity to execute this fraud, but his true identity was discovered through an undercover operation conducted by agents of the Arizona Attorney General’s Office and Scottsdale Police Department. http://www.mortgagefraudblog.com/?s=Daniel+Barraza+Nevarez+

The plea agreement requires Nevarez to pay $21,708.43 in restitution for legal fees incurred by the victims as a result of these crimes. Nevarez will also serve no less than eight months in Maricopa County Jail.

Attorney General Mark Brnovich made the announcement.

Assistant Attorney General Adam J. Schwartz prosecuted the case.

Nevarez will be sentenced on November 8, 2018, at Maricopa County Superior Court.

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Man Indicted for Multi-Million Dollar Loan Fraud

Stephanie Abbott —  August 28, 2018 — Leave a comment

Jon Richard Rattray, Gilbert, Arizona has been indicted on felony counts of Fraud Schemes & Artifices, Money Laundering, Controlling an Illegal Enterprise, Computer Tampering, Aggravated Identity Theft, and Forgery.

The State alleges that Rattray, through his company Hawkeye Real Estate Services, LLC, filed a series of forged lien release documents at the Office of the Maricopa County Recorder with the intent of freeing up equity in homes he owned so that he could take out new loans on those same properties or sell them to purchasers as unencumbered property.  The alleged loss to victims is estimated at over $6 million.

Arizona Attorney General Mark Brnovich made the announcement.

This case was referred for investigation by the Office of the Maricopa County Recorder and investigated by agents of the Arizona Attorney General’s Office.

All defendants are presumed innocent until convicted in a court of law.

Assistant Attorney General Adam J. Schwartz is prosecuting this case.

Full copy of the indictment.

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Man Indicted for Using Fake Deeds to Take Out Loans on Homeowners’ Properties

Stephanie Abbott —  March 19, 2018 — Leave a comment

Daniel Barraza Nevarez, Arizona, has been indicted on multiple felony counts of Fraudulent Schemes & Artifices, Money Laundering, Forgery, and Criminal Impersonation in connection with an alleged scam designed to defraud homeowners and lenders.

Nevarez allegedly filed a series of forged quitclaim deeds transferring ownership of at least 18 different homes to himself. The homeowners did not know Nevarez and were unaware the deeds to their homes had been transferred to him. The homes were located in different parts of Maricopa County, Arizona including Scottsdale and Paradise Valley.  One of the property deeds transferred is valued at approximately $3.5 million. Nevarez is then accused of contacting home equity lenders to try to take out cash loans on those same properties. To date, we believe Nevarez was unsuccessful in taking out a loan on those properties.

Nevarez was arrested during an undercover operation conducted by the Arizona Attorney General’s Office and the Scottsdale Police Department.

Attorney General Mark Brnovich made the announcement.

Concerned homeowners can go to the Maricopa County Recorder’s Office website to check to see what documents have been recorded in their name.

Assistant Attorney General Adam J. Schwartz is prosecuting this case.

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Real Estate Agent Convicted of Short Sale Fraud Scheme

Stephanie Abbott —  February 12, 2018 — Leave a comment

James Thornton, Arizona, a real estate agent, was found guilty of Fraudulent Schemes and Theft after defrauding two banks in a short sale home scam.

In 2012, Thornton was the listing real estate agent for the owner of a home who was in default on both mortgages in Mesa, Arizona. Thornton sold the property via short sale to his parents’ LLC for $580,000. There had been other offers to purchase the home for hundreds of thousands of dollars more, including offers for $870,000, $707,000, and $650,000. Both banks approved the short sale price to Thornton’s parents not knowing about any of the other offers to purchase the property for significantly more.

Four days after Thornton’s parents purchased the home, Thornton became their listing agent and tried to sell the home “off the market” for $1,100,000. Thornton eventually sold the home to a third party for $1,050,000 cash approximately two months later. Thornton’s parents earned $540,722 in profit on the sale for $1,050,000, only having owned the home for two months.

In the course of his fraud scheme, Thornton made false statements and misrepresentations to bank representatives, potential buyers, and other real estate agents. To discourage buyers on the short sale and devalue the home, Thornton misrepresented the true number of rooms and bathrooms in the home, pointed out a code violation that didn’t exist to an appraiser, and removed all of the high end, custom appliances from the home. Thornton also falsely told the $1,050,000 cash buyer that the reason there was a substantial gap between his parents’ purchase price of $580,000 and the new list price of $1,100,000 was because there had been a “lien paid outside of escrow.”

Sentencing is set for March 16, 2018. Thornton faces 3 to 12.5 years in prison.

Attorney General Mark Brnovich made the announcement.

The FBI Phoenix Field Office investigated this case.

Assistant Attorney General Maura Quigley and Scott Blake prosecuted this case.

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Mortgage Fraud Fugitive Arrested

Allison Tussey —  October 29, 2015 — 1 Comment

Anthony Cruz Quitugua, 38, Phoenix, Arizona, was arrested on May 23, 2012, to face charges of mortgage fraud. In May of 2011, a federal grand jury in Phoenix returned a 15-count indictment against Quitugua, which alleges that he defrauded mortgage lenders out of more than $3.5 million dollars.

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