Archives For California

Andrew Valles was sentenced today for operating a $2 million mortgage fraud scheme throughout Southern California.

The scheme occurred between 2012 and 2017. The defendants conspired using a fake insurance company, “SafeCare,” which promised to provide home loan services at a low monthly price to primarily Latino and African American families. During this time, the defendants would delay foreclosures and eviction actions by filing false bankruptcy and other court documents under fictitious names. They would instruct victims to deposit illegal advance fees and other large payments into a bank account controlled by the defendants. When the promised loan did not come through, they would proceed with the fabricated filings. The scheme took place in San Diego, Riverside, Orange, Los Angeles, and San Bernardino Counties in California. http://www.mortgagefraudblog.com/?s=Andrew+Valles

Today, Mr. Valles was sentenced to 13 years in state prison. Restitution was ordered in the amount of $2,342,957. Co-defendant Arnold Millman was previously sentenced to a state prison term of three years and four months.

California Attorney General Xavier Becerra made the announcement.

These con artists stole the life savings of decent Californians who thought they were making a smart decision for their homes and their families,” said Attorney General Becerra. “These actions will not be tolerated. My office will continue to identify, investigate, and prosecute those who prey on hardworking Californians to line their own pockets.

The sentencing and guilty pleas are the product of a joint investigation by the California Department of Justice, the California Department of Insurance, and the Federal Housing Finance Agency Office of the Inspector General (FHFA-OIG). A third codefendant, Jemal Lilly, pled guilty and is scheduled to be sentenced on September 4, 2019.

Michael “Mickey” Henschel, 70, Van Nuys, California, a career con man pleaded guilty today in a federal fraud case stemming from a real estate scam that targeted distressed homeowners, many of whom were elderly individuals who were scammed out of their homes, losing significant equity in the properties accumulated over the course of their lifetimes and sometimes over the course of generations of home ownership.

Henschel, pleaded guilty to mail fraud in relation to the scheme that generated more than $17 million in profits and caused homeowners to suffer approximately $10 million in losses when they lost title to their homes and when they were defrauded into giving Henschel and his co-conspirators money as part of the scam. Henschel’s fraudulent conduct also caused losses to mortgage lenders and purchasers of foreclosed properties.

With another defendant pleading guilty today, a total of seven conspirators linked to Henschel’s Van Nuys-based businesses have now pleaded guilty in the scheme that used fraudulent deeds to steal properties from homeowners, and also charged homeowners illegal fees to delay foreclosure and eviction actions.

According to court documents, Henschel, who used various aliases, including “Frank Winston,” “Steve Lopez” and “Ron Berman”, and his co-conspirators tricked distressed homeowners into signing fraudulent deeds on their properties with false promises that the deeds would help homeowners protect their properties from creditors. The fraudulent deeds allowed Henschel and the others to fraudulently file documents on the titles to the targeted homeowners’ properties. For example, they filed fraudulent grant deeds that purported to convey an interest in the properties to entities that Henschel controlled. They also filed fraudulent trust deeds based on fictional loans supposedly guaranteed by the targeted homeowners and fraudulent liens that recorded an interest in the properties based on fictional debts.

Henschel and his co-conspirators benefited from the fraudulent filings in a variety of ways, including through outright theft of the properties, mortgages that co-conspirators obtained on the properties, and rental payments that they obtained from tenants living in the properties. The schemers also made money by demanding payments from the targeted homeowners to clear up the title, and from fraudulent state court civil actions that Henschel and his co-conspirators used to leverage settlement payments.

Four other defendants who worked for Henschel’s various companies recently pleaded guilty to conspiracy to commit mail fraud and bankruptcy fraud. They are:

  • Camerino “Mino” Islas, 42, North Hollywood, California;
  • Claudia “Jessica” Islas, 43, Reseda, California;
  • Juan Carlos Velasquez, 44, Sylmar, California; and
  • Eugene “Gene” Fulmer, 84, Encino, California who pleaded guilty today.

Two other individuals, Shara Surabi, 35, Burbank, California, and Lidia Alvarez, 55, Bell Gardens, California, pleaded guilty in late 2017 to federal charges related to this scheme.

The real estate fraud scheme had two parts, one involving property theft and litigation extortion, and the other involving illegal foreclosure and eviction delay.

In relation to the first aspect of the scheme, Henschel and his co-conspirators identified distressed homeowners who were in default on mortgages or were experiencing financial troubles, even though some had large amounts of equity in their properties. These homeowners were falsely told that Henschel was a sophisticated real estate investor and attorney who would purchase their properties on fair market terms, or he could help protect the homes from creditors. Henschel and the others promised distressed homeowners that they could refinance mortgages or restructure real estate holdings to insulate the properties from creditors, and that Henschel and other co-conspirators could manage the properties on an ongoing basis.

Henschel and the others convinced homeowners to sign fraudulent documents that were recorded on the titles to their homes. In some cases, these fraudulent filings were used to steal properties outright. In other cases, the conspirators exploited the fraudulent filings by initiating foreclosure proceedings and demanding money from homeowners before the properties could be sold. Henschel and his co-conspirators also leveraged the high cost of bringing and defending civil actions to extort settlement payments from homeowners, relying on the fact that it would often be less expensive for homeowners to pay money than to fight them in court.

In the foreclosure rescue part of the scheme, Henschel and his co-conspirators used fraudulent filings to charge homeowners fees to delay foreclosure and eviction actions. Henschel and the others had homeowners sign fraudulent deeds that transferred interests to debtors in bankruptcy cases – but the bankruptcies were fraudulent and used solely as part of the fraudulent scheme, not as part of any genuine effort to restructure or eliminate debts. Many of the fraudulent bankruptcies were filed in the names of fictional people and entities, and some involved stolen identities. Henschel and his co-conspirators sent fake deeds and fraudulent bankruptcy petitions to trustees to stop foreclosure sales, and they delayed evictions in a similar way, mainly by sending bogus documents to various county sheriff’s offices.

As a result of his guilty plea today, Henschel is facing a statutory maximum sentence of 20 years in federal prison. The other six defendants each face up to five years’ imprisonment. Henschel is scheduled to be sentenced by United States District Judge Virginia A. Phillips on August 12, 2019 and the four other conspirators who recently pleaded guilty are scheduled to be sentenced on August 26, 2019. Surabi and Alvarez are expected to be sentenced later this year.

As part of his plea agreement, Henschel agreed to forfeit money and property that represent proceeds of the fraudulent scheme, including more than $100,000 in cash seized from a bank account and various residential properties in the San Fernando Valley, Glendale and Pasadena.

The case against Henschel and the others are the result of an investigation by the Federal Bureau of Investigation, and the Federal Housing Finance Agency – Office of Inspector General. The United States Trustee’s Office for the Central District of California initially referred the matter for investigation and has provided substantial assistance. Also providing assistance during the investigation were the Alameda County District Attorney’s Office, the Los Angeles County Recorder’s Office, the Alameda County Recorder’s Office, and the San Diego County Recorder’s Office.

This case is being prosecuted by Assistant United States Attorneys Kerry L. Quinn and Eddie A. Jauregui of the Major Frauds Section. The forfeiture part of the case is being handled by Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture Section.

Peter Cash Doye, 43, San Diego, California, a financial executive was sentenced today to 15 years in prison for his role as the “driving force” in a massive real estate loan scheme in which he and his co-conspirators stole nearly $50 million dollars from San Diego residents and lenders.

His co-defendant, Raquel Reid, 40, San Diego, California, a notary public and real estate broker, was previously sentenced to 65 months for her role in the fraud. The court also ordered Doye and Reid to pay more than $43 million in restitution to the victims.

According to the indictment and the evidence introduced at trial, the defendants defrauded lenders into making enormous loans against four multi-million dollar mansions in La Jolla and Del Mar, California then used forged documents to make it appear that the loans had been paid off, thereby enabling them to secure additional loans from new lenders who believed the mansions were owned “free and clear.”

Doye, a senior executive at the real estate investment firms Conix, Inc. and Variant Commercial Real Estate (“VCRE”), negotiated the financing from unsuspecting lenders and investors based on a host of lies about the collateral used to secure the loans.  To pull off the scam, Doye, Reid, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, complicating the chain of title for these homes.  Reid notarized the forged documents, helping to make the fraudulent paperwork appear authentic.

Doye’s business partner, Courtland Gettel,43, Coranado, California and Arizona attorney Jeffrey Greenberg, 67, Tucson, Arizona, who testified at the trial on behalf of the government, previously pleaded guilty to participating in the scheme and are serving sentences of 135 and 51 months, respectively. Gettel and Greenberg were also ordered to pay more than $43 million in restitution to victims, and to forfeit the proceeds of the crime.  Gettel was the owner of Conix and VCRE, which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.

During trial, the government proved that Gettel, Greenberg, and Doye acquired the high-end homes in La Jolla and Del Mar, California by claiming they would be used as luxury rentals and investment properties, although in fact, Gettel and Doye lived in the properties along with their families. When they needed money to fund other business deals, Gettel and Doye began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.  Greenberg admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off and helping to close the fraudulent deals.

In late 2014, the lenders began to uncover the fraud and learn that their secured interests in the properties were worthless.  In response to questions from these lenders, Doye, Reid and Gettel denied knowing anything about the fraudulent loans, and created yet more fraudulent documents to cover their tracks. For example, Reid destroyed her notary book and cut up her notary stamp, and then falsely reported to the California Secretary of State that her book had been lost.

This crime was a colossal $50 million swindle by a greedy, brazen thief who squandered the stolen money on lavish parties in Las Vegas, penthouse apartments, private jets and abundant drug use,” said U.S. Attorney Robert Brewer. “The defendant’s extravagant lifestyle was funded by the hardships of his victims, who suffered health problems, emotional stress, financial uncertainty and strain on relationships. This sentence underscores the significant harm victims to and the integrity of our financial system, and is a testament to the hard work of FBI agents and prosecutors Emily Allen and Andrew Young.”

Today, final justice has been served in this multi-million dollar loan fraud scheme. All four defendants, including Doye, who was sentenced to 15 years in custody today, are no longer able to perpetrate their deceit and lies to fulfill their personal greed,” said FBI Acting Special Agent in Charge Suzanne Turner.   “The FBI remains committed to pursuing fraud schemes that erode the integrity of our financial system.”

During the sentencing hearing, U.S. District Judge William Q. Hayes described the defendant as “cold blooded” and the “driving force” behind an “overwhelmingly selfish act” that was motivated by “pure unmitigated greed.” He scolded the defendant for having a “callous attitude” toward his victims, and remarked about his testimony during trial. “After you said your name, I’m hard-pressed to remember anything you said that was truthful,” Judge Hayes said.

The pair was indicted on September 19, 2017 on charges of conspiracy to commit wire fraud, wire fraud, mail fraud, and aggravated identity theft.  Reid was also charged with lying to a federal agent.  On November 20, 2018, after a two-week trial, a jury returned a guilty verdict on all charges against both defendants.

 

Jaime Mayorga, 40, and Ruben Rodriguez, 42, both of Sacramento, California were found guilty, on Tuesday, after a six-day trial, on one count of conspiracy to commit wire fraud.

On July 14, 2011, Mayorga, Rodriguez, and five others were charged by indictment with conspiracy to commit wire fraud. The defendants, including Mayorga and Rodriguez, worked for Delta Homes & Lending, a Sacramento, California, based real estate and mortgage lending company that falsified home loan applications to obtain mortgage loans for borrowers, many of whom did not and could not qualify for a loan without the lies submitted by Delta employees. Mayorga and Rodriguez were real estate agents and loan officers. The now defunct Delta Homes was founded by co-defendant Moctezuma “Mo” Tovar, 49, Sacramento, California.

According to court documents, Delta opened one office in 2003 and eventually had multiple offices in Sacramento, with additional branch offices in Woodland, Yuba City, and Southern California. Rodriguez and Mayorga both started working at the original Delta office on Enterprise Drive in Sacramento. Later, they both moved to a branch on Franklin Boulevard, and Rodriguez went on to work at other Delta branches, including a large branch office located on Howe Avenue.

According to court documents and evidence presented at trial, Delta targeted the Latino community with advertisements in Spanish that heralded the company’s ability to obtain home loans for borrowers who otherwise would not qualify for a mortgage. In addition to advertisements in which Delta claimed to be “Hispanics Serving Hispanics,” Delta employees solicited clients at flea markets and by going door-to-door through the community.

In order to obtain mortgages, the defendants falsified information on loan applications regarding the clients’ income, occupation, and personal savings. Straw buyers were sometimes used when the true borrower did not have a sufficient credit score to qualify. The defendants also deposited money into borrowers’ bank accounts to meet the lenders’ requirement that the borrower have money on hand, taking the money back after acquiring the verification of deposited funds that the lenders also required.

The evidence at trial showed that the defendants’ fraud was also personally lucrative. During the investigation, Rodriguez estimated that in 2006 alone, he earned more than $400,000. Similarly, Mayorga told agents that although he earned a salary when he started at Delta, he shifted to commission-based compensation and then earned between 50 and 85 % of the brokerage fees. Mayorga stated that he earned more than $500,000 in 2005.

The aggregate sale price of the homes involved in the conspiracy was in excess of $10 million, and as a result of the conspiracy, mortgage lenders and others suffered losses of at least $4 million.

Co-defendants Tovar, Manuel Herrera, 39, Davis, California; Sandra Hermosillo, 57,  Woodland, California; and Jun Michael Dirain, 46, Antelope, California all pleaded guilty to one count of conspiracy to commit wire fraud. Christian Parada-Renteria, 43, Woodland, California pleaded guilty to two counts of concealing felonies related to the wire fraud conspiracy.

Rodriguez and Mayorga are scheduled to be sentenced on August 6, 2019 by U.S. District Judge John A. Mendez. The court has not yet set a sentencing date for Tovar, Herrera, Hermosillo, and Dirain. Parada-Renteria was sentenced to serve one year in prison.

Each of the defendants faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

U.S. Attorney McGregor W. Scott made the announcement.

U.S. Attorney Scott stated: “Mayorga and Rodriguez took advantage of members of the Latino community who hoped to become homeowners and manipulated the real estate process for personal gain. As so often occurs in these cases, the result was losses to the financial institutions and neighborhoods burdened with foreclosed properties. We are grateful for the diligence and professionalism of the FBI in investigating this case.”

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Brian A. Fogerty and Justin L. Lee are prosecuting the case.

Erik Hermann Green, 37, Roseville, California was found guilty on Tuesday of three counts of wire fraud in a mortgage fraud scheme.

According to evidence presented at trial, Green was part of a large-scale mortgage fraud scheme to defraud the New Century Mortgage Company by submitting false documentation about employment, income and assets, including fraudulent loan applications and other altered bank documents. Around October 2006, when Green submitted his fraudulent loan applications to obtain a loan for $820,000, he was a licensed real estate sales person and managed approximately 15 loan officers. As part of the scheme, Green received a check for $100,000 that was funneled through a shell company at the close of escrow. Green used the funds for personal expenses.

Co-defendants Stephen Pirt and Janis Pirt previously pleaded guilty to wire fraud. Stephen Pirt was sentenced in 2015 to 25 months in prison and in 2014, Janis Pirt was sentenced to five years of probation with a year of home detention.

Green is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on June 13, 2019. Green faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

U.S. Attorney McGregor W. Scott made the announcement.

This case is the product of an investigation by the IRS Criminal Investigation and the Alameda County District Attorney’s Office. Assistant U.S. Attorneys Michael D. Anderson and Miriam R. Hinman are prosecuting the case.

 

Michael S. Davenport, 50, Santa Barbara, California, the former bass guitar player for the rock band, The Ataris, was sentenced on Wednesday for defrauding thousands of would-be renters and home-buyers throughout the United States from 2009 to 2016.

Davenport’s Santa Barbara-based business changed names several times but was known variously as MDSQ Productions LLC, Housing Standard LLC, Anchor House Financial, American Standard, American Standard Online, and Your American Standard. Court documents simply refer to the business as “American Standard.”

As part of his guilty plea, Davenport admitted that American Standard posted ads on Craigslist listing certain houses for sale or rent at very favorable prices, when, in fact, the houses described in the ads didn’t exist. Consumers who responded to the ads were told they would have to purchase American Standard’s list of houses before they could see any additional information. Consumers were also told that the houses on American Standard’s list were in “pre-foreclosure,” that they could purchase the properties by simply taking over the homeowners’ mortgage payments, and that the deeds to the homes would then be transferred into the customers’ names. The $199 fee that American Standard charged to access the list was purportedly to cover the cost of title searches and deed transfers. No matter what area of the country the consumer lived in, American Standard salespersons told them that the list contained numerous pre-foreclosure properties available in their area.

After consumers paid the $199 fee, they learned that the houses on American Standard’s list were not actually available for purchase. A substantial number of the addresses contained on the list were fictional, or there were simply no houses at those locations. In numerous other instances, the houses were not in pre-foreclosure or any financial distress and were not available to be purchased at below-market prices. If an American Standard customer asked for more information about a specific house advertised on Craigslist, the company’s customer service department always told them that the house was no longer available.

Davenport’s conspiracy and scheme to defraud operated from approximately January 2009 through at least October 5, 2016, over which time American Standard defrauded more than 130,000 people to the tune of more than $25 million. The victims were located in all 50 states and the District of Columbia. Over 100 victims of the scam were located within the Southern District of Illinois, spread across 22 counties, with multiple victims in both St. Clair and Madison counties. American Standard’s list included 534 houses located in Southern Illinois.

Four of Davenport’s former employees have also been charged with participating in the American Standard fraud conspiracy. On Wednesday afternoon, just hours after Davenport’s sentencing, Cynthia L. Rawlinson, 52, Santa Barbara, California was sentenced by Judge Yandle to five years of supervised release. Rawlinson was a salesperson who also served as a manager for American Standard for a brief period of time. Earlier this year, two other American Standard sales representatives from Santa Barbara, California, Mark A. Phillips, 50, Semjase E. Santana, 37 were also sentenced to serve five years of supervised release. And last June, Carlynne L. Davis, 34, Lompoc, California, pled guilty to conspiracy to commit wire fraud in connection with her participation in American Standard. Davis’s sentencing hearing is scheduled for April 5, 2019.

In handing down the seven-year sentence at the federal district courthouse in Benton, Illinois, United States District Judge Staci M. Yandle chastised Davenport for what she characterized as a crime of simple greed. “You were intoxicated with making all this money,” she told the ex-rocker. “You did horrible things.”

As part of his sentence, Davenport was ordered to forfeit $853,210.11 in fraud proceeds that were recovered from his credit card processing accounts, as well as $79,000 in cash that was seized from him at the Bill and Hillary Clinton Airport in Little Rock, Arkansas.

Davenport pled guilty last September to a one-count federal indictment charging him with conspiracy to commit mail and wire fraud.

This case is part of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service. The Office of the Honorable Joyce E. Dudley, District Attorney for Santa Barbara County, and the Santa Maria Office of the FBI have provided substantial assistance in the investigation. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.

 

Prakashumar (“Kash”) Bhakta was sentenced today for operating a mortgage fraud scheme throughout Southern California and the Inland Empire that preyed on homeowners facing foreclosure.

The fraud scheme stretched through San Diego, Riverside, San Bernardino, and Los Angeles, counties, in California. Defendants convinced distressed homeowners that they could provide legal assistance to help save their home. They persuaded victims to pay them $3,500 to start; then $1,000 monthly; and separate fees for filing legal documents. Defendants filed and recorded numerous fraudulent documents, including false bankruptcies and false court filings. The scam defrauded lenders and other owners of their rightful possession of the residential properties. Meanwhile, the defendants took thousands of dollars from homeowner victims to perform fraudulent services. Bhakta, who was an integral part of the scheme, falsely notarized numerous fractional interest grant deeds without the presence of the person whose signature was being notarized. Bhakta, the last defendant to admit fault, pled guilty on November 28, 2018, to 113 felony charges, including conspiracy, grand theft, and filing false or forged documents.   http://www.mortgagefraudblog.com/?s=Prakashumar

Mr. Bhakta was sentenced to seven years and eight months in state prison. Restitution will be ordered in the amount of $256,000. Co-defendants Jacob Orona, Aide Orona, John Contreras, Marcus Robinson, and David Boyd previously pled guilty. They were sentenced to state prison terms ranging from four years to seven years and four months.

California Attorney General Xavier Becerra made the announcement.

We have zero tolerance for scam artists who cheat vulnerable families by stealing their life savings and shattering their dreams of owning a home,” said Attorney General Becerra. “Today’s sentence should serve as a reminder: if you prey on hardworking Americans and betray their trust, my office will hold you accountable to the fullest extent of the law.”

The guilty pleas and sentences result from a joint investigation by the California Department of Justice, Fraud and Special Prosecutions Section; the Federal Housing Finance Agency, Office of the Inspector General; and the Stanislaus County District Attorney’s Office.

Peter Cash Doye, 41, San Diego, California, a  finance executive and Raquel Reid, 38, San Diego, California, a notary public and real estate broker, were convicted following a two-week trial, on all counts and for their roles in a massive real estate fraud scheme that generated nearly $50 million in fraudulently-obtained loan proceeds.

The evidence presented at trial demonstrated that Doye and Reid defrauded lenders into making enormous loans against four multi-million dollar mansions in La Jolla and Del Mar, California then used forged documents to make it appear that the loans had been paid off so they could obtain additional loans from new lenders who believed the mansions were owned “free and clear.”

Doye, a senior executive at the real estate investment firms Conix, Inc. and Variant Commercial Real Estate (“VCRE”), negotiated the financing from unsuspecting lenders and investors based on a host of lies about the collateral used to secure the loans.  To pull of the scam, Doye, Reid, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, complicating the chain of title for these homes.  Reid notarized the forged documents, helping to make the fraudulent paperwork appear authentic.

Doye’s business partner Courtland Gettel, 43, Coronado, California, and Arizona attorney Jeffrey Greenberg, 67, Tucson, Arizona, previously pleaded guilty to participating in the scheme, and are serving sentences of 135 and 81 months, respectively. Gettel and Greenberg were also ordered to pay more than $43 million in restitution to victims, and to forfeit the proceeds of the crime.  Gettel was the owner of Conix and VCRE, which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.

During trial, the government proved that Gettel, Greenberg, and Doye acquired the high-end homes in La Jolla and Del Mar by claiming they would be used as luxury rentals and investment properties—although in fact, Gettel and Doye lived in the properties along with their families. When they needed money to fund other business deals, Gettel and Doye began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.  Greenberg admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off and helping to close the fraudulent deals.

In late 2014, the lenders began to uncover the fraud and learn that their secured interests in the properties were worthless.  In response to questions from these lenders, Doye, Reid and Gettel denied knowing anything about the fraudulent loans, and created yet more fraudulent documents to cover their tracks. For example, Reid destroyed her notary book and cut up her notary stamp, and then falsely reported to the California Secretary of State that her book had been lost.

These defendants attempted to use their significant real estate experience to pull off an egregious fraud that created serious consequences for lenders and title owners,” said U.S. Attorney Adam Braverman.  “As this case demonstrates, federal prosecutors are fully committed to protecting the integrity of our lending system by holding such criminals accountable.”

The FBI will pursue each criminal participant in these sophisticated, multi-million dollar fraud schemes until final justice is served.” said FBI Special Agent in Charge John Brown. “Today, Peter Doye and Raquel Reid join co-conspirators Courtland Gettel and Jeffrey Greenberg as convicted felons for their roles in this massive loan fraud scheme.

United States District Judge William Q. Hayes remanded both Doye and Reid into custody following the guilty verdicts, and set their sentencing hearings for March 4, 2019, at 9:00 am.

This case is being prosecuted by Assistant United States Attorneys Emily Allen and Andrew Young.

Surjit Singh, 72, Dublin, California, Rajeshwar Singh, 44, Pleasanton, California and Anita Sharma, 56, Gilroy, California were sentenced today for crimes relating to their involvement in a mortgage fraud scheme.

According to court documents, in 2006 and 2007, Surjit Singh recruited individuals with good credit to act as straw buyers for residential properties owned by his family members and associates. Rajeshwar Singh, a licensed real estate agent, assisted in the scheme by submitting loan applications for the straw buyers. Anita Sharma, a dental assistant at the time, was one of the straw buyers. Because Sharma and the other straw buyers could not afford the homes based on their true incomes, the Singhs submitted fraudulent loan applications and supporting material to lending institutions that included false statements about the straw buyers’ income, employment, liabilities, and intent to occupy the homes as their primary residences.

At least 14 properties were involved in the scheme. Anita Sharma alone purchased five homes in San Jose, San Ramon, Elk Grove, Sacramento, and Modesto, California. Other straw buyers purchased or refinanced properties in Stockton, Modesto, Patterson, Lathrop and Tracy, California. All of these homes were ultimately either foreclosed upon or sold in a short sale where the bank lets homeowners sell their homes for less than is owed on the mortgage.

Sharma was paid for her involvement in the scheme. Rajeshwar Singh received financial benefits through broker commissions for the transactions and as the seller of seven of the properties. He also continued to occupy the San Ramon property at a time when Anita Sharma should have been living there. Surjit Singh benefitted through payments out of escrow directed to shell companies, such as SJR Investments and BK Investments, which were associated with his daughter and significant other, whose initials are SJR and BK respectively. These payments were purportedly for contracting services, which did not occur. He also benefitted through rental payments made to him and his significant other by the renters of the homes, as the straw buyers were not living in the homes. In addition, many of his family members received money by selling properties and had money directed to them out of escrow. According to court documents and evidence produced at trial, the defendants were responsible for the origination of more than $9.3 million in fraudulently procured residential mortgage loans.

Surjit Singh was sentenced to 11 years and three months in prison, his son, Rajeshwar Singh was sentenced to 11 years and three months in prison on four counts of mail fraud, four counts of bank fraud, and four counts of false statements on loan and credit applications. Anita Sharma, was sentenced to three years and 10 months in prison on two counts of mail fraud, two counts of bank fraud, and two counts of false statements on loan and credit applications. Surjit Singh was ordered to pay a $2 million fine, $698,787 in restitution, and $847,000 in forfeiture. Raj Singh was ordered to pay a $1 million fine, $928,287 in restitution, and $838,399 in forfeiture. Anita Sharma was ordered to pay $603,180 in restitution and $30,000 in forfeiture.

Surjit Singh is in custody.  Rajeshwar Singh and Anita Sharma are scheduled to self‑surrender on January 9, 2019.

U.S. Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Lee S. Bickley, Kelli L. Taylor, and Kevin Khasigian prosecuted the case.

Angela Grace Cotton, 46, Lawrence Edward Cotton, 52, Denaysha Coleman, 26, and Latrese Gevon Breaux, 26, California, have been charged today with running a sophisticated real estate scheme that resulted in the theft of more than $1.4 million.

From July 2014 through September 2016, Angela Cotton, assisted by her co-defendants, allegedly used fictitious escrow and title companies that she had created to deceive a lending company into believing it was funding two legitimate real estate transactions, according to Deputy District Attorney Daniel Kinney of the White Collar Crime Division’s Real Estate Fraud Section.

The group is accused of stealing the identities of nine people in order to facilitate the fictitious real estate sales. Along with the fake escrow and title companies, the defendants allegedly created a fictitious place of employment for one supposed homebuyer under whose name the two loans were approved, the prosecutor said.

To convince the lender of the legitimacy of the transactions and the entities involved, the defendants allegedly created fraudulent websites, emails and phone networks along with fake employment documentation and bank account statements from a non-existent financial institution for the borrower.

The lender transferred funds to a bank account it believed to be owned by a legitimate title company but was allegedly owned by one of the defendants.

The properties for which the defendants received loans were located in Los Angeles and La Cañada Flintridge, California and had not been listed for sale, the prosecutor added.

They are charged with 28 felony counts, including identity theft, forgery, mortgage fraud, grand theft of personal property, attempted grand theft of personal property, money laundering and counterfeit seal, according to the criminal complaint in case BA472018.

Additionally, Angela Cotton faces one felony count of possession of a firearm by a felon with four priors, and Lawrence Cotton is charged with one felony count of receiving stolen property exceeding $950 in value.

The charges include allegations of fraud and embezzlement resulting in the loss of more than $500,000, taking property exceeding $1.3 million in value and theft of more than $100,000. The case was filed for arrest warrant on October 16, 2018.

Angela Cotton, Coleman and Breaux were arraigned this week and pleaded not guilty. A preliminary hearing setting is scheduled for December 6, 2018 in Department 30 of the Foltz Criminal Justice Center.

Lawrence Cotton is still at large.

Angela Cotton was convicted in March 2010 in federal court for a similar real estate fraud scheme.

Angela and Lawrence Cotton each face a possible maximum sentence of 22 years and eight months in state prison if convicted as charged. Coleman and Breaux face a possible maximum sentence of 22 years in prison.

Bail was set at $1.41 million for Angela Cotton, $1 million for Coleman and $1.37 million for Breaux. The prosecutor is requesting bail for Lawrence Cotton be set at $1.39 million.

The Los Angeles County District Attorney’s Office made the announcement.

The case remains under investigation by the Los Angeles County Sheriff’s Department, Fraud and Cyber Crimes Bureau.