Archives For California

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.

Sergio Roman Barrientos, 64, Poway, California was sentenced today in multimillion dollar mortgage and foreclosure rescue fraud scheme. Barrientos was sentenced to 14 years in prison for conspiring to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, from about September 2004 through February 2008, Barrientos and co-conspirators Zalathiel Aguila and Omar Anabo operated an entity named Capital Access LLC, Vallejo, California. They preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the distressed homeowners’ properties was then used for operational expenses of the scheme and personal expenses of Barrientos and his coconspirators. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud. http://www.mortgagefraudblog.com/?s=Sergio+Roman+Barrientos

Co-defendant Zalathiel Aguila pleaded guilty and is scheduled for sentencing on November 16, 2018. Aguila faces a maximum statutory penalty of 30 years in prison and a $1 million fine. 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 Federal Bureau of Investigation and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

Larry Allen Todt, 66, formerly of Malibu, California was sentenced to over seven years in prison and ordered to pay over $3,000,000 in restitution for his role in a fraudulent mortgage elimination scheme.

On December 6, 2017, Todt was convicted following trial on one count of conspiracy and one count of bank fraud.

According to court documents, between April 22, 2010, and November 18, 2011, Todt was a member of a conspiracy that ran a mortgage elimination program purporting to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of title on residential properties, sold the properties, and received the sales proceeds.

As a requirement for participation in the “mortgage elimination program,” the conspirators enrolled homeowners as members in a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity, Pillow Foundation. The conspirators indicated to the homeowners that these entities would offer protection against the banks.

Todt ran a branch of the mortgage elimination program, recruiting homeowners into the scheme, marshaling the necessary recorded documents, and guiding the sale of the homes. Once the homeowner enrolled with Shon-te-East-a or Pillow Foundation, Todt would have a sham deed of trust created and recorded, giving the impression that the homeowner had refinanced the mortgage loan with a new lender. In reality, the new lender was a fake entity controlled by the conspirators, and the homeowner owed no money to the purported new lender.

The next step in the process was also a recorded document. The conspirators caused a fake deed of reconveyance to be recorded, giving the appearance that the true mortgage loan had been discharged and that the true lien holder no longer had a security interest in the home.

With title appearing to be clear, the conspirators caused the sale of the home with the proceeds split between the co-conspirators and the homeowners.

In total, 37 properties were sold through the Shon-te-East-a conspiracy. The conspirators recorded fraudulent documents on an additional approximately 100 homes, but were unable to sell these before the scheme unraveled.

One co-defendant, George B. Larson, formerly of San Rafael, California was convicted at trial along with Todt and sentenced to 121 months in prison. One other co-defendant, Michael Romano, Benicia, California was sentenced to 37 months in prison following his guilty plea. Remus A. Kirkpatrick, formerly of Oceanside, California and Laura Pezzi, Roseville, California have previously pleaded guilty. Tisha Trites and Todd Smith, both of San Diego, California pleaded guilty in related cases. All are awaiting sentencing.

Co-defendants John Michael DiChiara, Penn Valley, California, and James Castle, Santa Rosa, California are awaiting trial. The charges against DiChiara and Castle are only allegations; both defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

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

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Audrey B. Hemesath and Todd A. Pickles are prosecuting the case.

 

Zalathiel Aguila, 45, Vallejo, California pleaded guilty last Friday to conspiring to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, from September 2004 through February 2008, Aguila and co-conspirators Sergio Roman Barrientos and Omar Anabo operated an entity named Capital Access LLC, Vallejo, California. Capital Access preyed on homeowners nearing foreclosure, convinced them to sign away title in their homes, spent any equity those homeowners had saved, and used straw buyers to defraud federally insured financial institutions out of millions of dollars in home loans obtained under false pretenses. The equity stripped from the properties was then used for operational expenses of the scheme and personal expenses of the conspirators. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud. http://www.mortgagefraudblog.com/?s=+Zalathiel+Aguila

Barrientos and Anabo are scheduled to be sentenced on September 21, 2018, and April 26, 2019, respectively.

Aguila is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on November 16, 2018. Aguila faces a maximum statutory penalty of 30 years in prison and a $1 million fine. 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 Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorneys Matthew M. Yelovich and Todd A. Pickles are prosecuting the case.

 

George B. Larsen, 56, formerly of San Rafael, California was sentenced to 10 years and one month in prison and ordered to pay $1,759,100 in restitution for his role in a fraudulent mortgage elimination scheme.

On December 6, 2017, Larsen was convicted following trial on one count of conspiracy and four counts of bank fraud. http://www.mortgagefraudblog.com/?s=+George+B.+Larsen

According to court documents, between April 22, 2010, and November 18, 2011, Larsen was a member of a conspiracy that ran a mortgage elimination program purporting to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of title on residential properties, sold the properties, and received the sales proceeds.

As a requirement for participation in the “mortgage elimination program,” the conspirators enrolled homeowners as members in a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity Pillow Foundation. The conspirators indicated to the homeowners these entities would offer protection against the banks.

Larsen ran a branch of the mortgage elimination program, recruiting homeowners into the scheme, marshalling the necessary recorded documents, and guiding the sale of the homes. Once the homeowner enrolled with Shon-te-East-a or Pillow Foundation, Larsen would have a sham deed of trust created and recorded, giving the impression that the homeowner had refinanced the mortgage loan with a new lender. In reality, the new lender was a fake entity controlled by the conspirators, and the homeowner owed no money to the purported new lender.

The next step in the process was also a recorded document. The conspirators caused a fake deed of reconveyance to be recorded, giving the appearance that the true mortgage loan had been discharged and that the true lienholder no longer had a security interest in the home.

With title appearing to be clear, the conspirators caused the sale of the home, with the proceeds split between the co-conspirators and the homeowners.

In total, 37 properties were sold through the Shon-te-East-a conspiracy. The conspirators recorded fraudulent documents on an additional approximately 100 homes, but were unable to sell these before the scheme unraveled.

One co-defendant, Larry Todt, formerly of Malibu, California was convicted at trial along with Larsen. Three other co-defendants have previously entered guilty pleas: Remus A. Kirkpatrick, formerly of Oceanside, California, Michael Romano, Benicia, California and Laura Pezzi, Roseville, California. Tisha Trites and Todd Smith, both of San Diego, California pleaded guilty in related cases. All are awaiting sentencing.

Co-defendants John Michael DiChiara, of Penn Valley, and James Castle, of Santa Rosa, are awaiting trial. The charges against DiChiara and Castle are only allegations: both defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

Co-defendants John Michael DiChiara, Penn Valley, California and James Castle, Santa Rosa, California are awaiting trial. The charges against DiChiara and Castle are only allegations: both defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

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

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Audrey B. Hemesath and Todd A. Pickles are prosecuting the case.

 

SAN FRANCISCO ­— Two former senior executives at Sonoma Valley Bank and an attorney for one of its biggest borrowers were sentenced to prison Friday for their roles in defrauding the bank, costing taxpayers and investors millions of dollars when it collapsed in 2010. Sean Cutting, the bank’s former president and CEO, and Brian Melland, its former vice president and chief loan officer, each received eight-year sentences from U.S. District Court Judge Susan Illston.

Source: Sonoma Valley Bank executives sent to prison for bank fraud

Trung Anh Le, 36, California, pleaded guilty to one count of pattern of mortgage lending fraud, a category “B” felony. The fraud was committed in March of 2015.

Le misrepresented himself as the owner of three pieces of real estate property in Las Vegas, Nevada by impersonating the true owners of the property as a way to secure a loan in the amount of $180,000. As a result of Le’s misrepresentation, the title company filed deeds with the Clark County Recorder’s Office, effectively encumbering the properties.

Pattern of mortgage lending fraud is punishable by 3-20 years of imprisonment and a fine of no more than $50,000.The sentencing hearing for Le is scheduled for September 17, 2018 in the Eighth Judicial District Court.

Nevada Attorney General Adam Paul Laxalt made the announcement.

My office is committed to protecting homeowners from fraudulent scams, and I encourage those who suspect they’ve fallen victim to a scam to file a complaint with my office,” said Laxalt.

This case was prosecuted by the Nevada Attorney General’s Criminal Prosecution Unit.

To view the criminal Information for Le, click here. To file a complaint about someone suspected of committing fraud, click here.

Momoud Aref Abaji, 37, Huntington Beach, California was sentenced to federal prison for his leadership role in a “builder bailout” mortgage fraud scheme.

The scheme Abaji operated resulted in the fraudulent purchase of more than 100 condominium units around the country, causing more than $10 million in losses when the properties went into foreclosure.

Abaji, along with several co-conspirators, operated the scheme through Excel Investments and related companies based in Santa Ana and Irvine, California. The scheme involved kickbacks from condominium builders during the 2008 financial crisis, that Abaji and his co-conspirators hid from lenders to convince them to fund loans in excess of the actual purchase price. http://www.mortgagefraudblog.com/?s=Maher+Obagi

During the course of the scheme, co-conspirators identified condominium developments around the country where the builders were struggling to sell units and arranged to purchase multiple units at a discount. The builders benefited by making it appear that their condos were selling and maintaining their value, while members of the conspiracy obtained the kickbacks.

The co-conspirators negotiated with condominium builders in California, Florida and Arizona for discount units. The defendants bought units for themselves, their relatives, and on behalf of “straw buyers” whom they brought into the scheme. They identified straw buyers by looking for individuals with good credit scores and then recruited them into the scheme by giving them an upfront payment for their participation and by presenting the scheme as an investment opportunity that required no down payment and would generate income through rental payments.

To obtain mortgages for the properties, Abaji and other co-conspirators prepared loan applications with false information about the straw buyers – including fake employment, income and assets, as well as fabricated W2s, pay stubs and bank statements. The mortgage applications also included false information about the terms of the transactions, such as concealing the large kickbacks from builders through false and misleading HUD-1 forms. As a result of the false statements in the fraudulent loan applications, mortgage lenders provided over $21 million in financing to purchase more than 100 properties.

Many of these loans went into default, and mortgage lenders lost more than $10 million after foreclosing on the properties. The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) purchased dozens of these loans on the secondary mortgage market and suffered losses of at least $1.3 million as a result of defaults and foreclosures on the properties.

Abaji was sentenced to 108 months in prison by United States District Judge Andrew Guilford and ordered to pay more than $10 million in restitution to the financial institutions that were victims of the fraud.

Several other defendants were charged in connection with the same scheme.

  • Abaji’s brother, Maher Obagi, 32, Huntington Beach, California who was sentenced in June 2018 to 78 months in prison and ordered to pay just over $10 million in restitution.
  • Mohamed Salah, 43, Mission Viejo, California who was sentenced in June 2018 to 57 months in prison and ordered to pay just over $7 million in restitution.
  • Ali Khatib, 53, Newport Coast, California pleaded guilty in a related case and is scheduled to be sentenced on September 10th;
  • Jacqueline Burchell, 57, Orange, California pleaded guilty in June 2013 and is scheduled to be sentenced on October 1st;
  • Wajieh Tbakhi, 53, who is currently a fugitive; and
  • Mohamed El Tahir, now deceased.

This matter was investigated by the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of the Inspector General; and IRS Criminal Investigation.

The case is being prosecuted by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.