Archives For California

Assad Suleiman, 48, Irvine, California, was convicted and sentenced on Friday to eight years in state prison for operating an unlawful loan modification and money laundering scam that defrauded nearly $2.3 million from 387 homeowners.

Co-defendants Kevin Suleiman, 39, Irvine, California and Rosa A. Barraza, 45, Santa Ana, California were charged on October 3, 2017, with 36 felony counts of money laundering, 12 felony counts of grand theft, 10 felony counts of commercial burglary, and one felony count each of conspiracy to commit grand theft, money laundering, and unlawful loan modification, with sentencing enhancements for aggravated white collar crime over $500,000 and property damage over $1.3 million.

Assad Suleiman was convicted of, and Kevin Suleiman and Rosa Barraza are accused of the following:

Between May 2012 and July 2017, engaging in a sophisticated loan modification scheme and operating as Jefferson Legal Group, Los Angeles, California; Simplify Law Group, Irvine, California; Synergy Law Center, Anaheim, California; Wilshire Debt Advisors, Irvine California:

  • Operating without any lawyers involved, despite the misleading entity names
  • Charging advance fees for loan modifications and, if no loan modification was approved, ceasing communication with the victims after receiving an initial payment
  • If the defendant did get a loan modification approved for the victims, lying to the victims and telling them a trial payment and/or lump sum payment to their lender was required to cover taxes and various fraudulent fees
  • Directing the homeowner to make their trial payment directly to one of the four fraudulent entities for a three to four month period and falsely telling the homeowner that the trial payments would be forwarded to their lender
  • If the victims had any money still available, demanding additional payments to bring their impound accounts current
  • Failing to forward any payments to the mortgage lenders and laundering the money by depositing funds to the defendants’ Chase Bank and Bank of America accounts under their fraudulent businesses names
  • Defrauding a total of 387 victims with a loss of at least $2.28 million.

Suleiman pleaded guilty on July 13, 2018, to the following felony counts, (43) Money laundering, (10) Grand theft, (10) Second degree burglary and conspiracy to commit grand theft, money laundering, and unlawful loan modification.  Suleiman was ordered to pay $1,568,717 in restitution.

Kevin Suleiman is scheduled for a pre-trial hearing on July 27, 2018, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana, California. Barraza is scheduled for a pre-trial hearing on July 30, 2018, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana, California.

Barraza and Assad Suleiman were arrested on October 5, 2017, during a warranted search of their office. The Orange County District Attorney’s Office (OCDA) recovered $500,000 in cash. Kevin Suleiman was arrested by U.S. Marshals in San Diego on January 10, 2018.

It is against California law to charge an advance fee for a loan modification. Homeowners needing foreclosure relief are typically in financial distress and vulnerable to losing their family’s principal asset. In many instances, the conspirators directed the homeowners to stop making their mortgage payments, ostensibly to prove to the lenders that a loan modification was necessary and freeing up funds to pay the conspirators. Directing homeowners to breach their contracts in many instances would precipitate the commencement of foreclosure proceedings that would otherwise be unnecessary.

This fraud scheme was particularly effective and insidious because the lenders were never aware that trial payments and impound fees had been collected by the conspirators, and the homeowners believed the lies the conspirators made to them that their monies would be forwarded to their lenders. Many homeowners never discovered the fraud until their lenders commenced foreclosure against their homes. The conspirators deliberately chose entity names that implied attorneys were involved, and when complaints began to pile up or suspicious raised, the same conspirators would contact victims with new entity names, while the old entity simply disappeared in a financial “hit and run.”

The OCDA, along with the U.S. Federal Housing Finance Agency Office of Inspector General and U.S. Department of Housing and Urban Development Office of Inspector General, investigated this case.

Prosecutor: Deputy District Attorney George McFetridge, Major Fraud Unit

Dorothy Matsuba, 67, her daughter Jamie Matsuba, 33, and her husband, Thomas Matsuba, 67, all of Chatsworth, California, owners and/or managers of Los Angeles, California-area foreclosure rescue companies were sentenced to 240, 135, and 168 months in prison today for their roles in a foreclosure rescue scheme, respectively.

According to evidence presented at trial, from January 2005 to August 2014, Dorothy Matsuba, Jamie Matsuba, Thomas Matsuba and others engaged in a scheme to defraud financially distressed homeowners by offering to prevent foreclosure on their properties through short sales.  Instead, the conspirators rented out the properties to third parties, did not pay the mortgages on the properties, and submitted false and fraudulent documents to mortgage lenders and servicers to delay foreclosure.  The evidence further established that the conspirators obtained mortgages in the names of stolen identities.  The defendants also used additional tactics, including filing bankruptcy in the names of distressed homeowners without their knowledge and fabricating liens on the distressed properties, the evidence showed. http://www.mortgagefraudblog.com/?s=Dorothy+Matsuba

Two other defendants have been charged in this matter.  Defendant Jane Matsuba-Garcia, 42, Camarillo, California, previously pleaded guilty and is awaiting sentencing.  Defendant Young Park Los Angeles, California, is a fugitive.  In addition, in related cases, Jason Hong, 36, Chatsworth, California and Ryu Goeku, 48,  Canoga Park, California, previously pleaded guilty and are awaiting sentencing.

All three Matsubas were sentenced by U.S. District Judge R. Gary Klausner of the Central District of California.  Judge Klausner also ordered the defendants to serve three years of supervised release. Restitution and forfeiture will be decided at a hearing on Aug. 13.  All three defendants were remanded into custody. Dorothy Matsuba pleaded guilty on Dec. 4, 2017, to one count conspiracy to commit wire fraud, false statements to a federally insured bank or mortgage lending business, and identity theft, five counts of wire fraud, six counts of false statements to federally insured banks, and six counts of aggravated identity theft.  On Dec. 13, 2017, after a one-week trial, Jamie Matsuba and Thomas Matsuba were both convicted of one count of conspiracy to commit wire fraud, making false statements to federally insured banks, and committing identity theft and one count of making false statements to federally insured banks.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna for the Central District of California, Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Division, Acting Deputy Inspector General for Investigations Paul Conlon of the Federal Housing Finance Agency-Office of Inspector General (FHFA-OIG), Special Agent in Charge R. Damon Rowe of Internal Revenue Service Criminal Investigation’s (IRS-CI) Los Angeles Field Office, and Sheriff Jim McDonnell of the Los Angeles County Sheriff’s Department made the announcement.

This case was investigated by the FBI, FHFA-OIG, IRS-CI, the U.S. Attorney’s Office for the Central District of California, and the Los Angeles County Sheriff’s Department.  Trial Attorney Niall M. O’Donnell, Senior Litigation Counsel David A. Bybee and Trial Attorney Jennifer L. Farer of the Criminal Division’s Fraud Section are prosecuting the case.  Senior Trial Attorney Nicholas Acker previously worked on the investigation.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.

James Ignatius Diamond, 68, Riverside, California and Tricia Mae Gruber, 42, Riverside, California were named on July 12, 2018 in a thirty-count indictment for operating a fraudulent debt-elimination scheme to target distressed homeowners.

The indictment outlines how Diamond and his co-defendant Gruber and their co-schemers operated the scheme and highlights thirty instances of wire and mail fraud affecting a financial institution throughout the scheme.

Around 2010 and continuing to about September 2014, defendants Diamond and Gruber, and other co-schemers, knowingly participated in a scheme to defraud distressed homeowners, which also affected financial institutions to which they were indebted.

When targeting victim homeowners with at least one of his pitches, Diamond described a loophole in the Uniform Commercial Code regarding real estate ownership in which the homeowner could become the creditor and the financial institution creditor/lender would become the debtor, according to investigators. The programs purported to eliminate the victims debts altogether. After enrolling in the programs, Diamond and his co-schemers would collect from victims an advance-fee, followed by periodic program fees, and notary fees totaling hundreds of dollars. The average victim paid thousands of dollars, and some victims paid tens of thousands of dollars. Many victims lost their homes, were evicted from their homes, or suffered other adverse economic consequences. The investigation uncovered hundreds of victims with collective losses of more than $1.5 million.

According to the indictment:

Diamond owned and operated businesses with offices located in Riverside County, Californa including Transmitting Assets, Inc., Operation Save Haven, Citizen Beware, and Unlimited Logistics Corporation (collectively known as TAI/UCL). TAI/ULC purported to offer debt-elimination services to homeowners who were behind on their mortgage payments and other debtors who were behind on their debt payments, including car and student loans, in exchange for substantial fees, including an advance fee, periodic program fees, and notary fees.

Diamond, Gruber, and co-schemers induced victims to pay the TAI/ULC fees for services that defendants Diamond and Gruber falsely represented would eliminate the homeowners’ and debtors’ financial obligations to their financial institution creditors.

Defendants Diamond and Gruber recruited victim customers, many of whom did not speak English well or at all, through various means, including live seminars and presentations, as well as written marketing materials.

Defendants Diamond and Gruber and their co-schemers offered two primary methods of purported debt-elimination:

  1. The Diamond Home Claim Reclamation Method, also known as the Free & Clear Method, which targeted financially distressed homeowners; and
  2. The Electronic Funds Transfer Program, which targeted financially-distressed homeowners and victims with other debts including car and student loans.

The defendants and their co-schemers falsely told victim customers that they did not have to continue paying their mortgages after entering into the programs and should instead pay TAI/ULC. Defendant Diamond also falsely told victim customers that if they ceased making mortgage payments to their banks, the banks would be forced to settle with the victim customers.

At least as early as 2010, defendants Diamond and Gruber ignored correspondence they received from various financial institutions and government entities informing them that documents created by the defendants and their co-schemers, which they submitted or directed victim customers to submit to financial institutions (or other creditors) had no legal effect, that they would not discharge any outstanding debts owing, and/or that they were fraudulent.

When victim customers received similar correspondence from financial institutions and government entities and confronted defendants and their co-schemers with this correspondence or requested refunds, defendants Diamond and Gruber ignored them, claimed that the correspondence was part of the debt-elimination process, encouraged the victim customers to pay purported outstanding fees to TAI/ULC so that their debts would be successfully eliminated, or offered to enroll the victim customers in other services for additional fees.

After paying TAI/ULC for services, some victim customers received unlawful detainer notices, notices of trustee sale, and other foreclosure-related documents. Some victim customers lost their properties. When victim customers complained to defendants Diamond and Gruber about these foreclosure-related developments, defendants Diamond and Gruber would ignore them or offer to enroll the victim customers in other services for additional fees.

The defendants and their co-schemers did not comply with state laws and regulations that govern, and in some cases, prohibit the operation of advance-fee loan modification businesses.

Diamond Home Reclamation Method:

In order to participate in the scheme, the defendants and their co-schemers generally required victim customers to pay an advance fee ranging from $3,500 to $8,000 per property, plus additional fees per lien on the property, periodic program fees, and notary fees.

After victim customers paid an advance fee, the defendants and their co-schemers directed the victim customers to travel to the TAI/ULC office in Riverside, California, to provide TAI/ULC employees with information relating to the victim customers’ debt obligations. At the TAI/ULC office, defendants and their co-schemers directed the victim customers to sign various documents that purported to eliminate the victim customers’ debts when sent to financial institutions, including banks and mortgage companies, and government agencies, entities and officials (the Documents).

Defendant Gruber generally notarized the Documents and charged a fee for each document that she notarized, typically between $50 and $300 per document, which was well above the prevailing rate.

The defendants and their co-schemers provided some of the Documents to the victim customers and instructed them to mail the Documents to various entities. The defendants and their co-schemers also filed some of the Documents with county recorders’ offices for additional fees.

In furtherance of this part of the scheme, the defendants and their co-schemers made and caused others to make the following material false and fraudulent pretenses, representations and promises:

  • That victim customers who paid for the Diamond Home Reclamation Method would eliminate their mortgages entirely and own their residences free and clear when in truth and in fact, as defendants and their co-schemers then well knew, the Diamond Home Reclamation Method would not eliminate victim customers’ mortgages entirely or allow them to own their residences free and clear.
  • That the Diamond Home Reclamation Method had successfully eliminated debt obligations, when in truth and in fact, as the defendants and their co-schemers well knew, the method had not eliminated debt obligations.
  • That the Documents that the defendants and their co-schemers had the victim customers sign and send to financial institutions and government agencies would result in the elimination of the victim customers’ debts, when, in truth and in fact, as the defendants and their co-schemers then knew, the Documents would not eliminate any debt obligations and had no legal effect at all.
  • That victim customers were not legally obligated to continue to pay their mortgages, when in truth and fact, the DHRM did not relieve the victim customers of their obligations to pay their mortgages.
  • That correspondence received from various financial institutions stating that the Documents created by the defendants and their co-schemers had no legal effect, would not discharge outstanding debts owing, and/or were fraudulent actually were part of the debt-elimination process, when in reality, the letters were not part of a process that would eliminate any debt obligations.

The indictment alleges that the defendants knowingly concealed from victims the fact that the Documents had no legal effect and that their Diamond Home Reclamation Method had never succeeded in eliminating a customer’s mortgage obligation.

Diamond Electronic Fund Transfer (Diamond EFT):

In order to participate in the Diamond EFT Program, defendants Diamond and Gruber and their co-schemers generally required victim customers to pay a fee, which they calculated as a percentage, typically 13% of the amount of the debt to be discharged, plus additional program fees and notary fees. The victim customers were required to pay an advance fee, typically several thousand dollars, followed by monthly payments and notary fees. Defendant Diamond sometimes also recorded liens on the victim customers’ properties in the amount of the fee.

After victim customers paid the advance fee, defendants Diamond and Gruber and their co-schemers directed the victim customers to provide the TAI/ULC employees with information relating to the victim customers’ debt obligations.

After victim customers paid the advance fee, defendant Diamond prepared and directed to be prepared, among other documents, documents that appeared to be checks in the name of James I. Diamond, made payable to the victims’ financial institution creditors in the amounts of the balances owed on the victim customer debt obligations (the EFT Checks). The memoranda lines on the EFT Checks bore the words, FOR EFT ONLY FOR THE DISCHARGE OF DEBT, or similar words. Defendant Diamond and Gruber and their co-schemers then provided the EFT Checks to the victim customers and instructed the victim customers to mail the EFT Checks to their financial institution creditors and other entities as purported payments satisfying the outstanding balances owed by the victim customers.

Defendant Gruber generally notarized documents relating to the EFT process and charged a fee for each document that she notarized, typically between $50 and $300 per document, which was well above the prevailing market rate.

When victim customers advised defendants Diamond and Gruber that their financial institutions had rejected the EFT checks, defendant Diamond falsely told the victim customers that this was part of the debt-elimination process and that customer victims were required to continue making monthly payments to TAI/ULC in the amount of 13% of the amount of the debt obligation.

If a victim customer stopped paying the monthly payments, defendant Diamond would:

  • advise the victim customer that the debt-elimination process would not work until she/he had completed all payments;
  • threaten to foreclose on the victim customer’s property or other assets; and
  • threaten to assess late fees

In furtherance of this part of the scheme, defendants Diamond and Gruber and their co-schemers made and caused others to make the following material and false and fraudulent pretenses, representations and promises:

  • That victim customers who paid for the Diamond EFT Program would be able to discharge or entirely eliminate their debt obligations, including home mortgages, car loans, and student loans, when in truth and fact, as defendants and their co-schemers then well knew, the Diamond EFT Program would not discharge or entirely eliminate victim customers’ debt obligations.
  • That EFT Checks were valid, legal tender, drawn on open bank account, when in truth and in fact, as the defendants and their co-schemers then well knew, the EFT Checks were not valid, legal tender, and were not drawn on open bank accounts.
  • That EFT Checks would pay off the victim customers’ debts when in truth and fact, as defendants and their co-schemers then well knew, the EFT Checks would not pay off the victim customers’ debts.
  • That the financial institutions’ rejection of the EFT checks was part of the debt-elimination process, when in truth and in fact, as the defendants and their co-schemers well knew, the financial institutions’ rejection of the EFT Checks was not part of a process that would eliminate any debt obligations.
  • Also in furtherance of this part of the scheme, defendants Diamond and Gruber knowingly concealed the following material facts from the victim customers:
    • That the EFT Checks were not valid, legal tender and instead contained account numbers belonging to closed bank accounts.
    • That the EFT Checks had never succeeded in eliminating a customer’s debt obligations.

As a result of the fraudulent scheme, defendants Diamond and Gruber induced hundreds of distressed homeowners and other debtors to pay more than $1.5 million in fees to TAI/ULC.

Diamond was arrested Thursday at his residence without incident. Gruber, a notary public and office manager, will be summonsed to federal court at a future date.

Diamond appeared in federal court in Los Angeles Thursday afternoon for an initial appearance. If convicted of the charges in the indictment, Diamond and Gruber face a statutory maximum sentence of 30 years in prison each.

Investigators believe there may be other victims of this scheme not yet identified. If you believe you may have been victimized in this scheme, or have information about someone who has, you are encouraged to contact your nearest FBI office. In Los Angeles, the FBI can be reached 24/7 at (310) 477-6565.

Nicola T. Hanna, the United States Attorney in Los Angeles, and Paul D. Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office made the announcement.

This case was investigated by the FBI’s Los Angeles Division, Riverside Resident Agency, the Riverside County Sheriff’s Department, and the Drug Enforcement Administration. This case is being prosecuted by Assistant United States Attorney Cassie D. Palmer of the Major Frauds Section.

An indictment merely contains allegations that a defendant has committed a crime. Every defendant is presumed innocent unless and until proven guilty at trial.

 

Angela Fawn Wallace, 57, West Hills, California, a former attorney, pleaded not guilty today to the charges, which include multiple counts each of identity theft, grand theft, forgery and procuring a false document for recording. Wallace has been charged with 72 felony counts for taking $2 million from elderly property owners and others in a real estate fraud scheme

From June 2014 through January 2017, Wallace allegedly befriended elderly victims or located properties where the owners were already deceased in order to get her name placed on the title to the properties.

The defendant is accused of using her legal expertise to ingratiate herself with the victims, said Deputy District Attorney Walter Mueller of the Real Estate Fraud Section, who is prosecuting the case.

The scheme targeted four properties in different areas of Los Angeles, California and affected about two dozen victims, including property owners, estates, trusts, investment companies, property management companies and notaries, Mueller said. Wallace allegedly either obtained loans secured by the properties or sold them to innocent purchasers, purportedly keeping virtually all of the proceeds for herself, the prosecutor said.

In one case, she allegedly had her name placed on the title, then rented several of the units and kept the rental proceeds for herself instead of giving them to the estate of the deceased owner.

The defendant has several prior felony convictions, including grand theft in 2003, 2007 and 2013; forgery in 2003; and recording false documents in 2007.

She also denied special allegations that include taking of more than $200,000 and prior convictions.

Wallace faces a maximum possible sentence of 40 years and four months in state prison if convicted as charged. Bail was set at $2.32 million.

A preliminary hearing is scheduled for August 1, 2018 in Department 30 of the Foltz Criminal Justice Center. Case BA468922 was filed July 2, 2018.

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

The case remains under investigation by the Los Angeles County District Attorney’s Office, Bureau of Investigation.

 

Mary Sue Weaver, 65, Scottsdale, Arizona and formerly of Lincoln, California, was sentenced today to four years and two months in prison and ordered to pay $15,387,945 in restitution for her participation in a $22 million fraud scheme.

On December 15, 2017, Weaver pleaded guilty to one count of wire fraud and one count of bank fraud.  On June 1, 2018, co-defendant Abolghasseni “Abe” Alizadeh, 59, Granite Bay, California, was sentenced to four years and eight months in prison and ordered to pay $15,879,945 in restitution to the victims of his crimes.

According to court documents, Weaver was employed at a local title company and assisted Alizadeh, a Sacramento area commercial real estate developer, restaurateur and owner of Kobra Properties, in a scheme to fraudulently purchase land that he planned to develop.  http://www.mortgagefraudblog.com/?s=Abolghasseni+%E2%80%9CAbe%E2%80%9D+Alizadeh Alizadeh would write checks for the down payment on a commercial property, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of over $22 million.

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

This case was the product of an investigation by the Federal Bureau of Investigation, the IRS Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorneys Michael D. Anderson and Heiko P. Coppola are prosecuting the case.

Robert Farrace, 54, Modesto, California was sentenced today to two years in prison for a fraudulent short-sale scheme.

On November 14, 2017, a jury found Farrace guilty of three counts of wire fraud in connection with the scheme. According to court documents, Farrace, an attorney specializing in real estate law and the former president of the Stanislaus County Bar Association, owned two properties in Modesto, California with substantial mortgage loans. By early 2010, Farrace was in default and received foreclosure notices for the two properties. In order to keep the properties and avoid foreclosure, Farrace formed an entity called “Dignitas LLC” to purchase the properties.

According to evidence presented at trial, Farrace controlled Dignitas, but listed a friend’s name on the paperwork as a nominal manager because he knew the bank would not sell the property to a related party. Farrace then submitted short sale offers to the bank that serviced the loans on both properties, listing Dignitas and the nominee manager as the purchaser. Farrace misrepresented his relationship to Dignitas to induce the bank to approve the short sale. Because the servicing bank did not know of the true relationship, it went forward and completed one of the short sales. The short sale on the second property was stopped after law enforcement informed the bank of Farrace’s scheme.

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

This case was the product of an investigation by the Federal Housing Finance Agency–Office of Inspector General, the Federal Bureau of Investigation, and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorneys Michael G. Tierney and Shelley D. Weger prosecuted the case.

Maher Obagi, 32, Huntington Beach, California was sentenced on Tuesday to 78 months in prison and ordered to pay just over $10 million in restitution.  A second defendant, Mohamed Salah, 43, Mission Viejo, California was sentenced to 57 months in prison and was ordered to pay just over $7 million in restitution.    Obagi and Salah were sentenced to federal prison for participating in a “builder bailout” mortgage fraud scheme that 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.

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

During the course of the scheme, co-conspirators identified condominium developments around the country in which the builders were struggling to sell units and then arranged with the builders 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, Obagi 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 lenders 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.

Both defendants were sentenced by United States District Judge Andrew Guilford.

Following a trial in 2015, Obagi was found guilty of one count of conspiracy and three counts of wire fraud. Salah was found guilty by the same federal jury of one count of conspiracy.

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

  • Ali Khatib, 53, Newport Coast, California who pleaded guilty in a related case and is scheduled to be sentenced on July 16;
  • Momoud Aref Abaji, 37, Huntington Beach, California who was convicted at trial and is scheduled to be sentenced on June 14;
  • Jacqueline Burchell, 57, Orange, California who pleaded guilty and is scheduled to be sentenced on July 16;
  • Wajieh Tbakhi, 53, who is a fugitive; and
  • Mohamed El Tahir, who is 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.

Abolghasseni “Abe” Alizadeh, 59, Granite Bay, California was sentenced today to four years and eight months in prison.  Alizadeh pleaded guilty on January 12, 2018 to wire fraud, bank fraud and making false statements to a federally insured financial institution.

According to court documents, Alizadeh, a Sacramento-area commercial real estate developer, restaurateur and owner of Kobra Properties, came up with a scheme to fraudulently purchase land that he planned to develop. Banks usually loan up to 60 to 65 percent of the loan to-value ratio (LTV) on undeveloped commercial property. (LTV ratio is the comparison between the amount of the loan and the value of the property.) To circumvent the banks and fraudulently get a higher level of financing, Alizadeh submitted altered purchase contracts to the banks that greatly inflated the purported purchase price. The banks, which competed for Alizadeh’s business, were unaware that the purchase prices were inflated and sometimes loaned well in excess of the loan-to-value ratio. By concealing the true purchase price from the banks, Alizadeh received substantial amounts of cash, sometimes millions of dollars, at the close of escrow and avoided making the full down payment or, in some instances, any down payment.

Alizadeh was assisted in this scheme by co-defendant Mary Sue Weaver, 64, currently of Scottsdale, Arizona and formerly of Lincoln, California, who was employed at a local title company. According to the plea agreement, Alizadeh would write checks for the down payment, but because he lacked funds to cover the checks, he would call Weaver and ask her to delay depositing the checks until after escrow closed. Once escrow closed, Weaver disbursed funds from the title company’s escrow trust account to Kobra Properties. Kobra Properties then used those funds to cover its down payment and other costs. In this way, it appeared as though Alizadeh was making a substantial down payment when in fact he was not.

On April 29, 2005, Alizadeh submitted a fraudulent purchase contract to Central Pacific Bank, which induced the bank to lend him nearly $4 million for the purchase of 10.3 acres of property. This loan represented over 96 percent loan-to-value ratio. Similarly, on October 21, 2005, Alizadeh received over $22 million in funding and loans to purchase the Turtle Island property, when in actuality, the original purchase price was $10 million. In March 2006, Alizadeh also falsely claimed to Bank of Sacramento that he was paying $36 per square foot for a piece of property where he intended to build a TGI Friday’s restaurant. In reality, Alizadeh was paying only $21 per square foot. This resulted in a $650,000 inflation of the true purchase price. Alizadeh’s entire scheme, involving no fewer than six properties in the Sacramento area, resulted in a loss to various financial institutions of over $22 million.

U.S. District Judge Garland E. Burrell Jr. also ordered Alizadeh to pay $15,879,945 in restitution to the victims of his crimes.

On December 15, 2017, Weaver pleaded guilty to one count of wire fraud and one count of bank fraud and is scheduled for sentencing on June 22, 2018. She faces a maximum statutory penalty of 30 years in prison on each count 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.

The announcement was made by U.S. Attorney McGregor W. Scott.

The defendant used his reputation as a local business leader to perpetrate a complex fraud scheme to enrich himself at the expense of others,” stated U.S. Attorney Scott. “The U.S. Attorney’s Office will continue to work diligently with its law enforcement partners to expose schemes like this and bring criminals like the defendant to justice.

The scope of the fraud is staggering,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “As a well-known real-estate developer, title companies and banks competed for Mr. Alizadeh’s business. He submitted altered purchase contracts that greatly inflated the purchase price. This scheme cost financial institutions over $22 million. While this sentence cannot reverse the damage caused by Alizadeh and his co-defendant, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.

Today’s sentencing holds defendant Alizadeh accountable for causing more than $22 million in losses to the financial institutions, by corruptly inflating the value of property to obtain millions of dollars in fraudulent bank loans,” stated FDIC Inspector General Jay N. Lerner. “This case is a powerful example of law enforcement cooperation to combat fraud and bring such swindlers to justice.”

This case is the product of an investigation by the Federal Bureau of Investigation, the IRS Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General. Assistant U.S. Attorneys Michael D. Anderson and Heiko P. Coppola are prosecuting the case.

Ronald Cedric Touchard, 59, Newport Beach, California and Misty Denise Touchard, 43, Newport Beach, California were charged today with stealing over $5.9 million in a real estate fraud scheme and laundering money to purchase a luxury car and invest in a winery.

Between June 13, 2016, and July 1, 2016, Ronald Touchard is accused of taking over the titles of three residences in the city of Newport Beach, California he did not own or have claims to by submitting paperwork to the State of Delaware indicating he was the sole officer of Capital Win Corporation and Gainquick LLC (CWCG), an investment company based in Laguna Beach, California.

Ronald Touchard is accused of convincing “hard” money lenders that as the president of CWCG, he held the deed of trust for each residence although he did not. Mr. Touchard is further accused of taking $5.9 million in equity out of the three residences for his and his wife’s financial benefit.

Ronald and Misty Touchard are accused of using the stolen funds to make numerous large purchases including a Land Rover, and moving the money between various bank accounts in a pattern consistent with money laundering.

Ronald was charged with the following felony counts, (54) Money laundering; (3) Grand theft; (3) Recording false or forged instrument and faces a maximum sentence of 55 years and four months in state prison. His arraignment is set for May 24, 2018, 10:00 a.m. at Department CJ-1, Central Jail, Santa Ana.

Misty was charges with the following felony counts, (13) Money laundering; (3) Grand theft and faces a maximum sentence of 24 years and eight months in state prison. Her arraignment is set for May 24, 2018, 10:00 a.m. at Department CJ-1, Central Jail, Santa Ana.

The Orange County District Attorney’s Office investigated this case and arrested the defendants today with the assistance of Newport Beach Police Department.

 

Javier Gonzalo Sanchez, 56, California, pled guilty today to two felony counts of foreclosure consultant fraud.

Sanchez promised to help two victims avoid foreclosure on their homes by negotiating on their behalf with their lenders. Sanchez accepted approximately $40,000 in fees from the victims, who received little or no actual assistance in return. Each victim was diverted from seeking legitimate assistance and one victim lost his home as a result.

Sanchez will be sentenced on November 19, 2018, at 9:00 a.m., in courtroom 12 of the Ventura Superior Court, County of Ventura, California. He faces up to 365 days in jail and will be ordered to pay full victim restitution.

The announcement was made by District Attorney Gregory D. Totten.

The plea was the result of an investigation conducted by the District Attorney’s Real Estate Fraud Unit.

The Ventura County District Attorney’s Office is the public prosecutor for the county’s 850,000 residents. The office employs approximately 280 employees including attorneys, investigators, victim advocates,and other professional support staff who strive to seek justice, ensure public safety, and protect the rights of crime victims,