Archives For Commercial loan fraud

David T. Odom, 53, Chicago, Illinois, was sentenced to 30 months in prison, followed by three years of supervised release for a wire fraud conspiracy arising from a scheme to defraud lenders in order to obtain bridge financing for a movie. United States District Judge George L. Russell III also ordered Odom to forfeit up to $821,000 after the sale of the property and pay $700,000 in restitution.

Co-conspirator Darryl Wesley Clements, 50, Detroit, Michigan, previously pleaded guilty to wire fraud conspiracy.  Rodney Patrick Dunn, 40, Elkridge, Maryland, pleaded guilty in a related case to receipt of a bribe by a bank official.

David Odom owned CityScope Productions, LLC, and was seeking financing to produce the movie “Season Tickets.”   Odom met Darryl Clements through an attorney in New York. Clements created documents falsely stating that CityScope had permanent financing of $13 million for the movie from Bridge Capital and The Shah Group, and that the funds were held in escrow at a bank in Baltimore, where Dunn worked as a bank officer.  Dunn had agreed with Clements that when prospective lenders attempted to verify the existence of the escrow accounts, Dunn would text or telephone Clements with the caller’s information and permit Clements to return the telephone call posing as “Rodney Dunn, bank officer.”  Dunn believed he would obtain from Clements valuable contacts with professional athletes that would catapult his career change into sports agency.  Clements also promised to pay Dunn for his assistance.

In order to carry out the fraud scheme, Clements also created email accounts which appeared to belong to Dunn and The Shah Group, but which Clements actually controlled.  In February 2011, Dunn purchased five cashiers’ checks from his employer bank, each for $20 and made payable to Clements. Clements then altered the checks so that they totaled $4 million, the payees were individuals and entities affiliated with the movie, and “The Shah Group,” was the remitter.  Clements provided the altered checks to Odom/CityScope.  Odom knew that the checks were fraudulent since in fact, no one had been paid.  Clements also fraudulently placed Dunn’s forged signature on escrow agreements and proof of funds statements, which Clements emailed to Odom, so that Odom could furnish those fraudulent documents to prospective lenders.

Odom sought financing from multiple lenders including an unsuccessful attempt thwarted by the prospective lender’s local counsel in Baltimore.  Among other things, Clements created a fictitious bank statement for a purported escrow account, which Odom admitted he sent to a prospective lender.

In a telephone call on May 9, 2011, Clements posed as Dunn and fraudulently verified the account numbers and balances of the phony escrow accounts to an official of a California company which specialized in providing bridge financing for movies (California finance company).  On the same day, the California finance company loaned $2.5 million to CityScope and transmitted the funds by wire, specifying that the funds were to be used solely for movie expenses.

In early 2011, Odom’s house was sold in a foreclosure proceeding to the mortgage lender, and Odom was faced with moving or eviction. Odom admitted that he used the bridge loan funds to spend $821,000 to purchase his home back from the lender, approximately $60,000 to buy two cars, approximately $6,000 to take his family on the “Exotic Western Caribbean Cruise” by Carnival Cruise, approximately $90,000 in transfers to family members, and another approximately $75,000 in personal expenses.  Odom also paid some pre-production movie expenses.  Clements received $200,000 from the bridge loan proceeds.  Dunn received only the promise of money.

Odom did not repay the bridge loan.  The California finance company prepared to have the bank repay the loan from the purported escrow account, leaving messages for Dunn at the bank, which he then passed on to Clements.  Clements, posing as Dunn, falsely told the company that the loan repayment had been sent to CityScope, and Odom said that CityScope had not received the funds and sent a demand letter to the Baltimore bank.  When the California finance company was not repaid the loan, it sued Odom and others to recover its loan. Because of the allegations contained in the civil suit, Odom believed that criminal charges would be brought against Clements, and he told Clements his fears. Clements was engaged in another loan fraud and received proceeds of $4 million. In August 2011, Clements transferred $2 million to CityScope, which Odom used to partially repay the California finance company.

On April 28, 2017, Clements was sentenced to 18 months in the custody of the Bureau of Prisons, and on September 8, 2017, Dunn was sentenced to 30 weekends of incarceration and a fine of $2,000.

The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Eric M. Thorson, Inspector General for the Department of the Treasury.

 

Acting United States Attorney Stephen M. Schenning commended the FBI, SIGTARP, and the Treasury Inspector General for their work in the investigation.  Mr. Schenning thanked Assistant U.S. Attorneys Joyce K. McDonald and Rachel M. Yasser, who prosecuted the case.

Ben Leske, 40, Puyallup, Washington, who worked as a loan officer for PC Bank Home Loans, a division of Pierce Commercial Bank, between 2005 and 2008 was sentenced to 30 days of home detention, 100 hours of community service, two years of supervised release and more than $131,000 in restitution. Leske pleaded guilty in May 2017, to making false statements on loan applications.

According to records in the case, between 2004 and 2008, the architect of the fraud, Shawn Portmann, and other members of the conspiracy submitted false documents within various loan documents and applications.  They falsified information about the borrowers’ qualifications as well as their intention to reside in the homes being financed.  A review of a sample of conventional and HUD loans showed that members of the conspiracy closed over 300 loans with false and fraudulent documents and information.  More than half of this sample of loans have defaulted or otherwise caused loss, causing an estimated loss of more than $10 million to Pierce Commercial Bank, secondary investors and HUD/FHA.  Court records detail multiple false statements included in loan documents regarding an applicant’s employment, income, and intention to reside in the property. 

Pierce Commercial Bank was closed by regulators in November 2010.  Pierce Commercial Bank received $6.8 million from Troubled Asset Relief Program (TARP) in January 2009.  This money was never repaid.

Shawn Portmann and nine other defendants were prosecuted and sentenced between 2011 and 2013, with sentences ranging from probation to the ten-year prison sentence for Portmann.  Five additional conspirators were charged in 2017.  In addition to Leske, four others sentenced in the 2017 case include: Sam Tuttle, 54, Tacoma, Washington, a Vice-President of PC Bank Home Loans was sentenced to three years of supervised release; Angela Crozier, 44, Olympia, Washington, a loan processor was sentenced to one year of supervised release; Ed Rounds, 53, Puyallup, Washington, a loan officer was sentenced to two years of supervised release and Craig Meyer, 55, Dickenson, Texas, a Vice President and loan officer was sentenced to one year of supervised release.

Those whose crimes deepened the damage from the 2008 financial crisis deserve to be punished just like any other criminal”, said U.S. Attorney Annette L. Hayes in announcing the sentence.  “This defendant and 14 other well-paid bank employees from loan officers to bank vice presidents forged documents and made false statements to close loans they knew were not sound.  The result was the collapse of Pierce Commercial Bank and the expenditure of nearly $7 million of taxpayer funds to address the financial mess these defendants left behind.”

With the sentencing of mortgage banker Ben Leske, 15 bank employees have now faced justice for a conspiracy that directly contributed to Pierce Commercial Bank’s failure and the loss of $6.8 million in TARP bailout funds,” said Special Inspector General for the Troubled Asset Relief Program Christy Goldsmith Romero. “Ringleader Shawn Portmann, who was sentenced to 10 years in federal prison for his crimes, created a culture at PC Bank Home Loans, Pierce Commercial Bank’s mortgage lending office, where all loans applications were expected to approved, regardless of the applier’s ability to repay.  Under this ‘close every loan’ culture, he and his co-conspirators submitted false and fraudulent documents showing borrowers who appeared qualified for mortgages when in fact they were not. As a result, PC Bank Home Loans greatly expanded the residential mortgage lending operations of Pierce Commercial Bank prior to the financial crisis from no more than $3.9 million a month to nearly $500 million a year. I thank the U.S. Attorney’s Office for their commitment to fighting fraud related to TARP.”

Leske was sentenced by U.S. District Judge Benjamin H. Settle. The case was investigated by the FBI, the HUD Office of Inspector General (HUD-OIG), Internal Revenue Service Office of Criminal Investigation (IRS-CI), the Washington State Department of Financial Institutions, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) and the United States Postal Inspection Service.  

The case was prosecuted by Assistant United States Attorney Brian Werner and Special Assistant United States Attorney Hugo Torres.  Mr. Torres is a King County Senior Deputy Prosecuting Attorney specially designated to prosecute mortgage fraud in federal court.

Hooshang Noori, a loan broker who operated Finance for Americans, Corp, doing business as Pacific Realty, Lake Forest, California, was indicted on one count of wire fraud in the Central District of California.

According to the indictment, Noori submitted loan applications to Lone Oak Fund LLC, on behalf of his purported client M.G. and M.G.’s company, Noble Investments, LLC, to borrow $4 million for the purpose of buying commercial property in Los Angeles, California to be secured by a first deed of trust on a residence owned by M.G.  Noori, or a co-scheme, purporting to be M.G., directed the escrow company to distribute the loan funds to Noori’s company.  After escrow company representatives informed Noori that the funds could only be distributed to Noble Investments, Noori registered  “Noble Investments LLC” in Delaware and opened an account in the company’s name which he solely controlled.  Escrow was then directed to distribute loan funds to this account.

The funds were used to purchase a Mercedes Benz, pay off the lien on Noori’s residence, pay business expenses, among other things, and $3.6 million of the funds were transferred to a Emirates NBD bank account in the name of Four Directions Electronics, LLC.

 

Sanjiv Kakkar, 55, Saratoga, California, was sentenced to 48 months in prison and ordered to pay $4,208,565.36 in restitution to the victim for wire fraud and making misstatements to a bank.  Kakkar was concited after a twelve-day jury trial ending with a guilty verdict on all counts.

The evidence at trial demonstrated Kakkar presented false information to a bank in connection with refinancing a hotel property he owned in Boulder Creek, California.  In November of 2008, Kakkar sought to secure a $6 million loan to refinance the Brookdale Inn and Spa.  In connection with the loan, he submitted bogus documents to a bank, including falsified income information and tax returns, which overstated his business income.  Kakkar also did not comply with his continuing obligation under the terms of the loan to provide the bank with updated financial records and further tax documents.  Further, between January and June 2009, Kakkar submitted false and fraudulent documents to an escrow company.  Kakkar induced the escrow company to advance hundreds of thousands of dollars in wire progress payments that were earmarked for reimbursement of construction costs.

A federal grand jury issued a superseding indictment against Kakkar on June 2, 2016, charging him with one count of making misstatements to a bank, in violation of 18 U.S.C. § 1014, and six counts of wire fraud, in violation of 18 U.S.C. § 1343.  On November 8, 2016, a jury found Kakkar guilty of all the charges presented in the superseding indictment.

In addition to the prison term, and restitution, Kakkar was ordered to pay a $20,000 fine and to serve three years of supervised release.  Kakkar currently is released on bond and has been ordered to surrender on or before June 22, 2017, to begin serving his sentence.

The sentence was handed down by the Honorable Edward J. Davila, U.S. District Judge.  U.S. Attorney Brian J. Stretch and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder announced the sentence.Assistant U.S. Attorneys Amie Rooney and Maia Perez are prosecuting the case with assistance from Nina Burney and Elise Etter.  The case is the result of an investigation by the ATF.

Ataollah Aminpour aka John Aminpour, aka Johnny Aminpour, the former chief marketing officer at Mirae Bank, 57, Beverly Hills, California was indicted by a federal grand jury on eight counts of bank fraud and making false statements in connection with allegations that he was responsible for the bank issuing $150 million in fraudulent loans – loans that caused the bank to suffer $33 million in losses and were “a significant factor in Mirae Bank’s failure as a financial institution in 2009.”

According to the indictment, Aminpour held himself out as a successful businessman who could help people obtain financing for gas station and car wash businesses with little or no down payment. In some cases, Aminpour personally identified businesses to be purchased and negotiated a sale price, but he allegedly overstated the actual purchase price to buyers. For these buyers and others whom Aminpour introduced to Mirae Bank, the indictment alleges that Aminpour oversaw the loan process and provided loan officers with information and documentation that contained false facts and figures, including the actual purchase price of the business and the source of the down payment. As a result, Mirae Bank funded inflated loans, with excess funds secretly going to Aminpour, borrowers and/or “hard money lenders” who had surreptitiously provided funds used to make down payments. Continue Reading…

Ragini Vecham, 36, Cupertino, California; Kishore Pallapothu, 42, Cupertino, California; Satyanarayana Tota, 45, Sunnyvale, California; and Ramana Reddy, 44, Sunnyvale, California, were indicted for their part in an alleged conspiracy by which individuals used companies to fraudulently submit fraudulent H-1B visa applications and other documents to the U.S. Department of Homeland Security and the U.S. Department of Labor.  The companies indicted include Horizon Technologies, Inc., Softnet Technology Solutions, Inc., Rose Hayward LLC, Sage 20 Hayward LLC, Jasmine 20 Hayward LLC, Tulip 26 Hayward LLC, and Lily 20 Hayward LLC. Also according to the indictment, as part of the scheme, Vecham and Pallapothu created and funded numerous limited liability companies for the purpose of purchasing commercial and residential real estate to conceal funds generated from the illegal visa fraud and conceal assets from the Government investigation.  Vechum and Pallapothu allegedly also fraudulently obtained several loans to finance the purchases that were then titled in the names of the limited liability companies. Continue Reading…

Bruce Swisshelm, 68, Battlefield, Missouri, and his son, Bruce Swisshelm II, 43, Springfield, Missouri pleaded guilty in two separate but related cases, to their roles in a more than $5.5 million bank fraud scheme.  Swisshelm pleaded guilty to bank fraud and money laundering. Swisshelm II pleaded guilty to misprision of a felony. Continue Reading…

Mark Yaffe, 55, Tampa, Florida, has pleaded guilty to one count of conspiracy to commit bank fraud admitting his role in misrepresenting the extent of company collateral to Sovereign Bank in order to borrow $35 million.

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Stephen B. Deluca, 58, Deland, Florida, was sentenced by Senior United States District Judge John Antoon, II to six years and six months in federal prison for his role in a conspiracy to commit wire fraud and bank fraud wherein he defrauded several lenders using inflated assets to qualify for lines of credit.

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Abolghasseni “Abe” Alizadeh, 56, Granite Bay, California, and Mary Sue Weaver, 62, Roseville, California, are the subjects of a 21-count indictment charging them with various counts of mail, wire and bank fraud in connection with schemes to defraud lenders in large commercial real estate transactions between mid-2004 and April 2008.

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