ACTOR TOMMY LISTER CHARGED WITH MORTGAGE FRAUD AND AGREES TO PLEAD GUILTY
On Aug 31, Tommy Lister, an actor who has appeared in approximately 100 movies, was charged in federal court with conspiring to commit mortgage fraud in a scheme that led to $3.8 million in losses. Lister, who is also known as “Tiny” and “Zeus,” was charged in a criminal information with one count of conspiracy.
A second person involved in the scheme—Arcelia Chavez, a self-employed certified tax preparer—was also charged with conspiracy.
Both Lister and Chavez agreed to plead guilty to the conspiracy charges.
The scheme ran from November 2005 through June 2007 and allegedly involved Lister, Chavez and several other individuals, including: Sami Sager Sweiss, a former mortgage loan officer; Jason Patterson, a real estate agent; “J.R.”, formerly a manager of a Washington Mutual branch (and only identified by his or her initials by the U.S Attorney’s office); and Wanda Tenny, a former escrow officer.
Lister conspired with these individuals to fraudulently acquire title to four residential properties he could not afford. With the help of these individuals and others, Lister obtained mortgages for the four properties through fraudulent means, including submitting mortgage applications that included inflated income and asset amounts; fabricating bank statements and falsifying other documents to substantiate the fraudulent statements in the loan applications; and falsifying escrow records to deceive lenders into believing Lister had made required down payments.
In addition to fraudulently obtaining the mortgages, Lister and his co-conspirators concealed from lenders the fact that he would receive kickbacks from sellers after the real estate deals closed.
Relying on the fraudulent applications and documents, lenders issued mortgages totaling $5.7 million. Lister subsequently defaulted on the four mortgages, causing those lenders and their successors to lose approximately $2.6 million.
After acquiring title to the four residential properties, Lister obtained fraudulent home equity lines of credit on each of the four properties. Lister drew down a total of $1,146,000 in cash from the four HELOCs but did not pay back any of the principal.
Lister also admitted in his plea agreement that Chavez aided and abetted him in obtaining one of the fraudulent mortgages and a fraudulent HELOC by preparing a false CPA letter, as well as fabricating W-2s and a pay stub. The false CPA letter stated that Chavez had prepared Lister’s tax returns. Chavez separately admitted in her plea agreement that she prepared the false and fictitious documents, actions that caused lenders to lose approximately $1.1 million.
The charge of conspiracy carries a statutory maximum sentence of five years in federal prison. On July 30, Sweiss pleaded guilty to a conspiracy count before United States District Judge Dale S. Fischer. As part of his guilty plea, Sweiss admitted that he conspired with Lister, Patterson, Tenney, and Chavez to commit mortgage fraud. Sweiss is scheduled to be sentenced on March 18, 2013. (usattycacd83112)
Note that the federal prosecutors are still going back to 2005! That is seven years ago. As I have said many times in the e alert, the government has 10 years to prosecute form the time the last act was committed on the loan. This is when the broker receives the commission or when FHA receives the MI whichever is later.
CALIFORNIA MAN GETS 10 YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
On Aug. 27, Henrik Sardariani was sentenced to 10 years in federal prison for orchestrating a loan fraud scheme that netted him and his associates well over $5 million in less than eight months. He was sentenced by United States District Judge Virginia A. Phillips, who also ordered the defendant to pay $5.4 million in restitution to his victims and a $100,000 criminal fine.
Sardariani previously admitted that he had defrauded private money lenders by falsely assuring them that the loans they were making were safe when, in fact, he had no intention of paying the loans back and did not own the properties he had pledged as collateral. In determining the sentence, Judge Phillips noted the complexity of Sardariani’s criminal conduct, which included creating false real estate documents with cut-and-paste notarizations and falsifying government records to hide problems in Sardariani’s background that would have raised red flags for the lenders. A victim who spoke at the sentencing hearing summed up Sardariani’s crimes as robberies with fake documents instead of a gun.
Henrik Sardariani has been in custody since Dec. 21, 2010, when he and his brother, Hamlet, were arrested. Hamlet Sardariani pleaded guilty in June 2012.
Henrik Sardariani admitted that he falsified numerous documents to obtain more than $5 million in loans. To obtain one of the loans, Sardariani fraudulently claimed to be the president of the company that actually owned a property used as collateral, and he created false corporate records to maintain that pretense. Sardariani also admitted that he had created fraudulent property records to make it appear to the lenders that prior loans secured by the properties had been paid off and that, therefore, the new loans being made by the victim lenders were fully secured. The fraudulent reconveyances bore forged and fraudulent signatures of notaries public and fraudulent stamps of the notaries public.
Sardariani also admitted that in relation to another loan, he falsely told the lender that the loan was needed only briefly to extend a pre-existing escrow related to the purchase of a hospital and would be returned to the victim-lender at the close of the pre-existing escrow less than one month later. In fact, as Sardariani admitted, he did not intend to use the loan proceeds in connection with the purchase of a hospital, nor did he intend to leave the money untouched in the escrow account. Sardariani used the loan proceeds to place bets on horse races. After the lender wired $2.5 million to the escrow account that Sardariani had designated, Sardariani instructed the escrow officer to wire the funds to a Hong Kong bank account to fund the gambling. The escrow officer, Wanda Tenney, who was also charged in the case, pleaded guilty to conspiracy on Nov. 30, 2011. Sardariani’s gambling partner Christopher Woods, who was charged with money launderig in a related case, has also pleaded guilty. (usattycdca82812)
I wonder if any of the lenders thought of doing a title search before loaning the money.
CALIFORNIA MAN PLEADS GUILTY TO MORTGAGE ELIMINATION SCAM
On Aug. 28, Ernesto Diaz, a South El Monte man who formerly worked as a Realtor, agreed to plead guilty in Los Angeles Federal Court to a federal mail fraud charge in a scheme that falsely promised to eliminate mortgage debts for approximately 200 distressed homeowners who each paid a $15,000 fee. Instead of working on behalf of the homeowners, the man simply sent worthless “Sovereign Citizen” paperwork to lenders—paperwork that did nothing to affect the mortgage of a single homeowner.
As part of the agreement, Diaz has agreed to cooperate in an ongoing investigation into his company, Crown Point Education Inc.
Diaz joined the Crown Point scheme in March 2010 after the company had been in business for approximately one year. Diaz spoke at seminars to recruit distressed homeowners and to train salespersons in the Crown Point program. Diaz admitted that he and others promised distressed homeowners at these seminars that, in exchange for fees that were generally $15,000 per property, Crown Point would eliminate the homeowners’ mortgages within six to eight months through a secret process that involved sending packets of documents to lenders.
Even though he told victims that he could eliminate their mortgage woes, Diaz admitted in his plea agreement that the process had never been successful. Diaz failed to tell distressed homeowners that earlier Crown Point clients—including Diaz’s own brother—had lost their houses to foreclosure and been evicted from their houses.
Diaz admitted that another person affiliated with Crown Point filed bankruptcy documents in the names of Crown Point clients to delay foreclosure and eviction. Diaz acknowledged that Crown Point filed many bankruptcy documents without the knowledge of the company’s clients and that signatures of debtors and notaries were forged on many documents filed with the Bankruptcy Court.
Diaz admits that approximately 200 homeowner-victims paid Crown Point nearly $2.5 million for help they did not receive. The claims made to distressed homeowners were based on discredited “Sovereign Citizen” claims that mortgages are invalid because the banks did not actually lend the money used to fund mortgages and the notes were securitized.
The charge of mail fraud carries a maximum statutory penalty of 20 years in federal prison. (usattycdca83112)
I would think if he pleads guilty as part of a plea agreement he is looking at time. However, the fact that it is filed now and he has been co-operating for some time leads me to the opinion that more indictments are coming down the road and the other people involved should seek legal counsel now since they will undoubtedly be indicted later.
Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.
CALIFORNIA MAN GETS 18 YEARS AND ACCOMPLICE GETS 12 YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
Kenneth Powell, a defendant who pleaded guilty to what prosecutors say was one of the largest real estate fraud cases in Ventura County, said in court that his only goal was to make real estate profits for himself and his investors. But the judge didn't believe Powell and called the case a "classic Ponzi scheme," saying people lost their life savings and some lost their houses.
Powell received 18 years in prison, while co-defendant Kathryn “Katie” Rose got 12 years and eight months.
Powell and Rose were known as "Ken and Katie" when they hosted weekend infomercials called "Academy of Real Estate," "Money Intelligence" and "The Ken & Katie Show" on KVTA-AM 1520, authorities said.
The preliminary hearing for a third defendant, Paul Charles Lascola, 70, was set for Oct. 10.
Prosecutors said just under $3 million was stolen from 15 people in Ventura, Santa Barbara and Los Angeles counties. The victims were asked to invest in the development of vacant lots or in loans secured by real estate, prosecutors said. But virtually no construction took place on the lots, and some of the borrowers had pending foreclosures or bad debts, prosecutors said. Bank records showed that new investment money was used to pay earlier investors, prosecutors said.
Prosecutor Miles Weiss had said no stolen money has been recovered.
Rose pleaded guilty to 13 felony counts, including grand theft and theft from an elderly person. Powell pleaded guilty to 15 similar white-collar felony counts.
Some of the victims appeared in court and told the judge how the financial losses have affected their lives. Jack Bertsch said he lost more than $1 million. After being diagnosed with cancer, he wanted to invest some of his money to make sure his wife would be financially secure. Bertsch said he listened to Powell and Rose on the radio and that the investment sounded like a good deal. He said he was taken advantage of and persuaded to refinance his houses to invest money.
After Powell repeatedly lied to him, Bertsch said, he confronted Powell, who admitted to the scam. Bertsch said he told Powell he planned to go to the authorities. "I don't care," Bertsch said Powell told him. "I am going to get five years, and I'll be out in two." Bertsch, who said his cancer is in remission, told the court that Powell and Rose are dangerous and shouldn't be out on the streets.
Mike Gough said he lost $340,000—most of his retirement savings—and was persuaded to refinance his house. "Many of our retirement plans have been canceled," said Gough. Sharon Gough told the court, adding her husband will have to return to work "because we lost so much."
Nicole Corsi said she lost $100,000, wiping out her children's college fund.
Powell and Rose apologized to their victims. Powell's lawyer, Willard Wiksell, said Powell is broke. "He has nothing," Wiksell told the judge. He asked the judge to sentence Powell to a maximum of 16 years.
Weiss said Rose used some of the money on a car, mortgage and other personal expenses. Weiss said Powell was the brains and Rose was the heart of the fraud, and that her role was to get victims emotionally involved in the investments. After the sentencing, Bertsch said he didn't believe Powell's apology. (ventuar8112)
I guess Powell was wrong. He is alleged to have said he will get five years and be out in two. Instead he got 18 years. So I guess he will not be out in two. Sounds like it would have been just as well for him to go to trial considering the sentence.
THREE COLORADO RESIDENTS GUILTY OF MORTGAGE FRAUD
On Aug. 30, Michael Jacoby, Derek Zar and Susanne Zar were found guilty by a jury of wire fraud, bank fraud and money laundering. The guilty verdicts were the result of a four-week trial before Visiting U.S. District Court Judge Kathryn H. Vratil. Jacoby was taken into custody immediately after the jury returned the guilty verdict. They are scheduled to be sentenced by Judge Vratil on Dec 10.
They were indicted by a federal grand jury along with Michael Macy, who pled guilty previously. Guess who cooperated with the prosecution?
The jury returned guilty verdicts against the defendants on all counts with which they were respectively charged. Michael Jacoby was found guilty of 11 counts of wire fraud, three counts of money laundering, and two counts of bank fraud. Derek Zar was found guilty of four counts of wire fraud and one count of money laundering. Suzanne Zar was found guilty of three counts of wire fraud and one count of money laundering.
Between January 2005 and continuing through September 2006 in Colorado, the defendants knowingly devised and intended to devise a scheme to defraud various financial institutions and other commercial lenders that funded residential mortgages and to obtain money, funds, and other property owned by and under the custody and control of those financial institutions and commercial lenders by means of materially false and fraudulent pretenses and representations. In furtherance of the scheme, one or more of the defendants participated in real estate transactions involving 18 properties located in Colorado.
It was part of the scheme that Derek Zar and a co-defendant bought homes at purported discounted rates because they paid cash. Jacoby often lent them the cash for these initial purchases and was then paid back with interest. Furthermore, Jacoby acted as the Realtor for the sales.
Derek Zar and a co-defendant usually bought the homes through limited liability companies they owned and operated and then resold these homes within a very short time period to themselves as individuals at inflated prices financed by mortgage loans. Additionally, Susanne Zar often refinanced the homes with mortgage loans based on an inflated value. Sometimes, the inflated value was supported by false documentation showing a higher initial purchase price than the actual initial purchase price. The defendants also prepared and submitted and caused to be prepared and submitted applications for loans which contained various materially false and fraudulent representations.
It was further part of the scheme for the co-defendants to cause to be submitted false appraisals for some of the properties. Jacoby usually recommended an appraiser to the mortgage broker for the loan approval. He supplied the appraiser with inflated values of comparable homes or omitted information concerning the home sales so the appraiser would overvalue the current home. At closing, through a grant program, the defendants funneled money back to the home buyer who was one of the defendants. They concealed from the lenders and other parties associated with the transactions that the home buyer was receiving a kickback for buying the home. (loansafe.org83112)
Since January 2005. You will note the federal prosecutors indicted them for loans that funded over 7-1/2 years ago!
MINNESOTA REAL ESTATE WOMAN GETS FIVE YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
On Aug, 31, Barbara Lynne Puro, a 49-year-old real estate who previously pleaded guilty, was sentenced for her participation in a multi-million-dollar mortgage fraud scheme that victimized lenders across the country.
From Jan. 1, 2005 to Jan. 1, 2008, she conspired with others to obtain loan proceeds by making false representations to and withholding material information from lenders during the loan application process.
At the time, she was employed by Homestar USA, Re/Max Advantage Plus and Coldwell Banker Burnet, where she was responsible for recruiting and representing buyers and sellers of residential properties.
As part of the scheme, Puro arranged for unwitting homeowners to sell their properties to straw buyers at inflated prices. The result was fraudulent loans in excess of $10 million and losses of approximately $5.3 million. (cbsmn83112)
Again note, the loans prosecuted occurred 7-1/2 years ago. Remember, a lawyer is cheaper if you see them before the indictment and you can usually see the indictment coming long before it arrives.
LAS VEGAS MAN PLEADS GUILTY TO LOAN MOD FRAUD
On Aug. 28, Alex Soria, 65, accused of defrauding distressed homeowners trying to refinance or adjust their home mortgages which occurred between May 2008 and January 2010, pleaded guilty in federal court. He also pleaded guilty to theft of government funds in a separate scheme to illegally collect $208,106 in disability benefits from the U.S. Social Security Administration between 1990 and 2010.
Senior U.S. District Judge Lloyd George set a Dec. 11 sentencing for Soria, who is in federal custody. He faces a maximum 30 years in prison and $500,000 fine.
As part of his deal with federal prosecutors, Soria agreed to make full restitution. Prosecutors contend he owes $320,266 - the $208,106 to the government and $112,160 to the victims of the mortgage fraud scheme. Soria, who had worked in the mortgage lending business since about 1970, was indicted in April 2011.
The indictment charged Soria with falsely telling homeowners that he was a loan officer with Amwest Capital and that he could help them get relief with their mortgages through two federal programs. He acknowledged in his plea agreement that he provided homeowners with phony letters saying they were pre-qualified for a new loan and concealed from his clients that he was not licensed to act as a mortgage agent.
When he applied for federal disability benefits in 1990, Soria indicated that cataracts and a kidney condition kept him from working. He acknowledged in his agreement that he continued to collect the benefits long after he returned to work in the mortgage business.
Soria also is facing state charges in a mortgage and foreclosure scam (lasvegrevjl82812)
If he was never licensed as a mortgage agent in Nevada, how did he return to work in the mortgage business.
TEXAS TITLE CO. ATTORNEY CONVICTED OF MORTGAGE FRAUD
On Aug. 29, Lisa Carol Ross, an attorney and escrow officer for Vision Title LLC, pleaded guilty to conspiracy to commit wire fraud.
Ross and three others were indicted in 2011 for a scheme to defraud residential mortgage lenders. According to the indictment, the conspirators allegedly used fraudulent documents to help borrowers qualify for mortgage loans to purchase condominium units in a Houston building, as well as residential homes in the Houston area.
The indictment indicates the documents had false and misleading information about the borrowers’ income, assets, liabilities, employment status, bank deposits, rental payments, intent to use properties as a primary residence, and source of funds used to close the real estate transactions. Ross admitted that she arranged for disbursements from the title company to be turned into cash and money orders and secretly distributed to the involved parties.
Ross is currently in custody on unrelated state charges, where she will remain pending sentences in this case by U.S. District Judge Gray Miller on Jan. 25, 2013. At that time, Ross faces a maximum penalty of 20 years in prison and a $250,000 fine.
The others charged in relation to this case are set to begin trial on Dec. 3. (usattysdtx82912)
Licensed as an attorney, good job and throws it all away. It is difficult to fathom why?
CALIFORNIA RE AGENT PLEADS GUILTY TO MORTGAGE FRAUD
In July 2012 Teresa Rose, a real estate agent, pleaded guilty to taking part in a mortgage scam that caused lenders to lose about $5 million. Rose is one of four charged in connection to a scheme to inflate real estate prices, obtain mortgages fraudulently and skim more than $1.5 million in kickbacks based on an indictment filed in U.S. District Court in San Diego. The other defendants are: Mary Armstrong, an unlicensed mortgage broker who was arrested in Las Vegas; her assistant William Fountain; and Justin Mensen, who authorities said helped by creating fake companies and bank accounts to receive the reported kickbacks.
Rose was an agent at Coldwell Banker in Ramona, Calif., during the alleged incidents in 2006 and 2007, faces one count of conspiracy to commit wire fraud and to launder money. She could face up to a five-year prison sentence and a maximum $250,000 fine. Her sentencing is set for Dec. 3. Rose was terminated from Coldwell Banker Country Realty when the indictment was handed down May 10, said David Siroty, vice president of communications with Coldwell Banker Real Estate.
According to the indictment: Rose and Armstrong scouted for and found properties for sale in Ramona, El Cajon and parts of Washington state. Armstrong would recruit straw buyers for the homes and promise them $10,000 for taking part in what they called investments.
Armstrong falsified buyers' information to obtain 100% financing for the preselected properties. Rose persuaded sellers of the Ramona homes to inflate the sales price by $100,000, money that went to fake construction and development firms. The investigation concluded that the defendants failed to pay the mortgages on the 16 properties identified in court records and they eventually went to foreclosure. (usattysdca72009)
Can a corporate broker be liable to a lender when an agent licensed to the corporate broker commits a real estate crime in the course of agency? An interesting thought.
PHILADELPHIA LO ARRESTED FOR HUD/FHA MORTGAGE FRAUD
On Aug. 20, Satish Suri was arrested on an indictment charging him with bank fraud, false statements on loans, and false statements to the Department of Housing and Urban Development on a Federal Housing Administration-insured loan, announced United States Attorney Zane David Memeger.
The indictment charges that from 2005 to 2008, Suri, a loan officer for Sovereign Bank, Horsham, Pa., knowingly submitted false and fraudulent documents to Sovereign Bank on behalf of borrowers in support of mortgage applications on eight properties. The indictment charges that Sovereign Bank relied on the false documents in approving over $2.375 million in loans and mortgages. Further, according to the indictment, the mortgage on one of the properties was federally insured by HUD.
If convicted of all charges, Suri faces a maximum of 30 years in prison for each bank fraud count, a fine of up to $20.5 million, five years’ supervised release, and a $2,200 special assessment. (usatty82112edpa)
Notice that the federal prosecutors are still working on 2005 loans and they have 10 years to prosecute. Here they had the grand jury release the indictment seven years after the loan funded. Some of you have asked when it is going to slow down. I have informed several of you this is going to go on in my opinion for several more years, in all probability until after the end of 2013 at the earliest. In fact in this attorney’s opinion, the prosecutions will actually speed up and there will be even more indictments in 2013 since I am of the opinion even more foreclosures will take place in 2013 because of the five year “step up.”
VIRGINIA LOAN OFFICER PLEADS GUILTY
T O MORTGAGE FRAUD
Pervaiz Arshad pleaded guilty to conspiring to commit mail fraud and wire fraud in connection with his role in fraudulent mortgage loan transactions involving nine homes in northern Virginia and approximately $1.7 million in losses to lenders. Arshad also pleaded guilty to a passport fraud charge in connection with his attempt to obtain a fraudulent passport for a co-conspirator fleeing to Canada.
Arshad faces a maximum penalty of 20 years in prison on the conspiracy charge and 10 years in prison on the passport charge when he is sentenced on Nov. 2.
Arshad admitted that while acting as a loan officer for Annandale, Va.-based E-Star Lending, he recruited an individual to serve as a straw buyer in fraudulent real estate transactions designed to enrich himself and others. The properties, owned by co-conspirators, were sold to the straw buyer at a profit. Arshad ensured the straw buyer would qualify for the 100% financing used to buy the properties by reporting false employment and income information on the loan applications. Conspirators set up fake companies to verify the false employment information and further deceive the lenders. No payments were made on the loans, and Arshad intended for the straw buyer to flee to Canada before the fraud was discovered.
Arshad was indicted in this case in 2010, after he had fled to Pakistan to avoid prosecution. He was arrested in July 2012 when authorities discovered him on a flight into Dulles International Airport. Arshad is the sixth person associated with E-Star to be convicted of mortgage fraud related charges since 2008. (usattyedva82312)
The federal prosecutors are patient. This goes back four years to 2008. Obviously, it looks like a full doc loan and still he gets caught and having fled and then been caught the sentence will probably be stiffer. The federal prosecutors so far as I can determine are still chasing old loans and still chasing NINA, SISA and other no doc loans as well as fraud doc loans going back to 2004. They have 10 years from when the last act (receiving money) was performed to file an indictment. There is every indication they are still doing that throughout the United States. So, if anyone out three had questionable loans and they feel they may become a target, I suggest they consult their attorney now.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE. AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.