OCT 4, 2012
Compliance Matters

California Man Arrested in Foreclosure Rescue Scam

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CALIFORNIA MAN ARRESTED FOR FRAUDULENT MORTGAGE RESCUE SCAM

FACTS

Alan David Tikal is facing charges that he bilked more than 1,000 homeowners in a multi-state, multi-million dollar mortgage scam. Authorities say Tikal was arrested at his home in the Contra Costa County city of Brentwood on Sept. 28, the same day prosecutors filed a complaint in federal court against him.

Tikal is accused of operating a sham mortgage rescue company that offered homeowners cheaper mortgages and promised to cover their existing, more expensive home loan.

Prosecutors say he collected more than $3 million from the victims, most of who lived in California. The homeowners were allegedly instructed not to pay their original mortgages and ignore correspondence from the lender. Prosecutors say many lost their homes to foreclosure. It is not clear whether he had retained an attorney. (ap92812)

MORAL

Remember, everyone is presumed innocent until proven guilty in a court of law. However, if Tikal needs an attorney we have one available in San Jose.

CALIFORNIA MAN HAS ARREST WARRANT ISSUED FOR MORTGAGE FRAUD

FACTS

Mike Wimberly of California, whose alleged participation in a Myrtle Beach, S.C. area mortgage fraud scheme helped drive a retired couple into bankruptcy according to court records, was indicted this week by a federal grand jury on one felony charge of conspiracy to commit wire fraud.

On Sept. 25, 2012 a bench warrant for Wimberly’s arrest was issued.

Wimberly is charged with recruiting straw buyers for area properties and receiving fraudulent payments from real estate closings, including the January 2008 purchase of a five-bedroom Garden City Beach duplex by California retirees Robert and Carol Riley. The Rileys say they were duped by Wimberly’s false promises of quick riches, and the couple wound up filing for bankruptcy protection when the real estate deal soured.

Courthouse notebook | Trustee wants another interview with Pavilack

The trustee in charge of Myrtle Beach lawyer Harry Pavilack’s bankruptcy liquidation will interview Pavilack again next month to see what, if anything, he knows about previously undisclosed assets or other information that could help pay off some of his creditors.

The indictment states that Wimberly received payments from real estate closings that were either not shown on the HUD-1 closing statements or were misrepresented on the documents. The fraudulent closing documents contributed to RBC Bank’s decision to approve mortgages for the properties, according to the indictment. Wimberly faces a maximum penalty of 30 years in prison and a $1 million fine if convicted.

One of the properties that Wimberly pitched, according to the Rileys, was a duplex on Seabreeze Drive in Garden City Beach. The Rileys purchased the duplex sight-unseen for $885,000 in January 2008 from Stonegate Properties. The real estate closing took place in California.

Kenneth Paul Holmes, the owner of Stonegate Properties, pleaded guilty to mortgage fraud and was released from prison in June after serving a five-month sentence. Holmes, who received a light sentence because of his cooperation with federal investigators, remains on probation and must pay nearly $2.5 million in restitution to banks.

A civil lawsuit filed by RBC Bank against dozens of people accused of participating in area mortgage fraud schemes sheds light on another real estate transaction involving Wimberly and the Rileys—this one for a condominium at Myrtle Beach Villas II in Myrtle Beach.

Documents in the civil case state that Myrtle Beach Villas II owner Alvin Shuman worked with Wimberly and mortgage broker Darin Epps on an allegedly fraudulent transaction in January 2008. Shuman has denied any wrongdoing while Epps currently is serving a prison sentence for mortgage fraud.

The court documents in the civil lawsuit state that Shuman purchased a $41,386.33 cashier’s check that falsely identified Robert Riley as the remitter. That check was used to make the down payment on the condo purchased in Riley’s name.

Myrtle Beach Villas II received a $200,660.78 check from the condo closing, which Shuman deposited into the corporate account at 4 p.m. on Jan. 10, 2008, according to the court documents. One minute later, Shuman transferred $41,386.33 from the Myrtle Beach Villas II account to his personal checking account—thus repaying himself for the down payment he had made on the Riley condo, according to court documents.

One day later, Shuman wired $116,000 to Down to Earth Ventures, a California company controlled by Mike Wimberly. Then, on Jan. 14, 2008, Wimberly wrote a $15,000 check to Riley from the Down to Earth Ventures bank account.

The civil lawsuit filed by RBC Bank is pending in federal court. (myrtlebeachonline92612)

MORAL

See what can happen when a HUD-1 is not completed correctly!

ROSEVILLE, CALIFORNIA COUPLE ARRESTED FOR LOAN MODIFICATION AND RESCUE FORECLOSURE SCAM

FACTS

 

On Oct. 1, Martin Wayne Flanders and Ligia Sandoval Spafford were arrested on a complaint charging them with orchestrating a fraud scheme targeting distressed homeowners. Flanders was also charged with conspiracy to commit bankruptcy fraud for filing sham bankruptcy petitions as part of the fraud scheme. The complaint was filed in Sacramento on Sept. 28.

According to court documents, Flanders charged clients advance fees in exchange for a number of financial services, including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings, and a program to sell homes to “investors” with a rent-to-own option. Flanders and Sandoval marketed these services to economically distressed homeowners with particular emphasis on those who were Spanish-speakers. During a radio program aired twice weekly by a Bay Area Spanish-language Christian radio station, Radio Luz, Sandoval promoted the services she and Flanders offered. Flanders also advertised on a Spanish-language television station, Univision, and in Spanish-language magazines. About 98% of Flanders and Sandoval’s clients were of Hispanic descent, some of whom spoke little to no English. Sandoval speaks Spanish; Flanders does not.

The investigation to date has identified 25 to 30 individuals who paid for services and did not receive them for a total loss of approximately $120,000. Some homeowners who were not able to obtain relief were foreclosed upon by their lenders.

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