DEC 12, 2013

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Compliance Matters

Three Arrested for Loan Mod Fraud

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THREE ARRESTED IN CALIFORNIA FOR LOAN MODIFICATION FRAUD

FACTS

On Dec. 3, Federal agents arrested Bryan D’Antonio and Charles Wayne Farris for operating the Rodis Law Group and America’s Law Group businesses that allegedly offered bogus loan modification assistance to struggling homeowners. Ronald Rodis, an attorney, surrendered on Dec. 4 to federal agents on charges alleging that he participated in, and lent his name and the law license he formerly possessed to, the fraudulent operation. All three defendants were named in a federal indictment following an investigation by the FBI and IRS-Criminal Investigation.

According to the indictment, as a result of the scheme run by D’Antonio, Farris and Rodis, more than 1,800 financially distressed homeowners lost a total of at least $12 million in fees they paid to the companies. Many homeowners also lost their homes to foreclosure. During a nine-month period that began in October 2008, the Rodis Law Group and America’s Law Group allegedly defrauded distressed homeowners by making false promises and guarantees regarding the companies’ ability to negotiate loan modifications from the homeowners’ mortgage lenders, falsely representing that a “team of attorneys” would represent the homeowners and advising homeowners to cease making their mortgage payments.

The Rodis Law Group, and its successor company, America’s Law Group, allegedly advertised loan modification assistance on radio stations nationwide. According to the indictment, many of these radio advertisements featured Rodis’ voice telling homeowners that a “team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance” would negotiate with mortgage lenders. Sales staff hired and trained by Farris and D’Antonio allegedly told interested homeowners that Rodis Law Group was “100% successful,” “routinely lowered monthly payments,” and obtained reduced principal balances. According to the indictment, once the defendants and their co-conspirators convinced homeowners to pay a fee of several thousand dollars, little to no effort was made to obtain loan modifications. After making their payments, homeowners who tried to get updates on the status of their cases were often unable to contact anyone at either company.

The indictment further alleges that D’Antonio committed these crimes after having been convicted of mail and wire fraud for his role in a previous telemarketing scheme. The previous scheme resulted in a civil case by the Federal Trade Commission and ultimately a court order, entered in 2001, that permanently banned D’Antonio from participating in future telemarketing operations. The indictment in this case alleges that D’Antonio committed criminal contempt of court by directing the telemarketing activities of Rodis Law Group and America’s Law Group and by misrepresenting the services they provided.

D’Antonio, Farris and Rodis are each charged with 10 felony counts—nine counts of wire fraud and one count of conspiracy. Each of these counts carries a statutory maximum penalty of 20 years’ imprisonment. In addition, D’Antonio is charged with 13 counts of criminal contempt for violating the 2001 court order. Criminal contempt of court has no statutory maximum penalty. (usattyca12413-usdoj)

MORAL

Pay particular attention to the fact that the prosecutors are chasing loan modifications that occurred in 2008 over five years ago! They can and do go back 10 years to 2003 if they like. I have published cases recently that involved mortgage fraud from loans that occurred in 2004 and 2005!

CALIFORNIA REAL ESTATE AGENT PLEADS GUILTY TO MORTGAGE FRAUD IN CRISP & COLE FIASCO

FACTS

On Nov. 27, Jeriel Salinas pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud, and bank fraud relating to his involvement in an extensive mortgage fraud scheme while working at Crisp & Cole Real Estate.

Carl Cole and David Crisp owned and operated Crisp & Cole Real Estate and Tower Lending, an affiliated mortgage brokerage. Salinas was employed at CCRE as a licensed real estate agent, and according to court documents, between January 2004 and September 2007 he and others at CCRE and Tower Lending carried out a conspiracy to defraud financial institutions in part by using straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100% financing, based on false and fraudulent loan applications. The properties were nominally owned in the names of the straw buyers but were controlled by the conspirators and held for the benefit of the conspirators and CCRE.

The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price so that the conspirators and CCRE could extract the purported increased “equity” from the property for their benefit. Ultimately, and in many cases after the properties were flipped several times through various straw purchasers, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. According to court documents, the conspiracy caused close to $30 million in losses to mortgage loan companies and other financial institutions.

Salinas knowingly caused numerous fraudulent loan applications to be submitted to lenders. He knowingly purchased at least six properties as a straw buyer in Bakersfield and Shaver Lake. Salinas served as the real estate broker and received commissions for some of the fraudulent transactions. His actions caused $1.4 million to $2.5 million in losses to lenders.

Salinas is scheduled to be sentenced on Feb. 24, 2014, by U.S. District Judge Lawrence J. O'Neill. Salinas faces a maximum statutory penalty of 30 years in prison and a $1 million fine in addition to mandatory restitution. (usattyed112713)

MORAL

If you have been reading the e alerts on a regular basis, this is really an ongoing saga going back to 2004!

CALIFORNIA BRE IS SEEKING TO DISCIPLINE AND POSSIBLY REVOKE THE REAL ESTATE LICENSE OF THREE CORPORATIONS AND DAN HARKEY AS DESIGNATED OFFICER OF THE CORPORATIONS

FACTS

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