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Three Arrested for Loan Mod Fraud

DEC 12, 2013 5:22pm ET
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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

The California Bureau of Real Estate has filed an accusation in Case No. H-39155 LA against Point Center Financial Inc., a corporate real estate broker; National Financial Lending Inc. a corporate real estate broker; Calcomm Capital Inc., a corporate real estate broker and Dan Joe Harkey, the designated officer-broker of all three corporations. The accusation is dated Nov. 14, and consists of 53 paragraphs. If you would like to read the accusation in its entirety go to the BRE website and check the license and then go to the hyperlink H-39155LA .

This is in addition to a $12.5 million breach of fiduciary duty judgment against Harkey by investors and the bankruptcy of his company Point Center Financial. Harkey’s attorney is alleged to have said that the state accusation is based on patently false allegations by Harkey antagonists that have already been dismissed in the court. He also is quoted as saying the accusation would be dropped one the BRE gets the evidence of the prior court proceedings. The accusation is similar to claims pending in a fraud lawsuit against Harkey in front of Bankruptcy Judge Theodor Albert. (bre h-39155la and ocrlocal page 1)

MORAL

In a recent Supreme Court case the court has held that a finding of “Breach of Fiduciary Duty” is not sufficient to stop the dischargeabilty of a debt owed by a fiduciary. It must be “defalcation.” If you are interested we can give you the citation.

NORTHERN CALIFORNIA MAN SENTENCED TO 10 MONTHS IN FEDERAL PRISON FOR USING BANKRUPTCY COURT TO STOP FORECLOSURES

FACTS

In December Walter Harrell was sentenced by a federal judge to 10 months in prison for using the bankruptcy process in an attempt to conduct a mortgage fraud scheme. Harrell allegedly offered his services to Bay Area homeowners in danger of foreclosure. For a monthly fee, he and his associates stalled bank efforts to collect by splitting off ownership and filing for bankruptcy in an attempt to outmaneuver bank attorneys. Harrell later admitted that he made about $30,000 for his endeavors.

The scheme involved six Bay Area properties, including Harrell's home in Montara and a residence on Roosevelt Boulevard in Half Moon Bay.

The U.S. Attorney's Office successfully prosecuted Harrell in bankruptcy court for paying one of his associates to lie about her income, stating that she was making a six-figure salary. He pleaded guilty to charges of defrauding and making false statements. 

Harrell is scheduled to surrender to U.S. marshals on Jan. 31, 2014. (hlfmnbby12513)

MORAL

Putting fraudulent information on bankruptcy papers for filing is a federal felony. When our attorney goes with a client to the legally required “creditors meeting” there is an exceedingly large poster on the wall that has a white background and large black bold capital letters that informs you that lying on the bankruptcy papers is a felony. There are ways to forestall foreclosure legally such as loam modification requests, etc. If you have questions about filing bankruptcy in any form contact Jozef Magyar of our firm for the answers.

THREE GUILTY VERDICTS IN NATIONWIDE FORECLOSURE RESCUE SCAM THAT CAUSED OVER $15 MILLION IN LOSSES

FACTS

On Dec. 2, after a five-week trial, a federal jury in Sacramento returned guilty verdicts against Charles Head, Benjamin Budoff and Domonic McCarns. All three were convicted of conspiracy to commit mail fraud in connection with a nationwide “foreclosure rescue” scam. Charles Head was convicted of three additional counts of mail fraud. For Charles Head, the trial conviction is his second this year in this district stemming from a major mortgage fraud investigation. McCarns was remanded into custody immediately after the verdict. Charles Head remains in custody following a violation of the terms of his release after his conviction in May 2013 in the first trial.

Charles Head was the leader of a scam that operated from Orange County between March 2005 and June 2006. (Notice the prosecutors went back to offenses that took place eight years ago) The defendants used several entities to extract more than $5.7 million in equity from the homes of their victims, many of whom were in California. Evidence in the two trials established that he and his co-conspirators were responsible for at least $15 million in losses to homeowners.

In March 2008, a federal grand jury indicted Head, Budoff McCarns and others alleging violations of conspiracy to commit mail fraud, mail fraud, and other charges in a separate case related to the Head Financial Services equity-skimming scheme. The defendants found homeowners facing foreclosure and claimed that they could help the homeowners avoid foreclosure and repair their credit. Instead, through misrepresentations, fraud and forgery, the defendants led the victims to complete transactions that substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants or were solicited on the Internet. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then split the equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

This investigation has already yielding 16 convictions and the U.S. Attorney’s office said it is not finished yet.

Two other defendants pleaded guilty in this case before the trial: Keith Brotemarkle and Lisa Vang. (usattyedca12213)

MORAL

Can you imagine federal agents and prosecutors chasing you for over eight years through the federal criminal court system?

TWO SENTENCED IN SACRAMENTO FOR MORTGAGE FRAUD

FACTS

On Dec. 5, 2013 Vadim Vilchitsa and Yevgeniy Zazhitskiy were sentenced in federal court in Sacramento, Calif., in two related mail fraud cases involving the purchase and sale of 24 Sacramento-area homes in 2007 and 2008.

U.S. District Judge Kimberly J. Mueller sentenced Vilchitsa to 15 months and Zazhitskiy to 20 months in prison.

Before and during 2007, Vilchitsa and a business partner solicited funds from investors to buy residential properties, renovate them and flip them. The operation was successful before the financial crises, but when real estate values plummeted, the business was unable to sell its inventory.
Vilchitsa and his partner allegedly coordinated the purchases of 24 of their company's residential properties, although they knew the purchasing investors did not have the income or assets to support the loans for the properties. Loans were obtained for the investors through Zazhitskiy, a licensed real estate agent and broker who worked as a loan officer. Although Zazhitskiy had not interviewed the loan applicants, he knew their income and assets had been faked for purposes of the loan applications, authorities said. Nevertheless, he obtained loans for 23 properties.
Zazhitskiy was ordered to begin serving his sentence Jan. 15 and Vilchitsa on March 14.  (mortdly12513)

MORAL

Loans completed in 2007 and six years later sentenced to federal prison. Since the federal prosecutors have 10 years to file criminal charges for mortgage fraud they work their way forward. At the moment from my investigation and representation of some of those accused, they are using 2005, 2006 and 2007 fraud loans. Some are much closer occurring in 2011 because of the enormity of the loss. For questions contact Herman Thordsen.

THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE. AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.

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