Opinion

California Mortgage Broker Pleads Guilty to Stealing $6.9 Million from Investors

On Oct. 3, Mark Alan Helsing, a broker for "hard-money lenders," pleaded guilty to multiple felony counts for stealing $6.9 million from investors in a Ponzi and real estate fraud scheme, authorities said. He faces a potential term of 15 years in prison at his sentencing Dec. 5 by Superior Court Judge Craig E. Robison.

He pleaded guilty to 55 felony counts of grand theft, seven felony counts of filing false recorded documents, six felony counts of elder financial exploitation and sentencing enhancements for white-collar crime over $500,000 and excessive stealing. Helsing defrauded as many as 12 people in a Ponzi and real estate fraud scheme from May 2004 to June 2007 while operating as a broker for "hard-money lenders" through his four Orange County-based businesses, including SEA VIEW INVESTMENTS, HLHS FINANCIAL SERVICES INC., FOOTHILL REALTY AND SEA VIEW MORTGAGE, prosecutors said.

He stole from his private investors, most of whom were long-time friends who trusted the defendant, by keeping the money they lent for borrowers and not funding the loans as promised. Helsing supplied investors with bogus interest payments by taking small sums from their initial investment and providing them with falsified and forged documents to prevent them from discovering that the loans had not been repaid. Helsing embezzled the money and failed to return it the investors' initial principal.

Helsing used funds from new investors to pay off old investors in the Ponzi scheme, prosecutors said. In December 2008, the Tustin Police Department began investigating the case after receiving complaints of checks bouncing from some of Helsing's victims. Helsing was arrested in court June 12, 2009, after pleading guilty in an unrelated case to six felony counts, including grand theft and check fraud, prosecutors said. (ocreg10-3-11)

MORAL

This would be funny if it were not so tragic. It goes back to 2007 according to the news release The District Attorney website indicates trial was supposed to start on the same day Helsing pled guilty. Hard money lenders take note. Are you keeping your trust accounts accurately?

 

SAN FRANCISCO REAL ESTATE DEVELOPER PLEADS GUILTY TO MORTGAGE FRAUD

FACTS

On Oct. 5, 2011 in San Francisco federal court MAHER TALAL MUHAWIEH PLEADED GUILTY to wire fraud. Muhawieh admitted that he defrauded investors between approximately January 2006 and March 2009 by promising various individuals that their funds would be used to purchase and to renovate specific residential properties in San Francisco that would then be sold at a profit. Muhawieh claimed he would make regular and high rates of return for the lenders with limited risk. In fact, and contrary to Muhawieh's promises, he used investors' funds to pay interest on loans from other investors, and for personal expenses.

Muhawieh was indicted by a federal Grand Jury on Sept. 16, 2010. The indictment alleged that Muhawieh solicited and caused others to solicit at least $25 million from at least 80 investors based upon false promises and representations. Muhawieh was charged with 12 counts of wire fraud.

Muhawieh pleaded guilty to one count of wire fraud and faces a maximum statutory penalty of 20 years in prison and a fine of $250,000, or twice the total loss to the victims or gain to the defendant, plus restitution.

MUHAWIEH IS IN CUSTODY PENDING HIS SENTENCING, which has been scheduled for March 7, 2012, before United States District Court Judge Charles R. Breyer in San Francisco.  (usattyndca10611)

MORAL

I hope he gets credit for time served while waiting sentencing. I would say about five-to-10 years is what he is looking at. That is a lot of room and board and it definitely is not free. However, the restriction on movement is what gets to you most.

 

20 INDICTED FOR MORTGAGE FRAUD IN MIAMI, FLORIDA

FACTS

On Sept. 29, 20 individuals, including numerous licensed real estate industry professionals, were charged with conspiracy to commit bank fraud and bank fraud in connection with their alleged participation in a $40 million mortgage fraud scheme. According to the indictment, from March 2006 through June 2008, the defendants conspired to submit false loan applications and related documents to multiple banks for the purpose of obtaining approximately $40 million in mortgage loans and home equity lines of credit. This resulted in approximately $20 million in losses to the banks.

The defendants are variously charged with conspiracy to commit bank fraud (Count 1), bank fraud (Counts 2 - 21), RECEIPT OF GIFTS FOR PROCURING LOANS (Counts 22 and 23), and PROVIDING GIFTS FOR PROCURING LOANS (Count 24 and 25). The indictment also seeks the forfeiture of real property and money derived from the fraud. If convicted, the defendants face a maximum statutory penalty of up to 30 years in prison on each count.

As part of the scheme, brother AND SISTER TEAM, ALINA RUBI, A MORTGAGE BROKER, AND CAMILO GARCIA, A MORTGAGE BROKER AND REALTOR, USED IVETTE CARRENO, THEN A MANAGER AT REGIONS BANK, TO OBTAIN APPROVAL OF NEARLY TWO HUNDRED FRAUD-BASED HELOCS. Alina Rubi, Camilo Garcia, and his wife, Dianelys Garcia, and other co-defendants, prepared false documents, such as proof of employment, tax returns, and property deeds, to support loan applications that were replete with false statements. Other co-defendants, such as Pedro Rubi, Luis Pardo Dieguez, and Ivis Hernandez, prepared mortgage and HELOC loan applications on behalf of unqualified borrowers and buyers. The loan applications and related documents, which were submitted to lenders, contained numerous false statements regarding the borrowers' and buyers' employment, income, deposits, assets, liabilities, and other information necessary for lenders to assess their qualifications to borrow money. Some of the false statements included misrepresentations that the borrowers were doctors, dentists, engineers, or engaged in other high-paying professions, with false yearly incomes, sometimes exceeding $300,000. In many instances, the unqualified buyers lied about property ownership, in that they did not even own the properties for which they received the equity lines of credit. On some occasions, the defendants used the HELOC proceeds to later purchase the very properties for which they had obtained the HELOC loans.

Alina Rubi, Camilo Garcia, Pedro Rubi, Luis Pardo Dieguez, Galia Fernandez recruited individuals, and paid others to recruit individuals, to fraudulently obtain mortgage and HELOC loans on the properties. Among the individuals recruited to act as unqualified buyers and borrowers were defendants and co-conspirators Sheena Eizmendiz, Yovanis Obregon Jimenez, Jose Manuel Pardo, Sandra M. Rodriguez, Mayra Martinez Suarez, Laura Diaz, Juan Prieto, Flavia Perez, Jose Antonio Diaz, and Johny Hernandez.

To further the fraud scheme, Alina Rubi, Camilo Garcia, and other co-defendants used Silvia Zagales, a title agent, and her company, the TITLE SERVICES GROUP, to divide and disburse, among the defendants, millions of dollars in loan proceeds. As part of the closing procedure, Zagales prepared and submitted to lenders documents that falsely stated, among other things, that borrowers supplied their own funds at the closing of the sale transactions; that she had sufficient loan proceeds and cash-to-close funds to cover the disbursements approved by the lender; and that good faith deposits had been provided by borrowers. Zagales and her co-conspirators fraudulently disbursed the loan proceeds to the sellers and others. In some instances, Zagales used the loan proceeds to satisfy the buyers' cash-to-close obligations, and would often pocket seller proceeds through another company that she owned and operated. In addition, to conceal the fraud and to conduct multiple mortgage loan and HELOC closings with the same properties, Zagales and her co-defendants, in some cases, failed to timely record, and falsely recorded, mortgage deeds and mortgage documentation with State of Florida authorities.

MORAL

If guilty they were busy little beavers, weren't they?

 

MINNEAPOLIS FORMER LO PLEADS GUILTY TO MORTGAGE FRAUD

FACTS

On Oct. 6, in federal court, a former loan officer from Minneapolis pleaded guilty in connection to a $2.8 million mortgage fraud scheme that involved five properties. HANNAH NOEL PERLICH pleaded guilty to one count of wire fraud. Perlich, who was indicted on June 21, 2011, entered her plea before United States District Court Judge Richard H. Kyle. Perlich worked as a loan officer for two mortgage brokerage companies–ST. JOSEPH'S FINANCIAL AND LEGACY LENDING.

Perlich admitted that from November of 2005 through September of 2006, she, aided and abetted by others, obtained mortgage loan proceeds through fraud. The purpose of the scheme was to obtain mortgage loans in substantially higher amounts than the purchase price of the properties involved. They used inflated appraisals and fraudulent underwriting and loan documentation. Perlich admittedly caused the false loan applications to be provided to potential lenders through wire transfers. In addition, Perlich admitted concealing payments to herself from the loan proceeds by diverting them to buyers and other co-conspirators. At least $350,000 in concealed payments was made.

Several co-conspirators have already have been sentenced for their roles in the scheme, while others have been charged, and criminal proceedings against them are ongoing. For her crime, Perlich faces a potential maximum penalty of 20 years in prison. (isattymn10611)

MORAL

With the size of the loss and being on the eastern seaboard, I would say she is looking at two to four years.  What is your guess? Notice again the federal agents are looking at 2005 loans.

 

MISSOURI REAL ESTATE AGENT DRAWS 20 MONTHS IN FEDERAL PRISON

FACTS

On Oct. 3, ANGELA R. CLARK was sentenced to 20 months in federal prison without parole for her role in a $12.6 million mortgage fraud conspiracy that involved 25 upscale residential properties in Lee's Summit, Mo., and Raymore, Mo.

The court also ordered Clark to pay $5,634,747 in restitution.  Clark was a REAL ESTATE AGENT AND CO-OWNER OF CENTSABLE BUSINESS SERVICES. She sold new homes for builder JERRY R. EMERICK, in the Raintree and Belmont Farms subdivisions in Lee's Summit and the Eagle Glen subdivision in Raymore. CLARK AND EMERICK ARE AMONG 19 DEFENDANTS who have pleaded guilty and been sentenced in the mortgage fraud scheme that lasted from February 2005 through May 2007.

All of the fraudulent loans went into default and were foreclosed. The properties were eventually sold post-foreclosure to third parties, with a net loss of more than $5.6 million.

Clark orchestrated the mortgage fraud scheme, which also involved two mortgage loan officers and 15 straw buyers who purchased homes at inflated prices. Buyers obtained mortgage loans for more than the actual sale price by providing false information to mortgage lenders. The buyers, without the lenders' knowledge, then kept the extra loan proceeds. These KICKBACKS WERE PAID BY SUBMITTING FALSE INVOICES TO THE TITLE COMPANIES, WHICH SHOWED PAYMENT WAS DUE TO BUSINESS ENTITIES THAT, IN REALITY, WERE SHELL COMPANIES CREATED BY CO-CONSPIRATORS IN ORDER TO CONCEAL THE FACT THAT THE BUYERS WERE RECEIVING CASH BACK FROM THE LOAN PROCEEDS. Buyers received kickbacks of about $100,000 on each house.

Clark knew that loan applications and supporting documentation that contained material false information would be submitted to mortgage lenders, and Clark submitted false documentation and made fraudulent material representations to title companies.

EMERICK OWNED AND OPERATED TY CONSTRUCTION AND RESIDENTIAL CONTRACTING, LLC, which was engaged in the business of residential construction, primarily in Lee's Summit and Raymore. He WAS SENTENCED TO TWO YEARS AND SIX MONTHS IN FEDERAL PRISON WITHOUT PAROLE after pleading guilty to conspiracy to commit mortgage fraud and wire fraud and to transfer funds obtained by fraud across state lines.

In total during the course of the conspiracy, mortgage lenders approved loans for 25 homes totaling more than $12.6 million. From that total, buyers received more than $2.3 million without the lenders' knowledge. Clark received commissions and other payments from the inflated prices totaling $405,197.

According to court documents, Clark engaged in a similar mortgage fraud scheme with six other properties that are not part of this conspiracy, shortly before and during the same time frame as the conspiracy. The government contends that Clark received an additional $168,361 in commissions and other payments from those fraudulent purchases.  (usattywdmo10311)

MORAL

As I have stated the government is now pursuing the “deals” that closed in 2005 or later and the sentences are getting longer. There are many more active cases out there. If you are approached by anyone the best thing you can say and in fact the only thing you should say is “I would like my attorney present.” At that point see the attorney before you say anything. You have all heard of the famous proverb about “putting your foot in your mouth.” 

 

THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.

AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE

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