FACTS
A lawsuit filed Monday in Hennepin County District Court in Minnesota by Attorney General Lori Swanson alleges that Meredian Financial Corp. of Costa Mesa, Calif., pretended to be homeowners' current mortgage company in order to gain their trust, then collected fees for refinancing services that were not delivered.
"Meredian targeted homeowners struggling in the troubled economy who were looking to get out of an adjustable-rate mortgage or lower their interest rate by refinancing," Swanson said in a statement announcing the suit. The company's tactics, she said, "left homeowners with the short end of the stick."
Numerous online consumer blogs indicate that Meredian has been carrying out this alleged scheme for the past few years. Also, regulators in Georgia last year ordered Meredian to stop doing business in their state.
Here's how the attorney general's office says the scheme worked: Meredian presented itself as a homeowner's current mortgage lender, sometimes mentioning the consumer's lender by name, other times not. Meredian then made numerous false representations including low fixed rates, no out-of-pocket expenses, no appraisal requirement, and that the refinance had already been approved by an underwriter, in order to get them to pay upfront "rate-lock" fees.
Meredian said that these fees—typically from $1,000 to $4,000—would be refunded at closing, which it contended would occur within 30 to 45 days.
Once Meredian obtained the fees, it would cease work on the loan, creating excuses such as asking for documents that the homeowner already had provided or that were irrelevant to the refinancing, or changing the terms of the refinancing with higher rates and fees. Homeowners who attempted to cancel and requested that Meredian return their upfront fees were denied refunds. (startribune.com31411)
MORAL
Before you send your money, check to see if the company has the appropriate license.
CALIFORNIA WOMAN ARRESTED IN FORECLOSURE ASSISTANCE SCAM
FACTS
On March 17, agents from the Federal Bureau of Investigation and Internal Revenue Service arrested Tara Denise Bonelli of Santa Cruz, Calif. The day before, a federal grand jury in San Jose indicted Bonelli, charging her with 18 counts of wire fraud, one count of mail fraud, and three counts of money laundering.
According to the indictment, Bonelli was the founder and owner of Vista Holding Co., and Vista Funding Inc. Vista Holding owned and operated eight different entities: Vista, Independent Financial, Equity Advisors, Bonelli Properties, Lost Dollar Services, Equity Inquiries, Outlook Enterprises and Sovereign Property Management. Vista was a California corporation that claimed to offer a variety of real estate and financial services, including foreclosure assistance, the purchase of distressed properties, and the subdividing and development of properties.
In addition, according to the indictment, Bonelli, with her spouse, and under Vista, owned properties in Aptos, Bonny Doon, and Scott’s Valley, Calif., that she used as collateral in her scheme to defraud. Bonelli solicited funds from various individuals representing that she would purchase distressed properties for resale and engage in the business of foreclosure assistance, when in fact she knew the money would not be invested, but rather go to finance an extravagant lifestyle.
Further, according to the indictment, Bonelli offered the aforementioned properties as collateral for loans. In order to induce victims to send her money, Bonelli misrepresented the assessed value of the property used as collateral as well as her true interest in those properties. Bonelli caused prior deeds of trust on the collateral properties to remain unrecorded, thereby intentionally creating the appearance of less-encumbered collateral property to potential investors. She also utilized individuals as “door knockers” who solicited owners of properties in mortgage distress for so-called “mortgage assistance.” The door knockers, acting at Bonelli’s instruction, had the owners of distressed properties sign blank real estate sales contracts. Bonelli placated complaining investors by falsely telling them that escrows were about to close or that real estate deals were about to result in payments to Vista.
Bonelli made her initial appearance in federal court in San Jose on March 17, and was detained pending a detention hearing before Magistrate Judge Howard Lloyd on March 22.
The maximum statutory penalty for each count of wire fraud and mail fraud, in violation of Title 18, United States Code, Sections 1343 and 1341 is 20 years in prison and a fine of $250,000. The maximum statutory penalty for each count of money laundering, in violation of Title 18, United States Code, Section1957, is 10 years in prison and a fine of $250,000 or twice the value of the property involved. The indictment also contains two criminal forfeiture allegations.
The prosecution is the result of a three-year investigation by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation. (usattyndca31711)
MORAL
Remember from reading my prior e-alerts I have told you it takes the government about two years to put a case together due to all the paper they have to chase down with subpoenas. Point to be taken? If government agents have questioned you, remember that is generally toward the end of the two years but still not the end. You should always have your attorney present when being questioned. It is a right; in fact a Constitutional right and you should exercise it for your own protection. However, very few people do.
COLORADO LOAN BROKER PLEADS GUILTY TO OMITTING OVER $4.7 MILLION FROM TAX RETURNS
FACTS
On March 2, Leonid Shifrin of Aurora, Colo., pled guilty to one count of filing a false income tax return. U.S. District Court Judge Brimmer in Denver is scheduled to sentence Shifrin on June 24. A Federal Grand Jury in Denver indicted Shifrin on April 20, 2010. A superseding indictment was obtained on June 22, 2010.
From 2002 through 2005, Leonid Shifrin was principally employed as a mortgage loan broker, originating and closing loans for residential real properties. Shifrin, according to government calculations set forth in the plea agreement, under-reported his business receipts by $4,745,600 for the years 2002 through 2005. This under-reporting of the business receipts for these years would result in an additional tax due and owing of $1,365,788.
Beginning in or about 2002, Shifrin conducted his mortgage brokerage business in partnership with others under the name Consumer Mortgage Group with offices initially in Aurora and later Centennial. During this time, the defendant also formed a Nevada corporation under the name Mark Shifrin Inc., using the first and last names of his father, who at the time was retired and working various part-time jobs, including for a pizza restaurant as a deliverer and dishwasher. During this time, Shifrin indicated to his partners that checks issued to him for his loan commission payments and ownership distributions issued to him should be made payable to him under either the name “Mark Shifrin” or Mark Shifrin Inc. The defendant also started titling several of his assets, including real estate, in these names and opened and started to use bank accounts in these names.
In or about August 2003, after one of the partners left the business, CMG changed its name to Consumer Financial Services Corp. Shifrin continued to receive almost all of his loan commission payments and ownership distributions through checks not made payable to him. Shifrin received these payments either in his father’s name, in the name of Mark Shifrin, Inc., or in the name of Shifrin Inc., a Colorado corporation that Shifrin formed in or about September 2004 but whose name he began using sometime earlier.
In or about August 2004, Shifrin ceased conducting most of his mortgage loan brokerage business through CFS, withdrew from the partnership, and entered into a collaboration with a loan processor who had been a former employee and was, at the time, self-employed doing business under the name Mile High Mortgage Process LLC. The loan processor operated Mile High Mortgage out of offices in Greenwood Village and later, Golden, while Shifrin and his employees operated out of offices in Centennial. During this collaboration, Shifrin continued to structure his activities to avoid reporting all of his business’s mortgage loan commissions on federal income tax returns.
Shifrin faces not more than 3 years imprisonment, and up to a $250,000 fine. (usattyco31111)
MORAL
There is no statute of limitations on income tax evasion. The IRS normally has three years from when the tax is assessed to audit your returns for mistakes, six years in certain other cases and no time limit when you do not declare the income. Therefore declare the income and have your CPA do the returns for maximum benefit. Now Shifrin is looking at potentially three years in a federal prison.
DISBARRED CHICAGO LAWYER FOUND GUILTY OF MORTGAGE FRAUD
FACTS
On March 21, a federal jury convicted Lorie Westerfield, a disbarred Chicago lawyer, on fraud charges for her role in facilitating staged real estate transactions involving Chicago homes in 2003. Westerfield was found guilty on three counts of wire fraud and was acquitted on one additional fraud count by a jury after a week long trial in U.S. District Court.
Westerfield acted as a seller’s attorney and title company representative in fraudulent transactions that she knew a co-defendant had arranged to obtain lender proceeds from the fraudulent sales. Westerfield faces a maximum penalty of 20 years in prison and a $250,000 fine on each of the three fraud counts. She remains free on bond while awaiting sentencing, which was set for Aug. 4 by U.S. District Judge Samuel Der-Yeghiayan.
In 2008, following a previous federal conviction involving bankruptcy fraud, Westerfield voluntarily consented to disbarment.
Westerfield and 11 co-defendants were among 67 Chicago area defendants charged in a dozen separate mortgage fraud cases in June 2008 as part of Operation Malicious Mortgage, a nationwide initiative against fraudulent home-lending schemes. All 11 co-defendants previously pleaded guilty in the case and are also awaiting sentencing. These 11 co-defendants, including five loan officers, admitted to having various roles in a fraud scheme that obtained more than $3.2 million collectively in mortgage loan proceeds from more than a dozen lenders by submitting false loan applications using stolen identities for 17 purported home purchases in Chicago between January 2003 and November 2005. The scheme was orchestrated by Freddie Johnson, who arranged for various co-defendants to appear at staged real estate closings as the purported buyers, sellers, and their representatives, in some instances using the identities of deceased individuals, to obtain the loan proceeds to be paid to the purported sellers and their nominees. Johnson and three other co-defendants testified as government witnesses at Westerfield’s trial. (usattyndil32211)
MORAL
67, and counting! Note the loans go back to 2003. Anyone out there do “creative” loans between 2003 and 2011?
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
