CALIFORNIA MAN GETS FIVE YEARS IN ARIZONA FEDERAL PRISON FOR ADVANCE FEE MORTGAGE MODIFICATION AND RESCUE SCAM
FACTS
On Aug. 5, Frank Becerra Campos was sentenced by U.S. District Judge G. Murray Snow to five years’ imprisonment, followed by three years of supervised release, for his role in an advance-fee mortgage rescue scam that took place in Arizona and California.
Campos had previously pled guilty to conspiring with two others, Miguel Carrera and Oswaldo Esqueda, to defraud more than 250 distressed homeowners out of approximately $675,000 in up-front fees with false promises of mortgage modification assistance. Campos’ prison sentence was the maximum allowed by statute, and Campos was ordered to pay back the fees to the victims in the form of restitution.
Campos, Carrera and Esqueda operated under the business names Gold Capital Investments LLC and Foreclosure Home Savers LLC. They were accused of making false guarantees to mostly Spanish-speaking distressed homeowners that their mortgage principal balance and monthly payments would be reduced by 25%, and then failed to pursue any form of loan modification process on behalf of the homeowners.
When homes neared foreclosure, the homeowner was placed in bankruptcy proceedings to delay the foreclosure, but virtually all of the 250 or so victims ultimately lost their homes to foreclosure. Carrera and Esqueda, both citizens of Mexico, fled from the charges and are believed to be in Mexico. (usattaz8513)
MORAL
If someone wants an advance fee to stop a foreclosure or modify your home loan, run do not walk to the nearest exit.
LA MAN CAUGHT AFTER 10 YEARS AND NOW GETS TO SPEND THE NEXT 11 YEARS IN FEDERAL PRISON
FACTS
On Aug. 5, Glen Alan Ward, a Los Angeles resident who fled to Canada and was a fugitive from justice for more than a decade was sentenced to 11 years in federal prison for running a nearly 15-year foreclosure rescue scam that fraudulently delayed foreclosure sales for more than 800 distressed homeowners.
In addition to his prison term, Ward was ordered to pay $59,961 in restitution and to forfeit approximately $100,000 in cash and property previously seized by law enforcement authorities.
Ward pleaded guilty in April to three separate sets of charges stemming from his 15 year fraud scheme. In 2000, Ward failed to appear in United States District Court in Los Angeles after agreeing to plead guilty and fled to Canada. In 2002, while he was a fugitive, Ward was indicted on multiple counts of bankruptcy fraud in San Francisco. One year ago, in the third case, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in Los Angeles.
While in Canada, Ward recruited Frederic Alan Gladle, who was indicted by federal prosecutors in Los Angeles on bankruptcy fraud and identity theft charges in 2011. Gladle was sentenced last year to 61 months in federal prison.
On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.
After fleeing the United States in 2000, Ward continued his scheme while in Canada. To avoid being detected while accessing websites he needed for his scheme, Ward used a laptop computer in wireless hotspots away from his home. He also arranged for clients’ monthly payments to be deposited in the bank account of a person in Texas, which he could access with an ATM card.
Upon receiving confirmation that client funds had been deposited, Ward would withdraw the funds at one of many Waterloo, Ont.-area ATMs. Federal agents in the United States were able to identify Ward’s most-frequented wireless locations and his most-frequented ATMs.
Using near-real-time information, these agents repeatedly passed along information on Ward’s current or expected whereabouts to Waterloo and RCMP authorities in Canada. These Canadian authorities would then visit the locations as soon as possible, usually missing Ward by only minutes. Finally, Canadian authorities established “stake outs” on multiple ATMs after Ward had received confirmation of a deposit. When Ward visited one of these ATMs, Canadian authorities identified Ward and arrested him.
Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure with promises that Ward would delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database, retrieved the name of a debtor who had recently filed a bankruptcy petition, and directly the client to record a grant deed transferring a tiny interest in their distressed home. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, a notarized grant deed and a cover letter to the homeowner’s lender, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the recovery of money for months and even years. Additionally, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts. During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services. (usatttycdca8513)
MORAL
He was certainly very busy and creative. But, modern technology caught up with him. To the best of my recollection, this is the only case I can recall where someone had been doing it for 15 years before getting caught. Well, now he has 11 more years to think about it because there is no parole in the federal system.
THREE CHARGED IN CONNECTICUT WITH MORTGAGE FRAUD
FACTS
On Aug. 9, a federal grand jury sitting in Hartford returned an indictment charging three individuals with participating in a mortgage fraud scheme involving the purchase of more than 40 properties throughout Connecticut. The seven-count indictment charges Filippos Milios, Malgorzata Karas-Golka and Carmelinda Marotta with conspiracy and fraud offenses.
According to the indictment, from approximately June 2005 to at least November 2008, Milios, Karas-Golka, Marotta, and others conspired to commit mail and bank fraud by defrauding banks and mortgage lenders in obtaining dozens of mortgages for the sale of properties owned by Milios and Karas-Golka. Some of the loans involved in the scheme were insured through the Federal Housing Administration.
The indictment alleges that the mortgage fraud conspiracy involved the use of straw borrowers, false mortgage applications, false HUD-1 forms, fraudulent down payments, and false verification forms in connection with the purchase of more than 40 houses in Hartford, New Haven, and Middlesex Counties. As part of the scheme, Milios, Marotta, and others recruited or identified borrowers to purchase properties from Milios, Karas-Golka and their co-conspirators. Milios is alleged to have made the down payments on behalf of the borrowers recruited to purchase the properties he and his co-conspirators were selling.
The indictment also alleges that the three falsely represented to the lenders that a borrower intended to occupy a property as a primary residence. (Remember what I have said, that checking primary residence in and of itself is a felony when you as the borrower do not intend to live there). Part of the conspiracy involved borrowers submitting mortgage applications to purchase multiple properties as primary residences.
The indictment alleges that Milios paid money to borrowers, mortgage brokers, and recruiters, including Marotta, which was not disclosed to the mortgage lenders. Milios and Marotta also concealed from the lenders Marotta’s involvement in several fraudulent transactions and her receipt of a portion of the seller’s proceeds.
The indictment further alleges that Milios engaged in a money laundering conspiracy with Gabriel Serrano, a closing attorney. In the course of many of the fraudulent closings involving Milios’ sale to borrowers, Serrano received mortgage proceeds from banks and mortgage lenders. Serrano would frequently disburse some of those proceeds to private lenders who had loaned Milios money to purchase those properties.
Milios, Karas-Golka, and Marotta are charged with one count of conspiracy to commit mail and bank fraud, as well as separate counts of bank fraud. Each of these charges carries a maximum term of 30 years in prison. Milios and Karas-Golka are also charged with separate counts of mail fraud. Each of these charges carries a maximum term of imprisonment of 20 years.
The indictment also charges Milios with conspiracy to commit money laundering, a charge that carries a maximum term of imprisonment of 10 years, and Karas-Golka with making a false statement to federal agents in March 2013, a charge that carries a maximum term of imprisonment of five years.
The three defendants appeared in Hartford, pleaded not guilty to the charges and were released on bond.
On Aug. 6, Serrano waived his right to indictment and pleaded guilty to one count of conspiracy to commit mail and bank fraud, and one count of conspiracy to commit money laundering. He awaits sentencing. (usattyct8913)
MORAL
Here they went back to loans that occurred eight years ago. As I have said, the federal prosecutors can and do go back the full ten years to indict.
As for Serrano, here is one attorney that is looking at losing his license. Think about this: four years of college, three years of law school; months studying to pass the bar. Now it will all be gone. Greed does it every time. If anyone has questionable loans, contact your attorney now, not after you have been contacted by
NEW JERSEY STILL COMPETING TO BE IN MORTGAGE FRAUD SYSTEM
FACTS
On Aug. 8, Linda Cohen, an Orange, N.J. paralegal, admitted participating in a long-running, large-scale mortgage fraud scheme that defrauded financial institutions of at least $2 million.
She was charged with one count of conspiring to commit bank fraud and one count of transacting in criminal proceeds.
Cohen worked as a paralegal who handled real estate closing for S.B., an attorney licensed in New Jersey. Cohen acted as the settlement agent for fraudulent mortgage loans brokered by conspirator Klary Arcentales on behalf of Premier Mortgage Services. As closing agent, Cohen furthered the scheme by convening closings, receiving funds from lenders, and preparing HUD-1 reports that purported to reflect the sources and destinations of funds for mortgages on subject properties.
Those HUD-1s were neither true nor accurate. Cohen routinely certified HUD-1s in which she purported to have received a down payment from the buyer when no down payment had been made. At or following the closings, Cohen disbursed mortgage loan proceeds directly to Premier Mortgage Services, Arcentales and other conspirators. Cohen created shell bank accounts into which she funneled the proceeds of her fraudulent activity.
The count of conspiracy to commit bank fraud to which Cohen pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. The count of transacting in criminal proceeds is punishable by a maximum penalty of 10 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss. (usattnj8813)
MORAL
Guess who is cooperating with the prosecutor against the conspirators?
TEXAS HOLDS THAT THE 3% CAP ON ORIGINATION FEES INCLUDES THE LENDERS ORIGINATION POINTS
FACTS
In Finance Commission of Texas vs. Norwood, the Texas Supreme Court first held that the Commission did not properly interpret the term “interest” under § 50(a)(6)(E) of the state constitution, which caps origination fees at 3% of principal. The Commission interpreted “interest” to include fees paid to the lender, thereby removing lender fees from the fee cap. However, the court held the Commission’s interpretation invalid, thus ruling that lender fees must be included in the 3% fee cap. (62113)
MORAL
Now that ought to make it fun when reviewing Consumer Financial Protection Bureau caps and now the Texas caps.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE. AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
