FACTS
On Oct. 26, charges were expanded against four people accused of making illegal real estate deals that netted more than $11 million, and two defendants have been added to the amended complaint, according to the Fresno County District Attorney's Office.
The charges, filed in Fresno County Superior Court, were outlined in an indictment by the Fresno County Grand Jury that alleges grand theft, recording of false documents, false notarizing, identity theft and welfare fraud beginning in 2004.
The indictment accuses Justin Dee Linder; his wife Kelly Jo Linder; Gregg Borchardt; Hector Secco; Ryan Leffingwell; and Amy Leffingwell of making illegal real estate deals in Fresno, Madera and Riverside counties.
The Linders were indicted in nearly all of the counts, and the charges include additional enhancements that the property they allegedly took was worth more than $3.2 million.
In one of the cases, a neighbor of the Linders, Greg Samuelian, told investigators he gave Justin Linder $67,000 in 2007 to invest in a Shaver Lake project. The investment was secured by the deed of trust on a Clovis home Linder said he owned, but he actually was in default on the loan when Samuelian made the investment. Samuelian allegedly also told investigators Linder told him he had a contact that would create false documents and tax forms needed for a loan.
Bail was set for Justin and Kelly Linder at $2 million. Borchardt and Secco have posted bail and the Leffingwells were allowed to remain free on their own recognizance, according to the District Attorney's Office.
In October 2010, the Linders pleaded not guilty to a 133-felony complaint charging them with identity theft, grand theft and filing false documents with a public office. Borchardt and Secco also were charged in that case. The original criminal complaint alleged that between 2005 and 2007, the four defendants were involved in illegal real estate deals worth $9 million.
During those years, the Linders owned Summit Mortgage Services, where Borchardt worked as a real estate agent and Secco worked as a notary public.
The amended complaint alleges that Borchardt took real estate valued at $1.3 million. He was indicted on 51 felony counts of fraud, grand theft, filing false documents and false notarizing.
Secco was indicted on five felony counts of false notarizing. The Leffingwells were indicted on a total of 13 felony counts of grand theft of property worth more than $200,000. (fnobee102711)
MORAL
The State is going back to 2004 for indictments on mortgage and real estate fraud. The federal people are working on 2006 now and coming forward. If you count this week alone, there are 22 people in California alone. Have you noticed how the count is increasing?
EIGHT NORTHERN CALIFORNIA REAL ESTATE INVESTORS HAVE AGREED TO PLEAD GUILTY IN TWO SEPARATE CONSPIRACIES TO RIG BIDS AND COMMIT MAIL FRAUD AT PUBLIC REAL ESTATE FORECLOSURE AUCTIONS
FACTS
On Oct. 27, charges were filed in U.S. District Court for the Northern District of California in San Francisco against Gary Anderson, Patrick Campion, James Doherty, Keith Goodman, Troy Kent, Craig Liption, Henry Pessah and Laith Salma, alleging the real estate investors participated in a conspiracy to rig bids by agreeing to refrain from bidding against one another at public real estate foreclosure auctions in San Francisco County and San Mateo County. Doherty, Goodman and Lipton participated in the conspiracy in San Francisco, and Anderson, Campion, Kent, Pessah and Salma participated in the conspiracy in San Mateo.
Prosecutors said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco County and San Mateo County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
According to court documents, the eight real estate investors conspired with others not to bid against one another at public real estate foreclosure auctions in Northern California, participating in a conspiracy for various lengths of time between November 2008 and January 2011. The real estate investors were also charged with conspiracies to use the mail to carry out a fraudulent scheme to make payoffs to obtain title to selected real estate at fraudulently suppressed prices, to receive payoffs and to divert money to co-conspirators and away from mortgage holders and others with a legal interest in these properties.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum. To date, 18 people have agreed to plead guilty to charges stemming from this investigation. (usattdoj102711)
FOUR ARRESTED IN SACRAMENTO FOR MORTGAGE FRAUD
FACTS
On Oct. 24, Olga Palamarchuk; Pyotr Bondaruk; Peter Kuzmenko; and Vera Zhiry were arrested for mail fraud and bank fraud in a scheme that resulted in losses of at least $900,000 to lenders. According to court records, Palamarchuk, a loan officer at Capital Mortgage Lending Inc. recruited Bondaruk to purchase two houses using 100% financing and to obtain a home equity line of credit on one of the houses. In order to qualify for the loans, Palamarchuk and Bondaruk submitted fraudulent loan applications to lenders, falsely stating Bondaruk's employment, income, and intent to occupy the homes as his primary residence.
The indictment alleges that, in order to get more money out of the houses, the defendants diverted a $32,378 in “seller's proceeds” to be paid to Kuzmenko of Pete's Pool Service for repairs and improvements for work never actually done on the property. And $100,000 was paid to Zhiry to pay off a purported second mortgage. These two payments were a means to siphon fraudulently inflated equity out of the two properties. Kuzmenko was recently indicted in a separate mortgage fraud scheme.
If convicted, the defendants face a maximum statutory penalty of 20 years in prison for conspiracy to commit mail fraud, 10 years in prison for money laundering, and a $250,000 fine. If convicted of bank fraud, Palamarchuk and Bondaruk face a maximum statutory penalty of 30 years in prison and a $1 million fine. (usattcaed102511)
MORAL
I would say, if convicted Kuzmenko having a second indictment in a different problem is going to have to worry about the length of stay at a federal hotel. I would remind you as you so readily see of how many prosecutions are going on in California at this time. It is still going forward with intensity based on my knowledge of other cases that are not published so far as I am aware. If anyone believes they may be under investigation they should consult their attorney now rather than later because as you can see in the word later, later maybe too late!
SACRAMENTO MAN PLEADS “NO CONTEST” TO CHARGES OF COLLECTING ILLEGAL ADVANCE FEES FOR LOAN MODIFICATION
FACTS
Vincente Perez has pleaded no contest to charges that he collected illegal advanced fees for loan modification services and has received three years of probation. Perez accepted the fees, which are barred by state law, from three people, District Attorney Jan Scully announced. Perez was an employee of Turbo Mortgage Modification.
In addition to the probation sentence, he was ordered to serve 30 days in county jail, pay $2,800 in restitution and is prohibited from engaging in the real estate industry while on probation.
Another person also pleaded no contest in September in connection to mortgage fraud through Turbo Mortgage Modification. In that case, Ashik Ahmed Azeez was sentenced to 90 days in jail and restitution of $8,250. (sacrobusjl102811)
MORAL
For your information a “No Contest” pleas, also known as “Nolo Contendre," is the same as a guilty plea for criminal conviction purposes. However, the pleas cannot be used against the defendant in the event any of the victims sue him for money damages such as recovering the money given to him or other damages that could be alleged if he failed to perform as promised.
TWO INDICTED IN SAN JOSE, ONE IS A FUGITIVE
FACTS
On Oct. 24, 2011 David A. Nilsen pleaded guilty in San Jose Federal Court to conspiracy to commit mail and wire fraud. In pleading guilty, Nilsen admitted to deceiving investors in his Monterey-based private money lending company, Cedar Funding, and agreed to pay $69,828,833 in restitution. Cedar Funding, founded by Nilsen in 1980, connected residential real estate developers seeking to borrow money using real property as collateral with individual investors who were willing to make such loans.
In the plea agreement, Nilsen admitted that, from 2004 through 2008, an increasing number of borrowers defaulted on loans funded by Cedar Funding investors, due to market conditions and management and construction problems. In response to those developments, and in an attempt to salvage the real estate projects that secured Cedar Funding loans, Nilsen and his loan servicing manager failed to inform investors of certain material facts about the true condition of their investments. In particular, they failed to inform investors that borrowers had defaulted, that Nilsen had taken over many of the loans, and that Cedar Funding had advanced substantial additional investor funds into those loans. Nilsen further admitted in the plea agreement that the increasing loan balances, combined with the declining value of the underlying real estate collateral, resulted in the amount of the loan exceeding the value of the collateral. Nilsen also acknowledged in the agreement that he and his loan servicing manager did not properly record investors' fractional deeds of trust, and did not inform investors that, because the loans were not performing, Cedar Funding used a significant portion of the investment money advanced into the non-performing loans to meet interest payment obligations to investors in those loans.
Co-defendant Manoel Errico is a fugitive. Nilsen was charged with 31 counts of conspiracy, mail, wire and securities fraud. Under the plea agreement, Nilsen pled guilty to one count of conspiracy to commit mail and wire fraud. Nilsen was released upon a secured $1 million bond, and has been out of custody since. Nilsen is next scheduled to appear in court in San Jose on Feb. 27, 2012, before Judge Edward J. Davila, who will consider whether to accept the plea agreement. (usattynd102411)
MORAL
The investigations are still running “hot and heavy” in both northern and southern California based upon our workload and the knowledge we have. If anyone even thinks they have a problem, that person should consult their attorney now as opposed to later.
SIX PEOPLE IN SOLANO COUNTY INDICTED FOR MORTGAGE FRAUD
FACTS
On Oct. 27, a federal grand jury indicted six people in Solano County for alleged acts of mortgage fraud that resulted in losses of over $1 million to lenders. Temika Reed of Bay Point, Buena Marshall of Sacramento, Jake Weathers, also of Sacramento, Reginald Dodson of Tracy, Deborah Loudermilk of Suisun City, and Kadesta Harris, also of Suisun City, were charged with mail fraud the U.S. attorney's office said.
According to the indictment, the Reed purchased seven homes in Solano County between 2006 and 2007. With the help of Weathers and Dodson, who worked as loan officers with a local lender, Reed falsified her income and employment history to qualify for the homes, the indictment said.
Harris and others inflated the price of the homes by submitting phony invoices for repairs and other construction that never happened, the indictment said. If convicted, the defendants face up to 20 years in prison and a $250,000 fine. (sacrobee102811)
MORAL
Like I have been saying for some time now on every single e alert for the last two years, the indictments are coming down faster and faster. The federal prosecutors have now gone from 2004 to 2006 mortgages. Those who did loans in 2006 that had creative income and assets should consult with their attorneys.
TWO CHARGED IN PENNSYLVANIA WITH MORTGAGE FRAUD
FACTS
On Oct. 25, Jason Sheraw and Lewis Whoolery were indicted by a federal grand jury in Pittsburgh on a charge of wire fraud conspiracy.
According to the superseding indictment Whoolery operated a mortgage broker business called First Capital Home Equity that provided fraudulent information to lending institutions to secure loans collateralized by real estate. Whoolery and members of the conspiracy provided lenders with false information related to the borrowers' incomes and assets, and they also submitted fraudulent documents in support of those false representations.
In addition, as alleged in the superseding indictment, Whoolery used unlicensed appraisers to prepare appraisals for the properties serving as collateral for the loans. Whoolery entered into agreements with licensed appraisers Sheraw and Jeannette Gray in which, in exchange for money, Gray and Sheraw allowed the unlicensed appraisers to prepare and submit appraisals as if they had been prepared by Gray and Sheraw. Those appraisals often overstated the true values of the properties serving as collateral for the loans. The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. (usattyedpa102611)
SOUTH CAROLINA MAN PLEADS GUILTY TO TAKING GIFTS FOR PROCESSING MORTGAGE LOANS
FACTS
On Oct 28, Matthew Skinner pled guilty in federal court in Florence, S.C. to receipt of commissions or gifts for procuring loans.
Evidence presented at the guilty plea hearing established that Skinner had been an employee of RBC Bank (USA), and that on June 20, 2008, in Horry County, Skinner accepted payment from a private individual not associated with the bank in connection with mortgage loans. Skinner also admitted to accepting payments on several other occasions.
The maximum penalty Skinner can receive is a fine of $1,000,000 and/or imprisonment for 30 years, plus a special assessment of $100. (usattysc102811)
MORAL
One loan, one gift, one risk of a felony commission now realized. I guess Skinner as a banker should have “looked a gift horse in the mouth.”
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
