NEW LAWSUIT BASED ON THE CRISP AND COLE FIASCO IN BAKERSFIELD, CALIF.
FACTS
A suit filed Jan. 8, 2009 by the former Fremont Investment & Loan -- now Fremont Reorganization Corp. -- alleges fake employment information and fudged appraisals were submitted with seven loan applications it funded in 2005 and 2006 and seeks more than $4.2 million. The lawsuit names Crisp, Cole & Associates as being involved in a widespread fraud including appraisers, accountants, a homebuilder and others who worked, or allegedly worked with the Bakersfield real estate company. In all more than 15 people are named as defendants. Several including David Crisp have denied doing anything wrong.
The suit from says fake employment information and fudged appraisals were submitted with seven loan applications it funded in 2005 and 2006. In one example, Crisp's wife, Jennifer Crisp, claimed to make $25,500 a month as a self-employed consultant.
Fremont claims "all documentation...including the CPA letter, was falsified" and the appraiser "assisted" the scheme "by falsely stating the value" of the home.
David Crisp, whose real estate sales license was revoked on Oct. 15, 2008, said he is "just trying to get my life back together. I'm trying to pick up the pieces to pay everybody back," Crisp said, "but I can't do that when the (local Bakersfield) newspaper keeps blasting me." Cole, whose broker's license was also revoked Nov. 14, 2008, is challenging the revocation in court.
The homebuilder, John Balfanz of John Balfanz Homes Inc., said he's done nothing wrong. He is quoted as saying: "There is nothing fishy on my end."
The appraiser on the Oak Hills property, James Rudick, did not return a message seeking comment. Rudick is named once. Another appraiser named once, Gary Killian, did not return a call. Five of the contested appraisals were done by San Joaquin Appraisals Inc.
San Joaquin's owner, Kirksey J. "Mark" Newton Jr., who is named as a defendant, also has a pending accusation from state regulators seeking to revoke or suspend his license. Newton is fighting the charges.
The accountant who allegedly penned the employment verification letter, Timothy Hubbell, declined to comment. Hubbell testified during Cole and Crisp's license hearings that his former business partner, Kevin Sluga -- Jennifer Crisp's father and Crisp & Cole's CPA -- had admitted to creating forged letters bearing Hubbell's name.
Two other people named in the case as CPAs who submitted employment-verification letters don't have CPA licenses, state records show. Haysar Lopez of H & E Lopez Income Tax Service in Bakersfield, said she wasn't familiar with the transaction in question and has never written such documents. The other, Hilda Gonzalez, could not be located.
The suit also names former Crisp & Cole employees and associates Jayson Costa, Justin Eddleman, Robinson D. Nguyen, Lynnmai Nguyen, Christopher Stovall, Jerald Teixeira and David Bruce Whisler.
An ongoing Bakersfield Californian tally counts at least 126 properties, most being single-family homes in metro Bakersfield, tied to bad loans totaling more than $84.5 million. Of those, 110 have been foreclosed on. (12209bdrsfldcal)
TWO SISTERS ONCE LIVING IN VALLJO AND NOW IN SAN FRANCISCO AND LAS VEGAS RESPECTIVELY ARE INDICTED FOR MORTGAGE FRAUD
FACTS
On Jan. 22, 2009 a federal grand jury returned a five-count indictment charging Ralondria Stafford, of San Francisco, and Necole Ward, of Las Vegas, (both formerly of Vallejo, Calif.) with crimes relating to a mortgage fraud scheme carried out in Vallejo between 2005 and 2006. The defendants, who are sisters, operated RN Realtors in Vallejo. The indictment charges them with conspiracy to commit wire and bank fraud, wire fraud, bank fraud, and engaging in monetary transactions in property derived from specified unlawful activity (money laundering).
U.S. Attorney Lawrence G. Brown for the Eastern District of California said, "As today's indictment against these two former Realtors reflects, we will continue to give priority to those cases perpetrated by industry professionals."
The indictment alleges that between July 2005 and August 2006, the defendants began using straw buyers to purchase properties that they owned in Vallejo. The buyers were approached and offered $5,000 for the use of their name and financial information. The defendants represented to the buyers that the purchase would be in name only and that Stafford would purchase the properties back from the straw buyers in six to 12 months.
The defendants are alleged to have prepared Uniform Residential Loan Application forms in the straw buyers' names containing material false statements. These false statements included, among other things, overstating of the straw buyer's income, claiming employment at employers for which the straw buyers did not work, and misidentifying the purpose of the purchased locations as a primary residence. On one occasion, in support of the materially false statements, the defendants attached to the application falsified Internal Revenue Service form W-2s and a lease agreement.
The maximum statutory penalty for conspiracy is five years in prison, a fine of $250,000, and a three-year term of supervised release. The maximum statutory penalty for a violation of bank fraud and wire fraud is 30 years in prison, a fine of $1,000,000, and a five-year term of supervised release. The maximum statutory penalty for money laundering is 10 years in prison, a fine of $250,000, and a three-year term of supervised release.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. (usattyedca12209)
MORAL
1. The U. S. Attorney is chasing fraud loans that occurred in 2005/2006, over four years ago.
2. One of the charges is listing on the 1003 that the property being purchased is for a primary residence.
3. Any of this sounds familiar? If it does see your attorney now before the FBI sees you later. This way the problem may be mitigated.
SOUTHERN CALIFORNIA WOMAN SENTENCED TO OVER 12 YEARS IN PRISON FOR PROMISING TO HELP PEOPLE AVOID FORECLOSURE
FACTS
Jeanetta M. Standefor, resident of Altadena, Calif. was sentenced to 151 months in federal prison in Los Angeles Federal Court and ordered to pay $8,688,924.
Through her Pasadena-based company, Accelerated Funding Group, Standefor operated a bogus "foreclosure reinstatement" program that attracted more than 600 investors between 2005 and 2007. The scheme purported to use investors' funds to cure defaults on distressed properties about to be put into foreclosure. While soliciting investor money and promising returns of up to 50% in time periods as short as one month, Standefor and AFG were instead operating a Ponzi scheme that used money from new investors to pay previous investors.
Standefor pleaded guilty in September 2008 to two counts of mail fraud. Standefor's fraud was what is commonly called "affinity fraud," that is, a fraud directed at a particular community. Standefor and AFG targeted investors in the African-American community through a now-defunct Web site, word of mouth,
real estate seminars and testimonials by other seemingly successful African-American investors.
Standefor claimed investor funds would be used to assist owners of distressed properties. Written materials put out by AFG touted its foreclosure reinstatement program as "virtually risk-free" and promised investors that their principal would be safely returned within 72 hours at their request. Standefor and AFG did not use investor funds to cure defaults on any residential properties, and investors' requests for return of their investments were ignored. Standefor used more than $1.9 million of investor funds for personal expenses, such as her lavish wedding and honeymoon, cars, jewelry, tickets to entertainment events and home renovations.
In conjunction with the indictment against Standefor, the U.S. Securities and Exchange Commission filed a civil action against Standefor and AFG. The SEC obtained a default against Standefor and AFG on Sept. 18, 2008. (usattycacd12009)
MORAL
With the default judgment, the SEC will be chasing any personal assets she has, gave to others as gifts and take her home as well. However, you must admit, for the next 12 years she will not need the home because in federal prison you have to serve 85% of the time. What is 85% of 151 months?
SIX PEOPLE IN ORANGE COUNTY, CALIF. INDICTED FOR $52 MILLION FRAUD
FACTS
The cases have been filed by California Attorney General Jerry Brown in Orange County Superior Court on Jan. 22, 2009. This is in addition to SEC charges filed against operators of Carolina Development Co.
Lambert Vander Tuig of Rancho Santa Margarita and Jonathan Carman of Laguna Hills, were arrested on Jan. 22, 2009 along with two others. The bail for Vander Tuig and Carman is set at $52 million. Arraignment is currently set for Feb. 11, 2009. Public defender lawyers are to be appointed for them.
Promoters talked investors into putting up their money for planned resorts and golf courses and promising to make early investors reach by going public with the stock. Vander Tuig and Carman allegedly diverted more than $24 million for personal use. The four others charged are:
* Mark Sostak of Ladera Ranch; bail is $4.5 million
* Soren Svendsen of Coto de Caza; bail is $2.2 million
* Scott Yard of Costa Mesa, who is being sought and remains at large, and
* Robert Waldman of Irvine, who was scheduled to turn himself in Monday, Jan. 26.
There are 89 felony counts listed in the complaint with special allegations. (afpr12309)
MORAL
If they made so much money, why do they need a public defender? Remember, innocent until proven guilty but oh my gosh, the expense of trying to prove innocence on 89 felony counts.
TWO LOS ANGELES MEN CONVICTED IN KANSAS COURT FOR FORECLOSURE BANKRUPTCY FRAUD
FACTS
On Jan. 16, 2009 a federal jury convicted Isaac Yass, a citizen of Israel who has been living in Los Angeles, and co-defendant Robert Andrew Blechman of Culver City, Calif. of one count of conspiracy to commit mail fraud and aggravated identity theft, six counts of mail fraud and six counts of aggravated identity theft.
During the nine day trial, prosecutors presented evidence that Yass and Blechman conspired to operate a fraudulent service called Stopco claiming to be able to save homeowners who where behind on their mortgage payments from losing their homes. Evidence showed that Yass solicited homeowners who were going through foreclosure proceedings. He told them that for a fee he could help them keep their houses.
The defendants filed fraudulent bankruptcy petitions in federal bankruptcy courts in Topeka, Wichita and Kansas City, Kan. The petitions were filed in the name of nonexistent individuals with businesses that claimed to be part owners of properties that were in foreclosure. The result was an automatic stay in the foreclosures, halting any further actions by creditors against the properties. The petitions contained false names and Social Security numbers, and addresses for the creditors that were in fact mailboxes or UPS Store locations in Kansas.
Sentencing is set for May 11, 2009. A forfeiture hearing is set for Jan. 22, 2009. Yass and Blechman face a maximum penalty of 30 years in federal prison and a fine up to $1 million on each count of mail fraud, and a mandatory two years and a fine up to $250,000 on each count of aggravated identity theft. (usattwdks12009)
MORAL
The funny part is the stay itself is only temporary until the mortgage company makes a motion for relief from the stay to continue the foreclosure.
FOUR IN DETROIT INDICTED FOR MORTGAGE FRAUD
FACTS
Dequincy Hyatt of Detroit, Seaesther Thompson-Hayes of Flat Rock and Aaron Brooks Jr. of Southgate were arrested and charged with racketeering, a 20-year in jail felony if convicted, and two counts of false pretenses, each a 10-year felony. Pietro Biundo of Washington Township was charged with one count of false pretenses -- a five-year felony -- based on documents filed when selling a home in one of the transactions.
Authorities said that in 2006, Hyatt, managing partner of J.B. Homes/Construction LLC, Thompson-Hayes, a mortgage broker, and Brooks, a former service representative for the People's Trust Credit Union; joined together to secure mortgages on two properties.
For one, officials said the suspects secured a $710,000 mortgage for a $510,000 Shelby Township home. "After paying fees, the defendants were able to skim more than $163,000 off the transaction," officials said.
In a second case, the suspects allegedly secured a $785,000 mortgage though a straw buyer for a $515,000 Clinton Township home.
"The straw buyer was told that her name and credit, boosted by grossly inflated income and asset data, would be used to purchase the properties," officials said. "The mortgage payments would be made for her by the defendants and her name would later be removed from the mortgages. In return, the straw buyer was promised compensation. (detnws,cin12509)
MORAL
On and on it goes and where it stops nobody knows. Why? To easy to do, very easy to get caught. Not enough people to do the catching.
OHIO LOAN OFFICER DOES TIME IN FEDERAL PRISON FOR LOAN FRAUD
FACTS
Timothy Pearson of Beavercreek, Ohio, was sentenced to 20 months in federal prison, followed by three years of supervised release and ordered to pay $171,211 in restitution to the Internal Revenue Service for his role in a mortgage fraud scheme. Pearson had previously been employed as a loan officer. Pearson pleaded guilty on March 12, 2007 to one count of conspiracy to commit money laundering and to two counts of income tax evasion.
Pearson was involved in a mortgage fraud conspiracy between March 2001 and December 2005 where he directly and indirectly participated in at least 365 fraudulent real estate closings in the greater Dayton, Ohio area. Pearson prepared and submitted fraudulent mortgage loan applications on behalf of prospective purchasers of residential properties, a majority of which were located in the Dayton area. In addition, Pearson fraudulently provided down payments for the purchasers at the real estate closings. (ON1809)
MORAL
Notice the government went back nine years to find the 365 loans. Yet only 20 months in federal prison and a $171,211 restitution order. That is one hell of a deal. He had a good lawyer.
THREE MEN IN DALLAS SENTENCED TO FEDERAL PRISON FOR MORTGAGE FRAUD
FACTS
Mark Manners, Robert L. Loeb, and Andrew Siebert, who were involved in a massive mortgage fraud scheme that they ran in the area, were sentenced on Jan. 23, 2009. Mark Manners was sentenced to 30 months in prison, followed by three years of supervised release, and ordered to pay $1,762,362.71 in restitution. Robert L. Loeb was sentenced to 18 months in prison, followed by two years of supervised release, and ordered to pay $2,027,841,34 restitution. Andrew Siebert was sentenced to 60 months in prison, followed by three years of supervised release, and ordered to pay $2,027,841.34 restitution.
Their co-defendant in the scheme, Charles Cooper Burgess, was sentenced in March 2008 to nearly 22 years in prison and ordered to pay more than $3 million in restitution for his role in this mortgage fraud scheme and another scheme involving golf course property in Arkansas. Burgess pled guilty in January 2006 to his involvement in two fraudulent schemes, one involving mortgage fraud and one involving defrauding individuals who invested in golf course property in Arkansas. In November and December 2006, Burgess testified about Manners and Siebert's extensive role in the mortgage fraud scheme. At the conclusion of that trial, both Manners and Siebert were convicted.
Burgess admitted that he recruited 20 straw buyers with good credit but limited funds to sign loan and closing documents to purchase homes. As part of a signed "investor management agreement," Burgess promised to provide the down payment at closing as well as make all mortgage payments. When Burgess's company needed additional funds for borrower down payments, Siebert agreed to steal bank escrow funds for the borrowers' down payment.
As part of the scheme, Siebert also falsified settlement document on at least 20 loan closings. Siebert only agreed to steal these escrow funds if Burgess agreed to pay Siebert $5000 from each closing as a "kickback payment." Evidence at trial showed that Siebert stole escrow funds on 20 separate loans and then concealed the theft of these lender funds by falsifying loan closing documents.
Siebert stole lender funds held in escrow and then provided these funds to Manners prior to closing so that Manners could purchase a cashier's check in the name of the straw buyer. When Siebert received the cashier's check back from Manners, Siebert falsely certified to the lender on the settlement statement that the down payment came from the borrower. On the settlement statement, Siebert also fraudulently accounted for disbursements to Burgess' company by falsely listing the expense as a phony lien pay off, or as a "marketing and relocation fee" due to Burgess' company.
Eleven different lenders testified at trial that Siebert falsified the settlement statements to conceal his wrongful and fraudulent release of lender escrow funds. Each lender testified that the loan would never have been funded if the lender had known about the fraudulent use of lender escrow funds.
From December 2002 through March 2004, Siebert stole escrow funds which resulted in the loss of $2,027,841 to 16 different lenders. As a result of Siebert submitting false certifications on settlement statements for each of these 20 loans, Siebert and Manners fraudulently induced the disbursement of loans totaling more than $7 million. (usattyndtx12309)
MORAL
Busy little beavers, weren't they? Notice how the U.S. Attorney went back seven years for the false loans. Anyone out there have loans that are questionable in the last seven years?
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
