NEW CALIFORNIA DEPARTMENT OF REAL ESTATE EMERGENCY REGULATIONS EFFECTIVE NOW
FACTSThese are not all of them but what I consider to be the key features that you need to be aware of for audit purposes.
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FACTSSome real estate agents are counseling people to "walk away" from their mortgages.
Housing industry reps and readers current on their mortgages called these agents irresponsible, menaces that lacked morals and encouraged fraud. Yet the real estate agent view is that people have the right to walk away if lenders won't work with them. This has become mainstream in the Sacramento region, where 221,674 households owe more than their homes are worth.
When the lender will not work with a loan modification request which is reasonable and that takes over six months to make a decision and at the same time continues with the foreclosure process while staging they are working with the borrower, the borrower gets notably upset.
This line of thinking about walking away from the mortgage is especially prevalent in wealthier circles, where people with financial smarts refer to "walking" with a less morally weighted term, "strategic default." "Strictly a business decision," said one Coldwell Banker real estate agent. She sees strategic defaults discussed and acted upon repeatedly in her neighborhood, Lincoln's upscale Catta Verdera. People there are questioning $5,500 monthly mortgage payments on houses they bought for $800,000 and $900,000 four or five years back and which are now worth half that.
"People can make payments. But it's just not a prudent decision," said one agent. "You feel terrible about it, but it's like you bought a stock for $50 and it went to $100 and now it's $20. How long are you going to hold onto it?"
Scott Thompson, principal with Carmichael's Mortgage Resolution Services, listens daily to people wondering aloud whether to stay or go. "I'm having more and more initial conversation with homeowners saying, 'Man, I ran the numbers and this doesn't make sense.' For those people it takes awhile to get over the social stigma hurdle. But they're going to get there," Thompson said. (sacrob2510)MORALYou may remember I brought this up in the last issue of the e-Alert as a commentary by an Arizona law professor. But walking away without consulting legal counsel is like walking away from a firecracker that is lit into a stick of dynamite. There can be repercussions.
For example, under certain conditions, the lender has the right to send you an IRS Form 1099 for debt forgiveness. Thus if you walk away from a $150,000 mortgage you may find the lender sending you a debt forgiveness 1099 as if you received $150,000 in taxable income.
Second: Depending on the mortgage, the mortgage may be extinguished but not the debt and lender can sue you for the balance of the debt. It is being done right now and we are defending several people that are being sued after foreclosure has taken place. There can be and are certain defenses, but walking away before checking out your potential liability and evaluating it is like holding a stick of dynamite that is lit and not knowing when to let go. I strongly suggest you see your attorney before you walk away or you may find yourself getting sued or owing the IRS taxes on "debt forgiveness."CALIFORNIA DRE BARS FRESNO DEVELOPER FROM REAL ESTATE FOR THREE YEARS
FACTSTom O'Meara, a former developer of the failed Running Horse golf club project, was been barred from having any involvement in the real estate business for three years. O'Meara says the accusations against him are false, and he is fighting the rulings, which were issued Jan. 29, 2010 by the commissioner of the California Department of Real Estate.
O'Meara and a partner were the original developers of Running Horse, an on-again, off-again project in southwest Fresno. The two ran out of money for the project after two holes, and their real estate licenses were revoked in September 2008. The revocation stemmed from accusations of defrauding 10 investors out of about $6 million by allegedly selling the same lots to multiple buyers. At the time, O'Meara denied that he intended to defraud, but did not formally challenge the revocation.
DRE documents filed Jan. 29 accuse O'Meara of acting as a mortgage broker for reverse mortgages, a role that requires a valid real estate license, said department spokesman Tom Pool. O'Meara is accused of soliciting borrowers and lenders by placing advertisements and handing out business cards through the Palm Desert-based Desert Resources Group. He also is accused of negotiating loan terms. O'Meara denies the allegations.
DRE issued a desist-and-refrain order barring him from any activity that requires a real estate license. It also issued an order barring him having any involvement in the real estate industry for 36 months, including working in real estate or working for a mortgage lender, bank, credit union, or an escrow or title company.
The department was given the authority to bar people from the industry last year, and O'Meara is the third person to be barred, Pool said.
O'Meara said he already has responded to the ruling and will request a hearing, during which the order could be overturned. (fnob2510)MORALNote that under the new law effective Jan. 1, 2010 the Department can stop you from doing any licensed activity for three years. So, do not ignore a Desist and Refrain Order that contains a condition that you cannot be in the Real Estate Industry for the next three years. You have to fight it if you want to keep your license. O'Meara had his license revoked in September 2008 so now the DRE using the D&R system is attempting to stop him from "working in real estate or working for a mortgage lender, bank, credit union, or an escrow or title company even if he does not need a license to do so." See why you have to fight the D&R even if the license is revoked?FORMER PRESIDENT OF MORTGAGE ONE CORP. SENTENCED TO 13 YEARS IN FRAUD SCHEME THAT CAUSED NEARLY $30 MILLION LOSS AT HUD
FACTSOn Feb. 1, 2010, John Richard Varner, former president of Mortgage One Corp. in Hesperia, Calif., was sentenced to 13 years in federal prison by United States District Judge Virginia A. Phillips for defrauding the United States Department of Housing and Urban Development and private lenders by fraudulently obtaining hundreds of federally insured loans and selling those mortgages to private lenders in a scheme that caused tens of millions of dollars in losses to the federal housing agency. The judge also ordered Varner to pay $29,749,239 in restitution.
Last April, following a nearly four-week trial, a federal jury convicted Varner of one count of conspiracy to defraud HUD, one count of bank fraud, and two counts of subscribing to false income tax returns. Varner was the 15th defendant convicted in relation to the scheme. Varner and co-defendant Richard Elroy Giddens were at the center of the fraud that was run out of Mortgage One, and M-1 Capital Corp., which was based in Riverside and Rancho Cucamonga. Giddens, the former CEO of Mortgage One, pleaded guilty to the same charges Varner was convicted of at trial and in September 2009 was sentenced to 78 months in federal prison.
From 1997 until 2002, Mortgage One and M-1 Capital were in the business of approving, funding and then selling home mortgage loans, typically obtaining mortgage insurance on the loans from the Federal Housing Administration. Mortgage One and M-1 Capital obtained FHA mortgage insurance for their loans without HUD review due to their status as HUD-approved Direct Endorsement Lenders. They obtained and kept Direct Endorsement Lender status by submitting false documents, including bogus audits, to HUD.
Varner and his co-defendants defrauded HUD by submitting fraudulent loan application documents in order to qualify the loans for FHA insurance. The loans went to borrowers who either did not meet the FHA requirements to qualify for the mortgages or were only straw buyers. Mortgage One and M-1 Capital sold the funded loans to banks, such as the FDIC-insured Firstar Bank and Chase Manhattan Mortgage Corp.
As a result of the scheme, HUD lost $23,628,857 on 905 fraudulent loans and a total of $29,638,011 when interest paid by HUD during the foreclosure and resale process is included.
Varner was found guilty of filing false tax returns for the years 1999 and 2000 when he failed to report income that he used for personal expenses such as a Corvette, a $153,000 RV, jewelry, and more than $150,000 deposited into a personal investment account.
In sentencing papers, prosecutors argued that Varner's testimony at trial last year "consisted of a series of breathtaking lies that appeared designed to shift responsibility for defendant's crimes to others and to mislead the jury about the true facts." For example, Varner "denied knowingly approving fraudulent loan applications, despite testimony from numerous brokers that they discussed the fraud in the loan files and [Varner] indicated they should continue to submit the fraudulent loan files," according to court documents that concluded Varner "gave blatantly false testimony." (usattycdeca212010)MORALJudge Phillips is known for her fairness. I would suggest maybe he should have "copped a plea." That is, if one was available. Now he will spend 13 years in federal prison where there is no parole and you must serve 85% of your time. However, it would be interesting to know where Varner is going to come up with over $23 million to pay the restitution order. Wouldn't you like to know?CALIFORNIA WOMAN CONVICTED OF MORTGAGE FRAUD AND WITNESS TAMPERINGOn Feb. 2, 2010, Judy Miu Wan Yeung, the self-proclaimed "Honorable Lady of San Francisco," was convicted of wire fraud and witness tampering for defrauding mortgage lenders and financial institutions of $6.5 Million.
Yeung was convicted of one count of conspiracy to commit wire fraud, eight counts of wire fraud, and three counts of witness tampering by a federal jury. The jury, after deliberating for one day, found that Yeung engaged in a mortgage fraud conspiracy between approximately December 2004 and January 2007. Yeung, together with two mortgage brokers, recruited five individuals to submit loan applications in their names in order to obtain loans totaling more than $6.5 million. Evidence at trial established that Yeung had bad credit and could not have obtained these loans in her own name. Yeung engaged in these transactions in order to purchase investment properties in Gilroy, Calif., when real estate prices were still rising. Yeung also fraudulently refinanced her San Francisco residence in Balboa Terrace, in order to obtain cash from mortgage lenders and to pay off existing loans. Testimony at trial established that Yeung obtained more than $624,000 in cash from these fraudulent transactions.
Yeung's scheme involved the submission of false information and forged documents to mortgage lenders, including Washington Mutual and J.P. Morgan Chase. For example, the loan applications in each case grossly exaggerated the income, assets, and creditworthiness of the individuals posing as borrowers for Yeung. In addition, evidence at trial established that Yeung induced others to forge letters from Hang Seng Bank that falsely verified assets held by the borrowers. The forged letters were then used in support of the loan applications. Some of the individuals posing as borrowers testified at trial. They stated that Yeung had promised to pay the mortgages obtained in their names and that, in two cases, Yeung promised to pay them a reward of $20,000 to $40,000.
In addition, the jury found Yeung guilty of three counts of witness tampering. Two of the straw buyers whom Yeung had recruited testified at trial that Yeung told them to lie to the FBI agents who were investigating the case.
The guilty verdict followed a three-week jury trial before U.S. District Court Judge Susan Illston. Two mortgage brokers were charged in connection with the case, which was referred to the FBI by the San Francisco District Attorney's Office. They have pleaded guilty to wire fraud conspiracy charges and are awaiting sentencing. The sentencing of Yeung is scheduled for May 14, 2010, before Judge Illston in San Francisco. The maximum statutory penalty for each count in violation of Title 18, United States Code, Section 1349, is 30 years and a fine of $1,000,000, plus restitution. (usattyndca4310)SAN FRANCISCO TENNIS INSTRUCTOR INDICTED FOR FRAUDULENTLY OBTAINING OWNERSHIP OF THREE CONDOMINIUMS
FACTSOn Feb. 5, 2010, Winston Lum, a San Francisco tennis instructor, was charged with fraudulently obtaining ownership of three high-rise condominiums and borrowing $2.2 million against them. He was charged but did not enter a plea to 16 felony counts including charges of grand theft, identity theft and forgery. Lum, who runs a tennis business called Slam and Bang Tennis, was being held on $7.5 million bail. He does not have an attorney.
Prosecutors say that starting in January 2009, Lum forged the true owner's signatures on grant deeds for three condominiums at One Rincon Hill, put them in his name and recorded them with the city. He then borrowed $2.2 million against the units, which are worth a total of $7.5 million, prosecutors said.
The owner of the properties, identified in a civil lawsuit as Shirley Hwang, had never even met Lum, let alone authorized the transactions, prosecutors said. She sued Lum and his lender, De Witte Mortgage Investors Fund, last year. A trial is set for May 2010.
Authorities say Hwang became suspicious when she started getting mail for Lum at her home. She went to police in March after the management at One Rincon Hill told her she no longer owned the unit in which she lived.
At the time of his arrest, Lum was free on $45,000 bail while awaiting trial for separate burglary and theft cases, court records show. Those cases are still pending. (sfchron2610)MORALBusy little bee, wasn't he? He had better find a lawyer fast.ONE OF LARGEST FLORIDA MORTGAGE FRAUD RINGS IN HISTORY BEING INVESTIGATED BY FBI AMOUNTING TO ABOUT $200 MILLION
FACTSAccording to the Herald Tribune, Craig Adams, orchestrator of one of the largest real estate fraud rings in Florida history, has secretly spent more than a year and a half as an FBI informant, helping build cases against the people he once recruited into his schemes.
Federal court records show Adams has allegedly agreed to plead guilty to conspiracy charges at a later date and has pledged his help in an attempt to earn leniency. In at least one instance, Adams wore a wire to record a conversation with a key business associate.
So far he has disclosed at least $200 million in fraudulent property deals, incriminated more than 30 of his former business partners and given the FBI enough evidence to arrest his long time title agent, Lisa Rotolo, the alleged owner of Diamond Title according to court records per the Herald Tribune.
Adams' role as informant is described in a federal criminal complaint related to Rotolo's April arrest. Those documents, filed in U.S. District Court in Tampa, do not name Adams as the informant, referring to him only as the "confidential defendant" or "CD."
Using descriptions of the defendant, particularly the mention of a relative in the court documents, the Herald Tribune concluded that Adams was the informant. Lisa Rotolo's husband, Jay, and others familiar with the investigation confirmed Adams' identity this week.
Ultimately, dozens of Sarasota real estate investors could be caught up in the investigation. Adams' list of associates includes mortgage brokers, Realtors, real estate appraisers, attorneys and developers.
During a conversation Adams allowed the FBI to secretly record, Rotolo predicted a wave of legal trouble for Adams' business associates and for others who flipped property in Sarasota, the criminal complaint shows.
The newspaper's investigation revealed how Adams recruited friends, family members and business associates to trade houses back and forth for phony prices. With each sale, the price of the house was artificially increased, allowing buyers to qualify for oversized mortgages.
The Herald Tribune also revealed that Adams or his associates forged his aunt's signature to obtain a loan, hid outstanding loans from banks in order to borrow more money and sold properties without repaying attached mortgages.
The criminal complaint against Rotolo lays out how Rotolo and the confidential defendant worked together to artificially inflate home values and help buyers qualify for fraudulent mortgages. Instead of selling houses on the open market, they used "friendly sellers" so they could inflate values and hide false statements.
When a friendly seller could not be found, Rotolo, Adams and others involved in the scheme would create a fake set of closing documents. One set would go to the seller and another would go to the bank in order to hide how money was manipulated, the complaint states.
In at least one case, Rotolo took loan money that was supposed to be used to repay previous mortgages and funneled it to Adams, the complaint states.
Several of Adams' business associates, contacted by the Herald Tribune this week, were shocked to learn that Adams was cooperating with federal investigators. When informed by phone, Adams' associate Heather Kabobel began crying. "I feel sick to my stomach," she said.
Kabobel, a Sarasota real estate appraiser, is one of more than 30 people Adams implicated as a participant in real estate fraud, the Rotolo criminal complaint shows. Her husband, Jonathan Glucker, a mortgage broker with Prospect Mortgage, also appears on loan documents that Adams said were fraudulent, the complaint shows.
The documents list 37 addresses and related mortgages that Adams told the FBI were fraudulent.
Rotolo's arrest documents describe in detail the real estate transactions on the house at 1636 Baywood Way in Sarasota. Using his 80-year-old mother, Jocelyn Adams, as a straw buyer, Adams bought the house in March 2005 and began borrowing more money than his mother's income could justify, the criminal complaint states.
Although Jocelyn Adams' name is on the deed, Craig Adams and an unnamed investor retained ownership, the complaint says. They inflated the original purchase price from $1.65 million to $1.85 million and kept the excess proceeds from the mortgages obtained in Jocelyn Adams' name
Rotolo played a key role in the fraud, according to the criminal complaint against her. It says she prepared two sets of closing documents - one for the unwitting sellers and another for the bank that provided a loan on the inflated value. Rotolo prepared the legal documents for several more loans on the property over the years, the complaint says. In most of the paperwork, Adams forged his mother's signature and Rotolo notarized it, the complaint shows.
The documents show that in May 2008, a Tampa attorney contacted the FBI's Sarasota office and expressed "his client's desire to provide information to law enforcement about his and other individuals' involvement in wide spread (sic) mortgage fraud in Sarasota, Florida."
The informant agreed in principle to plead guilty to criminal conspiracy on condition that prosecutors not pursue any additional charges. Federal sentencing guidelines show criminal conspiracy carries a sentence of up to five years. (heraldtrib2710)MORALOver $200 million in fraud loans? Over 30 people involved?EIGHT INDIANA MEN SENTENCED FOR MORTGAGE FRAUD
FACTSOn Feb. 2, 2010 Kevin Lafavers, formerly of Indianapolis, was sentenced to 33 months in federal prison, and Donald T. Brown, Lebanon, Ind., was sentenced to 27 months in prison following Lafavers' guilty pleas to conspiracy to commit wire fraud and wire fraud and Brown's guilty pleas to conspiracy to commit wire fraud and money laundering. These proceedings concerned the defendants' participation in a multi-million dollar mortgage fraud scheme operated by Robert Penn in the Indianapolis area.
Six other involved individuals charged in the scheme were sentenced as follows: Robert Penn, 84 months' imprisonment; Mark Roth, 43 months' imprisonment; Timothy Brown, 37 months' imprisonment; Stephen Scott Brown, 37 months' imprisonment; Jerry Jaquess, 30 months' imprisonment; Tamara Scott, 24 months' imprisonment.
Between November 2003 and August 2005, at least 136 fraudulent loans, totaling $16,613,850.00, were obtained by Robert Penn and his numerous business entities, assisted by Lafavers and Brown and others.
Participants in the schemes, including Lafavers, located properties and arranged to purchase them at a fair market value generally by means of an option agreement or unrecorded land contract. Other participants in the scheme located straw purchasers who invested their good credit, but no money, to be the purchasers of these properties at a much higher price than that negotiated with the seller. Co-conspirators, including Brown, funded the down payments.
Lafavers was employed by Penn to locate properties for sale, negotiate the purchases of those properties, and enter into option agreements and land contracts with the sellers on behalf of Penn and his businesses. Lafavers generally received $1,000.00 per property located. Lafavers also attended some property closings on behalf of Penn's companies and received checks that represented illegal proceeds. Lafavers' sentence reflected his involvement in approximately 19 fraudulent loans. The total amount of those loans was $3,771,000.00.
Brown was primarily involved in funding down payments for investors on the fraudulent real estate transactions. Brown used a bank account, which was maintained by him and his son in the name of Brown Funding Inc. to fund the down payments. Brown obtained down payment checks and provided those checks to the title company, or to another co-conspirator, to be used for the closing. After the property closing, Brown received repayment of the checks from the fraudulent loan proceeds. In addition, Brown Funding Inc. received a fee of between $1,000 to $3,000 for each down payment provided. The sole purpose of Brown Funding Inc. was to fund down payments for investors.
Brown also added investors' names to the Brown Funding Inc. bank account in order to convince the lenders that the investors had access to money which they did not have. Brown's sentence reflected his involvement in approximately 113 fraudulent loans, including 86 Windsor Village loans. The total amount of those loans was $12,541,000. Lafavers was ordered to pay restitution in the amount of $1,475,851.63 and Brown, $ 9,985,004.15. (usattysdin2210)MORALIf you have been following these cases did you notice how the sentences appear to be getting "stiffer."?PRESIDENT OF LOUISIANA FIRST FIDELITY MORTGAGE GETS SIX YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD
FACTSOn Feb. 4, 2010 William Everett Nichols of Alexandria, La., president and sole shareholder of First Fidelity Mortgage Inc., was sentenced to six years in federal prison and ordered to pay $3,903,071 in restitution for bank fraud.
Nichols pled guilty to bank fraud in November 2009. The FBI investigation of Nichols and First Fidelity Mortgage, doing business as Southern Funding, showed that Southern Funding provided mortgages to customers in central Louisiana. Sabine State Bank and Peoples State Bank of Many, Louisiana, provided credit to Southern Funding for mortgages which were secured by customer notes pledged by Southern Funding to the banks. Nichols also had private investors as a funding source.
Nichols forged signatures of borrowers and provided the forged notes as collateral. He is responsible for a total amount of loss to banks and private investors of $3,903,071. (usattywdla2410)MORALForging signatures is pretty stupid and easy to prove, a lot easier than false income being traced back to being caused by the loan officer or the broker.SOUTH CAROLINA MAN PLEADS GUILTY TO MORTGAGE FRAUD IN OREGON
FACTSOn Jan. 27, 2010 Michael A. Wilson of Murrells Inlet, S.C., pled guilty to bank fraud. In November 2009, multiple indictments were returned by a federal grand jury against 13 defendants, including Wilson, on a variety of mortgage and loan fraud charges arising out of the collapse of Desert Sun Development, a commercial and residential construction company headquartered in Bend, Ore. Wilson's sentencing is set for June 28, 2010.
In December 2006, Wilson moved from South Carolina to Bend, where he joined DSD as a construction superintendent. In 2007, while working for DSD, Wilson fraudulently obtained two loans in his wife's name as her attorney-in-fact for the purchase and refinance of a DSD constructed home. To close the first loan to purchase the home for $530,000, DSD principals provided a cashier's check for approximately $112,000 at closing, falsely claiming that it was Wilson's money.
Shortly thereafter, Wilson sought to refinance the loan. To qualify for the refinance, Wilson was required to show that he had at least $47,000 in his bank account. Because he did not have sufficient funds of his own, DSD principals temporarily deposited DSD money into his account to make it falsely appear that he did. A letter was drafted at DSD to falsely explain that the origin of the $47,000 deposit was Wilson's semi-annual bonus from DSD. Wilson signed the letter as his wife. Additionally, Wilson signed a loan application on behalf of his wife, falsely asserting that she had worked for DSD for the past two years, earning $15,000 per month. Based on these fraudulent documents, the bank approved a loan for $500,000, but required that Wilson bring $42,000 of his own money to closing. Not having the money, Wilson again used DSD money for that purpose.
Relying, in part, on the fraudulent documents, banks approved and funded the loans for Wilson's home. Wilson was unable to make the monthly mortgage payments and defaulted. The bank foreclosed and took possession of the residence. The current loss associated with Wilson's conduct is approximately $360,000.
Bank fraud carries a maximum sentence of up to 30 years in prison and a $1,000,000 fine. (usattyor12810)MORALOne loan, one house, one fraud, one federal prison sentence coming up.RHODE ISLAND DIVISION OF BANKING HAS NEW MORTGAGE FORECLOSURE DISCLOSURE REQUIREMENTS AND THE FORM TO GO WITH THEM
FACTSEffective March 6, 2010, the state of Rhode Island Department of Banking will activate the emergency regulation to provide the form and requirements for the Mortgage Foreclosure Disclosure. The notice implemented by this regulation informs individual consumer mortgagors of their default, of the mortgagee's right to foreclose, and the availability of counseling for mortgagors through HUD-approved counseling agencies in Rhode Island. R.I. Gen. Laws § 34-27-3.1. This Regulation applies to all entities and individuals subject to regulation and supervision by the Rhode Island Division of Banking as well as to any mortgagee holding a loan secured by residential real estate located in Rhode Island. (alrgs2510)MORALJust keeping up with the new laws and regulations can give you a headache.IN HOUSTON, OWNER OF CATCO HOMES, FORMER OWNER OF FUTURE MORTGAGE AND A FORMER EMPLOYEE OF FUTURE MORTGAGE ALL INDICTED FOR ALLEGED MULTI-MILLION-DOLLAR MORTGAGE FRAUD
FACTSOn Feb. 4, 2010 Ming Shan Zhe, owner of Catco Homes, Alvin Mark Eiland, former owner of Future Mortgage Co. Inc, and Gary Leonard Robinson II, a former employee of Future Mortgage, were all named in a 19-count indictment charging them with offenses arising from a scheme to defraud residential mortgage lenders of more than $7 million in loans in connection with home purchases in the Houston area.
The trio is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and money laundering. Zhu and Robinson surrendered to federal authorities on Feb. 4, 2009.
According to the allegations in the indictment over a two-year period beginning in August 2004, Eiland, Robinson and Zhu located properties for sale in the Houston area. Eiland and Robinson then recruited individuals with good credit to act as borrowers in applications for residential mortgage loans to purchase one or more of these homes. The borrowers were allegedly paid cash to use their name and credit and told that the homes would be rented out for a year. Eiland and Robinson, according to the indictment, would then sell the home at an inflated price determined by Zhu, resulting in a significant profit.
Eiland and Robinson, according to the allegations in the indictment, set up sham construction companies to which Zhu would facilitate the forwarding of money at closing. Eiland generally told each borrower he would buy the home in the borrower's name, make any monthly mortgage payments, find others to live in the home and pay monthly rent, take the home out of the borrower's name after a period of time and compensate the borrower. Eiland and Robinson then allegedly completed and caused to be completed loan applications in the names of the borrowers that overstated their employment income and other assets, understated or omitted their debts and other liabilities, falsely represented that the borrowers leased the homes they resided in and received income from the rent and falsely claimed that the borrowers intended to occupy the newly purchased homes. In support of those fraudulent loan applications, Eiland and Robinson are accused of submitting and causing to be submitted false and fraudulent documentation, including sham lease agreements and bogus employment information.
At or near the closings for those home purchases, the indictment alleges Eiland, Robinson and Zhu caused title companies to disburse the fraudulently-induced loan proceeds to various individuals and entities, including Catco Homes and the sham construction companies. Eiland, Robinson and Zhu are accused of having represented to the title companies that the sham construction companies had been hired for projects to improve those properties when, in fact, the improvements were not made or were already in the home since the home purchased was a newly constructed home.
The maximum penalty, upon conviction, for each wire fraud and money laundering count is 20 years in prison as well as substantial fines. A conviction for money laundering carries the most significant fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater. (usattysdtx442010)MORALVery easy to do, very easy to get caught and if convicted a possible long-term residence at a federal hotel.THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
