TWO OF THE STARS OF “THE REAL HOUSEWIVES OF NEW JERSEY” INDICTED FOR MORTGAGE FRAUD
FACTS
Teresa and Giuseppe “Joe” Giudice, two of the stars of "The Real Housewives of New Jersey" have been indicted on federal charges, accused of conspiring to defraud lenders and of hiding assets during a bankruptcy proceeding, federal officials in New Jersey said.
The pair, who have been stars of the television show since it premiered in 2009, could face up to 30 years in prison if convicted of the top charge in a 39-count indictment, which alleges conspiracy to commit mail and wire fraud, bank fraud and making false statements.
The indictment charges the couple with submitting fraudulent mortgage and loan documents to lenders from 2001 to 2008, before the series began.
"The Giudices falsely represented on loan applications and supporting documents that they were employed and/or receiving substantial salaries when, in fact, they were either not employed or not receiving such salaries," the indictment alleges.
When the couple filed for bankruptcy protection in 2009, the indictment alleges, they "concealed businesses they owned, income they received from a rental property, and Teresa Giudice's true income from the television show 'The Real Housewives of New Jersey,' website sales, and personal and magazine appearances. The Giudices concealed their anticipated increase in income from the then-upcoming Season Two of the Bravo television show."
The indictment also alleges that during tax years 2004 through 2008, Giuseppe Giudice failed to file tax returns even though he had income of almost $1 million.
According to the U.S. attorney's office, if convicted the pair could face decades in prison and substantial fines.
"The conspiracy-to-commit-mail-and-wire-fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Each of the bank-fraud and loan-application-fraud counts carries a maximum potential penalty of 30 years in prison and a $1 million fine," prosecutors said. "The bankruptcy-fraud counts each carry a maximum penalty of five years in prison and a $250,000 fine. The failure-to-file-a-tax-return counts each carry a maximum penalty of one year in prison and a $100,000 fine." (md73013)
MORAL
We have and do represent clients with tax issues. However, the one thing we always emphasize is to file the return. You can argue and negotiate money, but prison is still prison and a felony is still a felony that takes away a lot of rights. The general rule I have found is that after nonfiling for three years you are at a very great risk of being visited by special agents of the IRS as opposed to revenue agents. While you can negotiate with revenue agents, special agents investigate criminally and that I have never seen negotiated. Point to be taken. If you have not filed see your tax person now.
CALIFORNIA REFUSES TO ENFORCE BORROWER’S OBLIGATION TO PAY DEFICIENCY IN SHORT SALE WRITTEN AGREEMENT
FACTS
The California Court of Appeal has recently held that the borrower was entitled to declaratory relief because the lender was not entitled to pursue its contractual entitlement to a deficiency after a short sale.
The court held that the borrower's agreement to pay the deficiency in a short sale agreement regarding a purchase-money first deed of trust was precluded by Code of Civil Procedure section 580b, and that the protections of 580b cannot be waived. "With the text and purpose of section 580b in mind, we see nothing in section 580b that leads us to believe it only applies after a foreclosure as Chase Bank urges." (Coker vs. JP Morgan Chase Bank, N.A., D061720, (Super. Ct. No. 37-2011-00087958-CU-MC-CTL)
MORAL
Meaning you cannot make the borrower give up to his right of no deficiency in the short sale of his home even in writing. And Chase probably knew this and was testing the waters to shaft the borrower? CCP Section 580e can protect homeowners on short sales against deficiencies where the mortgage is not a purchase money mortgage but rather a refinance.
SAN DIEGO 60-YEAR OLD MAN GETS OVER 15 YEARS IN FEDERAL PRISON FOR MASSIVE FORECLOSURE FRAUD SCAM
FACTS
On Aug. 2, after previously pleading guilty in state court to 14-counts including conspiracy to commit grand theft, identity theft and recording false documents, David Zepeda, a 60-year-old man who admitted guilt in a massive foreclosure fraud scam was sentenced to 15 years and eight months in state prison and ordered to pay at least $6 million in restitution. He is the last of four defendants involved.
The defendants acquired the titles to properties by forging hundreds of quitclaim deeds or convincing homeowners to transfer the property to them by promising the homeowner they would help avoid foreclosure. Once they had acquired the title, David Zepeda and his brother, John, would rent out the property.
More than 1,000 victims were discovered across southern California and Clark County in Nevada.
The defendants attracted their victims by holding seminars for people hoping to save their homes from foreclosure. Money was diverted from lenders and owners into the defendants' accounts, where the cash was used to support lavish lifestyles.
Authorities seized $335,000 in uncashed checks, $33,000 in cash, more than $8,000 in silver coins, gold watches and rings, and a Bentley automobile when they searched David Zepeda's home.
John Zepeda also pleaded guilty and has been sentenced to 12 years in state prison. (sdcacitynssrv8213)
MORAL
The one advantage they both have is that it is a state conviction and there is the possibility of parole reasonably early. If it were a federal conviction there is no parole at all!
EIGHT ARRESTED IN CALIFORNIA FOR
MORTGAGE FRAUD
FACTS
On July 31, in Ventura, Calif., federal and local authorities arrested eight individuals linked to a mortgage fraud scheme that filed loan applications on behalf of lower income, primarily Spanish-speaking individuals, generating substantial loan fees and commissions, and causing lending institutions to suffer millions of dollars in losses when homes went into foreclosure.
These arrests are the result of a grand jury indictment that charges the eight defendants in a conspiracy to commit bank fraud and wire fraud. The investigation, started by the Ventura County District Attorney’s Office, determined that members of the scheme generated dozens of mortgage loans for unqualified borrowers. The indictment specifically outlines a series of allegedly fraudulent loans worth more than $11 million.
The federal investigation resulting in the indictment being unsealed on July 25, (means they kept it hidden so there would be no advance warning; indictments not sealed can be searched on the website by name of defendant and give advance warning) was conducted by the Federal Bureau of Investigation; the Federal Housing Finance Agency, Office of Inspector General; the U.S. Department of Housing and Urban Development, Office of the Inspector General; and the United States Secret Service. (Five agencies!)
The indictment details a scheme led by Jose Garcia and run out of an Oxnard-based company called New Concepts Home Loans, where members of the alleged conspiracy prepared mortgage applications that contained false information about borrowers’ income, employment, and assets. As part of the scheme, according to the indictment, Jose Garcia’s wife and others obtained bogus “CPA letters” from tax preparers that falsely stated the mortgage applicants were engaged in a particular business.
The defendants in these cases generated huge commissions and fees through the mortgage application process—typically at least $10,000 per mortgage. The victim lenders who suffered losses as a result of the alleged scheme include Washington Mutual Bank, Wells Fargo Bank, Countrywide Bank, IndyMac Bank, SunTrust Bank, World Savings Bank, and JPMorgan Chase Bank.
District Attorney Gregory D. Totten stated, “These arrests for serious federal crimes illustrate the tenacity of state and federal law enforcement to continue our years-long effort to bring to justice who perpetrated real estate fraud-based crimes against unsuspecting, often monolingual, victims in our communities.”
Those charged are Jose “Joe” Bautista Garcia; his wife Lucy Ann; his sister Sesilia; Jose Fernando Murgua; Lili Ayala Hernandez; Lidubina Mendoza Perez; Gregg Scott Quinn; and Cesar Rodriguez Azamar.
All the defendants in this case face a statutory maximum sentence of 30 years in prison if they are convicted of the conspiracy count in the indictment. (usattyla72513)
MORAL
Like I have printed before many times, the government has 10 years to file criminal charges from the date of the last act involved in the enterprise. So if anyone reading this has been close to any questionable loans you may want to contact us now rather than later.
TENNESSEE NATIVE SENT TO FEDERAL PRISON IN VIRGINIA FOR MORTGAGE FRAUD
FACTS
On June 31, David Burrus Jr. was sentenced to 66 months in prison followed by a five-year term of supervised release for conspiring to commit wire and mail fraud. Burrus was also ordered to pay restitution of $241,779.26.
He managed and ran a Virginia Beach branch office of a mortgage brokerage firm headquartered in Tennessee from 2003 through 2007. Burrus also co-owned a title and escrow company that conducted real estate closings for many of the loans originated by loan officers supervised by Burrus. The accused also owned another entity, Southern Living Properties, which he used to receive money from fraudulent real estate transactions that he conducted.
From 2005 through 2007, Burrus sought and obtained numerous mortgage loans in both his and his spouse’s names. In the course of these transactions, Burrus agreed to buy local properties for more than the sellers' listing price; provided that the transactions were structured to ensure that any extra sales proceeds were paid to Southern Living Properties at the real estate closings. This ensured that, unbeknownst to the mortgage lenders, Burrus received a substantial portion of the loan proceeds when buying properties in his or his spouse’s name.
To induce lenders to approve various requests for mortgage loans, Burrus also submitted false loan applications, fictitious leases purporting to show his properties were generating rental income, and false Southern Living invoices billing property sellers for work and services that had never been performed. Burrus also made material misrepresentations to mortgage lenders about his and his spouse’s income and liabilities, his rental income, and about his spouse’s intent to occupy properties purchased as her primary residence.
Shortly before the crash of the real estate market, Burrus also sought to sell properties in his portfolio to his associates and offered to pay kickbacks to buyers to facilitate sales. Rhonda Wyland, then a loan officer working for Burrus, agreed to purchase one such property in Portsmouth, Virginia, in exchange for a kickback of $140,000. Wyland also made false statements to obtain a mortgage loan to complete this transaction and, after receiving the $140,000 kickback, defaulted upon the loan. On Dec. 12, 2012, Wyland pled guilty to criminal information charging her with conspiracy to commit wire fraud. On April 5, Chief United States District Judge Rebecca Beach Smith sentenced Wyland to serve six months in jail and six months of home confinement.
As a result of his activities, Burrus obtained mortgage loans to purchase 17 properties in Hampton Roads and then defaulted upon those loans. The known losses stemming from these loans are approximately $2,036,296.00. (usattyva73113),
MORAL
Notice as I have been saying all along, the prosecutors are going back to loans that occurred 10 years ago to prosecute. As an aside, Wyland probably cooperated with the prosecution against Burrus. The reason this is inferred is built within the way she was prosecuted.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE. AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
