CFPB ANNOUNCES PROPOSED CONSENT ORDER FOR $13M AGAINST CASTLE & COOKE FOR THE PAYMENT OF ILLEGAL BONUSES
FACTS
On Nov. 8, the Consumer Financial Protection Bureau announced a
Castle and Cooke was sued along with president Matthew Pineda and senior vice president of capital markets Buck Hawkins. (Utah Fed Ct. Civil Case No. 2:13-cv-00684-DAK)
MORAL
The next question is: Can the loan officer that did the loan be held liable for the loan by CFPB? A state licensing agency? Another regulator? Interesting questions are they not?
PHOENIX MAN GETS 30 MONTHS IN FEDERAL PRISON FOR LOAN FRAUD
FACTS
On Oct. 28, Joseph Gagliano was sentenced to 30 months in prison and ordered to pay $3 million in restitution by U.S. District Court Judge G. Murray Snow.
The SBA-OIG and FBI based the case against Gagliano on an investigation. Between June 2006 and July 2010, Gagliano sought a SBA loan for a car wash located in Chandler and mortgage loans for residential real estate located in Scottsdale and Phoenix. He submitted loan applications that falsely misrepresented that his father, who has the same name, was the actual borrower and also made misrepresentations concerning his income, assets, liabilities, and intent to occupy the residential properties as a primary residence. Gagliano also forged signatures, altered bank statements, and submitted bogus lease agreements. The scheme to defraud resulted in nearly $3 million in losses to the Small Business Administration, Wells Fargo Bank, and JP Morgan Chase. (usattyaz102913)
MORAL
The hard part is he took it out on his father by getting him involved at all through the fraud.
ARIZONA AG SETTLES WITH OWNER OF MORTGAGE RELIEF GROUP
FACTS
On Nov. 6, Arizona Attorney General Tom Horne announced the settlement of a consumer fraud case against Stan Allotey Jr., the owner of Mortgage Relief Group, for engaging in deceptive loan modification services. Allotey and his company are now barred from conducting any foreclosure consulting business and engaging in telephone solicitation sales.
Allotey admitted to violating the Arizona Consumer Fraud Act, the Arizona Telephone Solicitations Act, and the Arizona Foreclosure Consultant Regulation Law. The settlement provides for payment of $90,000 in restitution and civil penalties. In May of 2013, Horne also obtained a default judgment against Mortgage Assistance Group, a related company. The default judgment requires the company to pay $380,000 in restitution and civil penalties.
Allotey initially refused to cooperate with the state’s investigation. His refusal ultimately led to a week in jail until he complied with the court’s civil contempt order.
The lawsuit alleged that since at least February of 2008, the defendants deceived consumers into paying fees, ranging from $995 to $3,245, for loan modification services by misrepresenting their ability to help consumers obtain mortgage relief and save their homes, thereby violating the Arizona Consumer Fraud Act. Allotey and his company were also accused of using deceptive means to lure financially distressed homeowners into paying up-front fees with promises that the company would prevent foreclosure and save the consumers’ homes by negotiating modifications of mortgage loans. (azag11613)
MORAL
The really big problem? Attorneys would take these types of cases on contingency. But generally after getting a judgment, there are no assets to collect against.
THREE IN CALIFORNIA PLEAD GUILTY TO $30M MORTGAGE FRAUD THAT OCCURRED NINE YEARS AGO
FACTS
On Nov. 7, Carl and Caleb Cole pleaded guilty to charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007.
Carl Cole pleaded guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud. Caleb Cole pleaded guilty to mail fraud. Co-defendant Sneha Ramesh Mohammadi pleaded guilty on Nov. 5 to conspiracy to commit mail fraud, wire fraud, and bank fraud.
The defendants falsely inflated real estate prices knowing that the foreclosures that followed would do harm to local builders, consumers, and lenders,” said U.S. Attorney Wagner. “Crisp & Cole Real Estate was emblematic of the recklessness and lawlessness in the mortgage industry in the mid-2000s that caused the financial crisis that led to so much devastation in the Central Valley of California. ”
According to court documents, between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage loan companies and federally insured financial institutions, in part by using straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100% financing, based on false and fraudulent loan applications. The properties were nominally owned in the names of the straw buyers, but were controlled by the conspirators and held for the benefit of the conspirators and CCRE. The straw buyers typically received a payment ranging from several thousand dollars to $20,000 or more per property purchase, while CCRE and the conspirators received the profits upon the sale of the property.
The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price so that the conspirators and CCRE could extract the purported increased “equity” from the property for their benefit. Certain conspirators tracked the properties and for a time made mortgage payments on them using CCRE funds. Ultimately, and in many cases after the properties were flipped several times through various straw purchasers, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. Carl Cole admitted in his plea agreement that he and the co-conspirators caused losses of at least $30 million to the defrauded lenders due to the conspiracy. (usattyed11713)
MORAL
The prosecutors went back nine years to 2004 to get to these defendants. Remember, if you even have a “hint” of a problem you should see your attorney then preferably before others come to see you.
MORE THAN 100 COUNTS OF MASSIVE REAL ESTATE FRAUD CASE DISMISSED BECAUSE IT TOOK THE DISTRICT ATTORNEY OFFICE LONGER THAN FOUR YEARS TO FILE THE CASE
FACTS
On Nov. 1, seven people charged in a massive real estate fraudhad over 100 counts out of 140 dismissed after a Fresno County judge ruled the bulk of the case was filed too late. Judge Jonathan Conklin dismissed more than 100 counts of a 140-count indictment after concluding the Fresno County District Attorney's Office filed the case nearly a month after the four-year statute of limitations had expired. The decision leaves four of the original 12 defendants facing just 13 charges. One defendant previously reached a plea deal.
The original complaint accused 12 defendants of fraudulently obtaining $15.2 million in loans to buy 19 homes in Fresno, Clovis, Sanger and Bakersfield between July 2005 and December 2006.
The remaining 13 cases involve transactions that happened after October 2006, meaning the statute of limitations had not expired by the time charges were filed. (fnob11413)
MORAL
One dollar short and 25 days late. Someone should have watched the calendar. This is what a good attorney does for those under suspicion or indictment.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE. AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
