FACTS
The first day after his appointment as director of the Consumer Financial Protection Bureau, Richard Cordray indicated he intends to move aggressively to enforce the agency's expanded authority. He announced the launch of the agency's nonbank supervisory program and stated that the CFPB was already working on significant enforcement actions. Cordray vowed that the young agency "will make clear that there are real consequences to breaking the law." The bureau has several investigations underway, some inherited from other agencies, others that it initiated, he said. Some probes could end up being settled but others "may require enforcement actions."
Cordray first joined the bureau in 2010 as enforcement chief, built a reputation in his home state as a consumer warrior who went after mortgage servicers for flawed foreclosure practices.
With a permanent director in place, the CFPB ostensibly has the authority to supervise nonbanks, including mortgage companies, payday lenders and private student lenders. It also has the ability to prohibit "abusive" acts or practices by banks and nonbanks.
The agency had already launched its nonbank supervision program. Under Dodd-Frank, the bureau has the authority to oversee mortgage companies, payday lenders and private student lenders, regardless of size, and may also regulate large nonbanks in other markets.
Cordray is viewed as one of the more aggressive attorneys general in the consumer lending space. (ab1512)
MORAL
As you are aware we represent many of you in California, Nevada and nationally very well in DRE audits, HUD Audits, FDIC investigations and defending those threatened with or actually being sued for bad loans or investigated for mortgage fraud. Now we have the new agency that now has the ability to go forward and enforce its' authority under Dodd-Frank. If you hear from the CFPB I would like to know about it.
CALIFORNIA MAN PLEADS GUILTY TO $5 MILLION MORTGAGE FRAUD
FACTS
On Jan. 4, 2012 Henrik Sardariani of Glendale, Calif. pleaded guilty to five felony charges, admitting that he defrauded private money lenders out of more than $5 million, fabricating numerous documents and pledging as collateral properties he did not own.
Henrik Sardariani has been in custody since December 21, 2010, when he and his brother, Hamlet Sardariani were arrested by special agents with the Federal Bureau of Investigation and IRS-Criminal Investigation.
In order to obtain one of the loans, Henrik Sardariani fraudulently used a house as collateral and falsely claimed to be the president of the company that owned the property. To support the claim that he controlled the company, Henrik Sardariani created false corporate records that were presented to the lender. Henrik Sardariani also admitted that he created fraudulent property records to make it appear that prior loans had been paid off and that, therefore, new loans would be fully secured by unencumbered property. The fraudulent reconveyances bore forged and fraudulent signatures of notaries public, as well as fraudulent stamps of the notaries public.
In relation to another loan, Henrik Sardariani falsely told a lender that a loan was only needed briefly to extend a pre-existing escrow, would be needed for no more than a month and would result in a substantial payment to the lender when the loan proceeds were deposited into the pre-existing escrow. In fact, as Sardariani admitted, he intended to use the loan proceeds to bet on horse races. After the lender wired $2.5 million to the escrow account that Sardariani had designated, Sardariani instructed the escrow officer to wire the funds to a Hong Kong bank account to fund the gambling. The escrow officer, Wanda Tenney, pleaded guilty to conspiracy on Nov. 30, 2011, and is scheduled to be sentenced later this year.
Henrik Sardariani faces a statutory maximum sentence of 75 years in a federal prison.
Hamlet Sardariani of Sylmar is scheduled to go on trial on March 6. (usattycd1912)
MORAL
Hard money lenders beware. That is why you run your own preliminary title reports or at least have your attorneys run them. It is better to spend a few dollars of your own to be safe rather than to be sorry later.
FOUR INDICTED IN SACRAMENTO FOR MORTGAGE FRAUD
FACTS
On Jan. 5, a Sacramento federal grand jury issued new criminal charges as part of a yearlong investigation into one of Sacramento's largest mortgage fraud schemes.
The panel indicted Yevgeniy Charikov, a real estate agent; his wife, Juliet Romashin and Nadia Talybov on allegations of mail fraud. Charikov and Vitaliy Tuzman were indicted for alleged money laundering. The federal mortgage fraud investigation has yielded criminal charges against 48 people.
According to the indictment, Charikov recruited straw buyers who acquired two properties in West Sacramento at inflated prices using phony loan documents. The properties later went into foreclosure, resulting in losses of about $830,000 for lenders. (sacbee1612)
BILL PROPOSES AN EXPUNGED CALIFORNIA FELONY CONVICTION MAY STILL LET YOU BE A MORTGAGE ORIGINATOR
FACTS
Existing law provides for the licensure and regulation of mortgage loan originators, as defined, by the Commissioner of Corporations under the California Finance Lenders Law and the California Residential Mortgage Lending Act. Existing law requires a real estate license endorsement by the Real Estate Commissioner under the Real Estate Law for a real estate licensee to engage in the business of a mortgage loan originator. Existing law prohibits the issuance of a mortgage loan originator license or a license endorsement to act as a mortgage loan originator if the applicant for a license or license endorsement has been convicted of, or pled guilty or nolo contendere to, a felony during the seven-year period preceding the date of the application for licensing or at any time preceding the date of application if the felony involved an act of fraud, dishonesty, a breach of trust, or money laundering.
This bill would provide that an expunged or pardoned felony conviction does not require denial of a license or license endorsement but would authorize the consideration of the underlying crime, facts, or circumstances of the expunged or pardoned felony conviction when determining whether to issue a license or license endorsement, as specified.
(2) Existing law exempts from the provisions of the California Finance Lenders Law specified persons and entities, including any person doing business under any law of any state or of the United States relating to banks, trust companies, savings and loan associations, and insurance premium finance agencies. A willful violation of the California Finance Lenders Law is a crime. This bill would authorize a person exempt from the provisions of the California Finance Lenders Law to apply to the Commissioner of Corporations for an exempt company registration for the purpose of sponsoring one or more individuals required to be licensed as mortgage loan originators under the federal Secure and Fair Enforcement for Mortgage Licensing Act of if specified requirements are met, including that the mortgage loan originator is covered under an exclusive written contract with, and originates mortgage loans solely on behalf of, the exempt person. The bill would require an exempt person to comply with all rules and orders that the commissioner deems necessary to ensure compliance with the federal SAFE Act and would require an exempt person to pay an annual registration fee established by the commissioner. The bill would authorize a licensed mortgage loan originator who is an insurance producer to originate loans on behalf of an exempt person or on behalf of a licensed finance lender that originates loans for an exempt person, as specified.
An act to amend Section 10166.05 of the Business and Professions Code, and to amend Sections 22109.1 and 50141 of, and to add Section 22065 to, the Financial Code, relating to mortgage loan originators.
MORAL
Even with a felony conviction if you get it expunged there is a shot of getting an MLO endorsement on your license or the CFL side.
LAS VEGAS MAN PLEADS GUILTY TO $3.4 MILLION MORTGAGE FRAUD
FACTS
On Jan. 4, Hugo Patrick Coutelin, secretary of LAS VEGAS-BASED CPT REAL ESTATE INVESTMENTS pleaded guilty for his role in a $3.4 million mortgage fraud scheme involving victims in the Las Vegas area.
He pleaded guilty before U.S. District Judge Kent J. Dawson in the District of Nevada to conspiring to commit wire fraud, mail fraud and bank fraud. The conspiracy charge carries a maximum penalty of 30 years in prison. Coutelin is scheduled to be sentenced on April 18, 2012.
Coutelin was charged in an indictment on June 16, 2010, along with MICHAEL PERRY, DIRECTOR OF CPT; JEFF THOMAS, PRESIDENT OF CPT; AND LINDA MARIE KOT, A REAL ESTATE AGENT.
From April 2006 through November 2006, Coutelin and his co-defendants conspired to execute a fraudulent scheme in which they recruited and caused to be recruited straw buyers and bailout buyers, acted as straw buyers themselves and falsified mortgage loan applications with federally insured financial institutions. Coutelin caused false information to be included on straw buyers' loan applications regarding the borrowers' place of employment, income, assets and intent to occupy the properties so that straw buyers would qualify for loans for which they would not otherwise qualify. Coutelin knew that false information was included on straw buyers' loan applications and also knew that material facts were concealed from the lender.
According to the indictment, Coutelin caused material misstatements to be made on loan applications for seven properties, leading to the disbursement of loans in the amount of approximately $3.4 million.
ON DEC. 28, 2011, PERRY PLEADED GUILTY to one count of conspiracy to commit wire fraud, mail fraud and bank fraud, and is scheduled to be sentenced on March 28.
On Feb. 1, 2011, THOMAS PLEADED GUILTY to one count of bank fraud, and is scheduled to be sentenced on Feb. 22.
Kot is scheduled to begin her trial on Feb. 6. (usdojlasvgsdiv1612)
MORAL
Depending on the loss means the larger the loss, the more time in federal prison.
CINCINNATI, OHIO REAL ESTATE AGENT PLEADS GUILTY TO $6.9 MILLION MORTGAGE FRAUD
FACTS
On Jan. 5, RODNEY T. RIDDLE OF CINCINNATI PLEADED GUILTY in U.S. District Court to submitting fraudulent mortgage loan applications to secure $6,971,870 from lending institutions as part of a mortgage fraud scheme. Riddle pleaded guilty to one count of wire fraud and one count of bank fraud.
Riddle owned SEASONS REAL ESTATE AND TRUST, which was located on Vine Street in Cincinnati, in 2002. According to testimony by a Postal Inspector at the plea hearing, Riddle solicited and encouraged clients, many of whom were family friends or members of the church he attended, to buy homes at prices that they could not afford. Riddle assured them that they would not be required to make the down payment so most agreed to buy.
Riddle worked with a mortgage broker to submit loan applications for his clients that generally contained false statements regarding the borrower's assets and claimed that the borrower would be making a down payment. Riddle fraudulently created bank statements in order to support the fraudulent loan applications.
Many of the homes involved in the scheme required repairs. Riddle also owned a home repair company, QUALITY HOME MAINTENANCE, and submitted fraudulent invoices to the lenders showing repairs had been made when no work was actually done.
The plea agreement stated that the loss attributable to the scheme is between $1 million and $2.5 million. Actual loss will be calculated prior to sentencing and restitution will be determined.
Each count of wire fraud and bank fraud is punishable by up to 30 YEARS IN PRISON and a fine of up to $1 million. Judge Dlott will set a date for sentencing. (usattyedohio1512)
MORAL
All cases are not equal as each stands on its own. But it looks like this went back 10 years which is the statute of limitations for mortgage fraud in most cases.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
