Dozens of foreclosure rescue schemes operated in California have resulted in criminal prosecutions. The cases involve tens of millions of dollars in stolen equity, thousands of distressed borrowers and mortgage fraud. Some of the defendants have used fraudulent bankruptcy filings in their schemes.
Seventeen criminal defendants charged in six criminal cases in the Eastern District of California were among the 530 criminal defendants charged during fiscal-year 2012 in the Distressed Homeowner Initiative announced on Tuesday, according to the U.S. Attorney for the region. Of the estimated more than $1 billion in nationwide losses, $9 million were in the Sacramento region.
The U.S. Attorney for the Southern District of California said that 15 defendants in San Diego were charged as part of the federal initiative, Fox5 reported.
On Sept. 28, Alan David Tikal was arrested for masterminding a multi-state scheme that yielded more than $3.1 million collected from more than a thousand homeowners, an announcement from the U.S. Attorney for the Eastern District of California. Tikal allegedly convinced borrowers that he could satisfy their mortgages and replace them with a loan from his company, KATN Trust, that was just a quarter of the old balance. Victims were told to ignore notices from their lenders — resulting in foreclosure for many.
Ten defendants were arrested on Sept. 21 for peddling “bogus loan modification programs” through 21st Century Real Estate Investment Corp. and several related companies, according to a statement from the U.S. Attorney for the Central District of California. At least $7 million in fees were collected from 4,000 distressed borrowers from mid-2008 through the end of the following year — though many borrowers still lost their homes. In addition to 21st Century owner Andrea Ramirez, a total of 11 defendants included Christopher Paul George, Michael Bruce Bates, Crystal Taiwana Buck, Michael Lewis Parker, Catalina Deleon, Hamid Reza Shalviri, Yadira Garcia Padilla, Mindy Sue Holt, Iris Melissa Pelayo and Albert DiRoberto.
A plea agreement was reached between the Ventura County district attorney in California and Rene Solis, according to an Oct. 4 announcement. Solis operated a fraudulent home loan modification and foreclosure rescue program called Sunset Beach Management. With the help of co-defendants Nino Vera and Hector Menendez, Solis collected illegal up-front fees in return for promised modification services — though no actual services were performed — leading to $78,000 in losses.
Solis is scheduled for sentencing on Nov. 1, while Vera and Menendez are scheduled for an early disposition conference on Nov. 14.
Attorney Dean G. Chandler and telemarketing salesman Shelveen Singh have been indicted, and both were arraigned on Oct. 2, the U.S. Justice Department reported. Chandler, Singh and two previously arraigned defendants — telemarketer Anthony Calandriello and call center manager Michael Eccles — are accused of operating an $11 million modification scam through Chandler’s law firm, 1st American Law Center.
They allegedly used high-pressure sales tactics, false claims of a 98 percent success rate and lies about using a team of attorneys to determine if distressed borrowers would be among the few distressed cases they took on. Clients were deceived into believing that the company was 20 years old, thousands of prior clients had been previously helped and fees would be deposited into a trust account until clients were satisfied. They were persuaded to forego their mortgage payments and instead pay fees to the defendants.
Chandler and Singh are scheduled to face a federal judge on Nov. 13, while Calandriello is scheduled to appear on Oct. 17. Nine other defendants in the case have already pled guilty.
David Singui and Aziz Meghji were indicted on Sept. 6 and arrested on Sept. 11 for allegedly deceiving distressed borrowers into temporarily transferring title to their properties then using mortgage fraud to extract all equity, according to the U.S. Attorney’s Office for the Central District of California. The defendants, through their company Direct Money Source, obtained more than $15 million in fraudulent loans, and half was lost in the conspiracy. Another defendant, Kiet Truong, has surrendered to authorities, while a fourth defendant, Starr Smith, is on the lam.
More than 800 distressed borrowers were promised by Glen Alan Ward between July 2007 and April 2012 that their foreclosures would be postponed if they paid a monthly fee of $700, according to the Office of the Special Inspector General for the Troubled Asset Relief Program. Ward, who became a fugitive in 2000 for failing to appear on charges for a similar scheme, operated the scam while on the lam.
Ward advised borrowers to transfer a 1/100th interest in their properties to one of 414 unsuspecting debtors in federal bankruptcy filings then sent copies of the bankruptcy petitions to the lenders to stall foreclosure. Ward, who collected more than $1 million from the scheme, was arrested on April 5 in Canada and is pending extradition. He was indicted on Aug. 17 in U.S. District Court for the Central District of California.
SIGTARP announced on July 23 that Ziad Nabil Mohammed Al Saffar was sentenced in U.S. District Court for the Southern District of California to 21 months in federal prison, while Sara Beth Bushore Rosengrant and Daniel Al Saffar were sentenced to home detention. The defendants previously admitted to operating an audit and loan modification scam through Compliance Audit Solutions Inc. and CAS Group Inc. as well as deceiving customers about their affiliation with the government. Borrowers were charged audit fees of as much as $3,500 each. Prior to their sentencings, each defendant paid $30,000 in restitution.
A 144-month sentence was handed down on July 9 to former All Fund Mortgage manager Gregory Flores, a statement from the U.S. Attorney for the Central District of California said. Flores, who was ordered to pay more than $1,098,000 in restitution, pled guilty on Feb. 24 to conspiring with realtor Sheri Gale and loan processor Amy Hall between 2003 and 2006 to convince distressed borrowers to give up title to their homes to investors then refinance the property back into their names at better terms — though few of the victims ever got their properties back. Instead, any remaining equity in the properties was stripped through fraudulent mortgages that went into foreclosure. At least 21 borrowers were victimized for $1,042,866.08.