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Criminal Actions Third-Quarter 2011 Mortgage Litigation Index

Criminal Actions
Third-Quarter 2011 Mortgage Litigation Index
Cases involving criminal complaints.

Defendant
Plaintiff
Court
Amount
Overview
Case Title
Case Number
Date Filed Link to StoryLink to Story
Gary Foster United States U.S. District Court for the Eastern District of New York $19,000,000 Former Citigroup Inc. vice president suspected of swindling $19 million from his employer, according to a complaint and affidavit by FBI Special Agent Thomas J. D’Amico in support of application for arrest warrant filed last month in U.S. District Court for the Eastern District of New York. United States of America v. Foster M-11-645 6/23/2011 www.mortgagedaily.com/litigationcriminal072511.asp
Walter Daniel Olmstead United States U.S. District court for the Eastern District of California n/a Defendant pleaded guilty to a conspiracy to hold down bid prices on foreclosed properties, then hold another second private auction where conspirators would bid a higher amount than at the public auction, resulting in illicit fees.  Six others have pleaded guilty to the conspiracy, including Anthony B. Ghio, Jahn R. Vanzetti, Theodore B. Hutz, Richard W. Northcutt, Yama Marifat and Gregory L. Jackson. United States v. Olmstead 2:11-CR-0291 EJG 8/12/2011 (Plea and Cooperation Agreement filed) www.mortgagedaily.com/MctForeclosureAuction081311.asp 
John Robert Miller United States of America U.S. District Court, Middle District of Florida, Tampa Division $1,100,000 Miller pled guilty to paying former Coast Bank of Florida executive Phil Coon $1.1 million in a scheme where the pair illegally skimmed fees from loans closed through the bank. Coon was sentenced to 18 months for participation in a scheme to illegally skim fees from loans closed through Coast Bank of Florida. Judge Elizabeth Kovachevich sentenced Miller to 18 months. United States of America v. Miller 8:08-cr-0030-T30 TBM n/a www.mortgagedaily.com/litigationcriminal072511.aspwww.mortgagedaily.com/MctAmericanMortgageLink071611.aspwww.mortgagedaily.com/MctSentencePhilCoon070711.asp
Philip Coon United States of America U.S. District Court for the Middle District of Florida $1,500,000 A federal judge sentenced the former Coast Bank executive to 18 months in federal prison for his scheme to skim almost $1.5 million from borrowers’ construction loans. United States v. Coon 8:08-cr-00441-EAK-MAP 7/6/2011 www.mortgagedaily.com/litigationcriminal072511.aspwww.mortgagedaily.com/MctAmericanMortgageLink071611.aspwww.mortgagedaily.com/MctSentencePhilCoon070711.asp
Cary Jay Silberman; Robert Francis Childs State of California Santa Clara County Court n/a Criminal conviction in relation to foreclosure prevention scam  n/a n/a n/a www.mortgagedaily.com/litigationforeclosurefirms092711.asp
Howard R. Shmuckler United States U.S. District Court for the Eastern District of Virginia n/a Defendant was charged by a federal grand jury with operating The Shmuckler Group, a fraudulent mortgage-rescue business.  Defendant allegedly promised a 97% success rate in securing loan modifications and falsely claimed that he was a licensed attorney.   United States v. Shmuckler n/a 8/11/2011 www.mortgagedaily.com/LitigationCriminal082411.asp  
Jack Ferm State of Nevada n/a $192,000 Criminal charges brought against head of U.S. Justice Foundation in relation to loan modification/foreclosure relief scheme to charge upfront fees and defraud distressed homeowners. n/a n/a 3/11/2011 www.mortgagedaily.com/litigationforeclosurefirms092711.asp
Jeff McGrue, John-Pierre Rivera, Ronald Morgan, Gerald Guidry
United States U.S. District Court for the Central District of California $55,000,000 McGrue received a 25-year sentence during July in Gateway case. Guilty pleas for Rivera, Morgan and Guidry. U.S. v. McGrue, U.S. v. John-Pierre Rivera, U.S. v. Morgan, U.S. v. Guidry CR 08-1318(A)-ODW n/a www.mortgagedaily.com/litigationcriminal072511.asp
Marien Brown a/k/a Marien White United States U.S. District Court for the Eastern District of Missouri n/a Defendant operated 1st Financial Resource LLC and 1st Federal Resource LLC to target distressed borrowers in Hawaii, promising more than 80 clients that she would use her foreclosure-rescue service to help them avoid foreclosure.  When clients wired funds to the defendant, she allegedly spent the money on personal expenses.   United States v. Brown n/a 8/11/2011 www.mortgagedaily.com/LitigationCriminal082411.asp  
Peter James Porcelli United States U.S. Court of Appeals for the Eleventh Circuit $2,507,542 11th Circuit Court of Appeals affirms 2009 conviction of Porcelli for equity-stripping scheme related to assisting distressed homeowners. United States v. Porcelli No. 10-14777 9/21/2011 www.mortgagedaily.com/litigationforeclosurefirms092711.asp
Stephen Andrew Easterly; Emanuel Percival District Attorney – San Bernardino County San Bernardino County Court  $17,000,000 Attorney General action against individuals promising foreclosure relief assistance in exchange for upfront fees. n/a n/a 8/29/2011 www.mortgagedaily.com/litigationforeclosurefirms092711.asp
Bank of America, NA; Pablo Araque; Does 1-100 Patricia Arreola et al Los Angeles Superior Court – Central Civil West $30,000,000 Class Action plaintiffs are Latino families in California alleging ponzi scheme run by Juan Rangel which involved, among other things, a mortgage fraud scheme targeting homeowners with equity in the home but behind on their payments. BoA was sued for providing material assistance to the ponzi scheme.  Arreola v. Bank of America N.A. et al BC464530 6/30/11 www.mortgagedaily.com/LitigationInvestor092811.asp
John Rutigliano; Kenneth Kiefer United States U.S. District Court for the Eastern District of New York $1,500,000 Defendants were arrested over allegations that they convinced distressed borrowers to sign over their titles, only to be swindled out of their properties.  The scheme resulted in 14 borrowers losing $1.5 million. United States v. Rutigliano, et al. n/a n/a www.mortgagedaily.com/LitigationCriminal082411.asp  
Helen Hinojos, Ruth Farias, Esmeralda Garcia United States N/A N/A Mortgage loan processor Helen Hinojos, along with Ruth Farias and Esmeralda Garcia, are being tried for taking out fraudulent cashout second mortgages and stealing refinance proceeds from five elderly homeowners. n/a n/a n/a www.mortgagedaily.com/litigationcriminal072511.asp
Shawn L. Portman; Sonja L. Lightfoot; Jeanette R. Salsi; Adam S. Voelker United States U.S.  District Court for the Western District of Washington $45,000,000 Portman pleads not guilty in a federal action by US Attorney claiming Portman, and three other defendants, conspired together to submit false documents about borrowers’ qualifications and property values to induce the bank to fund loans amounting to more than $45 million.  n/a n/a n/a www.mortgagedaily.com/MctPierceCommercialBank080611.asp
William M. Vaughan, Craig Chambers, Patrick Friedl, Tom K. Crowley, Jon Nevins United States U.S. District Court for the Western District of Missouri $1,142,768 Former Northland National Bank vice president William M. Vaughan and mortgage broker and former police officer Craig Chambers were indicted along with Patrick Friedl, Tom K. Crowley and Jon Nevins for allegedly participating in a $485,000 mortgage fraud scheme. n/a n/a n/a www.mortgagedaily.com/litigationcriminal072511.asp
David Rubin, Joshua Gould United States U.S. District Court for Missouri $4,700,000 Rubin pled guilty to one felony count of wire fraud. Gould pled guilty to one felony count of wire fraud and one felony count of mail fraud. n/a n/a n/a www.mortgagedaily.com/litigationcriminal072511.asp
Frederick Darren Berg United States of America U.S. District Court for the Western District of Washington $100,000,000 Judge Richard A. Jones ruled that Berg would not be allowed to leave federal prison in order to use a more sophisticated computer for his defense.  Berg is accused of running a Ponzi scheme worth $100 million from his former firm, Meridian Mortgage funds. United States v. Berg 2:10-cr-00310-RAJ 10/14/2010 www.mortgagedaily.com/MctMeridian071411.asp
Kurt Branham Barton United States U.S. District Court for the Western District of Texas $50,000,000 A jury convicted Barton of operating a Ponzi scheme that cost 300 individuals more than $50 million.  Barton was the founder, president and chief executive officer of Triton Financial LLC.  United States v. Barton 1:11-cr-00083-LY 2/15/2011 www.mortgagedaily.com/LitigationCriminal082411.asp 
Marcilin Anne Benvin United States U.S. District Court for the District of Nevada $35,000,000 Benvin was indicted on 50 counts over allegations that she defrauded investors between 2004 and 2008 by deceiving them about the conditions and purposes of the loan, and provided fraudulent documents so that she could collect roughly 3 percent in origination fees as a mortgage broker. United States v. Benvin n/a 8/182011 www.mortgagedaily.com/LitigationCriminal082411.asp  
Philip Lochmiller Sr., Philip Lochmiller Jr., Shawnee Carver United States of America U.S. District Court $30,000,000 On July 21, a jury found Philip Lochmiller guilty of conspiracy, money laundering and mail fraud in connection with a ponzi scheme. Lochmiller Jr. pled guilty to conspiracy, money laundering conspiracy and mail fraud. Carver pled guilty to conspiracy, money laundering conspiracy and mail fraud. na na Guilty Conviction on July 21 www.mortgagedaily.com/Fraud/PressReleaseLochmillerGuilty072111.asp, www.mortgagedaily.com/litigationcriminal072511.asp
Robert Stinson Jr. United States U.S. District Court for the Eastern District of Pennsylvania $17,000,000 More than 260 investors lost over $17 million in a Ponzi scheme operated by Stinson, who allegedly solicited investors with fraudulent promises of returns between 10 and 16 percent.  Stinson pleaded guilty to the charges outlined in a 26-count indictment. United States v. Stinson 10-cr-0724 11/4/2010 www.mortgagedaily.com/LitigationCriminal082411.asp  
Sonoma Valley Bank; Brian Melland; Bijan Madjlessi United States U.S. District Court for the Northern District of California. $14,000,000 A federal grand jury is sifting through the collapse of Sonoma Valley Bank, but no criminal charges have been filed. n/a n/a n/a www.mortgagedaily.com/mctsonomavalleybank072411.asp
FDIC & Grant Thornton, LLP (joint stipulation) FDIC & Grant Thornton, LLP (joint stipulation) U.S. District Court, Southern District of West Virginia & 4th Circuit Court of Appeals $23,306,618 Settlement was reached with auditors of failed First National Bank of Keystone when the parties of the last outstanding federal civil complaint against the bank entered a joint stipulation.  Grant Thornton, LLP v. Federal Deposit Insurance Corporation 1:00-0655 & 1:03-2129 n/a www.mortgagedaily.com/MctSettlementKeystone080811.asp
Lee Bentley Farkas United States U.S. District Court for the Eastern District of Virginia n/a Farkas, former Taylor bean and Whitaker Mortgage chairman, is appealing his sentence to 30 years in prison on 14 criminal counts of conspiracy, bank, wire and securities fraud. n/a n/a n/a www.mortgagedaily.com/litigationcriminal072511.asp
Rene Rebello United States U.S. District Court for the Central District of California $1,200,000 Former Countrywide employee pled guilty to misappropriating consumer information  United States v. Rebello n/a n/a www.mortgagedaily.com/MctSentenceRebollo092911.asp
Christopher Dixon City of San Diego San Diego Superior Court $7,500 Owner of Nations Mortgage Solutions, Christopher Dixon, pleaded guilty to acting as a real estate agent without a license in connection with loan modifications.  n/a n/a n/a www.mortgagedaily.com/litigationcriminal072511.asp
Christopher S. Godfrey; Dennis Fischer; Vernell Burris Jr.; Brian M. Kelly United States U.S. District Court for the District of Massachusetts $3,000,000 An indictment against former employees of Home Owners Protection Economics Inc. alleges that defendants collected over $3 million from borrowers whom they misled in connection with the Home Affordable Modification Program. United States v. Godfrey, et al. 11-CR-10279 8/9/2011 www.mortgagedaily.com/LitigationCriminal082411.asp  
Joseph Yorkus; James Bartczak Nevada Attorney General  Eighth Judicial District Court of Clark County Nevada $383,176 Yorkus was sentenced to 48 months that will be served concurrently with another conviction. Allegedly sent fake transfer-of-servicing notices to some of Bank of America’s Nevada borrowers so that they could collect payments themselves through a sham company. Defendants also accused of charging for modification services through several businesses but not providing services.   n/a n/a n/a www.mortgagedaily.com/LitigationCriminal082411.asp  
Ronald Rodriguez; Zoar Rodriguez; Berta M. Cabrera; Kelly Rodriguez Florida Attorney General Pam Bondi n/a $750,000 Defendants were arrested for allegedly collecting modification fees through their company Best Value Homes Inc., but not delivering promised loan modification services.  Their 500 victims reportedly lost $750,000 in the scam. n/a n/a 8/17/11 www.mortgagedaily.com/LitigationCriminal082411.asp  
Joseph Traxler United States U.S. District Court for the District of Minnesota $8,000,000 CFO of mortgage company charged with defrauding warehouse lenders by concealing pre-existing mortgages to obtain double funding and concealing defaults.  United States v. Traxler n/a n/a www.mortgagedaily.com/MctChargesCentenial092911.asp
Marshall E. Home, Margaret Elizabeth Broderick  United States of America n/a n/a 10-count indictment over trying to act as imposter for Fannie and Freddie and steal 28 properties. n/a n/a Sept. 2011 www.mortgagedaily.com/Fraud/PressReleaseHomeCharged090811.asp
Louis Gendason; Kimberly Mackey; John Incadela; Marcos Echeverria United States of America U.S. District Court for the Southern District of Florida $2,570,000 The defendants were charged with one count of conspiracy to commit wire fraud for their participation in a reverse mortgage and loan modification scheme. Gendason, Mackey and Incandela pleaded guilty to one count of conspiracy to commit wire fraud. Echevarria charged with conspiracy to commit wire fraud and has not pleaded guilty. United States v. Gendason, et al. 0:11-cr-60145-WPD 6/20/2011 www.mortgagedaily.com/MctReverseFraud070711.asp
Douglas Brandewie United States n/a $10,000,000 A criminal information filed in June charges Douglas E. Brandewie with making a false statement to the FDIC.  United States v. Brandewie 11-20367 n/a www.mortgagedaily.com/litigationcriminal072511.asp

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