|A California mortgage broker was sentenced to a year in prison for using a fraudulently obtained property title to obtain a $1 million loan, according to the U.S. Department of Justice (DOJ). Edward Rostami and Sharon Palmer Ross were both convicted in the scheme, with Ross receiving a sentence of three years’ probation and four months’ home detention with electronic monitoring.The DOJ announced in April 2000 that the two were indicted on 11 counts that included mail fraud, bank fraud and money laundering.
According to the indictment — which contains allegations that the defendants have committed a crime — the scheme started around 1997. The victim in the case, Eleanor Coppola, was allegedly told that by deeding her Malibu, California property for eighteen months over to Polo Financial Services — an entity owned and operated by Rostami — she would earn a portion of the income generated. Palmer-Ross told the victim that she could withdraw from the program, known as the “Vested Income Program,” at any time before the eighteen month term.
The indictment said the victim signed a grant deed in conjunction with a written contract that included a provision that she would give up title to the property for eighteen months in exchange for a series of payments. However, only the grant deed — and not the agreement — was recorded. In addition, the indictment said, the defendants fraudulently altered the grant deed by adding the sentence, “This is a bona fide gift and the grantor received nothing in return, R&T 11911.”
The defendants then used the title to obtain a $1 million loan from China Trust Bank. The loan application for that transaction stated the purpose of the loan was to finance Polo Financial Services’ expansion plans by purchasing a computer system and office equipment, and by providing working capital. In addition to paying off $300,000 in outstanding liens against the property, the proceeds were actually used to pay debts of Rostami’s companies, the indictment said. Other companies owned by Rostami include TriStar Mortgage and KISS International.
When the victim tried to withdraw from the program, the defendants refused to deed the property back, the indictment said. The DOJ said that both defendants relocated to Mexico from the San Fernando Valley following the scheme. According to the Associated Press (AP), Palmer-Ross was arrested while trying to reenter the country with three Mexican nationals in the trunk of her car, while Rostami was apprehended in Rosarito Beach, Mexico.
Thom Mrozek from the U.S. Attorney’s office in Central California told MortgageDaily.com that because Rostami’s sentence is 366 days (one year and one day), he is entitled to receive up to 15% credit on his sentence. Rostami was ordered to pay $261,000 in restitution to the victim and $220,298 to the bank.
AP reported that both defendants recently completed state prison sentences for swindling an elderly homeowner out of nearly $750,000 in a similar scam.
|Other articles about mortgage fraud cases include:
Sam Garcia has been in mortgage lending since 1980, and is the Publisher of MortgageDaily.com. He also owns and operates CloseNow.com, a consumer real estate portal site.email: SamGarcia@MortgageDaily.com
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