Mortgage Daily

Published On: June 15, 2007
Hard Money Lender May do Hard Time

Tony Nava accused of investor fraud

June 15, 2007

By PATRICK CROWLEY

photo of Patrick Crowley
The operator of an alleged hard-money California lending scheme is being sued by state regulators and investigated for his possible connections to a motorcycle gang.

Tony Nava Jr. is accused of 86 counts of securities fraud in a 137-page lawsuit filed in Los Angeles County District Court by the California Department of Corporations. The Los Angeles County District Attorney’s office is also investigating Nava’s alleged ties to criminal activity and his association with the Mongol’s, a notorious southern California motorcycle gang.

Nava’s troubles with state regulators have to do with his operation of a hard-money investment pool that collected money from investors and then made real estate and other loans to high-risk borrowers with poor credit histories.

Regulators claim Nava, who could not be reached to comment, may have bilked investors of more than $2.5 million, according to court documents. He has been ordered to “cease and desist” offering the securities for sale, regulators said.

The state is also asking a judge to permanently ban Nava from the investment business.

“Nava’s offer and sale of securities were by means of misrepresentations and omissions,” the state said in the lawsuit.

The state claims that beginning in the spring of 2002, Nava sold “investment agreements” totaling at least $500,000 to 15 investors.

Nava told investors that would receive interest payments ranging from 10 percent to 55 percent within 10 to 45 days. But the promises were hollow, regulators said.

“This projection had no reasonable basis in fact,” the state says in its lawsuit. “Most of the investors have not received any of their money back.”

Nava also withheld information from investors or gave them false and misleading information, the state said.

The state intervened and at least twice — in 2002 and 2006 — ordered Nava to stop selling the investments. But both times he allegedly continued.

Nava also, the state said, altered official documents he received from the state “to impede and obstruct the (state’s) investigation by suppressing any suspicion of his illegal activities and to contain the investors’ dissatisfaction in not getting their money back.”

Published reports indicate investors were afraid to report Nava to authorities because of his biker gang ties.

Court documents, including affidavits and testimony from investors, show how Nava operated his alleged scheme.

One investor said he met with Nava at a realty office in June of 2005. Nava told the investor that some of the loans were going operators of “topless bars” and other businesses that were putting up deeds as collateral.

The investor said he gave Nava a check for $8,000 on June 5 and was supposed to receive a 40 percent return by Aug. 11. The investor then made another $20,000 investment on June 9 and eventually gave Nava more than $100,000.

“The due date on my first investment became due and I did not receive any funds nor did I hear anything from Nava,” the investor said in the lawsuit.

When the investor finally confronted Nava at his home, Nava allegedly said prosecutors had put a hold on his money because they were investigating him over “child support issues.”

“Nava assured us that there would be more than enough money to pay everyone off,” the investor said. “To date I have not received my money. As a consequence of Nava’s failure to return the investments I made to him, I had to put my house on the market.”

The state Nava must be booted from the investment and real estate industries.

“The public is at risk as long as Nava continues to entice them with his elaborate scheme of riches,” the state said.


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