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Mortgage Broker Takes Out $1 Mil Loan With Fraud Title

Mortgage Broker Takes Out $1 Mil Loan With Fraud TitleAccomplice apprehended while smuggling Mexican nationals

June 24, 2002

By SAM GARCIA

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.

MortgageDaily.com           
Other articles about mortgage fraud cases include:

  • Rene Abreu was among 11 people indicted in a case involving The Mortgage Pros, Inc. in Guttenberg, New Jersey
  • David Allan Van Velzer, Jr., was sentenced to more than 8 years in prison for wire fraud and money laundering
  • Kenneth Bradford and Jo Ellen Bryant received 10+ year sentences in a Georgia flipping case
  • Former PinnFund Chief Michael Fanghella pleads guilty
  • Seven indicted in AppOnline.com mortgage fraud scheme
  • Indian authorities apprehended Rajiv C. Shah, one of two brothers that allegedly sold loans with fraudulent documentation to 3 U.S. lenders
  • Loans originated by originated by Chapel Creek Mortgage Banker, Inc. could cost Chase Manhattan Mortgage Corp. between $10 and $20 million
  • Kent E. Baklor was sentenced for defrauding two lenders of over $8.5 million
  • Tamira Smyth was sentenced in a Chicago ‘flipping’ scam involving twenty defendants
  • Former Las Vegas mortgage broker David Ferradino was sentenced to five years’ probation and ordered to pay $4.2 million in restitution to 90 investors
  • Michael Graham received a sentence of more than 12 years in prison and was ordered to pay $515 million in restitution for his role in the failure of The First National Bank of Keystone.
  • Yehuda Shiv was charged by the SEC with overstating the value of his clients’ assets by more than $139 million
  • Cheryl A. Swain pleaded guilty to a charge of mail fraud in connection with her conduct as the VP for Marketing Syndication of MCA
  • Robert B. Herbert, Jr. of Raleigh allegedly “embezzled and misappropriated moneys from Stewart Title.
  • Donald Lukens allegedly defrauded more than 100 investors — including popular sports figures — of at least $12.5 million in a number of schemes, including one involving mortgage backed securities
  • Steven D. Mueffelman and John S. Lombardi charged in a 15-count indictment with mail and wire fraud
  • Raymond T. Jackman, JR. was sentenced to two years’ probation
  • GreatStone Mortgage in Florida is accused of fraud, sexual harassment.
  • The government is pursuing mortgage fraud cases in Charlotte and Cleveland.
  • Miami family allegedly ran a mortgage fraud ring that swindled lenders out of $3.8 million.
  • Maryland is the state with the most instances of possible fraud, according to Affinity Corporation’s ‘Suspected Fraud Activity Index’ for the months of June, July and August.
  • Thomas Eck and Zahra Gilak made as much as $15 million, and defrauded investors of $100 million in sham that included online mortgage brokerage
  • Richard Wood, a Las Vegas mortgage broker accused of bilking millions of dollars from dozens of investors in a nationwide Ponzi scheme, was gunned down outside his home.
  • FBI Investigating Massive Mortgage Fraud Case In Spokane
  • Richard Michael McDowell, who through southern California-based Active Home Loans and M&M Loan Service admittedly swindled an estimated $7 million from about two dozen investors, was sentenced to 27 months in federal prison

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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