Pocket Listings Anyone?

CAR just presented an hour webinar on the subject of ‘Pocket Listings’. It becoming a problem the way the market is right now. And agents who are not following the letter of the law will come under increasing scrutiny from the DRE and other regulators. That’s what the rest of us need – more regulations to curb the avarice of a few. Ain’t that the way it goes?

REALTORS® marketing a property for which they have obtained a listing will generally place that listing on the Multiple Listing Service (MLS).  At times, however, listings are not placed into the MLS.  Listings not placed on the MLS are commonly referred to as “pocket listings”. This article will discuss the various legal issues and risks of pocket listings.  Please note that this article references the California Model Multiple Listing Services Rules (Amended February 2013). REALTORS®, however, must comply with their own local MLS rules.  Many local MLSs adopt the Model MLS Rules in its entirety, whereas other MLSs may have slight variations and may have different numbering systems.

II.  Pocket Listings

Q 1. What is a pocket listing?

A A pocket or off-MLS listing generally refers to a listing agreement that an agent has obtained but does not place on the MLS. A “pocket listing” is not a legally-defined term, and can have other meanings as discussed below.

Q 2. Is a pocket listing legal?

A Yes, a pocket listing can be legal. However, a pocket listing raises a number of legal and practical issues that agents should consider and address as discussed below.

For more information on ‘Pocket Listings’, the legality, the ethics, the fiduciary, get the answers from CAR Legal:

Pocket Listings – CAR Legal

9 year fraud battle has a happy ending.

Over the years I’ve written a lot about real estate fraud. Real estate fraud had only just come to our region in a big way back in 2005/2005 and Realtors® were trying to grapple with this new issue. Problem was, nobody else thought it was an issue. Banks didn’t care, law enforcement wasn’t interested, our DA, the Dept. of Real Estate, FBI – you name it, nobody cared.

And over the years I’ve written a lot about the Stonewood Case – a house kiting scheme with some investment undertones. By the time the law finally got on the case, the perp’s were indicted for $143 MILLION dollars. Yeah, not exactly chump change. It really jump started our foreclosure market back in 2006-2007 as these places started to dump back onto the market in ever increasing numbers.

It’s been a 9 year effort led by local Realtors®, some tenacious reporters, our board attorney and a bunch of victims who weren’t afraid to stand up.

Yesterday the last two perp’s were found guilty. Hendrix Montecastro and his mother Helen Padrino. There were 9 people indicted, the others were so guilty they all plead guilty. These two decided to test it in court and act as their own counsel. Yeah, that worked well. So instead of the few or tens of years their cohorts were dealt, Padrino is up for 30+ and Hendrix is down for 100.

All I can say is, he looks a lot better in his orange jumpsuit than he did in the 3 piece Armani’s he used to sport when he’d come into the office to try to intimidate us. Sentencing comes in a couple weeks.

You can read some of the history and testimony here:

http://www.pe.com/business/business-headlines/20130325-fraud-trial-guilty-verdicts-in-multimillion-dollar-ponzi-case.ece

CA Attorney General files suit in massive 17 state mortgage fraud scheme.

CA State Attorney General Kamala Harris sued Philip Kramer, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers, and 14 other defendants who are accused of working together to defraud homeowners across the country through the deceptive marketing of “mass joinder” lawsuits. Prominent foreclosure attorneys Phillip Kramer and Mitchell Stein and at least 17 others have been accused of luring desperate homeowners into the scheme using deceptive advertising and telemarketing schemes aimed at millions of people in California and 16 other states.

The scheme claimed that courts have found that most mortgage lenders engaged in predatory lending practices or approved inappropriate loans (well, that part is certainly true), and that the homeowners bank was one of the guilty. As alleged in the lawsuit, defendants preyed on desperate homeowners facing foreclosure by selling them participation as plaintiffs in mass joinder lawsuits against mortgage lenders. Defendants deceptively led homeowners to believe that by joining these lawsuits, they would stop pending foreclosures, reduce their loan balances or interest rates, obtain money damages, and even receive title to their homes free and clear of their existing mortgage. Defendants charged homeowners retainer fees of up to $10,000 to join as plaintiffs to a mass joinder lawsuit against their lender or loan servicer.

It probably comes as no surprise that theses same ‘prominent foreclosure attorneys’ had previously been ‘prominent loan modification specialists’ but it is alleged that Kramer sent an email to another fellow defendant last year stating “Only morons would prefer to ‘sell’ mods from this day forward”.
Homeowners who have paid to be added to one of the lawsuits should contact the State Bar if they feel they may be victims of this scam. They can also contact a HUD-certified housing counselor for general mortgage related assistance. If you have sent money to any of the following seized entities, you should contact the CA Attorney Generals Office at http://oag.ca.gov/.

The Department of Justice has seized the practices of the following non-attorney defendants: Attorneys Processing Center, LLC; Data Management, LLC; Gary DiGirolamo; Bill Stephenson; Mitigation Professionals, LLC; Glen Reneau; Pate Marier & Associates, Inc.; James Pate; Ryan Marier; Home Retention Division; Michael Tapia; Lewis Marketing Corp.; Clarence Butt; and Thomas Phanco as well as seizing the practices and accounts of attorney defendants:The Law Offices of Kramer & Kaslow; Philip Kramer, Esq; Mitchell J. Stein & Associates; Mitchell Stein, Esq.; Christopher Van Son, Esq.; Mesa Law Group Corp.; and Paul Petersen, Esq.

Attorney General Harris is challenging the defendants’ alleged misconduct in marketing their mass joinder lawsuits; her office takes no position as to the legal merits of any claims asserted in the mass joinder lawsuits filed by defendants.

Victims in the following states are known to have received these mailers, or signed on to join the case. This is a preliminary list that may be updated:

Alaska, Arizona, California, Colorado, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Texas, Washington.

For more information please go to: http://oag.ca.gov/news/press_release?id=2552

Update: CA State Bar v. Michael T. Pines. SHARK ATTACK!

Last October I wrote about a local attorney by the name of Michael T. Pines who was making quite a name for himself in local real estate circles. (Another Real Estate Scam to beware of.) Counselor Pines was making the evening news by advising clients who had been foreclosed on and evicted to break back into their former homes under the theory that since the debt had been satisfied through foreclosure, they could now own their former home free and clear.

To say this hadn’t worked would be an understatement. Clients who actually followed his advice were summarily re-evicted if they were lucky and arrested if they were not. After all, the homes were now the property of the bank and in some cases had already been resold so charges of breaking and entering and other minor misdeeds were alleged.

Turns out Mr. Pines himself was in foreclosure on some homes he owned and lost his own law office building to foreclosure (he didn’t try to break into his own building). At that time a judge had also slapped him with a $16,000 fine for filing frivolous lawsuits and for wasting his time and not acting in the best interest of his clients.  He also had a couple restraining orders against him for civil harassment after a trial and had been cited for contempt at least once.

law

Today attorneys for the State Bar of California asked a judge to suspend the law license of Mr. Pines. According to the state bar, Pines behavior had become ‘so
egregious’ that it filed to have his license suspended on an interim basis while it seeks a permanent removal. Jeez, that’s like watching sharks attack another shark – gruesome yet exciting, and as rare in legal circles as it is in nature.

Chief Trial Counsel James Towery was quoted in a written statement as saying “To remove a lawyer from active practice before formal charges are filed is a drastic remedy. In this case, that remedy is justified by the established misconduct of Michael T. Pines, who has shown complete disrespect for the law, the courts and especially the best interest of his clients.” Duh.

Never to be outdone, Pines has filed his own lawsuit against the state bar. “I’m sure the charges are going to be thrown out,” says Pines. “They’re going to be really embarrassed when they find out the truth.”

Hmm, attorneys vs. attorney. I’m guessing the truth might be a rare commodity in this v enue. Of course that’s just my opinion, I could be wrong.

Meanwhile people who have already suffered through a legal foreclosure in Southern California will not have the opportunity to be further victimized by this predator – at least until he teaches the state bar a lesson and gets his dorsal fin back.

fin

gad blog ar eml fb swcahomes rltr
The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR, or any local or state government or other mental institution.

Murrieta men agree to prison in fraud case

The headline was exciting yesterday when news of our long-time resident scam artists started to trickle out. The authors of a $142 million dollar ponzi scheme & investment fraud have been in jail awaiting this moment for the past 1 1/2 years and now start to look forward to doing the rest of their time.

Long-time readers will be familiar with the Stonewood case, wherein these perpetrators enticed hundreds of people to invest in real estate. But not just invest – they were talked into buying homes for $100,000 or more over asking price with that overage going to the third party – Stonewood. People who could barely qualify for a car loan were talked into buying multiple properties, most i the $500,000 and over range, with the promise that the deficit between rental payments and the mortgage payment would come out of an investment fund seeded by that ‘overage amount’.

In some cases deficit payments were made for a month or so but quickly vanished as the perpetrators lived large, driving fancy cars, boats and living in multi-million dollar homes themselves. Ultimately over 200 homes went onto foreclosure, many starting in 2006 – well before the foreclosure crisis started. This wave of dead lawns jump-started our local foreclosure fiasco as the 200 homes were dumped onto the market along with dozens more from people who had bought in neighborhoods where the fraudulent purchases has driven up the comps.

Our local real estate association started noticing these transactions in late 2004 and by mid-2005 had compiled an extensive dossier on the scheme. At that time it involved about 60 homes and maybe $30 – $40 million dollars. We tried in vain to get local law enforcement, our District Attorney, our Dept. of Real Estate, the FBI – ANYBODY – to take an interest. To no avail.

Finally in late 2007 the SEC got involved not from the real estate side but from the investment fraud angle. This prompted the DRE to yank the brokers license from the principles but by then the damage had largely been done. Finally in 2008, the Justice Department, FBI and our DA got involved and brought the scanm to a screeching halt. Of course by then it had ballooned from 60 homes and $30 million to over 200 homes and $140+ million. Our DA was all puffed up taking credit for this great bust when, for years we had not even been able to get a meeting with him to discuss it. He was the first incumbent DA in our county to be voted out of office in over a century when voters rejected him this past November.

Two local reporters, Leslie Berkman of the Press Enterprise, and Chris Bagley or the Californian, were instrumental in keeping this in the public eye. Dozens of the victims banded together in a class action lawsuit. That helped. Our own Real estate Fraud Task Force was born out of this scandal and remains active and vigilant to this day.

So while many of the victims say a 18 year prison sentence is not nearly long enough for the ringleader, it’s at least a start. No punishment can ever rebuild the damage done to our community and no jury award will ever compensate for the retirement savings lost and the lives ruined by these people.

Maybe the lesson to be learned is – if the deal sounds too good to be true…

Of course as we all know, there’s a sucker born every minute and two grifters to fleece him out of his cash.

For the full story, please click below:

Murrieta Men Agree to Prison Time
Victims of Duncan’s Scheme Speak Out

Long overdue – Stonewood scam goes to trial

At long last the trial has begun for the perpetrators of the so-called Stonewood Scam in Southwest Riverside County. Long time readers are acquainted with the basics of this story from my years-long chronicle of events. Our local association tried to bring this to the attention of law enforcement beginning in late 2004 but were unsuccessful in catching anybody’s ear until the scam had nearly run its course and started to collapse under its own weight.

The real estate part of it consisted of representatives from Stonewood Financial buying homes at significant premiums over asking price. As this was at a time our housing market was appreciating 20% – 30% a year, the fact that someone would pay a 25% or 30% premium on a home purchase was not enough to warrant investigation by the authorities. Homes listed at $500,000 were routinely selling for $600,000 or more. Targeting specific neighborhoods, after the first two or three sales were obtained with fraudulent appraisals, it became a self-feeding scheme since subsequent appraisals were now based on actual sales, albeit fraudulent. Turns out many of the buyers were either made of straw, or people talked into buying multiple properties they couldn’t begin to afford. Naturally other buyers into those neighborhoods also became victims since selling prices became predicated on fraudulently inflated values. In addition to the 200+ documented cases, many more innocent victims lost their homes when prices tumbled by more than 2/3 in some cases.

How did they do it? Well, partially through affinity fraud – many of the buyers were either members of the same ethnicity as the perpetrators or were nurses at the same facility where one of the perpetrators worked. They were also promised that the properties could be rented, that any shortage between the rental income and the mortgage payment would be paid for them, and that the $100,000+ overage collected by Stonewood or a related entity, would be paid to an investment account with the promise of even greater dividends to come.

Naturally there was no investment account to produce income, after a month or two the promised rental offset payments dried up and houses started going into foreclosure by tens, then by hundreds. When we became aware that something smelled bad here, we documented about 60 homes and about $40 million dollars in potential scams. By the time authorities finally acted on it the result was over 200 homes with the perpetrators indicated for over $120 million dollars. Our local District Attorney did not see fit to take action until the SEC, FBI and US Attorneys Office had finally acted, then he stood up on the podium all puffed up taking the credit. I like to hope in some small way it was part of the reason he was soundly defeated in his recent re-election campaign by a relative unknown.

Anyway, in addition to our local real estate fraud task force, reporters Chris Bagley from the Californian and Leslie Berkman from the Press Enterprise payed significant roles in shining the spotlight on these nefarious activities and our own attorney John Giardinelli and an attorney for some of the plaintiffs Richard Ackerman were pivotal in keeping the focus on.

It took too damn long and cost too many people – not to mention the damage done to entire neighborhoods and our cities – but as they say – sometimes the wheels of justice grind slowly. Let’s hope in this case they also grind exceedingly fine.

You can read the whole story and related elements here.

Press Enterprise – Fraud Trail Begins

gad blog ar eml fb swcahomes rltr
The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Another Real Estate Scam to beware of.

raspberry

Last week our local paper bestowed their ‘Raspberry’ award to a SoCal based attorney by the name of Michael T. Pines. Pines qualified for this award by virtue of the fact that his business model apparently involves advising clients who have been through foreclosure and been evicted from a home to break back into the home and set up residency. Of the four families he has recently convinced that his advice is sound, he has accompanied them to the house with attendant locksmith and whatever press he can scrounge up.

He garnered a couple headlines.

But most figured it for just what it appears to be – a scam based on the old ‘produce the original document’ scheme combined with his theory that since the bank has foreclosed and the underlying lien has been satisfied by the insurance company, the home has therefore been paid in full and the previous homeowner should be able
to reclaim it and occupy it. Yeah, I know. But he’s preying on unsophisticated and desperate people.

So a couple days ago a judge called him out for filing frivolous lawsuits and slapped him with a $16,000 judgment that he owes one of his clients for wasting their time and money. Today the 2nd family in Escondido who broke into their home to great fanfare a couple weeks ago, was unceremoniously dumped back out by the new owner of the house. According to Emiliano Bolanos, “The people that bought the house, they want to take it again.” DUH

Now here’s something that will surprise you – they haven’t been able to get in touch with Mr. Pines! Yeah, go figure. Mr. Bolanos said he talked to Pines last week and was promised some paper from a judge saying they could stay but the attorney never called back. Another Pines client up in Simi Valley was evicted on Tuesday and was told by the attorney he would be there along with some private security to stop the eviction. He never showed there either. Perhaps it was because Pines had been arrested for vandalism and trespassing a few days before trying the scheme yet again in Newport Beach. (WSJ 10/15/10)

Turns out, according to The Californian, Mr. Pines himself is in bankruptcy. He also has seven of his own properties in foreclosure and lost his own battles to keep his own home by litigating against his lender. Oddly enough, he apparently hasn’t broken back into his own homes – which include properties in Utah, Arkansas and his home and law building in CA. He also has two restraining orders against him in San Diego County for ‘civil harassment after a hearing’. Sounds like a fun guy.

Pines, who has had a law practice for over 30 years, switched to real estate law and investing in 2000. When the market headed south, and with his own personal business apparently tanking, Pines started doing seminars on strategic default, how to use Chapter 11 to your benefit and so forth. It is interesting to note that of the 70 or so cases he claims to represent, he hasn’t won one, including his own. Most real estate attorneys scoff at this sham practice and frown on yet another
‘professional’ victimizing people who have already been cracked once.

Funny thing is – nobody, including Mr. Pines, denies that his clients are deserving of foreclosure. There was no problem with the bank, they either bought way over their head, got caught in some other investment scheme that backfired, or simply ATM’s every nickel out of their home at peak value. Oh, Pines believes that the basic banking model is unsound and fraudulent – but doesn’t deny his clients were all waaaaay behind, several on homes worth a million or more.

Meanwhile, Mr. Bolanos, remember him?. The Bolanos family is now living with the Rochas family, another victim of Pines who referred Pines to Bolanos. Bolanos says “They haven’t called me yet. I’m waiting for their call.” Good luck on that Emiliano. If I were you and he actually does call, I probably wouldn’t take it. Way less trouble for you and your family – although you might get a friendly judge to force Pines to cough up a few more grand for your troubles.

Folks, I know you’re desperate out there but if the deal sounds too good to be true… if it sounds flaky and shaky and full of crap, go with your gut. Chances are you’ll thank yourself later. Unless you’re a professional victim and enjoy it, USE YOUR DAMN HEADS PEOPLE. After all, there’s a sucker born every minute and two grifters to fleece him.

Of course that’s just my opinion, I could be wrong .

gad blogar fb swcahomes rltr
The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR, or any local or state government or other mental institution.

Another Mortgage Fraud Scammer Bites the dust.

DOWNEY MAN AGREES TO PLEAD GUILTY IN MULTI-MILLION DOLLAR FRAUD THAT BILKED INVESTORS AND HOMEOWNERS

Juan Rangel Agrees to Serve 15-Year Sentence for Targeting Spanish-Speaking Victims and Stealing Their Savings and Titles to their Homes

LOS ANGELES – A Downey man has agreed to plead guilty to federal fraud and money laundering charges, admitting that he ran two fraudulent operations – a Ponzi scheme that took in $30 million from more than 300 victims and a mortgage fraud scheme that preyed on homeowners by stealing the equity from their homes and secretly taking title to their properties.

Juan Rangel, 46, who is currently in federal custody, signed a plea agreement that was filed late Friday in United States District Court. Rangel agreed to plead guilty to one count of mail fraud and one count of money laundering. In the plea agreement, federal prosecutors and Rangel ask the court to impose a sentence of 15 years in prison.

Rangel agreed to plead guilty to a mail fraud count related to the Ponzi scheme in which Rangel and his company, the Commerce-based Financial Plus Investments, recruited new investors through Spanish-language newspapers and magazines, as well as in radio advertisements and infomercials broadcast on television. Rangel and Financial Plus promised to pay investors guaranteed returns of 60 percent each year out of the profits from Financial Plus’ real estate investments and lending business. However, Rangel admitted in the plea agreement that Financial Plus did not make any actual profits from real estate or lending. Rangel instead used the victims’ money to make Ponzi payments to other investors and for his own personal use, including the monthly mortgage payments on his $3 million home and monthly payments for his Lamborghini sports car.

In the plea agreement, Rangel also admitted that he and others operated a mortgage fraud scheme that targeted Latino homeowners at risk of losing their homes by offering them help to avoid foreclosure. Rather than assisting the distressed homeowners, however, Rangel took titles to their homes and drained the remaining equity out of the properties.  As part of this scheme, Rangel arranged to sell the homeowners’ properties, usually without their knowledge, to third-party straw buyers. He then applied for loans in the straw buyers’ names related to these supposed purchases, and used a variety of falsified documents to ensure that the fraudulent loans were approved. Rangel admitted that the scheme caused mortgage lenders to fund more than $10 million in fraudulent loans.

Rangel is scheduled to plead guilty Wednesday afternoon before United States District Judge S. James Otero. Once he pleads guilty, Rangel will face a statutory maximum sentence of 30 years in federal prison. Although the parties will recommend a sentence of 15 years, Judge Otero will make the final determination as to the appropriate sentence in the case.

A federal grand jury indicted Rangel last month in the Financial Plus schemes. The indictment also charges Javier Juanchi, 42, of Sherman Oaks, a vice president at Financial Plus, and Pablo Araque, 40, of Downey, who owns the Downey-based tax preparation and bookkeeping company A-One Tax Pros. Juanchi and Araque were charged in relation to the mortgage fraud and are currently scheduled to go to trial before Judge Otero on November 23.

The case involving Financial Plus is the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspection Service and IRS-Criminal Investigation.

CONTACT:        Assistant United States Attorney James A. Bowman

Major Frauds Section

A Raspberry to Michael T. Pines & Others

raspberry

The Californian today bestowed a raspberry entitled:

The “Uncommon Law’ award.

A raspberry to attorney Michael T. Pines, who has been advising his clients to break into their foreclosed homes.

Pines claims the actions are justified because lenders committed loan fraud and violated the Truth in Lending Act of 1968. A bankruptcy judge called his ideas frivolous and ordered him to pay $16,.430 in legal fees to the defendants in one case for wasting their time. Other local real estate lawyers are skeptical about his interpretation of the law.

While not every homeowner facing foreclosure is a victim, many are. They really don’t need one more expert giving them questionable advice that may further complicate their lives. They’ve gotten enough of that already.

To the Californian I say – AMEN. Folks, if it sounds too good to be true – you know the rest. And the same goes for those agents and attorneys advising their clients about short sale gimmicks through a series of trusts as well as those advising their clients they enable you to live in their homes indefinitely without paying. Our profession doesn’t need you, the market doesn’t need you and neither do people who have already been victimized once too often.

Shades of Stonewood – another scam artist goes down.

Sounds a lot like Stonewood. A member brought this to our attention a couple years back. The wheels of justice grind slowly but sometimes exceedingly fine. Thanks to Chris Plante for this update.

Irvine attorney indicted in mortgage fraud scheme

An Irvine attorney has been accused of profiting from a mortgage fraud scheme in which 15 mostly foreclosed homes in Orange County were purchased at inflated prices.

Gerald L. Wolfe, 41, a lawyer who was formerly a registered real estate broker, was indicted by a federal grand jury Wednesday on one count of conspiracy to commit wire fraud.

Wolfe, who lives in Corona del Mar, and other unidentified co-conspirators fraudulently purchased 30 residential properties in Orange and Riverside counties between the summer of 2005 and January 2006, the indictment says.

The alleged conspirators would recruit “straw buyers” and use their names and credit profiles to purchase the properties, according to the indictment.

The loan applications for the properties’ mortgages were a sham because they contained fake personal information about straw buyers, misled lenders into believing that Wolfe or straw buyers would reside in those properties, and sought mortgages for inflated sale prices with agreements that sellers would return the inflated portion of the sale price to the conspirators, said U.S. Attorney’s Office spokesman Thom Mrozek said.

Most of the 30 homes involved in the scheme went into foreclosure, Assistant U.S. Attorney Shashi Kewalramani said. The scheme resulted in more than a $2 million loss to the banks, he added.

Wolfe has agreed to surrender to authorities and will appear in federal court on Tuesday. His lawyer, Thomas Bienert Jr., could not be reached for comment Thursday.

Two co-conspirators, Andrew and William Bohuslavizki, also have pleaded guilty conspiracy to commit wire fraud and will be sentenced in January, Kewalramani said.

The statutory maximum penalty for a conspiracy to commit wire fraud charge is 20 years in prison.

Read the full article in The Orange County Register

California Joins Multi-State Coalition to Protect Homeowners Facing Foreclosure

SAN FRANCISCO – Attorney General Edmund G. Brown Jr. announced today that California has joined a coalition of 49 attorneys general and dozens of state banking regulators in a multi-state effort to demand that lenders find solutions to serious and potentially widespread problems in the foreclosure process across the country.

“While California continues its own vigorous efforts to ensure that homeowners facing foreclosure are treated fairly and lawfully,” Brown said, “we are now working together with other attorneys general and regulators to seek solutions that reach across state lines to protect all borrowers at risk of losing their homes in this foreclosure crisis.”

On Friday, Brown called on all lenders in California to halt foreclosing on California homes until they can demonstrate that they are complying with state law. Earlier, Brown sent letters to Ally Financial and J.P. Morgan Chase directing them either to prove they are in compliance with state law or else halt foreclosures. His office also has been in discussions with other lenders, including Wells Fargo, One West and Bank of America. Brown’s office will continue its independent efforts to protect homeowners facing foreclosure.

Bank of America announced on Friday that it was temporarily halting foreclosures nationwide.

The multi-state group will review how lenders verify foreclosure documents nationally. The group was formed after several lenders and loan services admitted that officials, dubbed “robo-signers,” had vouched for the accuracy and completeness of foreclosure documents without reviewing them. Such sham verifications may constitute a deceptive and unfair practice or otherwise violate state laws.

Regulators in the states involved, including California, have already started examining whether mortgage servicers have submitted improper affidavits or other foreclosure documents.

Although each state has its own foreclosure laws, all attorneys general and financial regulators have a common goal of making certain that every lender and servicer conduct a good faith review of foreclosure documents, only foreclose on homeowners after confirming all requirements have been met, and obey all state laws.

California law prohibits lenders from recording notices of default on mortgages made between Jan. 1, 2003, and Dec. 31, 2007, unless – with certain exceptions — the lender contacts or tries diligently to contact the borrower to determine eligibility for loan modification. A notice of default must include a declaration of compliance with California law.

California homeowners who experience problems with foreclosures, or other consumer issues, can file a complaint online with the Attorney General’s office at: www.ag.ca.gov/consumers/general.php.

# # #

More housing delays from Brown – thanks Jerry

Pandering for a few more votes, Jerry Brown is calling for a halt to foreclosures in California. Super. Let’s let more people stay in their homes indefinitely without making payments and stall off the inevitable for a few more months. That’s what our market needs. Thanks Clueless. What a tool.

Brown Calls on Banks to Halt Foreclosures In California

SAN FRANCISCO – Following his office’s negotiations with the state’s top loan servicers and today’s announcement by Bank of America that it is temporarily halting foreclosures nationwide, Attorney General Edmund G. Brown Jr. today called on the state’s other lenders to halt foreclosing on California homes until the banks can demonstrate that they are complying with state law.

“All lenders should halt foreclosures until they clear up this mess and ensure that the process is fair and complies with California law,” Brown said. “Bank of America has taken an important step, and the other major lenders should follow its lead.”

California law prohibits lenders from recording notices of default on mortgages made between January 1, 2003 and December 31, 2007, unless, subject to limited exceptions, the lender contacts or tries diligently to contact the borrower to determine eligibility for a loan modification. A notice of default must include a declaration of compliance with California law.

In the past few weeks, Brown’s office has been in discussions with Bank of America, Ally Financial, JP Morgan Chase, Wells Fargo and OneWest to ascertain whether they are complying with California law. Brown’s office has called on those banks to show they are complying with state law before continuing with foreclosures.

JP Morgan Chase, the nation’s third largest loan servicer, Ally Financial and One West have admitted that employees approved and signed foreclosure documents without first fully reviewing the borrowers’ loan files. As a result, those borrowers lost their homes based on affidavits the bank never confirmed were accurate.

Ally Financial and JP Morgan have suspended foreclosures in 23 other states that, unlike California, require a court order for foreclosures.

# # #

Attorney General Announces Charges Against Two Con Artists Who Took Money From Struggling East Bay Homeowners

FREMONT — Attorney General Edmund G. Brown Jr. announced charges today against two “callous con artists” who took thousands of dollars from dozens of struggling Northern California homeowners for foreclosure services never delivered.

“The housing crisis has been devastating for many Californians, and their pain has been sharpened by callous con artists like these,” Brown said. “Their arraignment today serves as a warning to people trying to save their homes from foreclosure that there are fraudulent operators out there who will take their money but do nothing to help.”

Angeline Lisa Lizarrago, 68, of Fremont and Michael Douglas Young, 67, of Los Gatos were scheduled to be arraigned today in Department 502 of the Hayward Hall of Justice on a 23 count complaint for felony fraud and theft they committed at their business, Avemos Financial Group, of Fremont.

If convicted, Lizarrago could face more than 15 years in prison. Young, a licensed real estate broker, faces up to 12 years.

The case was investigated and prosecuted jointly by the Attorney General and the Alameda County District Attorney.

From June 2008 to October 2009, Lizarrago and Young targeted Spanish-speaking homeowners as well as Southeast Asian immigrants, all desperate to save their homes.

People stood in line for hours to get into Avemos’s waiting room, which was decorated with shrines to the Virgin Mary. Clients seeking help typically paid $1,500 initially. Lizarrago, the owner of Avenos, and Young, Avemos’s general manager, promised they would take steps to stop banks from immediately foreclosing on their homes and renegotiate clients’ loans to reflect their homes’ current market value. Lizarrago and Young guaranteed a refund if they were unsuccessful. Many lost their homes in foreclosure and did not receive a refund.

Lizarrago also took advantage of the foreclosure crisis in another way. She told an 89-year-old man and his wife, who wanted to move away from Stockton, that she owned 51 properties, many of which had been foreclosed upon, and she could find them a home in Fremont. She asked for an up-front fee, which she promised to return with interest once the purchase was made. In a series of payments, the couple gave Lizarrago $25,000. She never found them a home, nor returned their money.

The criminal charges against Lizarrago and Young are based on 11 cases of fraud and theft, and prosecutors believe there are 50 more victims who haven’t been identified yet. Anyone with information about the Avemos Financial Group or the defendants should call the Alameda County District Attorney’s Office at 1-877-288-2882.

Lizarrago was moved to Alameda County jail from Chowchilla State Prison, where she was serving a two-year sentence for a prior real estate scam. Young was arrested September 30.

The California Department of Real Estate and the Fremont Police Department assisted in the investigation.

The Attorney General has fought to stop scammers and con artists from taking advantage of people during the housing crisis. He has sought court orders to shut down more than 30 fraudulent foreclosure-relief companies and has brought criminal charges and obtained lengthy prison sentences for dozens of other deceptive loan-modification consultants. For more information on the Attorney General’s action against loan-modification fraud visit: http://ag.ca.gov/loanmod

Brown Files $60 Million Lawsuit Against Fraudulent Forensic Audit Loan Modification Scam

SACRAMENTO — Attorney General Edmund G. Brown Jr. today filed a $60 million lawsuit against a pair of Sacramento companies that lured desperate homeowners with a deceptive marketing scheme that promised to obtain mortgage modifications through the use of computer-generated “forensic loan audits.”

“These defendants dangled the term ‘forensic loan audit’ as a sure-fire remedy for the mortgage problems of homeowners in distress,” Brown said. “In fact, it was no remedy at all, and hundreds of desperate California homeowners took the bait and lost their money — and sometimes their homes.”

Brown filed the $60 million lawsuit against US Loan Auditors, My US Legal Services, and five individuals, including two attorneys, who operate a fraudulent mortgage audit scheme that preys on desperate homeowners anxious to save their homes. The suit demands civil penalties, restitution for victims, and permanent injunctions to keep the companies and other defendants from fraudulently marketing forensic loan audits and legal services of little value.

The companies, based in Rancho Cordova, work together to market and sell “forensic loan audits” to homeowners, who pay thousands of dollars in up-front fees for a dubious computer-generated review of their mortgages. The audits purport to show violations of law by lenders, which sales agents cite to convince homeowners they have a strong legal case. Sales agents use these findings to encourage homeowners to stop making their mortgage payments and instead pay additional fees to bring “predatory lending” lawsuits against their lenders.

Both companies deceive homeowners by assuring them that filing these lawsuits will give them “legal leverage” to obtain a loan modification and prevent lenders from foreclosing or collecting monthly mortgage payments. Homeowners who filed these lawsuits have lost thousands of dollars and placed themselves in greater danger of losing their homes.

My US Legal Services bilks clients for months, filing cookie-cutter complaints with little or no merit, billing unjustified monthly fees, and then dodging clients’ phone calls or stringing them along with false assurances that a settlement is in progress.

Hundreds of California homeowners, many of them facing possible loss of their homes, have been duped into paying thousands of dollars to the two companies — one homeowner paid more than $55,000 — but received little or no relief.

Meanwhile, the litigation mill run by My US Legal Services has littered courts with hundreds of lawsuits that have scant chance of success. Two federal judges have expressed concern about the legitimacy of these lawsuits and have several times sanctioned attorneys involved.

In addition to the companies, Brown is suing the three owners: attorney and real estate broker James Sandison, Jeffrey Pulvino, and Shane Barker, as well as two California attorneys, Sharon L. Lapin and Jonathan G. Stein.

The State Bar filed disciplinary charges yesterday against Sandison for alleged misappropriation of clients’ funds and aiding the unauthorized practice of law.

The Attorney General’s investigation, assisted by the State Bar and the Department of Real Estate, located victims throughout California cities hit hard by the foreclosure crisis: Corning, Fresno, Hayward, Irvine, Manteca, Richmond, Sacramento, Salinas, Sanger, Santa Ana, Stockton, Tracy, Vacaville and West Sacramento.

In February, Brown, along with the Bar and the Department of Real Estate, issued an alert ( http://ag.ca.gov/newsalerts/release.php?id=1862&) warning consumers to be wary of forensic loan audits that require homeowners to pay up-front fees. There is no evidence or statistical data to support claims that forensic loan audits of a lenders’ mortgage practices – even if performed by a licensed mortgage professional or a lawyer — help homeowners obtain loan modifications or any other foreclosure relief.

Brown has led the fight against fraudulent mortgage rescue and loan modification companies. He has obtained court orders to shut down several companies and has brought criminal charges against deceptive loan modification consultants. For more information on Brown’s actions against loan-modification fraud, see: http://ag.ca.gov/loanmod.

If you are a homeowner who has been scammed, you can file a complaint online with the Attorney General’s office at: www.ag.ca.gov/consumers/general.php. You can learn more about avoiding scams and obtain a complaint form by visiting the Department of Real Estate’s website at: www.dre.ca.gov.

If you have a complaint against Sandison, Lapin, Stein or any other lawyer involved in a loan modification or foreclosure relief service, contact the State Bar Complaint Hotline at 1-800-843-9053. Complaint forms and an explanation of the attorney discipline system are available online at: www.calbar.ca.gov.

Attached are a copy of the complaint and a sample of the fraudulent advertising mailers sent by the companies.

# # #

No Matter What The Economy is Doing, Fraud is Always With Us.

DOWNEY MAN CHARGED WITH RUNNING $11 MILLION PONZI SCHEME, AS WELL AS RELATED $10 MILLION MORTGAGE FRAUD SCHEME THAT TOOK ADVANTAGE OF DISTRESSED HOMEOWNERS

Juan Rangel’s Financial Plus Investments Targeted Spanish-Speaking Victims and Conned Them Out of Their Savings and Titles to their Homes

LOS ANGELES – A federal grand jury has indicted a Downey man on a series of fraud charges for allegedly running two related fraud schemes – a Ponzi scheme that took more than $11 million from more than 300 victims, and a mortgage fraud scheme that preyed on homeowners by stealing the equity from their homes and secretly taking title to their properties.

Juan Rangel, 46, who is already in federal custody after his conviction last year for bribing a bank manager at Bank of America, was charged in a 16-count indictment that was returned by a federal grand jury on September 22.

In relation to the Ponzi scheme, the indictment alleges that Rangel and his company, the Commerce-based Financial Plus Investments, recruited new investors through Spanish-language newspapers and magazines, as well as in radio advertisements and infomercials broadcast on television. Rangel and Financial Plus promised to pay investors guaranteed returns of 60 percent each year out of the profits from Financial Plus’ real estate investments and lending business. The indictment alleges that Financial Plus did not make any actual profits from real estate or lending, and that Rangel instead used the victims’ money to make Ponzi payments to other investors, as well as for his own personal use, including the monthly mortgage payments on his $3 million home, to make monthly lease payments for his Lamborghini sports car and a limousine, and to buy cocaine.

In the related mortgage fraud scheme, the indictment alleges that Rangel and others targeted Latino homeowners who were at risk of losing their homes and offered to help them avoid foreclosure. Rather than assist them, however, the indictment alleges that Rangel took titles to their homes and drained the remaining equity out of the properties.  As part of this scheme, Rangel arranged to sell the homeowners’ properties, usually without their knowledge, to third-party straw buyers. He then applied for loans in the straw buyers’ names related to these supposed purchases, and used a variety of falsified documents to ensure that the fraudulent loans were approved. The proceeds from these loans went to Rangel and his companies. The indictment alleges that this scheme was successful in duping mortgage lenders into approving more than $10 million in fraudulent loans.

United States Attorney André Birotte Jr. announced the indictment today after Rangel’s two co-defendants were taken into custody this week and the indictment was unsealed.

Co-defendant Javier Juanchi, 42, of Sherman Oaks, a vice president at Financial Plus, was arrested by special agents with the Federal Bureau of Investigation on Monday. Juanchi, who is charged only in relation to mortgage fraud part of the scheme, was ordered held without bond.

The third defendant in the case, Pablo Araque, 40, of Downey, who owns the Downey-based tax preparation and bookkeeping company A One Tax Pros, was arrested yesterday. Araque, who is also charged only in relation to the mortgage fraud component of the scheme, is being held in jail pending a detention hearing scheduled for tomorrow afternoon.

Rangel, who is scheduled to make his first court appearance in this case tomorrow afternoon, is charged with a total of 11 counts of mail fraud, four counts of aggravated identity theft, and one count of money laundering, in relation to the two schemes he ran out of Financial Plus. If he is convicted of all 16 counts, Rangel would face a statutory maximum sentence of 232 years in federal prison.

Rangel owned and operated Financial Plus Investments, which was based in Commerce. Financial Plus purported to provide guaranteed returns to investors by using their money to invest in real estate and make high-interest loans to homeowners facing foreclosure. Financial Plus originally offered returns as high as 60 percent each year to investors, but during the later part of the scheme began to offer investors guaranteed annual returns of 100 percent on their investments. The indictment alleges, however, that only a small fraction of the money that Financial Plus received from investors was ever used to invest in real estate or to make loans. Instead, investor money was used to make monthly Ponzi payments to other investors that were falsely characterized as investment profits. At the same time, Rangel allegedly diverted a substantial portion of the investors’ money for his own use.

In addition to the company’s purported investment business, Financial Plus also purported to offer foreclosure relief services. Rangel and Juanchi identified Latino homeowners who were at risk of losing their homes but who appeared to still have substantial equity in their properties. Financial Plus then offered to help these homeowners avoid foreclosure. Many of the homeowners were told that Financial Plus would save their home by refinancing their mortgages using a co-signer who would be provided by the company. These homeowners were told that the co-signer would be removed from the loan after one year, once the homeowners had fixed their credit.

The indictment alleges, however, that Rangel and Juanchi did not refinance these homeowners’ properties. Instead, they arranged to sell the homeowners’ properties to straw buyers and apply for loans related to these supposed purchases in the straw buyers’ names. Rangel and Juanchi allegedly paid Araque to create false documents, including pay stubs and tax forms, to support the false information listed for the straw buyers on the fraudulent loan applications. Once the loans were funded by the victim banks, Rangel and his companies received the proceeds from the loans, funded by the equity from the homeowners’ properties, as well as title to their homes.

An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed to be innocent until proven guilty.

Rangel is currently pending sentencing for his conviction last year on federal charges of bribing a bank manager to falsify bank records and release holds on millions of dollars in checks that he deposited at the bank. Rangel’s son, Harold Rangel, was also charged in that case, but fled while on pretrial release.

The cases against Rangel are the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspection Service and IRS-Criminal Investigation.

CONTACT:        Assistant United States Attorney James A. Bowman

Major Frauds Section

(213) 894-2213

Release No. 10-139

New Scam aimed directly at Realtors. Don’t get burned.

This is a variation of the Craigslist scam and the Nigerian bank fraud. I sincerely hope no real estate professional has fallen for this grift ut since NAR is publicizing it – it’s probably bit a few folks.

NAR Legal Affairs has learned of a new scheme designed to trick unwary real estate professionals

NAR Legal Affairs has learned of a new scheme designed to trick unwary real estate professionals into forwarding money to the scheme operators. The scheme works in the following manner:

  • Salesperson receives an inquiry via email from an individual who identifies himself (no known female aliases yet) as a wealthy individual seeking a residential property. The individual lives outside the market area, and usually outside of the country. The individual operates under a variety of aliases, and also varies his housing requirements. Sometimes he is married with children, sometimes he is single.
  • The emails are written in a choppy fashion with incorrect grammar usage, suggesting English is not the writer’s first language. The emails also rarely contain any information relevant to the market in which he is seeking a home and are written in a generic style.
  • The individual claims to hold an important position at an existing business, although no one with the individual’s name actually is listed as working for the business.

If the real estate professional responds to the inquiry and sends the individual listing information, the following actions take place:

  • The alleged buyer selects the most expensive property from the listings that he receives and instructs the real estate professional to submit an offer for the property, stating that he will visit the property in the near future.
  • He represents that the transaction will be an all cash transaction, and no title company should be involved.
  • He requests the information that he needs to write on the deposit check, and states that the check will be sent either to the real estate brokerage or to an attorney.
  • He will also send a forged bank (or brokerage) statement, showing significant assets, in addition to a copy of a forged ID.

If the Salesperson provides this information, the real estate professional (or attorney) will receive a check larger than the deposit amount. The reason for the higher amount will be attributed to something like needing funds for furnishing the new home. If the check is cashed, the alleged buyer will immediately withdraw the overage amount. The real estate professional’s bank will present the initial check for payment, and will then be told it is forged. Therefore, the real estate professional will lose the overage amount taken by the individual, as the trail of money is usually untraceable once it is withdrawn from the brokerage’s escrow account.

If you receive this email, you should ignore it and forward it to your local FBI office- SCAM@ic.fbi.gov

Short Sale Fraud on the Rise

Brown Issues Warning about Rise of Short Sale Fraud

LOS ANGELES – Attorney General Edmund G. Brown Jr. today joined the California Department of Real Estate and the State Bar of California to warn homeowners about an alarming rise in short sale fraud across California in a field “rife with scam artists”.

A short sale is an arrangement in which a homeowner sells his or her home for less than the outstanding mortgage, with the consent of the lender.

“While short sales can provide homeowners with a last-ditch alternative to foreclosure, this market is rife with scam artists,” Brown said. “Homeowners and buyers, agents, and lenders should beware of short sale negotiators who operate without licenses, use straw buyers or charge illegal fees.”

With so many homeowners now considering short sales, an entire industry of so-called short sale negotiators has emerged. These individuals solicit homeowners by promising to expedite the process and help coax lenders into taking part in the transaction.

The Department of Real Estate is investigating more than 40 complaints of short sale fraud, up from “virtually zero” cases only three months ago, a spokesman said.

In April, the Obama administration launched a new initiative called the Home Affordable Foreclosure Alternatives Program, which encourages homeowners in financial distress — especially those who have failed to complete a trial modification or qualify for a loan modification — to consider a short sale as an alternative to foreclosure.

Before working with — or paying — any short sale negotiator, homeowners should consider the following red flags:

No license
With limited exceptions, only licensed real estate agents or attorneys can engage in short sale negotiations with a homeowner’s lender.

Up-front fees
Licensed real estate agents wishing to collect up-front fees from homeowners for short sale transactions must first submit an advance fee contract to the Department of Real Estate and receive a no-objection letter.

Surcharges
With many distressed properties listed well below market value, negotiators and agents are charging potential buyers thousands of dollars in surcharges and hidden fees just to place an offer on a home. These illegal fees are frequently not disclosed and are paid outside escrow.

Straw buyers and house flipping
In this scheme, short sale negotiators misrepresent the market value of a property to a homeowner’s lender by only submitting offers on the property from an affiliated straw buyer. After the home is purchased below market value, the fraudsters immediately flip it and pocket the difference.

Short sale negotiators and agents use a number of titles including debt negotiator, debt resolution expert, loss mitigation practitioner, foreclosure rescue negotiator, short sale processor, short sale coordinator and short sale expeditor.

If you are a homeowner who has been scammed, contact Brown’s office at 1-800-952-5225 or file a complaint online at: www.ag.ca.gov/consumers/general.php.

Homeowners can also learn more about avoiding mortgage and real estate fraud by visiting the Department of Real Estate website at: http://www.dre.ca.gov/cons_alerts.html. A complaint form can be accessed online at: http://www.dre.ca.gov/frm_consumer.html.

“Short sale fraud appears to be the fraud of the moment, and it is proliferating statewide,” according to Real Estate Commissioner Jeff Davi. “Consumers, licensees and lenders must all arm themselves with the tools necessary to avoid such scams.”

Homeowners can file a complaint against a lawyer, a legal specialist or a company purporting to operate as a law firm with the State Bar by calling 1-800-843-9053 or visiting: www.calbar.ca.gov.

Homeowners can learn more about the federal government’s Home Affordable Foreclosure Alternatives Program by visiting: http://makinghomeaffordable.gov/hafa.html.

Non-profit housing counselors certified by the U.S. Department of Housing and Urban Development are also available to provide free help to homeowners. To find a counselor in your area, call 1-800-569-4287.

Riverside County Scam Artists Bite the Big One.

I’m lovin’ this. Our friends up at the Ventura County Association  of Realtors had a hand in this. They’ve been very pro-active for years in fighting real estate fraud in their community and have worked hand-in-glove with their local District Attorney. Maybe now that Riverside County has a new District Attorney we can get some of this same attention to fraud that Ventura has enjoyed. They’ve even helped their DA receive substantial federal grants to combat this scourge. Kay Runion and the REFAT team in Ventura are ‘Da Bomb’.

REGIONAL LAW ENFORCEMENT JOINS TOGETHER IN CRACKDOWN ON

MORTGAGE FRAUD, WITH SEVERAL DOZEN BEING NAMED IN CRIMINAL AND

CIVIL ACTIONS FILED IN FEDERAL COURT

Federal and local law enforcement officials joined together this morning to announce a series of cases that have resulted from coordinated efforts to target fraud in the mortgage loan industry. As part of a nationwide crackdown, federal prosecutors in Los Angeles, Riverside and Orange Counties worked with local and federal investigators to bring criminal charges against a wide range of individuals involved in mortgage fraud, including borrowers, “straw borrowers,” corrupt real estate professionals, bank employees who help facilitate fraud, and those who prey upon distressed homeowners.

In addition to recently filed criminal cases that charge about three dozen defendants, the Civil Division of the United States Attorney’s Office this week filed five civil lawsuits that allege mortgage fraud, including one case in which prosecutors are seeking an immediate order from a judge to shut down an organization allegedly engaged in an ongoing scheme that is defrauding the federal government.

“Over time, we have seen repeated spikes of fraud targeting financial institutions.  Over the last decade, we saw one of those spikes as mortgage fraud blossomed with the housing bubble,” said United States Attorney André Birotte Jr. “ When the bubble burst, in part because of fraud permeating the system, the effects were felt around the world. We are now sorting the through the wreckage to identify and prosecute the most egregious offenders. We are also targeting those who continue to exploit the system by fraudulently obtaining new loans or by bilking upside-down homeowners through loan modification and rescue scams.

As part of its enforcement efforts, the United States Attorney’s Office is working collaboratively with a number of law enforcement partners to use all available resources and bring to justice as many criminals as possible. This morning, arrests were made in two federal cases involving mortgage fraud in Ventura. The matters were initially reviewed by the Ventura County District Attorney’s Office, and the investigations grew to include agents from the Federal Bureau of Investigation, the U.S. Department of Housing and Urban Development’s Office of Inspector General of, U.S. Immigration and Customs Enforcement, the Secret Service, IRS-Criminal Investigation, as well as District Attorney investigators. (i.e. conspicuous by their absence is the Riverside District Attorney’s Office – even though one of the biggest indictments is in our turf.)

The two cases involving mortgage fraud in Ventura name a total of 14 defendants, all of whom face potential sentences of hundreds of years in prison if they are convicted in the schemes that cumulatively helped unqualified and straw borrowers obtain tens of millions of dollars in fraudulent mortgage loans. But this is only one of several cases that seek to address the mortgage fraud problem from different angles.

●       In a civil action filed yesterday, prosecutors are seeking up to $1 million in damages from several real estate professionals allegedly involved in an ongoing scheme to obtain government-insured mortgage loans for unqualified borrowers. The complaint seeks a preliminary injunction that would shut down the allegedly fraudulent operation being run out of The Team Realty Group in Riverside. The complaint alleges that, for the past three years, Peter Morris, a California licensed real estate broker, and other professionals working at Morris’ Team Realty Group submitted bogus documents to banks to make their clients appear to be eligible for mortgage loans insured by the Federal Housing Authority or the Veteran’s Administration. The complaint, which is one of five civil actions filed this week by the United States Attorney’s Office, was filed pursuant to the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA), which became law in the wake of the savings and loan crisis and gave the Justice Department flexibility to pursue civil penalties, as well as criminal charges, against individuals involved in mortgage fraud.

●       In a criminal case indicted yesterday by a federal grand jury in Santa Ana, the owners of a mortgage brokerage firm are accused of obtaining more than $30 million in loans by submitting hundreds of loan applications that substantially inflated the borrowers’ true income and assets.

●       A Lancaster man pleaded guilty last month to conspiracy and making false statements for his role in a scheme to defraud homeowners by promising to delay or prevent foreclosures on their homes and pay-off delinquent mortgages in exchange for the homeowners making payments and transferring title.

Ellon Lindsey, Assistant Special Agent in Charge of IRS – Criminal Investigation’s Los Angeles Field Office, observed: “Mortgage fraud hurts our communities, drives some homebuyers into foreclosure, leaves lenders with bad loans, and burdens neighborhoods with deteriorating and abandoned properties. Today, IRS – Criminal Investigation is pleased to be a part of the numerous investigations that have successfully attacked these crimes on a variety of fronts. Using federal laws that include wire fraud, money laundering and tax offenses, we are able to successfully disrupt these schemes and bring their promoters to justice.”

The court cases that have been brought and resolved as part of the ongoing crackdown are the result of the collaborative efforts of a number of law enforcement agencies, including the United States Attorney’s Office, the Federal Bureau of Investigation, the Office of Inspector General for the United States Department of Housing and Urban Development, the United States Secret Service, IRS – Criminal Investigation, U.S. Immigration and Customs Enforcement, the United States Postal Inspection Service, and the Ventura County District Attorney’s Office.

Suspected fraud can be reported to the Financial Fraud Enforcement Task Forces at www.stopfraud.gov. The Los Angeles Field Office of the FBI also takes reports of suspected fraud at (310) 477-6565.

Proposition 16 – The Biggest Lie on the Ballot.

We’ve all been absolutely bombarded by election ads this cycle. Even people who are into that sort of thing are tired of the bombast and we’ve still got a week to go.

But one of the loudest and most consistent campaigns is being waged by Pacific Gas & Electric for Proposition 16. And let me tell you there is no more cynical and fraudulent campaign on next weeks ballot than the battle over Prop 16.

PG&E has titled Prop 16 the ‘Taxpayers Right to Vote Act’. That’s a lie. The Proposition is about nothing more than perpetuating PG&E’s utility monopoly and they’ve spent over $40 million to do it. Ask yourself – is any publicly run company really that altruistic that they would spend $40+ million dollars just to save their ratepayers or potential ratepayers some money? No even close. Folks – if they’re willing to spend $40+ million on this bill you know the payback has to be significant. And it is. In a rare moment of candor, one of their own ads claims that municipalities are considering spending $2.5 billion dollars to take over their own utility production. That’s the pot of gold at the end of the rainbow, folks, that $2.5 billion or more over the next several years. If PG&E can do an end-run by bamboozling enough people at the ballot box next week, they won’t have to spend money trying to defeat the matter every time it comes before a city or county in the future. Pure & simple.

You see, PG&E has a monopoly on electrical production in their part of the country. Nobody else like Southern California Edison or San Diego Gas & Electric can set up shop in Northern California. As a result, PG&E’s rates are even more onerous than the other utility companies – about 40% higher per kilowatt hour. So several cities in their jurisdiction have opted to produce their own power over the years and many more are climbing on the bandwagon trying to provide a measure of control and cost savings for their citizens. And while the other utliities are sitting back and taking a more wait-and-see approach, you can bet they are salivating at the prospect of a win as well. No more competition in any part of the state for any utility.

PG&E claims that these municipalities are able to just decide to do this on a whim and spend million of your dollars to do it. Nothing could be further from the truth. If your city decides to spend $50 bucks to improve a piece of roadway or $1 million to acquire a piece of land, it is subject to significant review by at least two commissions before it even gets to a vote of the council. Citizens have input every step of the way and if the project doesn’t pencil out it doesn’t fly. In some cities the public does have a chance to vote on the proposal (requiring a 50% majority) while in other cities it is decided by our elected officials, the council.

PG&E knows full well that if this passes and the voting requirement jumps to 2/3 they will never again be faced with an insurrection by a city or county because it is virtually impossible to muster a 2/3rd majority of public votes. Folks, if your city wanted to give away $20 bills on the street corner, you couldn’t get 2/3 of the voters to approve it. And that’s what PG&E is counting on.

Their ads are a lie – blatant and cynical. Rather than being the pro-consumer advocates they pretend to be, they are anti-consumer in that they would rob city and county governments of the ability to control their own destiny and reduce and control runaway utility costs for their residents. Both the California Association of Realtors and the Southwest California Legislative Council have denounced this fraud being perpetrated on the people by PG&E. The Southwest California Legislative Council is comprised of 4 major cities and Chambers of Commerce in Southwest Riverside County. You might be asking, ‘But Gene, the California Chamber of Commerce is one of the organization supporting this bill. Why would your local Chambers come out in strong opposition?’ I found the answer 2 weeks ago at the California Chamber of Commerce 2010 Business Summit in Sacramento. Prominently displayed as a presenting sponsor of the event was – ta-daaa – PG&E. Yeah, that’s right. Money talks. But PG&E money can’t buy off every local Chamber or association who have their constituents best interests at heart.

So when you go to the polls next Tuesday if you think you’re striking a blow for more accountable government and lower taxes by voting for Proposition 16, think again. This is just another egregious example of big money able to buy enough time to tell you a big lie time and again, hoping you’re not smart enough to see through it. I guess we’ll see next Tuesday if they were right.

Vote NO on Proposition 16.

For more information, please go to: PG&E Ballot Initiative Fact Sheet.

The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Temecula Man Accused of $20 million Mortgage Fraud Scam

californian

TEMECULA: Man accused of $20 million fraud

A Temecula man is among six people facing charges for what federal prosecutors said Thursday involves more than $20 million worth of mortgage fraud.

Michael Wayne Wickware, 54, faces one count of conspiracy to commit wire fraud and nine counts of wire fraud, the San Diego U.S. attorney’s office said.

According to online records, Wickware was in custody Thursday at the federal jail in downtown San Diego.

Also charged in the scheme are San Diego residents Brian Andrew La Porte, 34; Daniel John Schuetz, 37; Darryl Anthony Wallace, aka Darryl Anthony White, 47; and Terrence Smith, aka Terry Lee Smith, 45.

The final defendant is Chula Vista resident Roxanne Yvette Hempstead, 53.

The defendants are accused of submitting false and fraudulent mortgage loan applications —- inducing financial institutions to give 36 loans totaling approximately $20.8 million, according to the U.S. attorney’s office.

Federal prosecutors alleged in a newly unsealed indictment that the six defendants cooked up a scheme in which they lied to mortgage lenders to obtain money and property, and then diverted the proceeds for their personal use and benefit.

Under the alleged scheme, the defendants recruited straw buyers with good credit to take out mortgage loans.

But, other than having sound credit, the straw buyers would not have qualified for the loans —- so defendants La Porte and Schuetz allegedly prepared loan applications containing false financial and employment information from the straw buyers, according to the indictment.

Once the loans were made, the defendants allegedly had the escrow agents divert them the money so they could benefit from the proceeds.

The defendants are scheduled to be in federal court on June 28.

Read the article in The Californian here.

For more fraud info – click here the logo:

fraud