9:28AM

Allen County and Indiana AG announce fraud warning system

The following is taken from the Allen County Recorders Office website:

According to the FBI, Property and Mortgage fraud is the fastest growing white-collar crime in the United States. Unfortunately, it has become all too easy for a criminal to record a fraudulent deed, making it appear as if they own your home. Once this step is complete, they can use your home as collateral on a mortgage or even attempt to sell your home to an unsuspecting buyer.

Although this type of crime is rare in Indiana, it is on the rise nationwide. The Allen County Recorder’s Office has taken a proactive step to provide you with one tool for staying ahead of criminals who prey on property owners.

Property Fraud Alert is an internet-based system that automatically alerts you via email or phone, each time a document that includes your name is recorded in the Allen County (Indiana) Recorder’s Office.

Here is the best part…The service is free. No strings attached. Click here for more information and to sign up.

Click here to answer your questions about the Property Fraud Alert system

What should I do if I get an alert from the PFA system?

[Ed. note - Other counties offer this service across the country and I cannot see any reason why anyone who has equity in a property would not want to sign up for it]

7:43AM

5 indicted in Virginia based ID theft and flipping scheme

In the following FBI press release it was announced that five individuals are accused of a mortgage scam fraudulently purchasing homes in Northern Virginia and profiting by using the mortgage proceeds to pay “home improvement” expenses and other payments totaling nearly $337,000.

Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Joseph Persichini, Jr., Assistant Director in Charge of the FBI Washington Field Office; and Gregory Campbell, Postal Inspector in Charge, U.S. Postal Inspection Service, Washington Division, made the announcement following the indictment and subsequent arrest of all alleged conspirators.

On April 15, 2009, a federal grand jury indicted Nelson C. Cardoza, age 37 of Ranson, W.V.; Victor A. Valdez, age 27 of Fairfax, Va.; Monica J. Lambert, age 30 of Gainesville, Va.; Liguia Abaunza Miranda, age 54 of Chantilly, Va.; and Erick G. Chavarria, age 35 of Manassas, Va., on conspiracy and wire fraud charges. Cardoza, Valdez and Lambert were each indicted on five counts and face a maximum penalty of 100 years in prison. Miranda was charged with four counts and faces a maximum of 80 years in prison, and Chavarria was charged with three counts and faces a maximum sentence of 60 years.

According to the indictment and other court documents, Cardoza provided names of two different people to purchase five different properties in the Northern Virginia region. These buyers did not know of or authorize the purchases but the conspirators used their names and Social Security numbers to apply for and obtain the mortgage financing.

Lambert, a real estate agent, prepared the sales contracts, and Valdez, a mortgage broker, prepared fraudulent mortgage applications, which falsified the income and assets of the buyers. Chavarria worked for Valdez and added the names of one of the buyers to his bank account so the buyer would appear to have the funds needed to qualify for the loan. Miranda, the mother of Lambert and mother-in law of Valdez, operated a tax preparation business and authored letters to substantiate the fake employment of the buyers as listed in the fraudulent mortgage applications.

The conspirators profited by using part of the mortgage proceeds to pay “home improvement” expenses to themselves, entities they controlled and their associates. These home improvement expenses were approximately $33,000 to $55,000 per house. Some of the conspirators also earned thousands of dollars in commissions on the sales. According to the indictment, the conspiracy resulted in a total of at least $336,957 in fraudulent proceeds. The properties involved in the scheme have been foreclosed upon, causing substantial losses to the lenders.

This case was investigated by the FBI and the United States Postal Investigation Service. Assistant United States Attorney Edmund P. Power is prosecuting the case on behalf of the United States.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

7:07AM

Mortgage company and its owner plead guilty in "grow house" fraud

In the following press release the United States Attorney for the Western District of Washington announced that Jet City Mortgage, LLC and one of its owners and operators, Ha-Duyen Thi Le, a/k/a Holly Le, pleaded guilty today in U.S. District Court in Seattle to Conspiracy to Commit Wire Fraud and Money Laundering in connection with a mortgage fraud scheme. The company was first identified by law enforcement as part of “Operation Green Reaper” an investigation into large scale marijuana growing conspiracies in south King County. Financial investigation by Internal Revenue Service Criminal Investigation revealed the company had fraudulently obtained mortgage loans on many of the homes where marijuana grows were established. When sentenced by U.S. District Judge James L. Robart on July 6, 2009, LE faces up to 20 years in prison, fines of up to twice the amount of funds laundered or $250,000, and three years of supervised release. JET CITY MORTGAGE faces fines of up to twice the amount of funds laundered or $250,000 and a probationary period of up to three years.

According to the charging information and plea agreements, in 2005 and 2006, LE and her husband operated Jet City Mortgage. Le’s husband was a licensed mortgage broker and a licensed real estate agent. From the business’s office in Kent, Washington, LE conspired with others to falsify loan documents, allowing dozens of unqualified buyers to obtain mortgages and purchase one or more homes. When law enforcement began investigating garden supply stores that were providing equipment and advice to marijuana manufacturing rings, they discovered that many of the homes where marijuana grows were discovered were purchased using the services of Jet City Mortgage.

In their plea agreements,Jet City Mortgage and Le admit they falsified income and asset information, as well as documents purporting to verify that information, for borrowers seeking mortgages. Le conspired with the owners of three small businesses to provide false information to lenders who were attempting to verify the information in loan documents. These co-conspirators were paid a small fee each time they lied to the mortgage lenders. Jet City Mortgage collected fees and premiums both in the role of a mortgage broker and through LE’s husband’s work as a realtor. Financial records reveal Jet City Mortgage earned more than $230,000 from the scheme.

Many of the homes purchased through this scheme have now been foreclosed by the victim lenders. As part of the plea agreements, Jet City Mortgage will not attempt to keep the real estate and mortgage broker licenses which are being revoked by the State of Washington.

[Ed. note - The Washington Dept of Finance issued an order revoking Jet City’s license. Click here for a copy]

This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The financial investigation was conducted by the Internal Revenue Service Criminal Investigation (IRS-CI), and the Washington State Department of Financial Institutions (DFI). The drug case was investigated by the Drug Enforcement Administration, the South Snohomish County Narcotics Task Force (SSCNTF includes officers from Lynnwood Police, Edmonds Police, and Mountlake Terrace Police.), the Valley Narcotics Enforcement Task Force (VNET includes officers from the Kent, Renton, Auburn, and Tukwila Police Departments), the Seattle Police Department, Washington State Patrol, Port of Seattle Police, and King County Sheriff’s Office.

The case is being prosecuted by Assistant United States Attorney Sarah Vogel.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.

6:26AM

Scottsdale man arrested in $67 million real estate loan investment scheme allegations

The Scottsdale Police Department website reports that on Wednesday, April 15 arrested Danny Wise for a multi-million dollar fraud scheme. The fraud scheme consisted of Wise receiving money from victims with their belief that they were involved in legitimate investments. Wise utilized the monies received for personal gain and to facilitate a Ponzi scheme.

Scottsdale Police Dept

Scottsdale Detectives along with several Federal Law Enforcement Agencies served search warrants on Wise’s residence, business, and storage facility, all in Scottsdale. Currently the investigation has revealed a number of victims in multiple states. Wise was booked on theft and fraud charges as the investigation is ongoing.

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On April 6, 2009 the Securities and Exchange Commission (SEC) announced that it had obtained a temporary restraining order, asset freeze, and other emergency relief against Wise for targeting his accounting clients in a multi-million dollar real estate investment scheme.

The Commission’s complaint names Dan Wise, age 52, of Scottsdale, Ariz., and his four companies Whispering Winds Properties, LLC, LM Beagle Properties, LLC, Karlena, Inc., and Axis International, Inc. The complaint alleges Wise solicited his tax and accounting clients, and their friends and family, encouraging them to borrow money to invest with him. The complaint alleges that, from July 2001 to January 2009, Wise raised more than $67 million from approximately 125 investors by touting his 10 to 15 years of experience in real estate investments and luring investors with promises of lucrative annual returns ranging from 12% to 22%. The complaint further alleges that Wise claimed to use investor funds to make short-term real estate loans that would be fully collateralized and assured investors that they could obtain their principal anytime on 24 to 48 hours notice. The complaint alleges Wise never funded real estate loans, never paid the promised returns to investors, and never honored investors’ redemption requests.

The Honorable Mary H. Murguia, United States District Judge for the District of Arizona, on April 2 granted the Commission’s application for a temporary restraining order against the defendants and issued orders freezing defendants’ assets, prohibiting the destruction of documents, requiring accountings, and granting expedited discovery. On April 9, the Court will hold a hearing on the Commission’s motion for a preliminary injunction and appointment of a permanent receiver.

The Commission’s complaint charges the defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks, in addition to the emergency relief, preliminary and permanent injunctions, disgorgement with prejudgment interest, and civil penalties.

In a separate administrative action on April 3, the Commission forthwith suspended Wise from appearing or practicing before the Commission as an accountant, based on the Arizona State Board of Accountancy’s revocation of Wise’s license as a certified public accountant. In the Matter of Dan Wise, CPA, a/k/a Danny Wise, CPA, Admin. Proc. File No. 3-13430, Securities Exchange Act Release No. 59703; AAER No. 2959 (Apr. 3, 2009).

 

2:21PM

Todays existing case updates

1:35PM

Victorville couple sentenced in forged deed / elder abuse case

In the following press release the San Bernardino County District Attorney announced that a Victorville couple was sentenced to county jail on felony charges connected to real estate fraud and financial elder abuse. Joe Warf, 51, and Tracy Warf, 41, appeared in Victorville Superior Court on Friday, April 10, 2009. The pair was sentenced to 250 days and 365 days county jail, respectively, for financial elder abuse. Both will be placed on formal supervised probation for five years at the conclusion of their sentences.

In June 2008, Joe and Tracy Warf deceived the 94-year-old victim into signing over his San Bernardino home to them. The San Bernardino County District Attorney’s Real Estate Fraud Unit conducted an investigation and arrested Joe and Tracy Warf on November 24, 2009.

The court has already ordered that title to the San Bernardino house be transferred back into the victim’s name.

12:26PM

Ohio Dept of Commerce files complaint in $11 million real estate investment fraud allegations

The Ohio Department of Commerce has announced [pages 3 & 4] that a complaint filed with the Butler County Common Pleas Court on December 30, 2008, the Division of Securities alleges that James D. Powell; the estate of David L. Colwell; Midwest Marketing; Capital Investments; Great Miami Real Estate, LLC; and Great Miami Debenture LLC sold approximately $11 million in securities to about 100 investors located mostly in the Hamilton and Cincinnati areas. Investors had been told that their investments were safe and would be used to acquire and develop real estate.

The Division alleged that the defendants sold unregistered securities; sold securities without a license; misrepresented to investors that the investments were safe, risk-free, and backed by the Federal Deposit Insurance Corporation (FDIC) or otherwise insured; and failed to disclose to investors that they were not licensed, the securities were unregistered, and that Mr. Colwell and Mr. Miller had previously been issued cease and desist orders by the Division.

The court subsequently issued a temporary restraining order against the defendants and an agreed preliminary injunction against Hubert Jackson Rials of Cunningham, Kentucky; Stephen Chatsworth Jacobs of Hamilton, Ohio; and Kevin Miller of Fairfield, Ohio. The Division had alleged that Colwell, Rials, Jacobs, and Miller sold investments for the companies owned and operated by Powell.

On February 4, 2009, the Court issued a preliminary injunction against James D. Powell, Capital Investments, Great Miami Real Estate, LLC, and Great Miami Debenture LLC. The court also appointed Attorney Steven R. Watts of Dayton as Receiver to manage and operate the companies for the benefit of investors and creditors. The temporary restraining order and preliminary injunction bar the defendants from selling, offering to sell, or transferring any securities; buying, selling or transferring any real estate without the court’s prior approval; and engaging in any deceptive, fraudulent, or manipulative act. Defendants are also prohibited from destroying or altering records or divesting any assets derived from the sale of securities.

 

12:02PM

Georgia broker banned for 18 months - must undertake fraud education

On April 14, 2009, the Georgia Department of Banking and Finance announced that it has entered into a Consent Order with Oluwole “Joseph” Ojeikere of Lawrenceville, Georgia, to resolve allegations pertaining to a violation of the Georgia Residential Mortgage Act.

The terms of the Consent Order include the following:

  • Mr. Ojeikere is prohibited from directing the affairs of a Georgia mortgage broker or Georgia mortgage lender or from acting as a director, officer, partner, branch manager, agent, employee, equitable owner or any other equivalent role for a Georgia mortgage broker or Georgia mortgage lender for eighteen (18) months from the date of entry of the Consent Order
  • Mr. Ojeikere is prohibited from applying for a Georgia mortgage broker’s or Georgia mortgage lender’s license, either in her individual capacity or as the owner or officer of a corporation, partnership, or limited liability company for eighteen (18) months from the date of entry of the Consent Order
  • Mr. Ojeikere shall attend in-person and complete at least four (4) hours of continuing mortgage education on the subject matter of fraud.