Entries in California (369)

1:44PM

Man arrested for forgery on Deed of Trust

Real Estate Investigators from the San Bernardino (CA) County District Attorney’s Real Estate Fraud Unit arrested Paul Martinez, 54, formerly of Riverside, on Thursday, September 29, 2005. Martinez was arrested in the City of Los Angeles on several counts of forgery and filing a forged document with the County Recorder’s Office – all felonies. In 2002, Mr. Martinez allegedly forged the victim’s name on a Deed of Trust encumbering her property for $25,000.

Additionally, Martinez allegedly reproduced a notary public’s seal in the commission of the crimes. Martinez was booked into the West Valley Detention Center and bail is set at $50,000 .

1:29PM

California Loan officer charged with theft of cash-out checks

District Attorney Gregory D. Totten announced today that the Consumer and Environmental Protection Unit has filed a four-count felony complaint against Andres Zamora Acuna (DOB 7/26/69), of Oxnard. The complaint charges Acuna with three counts of grand theft and one count of forgery arising from Acuna’s actions as a loan agent for Pacific First Bancorp, a subprime lender in Oxnard, between June 2001 and August 2003. Acuna’s bail was set by Ventura County Superior Court Judge Vincent O’Neil at $50,000.


Acuna allegedly failed to tell clients that they were to receive cash following their refinance transactions. He intercepted cash-out checks and deposited them into his own bank accounts by forging endorsements on the checks. Acuna also allegedly requested that his clients give him personal checks payable to appraisers, credit agencies and title companies, and then altered the payee’s name to become or include his own name before depositing those checks into his personal account.

5:06PM

Woman Arrested For Real Estate Fraud

San Bernardino , CA – Friday, September 30, 2005, Real Estate Fraud Investigators from the San Bernardino County District Attorney’s Office arrested Martha Patricia Sandez, 42, at her home in San Bernardino, CA.

In May 2002, Sandez was working as a Real Estate Loan Agent and obtained a Real Estate Loan for a woman to purchase a house in Long Beach California. Sandez told the woman she needed a co-signer to qualify for the home loan. The woman got a friend to co-sign and the woman bought the house. In November 2002, Sandez used the co-signer’s personal information to obtain a home loan and buy herself a house in Highland, California. In August 2003, a Fraudulent Deed containing the forged signature of the co-signer was recorded with the San Bernardino County Recorders Office granting the property from the co-signer to Hugo Sandez, son of the suspect. In October 2004, the Sandez’s sold the property, making a large profit. Further arrests are pending.

Sandez was booked into the West Valley Detention Center for felony charges of Forgery, Recording Forged Documents, and unauthorized use of personal identifying information to obtain credit/goods. Bail was set in the amount of $500,000.00.

12:23PM

Ventura County DA wants fee imposed to pay for real estate fraud unit

Ventura County (CA) District Attorney Gregory Totten is asking for a $2 per recording fee to be imposed that would pay for prosecution of what authorities say is growing real estate fraud in the county’s high-priced market.

If approved by the Board of Supervisors, the $2 fee would be added to the costs for recording certain real estate transactions such as deeds of trust and notices of default.  The fees are expected to generate $250,000 over the next nine months to start a unit devoted to such crimes. One attorney and one investigator would be assigned to the project.

10:19AM

Dorean Group principles indicted

Our sincere thanks to the US DOJ’s Office in Oakland for the following information and documents.

The United States Attorney’s Office for the Northern District of California and the FBI announced that a federal grand jury in Oakland indicted Dale Scott Heineman, 45, Kurt F. Johnson, 42, and the Dorean Group in a 46-count indictment charging mail fraud, bank fraud, and conspiracy to commit wire fraud, mail fraud and bank fraud.  The principals of the Dorean Group are Dale Scott Heineman of Union City, California, and Kurt F. Johnson, of Sunnyvale, California.  They, along with the Dorean Group and entities associated with the Dorean Group, are charged with operating a debt elimination scheme whereby fraudulent documents are recorded as part of the title of their clients’ properties, causing home mortgage and equity loans to falsely appear satisfied when they actually had not been paid.  With this fraudulently-generated free and clear title, certain clients, at the direction of the Dorean Group, obtained hundreds of thousands of dollars in home equity loans from independent lenders. 

The following documents, provided by the US DOJ give color to this press release:
Indictment - click here
Map of the States involved - click here
The 6 steps to the alleged fraud - click here
Example Full Reconveyance - click here
Example of substitution of trustee - click here

               The charges in the indictment relate to 17 properties in California, Nevada, Texas, North Carolina, Florida, Colorado, Washington, Idaho, and South Carolina with a value of over $5 million.  The FBI is continuing to investigate more than 480 properties throughout 35 states with a potential value of $88 million in loans that may have been affected by this alleged scheme.  The FBI is investigating properties in 19 California counties affected by this alleged scheme.
                U.S. Attorney Kevin V. Ryan stated, “Homeowners should be cautious of offers that sound too good to be true.  This alleged scheme violates mortgage agreements between the lender and borrower and taints property titles by recording false documents on the title of a home.  Manipulating property titles and interfering with mortgage loans with the intent to defraud is illegal and will result in prosecution.”
        Joseph Ford, Special Agent in Charge of the FBI in San Francisco, stated, “Mr. Heineman and Mr. Johnson are accused of being con artists in a sophisticated telemarketing scheme.  They are alleged to have incorporated the internet to further their criminal enterprise which is nationwide in scope and has significant impact on the housing market in the U.S.  Because cyber space has no borders, the FBI is working with its law enforcement partners from around the world to address these growing crime problems.”
        According to the indictment, the Dorean Group is an unlicensed and unincorporated entity that has been operating a purported debt elimination program since at least January 2004. The Dorean Group uses brokers to promote its program.  On various websites, the Dorean Group and its brokers publically advertise that they have a “PROVEN, legal and moral way of eliminating your mortgage while adding $32K to your pocket (*based on a $200,000 mortgage).”
        According to the indictment, the Dorean Group’s scheme to defraud operated as follows:         
(1)     Fee:  The client pays an up-front fee of approximately $1,000 to $3,000 per loan to be eliminated and promises to make a “free-will offering of 50% of the REDEEMED mortgage.”  The redeemed mortgage refers to a subsequent equity loan (inaccurately dubbed a refinance loan in websites promoting this scheme) that is obtained from a separate lender based upon the false premise that the initial mortgage loan secured by the property had been fully satisfied.
(2)     Transfer of Title:  Once the initial fee is paid, the Dorean Group forms a trust with its client, the trustees of which are Heineman and Johnson.  The client records a quitclaim deed with the local county recorder’s office, which allegedly transfers the borrower’s title interests to this trust.  However, mortgage agreements between a borrower and a lender generally require the lender’s consent before the borrower may transfer his/her title interests.  According to the indictment, no lender has granted Heineman, Johnson, or the Dorean Group permission to act on behalf of the borrower under the applicable mortgage agreements.
(3)     Self-Executing Presentment Packet:  The Dorean Group subsequently mails a “self- executing presentment packet” to the lender of its client’s loan.  In this packet, the Dorean Group claims to act on behalf of the borrower and demands the lender prove the validity of its loan “to the unilateral satisfaction of the Dorean Group” within 10 days.  If the lender fails to take this opportunity, documents in the packet allege that, due to the lender’s “tacit assent” and “default,” Heineman and/or Johnson of the Dorean Group will act as the lender’s agent and attorney-in-fact as to the loan and the secured property.  In addition, if the lender elects to prove the validity of the loan, but fails to meet this burden, the lender is purportedly liable to the Dorean Group for damages twenty times the amount of the loan.
(4)     Substitution of Trustee:  After 10 days has elapsed, Heineman, Johnson and the Dorean Group prepare a  “Substitution of Trustee,” or, depending on jurisdiction, a “Specific Power of Attorney” or “Power of Attorney,” that is recorded as part of the title to its client’s property.  This recordation claims that Heineman and/or Johnson is acting as agent and attorney-in-fact on behalf of the lender.  According to the indictment, no lender has authorized Heineman, Johnson or the Dorean Group to act either as its agent or attorney-in-fact.
(5)     Full Reconveyance:  Under this false representation, Heineman, Johnson and the Dorean Group prepare a “Full Reconveyance” or, depending on jurisdiction, “Discharge of Mortgage” or “Satisfaction of Mortgage,” that is recorded as part of the title to its client’s property.  In this document, Heineman and/or Johnson of the Dorean Group – allegedly acting on behalf of the lender – represents that the loan secured by the property has been fully paid, when the loan had not, in fact, been repaid.  In this recordation, Heineman and/or Johnson purportedly transfers the lender’s secured interests in the client’s property to the client’s trust established by the Dorean Group, causing title of the property to falsely appear free and clear of any encumbrances. 
(6)     Subsequent Home Equity Loan:  With what appears to be free and clear title, the Dorean Group directs its clients to obtain a subsequent “refinance” or home equity loan from a separate lender, with the property serving as the security underlying this loan.  When the loan disbursement loan is made, the Dorean Group receives 50% of its proceeds, the Dorean Group broker receives approximately 10-25% of the funds, and the Dorean Group client keeps the remaining 25-40% of the loan.  The refinance loan is expected to be subject to the Dorean Group’s debt elimination program and is not repaid. 
        Mr. Heineman and Mr. Johnson were previously arrested on state charges filed in Salt Lake City, Utah.  They are currently being held in custody in Salt Lake County Metro Jail in Salt Lake City, Utah.  No bail arrest warrants were issued as to both Mr. Heineman and Mr. Johnson as a result of this indictment and will be lodged with the Salt Lake County Metro Jail.  An initial appearance on this indictment is not yet scheduled, as the Third District Court of the State of Utah, which has primary custody over Mr. Heineman and Mr. Johnson as a result of the pending state charges, must first determine when they can be made available for that purpose.
        On July 6, 2005, the Civil Division of the United States Attorney’s Office filed a complaint for injunctive relief pursuant to 18 U.S.C. § 1345, and a motion for a temporary restraining order directing that Messrs. Heineman and Johnson, doing business as the Dorean Group, stop marketing and operating their mortgage elimination scheme.  On July 6, 2005, Judge William H. Alsup granted the government’s motion for a temporary restraining order.  On August 1, 2005, Judge Alsup converted the temporary restraining order to a preliminary injunction, restraining the Dorean Group from engaging in any activities related to its mortgage elimination scheme, pending final judgment in the civil action.
        The maximum statutory penalty for each count of mail fraud in violation of 18 U.S.C. § 1341 and affecting a financial institution is 30 years imprisonment and a fine of $1,000,000, plus restitution.  The maximum statutory penalty for each count of bank fraud in violation of 18 U.S.C. § 1344 is 30 years imprisonment and a fine of $1,000,000, plus restitution.   The maximum statutory penalty for each count of conspiracy to commit mail fraud, wire fraud and bank fraud in violation of 18 U.S.C. § 1349 is 30 years imprisonment and a fine of $1,000,000, plus restitution.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. 
        An indictment contains only allegations against an individual and, as with all defendants, Mr. Heineman, Mr. Johnson and the Dorean Group must be presumed innocent unless and until proven guilty.
        James Keller is the Assistant U.S. Attorney who is prosecuting the case and Steven Saltiel is the Assistant U.S. Attorney who handled the government’s application for a temporary restraining order and preliminary injunctive relief against the Dorean Group.  The prosecution is the result of a nine-month investigation by the Federal Bureau of Investigation.  Several state law enforcement entities, including the Alameda County District Attorney’s Office and the California Attorney General’s Office, among others, provided valuable assistance and information about this alleged scheme to the United States Attorney’s Office

7:03AM

Real estate fraud related murder trial begins

The following story by John Berry is reproduced from an original article in The Press-Enterprise

Ernesto Barajas thought he was the next to die moments after his cousin emerged from a Highland home where a couple were shot execution-style in September 2002, his defense attorney said in opening statements Monday.

They say his cousin, Ernestina Bernal, 33, fired six rounds, two of them point-blank, into the Mollers as they prepared for a vacation in the Northeast. The Mollers owned a mortgage company that had worked with Bernal, a real-estate agent. Barajas was interviewed and arrested 10 days after the killings. Bernal fled to Mexico but unexpectedly surrendered to San Bernardino County sheriff’s detectives in April 2004 because she missed her home and family.

Bernal is being tried separately and is scheduled to appear in court next month. In his opening statement, Taylor depicted Barajas as a family man trying to achieve the American dream of owning a home and a business. He said Barajas made his living by working as a handyman on call.

He owed $23,000 in back child support. And, Taylor said, Barajas never would have obtained a loan for his recently purchased San Bernardino home without the help of his real-estate agent cousin.

On the night of the killings, Barajas went with his cousin because she needed help and she had promised him $40, Taylor said. He knew Bernal had a gun with her, but he never realized she was about to use it, Taylor said. Barajas thought Bernal was going to kill him on the ride home after the Moller slayings, or after dropping him off, Taylor said.

"She told me, ‘We’re going to be real good friends now,’ " said Taylor, speaking as if he were Barajas. "My fear was she was going to come back that night and take me out."

Lewis Cope, the San Bernardino County deputy district attorney prosecuting Barajas, promised in his opening statement that jurors would see and hear proof that Bernal wanted to harm the Mollers, and Barajas was aware of her intentions when they drove to the couple’s home.

"You will see how he misleads officers," Cope said. "You will see how he looked detectives in the eye and said that he is telling truth."

In the weeks before the killing, Bernal was angry at Sue Moller, an officer and secretary of the family-owned Statewide Mortgage, Cope said. Bernal had assumed correctly that authorities were recording a telephone call concerning fraudulent loans that Bernal had channeled through the Moller family’s business, he said.

Barajas told police that Bernal said she was going to "smoke" Sue Moller, Cope said. "The Mollers were executed," Cope told jurors. "A coup de grace was fired into each of them as they were lying on the ground."

9:17AM

Suspect charged in real estate swindle

The Daily Review in Alameda County (CA) reports that A 25-year-old Newark man has been charged with 13 felony counts of real estate fraud after he allegedly bilked money from his company and tricked six California homeowners out of their deeds. Kaseem Mohammadi was arraigned at the Hayward Hall of Justice on Wednesday and pleaded not guilty to the charges, said Deputy District Attorney William Denny.

Judge Alfred Delucchi ordered that Mohammadi be held at Santa Rita county jail in Dublin in lieu of $155,000 bail, Denny said.

The Alameda County District Attorney’s Office sought charges against Mohammadi and two other men after six homeowners, including one in Hayward and another in Oakland, complained that they lost the titles to their homes because of their dealings with Mohammadi and accomplices, 27-year-old Rahim Hamidi of Walnut Creek, and Manteca resident Elmer Aslami, 31. Hamidi has been charged with four counts, and Aslami with one.

The men, who worked for Newark’s Golden Key Inc., promised to help financially distressed homeowners by increasing their credit scores and lowering their monthly mortgage payments, Denny said. In all, six homeowners — three of whom spoke only Spanish — claim they lost more than $500,000 in home equity during a 13-month period between May 2004 and August 2005. The victims also said their titles had been lost to investors, Denny said.

In addition to victimizing the homeowners, Mohammadi is believed to have stolen about $268,000 from his employer, Denny said.

For more information, call the Real Estate Fraud Unit of the Alameda County District Attorney’s Office at (877) 288-2882.

2:50PM

Former loan agent gets 3 years and 8 months

Ventura County (CA) District Attorney Gregory D. Totten announced that Edgar Mauricio Berrazueta aka Edgar Mauricio Berrazueta Gonzalez (DOB 10/8/61), has been sentenced by Superior Court Judge Bruce Clark to three years, eight months in state prison, in a prosecution by the Consumer and Environmental Protection Unit. Berrazueta, an Ecuadorian national, had pleaded guilty on April 19, 2005, to multiple counts of grand theft, forgery, manufacturing false identification documents, attempting to dissuade witnesses, and special allegations under the aggravated white-collar crime statute, and excessive-takings enhancements.

Judge Clark also ordered that Berrazueta pay restitution totaling $120,000 to numerous victims of his fraudulent scheme. These victims are expected to receive 100 percent of the restitution due them, because the District Attorney obtained a “freeze and seize” order at the time of Berrazueta’s arrest. Two houses, two bank accounts, and several luxury automobiles were frozen. 

Berrazueta committed his crimes while employed as an assistant loan agent at Pacific First Bancorp in Oxnard , specializing in sub-prime home loans. Berrazueta promised homeowners lower monthly payments on their home loans if they refinanced through his company. Instead, the homeowners received worse loans than they already had, with higher payments, for which Berrazueta and his company received thousands of dollars in commissions. Berrazueta lied about, or hid, the true interest rates, fees, penalties, payment amounts, and costs to refinance these home loans. The homeowners were not aware of the terms of their new loans because all of the documentation was in English and the homeowners read and speak only Spanish.   

When Berrazueta later became aware that some of his customers were cooperating with the District Attorney’s investigation, he went to their homes or places of work and pressured them not to pursue charges against him. Berrazueta also stole clients’ cash-out checks. Berrazueta would not tell his clients they had money due them. He intercepted their cash-out checks, depositing them (in amounts up to $15,000) into his own bank accounts by forging their signatures on the checks. 


During the execution of a search warrant at Berrazueta’s residence, several fraudulently manufactured social security cards were obtained. Berrazueta admitted to manufacturing these cards to enable him and others to misrepresent their status as United States citizens to their employers.