January 30th, 2009 at 9:10am A husband and wife were charged with mortgage fraud, false statements on loan applications, bankruptcy fraud, contempt of court, perjury and money laundering in a recently unsealed federal indictment. The couple, Justine Lorraine Rice, 45, and Wendell Anthony Rice, 45, formerly of Rancho Santa Fe, were arrested in Escondido, according to the U.S. Attorney’s office. Justine Rice allegedly lied and falsified documents to obtain a mortgage to buy a home in Rancho Santa Fe. When Rice filed for bankruptcy two years later, she arranged for a straw buyer to purchase the home, which was in foreclosure, by falsifying documents. She may have also committed escrow fraud by managing to divert the proceeds to an account controlled by Wendell Rice. Read the Full Article in the San Diego North County Times.  February 11th, 2009 at 10:28pm
Christopher J. Warren, 27, a fugitive who fled the country after confessing to close to $1 billion worth of mortgage fraud on his website, was caught February 11 at the Candian border with $70,000 stuff inside his cowboy boots. He was also carrying $1 million in Swiss bank certificates and four ounces of platinum worth more than $1,000 per ounce. Warren was arrested early Wednesday while entering the United States at Buffalo, N.Y., according to acting U.S. Attorney Lawrence Brown. Brown indicated that Warren carried two fake passports, which he had used to fly first to Ireland on a privately-chartered jet, then to Lebanon and Canada before trying to enter the United States from Toronto by taxi.
Before disappearing on February 3, Warren confessed on the website of Triduanum, a company he is said to have controlled, to a career built on committing massive mortgage fraud, starting with his first job at Ameriquest. The charges against him for which the arrest warrant was issued include mail fraud, bank fraud and operating a continuing financial crimes enterprise with respect to his employment at Loomis Wealth Solutions in Roseville, California. The confession posted on the Triduanum website stated that the activities at Loomis were nothing more than a Ponzi scheme. A second suspect in the case, Garret Griffith Gililland III, 27, of Chico, was apprehended in Spain in October and is fighting extradition to the U.S. Authorities say they are still looking for Scott Cavell, 25, of Sacramento, who appeared to have fled the U.S. a day after Warren left. Note: this article is also posted on Daily News. February 6th, 2009 at 11:18am Christopher Warren, 27, the mortgage broker who replaced his company Web site with a seven-page essay describing his long career perpetrating mortgage fraud, has apparently fled the U.S. on a private jet. 
Christopher Warren (News10) Warren’s flight is most likely in response to a complaint sworn out by an IRS agent describing what may amount to a $100 million scam by Warren through his association with Loomis Wealth Solutions. The IRS charges Warren with operating a financial crimes enterprise, mail fraud and bank fraud. Read the Full Article on News10 ABC.
Sacramento-based company website has been replaced by a long-winded essay by its form managing broker, who, hopefully, will be indicted for the many crimes to which he confessed online. Christopher Warren, 27, whose broker’s license with the (DRE) is still in good standing as of this posting, claims to have begun his profitable career in fraud while still a teenager, when he went to work with now-defunct Ameriquest in 2001. Warren admits to adjusting loan applications at Ameriquest and hacking into their computer system to approve his own loans. Warren’s ambition drove him to start his own mortgage banking firm, WTL Financial, also in Sacramento just three years later, where he manipulated credit scores and W2 forms to investors. After WTL collapsed, he got a job as a vice-president for Loomis Wealth Solutions, where he worked until the FBI came knocking. After bragging about his contribution towards wrecking the national economy, Warren, in the tradition of Watergate criminal Charles “Chuck” Colson and Manson Family murderer Charles “Tex” Watson, is looking for redemption from “a higher power”. He ends his bloated, self-serving essay by claiming to be “the man for the job” to clean up the mess he helped created. Read Christopher Warren’s hallucinogenic missive on himself here. February 18th, 2009 at 9:09pm Appraisal fraud is just not given the attention it is due. In fact, without an appraiser willing to violate the code of ethics to which licensed appraisers must adhere, a large percentage of real estate fraud crimes would not have been possible. Three examples of large-scale appraisal fraud cases come immediately to mind. The first is the notorious mortgage fraud perpetrated against Lehman Brothers by accused former Prudential California brokers Joseph Babajian and Kyle Grasso. The two allegedly purchased properties in Beverly Hills and other expensive neighborhoods in West Los Angeles at market value, then hired appraisers Scott Robinson and Lila Rizk to inflate the properties’ values to justify the prices in the phony purchase contracts Babajian and Grasso wrote when re-selling the properties to straw/dummy buyers. Case number two: in November 2007, New York Attorney General Andrew Cuomo sued eAppraiseIT, a subsidiary of First American Corp., for caving in to pressure from its top customer Washington Mutual, aka WaMu, to use appraisers handpicked by WaMu. eAppraiseIT earned more than $50 million in revenue from WaMu from April 2006 until the time of the lawsuit. WaMu’s alleged motive was quite simple: the higher the appraised value of the properties, the higher the fees it earned from writing loans. Appraisers who refused to participate were generally blacklisted. Case number three is currently in the news: commercial real estate giant Marcus & Millichap, a number of its agents, Marcus & Millichap subsidiaries, Paul A. Morabito, Jack Waelti and their “alter-ego” shell companies are accused in a lawsuit of defrauding investors in a complicated scheme that required the active participation of an appraisal firm to provide artificially inflated values to properties which the Marcus & Millichap and other defendants owned and sought to sell to investors. At the core of the alleged Marcus & Millichap real estate fraud is PGP Valuation, Inc. Marcus & Millichap agents are accused of targeting and purchasing Jiffy Lube and Church’s Chicken franchises, including the land on which they were located, then creating phony inflated lease-back agreements with their co-defendants Morabito and Waelti. PGP Valuation would essentially reverse-engineer the leases to derive property values based upon “the as-is market value of the leased fee interest . . .”. PGP further provided comps on other properties submitted by and controlled by the agents that it had also artificially inflated. The investors were never informed of the relationships between the various defendants and they were certainly unaware that the appraisals were inaccurate. In all three cases, without a licensed appraiser to put his or her stamp of approval on an inflated property valuation, there would have been no means to commit the real estate fraud or mortgage fraud. In the big picture of its economic impact, appraisal fraud is responsible for losses in the billions in the U.S. housing market. This article was also posted in Los Angeles Times
January 21st, 2009 at 2:05pm
An Altadena woman charged by federal authorities with operating an $18 million real estate investment fraud scam that focused on African Americans received a sentence in federal court of 12 1/2 years in prison Jeanetta M. Standefor, 40, operator of Accelerated Funding Group (AFG) in Pasadena, was also ordered by U.S. District Judge Percy Anderson to pay over $8.6 million in restitution to her victims as a result of her investment fraud. Standefor promoted a “foreclosure reinstatement” program that attracted more than 600 investors and purported to use the funds to cure defaults on distressed properties, according to federal prosecutors. Although she promised returns of up to 50% in just a few months (Investors: that should have been a hint!), Standefor was in fact just operating a Ponzi scheme. Read the Full Article in the Pasadena Star News. December 19th, 2008 at 10:59am Charles Stipe, 57, and Brenda Lee Stipe, 58, have been arrested for for felony grand theft for allegedly scamming more than $269,000 from a victim in a real estate scheme, according to a press release issued by the San Bernardino County District Attorney’s Office. The District Attorney’s Real Estate Fraud Unit conducted an extensive criminal investigation into the Stipes, who sold manufactured homes in the Redlands area. Read the Full Article in Redlands Daily Facts. February 6th, 2009 at 11:01am A former Ramona-based financial planner who is thought to have defrauded his investors out of $20 million has been delayed to May 4 in U.S. District Court in San Diego. Rollo Richard Norton II, 53, pleaded guilty to mail fraud in August 2007, but his sentencing has been repeatedly delayed in a joint motion by both U.S. attorneys and his defense counsel who cite “an ongoing investigation.” Norton’s businesses were called Safe Harbor Financial Investments and Norton Financial Limited and sought investors for a condominium project in Pacific Beach, California. Norton not only applied for loans in his investors’ names without their knowledge or consent, he also signed their people’s names on grand deeds and other escrow documents. Read the Full Article in the Ramona Sentinel. 
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