In California, mortgage scammers find easy pickings

As foreclosures climb, so does fraud by schemers preying on desperate homeowners hoping to modify their loans. State investigators have 750 open cases -- up from just 10 a year ago.

Maricela Castellanos sat at her desk, the telephone pressed to her ear, a chill running through her body.

A representative from her mortgage company was on the line with troubling information about the loan on Castellanos' Hesperia home.

No one at the company had previously been in contact with her, Castellanos recalled the man saying. The bank had no record of a new loan agreement with her, he said, nor had it received cashier's checks for $2,260 and $1,408.23 she said she had sent.

Castellanos had been a victim of an alleged loan modification swindle -- a financial crime in which scammers pretend to help distressed borrowers renegotiate their mortgages with their banks but instead pocket the money and leave the homeowners in worse straits than before.

Law enforcement officials say the scams are becoming increasingly prevalent, especially in California, where the Department of Real Estate has reported an explosion from 10 open cases a year ago to more than 750 this spring. Nationally, U.S. Atty. Gen. Eric Holder has said that the FBI's "rescue scam" caseload is up 400% from five years ago.

Some schemes advertise with hand-drawn signs on freeway ramps, while others target homeowners by name with carefully forged documents that appear to come from their lender.

The alleged scam artists to whom Castellanos paid more than $5,000 last fall were among the most sophisticated operating in California, authorities said, stymieing investigators with a thicket of bank accounts, 1-800 numbers and wire transfers to Mexico.

......among the most sophisticated scams.... a thicket of bank accounts, 1-800 numbers and wire transfers to Mexico.....

(Sniffle) Just here for a better life (sob).

California state worker probed in ID security breach
SacBee | July 10, 2008 | Andrew McIntosh
FR Posted on Thursday, July 10, 2008 by radar101

A state worker recently married to a member of the Mexican Mafia (who is in Corcoran State Prison for a gang murder) is herself under investigation for downloading more than 5,000 names, addresses and Social Security numbers belonging to Department of Consumer Affairs staff, The Bee has learned.

The Department of Consumer Affairs disclosed that it suffered a data security breach last month, but at the time released few details about the incident. Officials sent a letter to employees, warning them to watch their credit for signs of identity theft, offering them free credit reports and $25,000 worth of fraud insurance.

Court documents obtained by The Bee show the department's own investigators have raided the Sacramento home of Rachael Rivas Dumbrique, a 32-year-old former Consumer Affairs personnel specialist, as part of an ongoing criminal investigation. Investigators are looking at why Dumbrique copied a confidential data roster with employee names, addresses and Social Security numbers and then shipped it to a private e-mail account on her last day of work at Consumer Affairs in June.

They also want to know if her gang-linked husband had any involvement, the court documents show. Dumbrique has since joined the Department of Mental Health, where she was at work Wednesday as a staff services analyst in the department's personnel office, spokeswoman Kirsten Deichert confirmed. She declined further comment. (Excerpt) Read more at sacbee.com ...

(Snicker) I just can't wait til Cali uncovers this scam (if ever).

Husband And Wife Plead Guilty To Massive Florida Straw Buyer Scheme ("God's children" living the American Dream (sob)

Staff Reporter, 06/02/08, Mortgage Fraud Blog

Juan and Rachael Torrens pled guilty to conspiracy charges in connection with their participation in a recent multi-million dollar mortgage fraud scheme in South Florida. The defendants acknowledged as part of their guilty plea that their scheme produced over $15,000,000 in fraudulent loans, and resulted in losses of over $5,000,000 to various lenders. With Juan and Rachael Torrens‘ guilty pleas, 15 of the original 31 defendants charged have pled guilty.

As previously reported by Mortgage Fraud Blog, defendants Juan Torrens, the de facto owner of Amsouth Trust & Investment Corp. (”Amsouth”) and president of Countryside Land & Development, Inc., Rachael Torrens, president of 1st Choice Realty of South Florida, Inc. and de facto owner of First United Mortgage USA Corp., Daniel Ramos, Alfonso A. Muxo, a State of Florida certified real estate appraiser and owner of Palm Bay Real Estate Appraisals, Inc., and Katherine Harris, former president and part owner of Floridian Home Title Corporation, were charged with conspiracy to commit wire fraud and/or wire fraud for their participation in this massive mortgage fraud scheme.

The scheme involved fraudulent mortgage loans obtained for the purchase of 28 properties located in Miami-Dade and Broward Counties, Florida, and in the City of Marco Island. All except Katherine Harris have already pled guilty, and are awaiting sentence.

The Indictment also charges defendants Mario E. Diaz, Aurelio Pozo, Oscar Barreiro, Lellany Rordriguez, Jose Asensi, Carlos Morales, Damaris Jimenez, Lizabeth Perez, Mario Blanco, Rene Rodriguez, Tamaris Angulo, Alicia Loaiza, Ester Crespo, Jesus Enrique Guevara, Janette Lugo, Priscilla Fleitas, Erick Clavijo, Luis DeJesus Planas, Moises Llorens, Milva Roque, Aurora Ramentol, Gladys Lens, Nancy Fundora, Yanny Cruz Pavon, Roger Rosario and Jacqueline Perez-Castillo ("the straw buyer defendants") with wire fraud for their participation in this mortgage fraud scheme. To date, guilty pleas have been entered by defendants Aurelio Pozo, Oscar Barreiro, Carlos Morales, Damaris Jimenez, Mario Blanco, Jesus Enrique Guevara, Janette Lugo, Priscilla Fleitas, Moises Llorens, Gladys Lens, and Roger Rosario.

According to the Indictment, Juan Torrens would identify sellers of residential properties who were willing to overstate the true selling price of their properties. Daniel Ramos and Juan Torrens would then recruit and pay the straw buyer defendants to pose as buyers and ostensibly participate in the purchase of the selected properties. Defendants Rachael Torrens and Juan Torrens would prepare fraudulent mortgage loan applications for the straw purchasers that included false employment verifications, pay stubs, income and funds on deposit, and IRS Forms W-2.

Thereafter, to support the overstated sales prices on the properties and the fraudulent mortgage applications, defendant Alonso A. Muxo would prepare fraudulent appraisals attesting to the inflated property values dictated by Juan Torrens. Roger Rosario, an employee of Regions Bank, assisted the fraud by providing, on at least one occasion, a fraudulent verification of deposit in connection with a mortgage loan application for one of the straw buyer defendants.

To effectuate the scheme, defendants Juan Torrens and Rachael Torrens, together with the straw buyer defendants, would create and submit to the banks and lending institutions HUD-Settlement Statement Forms, also known as HUD-1s, which falsely stated that the straw buyers brought their own funds to the closings. Once the mortgage applications were approved, the lenders would wire the loan proceeds to the title company, Floridian Home Title, for closing. At closing, Amsouth, a company owned and controlled by Juan Torrens, would receive a credit for the difference between the inflated price and the actual selling price of the property. Defendants Juan and Rachael Torrens would make the payments on the mortgage loans to maintain the loans afloat until the properties could be resold again, often to another straw buyer.

When the Torrenses failed to make payments on the loans, some properties went into foreclosure, resulting in substantial losses to the lending institutions (and US taxpayers).

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