FBI Seeks Fugitive Who Defrauded Homeowners

Allison Tussey —  December 21, 2012 — Leave a comment

David Kaup, 29, San Gabriel, California, who was scheduled to be sentenced on December 17, 2012, but failed to appear in court, is being sought by the FBI.

The defendant was scheduled to be sentenced in United States District Court in Los Angeles. Kaup pled guilty to two counts of wire fraud on April 9, 2012.

According to his plea agreement, Kaup carried out three separate fraud schemes, each of which caused millions in losses to victims. Kaup admitted in his plea agreement that over a period of approximately five years, he defrauded more than 50 families out of more than $11 million. Many of these victims were working class families who sought Kaup‘s assistance in refinancing their homes.

Kaup admitted in his plea that he had operated several companies, including Lunden Investments, American Loans and Funding (ALF), and First Mortgage West, each of which was based in Los Angeles. Through Lunden Investments, Kaup convinced investors to give him more than $9 million, which he said he was going to use for commercial loans. Kaup admitted in his plea, however, that he instead lost approximately $9 million of the victims’ money trading on the Foreign Currency Exchange Market.

After defrauding these victims, Kaup started a separate scheme to deceive homeowners into sending him money. In his plea, Kaup admitted that through his second company, ALF, he told homeowners that he could refinance their homes at below-market rates, so long as they provided certain funds up front to demonstrate that they financially qualified for the special loan terms. These funds were supposed to be kept safe during the loan process and then returned when the loan was either approved or denied.

Kaup admitted that he never tried to refinance the homeowners’ loans and instead used the victims’ money to buy luxury items for himself and to trade on the Foreign Currency Exchange Market. After this scheme collapsed, Kaup admitted in his plea that he ran the same scheme, along with others, through a third company, FMW. In all, through ALF and FMW, Kaup admits that he defrauded more than 50 families out of approximately $2 million.

In carrying out these schemes, Kaup used several aliases, including “David Smith” and “David Martinez.”

Kaup is described as follows:

Date of birth: January 26, 1983

Hair: Black

Eyes: Brown

Height: 5’11” tall

Weight: 190

Last known city of residence: San Gabriel, California

Kaup has been known to work as a disc jockey in the Los Angeles and Las Vegas areas and has used the moniker “New Age Dave.”

Anyone with information as to the whereabouts of Kaup is urged to call the FBI at 1-888-CANT-HIDE (1-888-226-8443).

The fraud case against Kaup and others was investigated by the FBI. Kaup is being prosecuted by the United States Attorney’s Office in Los Angeles.

Bill Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office, and AndrĂ© Birotte Jr., the United States Attorney in Los Angeles, made the announcement.

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Allison Tussey

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