Leader of Mortgage Relief Scam Receives 24 Year Prison Sentence

Allison Tussey —  March 5, 2015 — Leave a comment

Alan David Tikal, 46, the principal operator of a large-scale mortgage fraud/mortgage elimination scheme, was sentenced to 24 years in prison.

In September 2014, Tikal was convicted of 11 counts of mail fraud and one count of money laundering by United States District Judge Troy L. Nunley.

Between January 7, 2010 and August 20, 2013, Tikal operated a business under the name KATN, which targeted vulnerable and non-English speaking homeowners looking for mortgage assistance in the wake of the financial meltdown. According to evidence presented at trial, Tikal and his associates promised these homeowners that their outstanding mortgage debt would be reduced by 75%.  Tikal falsely claimed that he was a registered private banker with access to an enormous line of credit and was able to pay off homeowners’ debt in full. In exchange for various fees and payments, the homeowners existing mortgages would be satisfied and replaced with new loans to Tikal at 25% of the original loan obligation.

There were no instances in which the homeowner’s mortgage was paid, forgiven, or extinguished. Instead Tikal pocketed the victim’s money and spent it on chartered airline travel, a $5,000 suit, new cars, and other extravagant living expenses. Tikal and his associates convinced more than 1,000 homeowners in California and other states to participate in this fraudulent scam. Homeowners collectively paid more than $5,800,000 in fees and monthly payments to Tikal and his associates. The results were catastrophic for many families, the scam drained the victims’ bank accounts and ultimately led to the loss of their homes.

In February, co-defendant Ray Kornfeld was sentenced to 5 years for his role in the scheme and ordered to pay over $3 million in restitution to the victims. Co-defendant Tamara Tikal previously entered a guilty plea and will be sentenced on April 23, 2015.

Tikal’s arrest arose from an investigation by Special Inspector General for the Trouble Asset Relief Program (SIGTARP) and Attorney General Harris’ Mortgage Fraud Strike Force with assistance from the Stanislaus and Alameda County District Attorney’s Offices.

Attorney General Kamala D. Harris and United States Attorney for the Eastern District of California Benjamin B. Wagner  announced the sentence.  The case was jointly prosecuted by the United States Attorney’s Office for the Eastern District of California and the California Attorney General’s Office.

“Alan Tikal’s actions were illegal and will not be tolerated in California.  He and his partners defrauded hundreds of hard-working Californians who were fighting to keep their homes during our state’s foreclosure crisis,” Attorney General Harris said. “This predatory scheme robbed families of their life savings and in many cases, their homes. I thank our California Mortgage Fraud Strike Force and the U.S. Department of Justice for their work to bring these individuals to justice.”

“The financial crisis that hit our communities so hard made it very difficult for a lot of people to make ends meet,“ said U.S. Attorney Wagner. “Alan Tikal cynically took advantage of the desperation those people felt for his own profit, stealing payments meant to preserve family homes. Although we cannot undo the harm Tikal inflicted, today’s sentence provides a measure of justice.”

 

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Allison Tussey

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