Archives For Nevada

Melissa Beecroft was convicted, after a jury trial of conspiracy along with two counts each of mail and wire fraud. She was sentenced to three years in prison, five years of supervised release and ordered to pay restitution of $2,275,025. In addition, the court entered a criminal forfeiture order against Beecroft in the sum of $107 million for the conspiracy count and an additional $1,420,000 for the remaining four counts of mail and wire fraud. Beecroft appealed, arguing the amounts of restitution and forfeiture were not properly calculated and violated the Eighth Amendment prohibition against excessive fines.

FACTS

From roughly 2003 through 2008, Beecroft took part in a multi-million dollar residential mortgage-fraud scheme in the Las Vegas area which was led by Steven Grimm and Eve Mazzarella. The conspirators recruited and paid straw purchasers to buy homes at substantially inflated prices, sometimes with 100% mortgage financing. Once the mortgage loans were funded, Grimm and Mazzarella caused title and escrow companies to disburse excess funds to various shell corporations they owned, under the pretense of using the money to make repairs and improvements to the homes, though such repairs were never made. Grimm and Mazzarella also arranged to have participating mortgage brokers and loan officers remit a portion of their commissions and fees to Grimm. After each sale, the straw buyers would then transfer ownership in the properties themselves to Grimm and Mazzarella’s shell corporations.

The scheme involved more than 400 straw-buyer transactions and 227 properties purchased for more than $100 million. The vast majority of the loans involved went into default, causing the lenders to lose tens of millions of dollars.

Beecroft’s role began after September 2002, when she was hired as an administrative assistant at Grimm’s company, Desert Funding. In April 2003, Beecroft began working as an independent loan processor for Select Equities, another company Grimm owned, and she later became the owner and manager of a third company, Secured Mortgage Services, in which the majority of her business consisted of mortgages she prepared for Grimm. Beecroft participated extensively in Grimm’s mortgage-fraud scheme, completing loans for Grimm, handling false information that was given to banks on behalf of straw buyers and directing to whom fraudulent third-party disbursements would be made. Beecroft participated in the scheme for years—joining Grimm even before Mazzarella did—and was described by at least one witness as Grimm’s “right hand.” According to the government, Beecroft’s participation caused 143 of the 227 properties to go into default. The government believed she made in excess of $400,000 from commissions and fees generated during the scheme.

At sentencing, the district court concluded that, although Beecroft was in some sense “the hub” of the scheme, she was “not anywhere near as culpable as Mr. Grimm or Miss Mazzarella,” and did not orchestrate the conspiracy or perhaps even fully understand it.

DECISION

The court first considered the challenges that the restitution amount was not supported by adequate evidence and violated the Eighth Amendment. Lender restitution is calculated as the total amount of unpaid principal still owed on the relevant loans, less whatever money the banks recovered from sale of the collateral properties. The court found that the government submitted sufficient evidence and that the underlying court utilized the correct formula for determining the restitution amount – noting that the government requested the court order restitution of $52 million and the court ordered a much lesser amount. The defendant’s “bare speculation” that the process was deficient is not sufficient. The court also held that the restitution was not excessive noting that the court has previously found that, because restitution under the Mandatory Victim’s Restitution Act is inherently linked to the culpability of the offender, it would be difficult to find any mandatory restitution under the MVRA cruel and unusual.

The court next considered the forfeiture order. Pursuant to 18 USC 982(a)(2), a person convicted of these crimes must be ordered to forfeit to the US, any property constituting or derived rom, proceeds the person obtained directly or indirectly as a result of the crime. Forfeiture is not intended to restore the victim and so, in the case of a fraudulently obtained loan, the proceeds for purposes of forfeiture equal the amount of the loan and, when a conspiracy is involved, the proceeds equal the total of all loans obtained by the conspiracy as a whole. Thus, the underlying court ordered Beecroft to forfeit the total amount of money obtained from the fraudulent loans on the conspiracy count. First, the court found the evidence sufficient as to the amount and that it was proper that a defendant be ordered to forfeit the entire amount obtained by the conspiracy even though they did not receive it personally.

The court then addressed the argument that the amount is excessive agreeing, in the first instance, that the forfeiture order was properly subject to excessiveness review – finding that a forfeiture order, as distinguished from an order of restitution, is intended to punish – particularly in cases of in personam forfeiture orders.

In determining whether the fine is grossly disproportional to the gravity of a defendant’s offense, and thus violates the excessive fines clause of the Eighth Amendment, the court considers (1) the nature and extent of the crime, (2) whether the violation was related to other illegal activities, (3) the other penalties that may be imposed and (4) the extent of the harm caused. The court found that the amounts ordered on the four counts of wire and mail fraud were not excessive. With respect to the conspiracy forfeiture amount of $107 million, the court found that she was ordered to forfeit an sum more than 100 times greater than the maximum fine of $1M on that count and 5,000x greater than the lowest fine. Even considering the guideline prison time, the forfeiture amount was disproportionate. The court noted that it has previously rejected forfeitures that had much less disparity from the potential fines. The court concluded that, without any argument or discussion at the hearing to justify the amount, an order which so vastly outpaced the otherwise available penalties runs afoul of the excessive fines clause. The court vacated the $107M forfeiture order and remanded for reconsideration in light of the Eight Amendment’s Excessive Fines Clauase.

Emily Suzanne Vasquez, 47, Inglewood, California, was sentenced in Nevada 12-48 months in prison after being convicted of one count of attempted theft, a category “C” felony. Vasquez was sentenced as a result of a local, state and federal investigation of a complex mortgage fraud scheme. Vasquez was also ordered to pay nearly $53,000 in restitution to her five victims.

Vasquez and other defendants operated a scheme to defraud five homeowners struggling to pay their mortgages and in danger of losing their homes. The victims were lead to believe that Vasquez’ alleged company, California Sky, would perform one or more services, including preventing the foreclosure of their homes, lowering their mortgage payments and refinancing their mortgages and reduce the payment and principal. Vasquez failed to perform any of these services, and all five of her victims lost their homes after paying Vasquez and California Sky more than $50,000.

The consequences for vulnerable homeowners who fall victim to scams like this one are devastating,” said Nevada Attorney General Adam Paul Laxalt . “My Office will continue to investigate and prosecute frauds like this one to deter future scams and ensure the safety of Nevada’s homeowners.”

This case was investigated by Investigator Jaclyn O’Malley, and was prosecuted by Senior Deputy Attorney General Eric Nickel.

 

Terry Meisinger, 75, Seal Beach, California, was sentenced to 8 years in federal prison in connection with his operation of a bogus mortgage rescue scheme in which is made false promises to dozens of distressed homeowners, filed fraudulent bankruptcies to delay foreclosure and rented the properties to third parties during the bankruptcy delays. United States District Judge Virginia A. Phillips rejected Meisinger’s arguments that his age merited a lower sentence and noted that, even if Meisinger was released from prison when he was 80 years old, he would still pose a danger to the public. Continue Reading…

Kristen Michelle Ayala, aka Amber Lynch, aka Olivia Benet, aka Grace Williams, 30, formerly of Las Vegas, Nevada, and Joshua Manuel Sanchez, aka Nelson Cruz, aka Chris Ward, aka Daniel Mora, 34, formerly of Las Vegas, Nevada, were sentenced for conspiracy to commit wire fraud for their role in a $3.8 million dollar mortgage modification scam.

Ayala was sentenced to 135 months in prison, while Sanchez was sentenced to 151 months in prison. Both defendants were also sentenced to three years of supervised release and ordered to pay full restitution to the victims of their crime. Continue Reading…

Rodney Taylor, 51, Las Vegas, Nevada, pleaded guilty to two counts of false representation concerning title. Taylor participated in a scheme to claim liens on real estate in Las Vegas, Nevada by filing false documents. The fraudulent acts were committed between March and September 2012.

In addition to claiming non-existent liens on property, Taylor was also accused of filing false claims of ownership for real estate with the county recorder’s office. After filing these claims, Taylor applied for and received public funds from the Southern Nevada Housing Authority in exchange for renting to Section 8 tenants. The state is seeking restitution of over $45,000 for victimized individuals and state agencies.

Fraudulent real estate claims have a devastating impact on Nevada families and their homes,” said Nevada Attorney General Adam Paul Laxalt. “Prosecutors in my office will continue to ensure that those who attempt to defraud the public receive justice.”

False representation concerning title is punishable by up to five years of imprisonment and a fine of no more than $10,000. The sentencing hearing for Taylor is scheduled for February 11, 2016, in the Eighth Judicial District Court.

The investigation of this case was a collaborative effort between the Attorney General’s Fraud Unit, the City of North Las Vegas and the Department of Housing and Urban Development. Deputy Attorney General Daniel Westmeyer prosecuted this case.

Brett Depue, 42, Gilbert, Arizona, was convicted following a four-day jury trial, and 1½ days of deliberations, of one count of conspiracy to commit mail, bank and wire fraud, and seven counts wire fraud in connection with a Las Vegas mortgage fraud scheme.  Depue was remanded to custody and sentencing is scheduled for November 9 at 9:00 a.m. Depue‘s previous conviction on mortgage fraud charges was overturned by the Ninth Circuit Court of Appeals.

We are pleased that a second jury determined that Mr. Depue had committed fraud,” said U.S. Attorney Daniel G. Bogden.  “There were over 100 homes used as part of this conspiracy to defraud the financial institutions of millions.” Continue Reading…

Orlando Vera, 55, Whittier, California, pleaded guilty to one felony charge of mortgage lending fraud in Nevada, a category “B” felony.  His plea was a result of his role in a scheme to cheat several hopeful homebuyers out of $904,861. A month earlier, Vera’s co-defendant, Juan Robles, 35, Las Vegas, Nevada pleaded guilty to a gross misdemeanor for the same scam. Their crimes were committed between November 2012 and January 2014.

Vera schemed to defraud potential Nevada homebuyers by promising to purchase houses using their substantial savings as down payments, but ultimately failed to buy the houses. Fourth Judicial District Court Judge Kerry Earley will sentence Vera and Robles at a date to be determined. A third co-defendant, Christian Delgado, 39, Las Vegas, Nevada, will stand trial on April 4, 2016 for his role in the scheme. Continue Reading…

Patrick A. Nosack, 34, Henderson, Nevada, pled guilty in federal court to conspiracy to commit mail and wire fraud in connection with a telemarketing scheme involving timeshare resales. The telemarketing scam operated in Las Vegas, Nevada, and bilked over 3,000 victims of approximately 10 million dollars. Continue Reading…

With interest rates at an all-time low, many homeowners may be looking to modify their existing loans. Some home equity lines of credit, having been acquired by homeowners as long as 10 years ago, are due to be adjusted to higher rates over the next three years. For many struggling homeowners, particularly those underwater, securing a loan modification may provide the relief needed to avoid going into default.

Continue Reading…

Christopher L. Durling, 49, Sandy, Utah, who owned a title and escrow company that operated in Nevada, has pleaded guilty to wire fraud for embezzling almost $4 million from company escrow accounts for his own personal use.

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