Three Charged in Short Sale Investment Scheme

Rachel Dollar —  July 17, 2015 — Leave a comment

Jerome Whittington, 65, La Quinta, California; Patricia Torres Zavala, 42, Benicia, California; and, Kathleen Moore, 68, Olympia, Washington have been charged by a federal grand jury for their roles in a variety of fraudulent schemes, including one involving short sales, that victimized at least 20 investors and caused losses of more than $2 million.

The three defendants were charged in a superseding indictment filed on July 8, 2015. The 24-count indictment alleges that they lied to investors in a series of schemes, and then used investor money for personal expenses rather than investing the funds as promised.

Whittington is also charged in a separate case with posing as a former federal prosecutor in a case involving a former DEA agent. 

The superseding indictment alleges that Whittington and his two codefendants made false statements and misrepresentations to induce victims to invest money in various business ventures and real estate purchases. Among other misrepresentations detailed in the indictment, Whittington falsely claimed to be a wealthy real estate investor, a Purple Heart recipient and an attorney to gain the admiration of victims and add legitimacy to the scheme. In one instance, Whittington told a victim he owned a private jet and movie company.

In one of the schemes, Zavala, a former Bank of America employee, purported to be a short-sales expert working with Whittington in order to help victims obtain real estate properties at very low rates, according to the indictment. Zavala, who allegedly used her position at the bank to coerce victims to send money, was paid by Whittington from the proceeds of the fraud.

Moore purported to be Whittington’s accountant and, in that capacity, handled all finances and received money from various victims.

If convicted of the charges in the indictment, Whittington faces a statutory maximum penalty of 480 years in federal prison. If convicted, Moore faces a maximum of 240 years, and Zavala faces up to 200 years. The government will also seek forfeiture of real estate and money derived from the scheme if the defendants are convicted.

This investigation was conducted by the Federal Bureau of Investigation and SIGTARP, with the assistance of the Bossier Parish Sheriff’s Office in Bossier City, Louisiana, and the Ventura County Sheriff’s Department. During Tuesday’s arrest of Zavala, SIGTARP agents were assisted by the Federal Housing and Finance Agency and the Benicia Police Department. The case was announced by United States Attorney Eileen M. Decker; David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Norm Embry, Special Agent in Charge of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

 

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Rachel Dollar

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