Federal Court records show that on February 2, 2007 First Magnus Financial Corporation filed a civil complaint in the Nevada District Court against a number of defendants, the key ones have been named below.

Tyson Rondeau a former loan officer with First Magnus
Paul Hill Sr. and Paul Hill II and Accurate Accounting and Innovative Tax Service, 28235 Southfield Road, Lathrup Village, Michigan 48076
Brian Haneline who owned ACE APPRAISALS CORPORATION, 1450 W. Horizon Ridge Parkway, Suite B-304, Henderson, Nevada 89012
Cordebella Los Gatos Trust
Rafik, Inc
Cara Maria Gudelis owner of Options Are Us.
7540 Key Royale Trust
Michael Mullins
Panther Investments
Dwayne R. Smith
Rudolph Straat
Emmett Garfield Traylor
Lawyers Title of Nevada, Inc (accused of negligence in the closing of one property)

In the complaint FMFC alleges that defendants conducted a massive scheme of fraudulent real estate transactions involving residential properties located in Las Vegas, Nevada and Greater Metropolitan Phoenix, Arizona. The fraudulent investment scheme used straw buyers to purchase residential property in Nevada and Arizona, often from other members of the fraudulent investment scheme, with the intent to lease the properties for a period of time before selling the properties and splitting the profits among the members of the fraudulent investment scheme.

The members of the fraudulent investment scheme not only set up the residential mortgage transactions but assisted the straw buyer in submitting the necessary paperwork and information, often fraudulent, to convince FMFC to loan the straw buyer money to purchase the property. One straw buyer would often purchase multiple properties.

After the straw buyer signed the loan agreement and deed of trust necessary to complete the residential mortgage transaction, the property would be transferred, without notifying FMFC, to a trust whose Trustee was involved in the fraudulent investment scheme.

The fraudulent investment scheme then called for the Trustee to lease the properties to tenants who were given an option to buy the property. To entice the tenants, or even the buyers, the members of the fraudulent investment scheme promised them money and even cars. Pursuant to the fraudulent investment scheme, the Trustee was to sell the property, often to another straw buyer/member of the fraudulent investment scheme, and split the profits with other members of the fraudulent investment scheme.

The members of the fraudulent investment scheme, however, could not always deliver tenants or purchasers and several of the straw buyers were stuck with properties for which they could not pay the loan obligations.

As a result, several of the straw buyers defaulted on their loan obligations, forcing FMFC to foreclose on the property in an attempt to mitigate its losses through the foreclosure sale. Because the loans were issued fraudulently, and at times at inflated purchase prices, FMFC incurred significant losses due to the costs of remedying the fraud. FMFC has been damaged in an amount in excess of $925,000

Fraudulent information included fraudulent verifications of deposit, fraudulent letters concerning the source of the straw buyer’s income, fraudulent verifications of employment and fraudulent applications, which included the straw buyer’s intent to occupy the residence, the straw buyer’s current residence and the straw buyer’s liabilities.

Properties mentioned in the indictment are:

7540 Key Royale Court, Las Vegas, NV
5720 Mount Athos, North Las Vegas, NV
22226 Los Gatos, Sun City West, AZ

No date for trial has yet been set. Please click here to read the Civil Complaint.