Company owner admits huge fraud on his own website
Monday, February 2, 2009 at 9:00PM Captured
Garrett Griffith Gililland III and Christopher Warren
Wanted
Scott Edward Cavell
ABC News 10 reports that the managing broker behind a failed mortgage operation posted a rambling essay on the company’s Web site describing his years of fraudulent activity and asking for forgiveness. The seven-page essay by Christopher Warren, 27, has replaced the home page [print version here] of Triduanum Financial which abruptly closed its doors last month. [have managed to find a link into main site - click here]
The company was based at 9310 Tech Center Drive, Suite 290, Sacramento CA 95826.
Warren said his career in the mortgage industry began when he was still a teenager and took a job with the now-defunct Ameriquest in 2001. Warren claimed he manipulated loan applications to secure financing and eventually hacked into the Ameriquest computer system to approve loans himself with no oversight.
Warren said he left Ameriquest three years later with the personal information of 680,000 Ameriquest customers to start his own mortgage banking operation in Sacramento called WTL Financial [CA business records] and also cached website. WTL was also based at 9310 Tech Center Drive.
“At the ripe old age of 22, a fraudster trained by the best corporate environment for fraud, I built a company modeled after the movie Boiler Room,” Warren wrote.
Warren said WTL Financial faked credit scores and W-2s to peddle loans to investors who failed to scrutinize the files.
“I made over $2.25 million, all of which was spent on 24 cars, five houses and drugs,” he wrote.
Warren said WTL Financial originated $810 million in questionable mortgages before it collapsed in 2007.
Warren then moved on to work as a vice president for Roseville-based Loomis Wealth Solutions, which he described as a real estate Ponzi scheme. Federal authorities raided the offices of Loomis Wealth Solutions last August and searched the Granite Bay home of founder Lawrence Leland Loomis. Among items they were looking for were “any documents pertaining to Christopher Warren.”
In his essay, Warren said he had been interviewed by the FBI and expected to be indicted for his role in operations at Loomis Wealth Solutions. Public records show Warren struggled with other personal problems in 2008. In May he lost a $729,000 Folsom home to foreclosure and in November he finished three years of probation for narcotics possession.
State records show Triduanum Financial was incorporated last July. Warren’s document did not address Triduanum Financial’s business practices, but an earlier Web posting said the company had exceeded its line of credit by $20 million and suggested homebuyers find another lender.
In his essay, Warren said he helped ruin the nation’s economy and hopes his experiences can help reform the mortgage and banking systems.
“Almost a billion dollars of toxic assets came from me,” he wrote. “Looking back at the life I have led, I beg a higher power for forgiveness.”
The Editor - Ian Shuter - ACFE, DMS
On February 4, 2009 a Criminal Complaint was filed in District Court for the Eastern District of California and an arrest warrant was issued by US Magistrate Judge, Kimberley J. Mueller authorising the arrest of Warren who is a.k.a Mark A. Seagrave.
The complaint was filed by Special Agent Christopher S. Fitzpatrick of the Internal Revenue Service - Criminal Investigation Division.
Click here for the Criminal Complaint and supporting affadavit.
The Editor - Ian Shuter - ACFE, DMS
The Sacramento Bee states that Warren left the country on Monday by private jet. It quotes his attorney Donald Heller as saying:
“I’m very disappointed, he had knowledge of massive frauds; the biggest I’ve seen in this district, and I’ve been here 35 years. They cheated a lot of people out of their savings and retirements. What he told the agents and the prosecutors would have been very beneficial to him in terms of sentencing. More importantly, it was going to help clean up this huge fraud.
“What went wrong, I don’t know,” Heller said.
The Editor - Ian Shuter - ACFE, DMS
ABC News 10 in Sacramento reports that the FBI is seeking a second fugitive in what prosecutors describe as a $100 million Ponzi scheme involving fraudulent mortgages.
Scott Edward Cavell - Wanted Christopher Warren - Captured
Garrett Griffith Gililland III - Captured
A federal judge signed an arrest warrant Friday for Scott Edward Cavell, who is believed to have fled the country on a commercial airline flight with a phony passport.
Investigators identify Cavell as the “right hand man” of Christopher Warren, who is also believed to have fled the country— but on a private jet that cost him $156,000.
Click here for the full News 10 article
Garrett Griffith Gililland III was arrested in just outside Barcelona in Spain on October 16, 2008 after the FBI intercepted a FedEx package containing $20,000 in cash. He was arrested with his wife and is currently fighting extradition back to the US.
The Editor - Ian Shuter - ACFE, DMS
In the following press release Acting United States Attorney Lawrence G. Brown announced today that fugitive CHRISTOPHER J. WARREN, 26, of Sacramento, was arrested late last night while attempting to cross from Canada into Buffalo, N.Y., under a false name. Brown also announced that GARRET GRIFFITH GILILLAND III, 27, of Chico, Calif., who had also been a fugitive, was arrested on October 16, 2008, and is in the custody of Spanish authorities.
WARREN, GILILLAND, and SCOTT EDWARD CAVELL, 25, of Sacramento, are all charged with related mortgage fraud crimes.
According to Assistant United States Attorneys Russell Carlberg and Matthew Stegman, WARREN had been cooperating with authorities in the investigation of Loomis Wealth Solutions and others and had promised to remain in the United States. On February 2, 2009, however, WARREN fled the United States on a private jet. On February 4, 2009, an arrest warrant was obtained based on a federal complaint filed charging WARREN with bank fraud and other crimes.
Federal law enforcement tracked WARREN’s travels overseas. He was traveling under the alias of Mark Andrew Seagrave with a fraudulently obtained passport. He flew from the United States arriving in Shannon, Ireland, on February 3. According to the flight crew, WARREN declared that he was traveling with approximately $5 million worth of gold, and showed some of the gold to the flight crew. He then flew to and remained in Lebanon from February 4 through February 9. He was met in Lebanon by armed escorts. Law enforcement visited WARREN’s hotel room in Kasslick-Jounieh, Lebanon, and found evidence that he had fled leaving behind personal effects, false identification, and valuables. On February 10, WARREN flew into Toronto, Canada, and at approximately 11:15p.m. EST, WARREN, traveled by taxi, to Buffalo N.Y. where U.S. Customs and Border Protection agents arrested him based on an NCIC warrant from the FBI..
WARREN had passports containing his photographs but with false names, $70,000 cash hidden in his shoes, and four ounces of platinum. Immigration and Custom Enforcement (ICE) agents responded at 12:05 this morning and interviewed him. The ICE agents called the FBI and the subject was turned over to the FBI agents early this morning.
WARREN appeared in federal court in the Northern District of New York at 2:00 p.m. EST, for a detention hearing and an identification hearing. He waived his identity hearing and did not contest detention, but his attorney said he will raise grounds for bail when he returns to Sacramento. Depending on the outcome of that identification hearing, WARREN is expected to be returned to Sacramento in the near future to face the charges.
According to the filed complaint, since at least 2006, WARREN and other directors of Loomis Wealth Solutions (LWS), Nationwide Lending Group (NLG), and the NARAS Secured Fund #2 LLC, and related entities, have been running a large Ponzi scheme involving investment and mortgage fraud. The fraudulent activities span five states and involve approximately five hundred properties. Losses from this scheme are estimated at approximately $100 Million.
Stated Brown, “You can run but you cannot hide. The agencies are to be commended for their outstanding work bringing Warren to justice.”
GILILLAND, 27, of Chico, Calif., was arrested on October 16, 2008, in a suburb of Barcelona, Spain. The United States is awaiting his extradition to Sacramento. GILILLAND’s wife, NICOLE MAGPUSAO, is also facing extradition from Spain, but was released from custody and has been ordered to return to court in Spain.
On August 14, 2008, a federal grand jury indicted GILILLAND and MAGPUSAO in a related case on charges of making false statements on loan applications. GILILLAND alone was additionally charged with money laundering. On August 29, the grand jury returned a superseding indictment against GILILLAND and MAGPUSAO, charging both with mail fraud and making false statements on loan applications. GILILLAND separately is additionally charged with conspiracy to launder money, bulk cash smuggling, and conspiracy to cultivate marijuana.
According to the superseding indictment charging GILILLAND, he operated as an unlicensed mortgage broker who falsified loan applications for his straw buyers in the Chico, California, area.
“We are hopeful, based on the expected timetable for extradition, that GILILLAND and MAGPUSAO should be back in Sacramento by late spring,” Brown said.
CAVELL was charged by complaint filed on February 6, 2009, with bank fraud and other charges. CAVELL is still a fugitive, believed to be outside the United States.
These related cases are being investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the California Department of Real Estate, and the Butte County District Attorney’s Office.
The maximum statutory penalties for the charged crimes are as follows: Continuing Financial Crimes Enterprise is minimum 10 years to life; conspiracy to commit mail fraud and bank fraud is 30 years; bank fraud is 30 years; mail fraud is 20 years; making false statements on loan applications is 30 years; cultivating more than 100 marijuana plants is minimum five years to 40 years; conspiracy to launder funds is 10 years, and passport fraud is 10 years. Penalties include a possible fine and restitution to victims in addition to any prison time. Although the above is the maximum statutory penalty for each crime, the preliminary sentence for each defendant will be calculated through the application of the advisory federal Sentencing Guidelines, which take into account a number of factors, and the final sentence will be imposed at the discretion of the Court.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The Editor - Ian Shuter - ACFE, DMS
In the following press release Lawrence G. Brown Acting United States Attorney for the Eastern District of California announced today that a federal grand jury returned a 44-count indictment charging CHRISTOPHER JARED WARREN, 26, of Folsom, Calif., and SCOTT EDWARD CAVELL, 27, of Sacramento, with wire fraud, money laundering, passport fraud, and aggravated identity theft, related to the theft of more than $7 million from a mortgage lender and the purchase of millions of dollars of gold that WARREN took to Lebanon.
Resources:
This case is the product of a joint investigation by the Internal Revenue Service-Criminal Investigation; the Federal Bureau of Investigation; the Diplomatic Security Service, United States Department of State; and the California Department of Real Estate.
According to Assistant United States Attorneys Russell L. Carlberg and Matthew Stegman, who are prosecuting the case, the indictment alleges that WARREN and CAVELL used their Sacramento mortgage brokerage, Triduanum Financial Inc. to steal more than $7,000,000 during a two-month period, from December 2008 through January 2009. The indictment describes how WARREN and CAVELL misrepresented many facts to lender Taylor, Bean, and Whitaker Mortgage Corp. (“TB&W”) of Ocala, Florida, in order to make Triduanum qualify as a “correspondent lender” with TB&W. As a correspondent lender, Triduanum had authority to approve mortgage loans by “locking” loans and then selling them to TB&W, the “sponsor” lender. Triduanum was responsible for verifying the accuracy of the loans and for complying with money laundering laws.
The indictment describes how WARREN and CAVELL, using Triduanum, approved mortgages, but instead of funding the mortgages and recording the deeds, the two simply stole the money TB&W wired from banks in New York and Alabama to River City Bank accounts that WARREN and CAVELL controlled. Altogether, they stole more than $7,000,000 from 28 wire transfers.
In the money laundering counts, WARREN and CAVELL are charged with redirecting millions of dollars to gold bullion dealers, rare coin dealers, a Swedish bank account, a jewelry company, and others. The indictment also charges WARREN and CAVELL with stealing the identities of two men. They used the stolen identities to fraudulently obtain true passports in the names of the identity theft victims.
WARREN was apprehended on the night of February 10, 2009, attempting to cross the U.S.-Canadian border carrying one of the fraudulently obtained passports and $70,000 stuffed in his cowboy boots. He is currently in the custody of the U.S. Marshals Service and is being transferred to Sacramento. CAVELL remains at large and is believed to have fled the country. Anyone with information regarding his whereabouts should contact the FBI.
Coinciding with this indictment, a search warrant affidavit concerning the search of WARREN’s computers and hard drives was unsealed today in federal court, in case number 09-SW-0064 KJM. It provides additional allegations related to WARREN’s fraud.
“The scope and brazenness of the criminal conduct carried out by these two mortgage brokers over just two months astounds,” said Acting U.S. Attorney Brown, commenting on the indictment and the search warrant affidavit. “In coordination with multiple federal, state, and local agencies, we are doing everything we can to attack this epidemic of fraud that has contributed to the financial meltdown afflicting our region and the nation,” said Brown.
The maximum statutory penalty for each of the 28 alleged violations of wire fraud is 20 years in prison and a $250,000 fine. Money Laundering also carries a 20-year maximum. The crime of making false statements in an application for passport carries a maximum term of 10 years in prison. Aggravated identity theft carries a two-year mandatory minimum on top of any other sentence. WARREN and CAVELL were each charged with two counts of aggravated identity theft; if convicted, they face a potential four-year mandatory consecutive sentence in addition to any time they may receive for the wire fraud and money laundering charges. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The Editor - Ian Shuter - ACFE, DMS
United States Attorney Lawrence G. Brown and Butte County District Attorney Michael L. Ramsey announced that Spanish authorities yesterday handed over indicted mortgage fraud defendant GARRET GRIFFITH GILILLAND III, 28, Chico, California, after a year-long extradition and asylum battle in Spanish courts. GILILLAND will be arraigned today at 2 p.m. before United States Magistrate Judge Gregory G. Hollows. The government is requesting detention of the defendant as a flight risk and danger to the community.
This case is the product of an extensive and joint investigation by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the Butte County District Attorney’s Office.
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