In the following press release Cuyahoga County (Ohio) Prosecutor Bill Mason (pictured left) announced the indictment of George Michaels [who is accused of] obtaining $200,000 in fraudulent building contract loans for two houses worth almost $1 million in North Royalton. The work was never completed, leaving the victims to find another builder to finish construction. The U.S. Postal Inspection Service, a member of the Mortgage Fraud/Predatory Lending Task Force, conducted the investigations with the Prosecutor’s Office.

“The pervasive fraud—whether mortgage fraud or theft—-in the real estate market has been one of the big factors in our high foreclosure rate. These thieves are affecting not just our neighborhoods with blight and abandoned houses but our entire economy,” said Prosecutor Bill Mason. “Our county is making a concerted effort to tackle a mortgage industry gone awry, and these indictments add to this chorus of aggressively combating the criminal activity and sending a loud message that you will be held accountable if you get involved.”

Today’s indictments bring the total to 14 cases that have been indicted since the beginning of the year. These cases total 141 defendants and over $9.2 million in fraudulent loans for 69 properties located in twelve communities: Shaker Heights, Oakwood Village, Cleveland, East Cleveland, Cleveland Heights, Solon, Pepper Pike, Garfield Heights, Brook Park, Brooklyn, North Royalton, and South Euclid. For more on the Prosecutor’s Office’s efforts to address these types of fraud and the foreclosure crisis, including a Q and A on mortgage fraud and predatory lending, visit the Cuyahoga County Prosecutor’s Office website: http://prosecutor.cuyahogacounty.us .

George Michaels. Michaels owned Royal Crest Builders, located in Brunswick. He entered into a fraudulent contract to build two large houses, worth almost $1 million, in North Royalton located at 20884 Evergreen Trail and 10265 Buckeye Trail. He falsified several general contractor affidavits to obtain approximately $200,000 in construction draws (loans). He stated that a percentage of work had been done, when it had not, and he falsely stated that no debts were due on the properties. In addition, he made a $20,000 payment to one of his suppliers with a bad check.

Michaels, 62, of Brunswick, was indicted on one (1) count of Theft, for deceiving the bank, a third degree felony; one (1) count of Theft, for deceiving the owners of the Evergreen Trail property, a fourth degree felony; one (1) count of Theft, for deceiving James Lumber who supplied $150,000 worth of lumber for the two properties, a third degree felony; and four (4) counts of Tampering with Records, a fourth degree felony.

Arraignment date for the defendant is scheduled for November 15, 2007.

Resources:
Press Release

In the following press release United States Attorney for the District of South Carolina, Reginald I. Lloyd announced that on September 13, 2007 a Federal Grand Jury in Charleston, South Carolina returned a Bank Fraud Indictment against RAYMOND BARRINEAU, age 58, of Hanahan, who was charged in a 4-count Indictment with bank fraud, a violation of Title 18, United States Code, Section 1344.

The indictment alleges that BARRINEAU , a mortgage broker, embezzled construction loan proceeds from an attorney trust account from December 2003 through April 2004.

The maximum penalty that BARRINEAU could receive is a fine of $1,000,000 and/or imprisonment of 30 years. The case was investigated by agents of the Federal Bureau of Investigation and has been assigned to Assistant United States Attorney Rhett DeHart of the Charleston office for prosecution .

In the following press release the San Bernardino (CA) District Attorney announced that Robert Mark Andrues, 48, of Crestline was arrested for Diversion of Construction Funds at his home in Crestline by San Bernardino County District Attorney Real Estate Fraud investigators. Andrues, a licensed contractor, diverted the constructions funds of approximately twelve victims.

Andrues designed and built customs homes in the Victor Valley Area of San Bernardino County. Several of the victims in this case procured construction loans from a local bank in Hesperia. In the case of one victim, no construction lender was used. Andrues simply requested two payments totaling $115,000.00 and did no work for that money. Bail was set at $500,000.

SAN FRANCISCO – United States Attorney Kevin V. Ryan announced that Christina Kyeonghee Kim, 42, of McKinleyville, CA, was charged by superseding information with 51 counts of bank fraud, mail fraud, and aggravated identity theft. The information alleges that Ms. Kim stole over 12 identities, mostly from college and exchange students who worked at her restaurant, the Chosun House, in Arcata, California. According to the information, She then used these fake identities to open 49 bank and credit card accounts. In all, Ms. Kim obtained over $1 million from the scheme. These charges are the result of an investigation by the Federal Bureau of Investigation.

According to the charges, Ms. Kim is alleged to have obtained social security numbers, driver’s license numbers, and dates of birth from persons who either worked at her restaurant or were family members. She would then use this personal information to create new false identities. In addition to creating new identities based on real people, Ms. Kim also created at least two identities using her own information, but with different social security numbers. Ms. Kim would then use these false identities to open up bank accounts and credit card accounts. She would receive lines of credit from the banks and credit card companies, and then use the monies to pay for personal expenses, which included a new home, designer clothes, shoes, and jewelry.

The charging document also alleges that Ms. Kim, under her father’s name, received a construction loan for $682,000. She also allegedly submitted false documentation to Farmers’ Insurance Group regarding an alleged burglary at her house. Ms. Kim allegedly submitted false claims for numerous items stolen, including a Korean painting, identified as Diamond Mountains, by Chong Fon (circa 1676-1759), worth between $800,000 and $1,200,000.

Ms. Kim self-surrendered today and made her initial appearance in federal court in San Francisco. She is currently is out on a $200,000 secured bond. Ms. Kim’s next scheduled appearance is at 2:00 p.m. on May 16, 2006, for initial appearance in front of U.S. District Judge William Alsup. An information contains only allegations against an individual and, as with all defendants, Ms. Kim must be presumed innocent unless and until proven guilty.

AUSA Stacey Geis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Technician Ana Guerra. The prosecution is the result of a one year investigation by the Federal Bureau of Investigation.

Covington, KY - Frances E. Catron, Acting United States Attorney for the Eastern District of Kentucky; Larry R. Willis, Acting Special Agent in Charge, Federal Bureau of Investigation; and Cleve Daniels, Special Agent in Charge, Internal Revenue Service, jointly announced today that LARRY J. DAVIS, age 58, of Cold Spring, Kentucky, was sentenced in United States District Court, Covington Division. Click here for a copy of the indictment.

A Cache County, Utah man has been indicted and, according to the Herald Journal is about to plead guilty, on charges that he stole $86,000 from draw downs on commercial mortgages being used to fund the building of new houses.

Samuel Daines II, 38, is facing seven second-degree felony counts each of communications fraud and theft by deception, and four third-degree felony charges of forgery that stem from his alleged misuse of loans obtained for customers interested in buying a home from his company, Pathfinder Homes.

The case is now being sent to a different court to avoid any conflict as Daines is related to the Cache County Attorney who was due to prosecute the case.

COVINGTON - The Rev. Larry Davis used the former parsonage of the church he is charged with stealing from to post bond Friday. After Davis pleaded not guilty Friday to stealing more than $700,000 from First Baptist Church of Cold Spring, he told U.S. Magistrate Judge J. Gregory Wehrman he had $20,000 equity in the home at 970 Pooles Creek Road. The church trustees sold the parsonage, less than a mile from the church, on Feb. 16 to Davis and his wife, Connie, for $75,000, according to county records.

The indictment against Davis says that, contrary to First Baptist Church’s loan contract with Fifth Third Bank, Davis drew down hundreds of thousands of dollars for his personal use from building-fund accounts and others that he set up - and even made bank transfers at racetracks, hotels and casinos.

The church trustees had authorized a $3.5 million construction loan but, according to the indictment, Davis submitted forged documents claiming that the church authorized a loan of $4 million because of construction “cost overruns.”

Even as his joint “income” steadily rose into the hundreds of thousands of dollars from 2000 through 2003, the indictment states he either grossly underreported income or did not file an IRS return at all.

US DOJ Press Release - April 21, 2005

U.S. Attorney Johnny Sutton announced that James Carl Piersol, former owner of Kerr County Homes LLC., in Kerrville, Texas, pled guilty to one count of making a false statement to Norwest Bank. As a result, Pierson faces up to 30 years in federal prison and a maximum $250,000 fine.

Appearing before United States District Judge Fred Biery this morning in San Antonio, Piersol admitted that on July 7, 1999, he participated in a scheme with co-defendant and business partner, Heberto Ochoa-Morales, to divert approximately $22,000 in bank loans designated for new home construction and used those proceeds to pay off personal debt owed to Norwest Bank.

Sentencing for Piersol is scheduled for September 2005. On January 21, 2005, Heberto Ochoa-Morales was sentenced to ten years in federal prison and ordered to pay restitution in the amount of $87,050 for his role in the scheme.