David Saks: Former Broker and Son Sentenced in $30 Million Mortgage Fraud Scheme

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Former Broker and Son Sentenced in $30 Million Mortgage Fraud Scheme

Father and Son Sentenced in $30 Million Bakersfield Mortgage Fraud Scheme

U.S. Attorney’s Office February 24, 2014
  • Eastern District of California (916) 554-2700

FRESNO, CA—United States District Judge Lawrence J. O’Neill sentenced Bakersfield residents Carlyle “Carl” Lee Cole, 66, to 17 years and seven months in prison and Caleb Lee Cole, 37, to six months in prison for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced.

Carl Cole was ordered to pay $28,516,887 in restitution to lenders. He was taken into custody after today’s hearing. Caleb Cole was ordered to pay $663,950 in restitution and was ordered to self-surrender to begin serving his sentence on April 21, 2014. His six months in custody will be followed by 21 months of electronic monitoring.

U.S. Attorney Wagner stated, “Carl Cole is the second defendant to be sentenced for the illegal activities of the Crisp, Cole, & Associates real estate firm. During the fraud scheme, Cole enlisted the help of office workers to falsify documents and asked others, even his own son, to lend their names as straw buyers. Today’s sentence is fitting for someone who embodies the recklessness in the mortgage industry in the mid-2000s.”

“While today’s sentences cannot reverse damage that has been done to the real estate industry, mortgage industry, and consumer confidence in the Central Valley, they ensure that the Coles will be punished for their egregious crimes. As a licensed real estate broker, Carl Cole was well aware that this scheme was illegal and callously disregarded the damage he was causing to his own community,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento Division.

According to court documents, Carl Cole, a licensed real estate broker, and David Crisp owned and operated Crisp & Cole Real Estate (CCRE), a real estate brokerage, and Tower Lending, an affiliated mortgage brokerage. Between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage companies and federally insured financial institutions. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. Carl Cole admitted in his plea agreement that he and the co-conspirators caused losses of at least $29,884,498 to the defrauded lenders due to the conspiracy.

According to his plea agreement, Caleb Cole acted as a straw buyer for CCRE and knowingly made material misstatements and omitted material information in loan applications he submitted to lenders to obtain funds to purchase several properties.

Sentencing dates for the remaining defendants are as follows: Jennifer Anne Crisp on March 3, 2014; Michael Angelo Munoz on March 17, 2014; Jayson Peter Costa on March 24, 2014; David Marshall Crisp on March 31, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence. A trial for co-defendant Julie Dianne Farmer is set for April 8, 2014. The charges are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Before Carl Cole and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on March 24, 2104: Jerald Allen Teixeira (1:09-cr-375—one count of wire fraud for false statements on loan documents), Megan Balod (1:10-cr-016—four counts of wire fraud for acting as a straw buyer), and Christopher Lance Stovall (1:10-cr-271—four counts of mail fraud for making false statements on loan documents). Two are scheduled to be sentenced on March 31, 2014: Kevin Patrick Sluga (1:10-cr-001—four counts of wire fraud for false verification of employment letters) and Leslie Sluga (1:10-cr-002—two counts of wire fraud for acting as a straw buyer).

The maximum statutory penalty for mail fraud is 30 years in prison and a $1 million fine. The maximum statutory penalty for wire fraud is 20 years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal, III, and Christopher Baker are prosecuting the case.

This case was done in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

s0urce: FBI

http://www.fbi.gov/sacramento/press-releases/2014/father-and-son-sentenced-in-30-million-bakersfield-mortgage-fraud-scheme?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=301290

 




David Saks



Time&Temp Memphis

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Comment balloon 6 commentsDavid Saks • February 25 2014 03:24PM

Comments

It is beyond me how anyone could live this kind of life!

Posted by Lynn Afton, REALTOR® Near Big Rapids, MI, Mecosta County (Greenridge Realty Oakmont) almost 6 years ago

Fraud is pandemic in this business, Lynn.

Posted by David Saks ((retired)) almost 6 years ago

Will they get to share a cell together? 

Posted by Randy Mitchelson,APR, First Impressions are made at First Click (iPartnerMedia.com #goipm & Homeland Heroes Home Loans) almost 6 years ago

     A house of cards that was surely going to collapse.   17 year sentence for a 66 year old man is equivalent to life in prison.  What a waste.

Posted by Fred Griffin, on leave of absence from ActiveRain, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) almost 6 years ago

They'll make license plates together, Randy.

Posted by David Saks ((retired)) almost 6 years ago

The cards were all Jokers, Fred.

Posted by David Saks ((retired)) almost 6 years ago

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