D.A. Accuses 2 of a $400,000 Real Estate Scam

Two San Fernando Valley men have been charged with grand theft for allegedly bilking lenders out of at least $400,000 by borrowing on inflated property appraisals, according to the Los Angeles County district attorney’s office.

Deputy Dist. Atty. Timothy J. Browne said charges were filed against James M. Witczak, 41, of Bell Canyon and James J. Jeknavorian, 35, of Woodland Hills on Wednesday as the culmination of a investigation that began more than two years ago involving up to 40 properties.

Firm figures on loan losses from the alleged scheme weren’t available, but Witczak was charged with three counts of grand theft exceeding $100,000 each in connection with three Woodland Hills homes and faces up to 10 years in prison, Browne said.

Previous Court Case

Witczak has faced real estate charges before. Last year, in San Diego, he pleaded guilty to charges of forgery, attempted grand theft and conspiracy to cheat and defraud by using forged trust deeds to try to steal $650,000, said Robert J. Sullivan, a deputy San Diego County district attorney.

Witczak was sentenced last July to three years and four months in prison and a $16,000 fine, Sullivan said. He said Witczak, who also used the name Shawn Roberts, remains incarcerated, but, before his trial last year, Jeknavorian bailed him out, using $100,000 in cash.

Browne said Jeknavorian was charged Wednesday with grand theft exceeding $100,000 in connection with a Bell Canyon property and faces up to five years in prison. Jeknavorian was arrested Monday morning and released on bail Monday afternoon from Los Angeles County Jail.

Browne said that the alleged crimes occurred in 1982 and 1983, and that the two men appeared to share offices in Jeknavorian’s loan brokering business, R. H. Financial, in Woodland Hills.

The Jeknavorian case is a good example of how the scheme worked, Browne said. He said Jeknavorian bought a house in Bell Canyon for $280,000 in April of 1982 and, virtually simultaneously, sold it for $540,000 to a confederate, who Browne said used phony loan documents to borrow $432,000 to make the purchase.

When the buyer defaulted and the lender seized the house, it turned out to be worth only about what Jeknavorian paid to begin with.

Browne said the defendants sometimes paid the same confederate to act as property buyer, but that these “straw men” weren’t charged because one or more have cooperated with authorities. There was insufficient evidence to charge appraisers, Browne said.