IRS Joins Investigation of 2 Accused of Real Estate Fraud

TIMES STAFF WRITER

The Internal Revenue Service has joined the investigation of two Newport Beach businessmen charged in a $3.5-million real estate investment fraud.

Deputy Dist. Atty. Daniel B. McNerney said Tuesday that the IRS was asked to join the probe to determine whether American Federal Mortgage Co. executives David James Cook and Joseph Anthony Veltre had reported their incomes accurately during the company's operation.

Cook, 48, and Veltre, 41, have each been charged with 28 counts of grand theft related to the sale of secured interests in commercial and home mortgages that police said were supported by falsified documents.

McNerney said IRS agents have joined a special task force of investigators from the Newport Beach Police Department, California Department of Real Estate and the district attorney's office to continue the investigation.

Authorities said it was not immediately known how much company executives may have reaped in personal income from the alleged fraudulent transactions that involve 28 investors.

"Any time we have major losses like this, we usually invite the IRS," McNerney said.

Police have scheduled for today a meeting with members of a Los Angeles investment group which has claimed losses of $1 million related to the purchase of interests in several properties in Los Angeles and Orange counties.

Newport Beach police are also investigating whether Cook had been issued personal loans totaling $226,000 in the name of his deceased father.

Police said Veltre was free after posting a $25,000 bond, but Cook remained in custody late Tuesday in lieu of posting bonds totaling $250,000.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
57°