Federal prosecutors on Wednesday announced the filing of loan fraud charges against 21 people--including a Beverly Hills accountant and a state prison official--for allegedly submitting false mortgage loan applications, one of the most prevalent types of white-collar crime in Southern California.
Falsifying mortgage loan applications has become so commonplace that many people don’t even consider it a crime, according to prosecutors. But loan applicants can face federal prison terms and stiff fines if they are convicted of knowingly filing false loan applications to federally insured financial institutions and other kinds of lenders.
Last year, an estimated $425 million in fraudulent home loan applications were submitted to lenders across the Southland.
“Too many people in Southern California don’t think of that as a crime,” said Maureen A. Tighe, an assistant U.S. attorney in Los Angeles. “It’s a crime to lie to the bank, but people act as if it’s a way of doing business.”
The Los Angeles office of the FBI estimates that one out of four reports of alleged bank fraud it receives involve mortgage loan applications. Many incidents involve professional fraud artists, unscrupulous real estate developers and shady real estate agents.
However, the cases often involve eager home buyers who are trying to improve their chances of getting a home loan by materially inflating their income and assets or by lying about their sources of down payment.
“They work together and lie on the loan application,” said FBI special agent Sherri Owen, referring to loan applicants, real estate agents and loan brokers. “It’s no big deal” to them.
As part of its campaign against loan fraud, the Justice Department has sought bank loan fraud charges against the 21 individuals in cases involving residents or property located in Southern and Central California.
Those named in charges filed by the U.S. Grand Jury and U.S. Attorney include:
* Moshen Movaghar, a 44-year-old Beverly Hills accountant who allegedly filed loan applications with false financial information as well as false income tax returns to purchase a home on Rodeo Drive and other property.
* James Anthony Rojas Jr., 39, of Sherman Oaks, who allegedly submitted a loan application with a false name to buy a residential property in Toluca Lake, federal officials claim.
* Yoshio Kadono, 51, and Fumihisa Kimura, 58, who allegedly impersonated the owners of a Beverly Hills home to get a $400,000 loan.
* Norman Edell, 71, a Los Angeles attorney who allegedly submitted false income and tax return statements on two loan applications to buy a Wilshire Boulevard condominium.
* Elcie Winston, Jr., 54, a deputy commissioner of the California State Board of Prison Terms, who allegedly submitted false financial information, including falsely claiming ownership of rental property and failing to disclose a $559,000 liability.
None of the individuals could be reached for comment except for Winston, who said he would fight the charges. In a phone interview, he said he had deeded the rental property to his children and said the liability was only a contract to build a home--something he said he did not believe needed to be disclosed.
Computers and high-resolution photocopiers have made it easier to create and submit falsified financial and tax documents that are filed with home loan applications, Owen said. In addition, lenders are under increasing pressure to quickly analyze applications, leaving less time to verify documents and information.
However, Mary Trigg, a spokeswoman at Home Savings, based in Irwindale, said computer technology has made it easier and faster to check an applicant’s credit and financial history, reducing the risk of fraud.
“We catch a lot of [fraud] before we make the loans,” she said.