Valley Mortgage Brokers Face 11 Charges
Two former operators of a Woodland Hills mortgage brokerage, accused of bilking customers out of millions of dollars, were indicted Wednesday by a federal grand jury in Los Angeles on 11 counts of mail fraud, bank fraud and money laundering.
The charges were filed against Edward Rostami, 37, and Sandra Palmer Ross, 39, one-time fugitives who are currently in jail in San Jose awaiting trial on similar charges filed by the Santa Clara County district attorney.
Dan Burland, a San Jose lawyer for Rostami, said Wednesday night he hadn’t seen the indictment and could not comment.
Rostami, Ross and their business entities, including TriStar Mortgage, Polo Financial Services and KISS International, had been under investigation by the FBI and U.S. attorney at least since 1997. This prompted complaints of foot-dragging from former loan clients and their lawyers in Southern California, where many purported victims reside.
The complaints intensified when Santa Clara County authorities filed charges last year over a complaint from a single resident of the county--an elderly retiree who nearly lost her home in an alleged reverse-mortgage swindle perpetrated by TriStar.
But Wednesday, federal prosecutors drew praise from Paul Kelley, a Los Angeles lawyer for one of the alleged victims.
“These people [Rostami and Ross] defrauded a lot of people,” Kelley said. “You really have to applaud the U.S. attorney’s office and the Santa Clara County district attorney for prosecuting these cases.”
In numerous civil lawsuits and complaints to regulatory agencies, Polo and TriStar had been accused of cheating borrowers and lenders alike through bait-and-switch tactics and outright forgery and theft.
But the 11 felony charges filed Wednesday all involved a series of transactions in 1997 with Malibu property owner Eleanor Coppola and the China Trust Bank.
According to the indictment, Ross and Rostami fraudulently induced Coppola to deed over her property, valued at well over $1 million, in order to participate in a “Vested Income Program” that would pay her monthly income but return the property to her, free and clear of encumbrances, at any time she chose.
But according to the charges, they fraudulently altered the deed by describing the property as “a bona fide gift,” pledged it as security for a $1-million loan, and later refused to return the property to Coppola. She eventually recovered it through civil litigation, said Kelley, her lawyer.
Ross and Rostami had fled rather than face the Santa Clara charges. Ross was arrested last August under bizarre circumstances, while allegedly trying to enter the U.S. from Mexico with three Mexican nationals in the trunk of her car. A records check by Border Patrol agents at the San Ysidro border crossing turned up the Santa Clara County warrant.
Rostami remained a fugitive until late February, when he was arrested outside a computer business in Rosarito Beach by local police and Mexican federal authorities. Along with Ross, he has pleaded not guilty in the Santa Clara case.
The case had embarrassed officials with the state Department of Real Estate and Department of Corporations when it emerged that the Real Estate Department had revoked the companies’ licenses following numerous complaints, only to see the Department of Corporations, which has overlapping authority, issue similar licenses to keep the firms in business.
The agencies adopted a system for sharing information to keep firms facing loss of one license from simply applying for a new one.
