A Laguna Beach father and son who operated a realty appraisal service have been arrested on suspicion of conspiring to artificially inflate real estate values in order to secure more business with lending institutions. A Corona del Mar man has turned himself in on similar charges related to the case, said Farrah Emami, spokeswoman for the Orange County District Attorney’s office.
James Merritt Eaton, 60, his son Brian Chandler Eaton, 28, both of Laguna Beach, and real estate appraisal firm executive Michael John Bell, 32, of Corona del Mar, have been charged with one felony count of conspiracy to defraud another of property, 17 felony counts of grand theft by false pretense, two felony counts of identity theft, two felony counts of false personation, and sentencing enhancement allegations for aggravated white collar crime of more than $100,000 and property damage exceeding $50,000.
If convicted, each defendant faces a maximum sentence of 18 years in state prison. The three are scheduled for a continued arraignment on Feb. 22, Emami said.
James Eaton was arrested Dec. 15 by the Laguna Beach Police Department while driving near his home. Brian Eaton turned himself in to Laguna police on Dec. 18. Both have been released on $100,000 bond.
According to the district attorney’s office, between June 2005 and August 2007, James Eaton owned and operated an Irvine real estate appraisal firm, Landmark Equities Group that performed appraisals on residential properties. Brian Eaton was president, and Bell was an executive in the firm.
Landmark allegedly worked with Quick Loan Funding, a subprime mortgage company as their primary lender, according to the district attorney’s office.
The Eatons and Bell are accused of conspiring to fraudulently inflate appraisal values of properties in California, Arizona, and Nevada to make loans on those properties more attractive to lenders and investors.
Landmark opened branch offices in Dublin, CA, Las Vegas, NV, and Scottsdale, AZ, and also had an office space at Quick Loan Funding in Costa Mesa to facilitate loan officer input in the appraisal process, prosecutors allege.
The company officials are suspected of changing appraisals on documents through the use of employees’ passwords and electronic signatures, and removing negative property comments to increase the appraised value.
In one instance, they allegedly used an office manager’s electronic signature to overstate an appraisal without her knowledge or permission. The employee was allegedly fired after she refused to supply passwords for herself and employees to James Eaton.
The district attorney’s office is continuing to investigate the case with the Office of Real Estate Appraisers.
Anyone with additional information may contact Supervising District Attorney Investigator Ron Frazier at (714) 347-8691.
Anyone who believes they have been a victim of real estate fraud may download and fill out a complaint form on the Orange County District Attorney’s website at www.orangecountyda.com.