Pasadena city commissioner, associate plead not guilty to mortgage fraud charges

Posted on May 22, 2014 by Brian Day

A Pasadena city commissioner and his associate, accused of running a $2.3-million mortgage fraud scheme, pleaded not guilty Wednesday to a series of felony charges.

Northwest Commission member and real estate broker Allen Bernard Shay, 55, and former real estate agent Eddie Turner, 44, of Altadena appeared in Los Angeles Superior Court to answer to charges stemming from the alleged fraud related to the 2005 purchase and 2007 refinance of a $1 million home in the 2400 block of North Altadena Drive.

FULL STORY….

Hacienda Heights man accused of theft, practicing law without license

Posted on May 9, 2014 by Brian Day

LOS ANGELES — Prosecutors charged a Hacienda Heights man Thursday with nine felony counts for practicing law without a license and bilking four immigrant clients out of thousands of dollars, officials said.
Michael John Hernandez, 57, surrendered at Los Angeles Superior Court, pleaded not guilty and promptly posted $145,000 bail, Los Angeles County District Attorney’s Office spokeswoman Shiara Davila-Morales said.
He’s charged with six counts of grand theft, two counts of unauthorized practice of law and one count of perjury by declaration, district attorney’s officials said in a written statement.
Hernandez previously practiced law in Florida but has never been a member of the State Bar of California, prosecutors said. But he ran a law office in Hacienda Heights where he claimed to specialize in immigration matters.
“The alleged offenses involve four victims and occurred between Jan. 1, 2011 and Dec. 31, 2013,” according to the district attorney’s office statement. “A loss of approximately $16,000 is attributed to the defendant.”
“Hernandez, who allegedly targeted individuals with immigration issues, purportedly engaged in a pattern of financial fraud against clients who paid for legal services which were not rendered,” the statement continued.
District Attorney Jackie Lacey said commended the prosecution team and had harsh words for those who would falsely portray themselves as lawyers.
“To betray the trust of these victims and cheat them out of hard-earned money is heartless,” District Attorney Jackie Lacey said. “Any person practicing law without a license in Los Angeles County — especially those who target vulnerable immigrant populations — will be identified and vigorously prosecuted.”
If convicted as charged, Hernandez could face up to 10 years in county jail.
He was ordered back to court June 9 for a preliminary hearing setting June 9.

Pasadena man, West Covina man accused of torching Lexus for insurance money

Posted on March 14, 2014 by Brian Day

PASADENA >> Investigators Friday jailed a West Covina and a Pasadena man on suspicion of reporting a car stolen from an Arcadia shopping mall, then torching it in Pasadena in an insurance fraud scheme.
Tony Martinez Jr, 26, of West Covina and Robert Luis Palacios, 44, of Pasadena, were arrested Friday morning and booked on suspicion of arson, conspiracy, insurance fraud and filing a false police report, according to Pasadena Fire Department officials and Los Angeles County booking records.
Martinez owned the scorched 2008 Lexus IS 250 involved in the alleged fraud, fire spokeswoman Lisa Derderian said. She described Palacios as his friend.
The arrest came following more than six weeks of investigation, which began about 8:45 p.m. Jan. 25 when Pasadena police were notified of a 2008 Lexus IS 250 which was on fire at Lincoln Avenue and Del Monte Street, Pasadena police Lt. Jason Clawson said at the time.
After extinguishing the flames, firefighters determined the fire was suspicious, Clawson said. A possible suspect was spotted leaving the area of the burning car.
About 45 minutes later, Martinez called police in Arcadia to report his 2008 Lexus IS 250 had been stolen from the Westfield Santa Anita shopping mall, according to Arcadia police Sgt. John Bonomo.
Investigators determined Martinez and Palacios had conspired to stage a fake car theft and torch the Lexus as part of a conspiracy to commit insurance fraud, culminating in Friday’s arrests, Pasadena fire officials said.
According to county booking records, Martinez was released from custody a little more than three hours after his arrest on $50,000 bail. Palacios remained behind bars Friday in lieu of $50,000 bail pending his initial court appearance.

Former insurance broker from West Covina accused of ID theft, insurance fraud

Posted on December 20, 2013 by Brian Day

A man from West Covina who previously had his insurance broker’s license revoked is accused of stealing the identity of another agent who responded to an online employment add to carry out an insurance scam, authorities announced Thursday.
Eugene Shy-Ren Hsu, 31, is charged with grand theft, forgery and identity theft following his Dec. 11 arrest, California Department of Insurance officials said in a written statement.
California Insurance Commissioner David Jones expressed outrage at the allegations against Hsu.
“It is inconceivable that a former agent whose license was already revoked by my office would go to such lengths to game the system for his personal gain,” he said. “I will not tolerate deceitful actions that smear the reputation of honest agents and brokers.”
Though his license had previously been revoked, Hsu owned and operated a business called the NCP Insurance Center.
“(Hsu) allegedly stole the identity of an unsuspecting licensed California insurance agent who applied for a job with Hsu,” according to the CDI statement. The agent had responded to a “help wanted” employment advertisement Hsu had posted online via the website Craigslist.
Hsu used the licensed agent’s identity to write several insurance policies, without the knowledge of either the agent or the individuals named in the policies, officials said. Hsu collected more than $16,000 in commissions from the fraudulent policies, and charged nearly $4,000 in premiums to a credit card he had allegedly established in the name of the licensed insurance agent to keep the scheme going.
Authorities said the crimes took place between June and October of 2010.
Anyone who has responded to an employment add posted by Hsu or NCP Insurance, or who has purchased insurance through Hsu or the company, is advised to watch for unusual credit activity and check with insurers to verify of policies are valid. Those with concerns may contact the CDI’s Consumer Hotline at 800-927-4357.
Hsu, who faces up to three years in prison if convicted as charged, was released from custody two days after his arrest after posting a $70,000 bond, according to Los Angeles County booking records. He was scheduled to appear Jan. 6 in El Monte Superior Court.

San Gabriel man who fled from justice prior to sentencing in $11 million fraud case nabbed in Las Vegas

Posted on November 28, 2013 by Brian Day

Nearly a year after fleeing from justice prior to his sentencing, a former San Gabriel man who pleaded guilty to wire fraud after bilking dozens of investors and families out of $11 million was in custody Wednesday, authorities said.
Acting on tips from the public, FBI agents arrested David Kaup, 30, Tuesday at a home where he had been staying in Las Vegas, FBI officials said in a written statement. He’s accused of bilking $9 million from investors through a bogus investment scheme, as well as another $2 million from families through a fraudulent home refinancing scheme.
Kaup, who was free from custody after pleading guilty in connection with his case, never showed up at his sentencing hearing, FBI spokeswoman Laura Eimiller said. He faced a maximum sentence of 40 years in federal prison.
“(Kaup) was scheduled to be sentenced Monday, Dec. 17, 2012, in United States District Court after pleading guilty to two counts of wire fraud on April 9, 2012,” according to the FBI statement. “Once it had been established that Kaup fled the area and justice, a federal judge issued a warrant for his arrest.”
But Kaup did not prove an easy man to find, and the FBI reached out to the public for help in tracking him down.
Media coverage helped generate a tip that led investigators to the Las Vegas home where Kaup had been hiding out, authorities said. He was taken into custody without a struggle.
Kaup pleaded guilty to charges stemming from two different scams, officials said.
In the first scam, Kaup used created a company called Lunden Investments and persuaded investors to give him more than $9 million, which he claimed would fund commercial loans, officials said. But instead, he lost the money trading on the Foreign Currency Exchange Market.
Kaup then started a second con, officials said.
“Kaup admitted that through his second company, (American Loans and Funding), he told homeowners that he could refinance their homes at below-market rates, so long as they provided certain funds up front to demonstrate that they financially
qualified for the special loan terms,” according to the FBI statement. “These funds were supposed to be kept safe during the
loan process and then returned when the loan was either approved or denied. Kaup admitted that he never tried to refinance the homeowners’ loans, and instead used the victims’ money to buy luxury items for himself and to trade on the Foreign Currency Exchange Market.”
He ran a similar scheme with a third company called First Mortgage West, netting about $2 million from 50 families seeking help with refinancing their homes, FBI officials said.
Kaup was expected to be returned to Los Angeles to appear in court “in the near future,” according to the FBI statement.
It was not clear Wednesday if he would face additional charges in connection with his alleged flight from justice.

Alhambra man sentenced for $1 million credit card fraud scheme

Posted on November 22, 2013 by Brian Day

LOS ANGELES — An Alhambra man received a sentence of more than 7 years in federal prison Thursday for heading a global credit card fraud ring that netted more than $1 million, authorities said.
Zhanghang Wu, 38, received his 87-month prison sentence from United States District Judge John A. Kronstadt in federal court in Los Angeles, U.S. Attorney’s Office spokeswoman Thom Mrozek said in a written statement. He pleaded guilty in December, 2012, to charges of conspiracy and credit card fraud.
He was convicted of leading a fraud ring that, “used stolen credit card numbers from around the world to buy hundreds of thousands of dollars of luxury goods, cosmetics, electronics and other merchandise at retail stores,” Mrozek said.
Once credit card information was obtained, “That stolen information was used to manufacture counterfeit credit cards that bore the names of ‘runners’ — co-conspirators who went to retail stores including Nordstrom, Macy’s, Apple and Abercrombie & Fitch — who used the fake cards to make fraudulent transactions,” according to Mrozek. “After the runners purchased items with the counterfeit credit cards, they either returned the goods for credit, or the goods were sold to other parties.”
Investigators looking into the fraudulent use of credit cards in the San Gabriel Valley first discovered Wu’s wide-reaching scheme, officials said. He had previously been investigated for similar allegations by Chinese authorities.
After searching Wu’s home and finding machinery used to make credit cards and computers containing credit card information, Secret Service agents arrested Wu in July of 2012 in Las Vegas, “where he had He had fled after the search of his residence and where he continued to engage in credit card fraud,” Mrozek said.
“Wu had been living in casino hotels for several weeks and at the time of his arrest, was in the process of sending a group of runners to Chicago to continue the scheme,” Mrozek added.
Wu was the second San Gabriel Valley man to be sentenced to prison this month for widespread credit card fraud.
Xiaoliang Chen, 27, of Monterey Park was sentenced Nov. 4 to more than four years in federal prison for a similar scam that netted nearly a half-million dollars, Mrozek said. Chen was arrested in August of 2012, also in Las Vegas.

La Puente woman accused of scamming more than a dozen SGV residents

Posted on July 18, 2013 by Brian Day

A La Puente woman has been charged with 25 felony counts for promising to help more than a dozen people already in financial trouble get quick and easy loans, but instead using their personal information to steal from them, officials announced Thursday.
Si H. Liu, also known as Katie, 44, of La Puente, pleaded not guilty Tuesday to charges including burglary, grand theft, using an access card and possession of access card information, according to Monterey Park police and Los Angeles County District Attorney’s officials. She was arrested at her home July 12.
Sixteen victims had been confirmed, with additional victims yet to be contacted by police, Lt. Carrie Mazelin said.
“There might be more who haven’t reported it,” the lieutenant said.
“It started with one original report (in June),” she explained.
After launching an investigation and finding Liu in possession of other people’s sensitive documents and credit cards, detectives linked the suspect to similar crimes throughout the San Gabriel Valley, Mazelin said. Many of the known victims were located in Monterey Park, though some came from as far away as Hacienda Heights.
Liu would take out adds in Chinese language publications such as the Chinese Daily News, according to the police statement.
“Liu asked victims for their identification, social security numbers, and all of their credit cards so that she could ‘check their credit’ in order to obtain loans,” according to the statement. “Instead,Liu allegedly used the credit cards to obtain cash for herself using a credit card machine that she owned.”
Some of the victims also reported that Liu would accompany them to stores, such as Best Buy, where she would instruct them to open up a credit account as a way of building their credit, Mazelin said. Liu would instruct the victims to buy items for her, promising to pay them back, but never did.
The total amount of the alleged theft was not available Thursday, however some of the victims lost thousands of dollars, Mazelin said.
Liu would eventually return the victims’ credit cards, IDs and other documents, but only after making color copies, “possibly for the purpose of committing fraud and identity theft in the future,” the police statement said.
Liu, who speaks both Mandarin and English, has lived in the United Stated for about 10 years, officials said. She represents herself as a real estate agent and may also own a massage business in Fullerton.
Additional victims, or anyone with information was asked to contact Monterey Park police Detective Han at 626-307-1246.
According to officials and court records, Liu was being held in lieu of $560,000 bail pending her next court appearance July 30 in Alhambra Superior Court.

BOOKING PHOTO courtesy of the Monterey Park Police Department

Pico Rivera man, Downey woman get five years for prison unemployment fraud

Posted on March 20, 2013 by Brian Day

NORWALK – Two people were sentenced Tuesday to five years in prison for fraudulently getting more than $20,000 in unemployment benefits for a Pico Rivera gang member and convicted murder. Authorities said several gang members in county jail also got a share of the money.

Jury selection started Tuesday in the trial of Juan Leonard Garcia, 48, of Pico Rivera, and Sandra Muro Jaimez, 46, of Downey, at Norwalk Superior Court when the pair took a plea deal.

Deputy District Attorney Mike Enomoto said Juan Garcia pleaded guilty to two counts of making false unemployment insurance claims and two counts of second-degree burglary while Jaimez pleaded guilty to making a false unemployment insurance claim, possession for sale of methamphetamine and felony child abuse. She also admitted to the allegation that the fraud was committed to benefit a gang, Enomoto said.

The judge also ordered Juan Garcia and Jaimez to pay restitution of $22,087 plus interest to the California Employment Development Department.

A third defendant, 26-year-old Cynthia Limas of Menifee, had pleaded guilty to conspiracy to commit grand theft last year. Enomoto said Limas was sentenced to probation, 180 days in county jail and community labor

FULL STORY…

Arcadia man accused of year-long credit card fraud spree

Posted on January 23, 2013 by Brian Day

Prosecutors Wednesday filed eight felony charges, with more likely to come later, against an Arcadia man who used a complex credit card fraud and forgery scheme to support an opulent lifestyle at the expense of others for more than a year, investigators said.
South Pasadena police arrested Feng Xian, 21, Monday on charges including forgery, fraud, burglary and possession of equipment for forging fake credit cards, South Pasadena police Detective Bill Earley said.
At a room he was renting in Arcadia, police found 244 allegedly fraudulent credit cards, along with embossing machines and electronic equipment used to create the bogus cards, the detective said.
And it appeared Xian, who drove a Mercedes-Benz and wore designer clothing and jewelry despite having “no visible means of support,” had been involved in the scheme for many months.
“He’s been doing this for at least a year,” Earley said. “I have receipts more than a year old.”

… FULL STORY

PHOTOS of seized property, suspect Feng Xian courtesy of the South Pasadena Police Department

FBI: San Gabriel man skips out on sentencing after admitting more than $11 million in fraud

Posted on December 20, 2012 by Brian Day

The FBI is seeking a San Gabriel man who failed to show up for his sentencing Monday after pleading guilty to defrauding dozens of families of more than $11 million.
David Kaup, 29, pleaded guilty in federal court to two counts of wire fraud April 9, FBI officials said in a written statement.
He admitted taking part in three separate schemes using the business names Lunden Investments, American Loans and Funding and First Mortgage West, officials said.
“Kaup admitted in his plea agreement that over a period of approximately five years, he defrauded more than 50 families out of more than $11 million,” according to the FBI statement. “Many of these victims were working class families who sought Kaup’s assistance in refinancing their homes.”
Through Lunden Investments, authorities said, Kaup solicited more than $9 million from investors, telling them them he was using the money to fund commercial loans.
“Kaup admitted in his plea, however, that he instead lost approximately $9 million of the victims’ money trading on the foreign currency exchange market,” according to the FBI statement.
Through the other two companies, ALF and FMW, Kaup tricked homeowners into sending him money by promising to help them refinance their homes at below-market rates, officials said. He told the victims he needed an up-front payment to demonstrate that they were financially qualified, which would be returned to them upon approval or denial of their loans.
But instead, officials said, Kaup used the money to buy luxury items for himself and trade on the foreign currency exchange market.
While carrying out the schemes, Kaup used the aliases David Smith and David Martinez, according to the FBI.
He’s described as 5 feet 11 inches tall, 190 pounds, with black hair and brown eyes. He’s been known to work as disc jockey in the Los Angeles and Las Vegas areas using the moniker, “New Age Dave.”
Anyone with information is asked to contact the FBI’s Los Angeles office at 888-226-8443.

PHOTO of David Kaup courtesy of the FBI.

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