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Two Examples Of The Pot Calling The Kettle Black
If you spend as much time as I do researching, investigating, and reporting fraudulent real estate and mortgage transactions, you too might be a little nonchalant with respect to the two items I’m about to blog about. If, however, you’re new to the world of real estate and mortgage fraud detection, and you were wondering just how bad the problem has become, these two items should certainly knock your socks off:
BUSINESS SCHOOL PROFESSOR ARRESTED AND CHARGED WITH REAL ESTATE FRAUD: A business school professor at the University of Southern California’s Marshall School of Business was arrested last week for running a real estate fraud scheme that authorities say bilked $1,500,000 from investors, many of whom were the professor’s own students. You heard me correctly… someone entrusted with teaching graduate-level students a course called “Applications of Real Estate Finance to Problems of Development” was actually committing real estate fraud himself. According to the FBI, 36-year-old Barry Landreth was arrested last Friday (March 24th) on charges related to operating a scheme in which investors were defrauded when Landreth lured them with claims of large returns on real estate investments. According to a criminal complaint filed in U.S. District Court in the Central District of California, Landreth operated Webster Realty Investors and fraudulently represented to victims that he was in a position to invest in the development of real estate projects. Specifically, Landreth fraudulently represented that he was developing commercial properties in Las Vegas, Nevada, and Chicago, Illinois. In some instances, Landreth represented that the projects would return 190 percent of their initial investment within 30 to 45 days. The FBI also alleges that neither Landreth nor Webster Realty had any financial interest in the commercial properties represented. The FBI says Landreth obtained millions of dollars in investor funds based on his fraudulent representations, In short, Landreth operated what is commonly referred to as a Ponzi scheme, whereby early investors were paid with the investments of later investors in order to create the illusion of actual development deals and profitability. The complaint alleges that neither Landreth nor Webster Realty generated any profits or returns on the purported real estate development projects.
PRESIDENT OF THE OHIO ASSOCIATION OF MORTGAGE BROKERS EMPLOYS A FELON CONVICTED OF REAL ESTATE FRAUD: According to an article in yesterday’s Columbus Dispatch, Michael L. Matalka, president of the Ohio Association of Mortgage Brokers, is lobbying to change Ohio’s laws regarding the licensing of appraisers and mortgage brokers. While Matalka supports efforts to prohibit the appraisal of real estate for a mortgage loan without state certification or licensure, and also supports a national criminal background check on all applicants for a real estate appraiser certificate or license, a mortgage broker certificate of registration, or a loan officer license, oddly enough, one of Matalka’s own employees–at a company he runs called Manhattin Mortgage Group–is a convicted felon. The Columbus Dispatch’s Geoff Dutton reports that Manhattan Mortgage Group’s controller–Angela R. Robinson–pleaded guilty in 2002 to a federal felony charge of conspiracy to commit bank fraud for her central role in a property-flipping and kickback scheme in Columbus, duping banks out of hundreds of thousands of dollars. Click here for Geoff Dutton’s article.
Filed under: Arrest,California,Ohio,Real Estate Fraud
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I am glad you brought this Manhattan Mortgage Group in Coulmbus out in light. I am a victim of theirfraud Refinance for my home. I complained to BBB but Manhattan Mortgage Group didn’t admit. Let me know, if there is any Class-Action filed against this company. I would greatly appreciate.
Thanks,
Suman Jha.
Comment by Suman Jha — April 28, 2006 @ 12:49 pm
[...] To update a story Flipping Frenzy first reported back in March of 2006, a former University of Southern California Real Estate professor who ran a Real Estate investment scam that lured victims with bogus claims of large returns on investments in commercial real estate developments, was sentenced last week to serve six years in federal prison. [...]
Pingback by Real Estate Fraud | Mortgage Fraud | Flipping Schemes — July 17, 2007 @ 12:24 am