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Derek Davis and Dino Rosetti Indicted for Illegal Cash Back at Closing Scheme
The U.S. Attorney for the Eastern District of California announced last Friday morning that a federal grand jury returned an indictment charging Derek Davis — aka Terry McCullough, 62 — of Sacramento, California, and Dino Rosetti, 39 (pictured left), of Roseville, California, with mail fraud and making false statements in loan documents. Davis was separately charged with attempting to cause a financial institution to fail to file a currency transaction report, and Rosetti was separately charged with engaging in a monetary transaction in criminally derived property in an amount greater than $10,000.
Dino Rosetti (pictured above) was arrested last Friday morning by federal agents. Derek Davis was previously arrested on a criminal complaint and is in custody. Both were arraigned on the indictment at 2:00 p.m. Friday afternoon before United States Magistrate Judge Kimberly J. Mueller in Sacramento.
The Davis/Rosetti indictment is the product of an extensive investigation conducted by the FBI, the IRS-Criminal Investigation, the California Department of Real Estate, and the El Dorado County District Attorney’s Office.
According to Assistant United States Attorney Courtney J. Linn, who is prosecuting the case, the indictment charges that from June 2005 through December 2006, Derek Davis and Dino Rosetti engaged in a scheme to defraud mortgage lenders in connection with residential real estate purchases in Sacramento, El Dorado, and Placer Counties.
Davis recruited various individuals, including straw and nominal purchasers, to purchase 16 properties. He orchestrated the transactions and Rosetti, through his company 1st Option Mortgage, acted as the mortgage broker.
The indictment charges that the transactions involved fraudulent or false representations to obtain 100% mortgage financing, including misstatements about the purchasers’ monthly income, intent to occupy the property, and existing liabilities.
In addition, the indictment charges that in each transaction, the purchase price was above the true market price of the property. An amount approximately equal to the difference between the purchase price and the true market price was then diverted as “cash back” at the close of each escrow to the bank account of a Nevada Corporation called Calorneva Land Company.
As part of the scheme, Derek Davis caused the cash to be concealed from the mortgage lenders. The indictment charges that Davis in fact exercised control over the Calorneva Land Company bank account and used the fraudulently obtained funds for various purposes, including extensive cash withdrawals.
From U.S. Attorney McGregor Scott:
“Over the course of numerous investigations we have seen how fraud-for-profit mortgage schemes took root in our Sacramento-area housing market, particularly in this 2005 to 2006 time frame. There were undoubtedly many catalysts to the lending crisis that now grips our national economy. Mortgage fraud was one of them. As this investigation illustrates, the Department of Justice is committed to prosecuting those responsible for mortgage fraud, and to working with federal, state, and county law enforcement agencies to investigate and prosecute those involved in these activities.”
The maximum penalty for mail fraud is 30 years in prison if the fraud affects a financial institution, and a fine of up to $250,000, or twice the value of the gain or loss, whichever is greater. The maximum penalty for making false statements in loan applications is 30 years in prison and a fine of $1,000,000. The maximum penalty for engaging in monetary transactions involving more than $10,000 in crime proceeds is 10 years in prison and a fine of $250,000, and the maximum penalty for money laundering is 20 years in prison and a fine of up to $500,000 or twice the value of the money laundered, which ever is greater. The maximum penalty for causing or attempting to cause a financial institution to fail to file a currency transaction report is ten years in prison and a fine of $500,000.
The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.
Filed under: Arrest,California,Cash Back at Closing
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This does not surprise me a bit. I used to work for Dino and he is a very shady, dishonost broker. In the course of my employment I allowed him to do a loan for my parents which he cheated them out of almost $10,000. I was fairly new in the loan business, however I knew something wasnt right. The more I proddeed, the more vague he got. Eventually I uncovered enough information and confronted him, he fired me about 3 days later.
You live and learn.
Comment by Darlene — October 15, 2008 @ 1:12 am
Darlene,
You should keep your mouth shut about your personal experience. You have no validity as a disgruntled employee who was fired for incapacity. You have no idea whether or not Dino had any involvement in this scheme. They have already concluded that Davis had control over the Nevada Corporation and that he brought in the “straw” buyers. If you had any idea how many real estate agents were going back after the contract was executed and asking for cash back for repairs etc, you would understand that there is no way for Dino to know that the money was not going to be used for fraudulent activities. You do not have any other facts than what you have read and have heard, so from all of us that know Dino, we would appreciate it if you would keep your slander to yourself and mind your own business.
For all who read this, please do not judge a book by its cover. Dino is an honest and awesome man. He is a father and a husband and I think that we should all continue to send business his way and support his business and his wonderful family.
Comment by Dona — October 15, 2008 @ 2:24 pm
DONNA
WHAT HAVE YOU BEEN DRINKING?? READ THE ARTICLE.
DO YOU REALLY THINK THE FBI AND THE ATTORNEY GENERALS OFFICE WOULD INDICT PEOPLE THAT ARE INNOCENT??
GREED, GREED, GREED… LOOKS LIKE DINO WILL GET A LITTLE VACATION IN JAIL PAID FOR BY THE US GOVERNMENT
PEOPLE LIKE DINO NEED TO BE REMOVED FROM REAL ESTATE.
Comment by DAVE — October 16, 2008 @ 12:44 am
Dave, yes people do get arrested for stuff they didn’t do. That’s why you’re presumed innocent until guilty. That’s why we have juries and trials and such.
I have done a few deals with an agent in Dino’s office and have been to several of his seminars and met him. There is nothing about Dino or the way he runs his business that would lead me to believe he knowingly did this. Of course I could be wrong — I know that — but there is nothing “shady” about the feel of the office or the employees I’ve dealt with. As a matter of fact, they are all standing behind him.
Yes, it’s possible he did this, but it’s also possible he didn’t. We just have to wait for the facts to come out. The Derek guy has been incarcerated for a month or so — they won’t even let him out. The feds could be basing their prosecution on what this guy has said. We just don’t know yet.
And since when do people believe everything they read in the media? The media gets it wrong all the time!!!
Comment by Peggy — October 16, 2008 @ 1:26 pm
Dave,
I think that you are the one that has been drinking. Did you not read from Dona’s comment, that you should not base your sole judgment on just that article? That is exactly what you are saying:
“WHAT HAVE YOU BEEN DRINKING?? READ THE ARTICLE”
That is very sad you would base it all on one article. For people like you the news, magazines, etc. exist. Those that rather not think and just accept what the media tells you.
Learn to think on your own and analyse the situation before opening your mouth. Well, if that is possible. If not, I feel sorry for you.
Those that have worked and have known Dino for years and years know that he is inocent and an honest hard working man.
Comment by Mary — October 16, 2008 @ 1:51 pm
To clarify, for anyone who cares to know, the information contained in this blog entry was sourced directly from the office of the United States Attorney for the Eastern District of California; not “the media.”
Comment by Editor's Note — October 16, 2008 @ 2:40 pm
MARY AND PEGGY,
CAN YOU DIRECT ME TO ONE ARTICLE WITH IN THIS BLOG OR ANY OTHER MORTGAGE FRAUD ARTICLE THAT THE PERSON INDICTED ON MORTGAGE FRAUD WAS FOUND INNOCENT??
THE ATTORNEY GENERALS OFFICE AND THE FBI HAVE FACTUAL INFORMATION FROM CLOING STATEMENTS (HUD-1)TO BRING CHARGES AGAINST THESE PEOPLE.
GOOD PEOPLE MAKE POOR CHOICES.
POOR CHOICES IN MORTGAGE FRAUD USUALLY ARE THE RESULT OF GREED AND THE BELIEF THAT NO ONE WILL DISCOVER WHAT THEY HAVE DONE.
Comment by DAVE — October 16, 2008 @ 10:27 pm
I was sad to read this article about Dino. I was an AE for Countrywide and called on his office. I liked Dino and would not have thought him to be dishonest. I hope that they find that he is innocent and that he can continue to live his life and enrich the lives of others.
Comment by Kathy — October 18, 2008 @ 2:56 am
This is a lesson for all who are in the Real Estate Business that Fraud is not worth the commission. Realtors and Lenders are guilty as well as Loan Consultants who work for Banks like Countrywide. Unfortunately the small brokers will pay for all the Fraud done in this industry. Dino was a victim of his own greed he knew better. Bank’s like Countrywide will not be investigated. I worked for them as a HMC and left b/c I saw how they really did business and Fraud was rampant and their policy on loan fraud was “Plausible Deniability” (My Sales Manager told me that was a real word).
BOFA purchased a dog with fleas. More to come on that mess. Jane Doe
Comment by Jane — October 19, 2008 @ 4:33 pm
I to have know Dino for several years. Yes he can come across very caring, honest, family man. etc, However I know from personal interaction with him he is a very dishonest and sneaky individual. I for one am not surprised at his accuser and I have long felt it was just a matter of time before he met his match. I hope if not convicted of this crime he still gets his TIME for the crimes he has not been busted for.
Comment by Bob — October 21, 2008 @ 2:49 pm
I also know and like Dino Rossetti. He was a friend and I feel terrible for him right now. I can assure everyone that you CAN get in trouble on stuff like this and NOT be guilty—I have a friend who managed a title company office. A fraudulent loan/purchase scheme was using her office, as well as many other title companies, to close the loans. Merely because of that transaction, they are being sued. It is devastating to them—they have to do depositions, meet with lawyers, etc and it is taking hours…..just for doing title work and coordinating a few closings.
The Dino I met was very very nice, shared all his business ideas and thoughts. I hope it comes out in all this that he was duped by this guy. He was above-board personally and professionally. And by the way folks…how do you guys know that ANY of the “negative Nancy’s” know him….they could just be bored people with nothing better to do….
Please hold judgment till all the facts come out.
Comment by Robin K — October 21, 2008 @ 4:56 pm
Well, I guess we’ll all just have to see, I’m sure DRE had it in for him as well, why else would they revoke his license! I’m begining to see a conspericy here!!!
Give me a break, my bet is 14 years, I want to hear about all the other Realtors in these transactions, if there was cash back, it was fraud!!!
Comment by John — November 4, 2008 @ 8:18 pm
Sounds like Dino is a really nice family man.
How could this be oh wait I remember a story
Jekyl and Hyde
No one knows what goes on behind closed doors
When money is involved morallity sometimes is void.
The real estate market is like a large bucket of water
When the market is up the bucket is full
When the market goes down the bucket of water also goes down
Now the SCUM & CRAP can easily be seen !!!
Comment by John — November 5, 2008 @ 10:39 pm
I understood he was using loan agents that were not licensed by DRE – that may have been the issue DRE had.
Doesn’t look good – 16 transactions involving fraud.
Comment by Al — November 6, 2008 @ 1:00 pm
Sounds like Dino has some friends who might wrthy of investigation themselves, if they believe him to be a nice family man and father who never did anything worng in his life. for some, it’s easier to keep their heads in teh sand than face facts. Facts is, teh dude knew what he was doing, and he knew it was illegal. I wonder if he coached his nationals clients in the fine art of larceny-in-the-bones type stuff?
Hopefully he and the others go to jail or he’ll be back doing it again if he’s not already while ouot on bail.
Comment by John Smith — November 6, 2008 @ 2:56 pm
This blog entry seems to have come alive. I do not know or have ever heard of either of the two subjects in this entry.
However, comments being made, especially those acting as judge and jury seem totally out of place and is a sad indictment of our society as a whole.
Grand Jury’s are not and are not meant to be the final rule. If they were there would be no need for trials in front of a jury of peers. Grand Jury’s get it wrong all the time. All they hear is the prosecutor’s side – there is no defense.
The editor clarified where the information was retrieved from saying it came from “office of the United States Attorney for the Eastern District of California”. That is all well and good but still does not prove guilt or innocense. I don’t believe the editor is making a judgement other then reporting a story that still needs to be PROVEN in a court of law in front of a jury of peers hearing ALL the evidence.
One other thing to remember is that indictments on wire fraud and mail fraud are catch all very generalized charges. In addition, IRS and their investigations are also used as a back up and intimidation device. Until money is proven to have been ill got and/or taxes have not been paid on any of this money then what business does the IRS have in the case. The government must first prove their case, prove that the money was illegally received. The IRS should onlly be involved after the fact if the government can prove their case and taxes have not been paid on illegal profits.
Carefull folks, readily allowing government to convict leads to a police state where no one is safe nor free from prosecution. Cases could be made against anyone for anything. You too could be a victim even thought innocent.
Let the case play out. The public has been made aware of the charges, this blog has done its job by reporting. Now let the justice system work before we all proclaim guilt.
Comment by Larry Rubinoff — November 9, 2008 @ 3:27 pm
I would have to agree with john on the Jekyl and Hyde thery NO one KNOWS you have to seek out the truth for yourself.
The reason these people are getting caught is there is no more equity to stip form the people so they cant make money any more All the companys that were involved in my scam are no loger in business except for the title company I believe.
This person claimed to be a succesful business man had the same company name for approx. 20 years why? did they change the name.
Is it because the previus company name has an enforcement action filed on it in the state were he does business?
Comment by Bob McNeilly — November 10, 2008 @ 11:17 am
I am all for innocent until proven guilty BUT if it looks like a skunk, smells like a skunk, and acts like a skunk, it is probably a skunk. Innocent people do not get investigated, but questionable and guilty people do! How nice to live in a world where everyone has such noble intentions.
Comment by Susan — November 10, 2008 @ 10:07 pm
A world with noble intentions such as innocent until proven guilty is one of the foundations of our Democracy. The same Democracy that allows us to write what we think and feel and voice our opinions. Preservation of our Constitution is not a noble effort it is our obligation.
The “smell” test is often accurate but not always. Allegations made without facts and evidence backing them up can be made against anyone – even innocent people. I don’t know if these people are in fact guilty or if they are in fact innocent. I have read the charges based on the investigation and it would appear that guilt is the issue. However, I need to hear from those actually victimized to draw my conclusions.
I have always been against and fought fraud. It had no place in my profession and indeed has been a catalyst to destroy it.
There are still three sides to every story, yours, mine and the judge’s. Allowing any government agency to be judge, jury and executioner can be more dangerous to our freedom and liberty.
Comment by Larry Rubinoff — November 11, 2008 @ 12:01 pm
My suggestion to Dino: Since your teeth are going to rot in prison, have them pull out before you go in. You’re going to be some guy’s bitch, so you might as well offer them a “gumming” service.
Comment by Phillip — November 13, 2008 @ 9:44 am
Well this should asnwer everyones questions. I was contacted by dino and some Bluestein character, there were selling shares of a company that rented out equipment in the hotels. Dino said he had 150k invested and that it was a great way to invest money, next he paid to have Bluestein flown out to meet with people. I had 175k lined up to invest. About 2 weeks later, after thousands of dollars were collected, and I mean probably over a couple million dollars, the company went under, nad everyone lost their money. Thank God I held off for one week. I alsmost lost everything. I wonder how involved Dino was with this scam? If you have any questions about it you can email me at quixrep@hotmail.com
Comment by Nathan — November 17, 2008 @ 9:37 pm
Okay all of you are smoking crack. I was in the business and saw numerous NICE, SWEET, FAMILY ORIENTED, PEOPLE do this all the time. I personally didnt take any chances and left all RE alone compelelty cause people are way to shady and desperate.
It happens with these so called NICE GUYS/ GALS more than you think. Its called GREED and lately necessity.
I even know of one of the most honest brokers who is in the business and normally would never turn to this. but because she was in a lease and facing foreclosure herself and trying to HOLD On to her mortgage company.. SHE DID IT IN HER OFFICE WITH ONE OF HER OWN LOAN OFFICERS.
I dont think she ever got paid the 22,000 cash back cause the deal was SOOOOOOOOOOOOO shady that when it finally did close the loan office ran off with the money.
so anyway. I say dont do it. I say again dont do it and those who already have … I say WATCH YOUR BACK, the feds are coming for you sooner or later. TRUST ME…
Just look at the real estate market. Someone has to pay.
Comment by Kari — November 20, 2008 @ 9:09 pm
Dino is totally guilty just wait he will plead within 90 days
Comment by cassandra — November 21, 2008 @ 11:42 pm
Dino is one of the sneakest people I have ever met. You cant belive anything he tells you. He is the most self searving individual I have ever had the displeasure of meeting , I still wash my hand every time I hear his name. Dont know his family, dont want to know them, but I do feel sorry for them , to live with such a creep.
Bob
Comment by Bob — November 27, 2008 @ 5:25 am
there are many other people out there just like dino.
so just be prepared
Comment by bob mcneilly — November 27, 2008 @ 10:12 am
I too knew Dino from working with him (not at the same company) for SEVERAL years. I found him to be completely charming…a little too charming. My company constantly turned down his loans for false information. Whether that was his doing, or the borrower’s, who knows, but how much bad luck can one “innocent” guy have? I enjoyed talking to him, but you can believe when it was time to buy my own home, I wouldn’t have touched him with a ten foot pole. Please remember, being a great family man has no impact on how you are in business, and once you start providing a nice life for the family you love, it gets a little easier each day to cross that line just a few more inches. That’s how a family man can also be a crook.
Comment by Tiffany — December 22, 2008 @ 9:30 pm
He was friends with Frank Bluestein from MI. Dirt balls run in packs!!!
Comment by Cwill — January 13, 2009 @ 12:15 pm
told you they would plead, was right!
Comment by bow peeper — January 18, 2009 @ 11:22 pm
I posted earlier in this thread…..I want you all to know that Dino is still going to work in Roseville at 1st Option. They are now using his buddy’s company’s name of United Commonwealth Mortgage. He is still going to work everyday — I saw him myself.
I have talked to other lenders who said that he had to know about these large cash payments. And after reading some of these posts by people who have had dealings with him, I’m beginning to change my opinion and think he might be guilty, if in fact what these posts are saying is true. He definitely could be considered a smooth operator.
But, because we are in America, I will wait and see what happens. I know he is still working at his company, so for those of you who say his company is out of business, you are mistaken. They are very much alive. Call 916-960-5900, and, if you get the recording it will say “United Commonwealth and 1st Option Mortgage.” Or just ask the receptionist!
Comment by Peggy — March 1, 2009 @ 11:18 am
I cannot believe he opened another company under his wife’s name..do consumers really do loans with him? His name is all over the website. Thanks Peggy for keeping us informed. When is his court case? I would like to be there to see Dino go down.
Comment by sabrina — March 9, 2009 @ 1:17 am
People are quick to judge without knowing the facts. An indictment is not the same as a judgement. We are INNOCENT until proven guilty in this country. Dino is a national coach, mentor and a man who share ideas OPENLY with anyone who wants to succeed in real estate. Most of the people who have negative things to say about Dino are jealous of his success. He is one of the hardest working brokers that I have ever known and he does not take short cuts. BTW: he lost money with Bluestein too. He wa not “in” on anything. He met the guy at some seminar and was hood winked by this con-artist, Bluestein (anybody heard of Madoff???, he confessed to his guilt so I am not being hypocritical when I say INNOCENT until proven guilty)
Comment by Bob T. — March 17, 2009 @ 10:20 pm
Looks like they got old Dino now. He’s a criminal and deserves what he gets. Peggy and the others who lavish praise on him are idiots.
Comment by alan — March 24, 2009 @ 7:15 pm
Known this sneaky dude for years. hes gonna get what hes got coming. Prettyboy ,………Your gonna love prison amigo!
Comment by mel — April 18, 2009 @ 3:33 pm
It’s frightening to me how quick everyone is to judge… how quick they are to jump to conclusions without ANY knowledge at all of what they speak. I’ve known Dino for years and found him to be one of the most by the book people I know. He’s done several loans for me and it’s always been a great experience.
I know it’s easy for all your big talk when you’re sitting behind your computer veiled in anonymity, but get a life people… think about what all these lies and false accusations’ are doing to this guy’s career and life. This could very easily be you… it just takes one little BS claim by the right person to send everything spiraling out of control. I can’t wait to see what all perpetuators of all this ugliness have to say when the truth finally comes out.
Comment by Kevin — June 1, 2009 @ 8:51 pm
Does anyone know what happened to Dino? Did he ever go to trial or anything? I don’t deal with his company anymore so I don’t know what’s going on. Or the sentencing for his partner? I can’t find anything on the internet.
Comment by Peggy — July 28, 2009 @ 11:27 am
It’s interesting, isn’t it, that the only “news” on this story is limited to the 2 original news releases at the end of 2008? Ditto on the FBI website sacramento.fbi.gov.
It’s also interesting that the only poster with the courage to use a verifiable full name is the one who expresses himself with level-headed intelligence: “There are still three sides to every story, yours, mine and the judge’s.” Thank you, Larry Rubinoff.
(Incidentally, people who want to be taken seriously ought to use spell-check at least if you want to avoid sounding ignorant as well as ill-mannered with your juvenile demeanor. I’ve got to wonder whether you even know Dino or just like to see yourself on the internet.)
My experience with Dino back to 1995 has been that he was an exceptional person who continued to encourage me for many months (and many years since as well) until I was finally able to find a house that I could afford. Without him, I would not have become a homeowner. I remain hopeful to learn that he will be found innocent of these charges. I’ve continued to watch for updates regularly and would appreciate learning the conclusion to this story. If anyone knows, you could leave a message for me at k8x@juno.com. Thanks much.
Comment by K.S. Xavier — August 12, 2009 @ 8:12 am
I have very first hand experence with Dino and yes he is a dam crook and needs to be put away. I watched him steal and I reported it to the DRE and FBI. so no speculation here it was all first hand knowledge
Comment by Jerry L — October 6, 2009 @ 6:29 am
Anyone know if there is a hearing date and or event in the future that will determine an innocent and or guilty verdiict?
Comment by Tom Parducci — December 11, 2009 @ 11:16 pm
Word among people who have had dealings with Dino is that he is a pretty sleazy character. These allegations didn’t surprise many people who actually did business with him. I can only assume the defenders here are family.
Comment by S — December 18, 2009 @ 6:44 pm
Does anyone know what happened to Derek Davies at his sentencing? Can’t find any reports. Did he skip bail??
Comment by Charles D. — February 27, 2010 @ 6:37 pm
Dino is still working at United Commonwealth Mortgage on Reserve Drive in Roseville. Apparently nothing happend to him so far. DRE site says his licenes is revoked but he is still working.
Comment by concerned — March 9, 2010 @ 8:50 pm
September 7th, 2010.
He is back.
He is now selling “lead generation” and “marketing” services.
Watch out.
Saw him in a partner’s office on 919 Reserve Drive in Rosville.
Comment by Louis K — September 13, 2010 @ 7:30 pm