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Real Estate Appraiser Receives Three Years for Mortgage Fraud
BEL AIR—On January 29, a former state-licensed real estate appraiser was sentenced to three years in federal prison and ordered to pay more than $46 million in restitution for her role in a massive mortgage fraud scheme that caused tens of millions of dollars in losses to federally insured banks, according to the Federal Bureau of Investigation.
Rancho Santa Margarita resident, Lila Rizk, received the sentencing after her conviction the previous summer on conspiracy, bank fraud and multiple loan fraud charges.
United States District Judge Dean D. Pregerson ruled Rizk’s sentencing, and warned that other professional real estate appraisers needed to know that if they inflate appraisals and lie about the value of homes, “there is an overwhelming likelihood that they will be caught and go to prison,” according to the Department of Justice press release.
Evidence presented during Rizk’s trial last summer indicates that the 43-year-old was involved in a conspiracy that acquired inflated mortgage loans on homes in some of California’s most expensive neighborhoods, such as Beverly Hills, Bel Air, Holmby Hills, Malibu, Carmel, Mill Valley, Pebble Beach and La Jolla, according to the release. Those involved in the scheme sent false documentation, including artificial purchase contracts and appraisals, to the affected banks in order to mislead them into funding mortgage loans that cost hundreds of dollars more than what the homes actually valued. Lehman Brothers Bank, one of the victim banks, was deceived into funding more than 80 such inflated loans from 2000 into 2003, resulting in tens of millions of dollars in losses.
Rizk was found to have profited by collecting hundreds of thousands of dollars in fees for providing inflated appraisals in the scam. Rizk’s appraisals often placed the homes at values exceeding three times more than what they were actually worth. Rizk referred to “comps” or comparable homes, that were far larger, more luxurious and in better areas than the ones she appraised in an apparent effort to justify the inflated appraisals. At one point, Rizk had inflated a few dozen homes, and then used them as “comps” to allegedly justify inflated values for homes later in the conspiracy.
The release lists the following 10 real estate professionals as those who were found to be involved in the scheme, and who have been convicted of federal charges:
1) Scheme leader Charles Elliot Fitzgerald, a developer of Newbury Park and Beverly Hills, who had formerly been sentenced to 14 years in prison.
2) Mark Alan Abrams, of Los Angeles, a mortgage broker, who along with Fitzgerald orchestrated the scheme, who is scheduled to be sentenced on April 12.
3) Nicole LaViolette, of Palm Springs, a loan processor, who is scheduled to be sentenced on June 14.
4) Jamieson Matykowski, of Laguna Niguel, who found houses for the scheme, is scheduled to be sentenced on March 29.
5) Timothy Holland, of Santa Ana, an escrow officer, who is scheduled to be sentenced on June 28.
6) Richard Maize, of Beverly Hills, a mortgage banker, who is scheduled to be sentenced on June 28.
7) Thomas R. Schiff, of Brentwood, a mortgage banker, who was previously sentenced to 6 months in prison.
8) L. Scott Robinson, of Dana Point, an appraiser, who is scheduled to be sentenced on April 2.
9) Kyle Gras, formerly of Santa Monica, a real estate agent, who is scheduled to be sentenced on February 19.
10) Joseph Babajian, of Los Angeles, a real estate agent, who is scheduled to be sentenced on February 22.
The case results from an investigation by the F.B.I. and IRS-Criminal Investigation, according to the release.
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Ralph this is great work
Especially enjoyed you naming each of the people involved.
kl
Comment by Ken — February 8, 2010 @ 9:01 pm
I have been following this group for years. Thank goodness the end is near. All the people that they have hurt over the years.
Shame on all of them.
Comment by Jane — February 16, 2010 @ 4:41 pm