WASHINGTON – Representatives of President Obama’s Financial Fraud Enforcement Task Force will host the latest of a Mortgage Fraud Summit on THURSDAY, SEPTEMBER 30, 2010 in LOS ANGELES. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is holding another summit Wednesday in Fresno, and it has previously hosted mortgage fraud summits in Miami, Phoenix and Detroit.

In the morning session, task force members will meet with the general public, legal services providers and banking, mortgage and real estate industry representatives to discuss trends in the region and the effect of mortgage fraud on the community. Following the public portion of the meeting, the task force members will hold a press conference to discuss the work of the task force to combat mortgage fraud. In the afternoon, the task force members will meet privately with law enforcement agencies involved in the investigation of mortgage fraud.

Participating in the summits will be Assistant Attorney General for the Civil Division Tony West, United States Attorney André Birotte Jr., Chief of the FBI’s Financial Crimes Section Sharon Ormsby, Deputy Inspector General at the Department of Housing and Urban Development Michael Stephens and Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins. Additionally, representatives from the Federal Trade Commission, the Treasury Department’s Financial Crimes Enforcement Network, U.S. Postal Inspection Service, U.S. Secret Service, the California Department of Justice and local police agencies will participate in the summits.

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.