Kickbacks and ID Theft lead to Three Pleading Guilty

The United States Attorney General for the Central District of California announced in a press release that Benjamin Serrano formerly of Parker, Colorado had pleaded guilty to one count of conspiracy for his involvement in a scheme to defraud lenders and provide kickbacks to purchasers of luxury homes in the State of California.

Mr. Serrano, age 47, in his plea agreement admitted that his company was short on revenue and that he and Kristin A. Clerk and Bradley Bishop conspired to use kickbacks in order to fund his company and defraud lenders.

Mr. Serrano worked with Ms. Clerk, a licensed real estate agent in Los Angeles to commit fraud against Bank of America, Wells Fargo & Co., Washington Mutual Band and other lenders that are federal insured. The scheme included Bradley Bishop who worked as a loan officer for Washington Mutual Bank and then later for Bank of America. The three were not the only individuals involved in the scheme to create revenues for the company by using kickbacks however they are the principles in the scheme.

The trio concealed the illegal kickbacks by recording fraudulent second deeds of trust on properties that the company owned. The second deeds were recorded in amounts that were equal to the kickback under filed shell corporations owned by the company controlled by Serrano.  The trio would then market the home and find a purchaser. Mr. Bishop would inform Ms. Clark what data should be listed on the borrower’s application for mortgage in order for the transaction to qualify under the guidelines set forth by Bank of America or the lending institution the loan was going to be submitted to. Ms. Clark used that data to obtain fraudulent documentation to present to the lending institution. The properties where then sold, closed and funded and the banks used part of the purchase loan to pay off the second deed of trust recorded on the property. The pay offs were sent to the shell corporations and the trio used the shell companies to pay the purchasers a kickback for purchasing a property in the companies developments. The kickbacks on ranged from anywhere between twenty and twenty three percent of the sale price of the home. The homes that were sold all had purchase prices over one million dollars.

Mr. Serrano according to his plea agreement had arranged for a buyer to purchase a property in Parker, Colorado development for over one million dollars. Mr. Serrano’s company paid the buyer a kickback from the loan proceeds. The buyer was known to have a false identity when obtaining a loan from Wells Fargo & Co. and Mr. Serrano’s company arranged to paid the buyer to fly to Los Angeles to obtain a fraudulent identity that was better in order to qualify for the next loan.  The Federal Bureau of Investigation checked into this sale and discovered that buyer did default on the mortgage and the property was later sold for half a million dollars. The loss to Wells Fargo & Co was over six hundred thousand dollars. The buyer in the sale received a kickback of over two hundred thousand dollars.

Federal Bureau of Investigation Special Agents started investigating Serrano, Clark and Bishop and other involved in the conspiracy in April of 2008. The investigation into the trio was started because Bank of America was contacted by a woman who was reporting that her identity had been stolen and was used to apply for a property in Colorado valued over one million dollars.

Bishop and Clark have both plead guilty in regard to the scheme and agreed to assist the Federal Bureau of Investigation in regard to the investigation against Serrano and others.  Bishop and Clark’s plea agreements were partial sealed by the courts, however according to Bishops plea agreement between January 2008 and April of that year he submitted over eleven fraudulent mortgage loans with a combined value of twelve million five hundred seventy one thousand three hundred sixty six dollars. All were the loans were used to purchase property built by Serrano’s company.

Clark’s plea agreement reveals that she handled the fraudulent loan applications, tax returns, W2’s, paystubs and any other supporting documentation involved. Ms. Clark used K&K Investments and Cardinal and Gold Investments to funnel the kickbacks to the purchasers. The companies were owned by her.

Serrano has pleaded guilty to one count of conspiracy and is scheduled to appear for sentencing on December 14th. The maximum penalty for one count of conspiracy is five years in federal prison.

Clark pleaded guilty to thirteen counts of bank fraud and bank fraud carries a maximum penalty of thirty years in federal prison.

Bishop pleaded guilty to eleven counts of bank fraud.

United States District Judge Christina A. Snyder was the presiding judge in both cases.

The case against Serrano, Clark and Bishop is ongoing and is being investigated by both the Federal Bureau of Investigation in Colorado and Los Angeles.