Nilsen Ex-Cedar Funding President Charged

David Nilsen, the former president of Cedar Funding Inc has been charged with thirty one counts of fraud. Cedar Funding Inc was a mortgage lending firm that also managed mortgage investment pools. The accusations against Nilsen and his company state that he defrauded investors out of one hundred fifty million dollars.

Nilsen and his co-conspirator Manoel Errico, Loan Servicing Manager for Cedar Funding and its subsidiary Cedar Funding Mortgage Fund Inc. used funds from new investors to make payments to existing investors, according to the indictment filed September 8th. 

Nilsen and Errico received funds from investors in an amount over one hundred and fifty million dollars and failed to manage the investment fund properly, and diverted some of those funds for personal gain or benefit, according to the indictment.

The company Cedar Funding as filed last year for relief of its debts by filing a Chapter 11 bankruptcy. The bankruptcy states that company only had fifty thousand dollars in assets and over one hundred million to five hundred million dollars in debt.

According to authorities Nilsen has been release on a one million dollar bond that is secured by six properties. Mr. Nilsen and Mr. Errico have been unavailable for comment.

The case has been filed in Federal court in San Jose, California and will be prosecuted by Thomas E. Stevens, Assistant United States Attorney.