Real estate fraud continues to plague Monterey County

Real estate fraud continues to plague Monterey County. That’s according to a new report from the Monterey County District Attorney’s Office.

In the Annual Real Estate Fraud Report for Fiscal Year 2016-2017, fraud complaints are on the rise. In FY 2015-2016, there were 24 referrals. That rose to 34 in FT 2016-2017. Of those, 21 investigations were launched.

The common complaints were unlicensed real estate activity, mortgage loan fraud, deed theft and advance fee schemes.

“The trends that we continue to see and have seen are advanced fees taken from consumers where no services are being provided,” said Anne Michaels, assistant district attorney for the Monterey County District Attorney’s Office. “So it’s a straight theft.”

Real estate crimes can affect all classes, all backgrounds. They say technology is a big factor.

“We’re seeing an increase in cyber-crime, and just like you see with the issues concerned presently with Equifax and credit reporting and fraud that occurs over the internet, over the wire, we’re seeing an increase in that,” Michaels said.

Rental scams are still happening. Someone advertises a home or room on websites like Craigslist, when really they don’t have them. An unsuspecting victim sends money to them and these so-called landlords are never heard from again.

The Salinas Police Department and the DA’s Office just wrapped up a case like that. Veronica Lopez pleaded no contest to felony theft charges after authorities said she misled people into believing she was renting a property in Salinas. She would allegedly collect upfront cash deposits from families.

The DA’s Office has a dedicated team, an attorney, investigator and forensic auditor that looks at these cases. The work is time-consuming and resource intensive, sometimes taking years.

The team worked on one recent case that had dominated headlines more than five years ago – the hard money lender Cedar Funding.

David Nilsen and Manuel Antonio Errico are both serving federal prison sentences for defrauding about 1,000 people out of $170 million. Errico was extradited to the United States from Argentina last year, and pleaded guilty for his role in the Ponzi scheme in January. In May, he was sentenced to 15 months in prison and ordered to pay more than $8 million in restitution. Most of the victims were in Monterey County.

“They were defrauded of money,” said Monterey County District Attorney Dean Flippo. “They had to leave this area, they couldn’t afford to live here. Money that would be set aside for college education for the kids just disappeared, so it really impacts the wealthy and the poor.

Two years ago, the district attorneys in Monterey, Santa Cruz and San Benito counties, along with other law enforcement and real estate professionals launched the Real Estate Fraud Advisory Committee. It’s a group that meets quarterly to go over trends.

“We are able to get from the people in the field, good ethical people and they want their profession to be considered aboveboard, they were talking to us about what they were seeing,” Flippo said.

Gail Valdez is the owner and broker of Bay Property Management, overseeing rentals in Salinas and the Salinas Valley. She said people need to do some investigative work before making any decisions. One red flag is when owners say they can’t meet prospective tenants or show the property.

“You have to look out for yourself first of all,” Valdez said. “You can ask the neighbors of the house, history of the house. Is the neighbor local? Is there a local company taking care of that house. Most of the scammers want you to send money right away, so they’ll keep hounding you to send money, ‘I can’t send you the keys until you send money,’ so just slow down and really investigate it a little bit.”

The DA’s Office also suggest making sure the people you are working with are legit. For example, if it’s a realtor, to make sure they are licensed. They say if there’s something concerning to you, to call authorities.

“There are unfortunately some people that are going to try to take advantage of you and so, there’s assistance there and so we would encourage all of your viewers, if they have those questions to call,” Flippo said.