Another local homebuilder, real estate agents, ringleader's wife added to Chico "builder bailout" scheme indictments
A man authorities identified as a Chico-area homebuilder was indicted along with seven others Thursday by a federal grand jury for alleged participation in a multi-million-dollar Chico "builder bailout" scheme. According to a statement from the U.S. Attorney's office, William E. Baker, 65, former operator of Baker and Baker Construction, conspired with former Chico mortgage broker Garrett Griffith Gililland, 28, to sell six homes to "straw buyers" at inflated prices. Proceeds from loans at the artificially inflated prices were then distributed to several co-conspirators through companies operated by Gililland.
Another local homebuilder, real estate agents, ringleader's wife added to Chico "builder bailout" scheme indictments
By GREG WELTER - Staff Writer
SACRAMENTO -- A man authorities identified as a Chico-area homebuilder was indicted along with seven others Thursday by a federal grand jury for alleged participation in a multi-million-dollar Chico "builder bailout" scheme.
According to a statement from the U.S. Attorney's office, William E. Baker, 65, former operator of Baker and Baker Construction, conspired with former Chico mortgage broker Garrett Griffith Gililland, 28, to sell six homes to "straw buyers" at inflated prices. Proceeds from loans at the artificially inflated prices were then distributed to several co-conspirators through companies operated by Gililland.
Gililland has been identified as the central figure in the bailout scheme and other real estate frauds that may total more than $100 million.
During a news conference Thursday in Washington, D.C., Attorney General Eric Holder announced a nationwide crackdown on mortgage fraud called "Operation Stolen Dreams."
In his remarks, Holder referred to the Chico builder bailout scheme as a prime example of how mortgage fraud has contributed to the U.S. housing meltdown.
Last month, Chico-area homebuilder Tony Symmes stipulated to federal charges of money laundering and mail fraud after he conspired, allegedly with Gililland, to sell 62 of his homes to straw buyers at prices inflated by about $40,000 to $60,000 each.
Authorities estimate that $21 million in good-faith loans were made by banks and lending institutions in connection with the 62 homes.
The illegal transactions in Chico were allegedly concealed from lenders and escrow companies.
Information from the U.S. Attorney's Office alleges that the inflated home prices may have led to legitimate buyers paying more for their homes than if real comparable sales figures had been used.
As partial restitution, Symmes has deposited $4 million into a U.S. Treasury account, and may have to come up with more.
An amended indictment handed down Thursday increased the number of charges against Gililland from 23 to 50. His wife, Nicole Magpusao, 30, is also named, along with former Gililland lieutenant Shane Burreson, 38. Burreson is an Orland resident identified as the president of Norcal Innovative Investments, Inc., one of many companies established by Gililland.
Magpusao, a Paradise native, was recently extradited from Spain and is in federal custody in Sacramento.
Also named in the indictment Thursday are Christopher M. Chiavola, 31, Brandon Resendez, 31, Niche Fortune, 38, and Kesha Haynie, 39, all from Chico. Additionally named is Sacramento resident Leonard Williams, 48, and Remy Heng, 30, of Elk Grove.
Butte County District Attorney Mike Ramsey, whose office investigated the bailout fraud along with the IRS and FBI, said none of those indicated Thursday were straw buyers. However, Resendez is alleged to have purchased some of the properties in his own name.
Williams and Haynie are identified as licensed real estate salesmen.
According to the amended indictment, all defendants "assisted in obtaining residential loans for the transactions causing materially false loan applications to be prepared on behalf of the purchasers."
According to information in the indictment, all straw buyers were given 100 percent financing, based on falsified income and credit records.
Officials said it's unlikely that any of the buyers could actually have qualified for the loans.
The indictment issued Thursday specifies 42 counts of mail fraud, three counts of making false statements to financial institutions and four counts of money laundering.
Charges against Gililland, Burreson and Chiavola allege they transferred fraud proceeds through federally insured banks.
A bulk cash smuggling charge also alleged relates to the shipment of $20,000 in cash in a potato chip can to Gililland in 2008, after he fled to Spain with his family to escape prosecution.
Gililland was in custody in Sacramento, but was later transferred to the Butte County Jail. He was returned to Sacramento Thursday to face the amended indictments.
Penalties for the various offenses range up to 30 years in prison, a $1 million fine and five years of supervised parole. Actual sentences are determined at the discretion of the court.
Additionally, a conviction on any of the offenses will collectively subject the defendants to forfeiture of some personal property and cash totaling $9.1 million.
http://www.chicoer.com/ci_15323341?source=most_emailed
|