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Homebuilder to pay $11 M for Bank Fraud & Mortgage Scam
Sunday, 05 June 2016

Seeno company charged with bank fraud, fined $11 million
Six years after federal agents raided the Seeno homebuilder headquarters, federal prosecutors Friday criminally charged Discovery Sales with bank fraud and the East Bay family’s company will plead guilty and agree to pay $11 million in fines and restitution, according to unsealed court documents. ... scam that allowed the Seeno companies to continue selling properties at high prices during the housing market downturn by obtaining mortgages through illegal means.

Seeno company charged with bank fraud, fined $11 million
By Matthias Gafni, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

CONCORD — Six years after federal agents raided the Seeno homebuilder headquarters, federal prosecutors Friday criminally charged Discovery Sales with bank fraud and the East Bay family’s company will plead guilty and agree to pay $11 million in fines and restitution, according to unsealed court documents.

At a brief arraignment Friday morning, two Seeno attorneys pleaded not guilty to one bank fraud charge on behalf of the corporation, and agreed to return at 11 a.m. to plead guilty in an agreement with federal prosecutors that will end the long FBI probe that has netted three company employees and a half dozen associates.

In its plea agreement, Discovery Sales, a company created by Albert Seeno III, admits to operating a “builder bailout” scam that allowed the Seeno companies to continue selling properties at high prices during the housing market downturn by obtaining mortgages through illegal means. The company will also be placed on five years probation.

In Assistant U.S. Attorney John Hemann’s sentencing memorandum, he explained that the $8 million fine was not higher only because the victim — the banks — were not completely innocent in this scam either.

“Everyone was making money gaming the system, or at least trying to do so: the builders, the buyers, the real estate agents, the mortgage brokers, and the originating banks, and the banks who securitized the bad loans,” he wrote. “The largest victim of (Discovery Sales) conduct was the United States economy, which suffered in 2007 and 2008 in diverse ways as a result of the conduct of the defendant and many other culpable participants in the mortgage crisis.”

The Seenos will be required to pay $8 million in fines and $3 million in restitution to Fannie Mae and Freddie Mac, two taxpayer-sponsored financial services companies that lost more than $3 million in the scam, according to court documents.

No individual Seeno family members have been criminally charged in this scheme.

http://realestate.mercurynews.com/2016/06/03/seeno-company-charged-with-bank-fraud-fined-11-million/


 
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