Back in 2006-2007 when you could borrow 100% of the purchase price up to $1.5 million with only a 700+ FICO score, there was a team of scammers working the Carlsbad area. They hosted seminars where they offered to help unsuspecting marks get a piece of the booming-real-estate pie.
John was the lead guy, and Jenae was the broker who arranged for them to purchase Carlsbad homes at prices inflated by $100,000 over the list price. Then they promised to rent out the homes, and when sold in a few years, everyone would split profits. The extra $100,000 was laundered into their own accounts, and they told the buyers that the money would be used for property management.
Jenae claimed she was duped too, and that no one bothered to verify that they could rent out the homes for enough to cover the payments.
I filed a 20+ page report with the FBI office in Carlsbad that detailed the whole account, and four years later, it looks like it may have helped. Here are some of the details:
https://www.bubbleinfo.com/2008/02/28/collateral-damage/
From the nctimes.com:
A Carlsbad-based real estate consultant was sentenced to five years in prison for a multimillion dollar mortgage fraud scheme involving properties in Georgia, Florida and California, according to the U.S. Attorney’s office.
John J. Borzellino was also ordered by U.S. District Court Judge Janis Sammartino to pay $4.1 million in restitution, federal prosecutors said on Friday.
Borzellino, 53, arranged to purchase homes by offering more than the seller’s asking price with the understanding that the money above the asking price would be funneled to an account under his control, according to court documents.
Prosecutors said Borzellino disguised the funds diverted to him by falsely claiming them as “commission” or “consulting fees” to be paid by the sellers at closing, according to prosecutors. He also assumed several false identities to disguise his role in the transactions. He defrauded lenders into making more than $8 million in mortgage loans to purchase properties in the name of his wife and others, prosecutors said.
Borzellino also admitted that he failed to declare almost $1 million in income to the Internal Revenue Service, prosecutors said.
omg its about time.
Awesome news! The 20 page report probably got the whole investigation started. Good job, Jim!
I hope they send me a check like this:
http://www.businessinsider.com/meet-the-foreclosure-victim-who-scored-an-18-million-settlement-by-exposing-a-robo-signing-scandal-2012-3
Bravo to you Jim.
Finally!
He’ll look great in an orange jumpsuit. Good on ya Jim for helping to put this guy behind bars.
@Ocrenter – Nice job as well in helping to expose this back in the day.
Synchronicity. I mentioned super jenae to someone today as a fraudster who had not been charged. I gather she still hasn’t. Is she on the local board of Realtors?
Can obliviousness be used as a defense?
Apparently, because that is what she used and got off.
Are there still readers who remember when this was happening?
She found me talking about her – so we met for an hour so she could explain her side. She claimed to have no working knowledge of the scam, and that she thought it was legit.
But she should have lost her license, or at least faced disciplinary action for selling houses to people under the premise of renting them for $10,000 to $12,000 per month when model-matches in the same neighborhood were going for $4,000 to $5,000.
But if you think that people would pay double to get a lease-option, I guess it might be feasible.
I don’t think she is still on the board of realtors, but she served a couple of years at least. She is broker-of-record for a company representing a flipper, and is selling 200 houses per year.
The DRE shows this on her record:
NO DISCIPLINARY ACTION
I don’t think she is done . You’re pretty on top of things and I am sure you have seen she is working for Lenders Realty. The inhouse broker for Pacifica, SD coastline, SDII, SDIII or whatever they are calling themselves now. Haven’t seen as much from them lately but I lost offers to a couple head scratchers a while back where I had higher offers submitted for my investor client. Maybe John was the money guy which may be the reason they aren’t so active in the market anymore. She didn’t know is BS how the hell can you not know, and if you didn’t know you should have your license revoked for not watching out for the “client”.
Anyone frequenting this blog should take note of Jim’s courage as well as his honesty and integrity. Criminals don’t take kindly to those that point out (let alone document) their criminal activities.
p.s.: Hope that CCW permit is coming along!
that dude looks very shady.
Good work Jim! It takes guts to stand up against these fraudsters who helped ruin our entire economy.
You play stupid games, you win stupid prizes. Enjoy prison!!!
Jim, She should have lost her license. The fact she is selling 200 homes a year and has been on the board of realtors explains why she hasn’t. And the looks help too. Big dogs get treated differently in my county too and if you sell 200 homes you are a big dog.
And yes, I remember OC Renter and Jim documenting this stuff years ago to no effect. A LOT of well documented frauds have never been pursued by the authorities. Casey Serin is likely the best known.
Deserving credit to OCRenter who helped chase this story and many others.
these fraudsters who helped ruin our entire economy.
The worst part of this fraud was the deceit inflicted on the neighbors who thought these sales were legit, and used them to refinance their house to the hilt – which leads to more foreclosures or underwater homeowners struggling with decisions to make.
I should have taken a class on How to succeed as a crook at University of Pheonix. Then Id have some real money.
Wow. Nice work, Jim.
Magnum PI has nothing on JTR!
Jim, good job on getting the ball rolling on this and helping the system to put away such a sleazeball.
It’s disappointing that they didn’t do anything to Super Janae, though…