The Sheriff's Blogger

Countrywide Settles Discrimination Suit with Government for $335 Million

Department of Justice

JUSTICE DEPARTMENT REACHES $335 MILLION SETTLEMENT TO RESOLVE ALLEGATIONS OF LENDING DISCRIMINATION BY COUNTRYWIDE FINANCIAL CORPORATION

More than 200,000 African-American and Hispanic Borrowers who Qualified for Loans were Charged Higher Fees or Placed into Subprime Loans

WASHINGTON – The Department of Justice today filed its largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008. 

The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders.

The settlement, which is subject to court approval, was filed today in the U.S. District Court for the Central District of California in conjunction with the department’s complaint which alleges that Countrywide discriminated by charging more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending.  The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. 

The United States also alleges that Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans.  All the borrowers who were discriminated against were qualified for Countrywide mortgage loans according to Countrywide’s own underwriting criteria.

“The department’s action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for lending discrimination,” said Attorney General Eric Holder. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin. With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation.”

The settlement resolves the United States’ pricing and steering claims against Countrywide for its discrimination against African Americans and Hispanics. 

The United States’ complaint alleges that African-American and Hispanic borrowers paid more than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin.  Countrywide’s business practice allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors.  This subjective and unguided pricing discretion resulted in African American and Hispanic borrowers paying more.  The complaint further alleges that Countrywide was aware the fees and interest rates it was charging discriminated against African-American and Hispanic borrowers, but failed to impose meaningful limits or guidelines to stop it. 

“Countrywide’s actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “We are using every tool in our law enforcement arsenal, including some that were dormant for years, to go after institutions of all sizes that discriminated against families solely because of their race or national origin.”

The United States’ complaint also alleges that, as a result of Countrywide’s policies and practices, qualified African-American and Hispanic borrowers were placed in subprime loans rather than prime loans even when similarly-qualified non-Hispanic white borrowers were placed in prime loans.  The discriminatory placement of borrowers in subprime loans, also known as “steering,” occurred because it was Countrywide’s business practice to allow mortgage brokers and employees to place a loan applicant in a subprime loan even when the applicant qualified for a prime loan.  In addition, Countrywide gave mortgage brokers discretion to request exceptions to the underwriting guidelines, and Countrywide’s employees had discretion to grant these exceptions.       

This is the first time that the Justice Department has alleged and obtained relief for borrowers who were steered into loans based on race or national origin, a practice that systematically placed borrowers of color into subprime mortgage loan products while placing non-Hispanic white borrowers with similar creditworthiness in prime loans.  By steering borrowers into subprime loans from 2004 to 2007, the complaint alleges, Countrywide harmed those qualified African-American and Hispanic borrowers.  Subprime loans generally carried higher-cost terms, such as prepayment penalties and exploding adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.

The settlement also resolves the department’s claim that Countrywide violated the Equal Credit Opportunity Act by discriminating on the basis of marital status against non-applicant spouses of borrowers by encouraging them to sign away their home ownership rights.  The law allows married individuals to apply for credit either in their own name or jointly with their spouse, even when the property is owned by both spouses.  For applications made by married individuals applying solely in their own name between 2004 and 2008, Countrywide encouraged non-applicant spouses to sign quitclaim deeds or other documents transferring their legal rights and interests in jointly-held property to the borrowing spouse.  Non-applicant spouses who execute a quitclaim deed risk substantial uncertainty and financial loss by losing all their rights and interests in the property securing the loan. 

In addition, the settlement requires Countrywide to implement policies and practices to prevent discrimination if it returns to the lending business during the next four years.  Countrywide currently operates as a subsidiary of Bank of America but does not originate new loans.  

The department’s investigation into Countrywide’s lending practices began after referrals by the Board of Governors of the Federal Reserve and the Office of Thrift Supervision to the Justice Department’s Civil Rights Division in 2007 and 2008 for potential patterns or practices of discrimination by Countrywide.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.   The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.   The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.   For more information on the task force, visit www.StopFraud.gov.

A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing. 

The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of Countrywide’s discrimination.  The department will make a public announcement and post contact information on its website once an administrator is chosen.  Borrowers who are eligible for compensation from the settlement will then be contacted by the administrator.  Individuals who believe that they may have been victims of lending discrimination by Countrywide and have questions about the settlement may email the department at [email protected].

Part Owner and Managers of Douglas Nissan Sentence for Defrauding Customers

December 16, 2011

Case # 08CF2755

PART-OWNER AND TWO MANAGERS OF DOUGLAS NISSAN SENTENCED FOR DEFRAUDING CUSTOMERS AND BANKS IN THEFT CONSPIRACY *A fourth co-defendant is a fugitive in this case

SANTA ANA - A part-owner and two managers of Douglas Nissan in Orange were sentenced today for their role in an elaborate conspiracy to steal unsuspecting customer identities and defraud banks in the sale of used cars. Part-Owner Frank Ignacio Urbano, 57, Anaheim, and desk managers Luz Belem Corral, 29, Costa Mesa, and Kevin Allen DeRosier, 31, Anaheim, pleaded guilty May 6, 2011, to felonies including 43 counts of forgery, 31 counts of grand theft, and two counts of conspiracy. Corral additionally pleaded guilty to one felony count of perjury by declaration. Urbano was sentenced to one year in jail and 10 years in state prison suspended pending successful completion of five years of formal probation. DeRosier was sentenced to 240 days in jail and five years of formal probation. Corral was sentenced to 360 days in jail and five years of formal probation.

A fourth defendant is a fugitive with a $2 million warrant in this case. Marwan Abdellatif, 49, formerly of Lakewood, was charged Nov. 5, 2010, with one felony count of failing to appear in court. He is also charged in the Douglas Nissan case with 43 felony counts of forgery, 31 felony counts of grand theft, one felony count of conspiracy to defraud another of property, and one felony count of conspiracy to commit a crime. If convicted, he faces a maximum sentence of 38 years in state prison. Anyone with information regarding his whereabouts is asked to call their local police department's non-emergency number or Supervising District Attorney Investigator Eric Akerlind at (714) 347-8691.

ORIGIN OF CASE

In April 2007, the Orange County District Attorney's Office (OCDA) began investigating possible fraudulent activity at Douglas car dealerships. The OCDA discovered that between 2005 and 2007, more than two dozen relevant police reports were filed with the Orange Police Department regarding Douglas Nissan of Orange. More than 100 complaints had been filed with the DMV and Better Business Bureau about Douglas Nissan and the other dealerships for unfair business practices.

Investigators from the OCDA searched Douglas Nissan at 1140 West Katella Avenue in Orange on July 9, 2007. Evidence was seized including two computers, electronic data from four additional computers, and approximately 350 boxes containing approximately 12,000 car transaction dealer jackets. Each dealer jacket contained several documents including contracts, credit reports, applications, warranty and insurance information, and other documentation relevant to the sale or lease of a vehicle. The felony charges in this case represent only the most egregious acts, focusing on 31 fraudulent transactions and representing a small percentage of the large volume of evidence.

THE CONSPIRACY

At the time of the crime, Urbano was a minority share owner and general manager of Douglas Nissan responsible for day-to-day operations. Corral, DeRosier, and Abdellatif were desk managers who supervised dealership sales staff, secured documentation and financing for vehicle sales, and signed off on all car sale deals.

Between February 2005 and June 2007, the defendants participated in an elaborate ongoing conspiracy to sell used cars at prices above their value to drive up the cost of monthly payments by the customer. They participated in illegal business practices by submitting false loan information to defraud lenders and defrauded vulnerable customers by securing unaffordable loans in the customer's name.

When making a lending decision related to the purchase of an automobile, banks rely on Kelley Blue Book to determine the value of a vehicle. In order to justify high loan values for cars on their Douglas Nissan lot, the defendants falsified electronic Kelley Blue Book records by overstating the value of certain vehicles and falsifying features of the car. They defrauded the banks out of an estimated $911,500 in financing through the submission of the falsified records. Eight known banks and lending institutions were defrauded in the scheme. Bank of America, who had received dozens of identity theft affidavits from consumers, had stopped conducting business with Douglas Nissan in June 2007 because of the high number of fraudulent vehicle loan packages from the dealership. The other seven banks and institutions included Americredit Financial Services, Capital One Auto Finance, Nissan Motor Acceptance Corporation, NuVision Federal Credit Union, Wachovia Financial Services, Wells Fargo Bank, and Wescom Credit Union.

In addition to the banks, the increased loan also victimized customers. Urbano, Corral, DeRosier, and Abdellatif primarily targeted Spanish speaking customers who did not have proper identification or understand the process of buying a vehicle. They obtained or created false identities and assigned the identities to customers without their knowledge in order to qualify for higher loans. They created fake customer pay-stubs to support the falsified claim of higher income. The defendants encouraged victims to sign loan and purchase documents that had not been completed, and later filled in the documents with information that overstated the victims' loan payment abilities.

The defendants intentionally overstated the income of customers without the customer's knowledge in order to qualify the victim for a higher loan. In many cases the victims could not afford the payment on the higher loans and lost their cars. The defendants engaged in "loan packing," or having customers purchase extra insurance and warranty coverage by deceiving them about the amount charged for add-on items.

Victims also included non-customers, whose identities had been stolen and used to purchase cars. This resulted in victims with loans and vehicles in their names about which they did not know and to which they did not consent. In some cases, the defendants misled victims into believing they were acting as a reference for another customer, and instead used that victim as a co-signer without the victim's knowledge. These victims were left with the responsibility of the high loan if the original customer defaulted on the payments. 

In addition to the conspiracy, Corral also committed perjury for using a fake social security number on her application for a sales license, which is required in order to sell cars.

Senior Deputy District Attorney Doug Brannan of the Major Fraud Unit prosecuted this case.

Parole Denied in Workplace Violence Murder Case

December 20, 2011

PAROLE DENIED FOR MAN CONVICTED OF STABBING-MURDER OF COWORKER AND ATTEMPTED MURDER OF ANOTHER

SANTA ANA - The Board of Parole Hearings (Board), California Department of Corrections and Rehabilitation, denied the parole today for an inmate who was convicted of stabbing and murdering his coworker and attempting to murder another.

Ivory Joe Valentine, 57, is currently being held at Correctional Training Facility in Soledad, CA. Valentine was sentenced Oct. 21, 1986, to 20 years to life in state prison with an additional one year for the sentencing enhancement for the personal used of a deadly weapon, after he was found guilty of one felony count of second degree murder and one felony count of attempted voluntary manslaughter. This case was originally prosecuted by former Deputy District Attorney Mike Jacobs.

Deputy District Attorney Marc Labreche attended the hearing via video conference to oppose Valentine's parole. Before denying the inmate's parole, the Board took into consideration Valentine's recent prison rules violations and his lack of insight and remorse for the crime, citing that he is as dangerous today as he was in 1985. Valentine will be eligible for his next parole hearing in 2016.

Murder of Ronald Gorby

On Nov. 8, 1985, 31-year-old Valentine was at work when he was called to the Human Resources office on another floor. Valentine refused to go, which forced his supervisor, Personnel Director Ronald Gorby, and two other employees, including John Wolcott, to approach him at his work station. Valentine was being let go from his employment due to a personal problem he had with the Internal Revenue Service (IRS), which had become disruptive to the workplace and diminished his work performance.

During the termination, Valentine was told his last paychecks would be garnished to pay the IRS. Valentine became enraged, grabbed a knife, and murdered Gorby by repeatedly stabbing him. When Wolcott came to Gorby's aid, Valentine stabbed him multiple times. Wolcott survived the stab wounds.

 

Lack of Rehabilitation, Remorse, and Threat to Public Safety While incarcerated, Valentine has accumulated 16 prison rules violation, the last two serious prison rules violations for disobeying orders in October 2009 and disrespect in January 2010. The inmate's other prison rules violations include force and violence, disobeying orders, contact conducive of violence, unauthorized possession of a computer disk, attempting to post changes to a computer from which he was restricted, being aggressive towards staff, refusal to work, substandard job performance, incomplete and inaccurate work, job performance, disruptive behavior, delaying lock-up, being out of bounds, and possession of an unauthorized food item. Valentine has proven that he cannot follow the rules, even in a highly structured environment, for any significant amount of time without engaging in institutional misconduct.

Valentine has yet to show remorse for his crime and sees himself as a victim for his and his family's suffering due to his incarceration. In the People's 2011 opposition letter it states that "the inmate continues to focus on the victims' behaviors that provoked his aggressive reaction instead of recognizing that he escalated the situation by picking up a weapon."

Valentine continues to display a lack of rehabilitation and remorse, proving he cannot adhere to the rules and regulations of his environment while incarcerated, which demonstrates the serious threat he poses to public safety and shows that he needs to remain in prison.

Former Newport Beach Socialites Convicted of Multi-Million Tax Fraud

December 19, 2011

Case # 03HF1207

MARRIED COUPLE CONVICTED OF FAILING TO PAY TAXES ON OVER $180 MILLION IN UNREPORTED INCOME FROM POWER PLANT REFURBISHING BUSINESS

SANTA ANA - A formerly married couple was convicted Friday of failing to pay taxes on over $180 million in unreported income from their power plant refurbishing business. Richard Engel pleaded guilty Dec. 16, 2011, to four felony counts of failing to file tax returns for his corporation, three felony counts of filing false personal tax returns, and one felony count of failing to file a personal return.  The defendant also admitted sentencing enhancements for fraud in excess of $500,000 causing a loss in excess of $1 million.  Richard Engel faces a sentence up to 12 years and eight months in state prison at his sentencing Aug. 3, 2012, in Department C-40, Central Justice Center, Santa Ana.

Richard Engel's then-wife Jolene Engel pleaded guilty Dec. 16, 2011, to one felony count of failure to file tax returns for her corporation and one felony count of failing to provide material information in a tax return.  She faces a sentence up to five years and eight months at her sentencing Aug. 3, 2012 , in Department C-40.

Both defendants are required to pay the California Franchise Tax Board (FTB) approximately $1.2 million prior to sentencing.  They will also be required to pay over an additional $2 million in restitution as a term of their sentences.

Facts of the Case

Beginning in 1998, the defendants operated Powerplant Maintenance Specialists, Inc. (PMSI), a business that specialized in contracting for the refurbishment of power facilities. Jolene Engel acted as president of PMSI until June 30, 2001, when Richard Engel took over that role.  Richard Engel was also Chief Financial Officer (CFO) of the company, negotiated all contracts, handled company operations, and directed PMSI's financial affairs. 

Between 1998 and 2001, the company had a gross revenue of over $180 million. 

In October 2000, Richard and Jolene Engel entered PMSI into a contract with AES Corporation (formerly Southern California Edison) to refurbish its Huntington Beach power plant for approximately $108 million.  The contract called for AES to make bi-weekly $6.13 million payments to PMSI to obtain a discount on the contract price. The project was estimated to take 90 days from the date the project received the required permits, and the contract called for completion of the project by June 1, 2001. 

Oct. 4, 2000, and Dec. 31, 2000, the defendants received over $36 million to PMSI from AES for the power plant refurbishment, for which PMSI did virtually no work.  Richard and Jolene Engel diverted over $24 million in 2000 for their own purposes without fulfilling their end of the PMSI contract. The fraudulently diverted money was spent on luxury items for both defendants including jewelry and cars, a down payment on a Lear jet for Richard Engel, over $1 million to Richard Engel's other companies, and more than $8.5 million to Jolene Engel for her stock in the company when the couple divorced.  

Prior to June 2001, PMSI received nearly $100 million from AES as full payment on the balance owed on the contract. Despite this payment, PMSI failed to perform the work for which they were paid due to problems obtaining the required construction permits by June 1, 2001, the date the project was to be completed.  Richard and Jolene Engel continued to divert funds for their personal expenses. 

Due to Richard and Jolene Engel's diversion of funds, PMSI had insufficient funds to pay for required labor and materials when the company was required to complete the project. As a result, AES had to pay an additional $35 million for the project in order to pay for workers and materials directly so that the project could be completed. PMSI never completed the project, and left workers, subcontractors, and creditors unpaid.

In addition to this project, Richard and Jolene Engel received more than $72 million on behalf of PMSI for work performed in other states outside of California between 1998 and 2001. The result was that the company had little or no taxable income for state income tax purposes during those years. Despite this, California law requires that timely tax returns are filed for companies and a minimum $800 in tax is paid.

Richard Engel filed false tax returns in 1998 through 2000, and failed to file a return for 2001.  In late 2000, Richard Engel filed forms claiming no income for 1998 and 1999, and in March 2001 reported only $144,231 in income. During this time, Richard Engel received millions of dollars from PMSI, which he spent on personal luxuries including stays at Four Seasons Hotels, a 1999 Bentley, jewelry and other expenses. 

Jolene Engel failed to file personal income tax returns for 1998 through 2000, despite receiving a salary from PMSI and unreported income including the $8.5 million she received in 2000 for her stock in the company and approximately $3.7 million in 2001.    

The Orange County District Attorney's Office began investigating this case in late 2001 after receiving a call from a labor union regarding possible fraud related to the unpaid workers on the AES project. FTB assisted in the investigation.

Senior Deputy District Attorney Bill Overtoom of the Major Fraud Unit prosecuted this case.

Broker Gets 15 Years for $6.9 Million Theft in Ponzi Scheme and Real Estate Fraud

December 16, 2011

Case # 09CF1446

HARD MONEY LENDER BROKER SENTENCED TO 15 YEARS IN PRISON FOR STEALING OVER $6.9 MILLION FROM INVESTORS IN PONZI AND REAL ESTATE FRAUD SCHEME

SANTA ANA - A broker for "hard money lenders" was sentenced today to 15 years in state prison and three years of formal probation for stealing $6.9 million from investors in a Ponzi and real estate fraud scheme. 

Mark Alan Helsing, 53, Tustin, pleaded guilty Oct. 3, 2011, to 55 felony counts of grand theft, seven felony counts of filing false recorded documents, six felony counts of elder financial exploitation, and sentencing enhancements for white collar crime over $500,000 and excessive taking over $1 million and $1.3 million. Restitution will be determined at a later date.

Between May 2004 and June 2007, Helsing defrauded approximately 12 people in a Ponzi and real estate fraud scheme. Helsing operated as a broker for "hard money lenders" through his four Orange County based businesses including Sea View Investments, HLHS Financial Services, Inc., Foothill Realty, and Sea View Mortgage. The term "hard money lender" is a private investor who provides money to borrowers looking for funds from non-bank lenders.

He stole from his private investors, most of whom were long-time friends who trusted the defendant, by keeping the money they lent for borrowers and not funding the loans as promised. Helsing supplied investors with bogus interest payments by taking small sums from their initial investment and providing them with falsified and forged documents to prevent them from discovering that the loans had not been repaid. Helsing embezzled the money and failed to return it the investors' initial principal.

Helsing operated a Ponzi scheme and used funds from new investors to pay off old investors. A Ponzi scheme is a fraudulent scheme that offers investors high, short-term returns on investments by using the money from other investors. Instead of using the money to generate actual income and legitimate profits, the money from investors is kept for the benefit of the defendant or used to repay earlier investors.

In December 2008, the Tustin Police Department began investigating the case after receiving complaints of checks bouncing from some of Helsing's victims. Helsing was arrested in court June 12, 2009, after pleading guilty in an unrelated case (#08CF3304) to six felony counts including grand theft and check fraud.

 Deputy District Attorney George McFetridge of the White Collar Crime Team prosecuted this case.

 

Man Gets Life for Killing WWII Vet During Veterans Day Robbery

December 16, 2011

Case # 09CF1955

 MAN SENTENCED TO LIFE IN PRISON WITHOUT PAROLE FOR VETERANS DAY ROBBERY-MURDER OF WWII VETERAN *Defendant and co-defendant left victim in a coma for three years and were charged with murder after the victim's death

SANTA ANA - A man was sentenced today to life in state prison without the possibility of parole for the beating-murder of a WWII veteran during a robbery on Veterans Day. The victim was left in a coma for over three years until he died as a direct result of his injuries sustained in the 2003 attack. Curtis James Hill, 29, Huntington Beach, was found guilty by a jury Nov. 1, 2011, of one felony count of special circumstances murder in the commission of a robbery.

Co-defendant John Kirk McKinney, 29, Huntington Beach, is charged with one felony count of special circumstances murder in the commission of a robbery and faces a sentence of life in state prison without the possibility of parole if convicted. McKinney faces a jury trial Feb. 27, 2011, in Department C-41, Central Justice Center, Santa Ana.

The following was argued by the People during the trial against Hill. McKinney is accused of committing the following crimes:

At approximately 6:00 a.m. on Nov. 11, 2003, McKinney and Hill entered the parked van of 77-year-old Cecil Warren, a WWII veteran, with the intention of stealing items from inside. The victim, who was working as a handyman cleaning the Huntington Beach bank parking lot where his van was parked, noticed the defendants in his van. When Warren asked Hill and McKinney what they were doing, the defendants attacked the victim. The defendants hit and kicked Warren in the head, robbed him of his wallet, and left the victim on the ground before fleeing the scene.

Approximately 30 minutes later, a pedestrian found Warren bleeding and moaning on the ground in the parking lot and called 911. The victim gave police a brief description of the two defendants before losing consciousness. Warren was transported to the hospital, where he spent the next three and a half years in a coma.

For this crime, Hill pleaded guilty and was sentenced Oct. 10, 2006,  to nine years in state prison for one felony count of second degree robbery, one felony count of aggravated assault, and admitted to sentencing enhancements for great bodily injury to an elder and committing a crime against a vulnerable victim (Case #03WF2996).

 

McKinney was found guilty by a jury Nov. 15, 2006, of one felony count of second degree robbery and one felony count of aggravated assault. The sentencing enhancement for committing a crime against a vulnerable victim was found true (Case #03WF2996). He was sentenced on Feb. 2, 2007, to four years in state prison.

After spending more than three and a half years on life support in a coma, 81-year-old Warren died on Sept. 22, 2007. The defendants directly caused the head injuries that resulted in the victim's death. 

Hill and McKinney were charged with murder on Sept. 4, 2009. At the time, both defendants were serving prison sentences for the assault and robbery convictions stemming from the same attack. Prior to being charged with murder, Hill was set to be released from prison on Aug. 12, 2011, and McKinney was scheduled to be released on Sept. 1, 2009.

Senior Deputy District Attorney Sonia Balleste of the Homicide Unit prosecuted case.

Man Convicted of Revenge-Murder in Burning-Body Case

December 15, 2011

Case # 07NF2178

MAN CONVICTED OF CONSPIRACY IN REVENGE-MURDER AND ATTEMPTED MURDER OF FAMILY, WHOSE BODIES WERE BURNED AND HOUSE SET ON FIRE *Jury was unable to reach a verdict regarding co-defendant; A third co-defendant is pending trial

SANTA ANA - A man was convicted today for his role in a revenge-murder and attempted murder conspiracy targeting the family of a co-defendant's ex-girlfriend. Two victims were murdered and set on fire and a third was left in a coma after suffering life-threatening injuries.

Vitaliy Krasnoperov, 26, Hollywood, was found guilty by a jury of two felony counts of special circumstances murder, one felony count of attempted murder, and one felony count of conspiracy to commit murder. The sentencing enhancements for multiple murders, murder during the commission of a burglary, and murder during the commission of kidnapping were found true. This was the second jury trial against Krasnoperov, as a previous jury was unable to reach a verdict on May 10, 2011. He is expected to be sentenced to life in state prison without the possibility of parole on March 16, 2012, in Department C-41, Central Justice Center, Santa Ana.

The jury was unable to reach a unanimous verdict during the trial against co-defendant Charles Anthony Murphy, Jr., 27, Mission Hills, who is charged with two felony counts of special circumstances murder, one felony count of attempted murder, and one felony count of conspiracy to commit murder. He faces sentencing enhancements for multiple murders, murder during the commission of a burglary, murder during the commission of kidnapping, and murder for financial gain. Murphy faces a maximum sentence of life in state prison without the possibility of parole if convicted and scheduled for a pre-trial hearing Jan. 13, 2012. 

Co-defendant Iftekhar Murtaza, 27, Van Nuys, faces the same charges and enhancements as Murphy. The Orange County District Attorney is seeking the death penalty against Murtaza, who is scheduled for a pre-trial hearing Jan. 20, 2012, in Department C-41.

Background

In March 2007, 18-year-old Shayona Dhanak was a freshman at the University of California, Irvine, living in the campus dorms. Her father Jaypraykash Dhanak, 56, mother Leela Dhanak, 54, and sister Karishma Dhanak, 20, lived in the family home in Anaheim Hills.

 

On March 29, 2007, 18-year-old Shayona Dhanak ended a two-year dating relationship with Murtaza. The Dhanaks disapproved of the relationship partly because they were practicing Hindus and Murtaza was a non-practicing Muslim. Murtaza is accused of becoming angry about the break-up, believing that Shayona Dhanak's parents were responsible because they did not approve of the relationship and had pressured her to end the relationship.

Circumstances of the Conspiracy

After the break-up, Murtaza is accused of contacting his friend, Krasnoperov, online and telling him in an AOL Instant Messenger (IM) conversation that he wanted to kill Jaypraykash and Leela Dhanak. Murtaza is accused of having an IM discussion with Krasnoperov about ways to murder the victims, including burning their house down or using a hit man.  Krasnoperov offered to contact someone whom he knew "used to do this type of work."

On April 26, 2007, Murtaza is accused of having another online IM conversation with Krasnoperov to discuss an upcoming meeting, arranged by Krasnoperov. They are accused of planning this meeting with the intention of negotiating the murders of the Dhanak family.  Krasnoperov instructed Murtaza to obtain a picture of the victims by sending Shayona Dhanak an IM asking for a photograph from her recent family trip to India.

At approximately 1:30 p.m. on May 21, 2007, Murtaza is accused of contacting and exchanging a series of text messages with his childhood friend, Murphy, and offering him $30,000 "for a job." Murtaza is accused of telling Murphy that they should meet in person to discuss the details. Murphy is accused of agreeing to meet with Murtaza that day and participate in the murders of the Dhanaks that night.

Circumstances of the Murder

On May 21, 2007, the same day Murtaza met with Murphy, the defendants are accused of brutally murdering Jaypraykash and Karishma Dhanak and attempting to murder Leela Dhanak. 

Sometime after 6:30 p.m., Jaypraykash Dhanak, who worked with his wife in Irvine, was in his house alone after leaving work and agreeing to meet Leela Dhanak at home later. The defendants are accused of entering the Dhanaks' home and forcibly restraining Jaypraykash Dhanak. They are accused of beating him, stabbing him repeatedly, and putting him in a bathroom while waiting for his wife and daughter to arrive home.

At approximately 10:30 p.m., Karishma Dhanak was dropped off at home by a friend. The defendants are accused of forcibly detaining her. At approximately 10:45 p.m., Leela Dhanak arrived home from work. The defendants are accused of immediately attacking her and stabbing her in the stomach. They are accused of then dousing the home is gasoline, lighting the house on fire, and attempting to move the three victims to a van outside.

Once outside of the home, the defendants are accused of continuing to beat Jaypraykash Dhanak, who was severely injured and not defending himself. A witness in a nearby park observed the fire and began to run toward the house. As the witness approached, the defendants are accused of putting Jaypraykash and Karishma Dhanak in the back of a van and fleeing the scene. The witness flagged down a nearby police officer in a marked patrol car. The officer was the first to arrive at the scene and discovered Leela Dhanak lying unconscious on her neighbor's lawn. The victims' home was engulfed in flames and was largely destroyed by the fire.

Leela Dhanak was transported to the hospital with severe life threatening injuries. The victim suffered stab wounds to her stomach, blunt force injuries to the head, and third degree burns to her arm. She spent approximately three weeks in a coma and over one month in the hospital.

Shortly after 4:00 a.m. on May 22, 2007, five hours after fleeing the Dhanaks' Anaheim Hills home, the defendants are accused of taking Jaypraykash and Karishma Dhanak to a bike trail at Mason Regional Park in Irvine. They are accused of murdering the victims and setting their bodies on fire with gasoline. The defendants are accused of then fleeing the scene. Officers responding to calls reporting the early-morning fires discovered the bodies.

Officers from the Anaheim Police Department began investigating the case and indentified Murtaza as a suspect. Murtaza is accused of fleeing from Orange County to Phoenix, AZ. On May 25, 2007, he is accused of attempting to flee to India from Arizona with a one-way plane ticket and $11,000 in cash. He was arrested attempting to board a flight to India and was later extradited back to Orange County on June 13, 2007. Subsequent investigation led to the arrest of Krasnoperov on June 22, 2007, and Murphy on August 17, 2007.

Senior Deputy District Attorney Howard Gundy of the Homicide Unit is prosecuting this case.

Five Family Members Charged with Endangering Children in Waste-Infested Home with 110 Cats

December 14, 2011

FIVE FAMILY MEMBERS CHARGED WITH ENDANGERING TWO CHILDREN IN URINE AND FECES-INFESTED HOUSE WITH 110 CATS

 Orange County District Attorney's Office

SANTA ANA - A family of five adults has been charged with exposing two children to severely unsanitary conditions by living in a urine and feces-filled home with 110 cats. The five defendants are Sharon Lynn Howe, 65; her husband John Ed Howe, 68; her daughter Kerri Lynn Howe Moreno, 44; Kerri Moreno's husband Jessy Moreno, 41; and Kerri Moreno's daughter Courtney Lynn Howe Perez, 23.

All five are charged with two felony counts each of child endangerment. Sharon Howe and Courtney Perez are charged with an additional felony count of animal cruelty and face a sentence ranging from probation up to eight years in state prison if convicted. John Howe, Kerri Moreno, and Jessy Moreno face a sentence ranging from probation up to seven years and four months in state prison if convicted. They are expected to be arraigned Jan. 18, 2012, at the Central Justice Center in Santa Ana. The time and Department are to be determined.

Overview of the Case

Sharon Howe and her granddaughter Courtney Perez are accused of using their Santa Ana home to house unwanted cats. They are accused of obtaining many these cats from animal shelters under the pretense of operating a rescue organization to find the animals other permanent homes. The two defendants lived in the home with the other three adult defendants and two little girls, ages 6 and 12 years old.

All five defendants are accused of failing to protect and endangering the two children by having them to live in a severely unsanitary and unsafe environment. Sharon Howe and Courtney Perez are accused of also abusing the cats in their home by keeping them in an unsanitary environment and failing to provide food, water, and proper medical care.

Investigation of the Case

In February 2011, Santa Ana Police Department (SAPD) Animal Services Officers responded to the defendants' home after receiving complaints from neighbors about the foul animal odor emanating from the residence. The responding officers arrived and observed from outside the home an intense odor of urine and feces and live and dead flies congregating around the windows and doors.

Inside the home, the five defendants are accused of allowing two child victims to live in extremely unsanitary, filthy conditions. The Animal Services Officers entered the home wearing paper masks, but had to leave after only a few minutes due to feeling ill as a result of the overwhelming smell. They returned wearing full hazmat gear including body suits and respirators.

The defendants are accused of keeping a grossly unhygienic home with feces and urine all over the floors and other surfaces, as well as cat hair, roaches, and flies. Severe ammonia exposure, which can be caused due to exposure to urine, can cause health problems for humans including respiratory illness, eye irritation, headaches, burns, nausea, vomiting, dizziness, and shortness of breath.

The defendants are accused of having one of the child victims sleep in the living room on a couch, surrounded by cats and constantly exposed to the smell of feces and urine. They are accused of having the other child victim sleep in a bedroom under the same conditions. At least one of the victims was found to have scratches from the cats on her arms and legs. Two of the defendants were found to have cat feces caked on their feet from walking barefoot in the home when officers were admitted into the house.

Child Protective Services was contacted, but were not admitted into the home due to the health and safety risks. The children were not in the home at the time that police entered and the defendants were advised that the victims would not be allowed to re-enter the home and would be taken into protective custody if other accommodations could not be provided. Kerri and Jessy Moreno found alternative housing in February 2011 for the two young girls.

Over the course of multiple hours, the officers captured 110 cats inside of the home, many of them feral. Each cat was taken in a separate carrier for examination and medical treatment. More than 20 of the cats had to be euthanized and all of the surviving cats had severe flea infestations. Half of the cats suffered serious upper respiratory infections, 25 percent had ear mites, and 25 percent had fecal and urinary contamination of their coats. Defendants Sharon Howe and Courtney Perez are accused of failing to provide any veterinary treatment for these animals while in their care.

The total veterinary cost to treat the 110 cats was over $10,000. All of the surviving cats have been adopted by families or rescue organizations. None of the defendants currently live in the home.

SAPD investigated this case. Senior Deputy District Attorney Aleta Bryant of the Special Prosecutions Unit is prosecuting this case.

Alleged San Diego Gang Members Face Trial for Jewelry Robberies in Tustin, Laguna Beach

From the Orange County District Attorney's Office:

December 14, 2011

 Case # 09ZF0073

THREE SAN DIEGO GANG MEMBERS FACE TRIAL FOR CRIME SPREE ROBBERIES IN TWO ORANGE COUNTY JEWELRY STORES *Eight co-defendants have been convicted in this case

SANTA ANA - Opening statements begin today against three gang members for their role in a crime spree involving the armed robbery of two Orange County jewelry stores, identity theft, and street terrorism.

 

Aida Arroyo, 29, is charged with one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity and the vicarious use of a firearm by a gang member.

Michael Burgin, 32, is charged with one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity, the vicarious use of a firearm by a gang member, and two prior strike convictions for first degree burglaries in 1999 and 2002.

Adam Weick, 30, is charged with one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity, the vicarious use of a firearm by a gang member, and a prior strike for kidnapping in 2005.

Opening statements are expected to begin today, Wednesday, Dec. 14, 2011, in Department W-18, West Justice Center, Westminster. The time is to be determined.

This case involved 11 co-defendants, all residents of San Diego County, and was jointly investigated by the Laguna Beach Police Department (LBPD), Tustin Police Department (TPD) and Orange County District Attorney's Office with assistance from the Orange County and San Diego County Sheriff's Departments, Chula Vista and Oceanside Police Departments, and the U.S. Department of Homeland Security.

Co-Defendants

The eight other co-defendants in this case have been convicted. They are:

Salvador Barajas, 31, pleaded guilty Feb. 5, 2010, to one felony count each of receiving stolen property and street terrorism and was sentenced to 225 days in jail and three years of probation.

Touradj Barman, 68, pleaded guilty March 19, 2010, to one misdemeanor count of a pawnbroker failing to report receipt of property and was sentenced to one year of probation and a $10,000 payment to the Victim Witness Emergency Fund.

Sylvia Elena Castaneda, 30, pleaded guilty June 20, 2011, to one felony count of second degree robbery with a sentencing enhancement for criminal street gang activity and was sentenced to five years in state prison.

 

Jose Jesus Garcia, 37, pleaded guilty March 26, 2010, to one misdemeanor count of a pawnbroker failing to report receipt of property and was sentenced to one year of probation and a $10,000 payment to the Victim Witness Emergency Fund.

 Pedro Avina Hernandez, 31, was found guilty by a jury Feb. 2, 2010, of one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity and the vicarious use of a firearm by a gang member. He is expected to be sentenced Jan. 6, 2012, in Department C-40, Central Justice Center, Santa Ana.

Alonso Jose Lopez, 33, was found guilty by a jury May 20, 2010, of one felony count each of second degree robbery, second degree commercial burglary, and street terrorism, with sentencing enhancements for criminal street gang activity and the vicarious use of a firearm by a gang member. He has a prior strike conviction for kidnapping in 1998, Lopez was sentenced July 23, 2010, to 25 years in state prison.

Daisy Oregon, 23, pleaded guilty Feb. 5, 2010, to one felony count each of receiving stolen property and street terrorism with a sentencing enhancement for criminal street gang activity. She has a prior strike for robbery in 2005. Oregon was sentenced to two years and eight months in state prison.

Arturo Carlos Perez, 23, pleaded guilty July 9, 2010, to one felony count each of accessory after the fact and street terrorism with a sentencing enhancement for criminal street gang activity. He was sentenced to two years in state prison.

 Tustin Robbery

At approximately 5:00 p.m. on Aug. 4, 2009, Arroyo is accused of entering Tustin Village Jewelers under the pretense of selling a ring. The jewelry store has security gates and the defendant was buzzed in. While negotiating a price with the store owner, Arroyo is accused of asking to be let out of the store to make a phone call. When the owner buzzed the security gate to let Arroyo out, Burgin and Weick are accused of immediately rushing in to the store wearing caps and bandanas. They are accused of being armed with firearms and demanding at gunpoint that the victim unlock the jewelry cases to give them access to the diamonds.

 One of the defendants is accused of holding a gun to the back of the victim's head and threatening to shoot him if he did not open the safe. The defendants are accused of then duct-taping the victim and putting him in the bathroom. Burgin, Weick, and Arroyo are accused of stealing over $160,000 in jewelry and fleeing the scene.

Laguna Beach Robbery

At approximately 7:00 p.m. on Aug. 25, 2009, Burgin is accused of entering Baca Jewelers in Laguna Beach with Lopez and Hernandez as the store was closing. They are accused of dressing in black and attempting to hide their faces by wearing hoods and baseball caps. The defendants are accused of robbing a store employee at gun-point and stealing over $1 million in watches and jewelry before fleeing the scene.

 Officers from LBPD responded and Burgin is accused of leading police on a pursuit with Lopez and Hernandez from Laguna Beach to Aliso Viejo. The defendants are accused of abandoning their car in an Aliso Viejo parking garage and evading police by fleeing. LBPD officers learned that the abandoned vehicle was owned by Castaneda. Castaneda attempted to impede the police investigation by reporting her car stolen in San Diego County, despite loaning it to Lopez, Burgin, and Hernandez knowing that it would be used for a jewelry store burglary.

Perez assisted Lopez evade arrest and hide in an Oceanside home by acting as a look-out to determine if police were surveiling the home and obtaining a calling card for Lopez to make phone calls without detection. Based on a law enforcement bulletin put out by LBPD, TPD noticed similarities between the two robberies and the agencies began jointly investigating their cases.

Identity Theft and Receiving Stolen Property On Sept. 8, 2009, Barajas drove Castaneda, Oregon and Arroyo to Laguna Beach to pick up Castaneda's car, which had been abandoned after the Aug. 25, 2009, robbery and impounded by LBPD. While Castaneda was meeting with LBPD, the three other defendants stole mail from local Laguna Beach mail boxes. Arroyo is accused of being in possession of and fraudulently using credit cards, which had been stolen in San Diego County the day before.

Subsequent investigation into the robberies revealed that two second-hand jewelry stores in San Diego County, San Diego Jewelry and Loan and J&L Jewelers, were selling some of the stolen jewelry. Garcia attempted to make identifying the stolen jewelry more difficult by grinding off identifying markings. Barman purchased the property, knowing it had been stolen.

All of the defendants, except for Barman and Garcia, are members or associates of a San Diego Hispanic criminal street gang. They planned and committed these crimes to benefit their criminal street gang.

Senior Deputy District Attorney Jim Mendelson of the Gang Unit is prosecuting this case.

 

Border Patrol Busts Bogus Santa and Frosty

From US Customs and Border Protection:

U.S. Customs and Border Protection (CBP) officers assigned to the Los Angeles/Long Beach seaport complex seized 151 life-size decorative lights of Santa Claus, a snowman and a polar bear with electrical adaptors containing counterfeit Underwriters Laboratories, Inc. (UL) markings.

UL is an independent product safety certification organization that rigorously tests and evaluates products for potential risk of fire, shock, and personal injury. Products are not certified until they meet established standards.

Products bearing counterfeit UL certification marks have not undergone this rigorous testing and certification process, and can present potential safety hazards to the end-user.

The holiday figurines were seized on Nov. 23 and 25. CBP officers discovered the infringing merchandise in two shipments arriving from China. The estimated manufacturer’s suggested retail price for the 151 units is $173,000 with an estimated domestic value of $110,000.

These potentially dangerous holiday lights were identified by the Import Safety Commercial Targeting and Analysis Center in Washington, D.C., as part of a joint national operation with the U.S. Consumer Product Safety Commission. 

“Enforcing product safety laws is a top priority for U.S. Customs and Border Protection. By seizing untested and potentially hazardous products at our nation’s largest seaport, CBP officers not only protect the American consumer but contribute to a safe holiday season,” said Todd C. Owen CBP director of field operations in Los Angeles.

In fiscal year 2010, electrical articles presenting potential safety or security risks, with an estimated domestic value of $7.9 million, represented 19% of all commodities seized by CBP.