News and Press Releases

United States Attorney Benjamin B. Wagner
Eastern District of California

Leader Of $30 Million Bakersfield Mortgage Fraud Scheme
And Wife Sentenced

FOR IMMEDIATE RELEASE
Thursday, March 31, 2014
 

www.usdoj.gov/usao/cae

usacae.edcapress@usdoj.gov

 

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FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced San Diego residents David Crisp, 34, to 17 years and 7 months in prison, and Jennifer Crisp, 31, to five years on probation for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced. David Crisp was ordered to pay more than $28 million in restitution to lenders. He was taken into custody after today’s hearing. Jennifer Crisp was ordered to pay $1,689,952 in restitution.

U.S. Attorney Wagner stated, “David Crisp lived in the fast lane, steering a real estate company that was all image and no substance.  Today he crashed hard, and the prison sentence he began this afternoon is the final bit of devastation caused by his mortgage fraud scheme.”

“David Crisp rose to real estate millionaire by participating in a massive mortgage fraud scheme that contributed to the real estate bubble that devastated the savings of so many Californians,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento division.  “He flaunted his ill-gotten wealth with an extravagant lifestyle that included exotic cars, Armani suits, bodyguards and private jets.   His sentencing reflects the gravity of his crimes.” 

According to court documents, David Crisp and Carl Cole, who was sentenced last month to 17 years and seven months in prison, owned and operated Crisp & Cole Real Estate (CCRE), a real estate brokerage, and Tower Lending, an affiliated mortgage brokerage. Between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage companies and federally insured financial institutions. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. David Crisp admitted in his plea agreement that he and the co-conspirators caused losses of close to $30 million to the defrauded lenders due to the conspiracy.

According to her plea agreement, Jennifer Crisp acted as a straw buyer for CCRE and purchased several properties by submitting loan applications to lenders containing material misstatements and omissions of material information.

Last week, co-defendant Jayson Peter Costa was sentenced to 78 months in prison due to his participation in the scheme. Sentencing dates for the remaining defendants are as follows: Michael Angelo Munoz on May 5, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence.  The trial of the remaining co-defendant is set for April 8, 2014.  The charges as to that defendant are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Before David Crisp and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on June 2, 2014: Jerald Allen Teixeira
(1:09-cr-375 – one count of wire fraud for false statements on loan documents), Megan Balod (1:10-cr-016 – four counts of wire fraud for acting as a straw buyer), and Christopher Lance Stovall (1:10-cr-271 – four counts of mail fraud for making false statements on loan documents). Two are scheduled to be sentenced on May 27, 2014: Kevin Patrick Sluga (1:10-cr-001 – four counts of wire fraud for false verification of employment letters), and Leslie Sluga (1:10-cr-002 – two counts of wire fraud for acting as a straw buyer).

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.

This case was done in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

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