Alan Tikal Sentenced To 24 Years In Prison For Leading Massive Foreclosure Rescue Scam
SACRAMENTO, Calif. — Alan David Tikal, 46, formerly of Brentwood, Calif., was sentenced today by United States District Judge Troy L. Nunley to 24 years in prison for his convictions on eleven counts of mail fraud and one count of mail fraud relating to a foreclosure rescue scam, United States Attorney Benjamin B. Wagner announced. Tikal was convicted following a bench trial before Judge Nunley on September 15, 2014.
According to evidence presented at trial, between January 7, 2010, and August 20, 2013, Tikal was the principal behind a business known as KATN, which targeted distressed homeowners experiencing difficulties making their existing monthly mortgage payments. Many of the victims did not speak English. Tikal promised to reduce their outstanding mortgage debt by 75%, falsely claiming he was a registered private banker with access to an enormous line of credit and the ability to pay off homeowners’ mortgage debts in full. Tikal told homeowners that in return for various fees and payments, their existing loan obligations would be extinguished, and the homeowners would then owe new loans to Tikal in an amount equaling 25% of their original obligation. In reliance upon misrepresentations made by Tikal, many of these homeowners stopped making payments on their existing mortgage loans and lost their homes to foreclosure as a result.
In fact, Tikal never made any payments to financial institutions on behalf of homeowners in satisfaction of their pre-existing mortgage debt obligations; the purported “loan” payments paid to Tikal were simply spent by himself, his family and his associates for personal use; and there was not a single instance in which a homeowner’s debt was paid, forgiven or otherwise extinguished as a result of the mortgage relief program. In all, Tikal and his associated convinced more than 1,000 homeowners in California and other states to participate in the program. As a result of their participation, many homeowners became delinquent on their loans and ultimately had their homes foreclosed upon. Those homeowners paid more than $5,800,000 in fees and monthly payments into the program. Of that, more than at least $2,500,000 was paid into accounts controlled by Tikal and/or his family.
In sentencing Tikal, Judge Nunley referenced the victims who, as a result of their participation in Tikal’s scam, “can’t reside in houses they had, in some instances, spent their entire lives trying to pay off.” Judge Nunley called Tikal “the mastermind behind this whole scheme,” and said Tikal was deserving of the sentence he was receiving.
“The financial crisis that hit our communities so hard made it very difficult for a lot of people to make ends meet,“ said U.S. Attorney Wagner. “Alan Tikal cynically took advantage of the desperation those people felt for his own profit, stealing payments meant to preserve family homes. Although we cannot undo the harm Tikal inflicted, today’s sentence provides a measure of justice.”
“Alan Tikal’s actions were illegal and will not be tolerated in California. He and his partners defrauded hundreds of hard-working Californians who were fighting to keep their homes during our state’s foreclosure crisis,” Attorney General Harris said. “This predatory scheme robbed families of their life savings and in many cases, their homes. I thank our California Mortgage Fraud Strike Force and the U.S. Department of Justice for their work to bring these individuals to justice.”
“The defendant preyed on desperate homeowners who were caught up in the financial melt-down and looking for ways to stay in their homes”, said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “Rather than making payments to the banks, the defendants pocketed the money. Tikal lived a lavish lifestyle with new cars, chartered private airplane flights and a $5,000 suit. While this sentence cannot reverse the damage caused by Mr. Tikal and his co-defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
“Justice was served today when Tikal was sentenced to 24 years in federal prison for defrauding struggling homeowners out of millions of dollars, sending their homes into foreclosure, and destroying their lives,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Tikal’s silver tongue and gilded promises enticed victims, many of whom weren’t fluent in English and were simply holding out hope of saving their homes from foreclosure, yet Tikal’s words were nothing more than lies and gibberish that he masqueraded as financial sophistication. Tikal’s arrogance was supreme; he named his scheme ‘KATN Trust,’ short for ‘Kicking Ass, Taking Names,’ and even after being charged and locked-up, he continued to operate the scam from his jail cell with the help of co-conspirators. Today’s sentence is a warning to anyone either considering or engaged in a scheme to defraud struggling homeowners and a reminder of the seriousness and moral reprehensibility of their crime. SIGTARP stands united with our law enforcement partners to bring swift justice to perpetrators of fraud related to TARP.”
This case is a joint prosecution by the United States Attorney’s Office for the Eastern District of California and the California Attorney General’s Office. It is the product of extensive investigation by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service - Criminal Investigation, the California Department of Justice, and the Stanislaus County District Attorney’s Office. Assistant United States Attorney Philip Ferrari and California Deputy Attorney General Maggy Krell are prosecuting the case.A hearing on restitution has been scheduled for March 26, 2016. Co-defendant Ray Kornfeld was previously sentenced to a term of imprisonment of 5 years. Co-defendant Tamara Tikal previously entered a guilty plea and is scheduled to be sentenced by Judge Nunley on April 23, 2015.