Jury Sentences Head of Nevada Mortgage Fraud Program | USAO-EDCA
SACRAMENTO, Calif .– On Monday, a federal jury found James Christopher Castle, 57, former Petaluma, guilty on 35 counts in a bank fraud scheme that sought to fraudulently eliminate real estate mortgages and then profit from sales of subsequent homes, Acting US Attorney. Phillip A. Talbert announced. It was the first jury trial in the Eastern District of California since the start of the COVID-19 pandemic in March 2020.
“Castle decided to play with the system so that he could profit amid the then looming financial crisis, to which his actions contributed,” Acting US Attorney Talbert said. “We are satisfied with the jury’s verdict for this important fraud scheme. “
“Mortgage fraud is not a victimless crime. Identifying and investigating those who abuse the system for personal gain ensures that the mortgage system is safer and fairer for everyone. The FBI affirms our commitment to prosecute those who exploit false claims made to financial institutions to enrich themselves while threatening the stability of the banking system and taking advantage of desperate distressed homeowners to keep their homes or start over without significant losses, ”said Special Agent in Charge Sean Ragan of the FBI Field Office in Sacramento. “We thank our national and international law enforcement partners for their continued efforts to ensure that fugitives are brought to justice, regardless of distance traveled or time elapsed.”
According to court documents, in May 2020, Castle was extradited from Australia to the United States. Castle had fled to New Zealand and then to Australia in 2011 when it became clear his plan was falling apart. After a three-year extradition process, Castle was brought back to the United States by the US Marshals Service to stand trial in the United States.
“The US Marshals Service successfully carried out this extradition at the height of the pandemic,” said Acting US Marshal Lasha R. Boyden for the Eastern District of California. “To minimize exposure, the extradition was carried out quickly with minimal time in the field. All security precautions were implemented and Mr. Castle was extradited to the United States without incident.
Between April 22, 2010 and November 18, 2011, Castle was the leader of a conspiracy that ran a “mortgage elimination program” purported to help distressed homeowners avoid foreclosure. The conspirators fraudulently tampered with the chain of title to residential properties, sold the properties and received the proceeds from the sale.
As a condition of participating in the “mortgage elimination program,” the conspirators registered homeowners as members of a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity Pillow. Foundation. The conspirators told the owners that these entities would offer protection against the banks.
Castle led other co-conspirators in all aspects of the Mortgage Elimination Program, including recruiting homeowners into the program, collecting necessary registered documents, and directing homes through to sale. After the owner registered with Shon-te-East-a or the Pillow Foundation, Castle would cause a false trust deed to be created and registered, making it look like the owner had refinanced the mortgage loan with a new lender. In reality, the new lender was a bogus entity controlled by the conspirators, and the owner owed the alleged new lender no money.
The next step in the process was also a saved document. The conspirators registered a forged deed of retrocession, giving the impression that the real mortgage had been discharged and the real lien holder no longer had any security in the house.
With the title seemingly clear, the conspirators caused the house to be sold and split the proceeds between the co-conspirators and the owners.
A total of 37 properties were sold through the Shon-te-East conspiracy. The conspirators recorded fraudulent documents on around 100 additional homes, but were unable to sell them until the scheme collapsed.
This case is the result of an investigation by the Federal Bureau of Investigation. Deputy US prosecutors Audrey B. Hemesath and Tanya B. Syed are continuing the case.
Three other co-defendants have already pleaded guilty. On April 21, 2017, Remus A. Kirkpatrick, formerly of Oceanside, pleaded guilty to one count of falsely writing loan associations. On May 26, 2017, Michael Romano, from Benicia, pleaded guilty to conspiracy. On July 14, 2017, Laura Pezzi, of Roseville, pleaded guilty to falsely writing loan associations.
In related cases, on September 4, 2015, Tisha Trites and Todd Smith, both of San Diego, pleaded guilty to related charges.
Two other co-defendants, George B. Larsen and Larry Todt, were convicted of conspiracy and bank fraud following a jury trial in December 2017.
Co-accused John Michael DiChiara died on August 24, 2019, pending trial.
Castle is set to be sentenced by U.S. District Judge Morrison C. England Jr. on October 28, 2021, when he faces a maximum sentence of 30 years in prison and a fine of $ 1 million for bank fraud, 10 years in prison and a fine of $ 250,000 for fabricating false documents from a lending association, and five years in prison and a fine of $ 250,000 for conspiracy. The actual sentence, however, will be determined at the discretion of the court after considering all applicable statutory factors and federal sentencing guidelines, which take a number of variables into account.