Month: March 2016

Williams added his client’s name to William’s own business checking account, and then included statements from that account with the mortgage application to mislead the lender into believing that the deposits in William’s own checking account actually represented the buyer’s income. Mortgage Broker Javier Sandoval with Equity Financial Resources adamantly claimed to a group of buyers and others that this practice was legal and also acceptable within the industry. This incident related to the purchase of property located on Downing Street in Denver, CO; VICTIM 2.

Williams prepared and filed buyer’s mortgage application (VICTIM 1), and further exaggerated the buyer’s income, from the inflated $3,000 a month claimed for the previous Unit 11 (@ Yosemite Street Condominiums), to now, falsely claiming the buyer earned $5,000 a month. The buyer acknowledges guilt in some of the fraud, and other fraud he learned of only after the closing, reviewing the documents that had been prepared for him by Williams.

Williams signed the Warranty Deed, falsely indicating that the buyer’s legal address was that of the unit being purchased at Yosemite Street Condominiums. Williams had instructed the buyer to take a photo of himself at the property in a bathrobe to prove he had lived there. The buyer adamantly indicated that he would not lie about the address of his residence and also that he would not agree to apply for an owner-occupied mortgage.

Yosemite Stree Condominiums

Williams gave the buyer the earnest money needed as a down payment for VICTIM 1 to obtain his mortgage approval and subsequent financing.

Williams assembled the buyer’s fraudulent mortgage application, arranging with the buyer to repay the loan from Williams immediately after closing out of the fraudulently-obtained cash back funds.

Williams purchased long-vacant condominium units, some for less than $20,000, and resold them for $74,950 and $79,950 with up to $30,000 “cash back” enticements to unqualified buyers (which included closing costs), which were transacted through grossly falsified mortgage applications assembled by Williams himself. Williams also arranged a net listing to sell a long-vacant unit for an inflated price of $79,950 through falsified mortgage applications that were assembled by Williams, to a buyer who fraudulently received about $30,000 cash back (which included closing costs). Williams told buyers that it was legal for them to bill themselves $1,000 per hour or more, for their own “time,” to justify the cash back that they would receive, in case Williams decided to falsely report that cash on the HUD-1 form as payments to a transient contracting firm (to be set up by the buyer at the instruction of Williams). The buyers were told by Williams that such practices were completely legal. Others in the real estate industry also misled the buyers, including a mortgage broker, Javier Sandoval with Equity Financial Resources, 7900 E Union Ave, #1100 Denver CO 80237, (or 390 Union Blvd, 270 Lakewood 80228 303 954-0496). At a November meeting at 2900 Downing in Denver, with three of William’s buyers and many other attendees, Sandoval and Williams repeatedly claimed that the practice of falsifying Verification of Deposits on a mortgage application was legal and common, and that lenders actually approved of the practice in order to facilitate the deals. According to documents from at least one closing, Williams disguised the buyer’s “cash back” as HOA Assessment Fees (See attached.) Williams either was, or simply posed as, the HOA president, and Williams has since admitted to the newly organized permanent Yosemite Street Condominium Association, that he commingled HOA funds with his private business account, and to the date of this complaint, Williams has refused to provide the board with checking account statements of HOA deposits and disbursements. Significant amounts of the “cash back” enticements represent funds, some of which were owed to the HOA. These funds could have been used for many vitally important repairs including the boilers which have not worked since 2005. Williams systematically misrepresented the value of the units to his own clients, and instructed gullible and trusting clients not to seek other advice from appraisers, relatives, etc. Rather than disclosing severe problems with the properties at closing, Williams as the buyer’s realtor (and sometimes as the seller also), marked as “Unknown” the known serious problems with properties including that the heating system had been in serious disrepair since 2005 knowing that 1) the boilers in both buildings were broken so that the buildings had no central heat; (2) units were heated with free-standing electrical space heaters which amounted to a fire hazard; 3) extensive leaks from frozen pipes, including sewage leakage inside a unit; 4) mold problems; 5) roof leaks; 6) and an Excel Energy lien of $10,700; among many other serious problems never disclosed to the lender at closing. 
At the sale of William’s last two units in December 2006 to VICTIM 7, the closing documents did not disclose to the lender that those two units (along with eight others) were currently tagged as uninhabitable by the Denver Health Inspector. Williams put mechanics liens on many units for a total of tens of thousands of dollars of unpaid HOA dues, making the liens payable to himself disguised as the HOA, defrauding the HOA. Williams himself never paid HOA dues on the five units he owned. Williams told buyers that they would have to pay taxes on the money they had just borrowed and received as “cash back” in order to make the transactions look legitimate as though they had received the funds as ordinary income as contractors (even though in reality the funds had just been borrowed and must be repaid). Williams consistently misrepresented these and other transactions to buyers and prospective clients claiming that previous buyers made “profits” of tens of thousands of dollars in a matter of weeks.