Scam fraudulently eliminated home mortgages before profiting on sales.
A California man was sentenced this week to 15 years in prison for a bank fraud scheme aimed at fraudulently eliminating home mortgages before profiting on subsequent home sales, the US Attorney’s Office for the Eastern District of California said.
James Christopher Castle, 57, formerly of Petaluma, Calif., was given the lengthy prison sentence for the scheme. Last August, a jury found Castle guilty of 35 counts of bank fraud. According to evidence at trial, in May 2020, Castle was extradited to the United States from Australia. Castle previously fled to New Zealand and then Australia in 2011 when it became clear that his scheme was unravelling, the US Attorney said. After a three-year extradition process, Castle was transported back to the US by the US Marshals Service to stand trial in the United States.
Between April 22, 2010, and Nov. 18, 2011, justice officials said, Castle was the leader of a conspiracy that ran a “mortgage elimination program” that purported to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of title on residential properties, sold the properties, and received the sales proceeds.
Justice officials described how, as a requirement for participation in the “mortgage elimination program,” the conspirators enrolled homeowners as members in a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity Pillow Foundation. The conspirators told the homeowners that these entities would offer protection against the banks.
Castle directed other co-conspirators in all aspects of the mortgage elimination program, including recruiting homeowners into the scheme, marshaling the necessary recorded documents, and guiding the homes through sale, officials said. Once the homeowner enrolled with Shon-te-East-a or Pillow Foundation, Castle would cause a sham deed of trust to be created and recorded, giving the impression that the homeowner had refinanced the mortgage loan with a new lender. In reality, officials noted, the new lender was a fake entity controlled by the conspirators, and the homeowner owed no money to the purported new lender.
The next step in the process was also a recorded document. According to the US Attorney’s Office, the conspirators caused a fake deed of re-conveyance to be recorded, giving the appearance that the true mortgage loan had been discharged and that the true lien holder no longer had a security interest in the home.
With title appearing to be clear, the conspirators caused the sale of the home and split the proceeds between the co-conspirators and the homeowners.
In total, 37 properties were sold through the Shon-te-East-a conspiracy. The conspirators recorded fraudulent documents on an additional approximately 100 homes but were unable to sell these before the scheme unraveled, officials added.
Three other co-defendants have previously entered guilty pleas. On April 21, 2017, Remus A. Kirkpatrick, 65, formerly of Oceanside, pleaded guilty to one count of falsely making writings of lending associations and was sentenced to six years in prison. On May 26, 2017, Michael Romano, 75, of Benicia, Calif., pleaded guilty to conspiracy and was sentenced to three years in prison. On July 14, 2017, Laura Pezzi, of Roseville, Calif., pleaded guilty to falsely making writings of lending associations and was sentenced to time served.
In related cases, on Sept. 04, 2015, Tisha Trites and Todd Smith, both of San Diego, Calif., pleaded guilty to related charges. Trites is scheduled to be sentenced on June 14, 2022, and Smith was sentenced to two years in prison.
Two other co-defendants, George B. Larsen, 60, of San Rafael, and Larry Todt, 70, of Malibu, Calif., were convicted of conspiracy and bank fraud following a jury trial in December 2017. Larsen was sentenced to 10 years in prison, and Todt was sentenced to seven years and three months in prison.
Co-defendant John Michael DiChiara passed away on Aug. 24, 2019, while awaiting trial.