Real Estate Scam Artists Caught in San Jose

This week’s Mercury News tells a tale all too common in this market – a smooth talking Century 21 real estate agent and his wife have been charged with scamming lenders over the course of a year in an $8.5M home “flipping” scheme. Ten homes were purchased with no money down, rented out at below market prices, and refinanced to pull money out of each property. But no mortgage payments were made, and five of these houses are now in default. Lenders were left with properties worth far less than the inflated appraisals had claimed.

From the Mercury News:

Santa Clara County Superior Court Judge Rodney Stafford set bail for former Su Casa agent Thien Chi Vuong at $1 million and for his wife, Thanh Tuyen Tran, at $500,000 Tuesday on charges of conspiracy and grand theft in a series of real estate deals that allegedly netted them more than $500,000.

Vuong, 31, and Tran, 30, face up to 12 years in prison on the charges, according to Santa Clara County Deputy District Attorney James Sibley.

This firm, Su Casa, recently folded amidst many lawsuits – some of which were brought by Spanish speaking clients who claimed they were talked into buying properties they couldn’t afford, using subprime rates which have now adjusted rapidly upwards.

Also from the Mercury News:

In one example cited in the charges, Tran borrowed paid $655,000 for a house at 4355 Leigh Ave. in San Jose, according to the criminal charges and Landmark’s lawsuit. Su Casa collected over $20,000 in commissions and fees from the transaction. The house was then “quickly refinanced” by Tran, the district attorney said, for an additional $120,000, despite there being no equity in the property.

To obtain the loans, Tran allegedly provided false rental histories, in which Vuong claimed to be his wife’s landlord, phony employment records and false statements of assets.

Real estate agents and lenders, once the “darlings” of the South Bay, have come under increasing scrutiny during today’s housing crunch. I think we can expect more such news to come out in the coming months, and more crooks to be caught! The silver lining to the recent housing market woes is that fraud, scams, and crooks will have to face the music.