Two defendants convicted, Grass Valley man still facing charges in multi-million-dollar mortgage fraud scheme |

Two defendants convicted, Grass Valley man still facing charges in multi-million-dollar mortgage fraud scheme

A Grass Valley man who allegedly created a Nevada City church and made himself its archbishop still faces charges in a complex mortgage fraud scheme, while two of his co-defendants were convicted this week by a federal jury.

John Michael DiChiara currently remains set for trial and is scheduled to appear in U.S. District Court in Sacramento for a status conference in February.

DiChiara, who was arrested in September 2015, allegedly called himself the Archbishop of Shon-te-East-a, Walks With Spirit, the mission of which was to help individuals spiritually by alleviating them of their home mortgages through a “mortgage elimination program.”

He also was the self-named archbishop of the Pillow Foundation, a Utah corporation with a business address in Reno; both groups claimed to be tax-exempt religious organizations, according to the indictment filed against DiChiara.

DiChiara and his co-defendants allegedly recruited homeowners whose homes were upside-down, or worth less than the mortgage, with the promise of relief from foreclosure, typically requiring homeowners to assign or convey their homes to Shon-te-East-a or the Pillow Foundation as a charitable donation. Homeowners were allegedly led to believe they could take those donations as tax deductions and that they had transferred legal responsibility over their mortgages.

“In reality, responsibility to repay the loans … remained with the homeowners at all times,” the indictment reads.

The fraudulent reconveyances often led to foreclosure proceedings, and short sales initiated by DiChiara and his codefendants resulted in unsuspecting buyers of properties with false deeds of trust, according to the indictment.

In all, federal prosecutors alleged, DiChiara and his codefendants sold 37 properties, netting more than $8 million. An additional 97 properties reportedly had gone through some phase of the fraudulent “mortgage elimination program;” the indictment claimed the legitimate loans affected totaled in excess of $60 million.

In total, the federal government indicted seven co-defendants in the scheme.

Remus A. Kirkpatrick, formerly of Oceanside, has pleaded guilty to one count of falsely making writings of lending associations; Michael Romano, of Benicia, pleaded guilty to conspiracy; and Laura Pezzi, of Roseville, pleaded guilty to falsely making writings of lending associations. They are scheduled to be sentenced on Feb. 23, 2018.

This week, a federal jury found George B. Larsen, 56, formerly of San Rafael, guilty of conspiracy and four counts of bank fraud. Larry Todt, 65, formerly of Malibu, was found guilty of conspiracy and one count of bank fraud. They are scheduled to be sentenced on March 16, 2018.

In related cases, Tisha Trites and Todd Smith, both of San Diego, pleaded guilty to related charges and are scheduled to be sentenced on Feb. 9.

Other than DiChiara, only one codefendant — James Castle, of Santa Rosa — is still awaiting trial.

Contact reporter Liz Kellar at 530-477-4236 or by email at

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