4 indicted in $1 million fraud case
Four people face federal charges in connection with an alleged million dollar real estate “flipping” scheme involving houses in Lake of the Pines.
In a puzzling pattern, a couple kept buying the houses, then losing them, federal authorities said.
Those same authorities claim it was a scheme that ripped off lenders and netted a million dollars in ill-gotten gains.
On Thursday, a federal grand jury in Sacramento returned an indictment charging Cameron Park resident Joseph Raymond George, 41; his wife, Sheila Joleen George, 32; and brother, Elmer Louis George, 61, with ten counts of mail fraud and 13 counts of money laundering, according to federal authorities. The two George brothers, Joseph and Elmer, also face one count of structuring financial transactions, federal authorities said.
A Pollock Pines woman, Leslie Ann Toland, 51, was also charged with ten counts of mail fraud, federal authorities said.
None of the individuals charged Thursday could be reached for comment.
Under the scheme, the Georges allegedly bought homes on Madrone and Lakeshore in Lake of the Pines, often by making fraudulent statements on their loan applications, federal authorities said.
Court records show the homes were located at 11111 Lakeshore, 11669 Lakeshore, 11421 Madrone and 12022 Lakeshore in Lake of the Pines, and 3834 Strickland Mine Road in Placerville.
After Toland allegedly appraised the homes for an overinflated amount, the Georges refinanced them or resold them to an unidentified straw buyer, according to federal authorities.
Then the Georges or the straw buyer would fail to make mortgage payments, letting the property go into default, and the Georges would walk away with the proceeds, federal authorities said.
Undisclosed financial lenders would be left with the loss after the foreclosed property sold for less than Toland’s appraisal, federal authorities said.
“They would get their money out and move on to the next one,” said Assistant U.S. Attorney James Arguelles, who is prosecuting the case.
Joseph and Sheila George are accused of laundering $766,000 in proceeds from the scheme, which started in August 1997. Elmer George is accused of laundering $249,000.
None of the accused individuals has been arrested, said Arguelles. They will be issued a notice to appear in the Eastern District of California court in Sacramento.
Mail fraud and structuring convictions carry possible penalties of five years in prison and $250,000 in fines, while money laundering carries a 10 year prison sentence and a fine that is double the amount of illegal proceeds.
The case was investigated by the FBI, the Nevada County Sheriff’s office, and the state Office of Real Estate Appraisers.
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