Mortgage fraud case in California results in four guilty pleas

Four members of a California conspiracy ring pleaded guilty to crimes that resulted in losses approaching $500,000 for the Federal Housing Administration. 

In a fraud case involving falsified documents and altered incomes, Tjoman Buditaslim, of Daly City, California, submitted a guilty plea on Aug 1 in a federal district court in San Francisco. Between 2018 and 2022, Buditaslim, who also went by the name "Joe Lim," along with co-conspirators Travis Holasek, Jose Alfonso Tellez and Jose De Jesus Martinez, ran a real estate scheme that led to originations of more than 100 fraudulent mortgages totaling greater than $55 million. 

"These defendants used their professional knowledge of the mortgage industry to perpetrate a fraud on unsophisticated home buyers, funneling these victims into loans for which they were not qualified," said U.S. Attorney Ismail J. Ramsey, in a press release.

The four men schemed to help potential Northern California buyers find homes and apply for loans on properties that their true incomes would have shown they could not afford, the court said. In the original indictment from last November, Buditaslim was alleged to have created false documents, including divorce decrees and child support checks made payable to the buyer, while also fabricating bank statements with doctored financial assets. Upon submission and approval of the loan applications at various lenders, the defendants would collect commissions and direct escrow payments to accounts they owned. 

Tellez and Martinez pleaded guilty in July, while Holasek did the same on an unspecified date. In his plea, Tellez, identified as a loan officer in the press release, admitted to originating approximately 30 of the mortgages, earning a commission on each. Real estate agent Martinez also said he earned $590,000 in broker commissions in the scam. 

The crimes were committed unbeknownst to the borrowers themselves, the U.S. Department of Justice said. All four perpetrators were charged with wire fraud, while Lim, Holasek and Martinez also faced counts of aggravated identity theft. 

The FHA, which guaranteed many of the mortgages, lost over $486,000 to prevent the loans from going into foreclosure. A mortgage business, which was left unnamed in court documents, was also forced to repurchase some loans, costing it almost $8.2 million.

"The defendants took advantage of their knowledge and training in the mortgage industry to circumvent the rules and abused the positions of trust they held as real estate professionals and gatekeepers of FHA-insured loans in order to line their own pockets," said Western Region special agent-in-charge Mark Kaminsky of the U.S. Department of Housing and Urban Development's inspector general's office.

Buditaslim, Tellez and Martinez are scheduled for sentencing on Oct. 30 and face a maximum penalty of 20 years in prison and a fine of $250,000. Holasek is scheduled for a status conference meeting before the judge in early November to determine next steps in his case. 

Prosecution of the case came after a multiyear investigation involving attorneys from the FHA, HUD and the U.S. Postal Inspection Service. 

Research earlier this year showed approximately half of businesses in financial services struggling to deal with fraud scams, despite their heightened awareness and concerns. At the same time, a separate report also showed signs that pointed to potential wire or title fraud appearing in a little under 50% of residential or commercial lending transactions in the second quarter.