Friday, June 12, 2009

Real Estate Agents And Attorney Arrested For Fraud In San Bernardino

On June 4, 2009, the San Bernardino County District Attorney’s Office filed grand theft charges against Richard Nazabal (a Rancho Cucamonga real estate agent), Garabed Kamarian (Glendale attorney), and others (where charges were later dropped) related to an alleged real estate investment fraud scheme. The case is assigned to the San Bernardino County Real Estate Fraud Prosecution Unit. The felony complaint charges seemed to have been overstated since the case ultimately was plead out with two defendants dismissed and multiple counts dismissed

A criminal complaint contains only allegations against an individual and all four of these people must must be presumed innocent unless and until proven guilty.

The felony complaint alleges that beginning in 2006 and continuing through 2008, Richard Nazabal solicited funds from victims to invest in several inland empire homes with the stated intention of renovating and reselling the properties at a profit. It was alleged that more than twenty-five people invested more than $2.5 million dollars with the Nazabals. It is alleged that instead of investing the victims' funds, the Nazabals used the money for personal gain and never purchased homes for the victims.

Attorney Garabed Kamarian allegedly applied for loans the Nazabals could not qualify for in order to purchase the luxury home in the extreme north end of Alta Loma in which the Nazabal family was living. Kamarian allegedly falsified the loan applications, showing he was the owner and primary occupant of the home in order to make the purchase of the residence on behalf of Richard Nazabal.

Attorney Commentary: In the past, real estate fraud was not aggressively prosecuted. It was often treated as a civil matter. In today's economy and with increased real estate and mortgage fraud, county district attorney offices are making real estate fraud prosecutions a priority. For example, in Shasta County the district attorney recently sought to create a real estate fraud prosecution unit by having the county add $3 filing fees to any real estate documents so the units can be self-funded.

If real estate agents or other professionals are faced with civil fraud allegations, they need to be very careful so that the civil lawsuit is not used to build a criminal case or administrative case with the Department of Real Estate. Cases that would not have been treated as criminal years ago, may be treated so now.

Post-Script/Follow-Up: This case settled relatively quickly. In September 2009, Richard Nazabal pleaded guilty to four counts of grand theft and none counts of tax fraud, and was sentenced to 9 years in state prison (which would mean he would serve half his time) and pay approximately $2.5 million in restitution.  The charges against two other family members were dismissed.

The attorney Garabed Kamarian plead guilty to being an accessory to a felony after the fact (a misdemeanor). He admitted that he applied for a loan to buy a home for a "friend" who could not qualify because of unpaid child support. The friend said he would live in the house, give Kamarian money every month to pay for the mortgage and eventually Kamarian would sign a quit claim deed transferring his interest to the friend, who would apply for a loan in his name. In his loan application, Kamarian said he was the "real buyer" and would live in the house, knowing both statements were false. he believed his friend had adequate income to pay the mortgage. Of course, the reason the case was filed is because the friend made one payment before the house was transferred by Kamarian and then the friend did not apply for the loan, defaulted on the mortgage payments and the house went into foreclosure. The loan was in Kamarian's name.

 Any questions or comments should be directed to:  Tracy Green is a principal at Green and  Associates, Attorneys at Law, in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in real estate agents, brokers and other licensed professionals. 


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