Mortgage Broker Cops Plea To Using Phony Lien Claims To Pocket $1.8M In Proceeds From Real Estate Closings

From the Office of the U.S. Attorney (Sacramento, California):

• United States Attorney Lawrence G. Brown and Federal Bureau of Investigation Special Agent-in-Charge Drew Parenti announced [...] that JOSHUA GERVOLSTAD, 31, of Redding, pleaded guilty today to one count of mail fraud in connection with a mortgage fraud scheme. This case is the product of an extensive investigation by the FBI.

• According to Assistant United States Attorney Matthew D. Segal, who prosecuted the case, GERVOLSTAD, who was a mortgage broker, submitted inflated appraisals and false lien documents for use in closing purchase transactions involving five different real properties located in Redding and in Lodi. The closing statement for each property contained fraudulent papers requiring the payoff of a lien to an entity called "TPG Investments." In each case, the lien did not exist. In reality, GERVOLSTAD controlled TPG Investments and used its bank account to divert mortgage loan funds to himself and other persons.

• His conduct caused $1,798,888.91 in fraudulent payouts for liens that did not exist, affecting mortgages with a total value of $5,441,562. At least three of the properties were foreclosed and were sold for a combined loss of at least $1,170,000.

For the U.S. Attorney press release, see Redding Mortgage Broker Pleads Guilty To Mortgage Fraud.