Wednesday, July 01, 2015

Fresno Feds Bag Attorney For Alleged Misrepresentations Made In Connection w/ Proposed Short Sales Of Two Investment Properties; Accused Of Making Short Sale Offers To Lenders Thru Entity He Created & Controlled, Naming Friend As Registered Agent To Conceal Retained Ownership Interest

From the Office of the U.S. Attorney (Fresno, California):
  • Robert Farrace, 51, of Modesto, was indicted [] on three counts of wire fraud in connection with a fraudulent short-sale scheme, United States Attorney Benjamin B. Wagner announced.

    According to the indictment, Farrace was an attorney specializing in real estate transactions. He owned two investment properties in Modesto with substantial mortgage loans. In early 2010, he received foreclosure notices for the two properties. Farrace then created an entity called “Dignitas LLC” that he controlled but used a friend’s name as the company’s registered agent to conceal his control.

    Through Dignitas, Farrace submitted short sale offers to the bank that serviced the loans on both properties. During the process, Farrace misrepresented his relationship with Dignitas, and because the servicing bank did not know of the true relationship, it went forward and completed one of the short sales. The other sale was stopped by law enforcement and the bank.

    This case is the product of an investigation by the Federal Housing Finance Agency–Office of Inspector General, the Federal Bureau of Investigation, and the Stanislaus County District Attorney’s Office. Assistant United States Attorney Michael G. Tierney is prosecuting the case.

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