SACRAMENTO, California – On Monday, a federal jury found 57-year-old James Christopher Castle, a former Petaluma employee, guilty of 35 counts of bank fraud to fraudulently liquidate home mortgage loans and then profit from subsequent home sales. U.S. Attorney. – announced Philip A. Talbert. It was the first jury in the Eastern District of California since the start of the COVID-19 pandemic in March 2020.
“Castle decided to play around with the system to make a profit in the midst of the looming financial crisis, which his actions contributed to,” said Acting US Attorney Talbert. “We are pleased with the jury’s verdict on this serious fraudulent scheme.”
“Mortgage fraud is not a victimless crime. Identifying and investigating those who abuse the system for personal gain will ensure that the mortgage system is safer and more equitable for everyone. The FBI reaffirms our commitment to prosecute those who use false statements made to financial institutions for their own enrichment, while threatening the stability of the banking system and taking advantage of troubled homeowners desperate to keep their homes or start over without significant losses, ”said the special agent. Attorney Sean Ragan of the FBI Field Office in Sacramento. “We thank our national and international law enforcement partners for their ongoing efforts to ensure that fugitives are brought to justice regardless of distance traveled or time elapsed.”
According to court documents, in May 2020, Castle was extradited to the United States from Australia. Castle fled to New Zealand and then Australia in 2011 when it became clear that his plan was crumbling. After a three-year extradition process, Castle was taken back to the United States by the US Marshal Service to face trial in the United States.
“The US Marshal Service successfully completed this extradition at the height of the pandemic,” said Acting US Marshal Lasha R. Boyden of the Eastern District of California. “To minimize exposure, the extradition was carried out promptly, with a minimum period of stay on the spot. Every precaution was taken and Mr. Castle was extradited back to the United States without incident. ”
Between April 22, 2010 and November 18, 2011, Castle was the leader of a conspiracy that launched a “mortgage liquidation program” designed to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of ownership of residential property, sold the property, and obtained the proceeds from the sale.
As a requirement to participate in the “Mortgage Elimination Program,” the conspirators enrolled homeowners as members of the Shawn-the-East Nevada-based Walking in the Spirit Church or its subsidiary, the Pillow Foundation. The conspirators told homeowners that these organizations would offer bank protection.
Castle led other partners in all aspects of the mortgage elimination program, including bringing homeowners into the scheme, collecting required registration documents, and guiding homes on sale. After the homeowner registered with the Shon-te-East-a or the Pillow Foundation, Castle created and registered a fictitious trust, giving the impression that the homeowner had refinanced the mortgage from a new lender. In fact, the new lender was a fictitious organization controlled by the conspirators, and the landlord did not owe money to the alleged new lender.
The next step in this process was also the recorded document. The conspirators triggered the fixation of a fictitious re-repayment act, making it appear that the real mortgage had been paid off and that the true owner of the collateral no longer had a security interest in the house.
As the title seemed clear, the conspirators forced the sale of the house and divided the proceeds between the accomplices and the homeowners.
In total, 37 properties were sold under the Sean-te-East conspiracy. The conspirators filed forged documents for about 100 more homes, but were unable to sell them before the scheme was exposed.
This case is the result of an investigation by the Federal Bureau of Investigation. Assistant US Attorneys Audrey B. Hemesat and Tanya B. Syed are in charge of the case.
Three other defendants have previously admitted their guilt. On April 21, 2017, Remus A. Kirkpatrick, formerly of Oceanside, pleaded guilty to one count of fraudulent documents to credit associations. On May 26, 2017, Michael Romano from Benicia pleaded guilty to conspiracy. On July 14, 2017, Laura Pezzi from Roseville pleaded guilty to false information about credit associations.
In related cases on September 4, 2015, Tisha Treates and Todd Smith, both from San Diego, pleaded guilty to related charges.
Two other defendants, George B. Larsen and Larry Todt, were found guilty of conspiracy and bank fraud following a jury trial in December 2017.
Co-accused John Michael DiChiara passed away on 24 August 2019 while awaiting trial.
Castle is due to be sentenced by U.S. District Judge Morrison K. England, Jr. on October 28, 2021, when he faces a maximum sentence of 30 years in prison and a $ 1 million fine for banking fraud, 10 years in prison and a fine of $ 250,000 for fraudulent credit association paperwork, five years in prison, and a $ 250,000 fine for conspiracy. The actual sentence, however, will be at the discretion of the court after considering any applicable legislative factors and Federal sentencing guidelines, which take into account a number of variables.