A senior executive at a real estate investment company and a real estate broker stand accused of playing key roles in a $50 million mortgage fraud scheme involving a handful of multi-million dollar mansions in the San Diego area.
According to the U.S. Attorney’s Office for the Southern District of California, Peter Cash Doye, a senior executive at the real estate investment firm known both as Conix and Variant Commercial Real Estate, and Raquel Reid, a real estate broker and notary public, allegedly defrauded multiple lenders into making sizable loans against four multi-million dollar mansions in La Jolla and Del Mar.
Court documents show that Doye and Reid, as part of larger conspiracy, used forged documents to make it appear that the loans were paid off, which then allowed them to secure additional loans from new lenders that believed the mansions were owned “free and clear.”
Both Doye and Reid were indicted earlier this week on multiple charges stemming from the scheme, including wire and mail fraud conspiracy, wire fraud, mail fraud, aggravated identity theft, and others.
According to the U.S. Attorney’s Office, Doye’s business partner, Courtland Gettel, and an Arizona attorney, Jeffrey Greenberg, previously pleaded guilty to their roles in the scheme.
Gettel was the owner of Conix and VCRE, which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.
As part of this guilty plea, Gettel admitted last year that he and Doye acquired the high-end homes in La Jolla and Del Mar by claiming they planned to use the homes a luxury rentals and investment properties, but Gettel and Doye actually lived in the properties along with their families.
Then, when they needed money to fund other business deals, Gettel and Doye began negotiating with new lenders, pretending that the first loans never existed or were paid off.
As part of his plea, Greenberg admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals.
According to this new indictment, Doye negotiated the financing from the unsuspecting lenders and investors based on a “host of lies” about the collateral in question, the U.S. Attorney’s Office said.
As part of the scheme, Doye, Reid, and their co-conspirators allegedly created forged real estate lien release and recorded fraudulent records at the San Diego County Recorder’s Office. Reid allegedly notarized the forged documents, which helped to make the fraudulent paperwork appear authentic.
According to court documents, some of the lenders began to discover the alleged fraud in 2014, and realized their supposed interests in the properties were fake.
When questioned by the lenders, Doye, Reid and Gettel allegedly agreed to deny knowing anything about the fraudulent loans, and created more fraudulent documents to cover their tracks.
As part of the supposed cover-up, Reid allegedly destroyed her notary book, cut up her notary stamp, and then falsely reported to the California Secretary of State that it had been lost.
All told, the scheme generated nearly $50 million in fraudulently obtained loan proceeds.
But, the group later defaulted on their various loans, leaving the lenders to dispute the validity of their interests and resulting in tens of millions of dollars in losses from the unpaid loans.
As part of their pleas, Gettel and Greenberg were ordered to forfeit the proceeds they stole from the various lenders and pay restitution to the victims. Gettel also admitted that he arranged even more fraudulent real estate transactions after he pleaded guilty and while he was awaiting sentencing.
Doye and Reid were also charged with criminal forfeiture as part of the indictment.