United States Attorney
Eastern District of California
Friday, September 28, 2012
Suspect Arrested in California for Multimillion Dollar Foreclosure Rescue Scheme
Alan David Tikal, 44, of Brentwood, Contra Costa County, Calif., was arrested today at his home on a complaint charging him with mail fraud for masterminding a multistate scam that defrauded distressed homeowners, announced U.S. Attorney Benjamin B. Wagner and California Attorney General Kamala D. Harris.
According to the complaint filed in federal court in Sacramento today, Tikal has victimized more than 1,000 homeowners, who have paid in excess of $3.1 million. Of the identified victim homeowners, 95 percent are in California and approximately 185 reside within the Eastern District of California.
According to court documents, beginning in January 2010 and continuing to the present, Tikal operated a large-scale mortgage rescue scam. He convinced homeowners that he could satisfy their preexisting mortgage debt and replace it with a new debt to his company, KATN Trust. He claimed the new loan would only be for 25 percent of the original principal. Victims paid thousands of dollars in upfront fees and then made regular payments on their new loans. Tikal and his underlings instructed the victims not to pay their original mortgage and to ignore all correspondence from the original lenders. This resulted in many of the victims losing their homes to foreclosure. “Prosecuting mortgage fraud is a top priority of this office, and we are increasingly focusing on those scams that victimize distressed homeowners,” said U.S. Attorney Wagner
“As the foreclosure crisis continues, we are seeing a rise in scams that target struggling homeowners,” said California Attorney General Harris. “These predators rob innocent families of their life savings and their piece of the American dream. I am thankful for the fine work of the California Mortgage Fraud Strike Force and of our U.S. Department of Justice colleagues in cracking this case.”
“The elaborate mortgage rescue scheme alleged in this case swindled more than 1,000 distressed homeowners in California and other jurisdictions out of more than $3.1 million,” said Christy Romero, Special Inspector General at the Office of the Special Inspector General for the Troubled Asset Relief Program ( SIGTARP). “As alleged, Tikal's operation duped victims with false claims of drastically lowering their mortgage debt in exchange for advance fees. As a result of his alleged deceit, homeowners' financial condition worsened, and for some, the opportunity to participate in legitimate loan modification programs such as the government-sponsored Home Affordable Modification Program (HAMP) was lost. SIGTARP will continue to work aggressively with our law enforcement partners to stamp out this type of abuse.”
This case is a joint prosecution by the U.S. Attorney’s Office for the Eastern District of California and the California Attorney General’s Office. It is the product of an extensive investigation by the SIGTARP, Internal Revenue Service - Criminal Investigation, the California Department of Justice and the Stanislaus County District Attorney’s Office. Assistant U.S. Attorney Philip Ferrari and California Deputy Attorney General Maggy Krell are prosecuting the case.
Tikal is expected to make his initial appearance today before U.S. Magistrate Judge Edmund F. Brennan in Sacramento at 2:00 pm. If convicted, Tikal faces a sentence of up to 30 years in prison. The actual sentence, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The allegations in the complaint are mere accusations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov .