Member of Nevada City-Based Conspiracy Sentenced for Multi-million Bank and Title Fraud Scheme
September 27, 2018
Larry Allen Todt, 66, formerly of Malibu, was sentenced to over seven years in prison and ordered to pay over $3 million in restitution for his role in a fraudulent mortgage elimination scheme, U.S. Attorney McGregor W. Scott announced.
On Dec. 6, 2017, Todt was convicted following trial on one count of conspiracy and one count of bank fraud.
According to court documents, between April 22, 2010, and Nov. 18, 2011, Todt was a member of a conspiracy that ran a mortgage elimination program purporting to help distressed homeowners avoid foreclosure. The conspirators fraudulently altered the chain of title on residential properties, sold the properties and received the sales proceeds.
As a requirement for participation in the “mortgage elimination program,” the conspirators enrolled homeowners as members in a Nevada City-based church named Shon-te-East-a, Walks With Spirit, or its successor entity, Pillow Foundation. The conspirators indicated to the homeowners that these entities would offer protection against the banks.
Todt ran a branch of the mortgage elimination program, recruiting homeowners into the scheme, marshalling the necessary recorded documents, and guiding the sale of the homes. Once the homeowner enrolled with Shon-te-East-a or Pillow Foundation, Todt would have a sham deed of trust created and recorded, giving the impression that the homeowner had refinanced the mortgage loan with a new lender. In reality, the new lender was a fake entity controlled by the conspirators, and the homeowner owed no money to the purported new lender.
The next step in the process was also a recorded document. The conspirators caused a fake deed of reconveyance to be recorded, giving the appearance that the true mortgage loan had been discharged and that the true lienholder no longer had a security interest in the home.
With title appearing to be clear, the conspirators caused the sale of the home with the proceeds split between the co-conspirators and the homeowners.
In total, 37 properties were sold through the Shon-te-East-a conspiracy. The conspirators recorded fraudulent documents on approximately an additional 100 homes, but were unable to sell these before the scheme unraveled.
Contact ALTA at 202-296-3671 or [email protected].