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United States v. Morris

November 18, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
PETER G. MORRIS, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Honorable George H. King United States District Court Judge

[PROPOSED] FINDINGS OF FACT AND CONCLUSION OF LAW AGAINST DEFENDANTS ELIZABETH AGUILERA AND ALICE YOUNG

After full consideration of the papers in support of the Application for Temporary Restraining Order ("Application") filed by plaintiff United States of America ("United States"), and the lack of any filed oppositions by defendants Alice Young and Elizabeth Aguilera, the Court deems the Application to be a Motion for Preliminary Injunction unopposed by Young and Aguilera, and determines the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

1. Aguilera holds a State of California real estate salesperson license. (Declaration of HUD-OIG Forensic Auditor Cindi Connor ["Connor Decl."], ¶ 4, Ex. 1c.) While she was officially employed by defendant Peter Morris d/b/a The Team Realty Group ("Team Realty") from October 2008 to August 2009, she worked closely with defendants Peter Morris individually and Team Realty out of the Riverside office and continues to do so to the present. (Declaration of HUD-OIG Special Agent Terrence West ["West Decl."], ¶ 14, Ex. 14.)

2. Young also holds a State of California real estate salesperson license. (Connor Decl., ¶ 4, Ex. 1a.) Team Realty served as Young's employing broker from May 2008 until June 2010. Young's license expired on September 11, 2010. (Id.)

Aguilera's Acts

3. In or around June 2008, Aguilera, through Team Realty, served as the real estate agent for Borrowers*fn1 3A and 3B's purchase of certain real property on Bright Way in Perris. (Connor Decl., ¶ 8, Ex. 2a-8.) Borrowers 3A and 3B applied for and obtained an FHA-insured mortgage loan in the amount of $214,963. (Id., ¶ 20.) Borrowers 3A and 3B's mortgage loan application reflects that Borrower 3A was employed and earning an annual salary over $130,000, and the mortgage loan application file contains images of fictitious paystubs, paychecks, bank statements, tax documents, verifications of employment ("VOE"), and a letter purportedly signed by Borrower 3A describing details of his employment. (Connor Decl., ¶¶ 11-15, Exs. 2d-2h & ¶ 17, Ex. 2j.)

4. The Government's investigation, however, revealed that the statements and documents supporting these representations in the mortgage loan application are indeed false, fictitious and fraudulent, and that defendant Peter Morris and Aguilera worked in concert with each other and other defendants to conceal their falsity. (Connor Decl., ¶¶ 8, 14 & 19, Exs. 2a-2b, 2l.)

5. For example, the subpoena response from the California Employment Development Department ("EDD") reveals that since, at least 2005, Borrower 3A has not been employed, or earned an income. (Declaration of AUSA Indira J. Cameron-Banks, Decl.¶ 8, Ex. 16.) Further, aware of this fact, Aguilera carefully counseled Borrowers 3A and 3B as to what Borrower 3A's employer response should be to any VOE inquiries received regarding his employment. (Connor Decl., ¶ 19, Ex. 2l.) Additionally, HUD-OIG confirmed that Borrowers 3A and 3B's bank statements were digitally or electronically altered to reflect the bi-weekly deposits of Borrower 3A's purported salary. (Connor Decl., ¶ 14.)

6. In addition, Aguilera and Peter Morris recently worked in concert to conceal Morris' receipt of improper commissions through the short-sale of his own properties from the bank mortgage-holder. (West Decl., ¶¶ 10-15, Exs. 8a and 8b.) Within months of securing the $525,000 mortgage loan, Morris defaulted on the mortgage loan. (Id., ¶ 11.) In order to relieve himself entirely of the mortgage loan obligation, Morris again made false representations to the mortgage lender in order to convince the bank to allow a short sale to proceed on the property for less than $200,000. (Id., ¶ 12.) The bank, convinced by the false representations, allowed a short-sale to proceed on the property, which Aguilera handled as the real estate agent. (Id., ¶¶ 13-14.)

Young's Acts

7. Young not only served as a real estate salesperson working for Morris, she, along with several of her close family members that she directed to Morris, worked in concert with Morris in order to secure government-insured mortgage loans based on false representations, statements and documents. (West Decl. ¶¶ 7, 16-17; Cameron-Banks Decl., ¶ 5, Ex. 10.)

8. In or around August 2008, Aguilera, through Team Realty, is listed as the real estate agent for Borrowers 6A and 6B's purchase of certain real property on Braidwood Court in Victorville. (Connor Decl., ¶ 32, Ex. 4a-9.) Borrowers 6A and 6B, however, who are Young's parents admitted that Young served as the real estate agent on this transaction. (West Decl., ¶ 7.) Young then, in concert with defendant Peter Morris, originated and processed an FHA-insured mortgage loan in the amount of $184,978 for Borrowers 6A and 6B to purchase this property as "straw-buyers" for Young's sister and her nephew. (Id.)

9. The mortgage loan file contains statements regarding Borrowers 6A and 6B's intention to reside in the purchased property, when they, along with Young, knew that Young's sister and her son were the actual purchasers of the property. (Id.; Connor Decl., ΒΆ 33, Exs. 4b-1 & 4b-4.) In addition to concealing Young's sister and son as the actual purchasers of the property, the documents supporting the mortgage loan application contain a fraudulent rental agreement between Borrowers 6A and 6B and Young's sister reflecting Young's sister as a tenant of the property in which Borrowers 6A and 6B resided in at the time they applied for the mortgage loan for the Braidwood Court property. Under the rental agreement, Young's ...


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