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United States v. Tikal

United States District Court, E.D. California

May 2, 2017

UNITED STATES OF AMERICA, Respondent,
v.
ALAN DAVID TIKAL, Movant.

          ORDER AND FINDINGS AND RECOMMENDATIONS

          KENDALL J. NEWMAN UNITED STATES MAGISTRATE JUDGE

         I. Introduction

         Movant is a federal prisoner, proceeding without counsel, with a motion to vacate, set aside or correct his sentence pursuant to 28 U.S.C. § 2255. (ECF No. 284.) Movant challenges his 2014 convictions for mail fraud affecting a financial institution in violation of 18 U.S.C. § 1341 (counts 2-12) and money laundering in violation of 18 U.S.C. § 1957 (count 13.) Movant is serving a sentence of 288 months.

         Movant raises three claims. First, movant argues a lack of venue. (ECF No. 284 at 2.) Second, movant argues that the government failed to prove exclusive or concurrent jurisdiction. (Id. at 3.) Third, movant argues that his activities were lawful, citing Jesinoski v. Countrywide, 135 S.Ct. 790 (2015). (Id.) For the reasons stated herein, the undersigned recommends that movant's motion be denied.

         II. Background of Movant's Conviction

         On September 11, 2014, movant entered a waiver of the right to a jury trial and a stipulation of facts concerning his case. (ECF Nos. 140, 141, 143.) The bench trial occurred on September 15, 2014. (ECF No. 149.) The government relied on a stipulation of fact and a stipulation regarding the mailing of various documents. The stipulation of fact provided, in relevant part, as follows:

1. Between January 7, 2010 and August 20, 2013, I resided in Minnesota, Nevada, California. I was a principal of the KATN Trust, a purported revocable living trust, through which I operated my business, which was variously called a Banker Acceptance Program, Mortgage Debt Relief Program, and Homeowner Rehabilitation Program. KATN is an acronym for “Kicking Ass, Taking Names.”
2. I and my associates convinced more than 1, 000 homeowners to participate in a fraudulent residential mortgage relief program and to make payments to myself, my family and my associates totaling well over $3, 400, 000.00 in fees and “loan” payments. In reliance upon the misrepresentations made by myself and my associates, many of these homeowners stopped making payments on their existing mortgage loans and disregarded notices sent to them by their lending institutions. As a result, the financial institutions suffered losses, and many homeowners became delinquent on their loans and ultimately had their homes foreclosed upon.
3. My program targeted distressed homeowners in Sacramento, California and elsewhere who were typically experiencing difficulties making their existing monthly mortgage payments. Many did not speak English as their first language. We promised the homeowners their outstanding mortgage debt would be reduced by 75%. More specifically, the homeowners were promised that as a result of their participation in the mortgage relief program, their existing debt would be replaced with a new “loan” in an amount equaling 25% of their original obligation. These new “loans” would be owed to my business entity KATN. The homeowners were assured that if they participated in the mortgage relief program, the original lenders would have no way to foreclose on their properties.
4. In promoting the mortgage relief program, I falsely claimed that I was a registered private banker with access to an enormous line of credit and the ability to pay off homeowners' mortgage debts in full. We further falsely claimed that the mortgage relief program had a tremendous record of past success in saving homeowners from foreclosure. In truth, we never made any payments to financial institutions on behalf of homeowners in satisfaction of their pre-existing mortgage debt obligations; the purported “loan” payments received from homeowners were simply divided amongst myself, my family and my associates for personal use; there was not a single instance in which a homeowner's debt was paid, forgiven or otherwise extinguished as a result of the mortgage relief program; and many of the homeowners' properties were foreclosed upon by the original lenders.
5. Upon first entering the mortgage relief program, homeowners were required to provide an additional fee of approximately $1000. Portions of these funds would then be transferred to accounts controlled and accessed by myself or my associates. Subsequently, fraudulent documents were executed and recorded in local County Recorder's offices. The new recordings included a “Substitution of Trustee and Full Reconveyance” deed, which purported to substitute myself as the “beneficiary/new trustee” for the legitimate mortgage holding financial institution, and “Deeds of Trust” that purportedly secured the distressed homeowners' new “loans.” Among other things, these recordings served to make it difficult for financial institutions to foreclose on properties securing defaulted mortgage loans. When the documents were recorded, additional fees of approximately $1, 000 or more were collected from the homeowner, referred to as “closing costs.” Finally, the mortgage relief program collected “loan” payments from homeowners. Regardless of where the “loan” payments were originally directed, a large percentage of these deposits were continually transferred to accounts controlled and accessed by myself and by associates.
6. In the Summer of 2011, I signed and caused to be filed bankruptcy petitions in the United States Bankruptcy Court for the District of Nevada. One consequence of filing a bankruptcy petition is that creditors are temporarily prohibited from taking steps to recover debts from debtors. This prohibition, known as the “automatic stay, ” applies to actions such as property foreclosures. In these petitions, I claimed the original, legitimate home mortgage loans owed by each of the homeowners participating in the mortgage relief program as my liabilities, and the financial institutions that extended these mortgage loans as my creditors. We periodically filed amended schedules to the pending bankruptcy petition, adding the properties and loan obligations of new mortgage relief program participants. We also regularly opposed motions by the financial institutions seeking relief from the automatic stay. We utilized these bankruptcy filings to take advantage of the automatic stay and thereby postpone foreclose actions by financial institutions on homeowner properties. Postponing the foreclose actions allowed us to claim that the mortgage relief program was working, to attract new homeowners to participate in the mortgage relief program, and to encourage the homeowners to continue making payments to us rather than the financial institution.
7. On October 11, 2012, I was indicted in the pending case, and ordered detained pending trial. However, the mortgage relief program continued to operate at my direction, largely through the efforts of others involved. The bankruptcy proceeding continued, and new homeowner properties were periodically added to amended schedules. In addition, members of the scheme continued to oppose efforts by financial institutions to obtain relief from the automatic stay. Homeowner loan payments continued to be received and distributed amongst those participating in the scheme.
8. Throughout the life of the scheme, the homeowners would receive periodic correspondence from myself and my associates updating them on the progress of the program, and encouraging them to continue making their monthly “loan” payments. Often this correspondence was sent through the United States mail.
9. If called to testify as a witness, C.T. would testify that she participated in the program because she listened to webinars describing it and learned that she would owe only 25% of her previous loan, that she would not have to deal with her prior bank anymore, and that the program worked. Evidence would be presented that she paid a total of at least $9, 935.54 in fees and monthly payments. She would testify that ultimately, she learned the program did not work, and that her original lender still owned the loan to her house. In addition, C.T. would testify that the following mails were sent to or from her home in Sacramento, California, in connections with her participation in the program. On or about February 3, 2011, she received a letter sent from Las Vegas advising her of a change in where to send her monthly payments. On or about May 8, 2011, she received a letter from Las Vegas concerning the bankruptcy filing, and attaching a letter from an attorney requesting her monthly payments. On or about September 6, 2012, she received a letter from Las Vegas concerning the servicing of her “loan.” And on or about February 8, 2013, she sent a package of documents, including a fraudulent check created by associates of the program, from her home in Sacramento to an unnamed conspirator in Pittsburg, California.
10. If called to testify as a witness, L.R. and H.R. a married couple, would testify that they participated in the program with respect to a number of properties, including their home in Vallejo, California. They would testify they participated because of their belief that their existing loans would be replaced by new loans totaling only 25% of what they previously owed. Evidence would be presented that they paid a total of at least $7, 874.98 in fees and monthly payments. Evidence would be presented on or about November 1, 2010, they received a welcome letter re: their KATN loan together with payment coupons at their home in Vallejo. Evidence would also be presented that on or about June 14, 2012, they received a letter updating them on the progress of the program and requesting payments at their home in Vallejo.
11. Witness N.M. would testify that she participated in the program. Evidence would be presented that she paid a total of at least $608.38 in fees and monthly payments. Evidence would also be presented that on or about June 15, 2011, she received a letter from Las Vegas at her home in Stockton, California, which included an update on the bankruptcy proceeding and which requested continuing payments.
12. Witnesses A.E. and A.M. would testify that they participated in the program and evidence would establish that they paid a total of at least $16, 122.98 and $2, 700.00 in fees and monthly payments, respectively. Evidence would also be presented that on or about June 14, 2012, A.M. in Riverbank, California, and A.E. in Modesto, California received the same letter from Las Vegas updating them on the program and requesting continued payment.
13. Witness A.C. would testify that she participated in the program with respect to her home in Fresno, California. Evidence would be presented that she paid a total of at least $12, 275.28 in fees and monthly payments. In addition, evidence would be presented that on or about April 15, 2013, she mailed her monthly loan payment from Fresno to Pittsburg, California. On or about August 20, 2013, she received in the mail from Las Vegas a set of payment coupons re: her KATN loan at her home in Fresno.
14. In addition, the government would be able to prove that on or about October 5, 2010, I withdrew $10, 750 in cash from an account I controlled in the name of the KATN Revocable Living Trust (Checking Account No. xxxxxx0304) at Wells Fargo Bank in Rogers, Minnesota. The previous day, October 4, 2010, at my direction, an associate involved in the mortgage relief program transferred a total of $23, 975 in homeowner payments from an account in Stockton, California (JP Morgan Chase Checking Account No. xxxxx9911) to my account.
15. In all, the government would be able to prove that from January of 2010, through August of 2013, more than $5, 800, 000 in fees and monthly payments was paid by homeowners in the program to the defendant and his associates. Of those funds, the government would be able to prove that more than $2, 500, 000 was paid into accounts controlled by Tikal.
16. Many of the financial institutions owning the true and actual loans on the homeowners' properties were FDIC-insured, and many of them sustained actual losses, both in the form of foregone participant loan payments, legal fees to lift the automatic stay and clear clouded titles, and in foreclosing on defaulted properties.

(ECF No. 140 at 3-8.)

         At the conclusion of the bench trial, the District Court found movant guilty on counts two through thirteen.

         III. Discussion

         In the opposition to the pending motion, respondent argues that the motion should be denied because movant raised the claims raised in the instant motion on appeal. ...


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