|For Immediate Release
Case # 09CF2974
December 21, 2009
|Susan Kang Schroeder
Public Affairs Counsel
FATHER AND SON ARRESTED ON CHARGES OF FRAUDULENTLY INFLATING PROPERTY APPRAISAL VALUES TO GARNER BUSINESS FOR LENDERS
*A warrant has been issued for a real estate appraisal executive from the defendants’ firm in this case
SANTA ANA – A father and son have been arrested on charges of conspiring to commit fraud by inflating property appraisal values with their real estate appraisal executive in order to secure more business with lending institutions. James Merritt Eaton, 60, his son Brian Chandler Eaton, 28, both of Laguna Beach, and real estate appraisal firm executive Michael John Bell, 32, Corona del Mar, are each charged with one felony count of conspiracy to defraud another of property, 17 felony counts of grand theft by false pretense, two felony counts of identity theft, two felony counts of false personation, and sentencing enhancement allegations for aggravated white collar crime over $100,000 and property damage over $50,000. If convicted, each defendant faces a maximum sentence of 18 years in state prison.
James Eaton was arrested Dec. 15, 2009, by the Laguna Beach Police Department (LBPD) while driving near his home. Brian Eaton turned himself in to LBPD on Friday, Dec. 18, 2009. Both are out of custody on $100,000 bail and are expected to be arraigned Dec. 30, 2009, at the Central Justice Center in Santa Ana. A warrant has been issued for Bell.
Between June 2005 and August 2007, James Eaton is accused of owning and operating an Irvine real estate appraisal firm, Landmark Equities Group (Landmark), that performed appraisals on residential properties. He is accused of hiring his son Brian Eaton as president, and Bell as an executive. Landmark worked with Quick Loan Funding, a subprime mortgage company owned by Daniel Sadek as their primary lender. James Eaton, Brian Eaton, and Bell are accused of falsifying appraisals by inflating the prices of properties in order to increase their business by making themselves more appealing to lenders than their appraisal competitors. Lenders make a greater profit when they give higher loans on properties with higher appraisal values.
Between June 17, 2005, and Aug. 31, 2007, James Eaton, Brian Eaton, and Bell are accused of conspiring to fraudulently inflate appraisal values of properties in California, Arizona, and Nevada to make loans on those properties more attractive to lenders and investors. The defendants are accused of opening a branch office in Dublin, CA, Las Vegas, NV, and Scottsdale, AZ, to expedite the appraisal process and handle the high volume of appraisals generated by Quick Loan Funding. James Eaton, Brian Eaton, and Bell, are accused of arranging to have an office space at Quick Loan Funding suites in Costa Mesa to facilitate loan officer input in the appraisal process.
Between Dec. 17, 2005, and August 2007, James Eaton, Brian Eaton, and Bell are accused of accessing appraisals completed by other Landmark employees by requiring the employees to disclose their passwords and electronic signatures. They are accused of unlocking the original appraisals without the knowledge of the Landmark appraiser, making changes by removing negative property comments to increase the appraised value, and submitting the revised appraisal under the original appraiser’s name or their own.