A California man was convicted on several counts of fraud relating to a mortgage scam earlier in the week, Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero announced earlier this week.
Alan David Tikal, 46, of Contra Costa County, California, was convicted on September 15 after a one-day bench trial in the court of U.S. District Judge Troy Nunley. The announcement of Tikal's conviction was announced by SIGTARP along with U.S. Attorney for the Eastern District of California Benjamin B. Wagner; California Attorney General Kamala D. Harris, and Special Agent in Charge of IRS Criminal Investigation José M. Martinez. Tikal was convicted of 11 counts of mail fraud and one count of money laundering.
Evidence presented indicated that during a three and a half year period between January 2010 and August 2013, Tikal and his associates at a business called KATN defrauded homeowners out of millions by guaranteeing them reductions of up to 75 percent in some cases on their outstanding mortgage debt, promising them that in exchange for fees that their current loan would be paid in full and that the new loan would be only 25 percent of the original loan.
According to evidence, Tikal targeted homeowners who were having trouble making mortgage payments, many of whom were non-English speakers, and misrepresented himself to these homeowners as a registered private banker who could use an enormous line of credit to pay these mortgages in full. Tikal and his associates enlisted more than 1,000 homeowners in California and other states to participate in the fraudulent "loan reduction" program, collecting approximately $5.8 million in fees and payments from unsuspecting homeowners. Many of them lost their homes to foreclosure because they stopped making mortgage payments, believing that Tikal would bail them out.
"Tikal exploited the financial crisis by setting out to hurt others and profit from that hurt, and he accomplished his mission through his crime," Romero said. "Homeowners struggling to keep their heads above water paid Tikal thinking they were getting their mortgages modified, foregoing the chance to obtain a real mortgage modification through HAMP, the TARP housing program."
Investigators could not find a single instance in which the money paid was put toward any kind of mortgage relief for these homeowners. Instead, they found that about $2.5 million of the money went to Tikal and his family. Tikal was arrested and incarcerated on fraud charges relating to this scam in September 2012 and continued to run the scheme from his jail cell for another 11 months, according to Romero.
"The financial crisis that hit our communities so hard made it very difficult for many of our citizens to make ends meet," Wagner said. "Alan Tikal cynically took advantage of their desperation for his own profit, stealing payments meant to preserve family homes. We are gratified by the court’s guilty verdict."
Co-defendants Tamara Tikal and Ray Kornfeld have pleaded guilty and are waiting to be sentenced. Alan Tikal is scheduled to be sentenced on December 11, 2014, and he faces up to 30 years in prison and a $1 million fine.