Transcript of charges filed against the Slugas
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Last Updated Thursday, Jan 07 2010 04:20 PM
PENALTY SLIP
DEFENDANT: KEVIN PATRICK SLUGA
VIOLATION: 18 U.S.C. §§ 1343 and 2 -- Wire Fraud and Aiding and Abetting (Four Counts)
PENALTIES: 20 years imprisonment
$250,000 fine
3 years supervised release
$100 special assessment
IN THE UNITED STATED DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
UNITED STATES OF AMERICA, Plaintiff, v. KEVIN PATRICK SLUGA, Defendant.
Case No. 1:10 CR 00001 AWI
VIOLATIONS: 18 U.S.C. §§ 1343 and 2 - Wire Fraud and Aiding and Abetting (Four Counts)
COUNT ONE: (18 U.S.C. §§ 1343 and 2 - Wire Fraud and Aiding and Abetting)
The United Stated Attorney charges: KEVIN PATRICK SLUGA, defendant herein, as follows:
I. INTRODUCTION
1. At all times relevant to this Information, Defendant KEVIN PATRICK SLUGA was a resident of Bakersfield, California, located in the State and Eastern District of California.
2. At all times relevant to this Information, Crisp Cole Associates, also known as Crisp & Cole Real Estate ("CCRE"), was a real estate brokerage firm, and Tower Lending was an affiliated mortgage brokerage.
3. At all times relevant to this Information, defendant KEVIN PATRICK SLUGA was a Certified Public Accountant (CPA) and a co-owner of the business that was initially called California Business Solutions and later known as Comprehensive Business Solutions ("CBS") that provided tax-related services to the general public, including but not limited to tax planning and preparation, business advice, and payroll services.
4. In his capacity as a CPA with CBS, defendant provided corporate tax and accounting services to CCRE. Defendant also prepared tax returns for the owners and certain employees of CCRE. Defendant also prepared tax returns for his daughters.
II. THE SCHEME TO DEFRAUD
5. Beginning at a time unknown, but not later than in or about January 2005, and continuing to in or about January 2007, within the State and Eastern District of California and elsewhere, the defendant, along with others known and unknown, devised and executed a scheme and artifice to defraud mortgage loan companies and federally insured lending/financial institutions (collectively referred to herein as "Lenders") of money and property, and did obtain money and property from such Lenders, by means of materially false and fraudulent pretenses, representations, and promises, and aided and abetted such actions.
III. MANNER AND MEANS OF SCHEME TO DEFRAUD
6. During the above-described period, the defendant, with the assistance of others, executed the scheme and artifice to defraud Lenders by the following manner and means:
a. The defendant prepared verification of employment letters ("CPA letters") that contained false information to assist the owners of CCRE and others with the scheme to obtain mortgage loans from Lenders for purchases of real property through the use of straw buyers and other illegal means. The false CPA letters were submitted to Lenders in support of applications for mortgage loans to be used to finance purchases of real properties.
b. The CPA letters included material misstatements regarding the borrowers' employment status, occupation, and/or experience as a landlord, among other material misstatements and/or omissions. For example, the defendant would at times state that the borrower was employed at CBS in a specific capacity for a certain period time, when in truth and in fact, the borrower had either never worked at CBS and/or had not been employed in such a capacity at CBS.
c. Based on his experience as a CPA, the defendant knew and expected that the false and fraudulent CPA letters would be submitted to the Lenders in response to the Lenders' request for such verification, and that the Lenders would reasonably rely on such misstatements and omissions in approving the funding of the mortgage loans for the purchases of real property. The Lenders then distributed the mortgage loan funds to escrow companies or other companies, often across state lines.
d. The defendant prepared the false CPA letters, or caused them to be prepared at his direction, including without limitation the false statement regarding the borrowers' employment status, occupation and status as a landlord, mainly at the direction and request of one of the owners of CCRE, and also at the direction of the loan officers at Tower Lending. Additionally, defendant gave false answers to, or caused false answers to be given to, Lenders when Lenders called to verify the information in the CPA letters.
7. The defendant's conduct in preparing the false CPA letters enabled the purchase of properties with a total purchase value at the time of more than $12.6 million.
8. The defendant and others at CCRE and Tower Lending knew that the misstatements and/or omissions that the defendant and others caused to be submitted to the Lenders in connection with mortgage loan applications were materially false and fraudulent. The mortgage loans funded on the basis of such applications were knowingly obtained through materially false and fraudulent statements.
9. As a result of the conduct of the defendant and others, the defendant defrauded Lenders of approximately $3,979,625.
IV. WIRE COMMUNICATIONS
10. On or about the dates listed below, within the State and Eastern District of California and elsewhere, in furtherance of the scheme and artifice to defraud, and to obtain monies through false and fraudulent pretenses, and to aid and abet the same, as more fully set forth in paragraphs 1 through 9 above, the defendant caused, and aided and abetted in causing, the following sign and signals to be transmitted by means of wire and radio communications in interstate commerce:
Count 1
Approx. Date Transmitted May 2, 2006 -- Wire transfer of $638,621.40 from SunTrust Mortgage, in Georgia, to Chicago Title Company in Bakersfield, CA
Count 2
Approx. Date Transmitted May 2, 2006 -- Wire transfer of $122,398.54 from SunTrust Mortgage, in Georgia, to Chicago Title Company in Bakersfield, CA
Count 3
Approx. Date Transmitted Sept. 20, 2006 -- Wire transfer of $995,637.07 from SunTrust Mortgage, in Georgia, to Fidelity National Title Company in Bakersfield, CA
Count 4
Approx. Date Transmitted Sept. 20, 2006 -- Wire transfer of $293,844.23 from SunTrust Mortgage, in Georgia, to Fidelity National Title Company in Bakersfield, CA
All in violation of TItle 18, United States Code, Sections 1343 and 2.
***
PENALTY SLIP
DEFENDANT: LESLIE SLUGA
VIOLATION: 18 U.S.C. §§ 1343 and 2 -- Wire Fraud and Aiding and Abetting (Two Counts)
PENALTIES: 20 years imprisonment
$250,000 fine
3 years supervised release
$100 special assessment
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
UNITED STATES OF AMERICA, Plaintiff, v. LESLIE SLUGA, Defendant.
CASE NO. 1:10 CR 00002 AWI
VIOLATIONS: 18 U.S.C. §§ 1343 and 2 -- Wire Fraud and Aiding and Abetting (Two Counts)
COUNTS ONE AND TWO: (18 U.S.C. §§ 1343 and 2 -- Wire Fraud and Aiding and Abetting)
The United States Attorney charges:
LESLIE SLUGA, defendant herein, as follows:
I. INTRODUCTION
1. At all times relevant to this Information, Defendant Leslie Sluga was a resident of Bakersfield, California, located in the State and Eastern District of California.
2. At all times relevant to this Information, Crisp Cole Associates, also known as Crisp & Cole Real Estate ("CCRE"), was a real estate brokerage firm, and Tower Lending was an affiliated mortgage brokerage.
3. Between in or about October 2004 to in or about January 2007, in the State and Eastern District of California, the defendant, along with others, executed a scheme and artifice to defraud mortgage loan companies and federally insured lending/financial institutions (collectively referred to herein as "Lenders") of money and property, and caused money and property to be obtained from such Lenders.
II. THE SCHEME TO DEFRAUD
4. During the above-described period, the defendant, with the assistance of others, executed the scheme and artifice to defraud Lenders by the following manner and means:
a. From April 2005 through May 2006, at the direction of one of the owners of CCRE, defendant purchased approximately three (3) real properties with a total purchase value at the time of approximately $2.5 million, and obtained loans to finance such purchases.
b. In order to qualify for these loans, in almost all of these loan applications that the defendant caused to be submitted to the Lenders, the defendant knowingly made material misstatements and/or omitted relevant and material information. The defendant knew and expected that the Lenders would reasonably rely on such misstatements and omissions in approving the funding of the mortgage loans for defendant's purchases of real property.
c. The defendant's misstatements and omissions included, but are not limited to, misstatements concerning her employer, the number of years employed, and her position/title with the employer; misstatements regarding her income and her outstanding liabilities (including her liabilities with respect to other real properties); and misstatements that she would use certain properties as owner-occupied residences when in fact she had no intent to reside in the properties.
d. In or around October 2005, the defendant submitted a loan application to SunTrust Mortgage for the purchase of the real property located at 800 Astoria Park Drive, Bakersfield, California ("800 Astoria Park Property"). In the loan application, the defendant knowingly, and with the intent to defraud, failed to list the total outstanding obligations she had on other real properties she then owned. As a result of the material false and fraudulent information the defendant provided to SunTrust Mortgage, SunTrust Mortgage disbursed approximately $374,000 in funds for the purchase of the 800 Astoria Park Property.
5. The defendant and others at CCRE and Tower Lending knew that the misstatements and/or omissions that the defendant and others caused to be submitted to Lenders in connection with the mortgage loan applications were materially false and fraudulent. The mortgage loans funded on the basis of such applications were knowingly obtained through materially false and fraudulent statements.
6. As a result of the conduct of the defendant and others, the defendant defrauded Lenders of approximately $912,556.
IV. WIRE COMMUNICATIONS
7. On or about the date listed below, within the State and Eastern District of California and elsewhere, in furtherance of the scheme and artifice to defraud, and to obtain monies through false and fraudulent pretenses, and to aid and abet the same, as more fully set forth in paragraphs 1 through 6 above, the defendant caused, and aided and abetted in causing, the following signs and signals to be transmitted by means of wire and radio communications in interstate commerce:
Count 1
Approx. Date Transmitted Oct. 5, 2005 -- Wire transfer of $297,033.09 from SunTrust Mortgage in Georgia, to Chicago Title Company in Bakersfield, CA
Count 2
Approx. Date Transmitted Oct. 5, 2005 -- Wire transfer of $74,132.64 from SunTrust Mortgage in Georgia, to Chicago Title Company in Bakersfield, CA
All in violation of Title 18, United States Code, Sections 1343 and 2.
