Forged letter claim electrifies Crisp & Cole case
| Wednesday, Jul 30 2008 07:34 PM
Last Updated Friday, Mar 27 2009 01:39 PM
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Carl Cole waits for the start of his hearing on July 28.
David Crisp waits for the start of his hearing on July 28.
Administrative Law Judge Humberto Flores sits at a makeshift desk in the basement of the Masonic Temple located on 18th Street before the start of the Crisp & Cole Real Estate hearing Monday afternoon.
Boxes upon boxes of evidence sit behind the prosecution desk in the basement of the Masonic Temple on 18th Street, before the start of the Crisp & Cole Real Estate hearing Monday afternoon.
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A local accountant’s signature was forged to help David Crisp’s wife get a loan in 2006, according to testimony Wednesday in the ongoing license hearings of former Crisp & Cole Real Estate principals Crisp, 28, and Carl Cole, 61.
The session — an astonishing three-hour stretch after two days of relatively dry proceedings — also included testimony from onetime Bakersfield homebuilder Kyle Carter, who appeared under subpoena.
Certified public accountant Timothy Hubbell of Bakersfield took the stand to answer questions about a letter dated September 2006 apparently bearing his signature.
The letter was actually written by his former business partner, Kevin Sluga — Crisp’s father-in-law — Hubbell said after giving testimony.
The state’s attorney, Michael B. Rich, asked Hubbell if the signature was his.
“No,” Hubbell said.
“Did you write that letter?” asked Rich, who is representing the California Department of Real Estate in the administrative hearing.
“No, I did not,” Hubbell said.
The letter was in a 2006 loan file of Jennifer Crisp, David Crisp’s wife, submitted to Aegis Wholesale Corp. for what would be $475,000 worth of loans she received to buy 12706 Lanai Ave.
The letter was included in the file to clarify Jennifer Crisp’s supposed employment at California Business Solutions, a bookkeeping and accountancy firm co-owned by Sluga, her father.
At the time Hubbell and Sluga, also a certified public accountant, each owned half of the business.
Hubbell also testified the employment claim in the document, written on company letterhead, was false: Jennifer Crisp had not worked at the company for two years, as the letter claimed.
She had never worked there, he said.
While on the witness stand, Hubbell was not asked who had written the letter.
Cole’s attorney asked if he recognized the handwriting in the signature; Hubbell said he did not.
David Crisp, who is representing himself, asked Hubbell no questions.
After testifying, Hubbell told reporters who wrote the letter.
“Kevin did,” he said, referring to Sluga. “He told me he did.”
Hubbell said he first became aware of the letter when state regulators faxed him a copy in May 2007.
“I was shocked,” he said.
When confronted, Sluga admitted to writing the letter, Hubbell said.
“He was very remorseful,” he said of Sluga.
Sluga was not at his downtown office Wednesday and did not return a message requesting comment.
Hubbell also said Sluga later sent a letter apologizing for the incident and other events.
Hubbell said he forwarded the letter to state regulators, who in turn shared it with the FBI.
He left the firm in May 2007.
CRACKS WIDEN
Carter, the former Bakersfield homebuilder whose Kyle Carter Homes was bought by San Diego-based Corky McMillin Cos. in June 2003, also provided testimony that directly contradicted information in Crisp & Cole loan files, according to documents presented earlier in the week.
Carter answered questions about a written lease agreement he had with David Crisp regarding 11402 Marazion Hill Court. Carter sold the home to Crisp in 2005.
While the lease had no end date, its existence bolsters the state’s claim: Crisp bought Marazion Hill with no intention of living there.
Crisp’s loan files show he claimed the house would be his primary residence, giving him access to loan amounts and terms he wouldn’t have otherwise had, previous testimony showed.
The lender’s file had no record of the lease agreement between Crisp and Carter.
Another witness Wednesday, Joseph Nieman of SunTrust Mortgage Inc., answered questions about another apparently fraudulent claim in the Crisp & Cole loan files.
Nieman, who verified employment of loan applicants, gave details about checking a claim in October 2005 that Leslie Sluga, Crisp’s mother-in-law, worked at Crisp & Cole as a transaction coordinator.
SunTrust records of Nieman’s phone call to Crisp & Cole offices show the company verified Sluga’s alleged employment at the time.
The state’s complaint says Sluga never worked at Crisp & Cole.
Crisp, when cross examining Nieman, asked if Nieman had ever asked to borrow Crisp’s personal car. Nieman denied doing so even after Crisp reminded him he was under oath.
Later, Hubbell testified that Leslie Sluga worked a couple of days a week at California Business Solutions doing bookkeeping.
She earned about $8 or $9 an hour, he said, bringing in about $400 a month.
In other loan files, the hearings have shown, Sluga claimed she had been a co-owner of the business for 15 years.
Hubbell said after the hearing her income was stated as $40,000 a month in some loan applications.
UNUSUALLY LONG
The hearing could take up to three weeks — an unusually long time, said Department of Real Estate spokesman Tom Pool.
The department typically processes more than 1,000 hearings a year, Pool said. Most last only a few hours, he said, though some last two or three days.
“Weeks long?” he said. “That’s very unusual.”
The Los Angeles division of the state Office of Administrative Hearings is handling the state’s complaint against Crisp & Cole, which alleges numerous types of mortgage fraud took place in transactions involving 13 local homes. Administrative Law Judge Humberto Flores is hearing the case.
Flores’ decision will ultimately determine whether Crisp and Cole lose their real estate licenses, as state regulators want.
The judge’s written decision could come weeks after the quasi-trial ends. Either side can appeal results.
Two days after the state’s complaint was filed Sept. 10, FBI and IRS agents raided 13 local sites related to Crisp & Cole. No charges have been filed in the federal investigation.
The defunct company left a string of defaulted and foreclosed loans in its wake, an ongoing Californiantally shows.
Some $78 million worth of troubled loans borrowed against 130 properties, most in the metro Bakersfield area, are linked to employees, relatives and business associates. At least 113 of the loans have foreclosed as of July 25, the tally shows.
The state hearing resumes at 9 a.m. Thursday in the basement of the Masonic Temple, 1920 18th St. The hearing is open to the public.
Californian staff writer John Cox contributed to this story.
