Elder Real Estate Fraud Prompts FBI Arrests in Los Angeles

Federal prosecutors are bringing down the hammer on nearly a dozen people accused of defrauding elderly victims.

The U.S. Attorney’s Office unsealed a 15-count indictment this week for 11 people, mostly Southern California residents, accused of orchestrating a complex operation that used stolen identities to secure loans backed by properties across Los Angeles neighborhoods, according to federal officials, CBS News and KTLA reported.

Prosecutors allege the scheme ran from January 2021 through May 2023, with defendants Nazaret Chakrian and Arnold Moradians targeting older property owners in areas including Santa Monica, Hollywood, Westwood and Chinatown. The defendants allegedly harvested personal identifying information and then used it to impersonate victims and take out so-called hard money loans from private lenders.

To pull it off, the group fabricated a paper trail convincing enough to pass lender scrutiny. Authorities say the defendants created fake IDs, email accounts and supporting documents ranging from bank statements and rental agreements to doctors’ notes and even death certificates. They also posed as agents or relatives of the victims to shepherd deals through.

The operation extended beyond Southern California, with alleged ties to Sacramento; Tampa, Florida; and Calgary, Canada. Prosecutors estimate roughly $6 million in actual losses with intended losses reaching $17.4 million.

“This operation represents one of many sophisticated schemes used by criminals… to defraud U.S. citizens and taxpayers of their hard-earned property,” First Assistant U.S. Attorney Bill Essayli said, per KTLA.

Nearly all of the suspects face charges including conspiracy, wire fraud, aggravated identity theft and money laundering. If convicted, the defendants face up to 20 years in federal prison for each fraud-related charge, along with additional penalties for aggravated identity theft.

The L.A.-area scheme is the latest such defrauding of elderly California residents and retirees. Embattled Sonoma developer Ken Mattson was accused last year of a wide-reaching Ponzi scheme that defrauded hundreds of investors who entrusted their money in Mattson to invest in real estate. Prosecutors allege Mattson siphoned funds from investors into secret accounts for personal use, rather than using the money to invest in real estate on investors’ behalf. Many of those victims were elderly people who gave away their life savings or retirement funds with no way of recovering the money. Mattson’s case is ongoing.

California ranks the highest in the country for elder financial abuse. The state accounts for $620 million of the estimated $3.4 billion in losses suffered by victims of elder financial fraud, according to the FBI’s 2023 Elder Fraud Report.— Chris Malone Méndez