Mortgage Fraud – Loan Kickback Scheme Earns Renato Gonzalez Quiazon 3 Years in Prison!

It might have been mortgage fraud that started the crime, but in the end it was the IRS that nailed Renato Gonzales Quiazon, who was sentenced to three years in prison, followed by three years of supervised release for wire fraud and filing false tax returns. This sentence is the result of an investigation by the Internal Revenue Service – Criminal Investigation.

As evidenced by the recent prison sentence for Wesley Snipes for failure to file a tax return – the message is clear. Pay your taxes and don’t mess with the IRS!

Quiazon, age 54, of Hayward, California, acknowledged that he knowingly devised a scheme to fraudulently obtain payments of loan kickbacks, commissions and cash outs/extraneous line items from borrowers’ escrow accounts from which he received more than $500,000. Beginning about January 2000 through October 2004, the defendant was employed as a loan officer with New Century Mortgage, located in Emeryville, CA. During this time, Mr. Quiazon entered into an agreement with an independent mortgage broker to use his name and broker’s license on loans that Mr. Quiazon processed as the loan officer. By using the mortgage broker’s identity on these particular loans, Mr. Quiazon defrauded New Century Mortgage by causing it to issue a 1% commission (1% of the total loan amount) to the mortgage broker who had not earned that commission. As part of the agreement with the mortgage broker, the mortgage broker was to retain 20% of the fraudulent commissions and pay Mr. Quiazon a kickback of 80% of the commissions.

Mr. Quiazon further admitted that from about 2002 through October 2004, he violated his agreement with the mortgage broker by retrieving some of the commission checks directly from title companies, forging the mortgage broker’s signature on the back of these checks, and depositing them into his bank account. He conducted these financial transactions without the mortgage broker’s knowledge or consent.

Not only did he conduct a crime against New Century Mortgage, but he expanded the crime by conducting a crime against his co-conspirator. Note: if someone suggests participation in a crime – run like a scalded dog. If they are willing to deceive others they will deceive you. In fact, more times than not, the reason a crime is uncovered is that a co-conspirator exposes the crime. But back to Quaizon…

During this same time period, Mr. Quiazon added cash outs, ranging from approximately $1,500 to $12,300, and extraneous line items on borrowers’ escrow accounts that were shown as payments to creditors or other third parties on behalf of the borrowers in amounts ranging from approximately $200 to $14,000. Title company checks were disbursed for these amounts from borrowers’ escrow accounts without the borrowers’ knowledge or consent. The defendant forged the borrowers’ signatures and deposited these checks into his bank account.

Mr Quiazon also filed false individual income tax returns for the tax years 2001, 2002, 2003 and 2004. He did not report income relating to the aforementioned scheme to the IRS. The total amount of unreported income was approximately $430,661 for the period under investigation.

STOP: I am not proud of my past, but what gives me license to discuss these crimes in detail is that I have been convicted of them myself. I, too, went to prison for failure to pay taxes on stolen money. As a former CPA and tax partner for a CPA firm, it never occurred to me to pay taxes on stolen money. The thought never crossed my mind. Well, obviously it didn’t cross Quiazon’s either…and that’s what got him in the end. Me too!  However, I have learned that every choice has a consequence and you do reap what you sow…

Your comments are welcome…

For now, white collar crime speaker, Chuck Gallagher, signing off…

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