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Real estate couple gets jail time for massive $50M fraud scheme

(Business News) When a well known Realtor and his loan officer wife get rich off of $50 million in falsified loans and wash profits through shell companies, judges aren’t very sympathetic.

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Judge finds couple guilty of fraud

After a long investigation, the U.S. Attorney General’s office filed charges against Eric Elegado and Charmagne Elegado for perpetrating a $50 million fraud scheme, even targeting Charmagne’s parents who lost over $75,000 to the scheme.

Charmagne masterminded the scam, according to prosecutors, and Eric was the frontman and marketing mind, parking their Bentleys, Rolls Royces, and Ferraris outside of his seminars, teaching others how to get rich like them.

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U.S. District Judge Anthony Battaglia sentenced the couple to three years and five months in prison each for their role, and sentencing for others involved will take place later this year.

“You were living the American dream until greed entered into the picture,” Judge Battaglia said at sentencing.

How their scheme worked

The operation falsified loan applications for underqualified buyers’ subprime loans, obtained mortgages higher than the sales price of the homes, and funneled profits through dummy corporations, leading to millions in profits. According to the FBI investigation, Charmagne was a loan officer who directed fellow loan officers, as well as agents at her husband’s brokerage, E Real Estate and Loans, to falsify income and employment on loan applications, sometimes scribbling down names of friends’ companies.

Investigators say the scheme wasn’t directed at the general public, the couple took advantage of friends and family as part of the money making scandal.

The couple says they were just trying to help people get homes, prosecutors said it was a money grab in a tight-knit community where they took advantage of the trust they had earned.

Eric’s real estate company made roughly $3.5 million on 104 fraudulent deals, and the FBI says that the loss to lenders is roughly $10.5 million.

The couple apologized in court

The Elegado’s lawyers said that the couple’s criminal conduct was brief, only between December 2005 and February 2007, and was completely uncharacteristic of the two, and that Charmagne was pressured by the culture at New Century Mortgage, where no-document loans were common, and say Charmagne can’t be singled out for an entire subprime industry which “foster[ed] this type of behavior.”

Prosecutors called this argument a distraction and pointed out that the Elegados went to great lengths to corrupt the system for years.

Both expressed to the judge that they were sorry, and Eric offered to do all of the jail time so his wife could stay at home with their young son. The plea was rejected by the judge for this crime which left many homeowners in a bad credit position, many even having to move out of the state as a result. Dozens of their family and friends present cried when Judge Battaglia sentenced both to prison.

What now for the Elegados?

Eric continues to work as a real estate agent, despite his poor reputation, and Charmagne is earning a living as an independent contractor and a part time child care worker at her church.

They live with family in Escondido and are reportedly broke. There is no word as to their ability to pay the penalties. At a restitution hearing on May 27, prosecutors plan to ask the couple to repay the $10.5 million loss the lenders saw.

Four other employees charged in the case are set to be sentenced today, and others will be sentenced later this year.

Photo courtesy of U.S. Attorney General’s office has been modified.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Business News

How hemp could be used to stop marijuana at the border #YeahOk

(BUSINESS NEWS) 2019 was one wacky year. Maybe that’s why the possibility of building The Wall out of hemp doesn’t shock us anymore?

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Show of hands, how many of you believe people eating tide pods was this year? Seems at least five years ago, right? That’s because 2019 was a humdinger when it comes to the pace of the news cycle. And due to that, you might have missed this little tidbit about The Wall, Steve Bannon and hemp, of all things.

After President Trump legalized hemp almost a year ago, this plant started sprouting up in farms across the country. According to Quartz, hemp experienced a planting surge of 368 percent in 2019 as compared to 2018 planting data. Of course, you can chalk that up to the explosion of the CBD industry. But there are other industrial uses for this hearty plant. Enter hempcrete and The Wall.

Former Trump strategist Steve Bannon is reportedly enamored with hempcrete, a concrete compound made with 40 percent hemp byproducts. Bannon is on record telling Vice News that “I’m obsessed with the hempcrete. I think this plant has got tremendous entrepreneurial aspects to it, and it’s innovative.”

There’s more evidence to suggest Bannon considered hempcrete for The Wall. After Bannon raised millions of dollars to build his own private border wall in May, he told Politico reporters that, “Do you understand the irony of using hempcrete to keep out marijuana?” That got us wondering: could there be a hempcrete border wall? Some analysts say that it could be possible, in theory.

“One million acres of hemp builds Trump’s wall and $700 million buys the hemp, a pittance compared to overall construction estimates ranging from $15 billion to $70 billion,” wrote Chris Bennett in reporting for Ag Web Farm Journal.

$700 million would be a huge boon for cannabusiness — that is if supply could keep up with demand. US Farmers have only grown a little under 130,000 acres of hemp this year. For a hempcrete wall to be even slightly feasible, farmers would have to massively step up supply OR import the crop from overseas. That doesn’t gel well with Trump and Bannon’s trade agenda, does it? Plus, the price point, while much better than non-hempcrete construction estimates, is still much more than the 22 million managed to raise during Bannon’s GoFundMe effort this year.

Looks like without funding assistance from the feds and an incentive for farmers to grow more hemp, hempcrete border wall is just another pipe dream.

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Chick-fil-a stops donating to anti-LGBTQ orgs; can we eat hate nuggets now!?

(BUSINESS MARKETING) Boycotts, protests, and media coverage about the controversy may finally be making an impact as the company attempts to alter its reputation.

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After years of controversy for its anti-LGBTQ policies and donations, Chick-Fil-A announced Monday that it would stop funding three faith-based organizations similarly known for their anti-LGBTQ activities. The chicken sandwich empire has donated millions to The Salvation Army, the Fellowship of Christian Athletes, and Paul Anderson Youth Home, but from 2020 going forward, the chain will cease donations to these organizations.

Controversy over Chick-fil-A’s ethos exploded in 2012 when a Pennsylvania Chick-fil-A sponsored a Christian seminar promoting “traditional” marriage, and its CEO Dan Cathy made public comments opposing same-sex marriage. While these events brought Chick-fil-A’s homophobic politics to light, the chain had already, for years prior, been donating millions of dollars to organizations that either discriminate against or work explicitly to curtail the rights of LGBTQ people.

Some queers put down their sandwiches and joined a national boycott and protests, while others found tongue-in-cheek ways to process feeling guilty for continuing to enjoy waffle fries. At first the boycott backfired, with Governor Mike Huckabee hosting a Chick-fil-A Appreciation Day, encouraging conservative chicken lovers to show up en masse to support the chain and deliver a proverbial middle finger to the LGBT community by ordering extra nuggets.

However, the boycotts, protests, and media coverage about the controversy may finally be making an impact as the company attempts to alter its reputation. Chick-fil-A president, Tim Tassopoulos noted that there have been numerous news stories about the chain’s politics, explaining that “as we go into new markets, we need to be clear about who we are.” Attempts to expand into Europe hit a major setback when one of its two UK locations closed because the shopping center in which it was located took offense to Chick-fil-A’s anti-LGBTQ stance and decided not to renew the lease.

A spokeswoman told the Thomas Reuters Foundation that the company had fulfilled the “multi-year commitments” it made to Salvation Army and Fellowship of Christian Athletes, and that now that their “obligations” were complete, they would focus their charitable giving elsewhere.

Future donations will go toward charities that focus on education and homelessness, such as Junior Achievement USA and Covenant House. Grants will be distributed and reviewed annually. LGBTQ activists are optimistic, but slightly skeptical of the change. GLAAD director of campaign and rapid response Drew Anderson called for “further transparency” regarding Chick-fil-A’s “deep ties to organizations like Focus on the Family, which exist purely to harm LGBTQ people and families.”

Anderson further pointed out that Chick-fil-A has no non-discrimination policies protecting LGBTQ employees. The chain is also known for asking applicants about their religious and marital status in job interviews, making discrimination against non-Christian and LGBTQ applicants all too easy. Anderson called for Chick-fil-A to “unequivocally speak out against the anti-LGBTQ reputation that their brand represents.”

CEO Dan Cathy has been notoriously unapologetic for his homophobic views, expressing in 2014 that he regretted getting Chick-fil-A embroiled in controversy, but that his opinions about same-sex marriage had not changed.

While many are celebrating the withdrawal of funds towards certain anti-LGBTQ organizations, there’s no guarantee that more donations of this kind won’t be made in the future. So enjoy those hate nuggets with a large grain of salt.

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Business News

Ford rolls out a weird electric SUV that is somehow also a Mustang

(BUSINESS NEWS) Ford’s new Mach E is part of their big electric push, and their plan to get you in one is to appeal to the American dream of a mustang.

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What do you get when you cross a Mustang, Tesla and SUV? A traffic accident!

(Just kidding, bad joke; it’s the 2021 Ford Mach E, one of Ford’s 22 upcoming electric or hybrid vehicles. )

Since when has Ford been pushing for electric cars? Actually, it’s been a while, but Ford’s efforts have definitely increased since Jim Hackett took over as CEO of Ford Motors in 2017.

Hackett revitalized Ford’s mission and began pushing for a greater focus on electric and hybrid cars. In fact, Hackett even created an internal team – Team Edison – which oversaw the development of electric cars. The Ford Mach E is actually the first car to be unveiled.

One down, 21 to go.

Sure, the name Ford Mach E is pretty cool, but how cool can a sports car/SUV hybrid really be? It’s the first non-sports car to use the Mustang name, which is a bold move. Luckily, the Ford Mach E is slated to go 0 – 60 in under four seconds, which means it can keep up with other Mustangs and even go faster than some Porches. It also boasts around a 459 horsepower, which is higher than most SUVs on the market. Not half bad for an electric SUV.

Along with the battery – which will be able to last anywhere from 200 to 300 miles, depending on the unit – the Mach E is chock full of exciting new tech. For instance, it’ll boast hands-free driving assist technology comparable to Tesla’s.

It also includes a sleek interior, a large center screen and Ford’s new SYNC system, which will adjust entertainment customizations based on user preference.

This cloud-based system learns from drivers’ habits: if a driver typically stop for coffee in the morning, the system might automatically suggest routes to a coffee shop.

Kind of creepy, but also pretty neat.

The car is projected to hit the market in late 2020 and will be competing with other electric models from Tesla and Volkswagen.

Prices for the Ford Mach E will range from $43,000 to about $60,000, which is fairly comparable to other companies. With a $500 refundable deposit through the Ford website, individuals can place a reservation on one of these upcoming cars now.

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