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.
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.
Keep your company’s operations lean by following these proven strategies
(BUSINESS) Keeping your operations lean means more than saving money, it means accomplishing more in less time.
The past two years have been challenging, not just economically, but also politically and socially as well. While it would be nice to think that things are looking up, in reality, the problems never end. Taking a minimalist approach to your business, AKA keeping it lean, can help you weather the future to be more successful.
Here are some tips to help you trim the fat without putting profits above people.
Artificial intelligence frees up human resources. AI can manage many routine elements of your business, giving your team time to focus on important tasks that can’t be delegated to machines. This challenges your top performers to function at higher levels, which can only benefit your business.
Consider remote working
Whether you rent or own your property, it’s expensive to keep an office open. As we learned in the pandemic, many jobs can be done just as effectively from home as the workplace. Going remote can save you money, even if you help your team outfit their home office for safety and efficiency.
In today’s world, many are opting to completely shutter office doors, but you may be able to save money by using less space or renting out some of your office space.
Review your systems to find the fat
As your business grows (or downsizes), your systems need to change to fit how you work. Are there places where you can save money? If you’re ordering more, you may be able to ask vendors for discounts. Look for ways to bring down costs.
Talk to your team about where their workflow suffers and find solutions. An annual review through your budget with an eye on saving money can help you find those wasted dollars.
Find the balance
Operating lean doesn’t mean just saving money. It can also mean that you look at your time when deciding to pay for services. The point is to be as efficient as possible with your resources and systems, while maintaining customer service and safety. When you operate in a lean way, it sets your business up for success.
How to apply to be on a Board of Directors
(BUSINESS) What do you need to think about and explore if you want to apply for a Board of Directors? Here’s a quick rundown of what, why, and when.
What does a Board of Directors do? Investopedia explains “A board of directors (B of D) is an elected group of individuals that represent shareholders. The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight. Every public company must have a board of directors. Some private and nonprofit organizations also have a board of directors.”
It is time to have a diverse representation of thoughts, values and insights from intelligently minded people that can give you the intel you need to move forward – as they don’t have quite the same vested interests as you.
We have become the nation that works like a machine. Day in and day out we are consumed by our work (and have easy access to it with our smartphones). We do volunteer and participate in extra-curricular activities, but it’s possible that many of us have never understood or considered joining a Board of Directors. There’s a new wave of Gen Xers and Millennials that have plenty of years of life and work experience + insights that this might be the time to resurrect (or invigorate) interest.
Harvard Business Review shared a great article about identifying the FIVE key areas you would want to consider growing your knowledge if you want to join a board:
1. Financial – You need to be able to speak in numbers.
2. Strategic – You want to be able to speak to how to be strategic even if you know the numbers.
3. Relational – This is where communication is key – understanding what you want to share with others and what they are sharing with you. This is very different than being on the Operational side of things.
4. Role – You must be able to be clear and add value in your time allotted – and know where you especially add value from your skills, experiences and strengths.
5. Cultural – You must contribute the feeling that Executives can come forward to seek advice even if things aren’t going well and create that culture of collaboration.
As Charlotte Valeur, a Danish-born former investment banker who has chaired three international companies and now leads the UK’s Institute of Directors, says, “We need to help new participants from under-represented groups to develop the confidence of working on boards and to come to know that” – while boardroom capital does take effort to build – “this is not rocket science.”
NOW! The time is now for all of us to get involved in helping to create a brighter future for organizations and businesses that we care about (including if they are our own business – you may want to create a Board of Directors).
The Harvard Business Review gave great explanations of the need to diversify those that have been on the Boards to continue to strive to better represent our population as a whole. Are you ready to take on this challenge? We need you.
Average age of successful startup founders is 45, but stop stereotyping
(BUSINESS) Our culture glorifies (yet condemns?) startup founders as rich 20-somethings in hoodies, but some are a totally different type.
There’s a common misconception that startups are riddled with semi-nerdy, 20-something white dudes who do nothing but sip Nitro Brews and walk around the open office showing off the hoodie they wore yesterday. It turns out that it’s extremely rare that startup offices resemble The Social Network.
However, the academic backdrop for the real social network story (AKA Harvard), produced statistics that will serve to put the aforementioned misconception to rest. According to the Harvard Business Review, the average age of people who founded the highest-growth startups is 45. Say what?! A full-fledged adult?!
In fact, aside from the age category of 60 and over, ages 29 and younger were the smallest group of founders that are responsible for heading the highest-growth startups. I guess you can accomplish a lot when you’re not riding around the office on a scooter all day.
The study also found that older entrepreneurs are more likely to succeed. The probability of extreme startup success rises with age, at least until the late 50s. It was found that work experience plays an important role.
Many will argue, “Well, what about someone like Steve Jobs?” You could easily argue right back that it took Jobs until the age of 52 to create Apple’s most profitable product – the iPhone.
The study continues to answer questions like, why do Venture Capitalist investors bet on young founders? This goes back to the misconception at the start, and there’s a notion that youth is the key for successful entrepreneurship. Wrong.
There is also the idea that younger entrepreneurs are likely working with less financial options, so it may be common for them to take something from a VC at a lower price. As a result, they could be viewed as more of a bargain than older founders.
“The next step for researchers is to explore what exactly explains the advantage of middle-aged founders,” writes Pierre Azoulay, et al. “For example, is it due to greater access to financial resources, deeper social networks, or certain forms of experience? In the meantime, it appears that advancing age is a powerful feature, not a bug, for starting the most successful firms.”
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