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Former Real Estate Broker Is Sentenced in Fraud Case

September 23, 2003|Caitlin Liu | Times Staff Writer

Arla Waxman, a former real estate broker who arranged mortgages and loans in Los Angeles and Ventura counties, was sentenced Monday to six months in a halfway house and three years' probation for bankruptcy fraud.

U.S. District Judge Nora Manella also ordered the 33-year-old Santa Clarita woman to pay $5,000 in fines and reimburse the government about $4,400 in legal fees because she had falsely claimed to be impoverished and the court had provided her with a lawyer.

Waxman's former clients greeted her sentence with mixed feelings.

"This is a ridiculous slap on the wrist," said Bradley J. Herman, who has a lawsuit pending against Waxman that alleges that Waxman forged documents and stole two Westlake Village houses from him. "I think she got off easy."

But Kelly Brown of Agoura Hills said she believes Manella did the right thing.

"The judge did what she felt was appropriate under the law," said Brown, who won a $150,000 default judgment in 2001 against Waxman, who had set up an improper loan and concealed severe defects in a house in a deal with Brown. "For six months, hopefully [Waxman] won't be conning anyone else for a while."

In December, Waxman pleaded guilty to two counts of intentionally filing for bankruptcy using false Social Security numbers. In February she was fired from World Savings, where she worked as a loan officer.

In 1998, an administrative law judge revoked Waxman's state Department of Real Estate license after finding that she had prepared bogus bank statements and forged documents. But Waxman continued arranging loans and maintained her status as a state-certified notary public until her commission expired.

Herman alleges that Waxman, using her notary stamp, validated a forged property ownership document to help her steal his houses. Waxman's story prompted Herman and consumer advocates to question whether some state agencies do all they can to protect the public.

The Department of Real Estate posts brokers' discipline records on its Web site and in newsletters. But the California secretary of state's office, which oversees notaries, did not know that the other department had revoked her real estate license.

"There are too many cracks in the system," said Gail Hillebrand, senior attorney for Consumers Union. "If a person has more than one state license, a licensing agency that revokes a license should notify all the other licensing agencies."

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