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Former BofA employee accused of taking bribes to rig short sales

October 16, 2013|By E. Scott Reckard
  • Sales of bank-owned homes fell, but short sales surged 25% to a three-year high in the first quarter, according to RealtyTrac.
Sales of bank-owned homes fell, but short sales surged 25% to a three-year… (Jae C. Hong / Associated…)

A former Bank of America Corp. employee who had dealt with delinquent mortgages has been arrested on federal charges of accepting more than $1 million in bribes to allow homes to be sold far below their market value.

Kevin Lauricella worked at a BofA facility in Simi Valley where he focused on short sales, said Ariel Neuman, an assistant U.S. attorney in Los Angeles. Short sales are transactions that allow borrowers in default to satisfy their mortgage debts by selling the property for less than they owe.

A 28-count grand jury indictment, unsealed Tuesday, listed 18 properties allegedly sold in late 2010 and early 2011 at prices below those the bank would have approved. Lauricella is accused of enabling the sales by improperly approving short sales and falsifying bank records.

Most of the homes were in the San Fernando Valley, but others were in Corona, Coto de Caza, Beverly Hills and Bel Air.

“The buyers would either resell the homes at the actual property values or in some cases would refinance the property at the actual value, thereby extracting profits on the deals,” Newman said.

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Lauricella, 28, of Thousand Oaks, entered a not guilty plea Tuesday before a federal magistrate and was released on a $100,000 property bond, said his attorney, Ronald D. Hedding. Hedding said he had not yet had time to study the evidence against Lauricella and could not comment.

Documents filed with the indictment indicated the government seized Lauricella’s Chevrolet Suburban on grounds it had been purchased with criminal proceeds and intended to try to take away his home.

Plea agreements filed by three other defendants indicated the arrest stemmed from a long-running probe into the manipulation of Southern California short sales for illicit profit.

A Bank of America spokesman said Lauricella had been fired in 2011 and that the bank cooperated with the FBI investigation of the case.

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