Loan Fraud

Lehman Bros. is accusing a Japanese trading company of perpetrating a massive fraud and plans to sue it for hundreds of millions of dollars, officials at the U.S. investment bank said Sunday. Lehman seeks to recoup $350 million in defaulted loans, the company said. The bank loaned the money to a unit of LTT Bio-Pharma, according to Matthew Russell, a senior spokesman for Lehman Bros. Holdings Inc.

Two high-profile Beverly Hills real estate agents and two licensed appraisers were indicted Thursday on charges of joining in a sophisticated scheme that lenders said cost them more than $40 million in fraudulent loans for homes in some of Southern California's most expensive neighborhoods.

Consumers seeking home loans need to be vigilant against scam artists, especially now that U.S. banks are tightening lending standards for nontraditional and sub-prime home mortgages, making loans harder to come by. The FBI recommends the following to avoid mortgage fraud: * Get referrals for mortgage professionals, and check their licenses with state, county or city regulatory agencies. * Be wary of unsolicited contacts and high-pressure sales techniques.

Capping an elaborate sting, federal officials said Wednesday that they had charged 23 people with operating a Southland-based equipment-leasing scam that generated at least $20 million in losses at some of the nation's biggest financial institutions. The scheme involved phony invoices and other fraudulent methods used to get funds from Citigroup Inc., Wells Fargo & Co., GE Capital, Bank of America Corp. and other lenders.

ABN Amro Mortgage Group Inc. has agreed to a $41-million settlement with the federal government for falsifying documents in tens of thousands of loans insured by the Federal Housing Administration, the Department of Housing and Urban Development said. In 2003, the department discovered underwriting deficiencies and improper conduct by an ABN employee.

Consumers trying to warn the public about so-called loan modification scams found themselves tripping an alarm of another sort Wednesday: About 15 of them got stuck in a Buena Park office building's elevator during a demonstration. The failed protest was the latest in a string of tough breaks for a group of about 30 mostly elderly and Latino homeowners who gathered Wednesday outside the offices of a company called Centre Legal.

A self-described credit union that advertised personal loans nationwide was not registered as a lending institution and gave a phony address, according to Pennsylvania and Michigan banking regulators. First Star Credit Union, which advertised in the Los Angeles Times and other newspapers this month, referred consumers to a toll-free phone number and a website for information on getting a loan. The company operating the website, which listed a York, Pa.

A Silicon Valley financier who owns a stake in the NHL's Nashville Predators has filed for personal bankruptcy two weeks after being accused of loan fraud. William "Boots" Del Biaggio III, 40, scion of a prominent San Jose banking family, has at least $57 million in unpaid personal and business loans, credit card bills and other financial obligations, according to the Chapter 11 filing in U.S. Bankruptcy Court for the Northern District of California. The filing didn't enumerate Del Biaggio's assets or debts.

Former San Diego Charger player Benjamin Leon Coleman was sentenced Friday in federal court to three years in prison for fraudulent loan applications, identity theft and tax evasion. Coleman, 37, pleaded guilty to scams that involved borrowing money based on phony companies. A star at Wake Forest University, Coleman played from 1993 to 2001 in the NFL, including seven seasons with the Chargers. At his career best, he earned $1.5 million a year. District Court Judge Dana M. Sabraw ordered Coleman to pay about $240,500 to the financial institutions he defrauded.

The Obama administration recently announced it was cracking down on loan modification "experts" who collect big fees but do little or nothing in return. Here are signs that you might be the target of a loan mod scam, according to the Federal Trade Commission and other agencies. You're asked for upfront fees. You're guaranteed success. You're asked to pay by wire. You can't get them on the phone after paying. You're told to stop paying your mortgage. You're told not to contact your lender or attorney.