In the following press release the Orange County (CA) District Attorney announced that a father and son have been arrested on charges of conspiring to commit fraud by inflating property appraisal values with their real estate appraisal executive in order to secure more business with lending institutions. James Merritt Eaton, 60, his son Brian Chandler Eaton, 28, both of Laguna Beach, and real estate appraisal firm executive Michael John Bell, 32, Corona del Mar, are each charged with one felony count of conspiracy to defraud another of property, 17 felony counts of grand theft by false pretense, two felony counts of identity theft, two felony counts of false personation, and sentencing enhancement allegations for aggravated white collar crime over $100,000 and property damage over $50,000. If convicted, each defendant faces a maximum sentence of 18 years in state prison.
James Eaton was arrested Dec. 15, 2009, by the Laguna Beach Police Department (LBPD) while driving near his home. Brian Eaton turned himself in to LBPD on Friday, Dec. 18, 2009. Both are out of custody on $100,000 bail and are expected to be arraigned Dec. 30, 2009, at the Central Justice Center in Santa Ana. A warrant has been issued for Bell.
Between June 2005 and August 2007, James Eaton is accused of owning and operating an Irvine real estate appraisal firm, Landmark Equities Group (Landmark), that performed appraisals on residential properties. He is accused of hiring his son Brian Eaton as president, and Bell as an executive. Landmark worked with Quick Loan Funding, a subprime mortgage company owned by Daniel Sadek as their primary lender. James Eaton, Brian Eaton, and Bell are accused are accused of falsifying appraisals by inflating the prices of properties in order to increase their business by making themselves more appealing to lenders than their appraisal competitors. Lenders make a greater profit when they give higher loans on properties with higher appraisal values.
Between June 17, 2005, and Aug. 31, 2007, James Eaton, Brian Eaton, and Bell are accused of conspiring to fraudulently inflate appraisal values of properties in California, Arizona, and Nevada to make loans on those properties more attractive to lenders and investors. The defendants are accused of opening a branch office in Dublin, CA, Las Vegas, NV, and Scottsdale, AZ, to expedite the appraisal process and handle the high volume of appraisals generated by Quick Loan Funding. James Eaton, Brian Eaton, and Bell, are accused of arranging to have an office space at Quick Loan Funding suites in Costa Mesa to facilitate loan officer input in the appraisal process.
Between Dec. 17, 2005, and August 2007, James Eaton, Brian Eaton, and Bell are accused of accessing appraisals completed by other Landmark employees by requiring the employees to disclose their passwords and electronic signatures. They are accused of unlocking the original appraisals without the knowledge of the Landmark appraiser, making changes by removing negative property comments to increase the appraised value, and submitting the revised appraisal under the original appraiser’s name or their own.
Between April 17, 2006, and Dec. 30, 2006, James Eaton, Brian Eaton, and Bell are accused of fraudulently changing and submitting 15 appraisals with increased values ranging from $4,000 to $40,000.
On Dec. 17, 2005, the three defendants are accused of submitting an overstated appraisal on a Sacramento home and falsely representing that a Landmark Office Manager, Vanessa M., had completed the appraisal by using her electronic signature without her permission or knowledge.
On Aug. 9, 2006, James Eaton is accused of flying out to Landmark’s office in Dublin, CA. He is accused of firing Vanessa M. after she refused to provide him with her password and the passwords of her employees.
On Aug. 30, 2006, James Eaton, Brian Eaton, and Bell are accused of submitting an overstated appraisal on a Los Banos, CA, property and falsely representing that the appraisal was completed by Sonya M., who was no longer working for Landmark at that time.
The investigation was conducted with assistance from the Office of Real Estate Appraisers. The investigation is ongoing. Anyone with additional information is encouraged to contact Supervising District Attorney Investigator Ron Frazier at (714) 347-8691. Anyone who believes they have been a victim of real estate fraud may download and fill out a complaint form on the Orange County District Attorney’s website at: http://www.orangecountyda.com.
Deputy District Attorney George McFetridge of the Major Fraud Unit is prosecuting this case.