Daniel Sadek can't seem to keep himself out of the crime files lately.
A couple weeks ago it was an armed invasion of the former sub-prime mortgage king's Newport Coast home.
Today, the owner of an Irvine real estate appraisal firm associated with Sadek–who September's Vanity Fair
ranked No. 86 on a list of institutions
and people most to blame for the nation's economic problems–was charged with conspiracy to commit fraud by inflating property appraisal values to secure more business with lending institutions.
Laguna Beach police arrested James Merritt Eaton, the 60-year-old owner of Landmark Equities Group, as he was driving near his home on Tuesday. His son and Landmark's president, Brian Chandler Eaton, 28, also of Laguna Beach, turned himself in to police on Friday. An arrest warrant has been issued for the firm's real estate appraisal executive, Michael John Bell, 32, of Corona del Mar.
According to the Orange County District Attorney, Landmark was the principal lender to Sadek's Newport Beach-based Quick Loan Funding subprime mortgage company.
The Eatons are out of
custody after posting $100,000 bail each. They are scheduled to be
arraigned Dec. 30 in Santa Ana on one felony count each 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. Bell faces the same charges, and if convicted all three could get 18 years in prison each.
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According to the Orange County District Attorney:
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.
Quick Loan Funding wrote $4 billion in mortgages between 2002 and
2007. But the California Department of Corporations revoked Sadek's lending and escrow licenses
in December 2008 after investigators concluded he used funds from another one of his companies, Platinum Coast
Escrow Inc., to take out markers to cover gambling at various Las Vegas hotels, among other offenses.
A January Orange County Register
investigation found Sadek owed $2.3 million for
unpaid taxes, mortgages and homeowner association dues. That didn't
count $134,467 an Orange County Superior Court judgment filed that same
month said Sadek owed the Bellagio Casino and Hotel in Las Vegas. He reportedly declared bankruptcy in Nevada two months ago.
Quick Loan Funding was sued 13 times locally in its last two years, and Sadek lost a house at
65 Briar Lane in Irvine after he defaulted on a loan from Citibank, the Reggie reports. The former Fletcher Jones Motorcars salesman also wrote and produced the movie Redline, which starred his then-girlfriend Nadia Bjorlin, comedian Eddie Griffin and Sadek's fleet of Ferraris, Porsches and Saleen S7 exotic cars. It cost him $31 million to make, distribute and publicize, but only earned a reported $8.2 million in ticket sales worldwide.
Two weeks before the Newport Coast home invasion, at 3 a.m. on Thanksgiving morning, a Mercedes Benz CLK 550 was reported burning in the driveway of Sadek's multi-million-dollar pad on 3 Longboat, off
Pelican Ridge. The fire singed the house and garage before firefighters knocked it down. The Mercedes did not belong to Sadek.
Authorities have not said whether the crime or fire are related to debts Sadek owes or his other financial woes.
OC Weekly Editor-in-Chief Matt Coker has been engaging, enraging and entertaining readers of newspapers, magazines and websites for decades. He spent the first 13 years of his career in journalism at daily newspapers before “graduating” to OC Weekly in 1995 as the alternative newsweekly’s first calendar editor.