A California man will spend the next 24 years in prison for leading a mortgage fraud scheme through which he stole $5.8 million in fees and monthly payments from struggling homeowners.
In September, Alan Tikel, 46, was convicted of 11 counts of mail fraud and one count of money laundering stemming from his role in a “large-scale mortgage fraud scheme,” and this week was sentenced to 24 years in prison, California Attorney General Kamala Harris and United States Attorney for the Eastern District of California Benjamin Wagner announced Thursday.
What's more, even after getting busted, Tikel continued to commit fraud while incarcerated.
According to evidence presented at trial, between January 7, 2010 and August 20, 2013, Tikal operated a business under the name KATN, which targeted “vulnerable and non-English speaking homeowners,” who were looking for mortgage assistance in the wake of the financial meltdown.
Tikal and his associates promised homeowners that their outstanding mortgage debt would be reduced by 75%. Tikal also falsely claimed that he was a registered private banker with access to an “enormous” line of credit and was able to pay off homeowners’ debt in full.
In exchange for various fees and payments, Tikal claimed the homeowners’ existing mortgages would then be satisfied and replaced with new loans to Tikal at 25% of the original loan obligation.
According to evidence, there were no instances in which a homeowner’s mortgage was paid, forgiven, or extinguished by Tikal.
Instead, Tikal took the victim’s money from himself and spent it on chartered airline travel, a $5,000 suit, new cars, and other extravagant living expenses, the State of California said in a release.
In total, Tikal and his associates convinced more than 1,000 homeowners in California and other states to participate in their scam, with the homeowners handing over more than $5.8 million to Tikal.
When Tikal was convicted, Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, said that after Tikal was arrested, he continued to run the scheme that fraudulently stalled foreclosure proceedings brought by TARP banks from inside his prison cell.
“Alan Tikal’s actions were illegal and will not be tolerated in California. He and his partners defrauded hundreds of hard-working Californians who were fighting to keep their homes during our state’s foreclosure crisis,” Harris said.
“This predatory scheme robbed families of their life savings and in many cases, their homes,” Harris continued. “I thank our California Mortgage Fraud Strike Force and the U.S. Department of Justice for their work to bring these individuals to justice.”
In February, Tikal’s co-defendant Ray Kornfeld was sentenced to 5 years for his role in the scheme and ordered to pay over $3 million in restitution to the victims. Co-defendant Tamara Tikal previously entered a guilty plea and will be sentenced on April 23, 2015.
“The financial crisis that hit our communities so hard made it very difficult for a lot of people to make ends meet,“ Wagner said. “Alan Tikal cynically took advantage of the desperation those people felt for his own profit, stealing payments meant to preserve family homes. Although we cannot undo the harm Tikal inflicted, today’s sentence provides a measure of justice.”
