Law Enforcement

LOS ANGELES -- Martin Vasquez, 43, one of the ringleaders of a million-dollar Southern California car theft ring that employed phony DMV documents and stolen driver’s license numbers, was arraigned today in Los Angeles Superior Court.

All three men named in a complaint filed last week by the state Department of Justice have now been taken into custody and arraigned on multiple counts of theft and conspiracy in connection with the use of fraudulent DMV documents to clear the titles of two dozen vehicles so they could be sold at auction or to individuals. The estimated value of the stolen cars was $1.2 million.

Luis Marroquin, 64, of Huntington Park was arraigned Monday in Los Angeles County Superior Court. Marroquin’s bail was set at $700,000. He is being held in Los Angeles County Jail.

Marroquin and Kirsio Cruz, 46, of Norco were arrested Thursday after an investigation by the California Highway Patrol and the Department of Motor Vehicles. Cruz was released Friday on $150,000 bail after arraignment.

Vasquez was arrested late Tuesday night at a coffee shop in Southgate. His bail was set at $355,000.

Vasquez and Marroquin ran a smog shop and a fraudulent registration service called Latinos Smog in the Boyle Heights section of Los Angeles, according to documents filed in the case. To advance their scheme, they used fraudulent California driver’s licenses, Social Security cards, notary stamps and CHP and DMV rubber stamps to “wash” vehicles of their lien holders.

Their use of stolen driver’s licenses and Social Security numbers put innocent, and unwitting, citizens at risk of further identity theft abuses and loss of credit.

Here’s an example of how the scheme worked: In October 2007, a phony DMV release of lien holder form was filed, removing Toyota Motor Credit as the lien holder for a 2005 Toyota Camry registered to an Inglewood man. That “washed” a lien of $27,261.16 on the car, unbeknownst to Toyota Credit, which tried to repossess the car and then wrote off the vehicle when it could not be located. It was later recovered by Oakland police.

In another instance, a 2005 BMW 645i was purchased using a stolen driver’s license and a stolen Social Security number belonging to innocent citizens. The company that financed the purchase then had its lien removed through a forged document filed with DMV, a process that allowed the car to be sold at auction by the car thieves.

A silver metal briefcase and other containers found in a Ford Taurus parked at Latinos Smog, according to a CHP inventory, contained at least 125 stamps, including stamps for Hawthorne, Pasadena and several other DMV locations; notary public #48012714 stamp; a CHP stamp; a stamp for Toyota Motor Credit; stamps for various other auto financing agencies; and stamps for auto auctions in Fontana, Riverside and elsewhere in Southern California.

The investigation into the car theft ring continues.

A copy of the complaint is attached.

SACRAMENTO – A Citrus Heights computer hacker pleaded guilty to seven felony charges for breaking into hundreds of women’s e-mail accounts, the sort of identity theft crime that Californians should take steps to protect themselves against, according to Attorney General Kamala D. Harris.

“This case highlights the fact that anyone with an e-mail account is vulnerable to identity theft,” Attorney General Harris said. “One of the major goals of my office is to track down and prosecute every criminal who would stoop to stealing people’s identities.”

George Samuel Bronk, 23, of Citrus Heights, faces six years in state prison after entering guilty pleas today in Sacramento Superior Court to seven felonies including computer intrusion, false impersonation and possession of child pornography. Bronk will have to register as a sex offender. He will return to court on March 10 for further proceedings relating to his sentence.

From December 2009 through September 2010, Bronk accessed e-mail accounts and Facebook pages of people in 17 states, as well as residents of England. He essentially found answers to the women’s e-mail security questions in information they had posted on their Facebook sites.

Bronk targeted his victims by scanning Facebook for women who also posted their e-mail addresses there. He then contacted the woman’s e-mail service, pretending he was the legitimate customer, and claimed to have forgotten the password. Bronk was able to correctly answer security questions posed by the e-mail service by finding the answers on victims’ Facebook pages.

Some of the security questions posed by e-mail providers included, “What is your high school mascot?” “What is your father’s middle name?” “What is your favorite food?” and “What is your favorite color?”

Once Bronk gained access to the e-mail account, he changed the password and the victim was locked out.

Bronk searched the victim’s “sent mail” folder for nude or semi-nude photographs and videos, which he often sent to the victim’s entire e-mail address book. He also gained access to some victims’ Facebook accounts by clicking the “Forgot Your Password?” link and asking for a new password to be sent to the victim’s e-mail account, which he now controlled. In many cases, he posted the photographs to victims’ Facebook pages and to other Internet sites and made comments on the Facebook sites of friends.

Bronk messaged one victim that he had taken over her e-mail account “because it was funny.” In an online chat session with another victim using the name “xogreeneyesx3,” Bronk demanded the victim send him more explicit photographs or he would post the photographs he already had more widely. The victim complied.

The investigation began after one victim contacted the Connecticut State Police, and the agency then contacted the California Highway Patrol because the suspect appeared to be operating here. The CHP requested the Attorney General’s assistance.

On the hard drive of Bronk’s desktop computer, which was confiscated from his Citrus Heights’ home during a search in September, investigators found more than 170 files containing explicit photographs of women, including a film actress, whose e-mail accounts he had commandeered. Finding victims, however, proved a challenge. CHP and Attorney General agents were able to use location tagging information embedded on the photographs on Bronk’s hard drive to assist in identifying victims, and e-mailed 3,200 questionnaires to potential victims asking them to come forward.

Some 46 victims did, including one who described Bronk’s actions as “virtual rape.”

Bronk was arrested in October and has been held since then on $500,000 bail.

Attorney General Harris reminded users of e-mail and social networking sites that security questions and answers need to be as secure as passwords. There are steps people can take to avoid being victimized by “security question” hacks. These steps include:

•Pick security questions and answers that do not involve any personal information that is available from social networking sites or any other sites.

•Try to switch the security questions you choose for password protection on e-mail services and social networks.

•Add numbers or special characters to your security answers. For example, the question 'What was the name of your High School' could be answered “Middle02High@School.”

Joining the Attorney General’s office in this investigation were the Sacramento Valley Hi-Tech Crimes Task Force, the CHP, and the Connecticut State Police. The Attorney General’s office prosecuted the case.

For more information about identity theft, please see http://ag.ca.gov/idtheft/.

The arrest warrant and complaint are attached at the Attorney General’s website www.ag.ca.gov.

MARTINEZ – Two men were sentenced today to prison for their role in stealing more than $90,000 from some 200 people in Northern California by stealing personal financial information with a sophisticated skimming device placed inside ATM and credit card payment devices at gas station pumps.

This morning in Contra Costa County Superior Court in Martinez, the two men pleaded guilty to all felonies they were charged with, including conspiracy and identity theft. David Karapetyan, 32, pled guilty to 37 felonies and received a seven-year prison sentence. Zhirayr Zamanyan, 31, pled guilty to five felonies and received a five-year prison sentence. Two other defendants, Edwin Hamazaspyan, 31, and Naum Mints, 21, are scheduled to appear in court on February 15.

In March, the Attorney General's office took over prosecution of the case from the Contra Costa District Attorney's office because the crimes occurred in multiple jurisdictions throughout Northern California. An amended complaint was filed in October.

In their high-tech crime spree, the gang traveled to gas stations across the Bay Area in a rented Cadillac Escalade. From November 2009 to February 2010, they are believed to have stolen $90,000 from 196 people through their skimming scheme.

The thieves acquired keys to unlock various kinds of gas station pumps. Once they opened the pumps, they were able to connect two cables inside to their two-inch electronic device, which looked like a circuit board encased in electrical tape, and recorded ATM and credit card data as well as victims' PINs. No tampering was visible on the outside of the pumps. The gang would later return to retrieve the skimmers, which took less than 20 seconds.

The investigation began in February when police in Solano and Contra Costa counties reported an increase in identity theft and a 7-Eleven store employee in Martinez noticed a skimming device inside a gas pump. Police removed the device, replaced it with a mock device and conducted 24-hour surveillance. Karapetyan and Zamanyan were arrested when they arrived to remove the device. In total, seven devices were found inside gas pumps in Martinez, Benicia, Livermore, Hayward, Oakland, San Mateo and Sacramento.

Banks have reimbursed the victims.

The Northern California Computer Crimes Task Force, a partnership of 17 local, state and federal agencies, participated in the investigation with assistance from the U.S. Secret Service, Martinez Police Department and the Glendale Police Department.

The amended complaint and second amended complaint, as well as the arrest affidavit for Mints, are attached to the electronic version of the press release on the Attorney General’s website: www.ag.ca.gov.

SACRAMENTO – In a case prosecuted by the state Department of Justice, William Arthur Sassman II, who looted the life savings of dozens of investors to bankroll his own lavish lifestyle and finance his own investments, was sentenced today to 18 years in prison.

Sassman convinced people who had painstakingly saved for their retirement that he could make a lot of money for them. Instead he used their money for his fine clothing, his expensive cars, his several homes and his own illegal investments.

Sassman, 42, of Sacramento, appeared in Sacramento County Superior Court today where he had previously entered a guilty plea on 13 felony counts of grand theft.

Judge Lloyd G. Connelly sentenced Sassman to prison and ordered him to pay more than $4.45 million in restitution to 48 victims. No funds have been found, however, and it is unlikely victims will receive repayment.

An investigation by agents of the Department of Justice revealed that Sassman, a licensed insurance agent, operated a Ponzi scheme starting about 10 years ago in which he repaid current investors with money from new investors.

Using a book he wrote, “Secrets of a Worry Free Retirement,” Sassman convinced investors, many of whom were senior citizens, to shift their life savings to 'high return' investments. These investments included foreclosed properties and real estate on Mare Island (Vallejo) and in other states, commercial property in El Dorado Hills near Sacramento, the production of a laptop computer stand called the 'Notefloat,' which never sold, and annuity, stock and foreign currency investments.

Sassman actually invested little of the money and rarely paid the double to triple digit returns he promised. Instead, he spent investors' millions financing his lavish lifestyle. He charged more than $1 million on his American Express cards, spent $300,000 on automobiles, including two Ferraris, and spent more than $121,000 at Polo Ralph Lauren. Sassman possessed three invitation-only Centurion cards, which are black metal cards issued by American Express for high spenders. He also had an electronic card for collecting public assistance despite owning three homes and numerous cars.

The limited funds Sassman did invest were channeled into other illegal operations in which Sassman himself was victimized. Sassman failed to disclose to investors that he had invested more than $200,000 in a “Nigerian swindle” in 2000-2002. He also lost money in a 'stock trading program' run by a group subsequently indicted in federal court in 2009 for running a Ponzi scheme and a European investment scam that promised a 200 percent profit in 45 days or 800 percent annually.

As Sassman’s empire fell apart in September 2009, he sought bankruptcy for himself and his companies, but he continued to solicit funds from investors. When Sassman was arrested in November 2009, investigators discovered that in the two months before his arrest he had sent another $20,000 to a new “Nigerian swindle.”

Since his arrest, Sassman has remained in custody with bail set at $2 million. But investigators discovered that he had family members gain access to stolen funds to support his family and put funds on his jail commissary account.

Sassman's victims include a Sacramento resident who invested more than $250,000 in one of Sassman’s companies. Sassman promised her a seven percent annual return. Her money was combined with money from other investors for a total of more than $700,000. Of that money, Sassman spent approximately $400,000 on personal expenses, more than $50,000 went to Sassman's wife, and more than $34,000 was paid in returns to other investors. The victim lost $170,000 of her investment.

In January 2007, a Sacramento couple gave Sassman more than $80,000 that was supposed to be invested in real estate and interest-bearing accounts, but the entire amount was used to pay previous investors.

The investigation was conducted by the Department of Justice, with assistance from the Department of Insurance and the Department of Corporations.

SACRAMENTO – Attorney General Edmund G. Brown Jr. today announced criminal charges against the owner of a Placer County concrete company who submitted false payroll reports, misrepresented the status of his employees as independent contractors, and owes the state $230,000 in back taxes.

“This company cheated the state out of hundreds of thousands of dollars in taxes and workers’ compensation premiums by submitting phony data and disguising wages as payments to independent contractors,” Brown said.

Thomas Bernhardt, the founder and chief executive of T.B. Concrete, Inc. in Granite Bay, and his wife Rachel Bernhardt, the company’s office manager, are scheduled to be arraigned today in Placer County Superior Court on 15 felony counts of payroll tax evasion and workers’ compensation insurance fraud. Both are free on bail.

In 1999, Thomas Bernhardt, a licensed contractor, started T.B. Concrete, which performed concrete work for retail construction and other projects in Northern California. Rachel Bernhardt prepared the workers’ paychecks and submitted payroll reports to the state and to its workers’ compensation insurance carrier.

In its joint investigation, launched in December 2008 with the Employment Development Department, the state agency that collects payroll taxes, and the Department of Insurance, Brown’s office found that the Bernhardts intentionally under-reported wages by disguising the funds as payments made to independent contractors in order to illegally reduce the company’s state payroll tax and workers’ compensation expenses. Because of the nature of their employment, T.B. Concrete’s workers should have been classified as employees with legally mandated protections and benefits, and their wages should have been reported in full to the state and the company’s insurance carrier.

Both payroll taxes and workers’ compensation premiums are based on total wages. The investigation into T.B. Concrete found that from 2004 through 2009, the company under-reported the wages of 111 workers by $2.1 million, approximately 85 percent of the company’s payroll. T.B. Concrete’s state payroll tax liability is more than $230,000 on the under-reported wages.

During the same period, T.B. Concrete also failed to report nearly 85 percent of it payroll to the State Compensation Insurance Fund, which was T.B. Concrete’s workers’ compensation carrier. In addition, the Bernhardts misrepresented workers’ job classifications in order to further reduce premiums. For example, some concrete workers were classified as clerical workers. The under-reporting and misclassifications cost the State Compensation Insurance Fund more than $180,000 in lost premiums.

Workers’ compensation insurance covers employees’ lost wages when they are unable to work because of a work-related injury. When a company intentionally misclassifies employees as independent contractors, these workers may have difficulty obtaining benefits when they are injured on the job because they were not reported as employees.

The Attorney General's investigation was conducted by the office’s Underground Economy Unit. Brown created the unit in 2007 to protect workers by investigating businesses for suspected violations of state wage and labor laws.

A copy of the complaint is attached.

RIVERSIDE – Bail of $300,000 was set today for a Riverside County recycling center owner arrested along with two employees last week by special agents with the Attorney General’s office for bilking the state’s beverage container recycling program out of $7 million. Bail was set at $30,000 each for the two employees.

“These people pretended to be recycling California aluminum cans when they were really importing tons of cans from Arizona, which are not eligible for California’s recycling refunds,” Attorney General Edmund G. Brown Jr. said. “They brazenly defrauded the state’s successful recycling program.”

Howard Leveson, 68, owner of Perris Valley Recycling in Perris, Riverside County; Jose Barragan, 35, the center’s general manager, and Susie Ambriz-Molina, 25, an office worker, were arrested October 12. Leveson was also charged with illegal possession of an assault weapon.

They face a total of 18 felony counts on charges including recycling fraud, grand theft and conspiracy. If convicted of all charges, they could each spend seven years in prison.

Special agents with the Attorney General’s office, working with the Department of Resources Recycling and Recovery (CalRecycle), conducted the investigation into Perris Valley Recycling with the help of the Riverside County Sheriff’s Department. The Attorney General’s office is prosecuting the case. CalRecycle oversees the state’s beverage container recycling program.

A search of Leveson’s home and business recovered $50,973 in cash and an Uzi assault rifle. In addition, Leveson’s assets and those of his business were frozen, including $4.2 million in bank accounts.

From February 2009 until July 2010, Perris Valley Recycling collected as much as 10,000 pounds per day in aluminum cans, far more than comparable facilities, which average about 500 pounds per day. The unusually high volume indicated the possibility that out-of-state containers were being brought to the facility.

In Arizona, aluminum is sold only for its scrap value. California, however, has the added incentive of the California Refund Value (CRV) deposit, which pays $1.57 for a pound of used aluminum cans.

Investigators estimate Perris Valley Recycling took in 4.4 million pounds of cans trucked from Arizona, then illegally claimed as much as $7 million in reimbursement from the California Beverage Container Recycling Fund.

As a deterrent to such fraud, recycling centers are required to report to CalRecycle purchases of more than 250 pounds of aluminum CRV material. According to investigators, Perris Valley Recycling hid the size of incoming loads by creating multiple weight tickets for trucks coming in with loads larger than 250 pounds, making it appear they were many individuals with smaller loads.

Over the past five months, 20 people have been arrested for making deliveries of out-of-state containers to the Perris center, whose slogan is “It’s Not Trash, It’s Cash.” Perris Valley Recycling remains open, however CalRecycle continues to conduct inspections and has placed restrictions on the center’s reimbursement claims.

In California, consumers pay CRV at the checkout stand when purchasing beverages in bottles or cans. When the empty container is redeemed at one of California’s more than 2,000 recycling centers, the CRV is returned to the consumer. Recycling centers recoup the CRV from the state and then make money by reselling the materials for scrap value. When an out-of-state can or bottle is fraudulently redeemed in California, the program loses money.

"By cracking down on fraud, we send an unmistakable message that criminal activity that undermines California’s beverage container recycling program will not be tolerated,” said CalRecycle Director Margo Reid Brown. “CalRecycle investigators will continue to work with law enforcement to put a stop to recycling fraud and hold accountable those responsible.”

California's program began in 1987. Last year, 82 percent of the CRV cans and bottles purchased in the state were returned for recycling. California is one of 11 states with a bottle and can redemption program.

To learn more about CalRecycle and the California Beverage Container Recycling Program, visit http://www.calrecycle.ca.gov/. CalRecycle contact: Mark Oldfield (916) 319-9942 or (916) 616-9683 (cell) or mark.oldfield@CalRecycle.ca.gov.

The suspects’ booking photographs are available upon request.

SACRAMENTO – The California Attorney General’s Office announced the arrest today of a con man who defrauded entrepreneurs by promising to help them secure patents on inventions ranging from sophisticated software to garden products but then stole their inventions and made thousands of dollars selling their patent rights.

“This thief of intellectual property pretended he was helping entrepreneurs obtain patent protection but instead sold their inventions and took all the profits,” said Attorney General Edmund G. Brown Jr.

Today, Franklin Michael Beninsig, 53, who currently lives in Reno, was arrested and booked in Washoe County Jail. He faces four felony charges in Sacramento County, including theft and embezzlement. If convicted, he could receive five years in prison. Bail was set at $50,000.

From 2004 to 2008, Beninsig represented himself as a patent law expert and investment consultant. At his Hot Pepper Ventures office on Investment Boulevard in El Dorado Hills, Beninsig wooed entrepreneurs by promising to help them file patent applications with the United States Patent and Trademark Office. He claimed he worked with ghost writers and patent lawyers in India who could draft patent applications quickly and inexpensively.

But when Beninsig filed patent applications for his clients’ inventions, he listed himself as either the sole inventor or a joint inventor.

Bob Pingree, chief executive of Nexxus Systems in Scottsdale, Arizona, paid Beninsig $8,000 in 2004 to file a patent application for software that searches for online and broadcast media preferences. Beninsig listed himself on the application as the sole inventor.

When Pingree questioned him, Beninsig promised to remove his name, but instead he sold the patent rights for $55,000 plus royalties.

Jerry Ponzo, president of Backyard Dream in Granite Bay, met Beninsig in 2008 at an investors’ conference in Silicon Valley and later paid him nearly $13,000 to find investors for his new product, a three dimensional galvanized wire panel for climbing plants. Beninsig found no investors, but he claimed Ponzo’s patent applications were not written correctly and offered to fix them. Instead, he listed himself as a joint inventor, which Ponzo discovered when he checked the patent office’s website.

The Attorney General Office’s investigation began when it received a complaint from an entrepreneur who complained he gave $30,000 to Beninsig to find investors for his product, a biodegradable mobile urinal, intended for truckers and other long-haul drivers, called The iPee. Beninsig wasn’t charged in that case in part because he arranged some meetings with investors, which proved unsuccessful. But the entrepreneur tipped investigators to other disgruntled inventors with whom Beninsig was involved.

The Attorney General’s office is prosecuting Beninsig’s case. The complaint and arrest declaration are attached.

MARTINEZ, Calif. – The California Attorney General’s Office today filed criminal charges against three men who stole more than $150,000 from about 200 people by creating fake credit and debit cards from banking information they skimmed from ATM and credit cards through devices placed inside gas station pumps in Northern California.

“These thieves broke into gas station pumps and installed devices that collected customers’ debit and credit card numbers and ATM PINs,” Attorney General Edmund G. Brown Jr. said, “and later they used that stolen information to create fraudulent cards, make purchases and withdraw thousands of dollars from victims’ accounts.”

David Karapetyan, 32, Zhirayr Zamanyan, 30, and Edwin Hamazaspyan, 31, all of Los Angeles, were scheduled to appear today in Contra Costa County Superior Court to face charges. The complaint against them includes 42 counts of felony identity theft and one count of conspiracy.

If convicted on all charges, the three could each face up to 31 years in prison.

In March, the Attorney General’s office took over prosecution of the case from the Contra Costa District Attorney’s office because the crimes occurred in multiple jurisdictions throughout Northern California. An amended complaint was filed today.

In their high-tech crime spree, the three traveled to gas stations and banks across the Bay Area in a rented Cadillac Escalade. From November 2009 to February 2010, they are believed to have stolen $158,800 from 196 people.

They acquired keys to unlock various kinds of gas station pumps. Once they opened the pumps, they were able to connect two cables inside to their two-inch electronic device, which looked like a circuit board encased in electrical tape, and recorded ATM and credit card data as well as victims’ PINs. No tampering was visible on the outside of the pumps. The trio would later return to retrieve the skimmers, which took less than 20 seconds.

The investigation began in February when police in Solano and Contra Costa counties reported an increase in identity theft and a 7-11 Store employee in Martinez noticed a skimming device inside a gas pump. Police removed the device, replaced it with a mock device and conducted 24-hour surveillance. Karapetyan and Zamanyan were arrested when they arrived to remove the device. In total, seven devices were found inside gas pumps in Martinez, Benicia, Livermore, Hayward, Oakland, San Mateo and Sacramento.

Banks have reimbursed the victims.

The Northern California Computer Crimes Task Force, a partnership of 17 local, state and federal agencies, led the investigation with assistance from the U.S. Secret Service, Martinez Police Department and the Glendale Police Department.

MODESTO-- Attorney General Edmund G. Brown Jr. announced criminal charges today against three people who marked cards at the Turlock Poker Room and stole $24,000 in 30 minutes.

“These people wanted to ensure they would win big at blackjack so they rigged the game, putting hard-to-detect grease marks on the outside edge of the King, Queen, Jack and 10s as well as marks on other cards,” Brown said. “They won $24,000 in 30 minutes but today face felony charges for their actions.”

Robert Younan, 46, a Turlock Poker Room floor supervisor, Gabriel Urbieta Rodriguez, 71, and In Cha Say, 58, were scheduled to be arraigned today in Stanislaus County Superior Court in Modesto. The three are charged with a total of 11 criminal counts including burglary, conspiracy, grand theft and winning by fraudulent means. If convicted, they could each could face a maximum of three years and eight months in prison.

Agents with the state’s Bureau of Gambling Control arrested the suspects last month for crimes that took place on July 12 at the Turlock Poker Room, which operates 12 tables of card games 24 hours a day.

In two hours, Rodriguez played at a blackjack table where players bet a minimum of $25 and a maximum of $2,500 per hand.

At first, Rodriguez lost more than $6,000. But then, playing two or three hands at the same time, he began to win. Turlock Poker Room employees became suspicious of his unusual playing patterns.. Sometimes, when his cards added up to 17, Rodriguez would ask for another card, or “hit” – the opposite of normal strategy. Other times, he would “stand,” or decline another card, when his cards totaled 11 – also contrary to usual play. In a span of 30 minutes, he won more than $24,000.

After poker room employees introduced new cards to the table, Rodriguez immediately cashed his chips and left. Agents with the Bureau of Gambling Control later found the cards Rodriguez had played showed grease marks indicating their value. For 10s and face cards, there were marks on the outer edge, while 7s, 8s, and 9s cards were marked at the center. Other cards - aces, 2s, 3s, 4s, 5s and 6s - were not marked.

A review of surveillance video before Rodriguez began winning showed Say placing a large yellow bag behind Younan, the card room floor supervisor. Younan walked to the bag and minutes later, swapped out the cards in the six deck “shoe,” a container that held the three decks of red-colored cards and three decks of blue-colored cards on the blackjack table where Rodriguez was playing.

The case is being prosecuted by the Stanislaus County District Attorney.

The Attorney General’s Bureau of Gambling Control regulates gambling in the state. It ensures that gaming is conducted honestly, competitively and free from crime and corruption. So far this year, the Attorney General has made 100 felony arrests related to gaming-related crimes, such as counterfeit cases, loan sharking, extortion and robbery. For more information, please see: http://ag.ca.gov/gambling/

The complaint is attached.

SAN FRANCISCO – Following his office’s negotiations with the state’s top loan servicers and today’s announcement by Bank of America that it is temporarily halting foreclosures nationwide, Attorney General Edmund G. Brown Jr. today called on the state’s other lenders to halt foreclosing on California homes until the banks can demonstrate that they are complying with state law.

"All lenders should halt foreclosures until they clear up this mess and ensure that the process is fair and complies with California law,' Brown said. 'Bank of America has taken an important step, and the other major lenders should follow its lead.”

California law prohibits lenders from recording notices of default on mortgages made between January 1, 2003 and December 31, 2007, unless, subject to limited exceptions, the lender contacts or tries diligently to contact the borrower to determine eligibility for a loan modification. A notice of default must include a declaration of compliance with California law.

In the past few weeks, Brown’s office has been in discussions with Bank of America, Ally Financial, JP Morgan Chase, Wells Fargo and OneWest to ascertain whether they are complying with California law. Brown’s office has called on those banks to show they are complying with state law before continuing with foreclosures.

JP Morgan Chase, the nation's third largest loan servicer, Ally Financial and One West have admitted that employees approved and signed foreclosure documents without first fully reviewing the borrowers' loan files. As a result, those borrowers lost their homes based on affidavits the bank never confirmed were accurate.

Ally Financial and JP Morgan have suspended foreclosures in 23 other states that, unlike California, require a court order for foreclosures.