A California mortgage broker who contributed $1 million to buy naming rights at a college sports complex and pledged money for a cancer center is now sitting in a jail cell facing charges in a multimillion dollar fraud scheme. Also accused in the case is a former escrow officer of a major title insurance company.
Tony Daniloo, chief executive of the former DreamLife Financial in Modesto, Calif., and his wife, Nansi Masihi Daniloo, have been arrested and face 41 counts of felony grand theft in Alameda County.
Court papers filed by an Internal Revenue Service agent detail how Daniloo and his wife allegedly used a system of phony documents to bilk borrowers out of nearly $5 million.
Investigators believe the couple used the money to pay for a lavish lifestyle that included expensive jewelry, watches and luxury cars.
DreamLife Financial, a subprime lender, is no longer in operation, according to the court affidavit filed by the IRS agent.
News of the arrest comes just about a month after the couple put up $1 million under a five-year agreement to buy naming rights at a sports complex being developed by California State University’s Stanislaus campus.
At the time the school was thrilled with the deal.
“We are fortunate that the Daniloos have stepped forward to make such a bighearted contribution,” school President Marvalene Hughes said in a statement announcing the agreement.
But California State University is now returning the money and disassociating with the Daniloos.
In a statement the university said it has reached an agreement with the Daniloos to “postpone our partnership at this time.”
“The values and commitment to education by the Daniloos are recognized by this gesture,” the university said. “This is a decision to which both parties agree, without judgment. California State University, Stanislaus will return the contributions made and decline associated naming opportunities at this time.”
The statement from the school indicated that the Daniloos had also pledged $4.5 million to a medical center to build a cancer treatment center.
DreamLife appeared to be a successful company with seven offices. But Daniloo shut it down in mid-December as investigators converged, according to the affidavit.
DreamLife has also been accused of taking $4.2 million from the escrow accounts of its customers, according to a lawsuit filed by First American Title Insurance Co.
The IRS affidavit alleges Daniloo worked in concert with a First American escrow agent to alter documents showing that mortgages had been paid off when instead the money was being diverted into Daniloo’s personal bank accounts.
First American fired the escrow officer, according to the affidavit.
“The wires into Daniloo’s personal account show a pattern of fraud very similar to that involving loans processed by First American,” the IRS agent says in the affidavit.
“There was no legitimate reason for the funds from new mortgage loans to be wired to Daniloo’s personal account instead of being paid to the banks that held the old mortgage loans,” the agent said.
DreamLife employees were also “doctoring” customers’ financial records to they could qualify for loans, the IRS alleges.
In one instance, a 76-year-old woman was supposed to receive $38,000 cash through a mortgage loan she did with Daniloo.
But the woman did not receive the money and she eventually lost her home through a foreclosure because the old mortgage loan was not paid off.
Daniloo faces more than 30 years in prison. For now he only faces state charges, but federal authorities are also investigating.
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