PinnFund U.S.A.’s former chief executive officer reportedly sobbed as he was sentenced for one of the biggest fraud cases in southern California history.
Michael J. Fanghella — who last year pleaded guilty to being a coconspirator in a more than $300 million Ponzi scheme — was sentenced to 10 years in federal prison, according to an announcement from the U.S. Attorney’s office.
The government said Fanghella and his coconspirators raised more than $330 million from at least 166 investors in a sham that funded his exotic lifestyle amid losses at PinnFund. The Securities and Exchange Commission obtained a judgment against Fanghella for about $110 million.
The inspector general of the U.S. Department of Housing and Urban Development has said that the case represents “one of the largest investment fraud cases in Southern California.”
Fanghella cried during the sentencing and stood with his head bowed as the judge imposed the penalty, the Associated Press (AP) reported.
In addition to operational losses, Fanghella spent more than $100 million on parties, call girls, alcohol, drugs, and gifts for a porn actress — including a $5 million home. Some of PinnFund’s executives allegedly helped Fanghella hide losses from investors by preparing and disseminating false financial statements.
As the scam began to unravel, Fanghella planned to escape to the Caribbean on $1 million yacht, but was stopped when his estranged wife found out and obtained an injunction preventing the yacht from sailing. Fanghella then disappeared until he surrendered in August 2001.
“You don’t run from your problems,” Fanghella was quoted by AP as saying upon his surrender.
In addition to 10 years in prison, Fanghella also was ordered to pay $234.3 million in restitution, the U.S. Attorney’s office said.
At his sentencing, AP reported that the former fugitive said, “my very presence here today is about doing the right thing with honor, character, and integrity.”
Read the following articles about the PinnFund saga:
- 09.05.02 Two More Plead Guilty In PinnFund Scam — Former CFO admits to role in fraud financials
- 04.03.02 Guilty As Charged — Former PinnFund Chief Fanghella pleads guilty
- 03.21.02 Fanghella Faces Trial In May — The PinnFund Saga
- 08.02.01 PinnFund Fugitive Surrenders — Michael Fanghella surrenders to U.S. Marshals in San Diego
- 05.14.01 Former PinnFund CEO Planned To Escape To Caribbean On $1 million Yacht — Estranged wife obtained injunction preventing yacht from sailing
Other articles about mortgage fraud cases include:
- Patrick McNamara, a mortgage broker, lies on stand in $67 mil mortgage fraud case
- Builder A. William Erpenbeck, Jr. directed his employees to deposit checks made out to construction lenders to the company’s own bank account.
- Angel L. Serrano Jr. accused of duping mortgage lenders in a Massachusetts flip scheme.
- Fraud Flips National Phenomenon: A look at mortgage fraud schemes.
- Atlanta fraud network responsible for more than $100 million in losses.
- Several southern California individuals have been charged for defrauding lenders and HUD of millions.
- The Provident Bank has reportedly filed a civil lawsuit against Community Home Mortgage Corp., accusing the company of fraud.
- Todd H. Charske and Gregory B. Romer of Kemper Financial Inc. are accused by the FBI of operating a flipping scheme and defrauding Meritage Mortgage Corporation
- According to the Suspected Fraud Activity Index for August of this year, the state showing the most deterioration in the Fraud Index combined with the higher activity levels is Texas.
- Two Virginia men are accused of using a Virginia title insurance agency to illegally divert loan proceeds for their own benefit.
- 83 individuals have been indicted by a Cleveland grand jury for participating in mortgage fraud schemes.
- Three Peoria, Illinois women were sentenced for their involvement in a mortgage loan scam where they defrauded a bank of $1.7 million in a classic flip transaction scheme
- Shirley Harwood and her employee pled guilty to defrauding two lenders out of more than $6 million
- Loan originator Brian J. Wilkozek and two loan processors are among fifteen people indicted in a south side Chicago “flipping” scheme
- Edward Rostami was sentenced to a year in prison for using a fraudulently obtained property title to obtain a $1 million loan
- Rene Abreu was among 11 people indicted in a case involving The Mortgage Pros, Inc. in Guttenberg, New Jersey
- David Allan Van Velzer, Jr., was sentenced to more than 8 years in prison for wire fraud and money laundering
- Kenneth Bradford and Jo Ellen Bryant received 10+ year sentences in a Georgia flipping case
- Seven indicted in AppOnline.com mortgage fraud scheme
- Indian authorities apprehended Rajiv C. Shah, one of two brothers that allegedly sold loans with fraudulent documentation to 3 U.S. lenders
- Loans originated by originated by Chapel Creek Mortgage Banker, Inc. could cost Chase Manhattan Mortgage Corp. between $10 and $20 million
- Kent E. Baklor was sentenced for defrauding two lenders of over $8.5 million
- Tamira Smyth was sentenced in a Chicago ‘flipping’ scam involving twenty defendants
- Former Las Vegas mortgage broker David Ferradino was sentenced to five years’ probation and ordered to pay $4.2 million in restitution to 90 investors
- Michael Graham received a sentence of more than 12 years in prison and was ordered to pay $515 million in restitution for his role in the failure of The First National Bank of Keystone.
- Yehuda Shiv was charged by the SEC with overstating the value of his clients’ assets by more than $139 million
- Cheryl A. Swain pleaded guilty to a charge of mail fraud in connection with her conduct as the VP for Marketing Syndication of MCA
- Robert B. Herbert, Jr. of Raleigh allegedly “embezzled and misappropriated moneys from Stewart Title.
- Donald Lukens allegedly defrauded more than 100 investors — including popular sports figures — of at least $12.5 million in a number of schemes, including one involving mortgage backed securities
- Steven D. Mueffelman and John S. Lombardi charged in a 15-count indictment with mail and wire fraud
- Raymond T. Jackman, JR. was sentenced to two years’ probation
- GreatStone Mortgage in Florida is accused of fraud, sexual harassment.
- The government is pursuing mortgage fraud cases in Charlotte and Cleveland.
- Miami family allegedly ran a mortgage fraud ring that swindled lenders out of $3.8 million.
- Maryland is the state with the most instances of possible fraud, according to Affinity Corporation’s ‘Suspected Fraud Activity Index’ for the months of June, July and August.
- Thomas Eck and Zahra Gilak made as much as $15 million, and defrauded investors of $100 million in sham that included online mortgage brokerage
- Richard Wood, a Las Vegas mortgage broker accused of bilking millions of dollars from dozens of investors in a nationwide Ponzi scheme, was gunned down outside his home.
- FBI Investigating Massive Mortgage Fraud Case In Spokane
- Richard Michael McDowell, who through southern California-based Active Home Loans and M&M Loan Service admittedly swindled an estimated $7 million from about two
