http://pleasantonweekly.com/print/story/print/2013/04/26/lenders-charged-with-fraud-theft-conspiracy


Pleasanton Weekly

News - April 26, 2013

Lenders charged with fraud, theft, conspiracy

CEO arrested while in court for attacking roommate

by Glenn Wohltman

Former financier William Hogarty was set for a preliminary hearing Monday on an allegation of attacking and threatening his former roommate at his Livermore mansion. Instead, he was led from the courtroom in handcuffs, facing 12 new counts of real estate fraud, three counts of criminal conspiracy and one count of perjury.

That's in addition to a civil case filed by several people who claimed he defrauded them and they lost their homes as a result.

Hogarty, 49, is the owner of the now defunct OF Lending, which claimed to do short-pay refinancing (SPR), allowing homeowners who were underwater on their homes to renegotiate with their banks.

The perjury charge stems from Hogarty's recent bankruptcy hearing, in which he was allowed to withdraw his filing by mutual agreement with the federal court.

Hogarty declared bankruptcy in 2011, which blocked him from being added to the civil case, filed by former clients.

The criminal case against Hogarty and three co-defendants is now being handled by Alameda County's real estate fraud division. A court filing in Hayward says Hogarty lied under oath to U.S. Bankruptcy Attorney Margaret McGee regarding his financial assets and interests.

"At the hearing, Defendant Hogarty committed perjury when he testified that he 'gave out $421,000' (in) refunds to clients," Alameda County court documents say. "Based on the foregoing investigation and OFL financial records collected by the U.S. Department of Justice - Office of the United States Trustee from Defendant Hogarty, he did not distribute $421,000 in refunds."

The documents also claim Hogarty and co-defendants James Allen Rivera Jr., Gregory Wayne Lomba and James Torpey conspired to defraud people of their property, that they conspired to commit false advertising, and conspired to collect advance fees.

The four are also charged with a combined 12 counts of grand theft, for taking more than $69,000 from clients who hoped to save their homes.

An inspector from the Alameda County District Attorney's Office "learned from former OFL employees that when Defendant Hogarty needed funds to pay for his overdrafts, mortgage, yacht or other personal expenses, Defendant Hogarty would instruct employees to pay for such expenses from his OFL bank accounts." The inspector "also learned from former OPL employees that OFL bank accounts were consistently overdrawn $80,000 to $100,000 and OFL received daily calls from banks regarding overdrawn checks," court documents say.

A second inspector " determined that 66 OFL victims paid a collective total of $369,326.79 in advance fees to Defendant Hogarty and/or his OFL associates for a reduced mortgage in the SPR program," according to court documents. "All 66 victims were unsuccessful in their efforts to obtain a reduced mortgage in OFL's SPR program and only 8 out of the 66 victims received a partial refund totaling $26,875 from Defendant Hogarty and his company OFL."

According to court documents, Hogarty was "fully aware that Wells Fargo Bank, Chase Bank and Bank of America did not participate in the SPR program," and he told his employees to sell the program to clients even if they had Bank of America home mortgages.

He also "encouraged OFL associates to charge as much as they could in advance fees from potential OFL clients," and, when a law was passed prohibiting advance fees, OFL continued to collect those fees from clients, court documents state.

Hogarty and Rivera falsely advertised a high SPR success rate to potential clients, when in reality the success rate was 3% or less, according to court documents, which say the advance fee for an SPR was determined by Hogarty, and that "many applications that OFL sent out to their client's lenders were incomplete."

In one case, where the mother of a client went to OFL's offices and demanded documents about her son's account, Hogarty became irate, pushing her and knocking her glasses off, court documents say.

In a recent interview with the Pleasanton Weekly, Hogarty said he was not responsible for any of the losses to OFL's clients.

"None of these clients were my clients. They were all agents' clients," he said, blaming Rivera for the misdealings. "He was the man behind 80% of the problems. I paid dearly for that."

He also blamed the victims, saying some of them now say they don't know what they signed.

Hogarty appeared on a Bay Area television show, "View from the Bay," in January 2010, where he promoted his company, and claimed he'd saved one woman $370,000 by doing a short-pay refinance. On the show, Hogarty advised people to never submit false or untruthful information.

"The truth is always best," he told the show's hosts.

Hogarty, Rivera, Lomba and Torpey also face additional time under a California enhancement that increases possible prison time for white collar crimes. The four, court documents say, had a "pattern of related felony conduct" that involved "the taking of and results in the loss by another of more than $100,000."

Hogarty, the 2005 Mr. California Bodybuilding Champion, still faces felony aggravated assault and threats charges, in which his former roommate claims he was choked until he nearly blacked out. The preliminary hearing was postponed when Hogarty was arrested on the new charges.

He has since been released on bail, and the $250,000 bond from his criminal charges was renewed. Lomba and Torpey were each being held on a $100,000 bond, and Rivera could not be located.

In the civil case, 22 people have claims under the lawsuit that now includes Hogarty. Virtually every employee of the company was named in the suit, including both Hogarty's wife, Christy, and his ex-wife, Micaelanne Hogarty -- along with Riviera, Tiffany Carr and Lomba. That case alleges clients paid upfront fees ranging from $1,200 to $12,000, for the company's short-pay refinancing services.

At least three people have already won judgments against Hogarty.

Hogarty sold his own home in a short-sale deal. The 12,978-square-foot mansion, with eight bedrooms, a 12-car garage and swimming pool was promoted by Hogarty and his wife Christy as Northern California's answer to the Playboy mansion. It was the scene of risque parties, such as the Fallen Angels Lingerie Party and Mardi Gras at the Mansion. Hogarty said those parties were in full compliance with the law.

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