Archive for the ‘Crimes’ Category

GARCIA INDICTED!

Tuesday, June 21st, 2016

On June 16, 2016, Sergio Garcia, Sr. and Sergio Garcia, Jr. were indicted for various real estate related frauds. The US Attorney for the Northern District of Indiana and the Gary Post Tribune give further details. The Garcias have shamelessly defrauded the public for years and the Garcia Victims Committee is pleased to see that justice will finally be served upon them.

HUD Scams

Saturday, March 12th, 2016

Sergio Garcia and his children, Sergio Garcia II and Tomi (aka Tomasa) Johns, continue to perpetrate a variant of the “Phony Hold” involving HUD homes. The HUD Scam starts with the Garcias finding homes foreclosed by the federal Department of Housing and Urban Development (“HUD homes”) that have been assigned to local real estate brokers for resale to the public. The Garcias then obtain access or break into the HUD homes in order to remove the authorized broker’s marketing materials and signs. Later, the Garcias advertise the HUD homes “for sale” on craigslist and place signs on light poles or around the neighborhood. After luring in a victim, the Garcias offer to “sell” the HUD home to the victim offering incredible deals and request a large “earnest money deposit” to secure the sale. No sale occurs and the victims are out their earnest money.

The Committee to Obtain Justice for the Victims of Sergio Garcia, Inc. recently assisted another Garcia victim and obtained a $5,000 recovery. Here is a copy of the Complaint filed in Federal Court.

Garcia Victims’ Committee Reports Successes

Monday, September 29th, 2014

Since 2013, the Committee to Obtain Justice for the Victims of Sergio Garcia reports assistance and recoveries for victims:

S.H. defrauded by a Phony Hold. Recovered $1,902.00 after litigation.
M.H. defrauded of down payment on house. Recovered $5,000 after law enforcement became involved.
A.W. defrauded by a Phony Hold. Recovered $2,720 after litigation.
S.P. defrauded into purchasing a condemned home. Judgment of $6,000 entered; collection underway.
C.M. defrauded $5,000 down payment on property. Recovered $5,000 after litigation.
D.B. defrauded $5,000 down payment on property. Investigation pending.

If you are a victim of Sergio Garcia or his co-conspirators, the Garcia Victims’ Committee may be able to assist you. Call (219) 803-4550 and ask to speak with Jonathan Petersen.

Sergio Garcia and the “Phony Hold”

Tuesday, February 5th, 2013

A Phony Hold occurs when a victim gives a money deposit in reliance on false representations that a house is “For Rent” or “For Sale.”  Here’s how this works:  Garcia and his co-conspirators install signs on vacant or foreclosed houses and advertise the houses on the internet through Craigslist or other websites. The signs and ads request the victim to call a telephone number for more information about each house offered “For Rent” or “For Sale.”  After calling, an appointment is scheduled to show the house to the victim.  While at the property, Garcia or his co-conspirators determine how much the victim can afford and then request the victim to pay a “hold” deposit to reserve the house.    Later, the victim discovers that the house is not available and Garcia and his co-conspirators will refuse to refund the deposit.

  1. The House: For this Phony Hold example, the house was located at 36 Ruth Street, Hammond, IN 46320.
  2. The Perpetrators: Although Kerusso Real Estate LLC, had recently taken title to the house, Kerusso Asset Management LLC advertised the property.  Both of these companies are owned by Garcia or other co-conspirators.  Interestingly, Garcia often does not own the houses that are advertised “For Rent” or “For Sale.”
  3. The Victim: The victim, S.H., found an advertisement on the now defunct website www.4closed.net offering 36 Ruth Street “For Rent” and called the telephone number 219-972-9999.
  4. Showing the Property: S.H. was instructed to go to 36 Ruth for a showing.  After she arrived, she met Garcia co-conspirator Pedro Gonzalez.
  5. The Phony Hold: During the showing, Pedro asked S.H. to pay a deposit of $1,200 to hold the property.  See Payment from Victim After her payment, S.H. was given the Phony Hold Agreement.
  6. Discovering the House isn’t Available: About a week later, S.H. was called by Sergio’s brother, Manny Garcia, and told that her credit didn’t go through.  Manny demanded that she pay an additional $1,600 to keep 36 Ruth Street.  After refusing to pay more money, S.H. requested her deposit back.  Garcia refused to refund the money.
  7. The Crime: The Phony Hold is both a violation of Indiana Code 35-43-4-2 Theft, a Class D Felony and Indiana Code 35-43-5-3, Deception, a Class A Misdemeanor.
  8. How this Hurts YOU: In some instances, we believe victims have lost their entire life savings due to the Phony Hold.  The Phony Hold impoverishes innocent victims seeking a good home, hurts honest sellers and landlords by reducing the number of available buyers/tenants and increases law enforcement costs and property taxes.

If you are with law enforcement or a victim of Sergio Garcia, more information can be obtained by contacting the Committee to Obtain Justice for the Victims of Sergio Garcia, Inc.; Jonathan Petersen, Executive Director; 1544 45th Avenue, Suite 3, Munster, IN 46321, (219) 803-4550.

The Garcia Victims’ Committee is pleased to report that the above described victim obtained a full recovery after litigation assisted by a committee attorney.

Criminal Prosecution of Sergio Garcia II

Tuesday, September 25th, 2012

On September 27, 2013, The Northwest Indiana Times reported on an award presented to Highland Detective John Siple for his investigation of “Phony Holds” in Highland.

As a result of Detective Siple’s work, Sergio Garcia II, the son of Sergio Garcia, was charged with felony theft and misdemeanor deception by the Lake County, Indiana Prosecutor’s office.  You can access more information through the Lake County Clerk’s web portal.  Choose “Search for specific case” and copy case number 45G01-1201-FD-00013 into the search field.

The Garcia Victims’ Committee also learned that $5,000 in restitution was paid to the victims of these crimes.

Court Dismisses Bankruptcy after Showing of Misconduct

Saturday, January 7th, 2012

Sergio Garcia has employed many different companies to further his criminal activities and defraud his creditors.   According to court filings by creditor Arthur D. Pringle III, Garcia and his wife used one of those companies, Kerusso Real Estate, LLC, to funnel funds for a Ponzi scheme.  Pringle and other creditors sued, but Garcia put Kerusso Real Estate LLC into bankruptcy and then engaged in further illegal activities.  After discovering this wrongdoing, Garcia’s creditors obtained a dismissal of the bankruptcy that included an order forever barring Kerusso Real Estate LLC  from filing for bankruptcy for itself or any of the properties that it owns.  Exhibit 1 A dismissal of this nature is very rare and only issued after a showing of serious misconduct.

Sergio Garcia and “The Flip & Clip”

Sunday, January 9th, 2011

A Flip & Clip mortgage fraud occurs when multiple loans are fraudulently placed on a single property.  Ultimately, the subject property is overencumbered, the loans go into default and the lenders suffer large losses.

  1. The Perpetrator: Here, Sergio Garcia uses one of his many front companies Kerusso Konstruction Kompany, LLC also known as KKK, LLC with an office at 2931 Jewett Avenue, Highland, IN 46322.
  2. Identify a Property: Next, Garcia identified a valuable property.  On or about October 18, 2005, KKK, LLC, by Garcia, executed a purchase agreement for the property located at 930 Mohawk Drive, Crown Point, IN 46307.  Exhibit 1
  3. Obtain the First Mortgage Loan: On November 22, 2005, Garcia obtained a loan from Pilgrim Financing, LLC in excess of $123,000 for the purchase of 930 Mohawk.   Exhibit 2 Meridian Title Corporation served as the title insurance company and closing agent.  Interestingly, Pilgrim required as a loan condition that the mortgaged property be placed into trust in order to prevent the borrower (i.e. Garcia) from manipulating the title.   Exhibit 3
  4. The Flip, Part A: Since the trust agreement would force Garcia to pay-off Pilgrim when he sold the property, observe what Garcia did next.  On or about January 3, 2006, Garcia misrepresented that he was an officer of Austin Bertrand, Inc. and created a fraudulent Trustee Deed in order to deed 930 Mohawk back to Kerusso Konstruction Kompany, LLC.  As a result, Garcia controlled title to the property and interposed a deed between the original sale and mortgage loan on November 22, 2005 and his subsequent activities.  Exhibit 4
  5. The Flip, Part B: With control of title to 930 Mohawk, Garcia needed a new lender to provide a new “purchase money” mortgage loan on the property while simultaneously concealing the existence of the prior loan from Pilgrim.  If successful, Garcia could then pocket the proceeds of the new loan.   How did Garcia do it?
  6. Characteristics of the Fraud – Speed: Garcia had to move fast.  Remember, the original sale and mortgage loan occurred on November 22, 2005.  Although that mortgage was recorded on December 21, 2005, a “GAP” period existed in the Lake County Recorder’s office between when the mortgage document was recorded over the counter and when the document would appear in the public records.  During the GAP period, a title report would not show the mortgage in favor of Pilgrim and Garcia could falsely claim that he owned 930 Mohawk “free and clear.”
  7. Characteristics of the Fraud - Use a different Title Company: Obviously, the title company involved in the prior sale and mortgage loan from Pilgrim would require a pay-off from Garcia.  Consequently, Garcia found a new title company, Stewart Title Services, to close the later “sale” to his co-conspirator, Hector Rodriguez, who is the step-father to Garcia’s wife.  Exhibit 5 (See blue arrow in exhibit identifying the new title company)
  8. Characteristics of the Fraud – Deceive the new lender: Garcia deceived the new lender (and new title company) by executing a fraudulent Vendor’s Affidavit.  Through the Vendor’s Affidavit, Garcia falsely swore that he had not “…permitted anyone in [his] behalf to execute, any…mortgage…upon the Real Estate…”  Exhibit 6 (See red arrow in exhibit)
  9. The Clip: So who was damaged?  Clearly there are two lenders who each believed that they had a purchase money mortgage on 930 Mohawk.  After the music stopped, only one of the lenders would have security for its loan.  At this time the losses for both lenders exceed $500,000 including court and legal fees, lost payments, and property maintenance costs.  By contrast, Garcia obtained monies in excess of $273,000 and control of 930 Mohawk. Not surprisingly, both lenders have sued Garcia.  See attached the lawsuit by the second lender seeking to recover for its losses.  Exhibit 7
  10. The Crime: Presently, Garcia remains unindicted for his actions.  Nevertheless, Garcia and his co-conspirator violated 18 USC § 1344 Bank Fraud.  This crime is a felony carrying a fine up to $1,000,000 and imprisonment up to 30 years.  For law enforcement, attached is an indictment ready complaint for this crime.  Exhibit 8
  11. How this Hurts YOU: Mortgage fraud affects you in many ways.  1)  It reduces the money available to honest borrowers and drives up interest rates and transaction costs; 2) It hurts neighborhoods since foreclosed homes are often blighted, vandalized or otherwise an eyesore; 3) It increases your property taxes since foreclosed homes cost the community money in lost tax revenues and additional services.

If you are with law enforcement or a victim of Sergio Garcia, more information can be obtained by contacting the Committee to Obtain Justice for the Victims of Sergio Garcia, Inc.; Jonathan Petersen, Executive Director; 1544 45th Avenue, Suite 3, Munster, IN 46321, (219) 803-4550.

Our Goal: Justice for the Victims of Sergio Garcia

Saturday, January 1st, 2011

Sergio Garcia (aka Sergio Garcia, Sr. aka Serjio Garcia aka Serjio Ernesto Garcia) has defrauded millions of dollars from victims throughout Northwest Indiana and Chicagoland in what appears to be a decade long real estate and mortgage fraud conspiracy. Garcia lived in St. John, Indiana and has claimed to live in Highland, Indiana. Presently, Garcia lives in Chicago. He has or had offices in Highland, Griffith and Munster, Indiana but now moves around shared office spaces in downtown Chicago attempting to appear as a legitimate company. Although, Garcia falsely advertised that he is a broker, he has admitted under oath that he is not a licensed real estate agent. We have also observed that Garcia has created a number of “clutter” websites to distract search engines from producing results related to his fraudulent activities.

Between 2014 to 2016, Sergio Garcia II, the son of Sergio Garcia, appeared as the public face for his father. In 2016, we have seen that Sergio’s daughter Tomi (aka Tomasa) Johns and son-in-law Nathan Johns are the public face for Sergio Garcia. In either case, victims report that a mysterious “boss” (i.e. Sergio Sr.) continues to be involved behind the scenes.

This website is dedicated to exposing the criminal activities of Sergio Garcia and his co-conspirators and bringing them to justice.