Archive for January, 2011

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.

What to Do if YOU are a Victim of Real Estate or Mortgage Fraud?

Sunday, January 2nd, 2011

If you have been victimized by real estate or mortgage fraud, an attorney may be able to assist you you.   Call the Law Office of Jonathan Petersen for more information on your legal rights at (219) 803-4550.  Whether you seek a recovery from the perpetrator or you need debt relief, my office is prepared to assist you.

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.