Mortgage scam suspects appear in federal court

A follow-up to an I-team report about a real estate scheme that ruined the credit of dozens of Bay Area investors.
June 3, 2010 6:27:06 PM PDT
A follow-up to an I-Team investigation about a statewide real estate scheme that ruined the credit of dozens of Bay Area investors and cost others their life savings.

The case finally wound up in federal court on Thursday, but the man who prosecutors say was behind it all is still on the run.

Former investors gathered at the federal courthouse in Oakland to see suspects in a real estate investment scheme face charges.

"How can you do that to all these people? I mean, a lot of us have families and little kids, and we're just barely getting by," former investor Melissa Gay said.

A federal grand jury indicted Jim McConville last month for mail and wire fraud.

Property records show that his real estate scheme may have earned him more than $10 million.

McConville is still on the run from the FBI, but three others accused of helping him made their first appearance in federal court in Oakland on Thursday. Each of them faces a single count of conspiracy to commit mail and wire fraud.

According to the federal indictment, Jason Piette, a realtor who worked for McConville, used Photoshop to create false bank statements. Donna Demello, an escrow officer at Stewart Title, helped hide large payments to McConville's companies from lenders and Araks Davoudi, a personal banker at Citibank, kept falsified deposit records.

All three entered not guilty pleas and were released on a $50,000 bond.

Laura Caton, another former employee of McConville's, made her second appearance in court on Thursday. She pleaded not guilty and has been released on bail of $250,000.

"Hopefully they will find him. He's caused a lot of people a lot of heartache," former investor Gene Campbell said.

Investors tell the I-Team they hope the FBI arrests McConville soon.

"I want to get Jim McConville. He's the one who caused all the heartache with all these people. He's ruined our lives," former investor Charlene Lujan said.

All of the defendants at court declined to speak to us for this story. The maximum penalty for mail and wire fraud is 30 years in prison and a $1 million fine. We'll keep you posted on the case.


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