Grover Beach man pleads guilty to loan fraud

January 29, 2013

grover beach manA Grover Beach man and his brother pled guilty last week to committing loan fraud to fund their music business and a singer in a rock bands lavish life style.

Jason Salazar, 28, of Grover Beach and Matt Salazar, 29, of Valley Village, who are co-owners of the Burbank-based Matt Salazar Recording Productions and part-owners of LA Sound Gallery, admitted in court that they provided false documents to Bank of America, Greystone Bank, and Huntington National Bank to obtain about $1.7 million in loans for their music business.

In a related case, Robert Brandon Mawhinney, the frontman of a Los Angeles-based rock band called Lights Over Paris, was charged with submitting false documents to banks to fraudulently obtain millions of dollars worth of loans, money that he allegedly used to fund his band and his lavish lifestyle.

Mawhinney used the Salazars’ studio to bolster his own fraudulent loan applications. Mawhinney met with a Comerica loan officer at their recording studio and falsely claimed to be an owner of the studio.

During the hearing last week in United States District Court, United States Magistrate Judge Charles F. Eick ordered Mawhinney held without bond after determining that he posed a flight risk, given Mawhinney’s frequent travel abroad, conflicting information about his finances, and the fact that he had sent hundreds of thousands of dollars to Cyprus.

Mawhinney, who uses the stage name Robb “TaLLLLL” University, was arrested at Miami International Airport earlier this month after he returned from a trip to Buenos Aires. Mawhinney was arrested pursuant to a criminal complaint that alleges he applied for loans by submitting phony brokerage statements that falsely showed that he had almost $8 million in assets. The phony statements were altered versions of real statements that showed less than $10,000 in the brokerage accounts.

According to the affidavit in support of the criminal complaint, between August 2009 and April 2011, Mawhinney obtained four loans from Comerica Bank totaling approximately $6.25 million. Mawhinney defaulted on the loans, causing Comerica to suffer losses of approximately $6 million.

Mawhinney allegedly told bank officials that he needed the money to fund his music business and to purchase recording equipment. According to investigators, Mawhinney used the money from the Comerica loans and loans from other banks to pay for travel, entertainment, and a luxury tour bus that cost well over $750,000.

The other banks that issued loans to Mawhinney and suffered losses were JP Morgan Chase, Zions Bank, and Bank of America, according to court documents.

Mawhinney is charged with making a false statement in a loan application. If he is convicted of the charge in the criminal complaint, Mawhinney would face a maximum statutory penalty of 30 years in federal prison. Mawhinney is scheduled to be arraigned in this case on February 11.

The case against the Salazars has been assigned to United States District Judge Judge Cormac J. Carney, who will schedule a hearing for the brothers to enter their guilty pleas. Once they plead guilty, each of the Salazar brothers will face a statutory maximum penalty of five years in federal prison.

The cases against Mawhinney and the Salazar brothers are the product of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation.

 


7 Comments

  1. hotdog says:

    And what about our local crooks, Miller and Gearhead, still free and having martinis on us? The courts, lawyers, regulators, trustees and other vermin are making a killing while the victims rot. After 5 years of known fraud to the tune of over $125 million stolen from mostly senior citizens the crooks are still free, still enjoying the fruits of their crimes while the victims have lost their homes, die of old age or live out their remaining few years full of strife and worry because all their money was stolen. Rotten system. I hope these music crooks rot in jail, even though they stole from banks we will pay for it somehow, it is always us who pay for all the crimes of the white collar crooks. The fines and jail time never match the depth of the losses.

    Like or Dislike: Thumb up 15 Thumb down 0

  2. Robert1 says:

    And here I thought there was honor amongst thieves-

    Too Big to Fail, Not Too Big for Jail
    http://www.thenation.com/article/too-big-fail-not-too-big-jail#

    Like or Dislike: Thumb up 5 Thumb down 0

  3. The Gimlet Eye says:

    Speaking of banksters,

    Libor Lies Revealed in Rigging of $300 Trillion Benchmark — The benchmark rate for more than $300 trillion of contracts was based on honesty. New evidence in banking’s biggest scandal shows traders took it as a license to cheat.

    http://www.bloomberg.com/news/2013-01-28/libor-lies-revealed-in-rigging-of-300-trillion-benchmark.html

    Like or Dislike: Thumb up 2 Thumb down 3

  4. Bert says:

    Potentially 30 years for Mawhinney for $6 million. Put that in perspective with the two, and arguably the only two, wall street crooks who were sentenced to prison after the 2008 crash they created…

    -Michael J. McGrath Jr., former president of U.S. Mortgage Corp., got 14 years in prison for orchestrating a conspiracy that defrauded credit unions and Fannie Mae of $136 million.

    -Lee B. Farkas, former chairman of Taylor, Bean & Whitaker Mortgage Corp., got 30 years in prison and was ordered to forfeit $38.5 million, for his role in a $3 billion scheme to rip off banks through the sale of fake mortgage assets.

    Wall street stole from each and every one of us. Virtually no consequence. We are f***ked.

    Source- Christian Science Monitor- http://www.csmonitor.com/USA/Latest-News-Wires/2011/1011/Fact-or-fiction-No-one-on-Wall-Street-went-to-jail-for-financial-crisis

    Like or Dislike: Thumb up 10 Thumb down 1

  5. abigchocoholic says:

    Exactly what I was thinking. How dumb must those bankers have been?

    Anyone who’s tried to refinance their home loan since the real estate crash knows the extensive verification process lenders now go through to research and verify and basically audit stated assets and incomes—all for what amounts to a non-recourse loan in the first place.

    If these commercial bankers had conducted even the most cursory of audits on bank accounts and cash flow, this ruse would have fallen apart like a soggy paper bag.

    Like or Dislike: Thumb up 11 Thumb down 0

    • tomsquawk says:

      Jr. Management (won’t call them Senior because they aren’t) set unrealistic goals for their lenders, encouraging more risk and rapid growth. you look like a rock star (how appropriate) for a while until the inevitable truth surfaces. same with the real estate debacle; great party until reality settle in. bankers are too busy looking at the shine on their wingtips.

      Like or Dislike: Thumb up 7 Thumb down 0

  6. tomsquawk says:

    shows ya how smart bankers are. bet the banker had some great lunches with those guys, though.

    Like or Dislike: Thumb up 14 Thumb down 0

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