Two Charged in National Real Estate Scam

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Source: Department of Justice


Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced [in December] , a grand jury in East St. Louis, IL, returned an indictment charging two California residents for their participation in a nationwide telemarketing real estate scam. Michael S. Davenport, 49, of Santa Barbara, CA, and Cynthia L. Rawlinson, 51, also of Santa Barbara, CA, were both charged with conspiracy to commit mail and wire fraud, five counts of wire fraud, and one count of mail fraud. The indictment arises from Davenport’s and Rawlinson’s participation in a Santa Barbara based telemarketing business. The business changed names several times, but was known at various times as MDSQ Productions, LLC, Housing Standard, LLC, Anchor House Financial, American Standard, American Standard Online, and Your American Standard (for ease of reference hereafter “American Standard”).

According to the indictment, American Standard placed ads on Craigslist stating that certain houses were available for sale or rent at very favorable prices. When individuals called in response to these ads, American Standard salespersons told them they would have to purchase American Standard’s list of houses in order to get more information about the property in the Craigslist ad. The salespersons also said that the houses on the American Standard list were in

“pre-foreclosure,” that the customers could purchase the houses by simply taking over the homeowners’ mortgage payments, and the deeds to these homes would then be transferred into the customers’ names. The salespersons told the customers that there was a $199 fee for access to the list, but claimed that this $199 fee would cover title searches and deed transfers. In addition, regardless of what area of the country the customers lived in, the salespersons told them that the list contained numerous pre-foreclosure properties that were available in their area.

The indictment further alleges that, after the customers paid the $199 fee, they learned that the houses on American Standard’s list were not available to be purchased. Instead, the customers found that a substantial number of the addresses contained on the list were fictional and/or no houses existed at those locations. In numerous other cases, the customers learned that the houses were not in pre-foreclosure or financial distress, and were not available to be purchased at below market prices. If the customers asked for more information about the houses they had seen on Craigslist, American Standard’s Customer Service Department informed them that the houses were no longer available.

The indictment charges that Davenport was the owner of American Standard and oversaw the operations of the company. It is alleged that Rawlinson started out as a salesperson, but was promoted to the position of Sales Manager for American Standard’s Santa Barbara office. American Standard also had a sales room located in Lompoc, CA.

According to the indictment, the conspiracy and scheme to defraud operated from approximately January 2009 through at least October 5, 2016. During this period, American Standard victimized over 100,000 people and defrauded these individuals out of more than $27,000,000. The victims were located in all fifty of the United States and the District of Columbia. At least 104 victims of the scam were located in twenty-two counties within the Southern District of Illinois, with multiple victims in both St. Clair and Madison Counties. In

addition, the indictment charges that American Standard’s list included 534 houses located in Southern Illinois.

Davenport and Rawlinson are scheduled to be arraigned on the indictment on January 17, 2018, at the Federal Courthouse in East St. Louis, IL.

Under the SCAMS Act, because it is alleged that the crimes took place in connection with telemarketing, and victimized ten or more persons over the age of 55, the maximum penalty for the conspiracy to commit mail and wire fraud charge is 30 years of imprisonment. Each of the individual mail and wire fraud counts carries a maximum sentence of 20 years in prison. The defendants can also be ordered to serve up to five years of supervised release after any term of imprisonment, can be fined up to $250,000 per count, and can be ordered to pay restitution to the victims. The indictment also seeks forfeiture of $853,210.11 that was seized from Davenport’s Merchant Processing accounts, and $104,000 in cash that was seized from Davenport at the Bill and Hillary Clinton Airport in Little Rock, Arkansas.

This case is part of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service. The Office of the Honorable Joyce E. Dudley, District Attorney for Santa Barbara County, and the Santa Maria Office of the FBI have provided substantial assistance in the investigation. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.

An indictment is a formal charge against a defendant. Under the law, that charge is merely an accusation and the defendant is presumed innocent unless proven guilty.

[EDitor's Note: This press release was postponed for posting due to the Thomas Fire and Montecito debris flow coverage]

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a-1519125753 Feb 20, 2018 03:22 AM
Two Charged in National Real Estate Scam

With every arrest and conviction of a white collar criminal, it just seems to reiterate that crime DOES pay. Also, how is anyone dumb enough to fall for obvious scams such as this?

Lucky 777 Feb 19, 2018 11:18 AM
Two Charged in National Real Estate Scam

Add to these stories the vast number of times that small businesses encounter embezzlement and fraud but do not prosecute, just quietly fire the employee. Bad role models and low morals abound.

a-1519062791 Feb 19, 2018 09:53 AM
Two Charged in National Real Estate Scam

All these comments and citing of other cases is proff positive that white collar crimes pays! ONly the stupid get caught.

Remember, "There's a sucker ....." Y

ou know the rest!

PamSB Feb 19, 2018 09:29 AM
Two Charged in National Real Estate Scam

We have one in Santa Maria (was all over the front page of the local papers at the time) who took close to $300,000 from the property management company she was working for, arrested, pled guilty, was sentenced to 1 year in county jail and restitution (yeah, sure!), and ended up spending a couple of weeks incarcerated, whereby they released her (overcrowding), slapped an ankle bracelet on her, and now, guess what? She's working for another property management company. Another one (Berkeley area) stole $190,000 from the current employer, for whom she applied for employment with a fake ID (her twin sister's). If she had told her real name, they would have discovered that she had just served 18 months for stealing $900,000 from her previous employer, mostly due to the fact that she owed restitution of $250,000 to employer #3 (robbing Peter to pay Paul, perhaps?). I could write a book (or two or three).

a-1519057650 Feb 19, 2018 08:27 AM
Two Charged in National Real Estate Scam

Amazing that with our system it was able to continue for 7 years and $27,000,000 before someone blew the whistle on them!

Mesarats Feb 18, 2018 03:46 PM
Two Charged in National Real Estate Scam

I hope they rot, but more likely they will have a little vacation in a country club institution, find God and be back for scam 2.0.
On a similar note the Trump appointee to oversee the Consumer Financial Protection Bureau, Mick Mulvaney plans to cease enforcement of predatory loan practices. He dropped the lawsuit against a company that was charging a annual interest of 950% and also dropped the investigation of Equifax‘s data breach of 143 million. It will only get worse.‘

PamSB Feb 18, 2018 03:53 PM
Two Charged in National Real Estate Scam

Mesarats: One of the attorneys I work with recently had to take a deposition from an inmate in Texas who is serving minimal time for a scam almost exactly like the one described here. It was his THIRD time behind bars for the same type crime. He was very talkative and during breaks in the deposition he chatted with my attorney friend. He bragged that he figured each scam would be good for about five years while he lived free and high on the hog, then he would be caught, spend a few years in the "country club" and conspire with "like minds" to come up with his next plan. 5 more years of living well, then back to living off the state. I kid you not!

PamSB Feb 18, 2018 01:03 PM
Two Charged in National Real Estate Scam

OK, let's see how much time they really serve! I help put these types of scumbags away and they usually spend about 17 days in jail (if that) and no victim ever gets a penny back. After 50 years in the business of helping put away these creeps, I'm more than disgusted with our legal system. That $27,000,000 is long gone and these degenerates laughed all the way to the bank!

Mesarats Feb 19, 2018 07:50 AM
Two Charged in National Real Estate Scam

PAMSB I doesn’t surprise me. Below is the JD press release for another guy in Montecito, Efstratios “Elias” Argyropoulos, who was arrested last month. Also in 2015 he bilked at least 3.5 million from people and settled that with the S and E. Then we have our police department embezzling accountant crook who didn’t serve any real time.

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