Real-Estate Fraud Scheme Raised Millions of Dollars; Defendant Was…

Real-Estate Fraud Scheme Raised Millions of Dollars; Defendant Was Finalist for Naming Rights to San Francisco 49ers Football Stadium

SAN FRANCISCO — LAWFUEL – Law Jobs & Law News Network – United States Attorney Kevin V. Ryan announced that a federal grand jury in San Francisco earlier today indicted Tony J. Daniloo, of Turlock, California, on 122 charges of fraud and money laundering in connection with a scheme to defraud homeowners of millions of dollars in cash.

According to the indictment, Mr. Daniloo, 32, secretly embezzled large amounts of money from real-estate clients in the East Bay and the central California valley. From 2000 to 2002, Mr. Daniloo managed the Dublin branch office of Residential Credit Corporation, a mortgage brokerage company based in Westminster, Calif. In 2003, Mr. Daniloo co-founded DreamLife Financial, which maintained headquarters in Modesto and as many as seven branch offices, and served as President and CEO of DreamLife Financial until it closed in December 2004.

The indictment alleges that Mr. Daniloo’s clients at both Residential Credit Corporation and DreamLife sought to refinance their properties in order to convert the equity in their properties for their cash needs. Instead, according to the charges, Mr. Daniloo altered escrow documents to cause large amounts of cash intended for his clients to be deposited into his personal bank accounts.

In total, according to the indictment and a search warrant affidavit for a search executed by federal agents in December 2004, Mr. Daniloo defrauded homeowners of approximately $7 million in cash that the victim homeowners had intended be used for their own cash needs.

The indictment alleges that Mr. Daniloo laundered his criminal proceeds by making numerous “lulling payments” to victim homeowners, as well as spending massive amounts of stolen money to garner publicity for DreamLife. For example, according to the indictment, Mr. Daniloo made a $1 million pledge to the athletic department at California State University at Stanislaus, in exchange for the university renaming its athletic arena “DreamLife Arena.” In 2004, DreamLife was a finalist for naming rights of the San Francisco 49ers’ football stadium at Candlestick Point.

“Fraud in real estate deals can deprive innocent victims of their life savings,” said Kevin Ryan, United States Attorney for the Northern District of California. “Unfortunately, this fraud is all too easy to perpetrate, given the complexity of escrow documents. According to the charges, the defendant preyed on the assumption that his clients would trust him and not read all the fine print. Unfortunately, the victims paid a heavy price for this misplaced trust, losing hundreds of thousands of dollars — and in some cases, losing their homes through foreclosure. This indictment demonstrates my Office’s commitment to bringing to justice those who would enrich themselves through fraud, at the expense of innocent investors.”

U.S. Attorney Ryan praised the coalition of federal and local law enforcement agencies that collaborated to investigate the matter. “This case has been a model of cooperation and teamwork between different federal agencies, as well as between federal and local law enforcement. I would like to thank the Alameda County District Attorney, the Internal Revenue Service, and the United States Secret Service for their excellent work on this case.”

Paul Morrissey, Special Agent in Charge of the Secret Service’s local field office, said: “This is another example of federal and state law enforcement working in a collaborative effort to stop criminal activity in pursuit of successful prosecution. In this era of complex criminal trends, law enforcement needs to pool their resources and expertise to combat crime.”

In addition to the federal charges filed today, Mr. Daniloo faces local charges in Alameda County. Bill Denny, Deputy District Attorney for Alameda County, praised the work of both federal and local investigators. “I would particularly like to thank District Attorney Investigators Rick Knowles and Phil Dito for their outstanding investigation,” Denny said. “It is our intent to seek the maximum sentence against Daniloo in state court.”

Mr. Daniloo was arrested by federal agents on June 29, 2006, pursuant to a federal complaint and arrest warrant, and made his initial appearance in federal court the same day. He remains in federal custody at North County Jail in Oakland. Mr. Daniloo’s arraignment is scheduled for September 1, 2006, at 9:30 a.m., before Magistrate Judge James Larson.

The indictment returned today charges Mr. Daniloo with 41 counts of wire fraud, in violation of 18 U.S.C. § 1343; four counts of mail fraud, in violation of 18 U.S.C. § 1341; and 77 counts of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i). The maximum statutory penalty for each of these counts is 20 years imprisonment, a fine of $250,000, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

An indictment contains only allegations against an individual and, as with all defendants, Mr. Daniloo must be presumed innocent unless and until proven guilty.

Assistant U.S. Attorney Michael Li-Ming Wang, Chief of the White Collar Crimes Section, is prosecuting the case, with the assistance of Helen Yee and Ana Guerra.

Further Information:

A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at [email protected]

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