FBI Hunts For San Gabriel Man Behind $11M Mortgage Fraud Scheme
LOS ANGELES (CBSLA.com) — Federal investigators on Thursday asked the public for help in finding a San Gabriel man who admitted to defrauding homeowners out of as much as $11 million in three separate fraud schemes.
David Kaup, 29, was scheduled to be sentenced Dec. 17, in U.S. District Court in Los Angeles after pleading guilty to two counts of wire fraud (PDF) in April, but failed to appear in court, according to Bill Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office and André Birotte Jr., the United States Attorney in Los Angeles.
According to his plea agreement , Kaup admitted in his plea agreement that he defrauded more than 50 families out of more than $11 million over a period of approximately five years – several of whom were working-class families who sought Kaup’s assistance in refinancing their homes.
Kaup admitted in his plea that he had operated several companies, including Lunden Investments, American Loans and Funding (ALF) and First Mortgage West, each of which was based in Los Angeles. Through Lunden Investments, Kaup convinced investors to give him more than $9 million, which he said he was going to use for commercial loans.
Kaup admitted in his plea, however, that he instead lost approximately $9 million of the victims’ money trading on the Foreign Currency Exchange Market.
After defrauding these victims, Kaup started a separate scheme to deceive homeowners into sending him money. In his plea, Kaup admitted that through his second company, ALF, he told homeowners that he could refinance their homes at below-market rates, so long as they provided certain funds up front to demonstrate that they financially qualified for the special loan terms.
These funds were supposed to be kept safe during the loan process and then returned when the loan was either approved or denied. Kaup admitted that he never tried to refinance the homeowners’ loans, and instead used the victims’ money to buy luxury items for himself and to trade on the Foreign Currency Exchange Market, according to investigators.
After this scheme collapsed, Kaup admitted in his plea that he ran the same scheme, along with others, through a third company, FMW. In all, through ALF and FMW, Kaup admits that he defrauded more than 50 families out of approximately $2 million.
Kaup – who has used the aliases “David Smith” and “David Martinez” – has been known to work as a disc jockey in the Los Angeles and Las Vegas areas and has used the moniker “New Age Dave”.
He is described as having black hair, brown eyes, about 5’11″ tall and weighing 190 pounds.
Anyone with information on Kaup is urged to call the FBI at (888) 226-8443.