Orange County News Blog

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A federal jury this afternoon convicted a licensed real estate appraiser from Trabuco Canyon of conspiracy, bank fraud and numerous loan fraud charges related to a massive mortgage fraud scheme that caused more than $40 million in losses to federally insured banks, the FBI announced.

Lila Rizk, 42, had stood trial for five weeks alongside prominent Beverly Hills real estate agent Kyle Grasso, 38, formerly of Santa Monica, when the jury handed down its decision, which found Grasso guilty of the same charges as well as three counts of money laundering. U.S. District Court Judge Dean D. Pregerson is scheduled to sentence the pair on Jan. 29, 2010.

The scheme's leader, Charles Elliott Fitzgerald, 48, formerly of Newbury Park and Beverly Hills, has already been sentenced to 14 years in prison.

The man who helped orchestrate the scheme alongside Fitzgerald, Mark Alan Abrams, 47, of Los Angeles, has pleaded guilty and awaits sentencing.

A third defendant who went to trial, Joseph Babajian, a 56-year-old Westside real estate agent, was acquitted on 13 criminal counts, and the jury was unable to reach a verdict on eight additional counts. Pregerson declared a mistrial on the eight counts.

Other Orange County real estate professionals who have pleaded guilty in the scheme include: Jamieson Matykowski, 35, of Laguna Niguel; Timothy Holland, 37, of Santa Ana; and L. Scott Robinson, 46, of Dana Point. Richard Maize, 54, of Beverly Hills; Thomas R. Schiff, 47, of Brentwood; and Nicole LaViolette, 38, of Palm Springs, have also pleaded guilty. They all await sentencing.

An investigation by the FBI and IRS discovered members of the conspiracy sent false documentation, including bogus purchase contracts and appraisals, to the victim banks to deceive them into unwittingly funding mortgage loans that were hundreds of thousands of dollars higher than the homes actually cost. Homes in some of Southern California's most-expensive neighborhoods were targeted.