Fraud alleged at LV lending company

Grace Leong

Friday, April 6, 2001 | 11:10 a.m.

The president of a Las Vegas mortgage loan company, who was indicted this week on 29 counts of money laundering and wire fraud, faces prison time if convicted and may be required to forfeit up to $4.353 million to the government.

David Allan Van Velzer Jr., the president of American Mortgage Industries, which had one office in Las Vegas and another in California, was indicted by a federal grand jury in Las Vegas Wednesday.

Federal prosecutors allege he improperly obtained funds from financial institutions from January through June 1997 by allegedly creating fraudulent loans and fictitious buyers whom he would represent to the lenders as people seeking loans to buy existing homes.

The Las Vegas office of American Mortgage Industries is now closed. Lyndon Evans, the Nevada Financial Institutions Division's deputy commissioner, said the company is no longer licensed.

Van Velzer is detained in the North Las Vegas Detention Center pending a trial in August. He could not be reached for comment on the allegations. Potentially he could face up to a maximum of five years in jail and a $250,000 fine for each count for wire fraud and up to a maximum of 20 years and a $250,000 fine for each count of money laundering.

The indictment said Van Velzer should forfeit up to $4.353 million to the government -- "property constituting or derived from proceeds he obtained directly or indirectly as a result of such violations."

Typically, Van Velzer, who would seek investors to fund loans once American Mortgage had borrowers, would obtain temporary funding for the loans before he obtained permanent funding from a mortgage investor, the government said.

To obtain funding, he was required to disclose the name of the borrower and the address of the property purportedly being purchased and provide loan documents including a mortgage note and a deed of trust.

The indictment said he defrauded two lenders by creating false and fraudulent loans and fictitious buyers to obtain temporary funding from Phoenix-based Bank One of Arizona and permanent funding from Freddie Mac, a Reston, Va., mortgage financier.

Van Velzer and his company would obtain loans under fictitious names including Peter Kendrickson, Jonathan Totalski, Mark Steinerman, Julis Cervaski, Allie Sandenmeyer and Tatiana Kofferman, the indictment said.

The indictment said the loans were "not sought for residential purchases, and some of the properties that purportedly had houses on them were merely vacant pieces of land and that other properties were not worth the amount of money for which the loans were being sought."

Van Velzer was accused of signing the names of fictitious borrowers on the false loan documents he submitted to Freddie Mac and Bank One and also allegedly caused an American Mortgage employee to falsely notarize one or more of the loan documents.

Van Velzer, who allegedly caused Bank One and Freddie Mac to wire-transfer the funds directly and indirectly to American Mortgage, allegedly used the funds to operate his mortgage company, support his lifestyle and repay other mortgage companies for other fraudulent loans he made.