Dozens of California real estate professionals charged with crimes or sued for allegedly fraudulent dealings in recent years still have their licenses, with no disciplinary sanctions listed on their records, according to a Sacramento Bee investigation.
The Bee ran the names of 260 people charged with a real estate-related crime or sued by the state in recent years through the California Department of Real Estate’s licensee database.
Among that group, 45 people had active real estate broker or salesperson licenses. The licenses of a dozen others had been suspended or revoked, and the rest of the group were either unlicensed or did not work in the real estate industry.
A spokesman for the Department of Real Estate told the newspaper that it can’t use an arrest or indictment as the basis for disciplinary action. After receiving a complain or accusation, licensees are entitled to a hearing before an administrative law judge.
But the Bee found instances in which real estate professionals who have pleaded guilty to or been convicted of mortgage-fraud-related crimes still have licenses in good standing.
In California, licensed real estate brokers can list and sell real estate, and can also negotiate loans secured by real estate. Apart from real estate brokers and their licensed employees, only attorneys are authorized to negotiate with lenders.
The paper cited the example of Herman Michael Covarrubias, who was charged with mortgage fraud-related crimes in Santa Clara County in 2005 and convicted in 2008. Covarrubias was sentenced to nearly 20 years in state prison in May 2009, but is still a licensed broker, the Bee reported.
A lawyer who represented victims in the case told the Bee that Covarrubias and an accomplice continued operating their business after they were charged.
Also retaining his license is Americorp Funding co-founder Richard Allen Maize, who pleaded guilty in August 2007 to his role in a mortgage fraud scheme that resulted in $18.5 million in losses to banks. The entry for Maize in the Department of Real Estate’s database lists "No disciplinary action."
The Bee also discovered that Anthony Garth Symmes, a Chico homebuilder who pleaded guilty to playing a role in a multimillion-dollar fraud scheme, still has his real estate broker’s license, with "No disciplinary action" listed.
Department of Real Estate spokesman Tom Pool told the Bee that it’s not necessarily the best use of the department’s limited resources to revoke the license of someone who is headed to jail, according to the report.
The department revoked 528 licenses in fiscal year 2008-09, up from 236 in 2004-05, the Bee reported.