Lender asks to delay civil trial against Crisp, Cole, others
By BYCOURTENAY EDELHART Californian staff writer cedelhart@bakersfield.com
A lawyer for the former Fremont Investment and Loan has asked for a delay in its civil trial against a group of people who worked for or with Crisp, Cole & Associates, a defunct Bakersfield real estate firm whose principals are under federal indictment in a mortgage fraud case.
Fremont was a subprime lender and servicer that went bankrupt in 2008 after a flood of home loans defaulted in the real estate crash. It was reorganized as Fremont Reorganizing Corp. and taken over by Signature Group Holdings Inc., a private investment firm that provides credit and investment capital for mid-market companies.
Originally filed in 2009, the civil lawsuit named about 85 defendants as "co-conspirators" in what it alleged was a massive scheme to induce Fremont to loan money based on fraudulent information such as inflated home appraisals and false income statements. The suit went after real estate agents, appraisers, title companies and others involved in more than 100 mortgage loans that allegedly defrauded the company of about $23 million.
The defendants have been whittled down over the past two years through out-of-court settlements and arbitration, but more than a dozen defendants remain, including former Realtors David Crisp and Carl Cole, whose company was one of the most high-profile players in the local real estate market during the boom years.
In January, both men were named in a 56-count federal indictment alleging conspiracy to commit bank, mail and wire fraud and to launder money from about 2004 to roughly 2007.
Several of their business associates and relatives have accepted plea deals in exchange for cooperating in that investigation, but they have not been sentenced.
At Friday's hearing In Kern County Superior Court, Fremont attorney Michael St. Denis brought Judge David Lampe up to date on which defendants have settled out of court, and which defendants are to go to trial.
St. Denis also filed a motion for a delay in the civil matter until after the criminal proceedings are resolved in federal court in Fresno.
It doesn't make any sense to move forward with the civil trial while the criminal matter is pending in federal court, he said, expressing concern that the key players in the civil trial will invoke their Fifth Amendment right against self-incrimination.
Lampe is scheduled to rule on that motion Sept. 12.
The next hearing in the criminal case won't take place until October, but the actual trial isn't likely to begin until next year.
St. Denis is in settlement talks with First American Title and Chicago Title, among others, he said in a telephone interview Tuesday.
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