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Santa Barbara Pair Indicted On Federal Fraud Charges For Real Estate Website

Indictment on federal charges is related to earlier raid of Lompoc call center, other Santa Barbara area locations after investigation of distressed-property website

Lompoc police, the FBI and other agencies served search warrants to a Lompoc call center in October 2016 as part of an investigation into an allegedly fraudulent real estate website. Click to view larger
Lompoc police, the FBI and other agencies served search warrants to a Lompoc call center in October 2016 as part of an investigation into an allegedly fraudulent real estate website.  (Janene Scully / Noozhawk file photo)

Two Santa Barbara residents have been indicted by a federal grand jury for operating what authorities say was a fraudulent real estate website that included a Lompoc call center. 

Investigators said thousands of people lost $27 million over eight years related to the alleged crimes. 

The indictment came 14 months after FBI agents and other law enforcement officers raided the Lompoc call center plus three Santa Barbara locations allegedly affiliated with a Montecito-based online real estate site that had generated repeated consumer complaints.

Michael S. Davenport, 49, and Cynthia L. Rawlinson, 51, both of Santa Barbara, were charged with conspiracy to commit mail and wire fraud, five counts of wire fraud, and one count of mail fraud in the distressed-property website that operated under multiple names.

Davenport was the owner of the business and oversaw the operations of the company while Rawlinson started out as a salesperson, but was promoted to sales manager for the Santa Barbara office.

A federal grand jury in East St. Louis, Illinois, returned an indictment Tuesday charging the pair for their alleged role in a nationwide telemarketing real estate scam, said Donald S. Boyce, U.S. Attorney for the Southern District of Illinois, on Thursday. 

At one point the business had a call center that operated in a Lompoc strip mall unit at 115 North V St., near the intersection with Ocean Avenue, where law enforcement officers converged Oct. 6, 2016.

The Lompoc call center reportedly was linked to a business known by several names including American Standard Online, a real estate website that reportedly offered consumers a list of pre-foreclosed properties as a simple method for renters to buy a house.

The business changed names several times, but was known at various times as MDSQ Productions, LLC, Housing Standard, LLC, Anchor House Financial, American Standard, American Standard Online, and Your American Standard.

Federal authorities contend the illegal activity occurred from January 2009 to Oct. 5, 2016.

For $199, call center employees assured the customer would receive access to the website to find houses for sale and to take over the monthly mortgage payments on foreclosed or pre-foreclosed homes.

Customers claim the homes on the list were not for sale, didn’t exist or had owners not interested in selling or not at risk of foreclosure.

Call center employees reportedly were sent home after the October 2016 raid by law-enforcement officers who showed up at the site.

Victims, numbering more than 100,000, reportedly have been found in all 50 states and the District of Columbia. At least 104 alleged victims were located in 22 counties within the Southern District of Illinois.

The Better Business Bureau of Tri-Counties, which provided a lengthy list of names affiliated with the firms, noted the firm appeared to have had addresses in Santa Barbara, Ventura, Goleta and Montecito, and began operating in early 2006, with the first complaint reported weeks later.

"Over the years, the Better Business Bureau of the Tri-Counties has worked hard to help consumers resolve their disputes with this company," President/CEO Rick Copelan said Friday. "We have processed well over 1,000 complaints against this company and their related entities but more importantly, we provided tens of thousands of generally F-rated reliability reports to their potential customers.

"This is yet another example of how consumers really need to be diligent about doing their homework before becoming involved with any company they are not familiar with," he added.

Within a three-year period, the BBB had processed 376 complaints and provided the companies' F-rated reports to consumers "a staggering 94,668 times" mostly through the website, Copelan said last year after the raid.

The organization provides its services at no cost to consumers, he added.

The indictment also seeks forfeiture of $853,210.11 that was seized from Davenport’s merchant accounts, and $104,000 in cash that was seized from Davenport at the Bill and Hillary Clinton Airport in Little Rock, Arkansas, federal officials said.

If ultimately found guilty, the pair could face lengthy prison sentences. Since some victims were over age 55, the conspiracy to commit mail and wire fraud charge could bring 30 years of imprisonment. 

Each individual mail and wire fraud counts carry a maximum sentence of 20 years in prison. Fines up to $250,000 per count and an order to pay restitution also are possible punishments.

The pair were scheduled to be arraigned Jan. 17 at the federal courthouse in East St. Louis, Illinois.

Noozhawk North County editor Janene Scully can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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