Pasadena story: From flipper to accused fraud ringleader

In the 2004 photo at right, an Ameriquest account executive named Jeanetta Standefor makes her pitch to appear on a cutting-edge cable TV show: She's talking about the quick money she's going to make remodeling a Pasadena condo and reselling it for a quick profit. Out with the Formica, in with the granite counters. She's a flipper!

Fast forward four years to today's newspaper: "The FBI arrested the president of a Pasadena company Wednesday, a day after a federal grand jury indicted her on fraud charges, accusing her of operating a real estate investment scam. The 11-count indictment, handed up in Los Angeles, charges Jeanetta M. Standefor of Altadena with wire fraud, mail fraud and money laundering."

Same woman? From flipper to accused fraud ringleader?  A parable for our times? I asked FBI agent Linda English, who spent Wednesday in federal court with Standefor and took a look at the photo above. "It is the same woman," she told me. I put in two phone calls to Standefor's lawyer, and haven't heard back.

The fraud charges against Standefor have nothing to do with flipping. She's accused of running a Ponzi scheme in which she allegedly convinced 600 people to invest $18 million dollars in what was described as a "foreclosure reinstatement" program. Investors allegedly believe they would make returns of up to 50% in 30 to 45 days by investing in a program that helped distressed homeowners refinance their mortgages and avoid foreclosure. The government alleges there was no such program at all, and that Standefor simply pocketed some of the cash -- and spent $1.9 million on cars, a fancy wedding and honeymoon, home renovations and other personal expenses.

Big giant hat tip: Geek Seek.
Photo Credit: L.A. Times.
Those who want to read the entire, original profile of the aspiring flipper, click below, the whole thing is there.                        

Flipping for fame and fortune
  * Buy a house, fix it fast, try to sell it for a profit. It's a way of life in L.A., and it's headed for TV.

By Lynell George, Times Staff Writer

Relying mightily on her powers of imagination, Jeanetta Standefor paces the length of an unremarkable bare box of a dark living room of an equally nondescript condo complex in Pasadena.

   Though just a week or so into escrow, Standefor already has big plans: "I want to replace that acoustic ceiling," she waves her hand at the "cottage cheese" above. "I'm thinking, I want to do something Mediterranean in this room because that's popular now." She muses, then heads into the next set of rooms. "That Formica? When was the last time you've seen that in a kitchen? I think I want to resurface it in granite," she decides, then strolls toward the rear rooms.

   "And here," she says, standing in the center of a forlorn-looking master-bedroom suite, "I'm going to work on different window treatments. Maybe plantation shutters. Then some Berber carpets."

   Even in the 100-degree heat, Standefor is unwilting. She ticks it all off in that bright-eyed, butter-cream cheerful spiel that we've become accustomed to -- and read as "enthusiasm" -- on television. That's because, ultimately, this will be for television -- or so she hopes.

   That's right. She isn't sharing these grand plans with friends or curious potential neighbors but with two casting associates, Jennifer Ayala and Lindsey Topping, who are on the prowl for potential participants for the latest wrinkle in reality television: rehabbing homes to resell -- or "flip" -- for big profits.

   Tentatively titled "Property Ladder," the series will air on the Learning Channel next spring. It takes its name from its British inspiration produced by BBC's Channel 4. Like its counterpart, the show will follow a series of novice real estate developers through renovation and resale. Concentrating on Southern California, the show hopes to tap into the ready-made drama of the insanely competitive -- and even more insanely priced -- California real estate market.

   It was only a matter of time. Real estate stories in California have transformed into this generation's turn on the amazing fish tale: the quest, the wrangling and the lament of the one that got away. Inherent in those over-heated house-hunting scenarios are ready-made narrative tensions rife with possibilities for outrageous success or dismal failure. So producers, always in search of new reality TV formats, are only half a step behind.

   Standefor, a senior account executive at Ameriquest Mortgage Co., is auditioning to become one of the first-time flippers. She says it began to dawn on her, as she helped clients get into homes or acquire rehab properties, that she could do it herself. She bought this property for $285,000 and hopes to make at least a $50,000 profit.

   "I just began to realize that there are a lot of people who don't think that it can be done, alone, by a female," she explains. "I wanted to show people that it isn't that difficult."

   The ground rules for "Property Ladder" are simple: Novice flippers will be coached by veteran flippers on the ins and outs of rehabbing property. They will have three to five months to purchase the property, rehab it and sell it (or, in real estate speak, to "turn it over"). Each episode is an individual stand-alone story that will track the process from beginning to end. The hope: that each rehabber will get his or her asking price.

   Reality TV and real estate are proving to be a good mix. Viewers have already looky-loo'd deep into the nitpicky squabbles and tear-jerking epilogues of redecorating and rehabbing shows, from "Changing Spaces" to "Extreme Makeover -- Home Edition." But why stop at rethinking one room or even an entire house when one can delve into the risky business of flipping? What happens when the amateur flipper finds that a simple rehab has devolved into a waking nightmare -- termite-infested walls, mildew, archaic or byzantine electric wiring? How they recover from it -- or don't -- is the stuff of drama.

   Overheated market

   Flipping a home for profit has a few forms. There's the quick turnaround that might find the property back on the market mere days after a sale reaping a profit of, say, $10,000 to $50,000. Then there is the multi-stepped version, rehabbing an on-the-wane property, then turning it around -- flippers hope -- for handsome profit.

   In recent years, the region has seen a dramatic increase in flipping. In a recent report in the Los Angeles Times' Business section, real estate experts noted that the number of homes sold last May after having been owned six or fewer months by the sellers was 47% higher than it was last year. These constituted 3.1% of all homes sold in the month, nearing the flipping record, set in early 1989, of 3.5%, according to DataQuick, a La Jolla real estate information firm.

   Real estate experts see the trend as a sign of an overheated market. Television, however, sees it as a potential hot property, so to speak.

   "Property Ladder" executive producer Tracy Verna notes, "The journey for each flipper is different." Verna, an executive in "lifestyle programming" for FremantleMedia Inc., which produced "American Idol," said the show aims to "follow the trials and tribulations of these new rehabbers. We want to show what really happens. How renovating impacts a family [or] a single person. What if the balance of your life is thrown off? What happens when you are paying two mortgages? What happens when you open a wall and find that your electrical is a mess? There's additional debt they're incurring; they've got a deadline staring them in the face. The project is an albatross around their neck."

   Well, for ratings' sake, they can only hope.

   The producers are looking for half a dozen owners who will be doing some, if not all, of the rehab themselves. They will be coached by a host (yet to be named), a veteran developer who will help novices prioritize and make decisions. The show is scheduled to begin taping next month.

   Early on, the producers cast a wide net: contacting real estate agents, attending design shows, trolling lumberyards and encouraging potential flippers to navigate to the show's website (www.propertycasting.com) to see if they qualify. Already Verna -- who is also executive producer of another new reality series, "How Clean Is Your House?" -- and crew have seen about 100 potential flippers and have tried out 300 prospective hosts with experience in the rehab fray.

   The host's role will be to help novice developers to keep cool and alert them to potential roadblocks. The husband-wife team of Russell and Paige Hemmis, local real estate investors who own their own company, RTO Investments, decided to toss their hats into the hosting ring. "There are things you just don't find out about until you start tearing things apart," Russell Hemmis notes. "But the idea is not to be discouraged. Real estate is gold. It doesn't disappear."

   'That's a pain'

   Auditioning for the role of novice flippers, Chris Mullen and Mark Anthony Puopolo vamp for the video camera. Blueprints in hand, the couple stand on the walkway of the nearly 100-year-old California Craftsman, on which they just closed escrow. It's a corner lot not far from Standefor's property, on a lively tree-laden street. Kids whiz by on scooters, and an ice cream truck trundles by with its woozy music box, creating an idyllic suburban-urban nostalgic postmodern backdrop for the audition tape.

   There are cosmetic changes they'd like, including a better garden to replace the dry yellow grass and scruffy succulents. "I'm thinking trellises and wisteria," says Puopolo. They want to add a 700-square-foot master bedroom and bath suite and know they need to apply for variances. "The major issue is the roof," says Mullen. "We found out there is asbestos. That's a pain, and we figure that it's going to cost a little bit more than we expected."

   They paid $487,000 for this three-bedroom, one-bath home and hope to sell it for $800,000 to $900,000, after five to six months of work. "It's the small costs that tend to add up quickly," says Puopolo. "We worked out the numbers separately, and together we decided that our goal is to spend between $100,000 and $150,000." What they fear most is merging the personal and the professional and the stress that it might have on their partnership, says Mullen. "Stress affects me differently," says Mullen, 40. "It slides right off. With Mark ... he tends not to listen."

   "I'm more of a realist. Chris is more of an idealist," says Puopolo, 32, standing off to the side. "I need to improve on my listening. But he needs to be realistic."

   Real estate experts see theatrical potential. "If they are going to be honest about it and show all the steps, it could be very interesting," says Gene Hamilton, who along with his wife, Katie, wrote "Fix It and Flip It." "There are so many factors -- the market, interest rates. And for that reason, we usually recommend a strategy that is flexible. A deadline certainly ought to work for entertainment."

   "Managing the job is really crucial," says Katie Hamilton. "And if you don't work it out, it's a good way to flush out the relationship."

   Standefor is ready, come what may. She figures on spending $15,000 for her rehab but can go as high as $20,000 for everything from painting to new fixtures, countertops and even "staging" the property -- setting up furniture to give potential buyers a lived-in, "you could be home right now" feel.

   "I've done a lot of research on my own talking to other people, taking classes," Standefor tells the camera, finishing up her audition. "I researched the neighborhood to find out who's the target market and did research on what styles are popular in the marketplace. For me it would be a first-time home-buyer. Maybe a single or a small family. So I have to keep that in mind with my rehabbing theme."

   Reworking this collection of dark, characterless rooms, she knows, will take a world of more than imagination. What she keeps at the front of her mind: "The reason I'm buying this is to make a profit"; and when the going gets tough, she'll remember: "I'm pretty handy with a paint brush."

   Whether "Property Ladder" will launch speculators scrambling for gold or scare them away as a cautionary tale remains to be seen. Gene Hamilton compares the concept to that of the "Antiques Roadshow" on PBS.

   "And," exclaims Katie Hamilton, "look what that did for junk! I think it's a good concept for a show, better than a lot of screwy things out there like eating worms."

Comments

[Cal]

I think in that photo she is talking about the breast implants she is going to buy with the money from the flip.

[Uncle Billy]

She's got the looks and the poise -- all she had to do was put on some strong perfume to cover up the Ameriquest odor -- and suckers would melt in her claws (allegedly).

Who wants odds that her alleged victims were mostly churchgoing african americans.

[Mike Barker]

When will the race card be played?

[Susan Hilton]

Some people have no shame! She should spend a LONG time in jail!
http://www.thecenturytreereader.com

[E]

Too funny.

I'm more curious about the people that were part of putting the stupid housing porn shows on T.V.

There are too many Jennifer Ayalas out there for Zabasearch to be of any use but Lindsey Topping is a nice rare name. She appears to have flipped 588 Rio Grande Thousand Oaks 91360 however not for very much profit (per Redfins records) and it looks like she got out just in time and found herself a nice bagholder.

Her mother must be proud.

She also seems to have an address at the Woodland Hills Tennis Club APARTMENTS.

HUH? WHAT? SHE'S A RENTER?

SAY IT ISN'T SO!

I could be wrong though.

[sfvrealestate]

There you go again, Cal.

[sfvrealestate]

Peter, speaking of Ponzi schemes, has anybody at the LAT (or anywhere else that you know of) done any investigating on the Nouveau Riche real estate program? Sounds like a straight out pyramid scheme to me.

[claptrap]

"Lindsey Topping is a nice rare name. She appears to have flipped 588 Rio Grande Thousand Oaks 91360 however not for very much profit (per Redfins records) and it looks like she got out just in time and found herself a nice bagholder.

Her mother must be proud.

She also seems to have an address at the Woodland Hills Tennis Club APARTMENTS.

HUH? WHAT? SHE'S A RENTER?

SAY IT ISN'T SO!

I could be wrong though."

YOU'RE PROBABLY NOT WRONG.
What do you think "casting associates"
in reality television make?

[J.Ho]

When the flippers lose their shirts and the media touts any investment but real estate, that's when we'll see housing prices turn around.

[Cal]

Hey if it was a dude and he was holding his hands like that 2 feet lower I'd have a similiar comment to make.

[MyLessThanPrimeBeef]

Perhaps Hillary won't give up her fight to help these troubled people and will continue her historic crusade after the nomination with her own 'Cow Moose' candidacy.

From what I can tell, she is as fit as a cow moose. And what a change from business as usual that will be!

[LA-renter]

Thank you Cal for pointing out the "This American Life" show on CDOs...

All the real estate nonsense of the past several years provides colorful stories, but the beginning of the radio program provides a more important and truly scary story and answers the question, why did the real estate market go crazy:

Global savings/investment money doubled from $36 trillion dollars (to $72 trillion) in 6 years!

It was this money looking for an outlet that is responsible for the absurd loan activity.

The scary question is what is this excess money doing now!... Inflating the value of fuel and commodities?

[blackbox]

Where is the Rev. Sharpton when you need him !

[em]

sfvrealestate

I saw your post and found an article on CNN/Money from August of last year. http://money.cnn.com/2007/08/06/magazines/fsb/
real_estate.fsb/?postversion=2007080706

My God! We will soon be hearing about all the suckers..err..students losing their shirts and crying how Nouveau Riche "University" conned them into the poorhouse.

[Inland Empire]

There are plenty of new RE scams out there. I looked at the outside of a REO house a few months ago. The next day, my agent and I went to view the interior after talking to the listing agent. The entry gate was locked and the key code for the lock box did not work. Calls placed to two phone numbers went unanswered. Emails to the listing agent went unanswered. A week later, my agent finally was able to reach them at which point the house had been sold (the same day we were to see it). In the 'old days", the listing agent would have let us see it and mentioned that it may/might have offers coming in. They would have at least answered our calls.
Last night, I went with my agent (different one) to see another house that had been on the market one day. The key was missing from the lock box. The listing agents sign was down on the ground and held down by several large rocks. I am putting an offer in today as the price is right and I know the floor plan. You can bet money that while my offer is well above asking price, someone else will have purchased the property.
I went to another house a few weeks ago to look at it from the outside. The door was open so we called out. A contractor was inside with two of his friends. He wanted to buy the house himself as he had done some work on it. He had the combination to the lock box given to him by the agent and he had gotten in by using the key. He made sure to tell us all that was wrong with the house at inflated repair prices so we would be deterred from making an offer. (Little did he know that we can do most of the work ourselves). In the "old days", no one had access to the keys except RE agents themselves. I wonder if yesterday's missing key is in the hands of a contractor.
I have put in offers on seven or eight houses in the last several months. All of the houses disappeared quickly and I have reason to believe that in some cases, my offer was not even presented. My offers have been below, at or above asking price.
There is a well-known name in REO property that supposedly has several hundred signs. You cannot reach him at his office or by email and get a response about any of these houses. Obviously, one agent cannot be effective with this many houses to handle.
There are ethical and honest RE agents out there. But there are still some rotten apple out there.

[LA]

I am shocked. SHOCKED!

Cal has a sense of humor!!!

[Rob]

Were going to have to call you Gum Shoe Viles from now on...

"it was a long hot spring night when a crack was heard off in the distance. Just then... a knock at the door. Who could this tall drink of water be at this hour?"

[Joseph...The Real Estate Guy]

Lots of Suckers out there!

[Pay no attention to that man behind the curtain]

Unrelated to post by I thought blog readers might be interested in an interesting article in the Wall Street Journal about angryrenter.com, which is apparently sponsored by former House majority leader Dick Armey and Steve Forbes.

http://online.wsj.com/article/SB12109016413729
7527.html?mod=hpp_us_pageone

[JPG]

Inland empire:

I read your entire post and have no idea what you're inferring about said real estate agent and/or the contractors. Maybe I'm a little slow, but I'm not quite sure how not answering phone calls and giving the keys to a contractor is unethical behavior. Are you saying that the agent is keeping the properties for him/herself instead of accepting your higher offers? Or that the agent is selling to friends for less money than your offers? Please explain if you don't mind.

[Jonathan]

50% return on your money within a month? Does that sound plausible to anybody? Those people deserve to lose their money. Greed is deadly.

[Inland Empire]

I read your entire post and have no idea what you're inferring about said real estate agent and/or the contractors. Maybe I'm a little slow, but I'm not quite sure how not answering phone calls and giving the keys to a contractor is unethical behavior. Are you saying that the agent is keeping the properties for him/herself instead of accepting your higher offers? Or that the agent is selling to friends for less money than your offers? Please explain if you don't mind.

A contractor should not have the combination to the lock box. If the agent wants to give him or her a key to use temporarily, fine. Otherwise I think its a breach of RE ethics. Access to one code could potentially give the contractor access to other homes he or she has no relationship to. If you don't know who has access to your vacant house, how do you know someone who is unknown to you isn't stealing parts from the AC, the fixtures or whatever else is handy? If the agent tells your agent, yes, by all means, go look at the house, here is the combination and you go that same day. You cannot get in to the house and they are not answering the phone during normal business hours, yes, I think something is very wrong. And something is wrong when more than one person cannot get an answer on a certain house for a whole week.
I think some of the agents are keeping properties in reach or stacking the deck for various friends, associates or relatives. I have also heard of this from another agent who is in another area.

[dot]

Regarding post by Inland Empire:

Experienced a similar situation. Called about a REO listing and felt for sure there would be a quick return call from the agent since all the news reports say the real market is soooo slow in the Coachella Valley. Well, three days go by and I try again because there hasn't been a response received. This time I get her and her first comment is if you're interested submit an offer. When I told her I'd like to see the inside of the house, she told me she was "too busy" but I should call her assistant and see if she could possibly show it.

A good question to ask is HOW do the REO sections of banks choose Real Estate Agents for their property? What guarantees are there that they are doing a "fair job" for the bank?

.

[Uncle Billy Climbs Mont Pelerin]

IE writes: "I think some of the agents are keeping properties in reach or stacking the deck for various friends, associates or relatives. I have also heard of this from another agent who is in another area."

Seems that way from my brief flirtation with foreclosures earlier in the year. I doubt the banks even call their brokers anonymously to check to see if the properties are being marketed properly or at all. I'd be curious to hear from buyer's reps to see how much success they are having on behalf of their buyers.

Do you run into quicksand when you try to present offers? Are you finding foot dragging, misrepresentation, or even outright lies? Do you have a way to verify if your offers are even presented?

[Who wants to know]

I know her, her family, and a lot of her investors. She is the same age as me. She would be the LAST person on earth you would imagine to do this. Oh I know that she did the things that she is accused of; but, she was the mousiest, most quiet, and unassuming person you would ever meet. I've known her for years. Her mom babysat my nephew, because her mom ran a family daycare center from their home in Inglewood (the city she is originally from). Plus, my mom worked with her years ago when they worked for the Veterans' Administration in Westwood. When I knew her she was quiet, shy, very smart, and nice. I was stunned to find out she could serve a 180 year prison sentence. I was apporached to be a part of this "invesstment opportunity". I declined.

[SO Disappointed]

I have known Jeanetta since I was in diapers and her mother(who recently passed away) was like my grandmother,she was my grandmothers best friend.I don't think that I ,or anyone else on here, have the right to pass judgment,but I do have the right to voice my opinion and I feel that her husband should be charged also.He knew about this whole scam and he knew of the means inwhich he was being paid.Funny how he has disappeared since this whole thing went down.I was there when they exchanged vows so what happened to "for better or worse"?

[SO Disappointed]

I have known Jeanetta since I was in diapers and her mother(who recently passed away) was like my grandmother,she was my grandmothers best friend.I don't think that I ,or anyone else on here, have the right to pass judgment,but I do have the right to voice my opinion and I feel that her husband should be charged also.He knew about this whole scam and he knew of the means inwhich he was being paid.Funny how he has disappeared since this whole thing went down.I was there when they exchanged vows so what happened to "for better or worse"?