Seeno executive accepts plea deal, agrees to testify
against company in FBI probe
By Matthias Gafni Contra Costa Times
Posted: 03/15/2013 05:04:57
PM PDT
Updated: 03/17/2013 01:49:02
AM PDT
OAKLAND -- A top Seeno company sales
executive pleaded guilty Friday to one count of wire fraud in exchange for her
testimony against her employer, a dramatic twist in the Seeno saga that could
strengthen the criminal case against the powerful real estate empire.
The attorney for Carey Hendrickson,
37, of Martinez, also spoke to Bay Area News Group for the first time, saying
his client will testify if called before a grand jury or trial and that she was
a small player in the case that began with a 2010 FBI raid of the Seeno
family's Concord headquarters.
"I know she's not the biggest
cog in this machine," attorney John Runfola said outside a federal
courtroom in Oakland.
Hendrickson was indicted last year
on three counts of wire fraud, becoming the first casualty from the 2010 FBI
raid in which agents carted off dozens of boxes of evidence in their efforts to
unravel complicated real estate transactions that stretched across much of the
East Bay. The Seeno family empire, which has built homes across the Bay Area for
generations and donated to countless political campaigns, has been heavily
fined for environmental improprieties, but has avoided criminal wrongdoing.
She is accused of participating in a
scheme that inflated the value of four houses she tried to buy in 2008 in a
struggling Pittsburg development owned by her employer. Court documents show
Hendrickson's alleged activities may have been part of a larger Seeno effort to inflate the value of homes, also
known as a "builder bailout."
As part of the deal, prosecutors
dropped two of the counts. She could still face a maximum penalty of 20 years
and has agreed to pay $293,000 in restitution, but will not be sentenced until
her cooperation with the prosecution is complete. A sentencing hearing was set
for Sept. 12.
It has been a stressful year for
Hendrickson, who is on disability leave from Discovery Sales, a Seeno company
subsidiary, where she worked as district sales manager and managed the Contra
Costa sales teams. She told the federal judge Friday that she missed Thursday's
planned court date due to an "extreme anxiety attack."
In the half-hour proceeding Friday,
a soft-spoken Hendrickson responded to the judge's questions before a nearly
empty courtroom, except for a Seeno attorney who took notes.
In her plea agreement, Hendrickson
accepted responsibility for hiding within loan documents down payment and
mortgage assistance Seeno Homes promised her. In turn, Seeno Homes failed to
disclose those builder incentives in the paperwork it submitted to the lender,
leading the bank to issue loans based on inflated sales prices, according to
the FBI affidavit.
The sales tactic of offering to pay
a buyer's down payment and the first year of mortgage payments without
disclosing that incentive to lenders is part of an emerging scam called a
"builder's bailout," according to mortgage giant Freddie Mac.
Struggling builders often resort to
such methods to quickly move inventory at inflated prices to maintain large
lines of credit, according to Freddie Mac.
During a 16-month period in 2008 and
2009, various Seeno companies borrowed at least $1.24 billion in construction
lines of credit, according to Contra Costa deed of trust notes. A now-settled civil
lawsuit also claimed that the Seeno brothers owed $500 million in income taxes
around that time.
The affidavit hints that Hendrickson
may have preached the scam to her sales staff.
In an Aug. 23, 2007, email from
Hendrickson to her Seeno sales staff titled "Appraisers," she told
them not to inform appraisers about the incentive program.
"Offering up incentive
information to the appraisers has destroyed the scheduled closings on two homes
in the last couple weeks and we have been fighting to get new comps (comparable
sales data) to appraisers this week," she wrote.
Hendrickson's attorney said his
client was ready to move on with her life. "Her job before this was
selling automobiles. She had very little experience in this industry and
learned by example and by doing," he said. "A lot of people in the
banking and mortgage industry made a lot of mistakes, many of which were
criminal in nature. Carey was a lower level person who made some of those
mistakes. She's accepted responsibility for the fact that she did do things
that were criminal in nature."
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