The mother of a popular South County high school student whose prescription drug overdose death helped inspire an anti-drug documentary making its world premiere at the upcoming Newport Beach Film Festival has been arrested for participating in a $4.2 million real estate "flipping" scheme that included properties that did not exist. Sylvia Melkonian was arrested Monday morning by FBI agents and later pleaded not guilty at arraignment in federal court in Santa Ana, where she posted $20,000 bond, according to the U.S. Attorney's office.
Melkonian, 48, of Laguna Beach, faces five counts of wire fraud that could bring a maximum sentence of more than 100 years with a conviction.
Her son's role in the creation of the anti-drug film premiering May 2 was just featured in the Weekly article, "OC OD Tsunami: That's how Behind the Orange Curtain describes a prescription-drug 'epidemic' killing local kids." Here is the first paragraph of that story:
Apologies for the macabre opening, but the documentary Behind the Orange Curtain was born out of the deaths of Jarrod Barber and Mark Melkonian, South County teens who succumbed to drug overdoses. Barber, 19, drifted away on the family couch in Laguna Niguel on Jan. 8, 2010, after a cocktail of Opana, a narcotic painkiller; Seroquel, an anti-psychotic; and Clonazepam, an anti-convulsant often used to treat anxiety. Melkonian was a 17-year-old junior at Dana Hills High School when he overdosed on prescription pills on May 25 of that same year.
Sylvia Melkonian also appeared recently with Jarrod's mother, Jodi Barber, and Rep. Mary Bono Mack (R-Palm Desert) on Dr. Drew Pinsky's HLN program.
Previously, Melkonian appeared in a video for TCS Foreclosures, also known as Trinity Consultants of Irvine, which taught students how to make money through "short sales," a real estate term for the sale of homes just before foreclosure proceedings begin.
According to the feds, Melkonian and five others around the country promised more than three dozen investors title to homes that could be easily resold, but which in fact did not have "clean" titles, were uninhabitable, were simply worthless or, in some cases, did not even exist. The victims had attended classes in Irvine; Costa Mesa; Orlando, Florida; Dallas, Texas; and on Internet "webinars."
An indictment returned by a federal grand jury on April 18 accuses the defendants of participating in a real estate scheme from mid-2009 through mid-2010 in which they sold Real Estate Owned-REO, or bank owned-properties for as much as $45,000 each. Buyers were told the properties were more valuable than that and could be resold-or flipped-for a profit within a year. The defendants only paid about $10,000 for each property, the indictment alleges.
Buyers were also promised properties came with clean titles, property management services and guaranteed rentals for the first three months, according to the indictment, which further alleges victims were promised an "exit strategy" in which they could sell the properties back to the defendants for $60,000.
Besides some properties not existing, others were condemned or had issues with their titles that prevented buyers from taking control of the properties, according to a statement from the U.S. Attorney. Some titles were encumbered by tax liens, fines or building code violations. And the investor funds were not placed in escrow, as is routine, but immediately dispersed upon receipt, according to the feds.
Besides Melkonian, Orange County defendants are Andrew Wardein, 38, of Irvine, and Craig Shults, 41, of Huntington Beach. Wardein surrendered to authorities on Friday and was released on a $25,000 bond after a judge scheduled a trial in the case for June 12. Shults is scheduled to appear for an arraignment Wednesday.
Sheridan Snyder, 65, of Turtletown, Tennessee, was also arrested Monday by the FBI. After appearing in federal court in Tennessee, Snyder posted a $30,000 bond and is due in Santa Ana federal court May 14 for arraignment. Paul LiCausi, 47, of Fort Pierce, Florida, and Joseph Haymore, 31, of Port St. Lucie, Florida, are due in Santa Ana Monday for arraignment.
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Like Melkonian, the other defendants each face at least five counts of wire fraud and, with a conviction, a maximum sentence of at least 100 years in federal prison.
An online search of TCS Foreclosures revealed several sites where people leaving comments accused the company of pulling a scam. An anonymous poster wrote the following on May 18, 2009 (although I'll spare you the ALL-CAPS): "There are no words to describe how taken advantage of and misrepresented by TCS other than to say I would never go near the 'company.' Andrew Wardien should be arrested . . . I would [like] nothing better than to see all of their scams stopped and refunds be made--I won't hold my breath on that one--and to see them behind bars!"
That last wish could be granted.