Torture, Lies and Louis XIII Cognac

A Tale of Falling Home Prices

May 6, 2010

The police dispatch said a man named Lamond Dean had been hit in the head with a gun. When the officers arrived about 9:30 p.m. at a shabby bungalow set back from Verdugo Road in Glendale, they knew it would be a long night.

A crowd was milling in the driveway. One man had blood on his shirt. A cop searched him, and fished a pair of wooden knuckles from his pocket. Another cop said he was looking for Dean.

A man stepped forward, looking worn out, like he had survived an ordeal: Lamond Dean.

The officer asked what had happened.

“You know what happened,” he said. “It's all over. I just want to go home.”

There was a gash on the back of his head, still wet, and a cut on his left pinkie, as though someone had tried to cut it off.

Not far away, officers had pulled over a white BMW for making an illegal U-turn. The driver, Luis Garcia, was bleeding from the forehead. He said he had been kidnapped and tortured, but he couldn't remember how he had escaped.

The officers were right — October 20, 2009, would be a long night.

At 4:30 a.m., a judge approved a search warrant for the bungalow, which was split into two units. On the right was a small apartment. On the left was the office of Abaka Republic Marketing, which began as an outlet for herbal balms before switching to real estate.

Inside the office, police found a bloody handprint on the back of a chair. Blood was spattered on a wall, and broken hangers and broken pieces of a chair littered the floor. The place had the look of a torture scene.

It was.

Dean and Garcia had been tied up for hours, whipped with electric cables, threatened with guns, beaten and robbed.

Drug lords do this kind of thing to people. So do godfathers and other figures from organized crime. What could Dean and Garcia possibly have done to earn such treatment?

Police found the answer lying on a desk in the front room, in the form of a green three-ring binder. It was marked “Pending Files Loan Mod.”

Dean and Garcia were loan-modification consultants — opportunists looking to milk some profit from the housing crash. At the time, millions of homeowners were struggling to make payments on underwater loans. Dean and Garcia offered to throw them a rope. For a few thousand dollars, they promised to talk to the banks, get a lower payment, keep people in their homes.

They took the money up front, but did nothing to stop the banks from foreclosing. As the recession spread, the real estate world was teeming with such scams. Most victims would just move on, too embarrassed or defeated to fight back.

But detectives could tell from the blood on the wall that Dean and Garcia had run into some homeowners who wouldn't go away quietly. They had taken revenge, meting out a kind of frontier justice that other fleeced homeowners could quietly cheer.

Except for one thing. The homeowners' hands were dirty, too, and had been long before they went to work on Dean and Garcia. Turns out, every victim in this nasty little event was also a villain.

Instead of a simple story of revenge, the case became a study of the sinister side of the real estate boom — and crash — and the easy-money mania behind it all.

Two days after the bloody night at the bungalow, the police arrested Daniel Weston outside his million-dollar home in La Cañada Flintridge. He and his girlfriend, Mary Ann Parmelee, were charged with torture.

Their arrests ended a modern-day Bonnie-and-Clyde spree through the Los Angeles real estate market. Speculating madly, they had turned home-buying into a virtual Ponzi scheme. They had solicited phony investments, racked up unpayable debts and swindled acquaintances and friends. Their trajectory over the last decade would match a chart of L.A. home prices, rising to irrational highs and ending in a horrific crash.

Like all cons, theirs relied on the honesty of the victims. And that made them vulnerable. The last thing they expected was to walk into another con. When they did, their guile turned into rage.

Weston is barrel-chested — 6 feet 2, 250 pounds — with the long, eely lips of a trumpet player. He often claimed to be a Grammy-winning jazz producer. A former landlord said he kept gold records on his wall. Only later did she learn they were commemorative, the kind that anyone could buy from QVC. In reality, he has a record of financial crimes that dates back to the 1980s. In the early '90s, he served three years in state prison for passing bad checks. His court record of battery suggests a temper.

Parmelee is a Filipino immigrant. She has said she came to the U.S. in the 1970s with 30 cents in her pocket and a fierce sense of ambition. Later, she married an L.A. County prosecutor, had two children and settled into a comfortable life. But after a bitter divorce, she ended up a housewife over 40, with no prospects of supporting herself. With Weston's help, she remade herself as an investor in real estate.

They made quite a team. “Mr. Weston is definitely the charmer,” says Ophir Britton, an attorney who sued them to collect a debt. “Ms. Parmelee is definitely the very aggressive, very vicious one.”

Both were strivers. And, for a while, they lived out a version of the American dream in a 4,000-square-foot ranch house in the hills above Pasadena. They opened an upscale liquor store, hosted fund-raisers, and joined the Chamber of Commerce.

But according to court records, their fortune was built on loan fraud. Today, their properties are in foreclosure while they sit in county jail.

Their life together began in 2000, with a chance meeting at the Brookside Golf Course in Pasadena. They were each getting out of relationships.

Weston had been dating a woman named Sharon Loudd, but their romance had begun to unravel over a kitchen remodeling. According to a civil judgment in the case, Weston had started the job, but had run out of money. To finish it, he suggested she deed her house to him, so he could use his work history to get a home-equity loan. He promised to transfer the deed back to her once he finished the job. Loudd, who was living out of a cracker box at that point, agreed.

Instead of deeding the house back to her, however, Weston pulled out all the equity and went into default. Loudd started to get calls from creditors she knew nothing about. Then her home was foreclosed. She endured years of litigation to regain title to her house.

“This is his game,” Loudd told the Weekly. “He's a con man. He's a liar, but he's very charismatic.”

Parmelee was engaged in her own struggle with her husband of 10 years, David Eng, a deputy district attorney. In 2000, Eng was a rising star in the District Attorney's Office, heading up a task force that was investigating the high-profile Belmont Learning Center scandal.

But at home, his life was a mess. According to voluminous court records, he fought with Parmelee over child support and visitation rights. They also could not agree on how to divide three properties in San Marino and La Cañada Flintridge, exclusive communities that boast the state's top two school districts.

At some point, Eng says he got a call from Weston, whom he had never met. Weston offered to buy one of the houses in La Cañada Flintridge. Told that it was not on the market, Weston called back later and offered to buy the other one.

Eng became suspicious. Soon he discovered that Weston was living with his estranged wife.

Alarmed, he began digging into Weston's criminal background.

As it turned out, this was not their first encounter. A year earlier, Eng had helped to prosecute Weston's mother in a real estate fraud case.

Could it be that Weston had courted Eng's wife and, together, they targeted Eng for revenge? They maintained they met by chance at Brookside Golf Course. (A judge handling Loudd's case would later voice skepticism that the two met so innocently.)

As Eng, who declined to comment for this story, tried to unravel Weston's past, he obtained Weston's rap sheet. When Weston learned of that, he complained to the District Attorney's Office. Eng was charged with misusing government databases, and put on unpaid leave. The case was ultimately dropped and Eng returned to work — but at a juvenile branch an hour from his house.

“He got what they call freeway therapy,” says Jay Ritt, who is representing Eng in a lawsuit against District Attorney Steve Cooley. “He went from being a highly regarded toxic-crime investigator to never prosecuting another toxic crime again.”

After eight years of bickering, Eng and Parmelee finalized their divorce. Parmelee would keep the two homes in La Cañada. Eng would keep the San Marino house. Having wiped out her debts by declaring bankruptcy, Parmelee moved quickly to leverage her assets. In a letter to potential lenders in 2004, she said that she had already invested in three new properties.

“With hard work, tenacity and determination, I was able to achieve the American dream,” she wrote, in imperfect English.

Explaining her bankruptcy, she said it was necessary to free her from her ex-husband's “reign of terror.” Now, she would have a clean slate. If a bank would have faith in her, she would meet her obligations.

“I am energized and excited to start a new life and a new beginning. I am good in what I do,” she wrote. “I have now a chance to focus in investing in real estate. … All I see is a rainbow at the end of the tunnel!”

In 2004 or thereabouts, Luis Garcia went to work in a boiler room at the nation's largest subprime lender, Ameriquest Mortgage. A Guatemalan immigrant, Garcia had failed a test to get into the U.S. Marine Corps. At Ameriquest, he would have found a sales culture nearly as stressful as boot camp.

According to an investigative series that ran in the Los Angeles Times in 2005, Ameriquest sales agents were pushed to the limit to feed Wall Street's insatiable demand for new mortgages. They slammed Red Bulls to get through hour after hour of cold calls. They said they were encouraged to take shortcuts in the pursuit of six-figure salaries. According to the Times series, they forged loan documents, used false appraisals and false income statements, and saddled unsophisticated debtors with high interest rates and hidden fees.

At his job, Garcia met another agent also refinancing loans. His name was Lamond Dean.

In July 2004, a loan application came into Argent Mortgage, a sister company of Ameriquest. Mary Ann Parmelee wanted to refinance one of her La Cañada properties.

In the bankruptcy, the home had been valued at $625,000. Now, it was appraised at $1.2 million, a 90 percent jump in one year.

She had told the bankruptcy court that she was an unemployed real estate consultant, with no income other than her monthly alimony check. Now, she produced a Form W-2 from her employer, Weston's Land Development, which showed that she had made $230,000 in 2003 — the same year in which she had previously said she was unemployed.

She also checked a box stating she had never filed for bankruptcy. The bankruptcy that came up under her name in public records “belongs to ex-husband,” she said.

In the frenzied lending climate of the time, nothing about the application seemed unusual. The numbers were plugged into a formula, and she was granted a $700,000 loan.

In the subsequent months, Parmelee used the proceeds to buy two large homes on La Porte Drive in La Cañada. She began to remodel them, installing hardwood floors. Later, she would refinance those properties as well, pulling cash out to invest in more homes.

“They just milk the heck out of properties,” says Arnold Graham, an attorney who fought the couple in a landlord-tenant dispute. “They pick up properties and flip them back and forth between various owners, some real, some not. Each time they would pull as much equity as they could. Even under the best of market conditions, that's destined to fail.”

When they maxed out, they turned to acquaintances. In the fall of 2006, a Filipino nurse named Luzminda Lucero says Parmelee approached her with an investment opportunity. Lucero says Parmelee persuaded her to take out two home equity loans and use the proceeds as a down payment on two properties that Parmelee owned. According to a deposition transcript, Lucero borrowed more than $2 million from Washington Mutual, almost all of which went to Parmelee. Lucero testified that she never moved into either home she had “purchased,” never received the deeds and only saw them once.

Sometimes, Lucero got calls from lenders saying that her payments were past due. She would call Parmelee, who, Lucero says, said she would take care of it. Once, Lucero asked for some of her money back, but says that Parmelee told her she didn't have any.

Lucero says that in early 2008, Parmelee stopped returning her calls. Lucero never saw her “investment” again.

“I just believed her,” she testified.

Public records show that Parmelee also turned to Pastor Espinoza, an illiterate Guatemalan laborer whom she persuaded to “invest” in a new liquor store. Not having any capital to speak of, he, too, turned to Washington Mutual. In January 2007, the bank loaned him $464,000 against the equity in his house. What the bank did not know was that Espinoza's home was already mortgaged.

A few months later, Espinoza stopped making mortgage payments. The holder of the first deed foreclosed, leaving Washington Mutual with $464,000 plus interest in unrecoverable debt.

As the market crested, Parmelee and Weston still appeared to be living the good life. They had a live-in housekeeper. They opened Lee Ann's Place, a liquor store around the corner from their house. The store had rosewood cabinets and slate floors, and the shelves were stocked with Kauffman vodka and Louis XIII cognac, which sells for upward of $1,500 a bottle. To get the word out, they hosted an event for the La Cañada Chamber of Commerce.

“The inside of the store was so beautiful that it really captured people's attention,” says Pat Anderson, the president of the chamber. “People were looking at the inventory and saying, 'Wow, he's carrying the high-end stuff.'"

In an interview with the La Cañada Flintridge Outlook, Weston described the shop as “the Rolls-Royce of liquor stores.”

“You can't find the wine we carry anywhere else in Southern California,” he said. “If there's a special wine you want that's made out of the country, we'll call and have it brought in.”

But according to bankruptcy filings, Weston was paying his distributors with bad checks.

“He was a complete bullshit artist,” says one distributor, who asked not to be identified to protect his business. “Everything that came out of his mouth was a line of crap.”

Weston was kicked out of the Chamber of Commerce for failing to pay his dues.

As money grew tighter, he became more bold.

Early in 2007, a contractor sued Weston over an unpaid invoice for $9,000 of rosewood. In the course of the litigation, Weston claimed that he had resolved the matter by cashing a check at a Washington Mutual branch, and handing the money to the contractor.

To prove it, he produced a sworn declaration from a bank teller, Oshin Baghram, stating that he had watched the transaction take place. But the contractor said it never happened.

The contractor's lawyer found the Outlook article, which showed that Baghram worked for Weston at the liquor store.

“There's nothing you can't learn from this man about work and about life,” Baghram told the Outlook. “It's an honor working for him.”

The contractor won a judgment, but has been unable to collect.

The market caught up with Weston and Parmelee in 2008, when they started defaulting on their loans. They fell behind by $26,000 on a $1.2 million loan against their primary residence on La Porte Drive. They failed to pay wages to a gardener and a cleaning lady. In July, they got a notice that one of their rental properties would be sold at auction.

They also fell behind on a $500,000 loan on the liquor store. They got a loan modification, made three more payments and then defaulted again. In October, Parmelee again declared bankruptcy, but the filing was thrown out of court. In seven years, her assets had grown from $1.1 million to $7 million. But she owed $9 million, and she was falling further behind at the rate of $8,000 a month.

Without a rising housing market, the couple had nowhere to turn for cash.

“The banks turned around and said, 'Hey, we can't give out any money,'” Weston said, in an interview with the Weekly from Los Angeles County jail. “Did it hurt us? Yes, it did.”

In a lawsuit, a lender accused them of forging a bankruptcy document in the name of one of their corporations, in an effort to stall the foreclosure of Lee Ann's Place. The store was ultimately foreclosed, and will reopen soon as Remedy Liquor.

In desperation, Parmelee turned to Garcia and Dean.

The two men had continued to refinance mortgages until the bubble burst in 2007. Then, they reinvented themselves as loan-modification consultants, offering to fix the same kinds of loans they had helped to sell at Ameriquest, for a fee.

One of their clients was Aurora Buchanan, a cosmetic surgeon's “aesthetic consultant,” who had bought five spec homes and now feared she would go into default.

She says she got a phone solicitation from Garcia, who offered to refinance her loans. Garcia said he knew a manager at Bank of America, Dean, who could do a loan modification in 24 hours. She agreed, ultimately paying $13,000 for modifications on several properties.

Thinking she had found a miracle solution, she referred Garcia to her friends, Marissa Parker and Mario Gonzales.

Parker and Gonzales ran Abaka Republic Marketing out of a shabby bungalow in Glendale.

They had many clients, mostly Filipinos, who were desperate for loan modifications. Soon, the two were working with Garcia and Dean on the alleged loan-modification scam.

Another client, Sonia Hernandez, said she received a modification agreement from Garcia. But when she called Bank of America, the bank had no record of it. The agreement, for which she had paid $3,500, was fake.

Garcia testified at a preliminary hearing in February that he believed Dean had friends inside the bank who could expedite the modification process. Whereas many clients were waiting for 90 days or more just to hear back from their lender, Garcia testified that Dean could deliver modifications within three to five days.

Garcia said he thought that $2,000 of each transaction went to Dean's friends inside the bank. The remainder, he said, was split between himself, Dean, Parker and Gonzales.

(In a statement to the Weekly, Bank of America said it could not comment on the case, but warned customers not to pay up-front fees for loan modifications.)

Attorneys who represent the defendants in the torture case have tracked down more than 30 clients who say they paid Garcia and Dean for loan modifications. According to the attorneys, not one received a modification.

The lawyers allege that Garcia and Dean kept the money for themselves. The night of the beating, Garcia bragged to a female police officer that he made $60,000 a month. He denied that figure in court.

According to Weston, Parmelee alone paid $22,000 for loan modifications. From jail, he blames all of his financial troubles on Garcia.

“I lost $10 million in real estate because of Luis Garcia,” Weston says. “Con artists can pretty much have their way today.”

Late last September, Garcia returned from a trip to Hawaii with his girlfriend to discover that Parker and Gonzales had cut him out of their business. Instead of referring clients to Garcia, they were going directly to Dean.

Angered at being squeezed out, Garcia threatened to call the bank. “I knew Bank of America didn't know,” he testified.

On October 20, Garcia went to the Abaka Republic Marketing bungalow at 3 p.m. He wanted to clear the air. He had dangled the offer of a $30,000 loan from his mother's retirement account as leverage to get back in business.

What happened when Garcia arrived at the bungalow is culled from allegations in preliminary-hearing testimony, search-warrant affidavits and a civil complaint.

When Garcia walked through the front door, he says he saw Dean tied up on the floor, wearing just his boxers.

Before he could figure out what was going on, Weston grabbed him and said, “Do you know that I lost my house! You motherfucker!”

With that, Weston allegedly hit Garcia on the forehead with the butt of a 9mm pistol. He passed out.

Dean would later tell police that Parker and Gonzales had lured him there to talk about pending loan modifications. After being led to the back office, he was confronted by two men with guns. He said one was Weston and the other was Gustavo Canez, a liquor-store employee just off parole for assault with a firearm.

Dean said Weston pointed a gun at his temple and said, “I'm gonna kill you. You're going to die today.”

“He'll do it,” Canez warned. “You better do what he says.”

Dean says Weston had him empty his pockets and strip down to his boxers, then demanded more money, as they kicked him and whipped him with an extension cord. He says Weston hit him on the back of the head with the gun, causing a gash. Then Parmelee came into the room.

“Kill him,” she said. “He's the one that did this to us.”

She also threatened to cut off his fingers with a paper cutter, and was serious enough about it to open up a one-inch cut on Dean's pinkie.

Garcia said that when he woke up, he had been stripped and tied up in a chair in the backroom. Weston and Canez were demanding his PIN numbers. Weston pointed a gun at him and demanded that he call someone to bring more money. Garcia was kicked, beaten and whipped with the extension cord. At some point, Garcia said that Gonzales hit him in the head with the wooden knuckles.

Brandishing a carving knife, Parmelee screamed, “Cut their balls off!”

According to Dean, Garcia told them he had already spent the Parmelee-Weston loan-fee money. But if they were released, they would process the modifications and make things right.

The two say that they were let go after six hours.

Neither man called the cops. Garcia drove off in his white BMW. Stranded, Dean called his cousin to come pick him up. His cousin called the police. Just why Gonzales hung around the scene with wooden knuckles in his pocket remains a mystery. His lawyer says it's because he is innocent.

Weston tells a different story of that night. He alleges that Dean and Garcia beat each other up, because each blamed the other for the collapse of their scam.

After hearing three days of testimony, however, a Burbank judge found enough evidence to order all five defendants — Weston, Parmelee, Gonzales, Parker and Canez — to stand trial for torture, robbery and assault. Weston's attorneys are trying to work out a deal with prosecutors that would send him to prison for five years. Parmelee is expected to be released soon and to accept a plea deal that would not require her to serve more time.

Considering the charges carry a maximum sentence of life, it's a bargain.

While Weston and Parmelee were behind bars, the invisible gears of the foreclosure process continued to turn. They got a delinquency notice on a property of theirs in Beverly Hills. They were $42,000 behind. In November, they were sued by J.P. Morgan, a formality on the way to foreclosure of their house. For now, it sits vacant.

In a jailhouse deposition in February, Parmelee said that all of her properties were in foreclosure. “It's crazy,” she said. “This economy is really bad. … Everybody is out of business. Everybody is bankrupt. Everybody doesn't have any money, including Donald Trump.”

Asked by the Weekly to account for the trail of financial destruction in his wake — the bankruptcies, the foreclosures, the unpaid bills — Weston argued, in essence, that this is how business is done. He was just playing by the rules that others have used to build their empires.

“I was always told that if you're not being sued, you're not doing anything in life,” he says. “Look at Donald Trump. Same thing. Him and the bankruptcy court are on a first-name basis.”

Another perspective comes from Daniel Weintraub, an attorney who represented Weston and Parmelee in bankruptcy court. He knew them as investors with aggressive goals for their portfolio — no different from legions of other speculators through the '00s.

“They were like so many people who thought tomorrow would never come,” Weintraub says. “There are people who borrowed and borrowed and borrowed, and the banks loaned and loaned and loaned. And then the music stopped.”

Weston's victims have a less charitable view. Many believe Weston should have been prosecuted for any of a series of frauds and forgeries. When he wasn't, it made him think he was untouchable.

“I believe he had that sense of invulnerability,” says Julius Johnson, who represented Loudd in her civil case. “You do so much dirt and you are rewarded for it so handsomely that you think, 'There's nothing I can't get away with.'”

Garcia and Dean are still under investigation for loan-modification fraud. At the preliminary hearing in the torture case, Garcia considered invoking his Fifth Amendment right not to incriminate himself. Then he changed his mind. He also filed a $10 million lawsuit against the five defendants.

In a brief interview outside court in January, he said he was getting out of the real estate business.

“I have nightmares about them beating me,” he said, a large scar still visible on his forehead. “I'd rather work at McDonald's.”

Dean offered limited cooperation with the police and did not testify. Shortly after the beating, he fled California. At last word, he was in Arizona.