Fresno condo complex in meltdown

Investor blamed for deals that put 96 units at risk.

Published online on Saturday, Sep. 12, 2009

There's a pool at Stonemark condominiums in Fresno, but no one swims. For-sale signs dot the complex. Dozens of padlocks signal a ghost town.

Only a handful of residents remain -- and that number shrank again when Jessica Delatorre moved her family out of the condominium she had rented for about two years.

"We got a notice to move out," she said recently. "The bank will take it over."

Lenders are busy at this 106-unit complex at McKinley and Winery avenues in east-central Fresno. All but 10 are bank-owned or going through foreclosure, and property values have dropped by 90% or more.

In interviews and legal documents, many people blame a rough-edged Alameda County real-estate investor with a persuasive pitch for the meltdown of Stonemark.

James Delbert McConville, who has been accused of fraud in lawsuits over other real-estate deals around the state, could not be reached. Steve Morger, an attorney for McConville, declined to comment on the allegations against him. Investors, attorneys and a former employee claim McConville used so-called "straw buyers" -- people who used their credit to get loans and often received a fee in return -- to gain access to loan proceeds. When the loan payments weren't made and the properties went into foreclosure, those straw buyers were left on the hook, often suffering damage to their credit ratings.

"There were multiple straw buyers involved in the Stonemark fiasco," said Michael Lampe, a Visalia attorney who is suing a lender over a condo deal at the Fresno project. Lampe's lawsuit does not directly involve McConville or name him as a defendant.

Lampe filed a lawsuit on behalf of JPMorgan Chase after the lender found two deeds of trust on the same Stonemark property. A Fresno doctor who received the first deed testified in a deposition in May that he was to get a $10,000 fee from McConville and a portion of any profit from a resale.

The physician testified that James McConville had told him that using middlemen to receive loans is a common financing method. McConville said he would make all mortgage payments, but he didn't.

And the Fresno physician -- who had met McConville through a relative and attended a promotional session with other investors -- started getting default notices.

"I trusted these people," the physician said during the deposition. "I got snowed, and it damaged my credit."

McConville is named in a lawsuit by SunTrust Mortgage, which accuses him and a group of Kern County residents of fraud in connection with $2.4 million worth of loans SunTrust bought and thought were secured by trust deeds. SunTrust planned to package and then sell them to investors but couldn't because the loans were unmarketable.

In addition, McConville and his daughter Nicole McConville are accused of defrauding a private lender in Marin County of more than $400,000 by selling property that was collateral for the loan and never repaying him.

Then there is a complaint filed in Alameda County by Sung Kim, a former employee of James McConville, who says Stonemark Asset Portfolio and other corporations linked to the pair are shells without assets or stockholders. Kim wants lost overtime pay.

At Stonemark, some of the condominiums were sold to different buyers, but the mailing address for those buyers is the Fremont address of James McConville. It is unclear how many units were involved.

Former McConville employee Jack Thomas says Stonemark was a converted apartment complex when McConville came on the scene. "He gets straw buyers and offers to pay them money to use their credit. Sometimes he pays them and sometimes he doesn't," said Thomas, who worked as a construction superintendent for McConville.