In an earlier installment it was noted that Ms. Knox (Kati L Knox) and her San Leandro based business were the subject of a civil court proceeding in Alameda County. Though court records reflect alleged claims of real estate fraud, two specific mortgage related loan claims caught our attention. In light of the mortgage crisis and on-going nation-wide investigations by local District Attorneys and State Attorney Generals, we felt reporting on this matter was in the public's best interest.
Here’s what we know: Court records reflect that Ms. Knox personally acquired a $100,000 Equity Line of Credit (ELOC) using a co-tenant (two or more owners of a property) investment property as collateral, for a down payment on her (new) personal residence in Danville. Court and public records reflect Ms. Knox neither asked nor received approval from her co-tenant investor to use the co-tenant property as collateral. Furthermore, as supported by public records, Ms. Knox did not inform Bank of America (the source of the ELOC) when acquiring the loan that there was a co-tenant on the collateralized property. Moreover, court records indicate Ms. Knox does not recall filling out a loan application. We asked Bank of America about Ms. Knox’s claims. They made it clear every loan of any amount requires a loan application, and co-tenant (co-owner) disclosure is a key part of any real estate loan application. Most, if not all, loan applications do have truth in fact clauses (aka perjury clauses).
Sources and records indicate that when Ms. Knox’s co-tenant investor uncovered the unauthorized loan, Bank of America was contacted via the co-tenants attorney seeking an explanation. Bank of America replied almost immediately indicating the loan would be promptly repaid and closed, which it was.
The second matter relates to a loan from a current employee of Rosegate Assisted Living. After reviewing court records and determining this employee testified under oath and is currently listed on Rosegate’s website, we will refer to him by name; Darryl Chin (Mr. Chin).
Both Mr. Chin and Ms. Knox admitted Mr. Chin contributed money towards the “project”, in the amount of $30,000. Mr. Chin also admitted under oath that he and Ms. Knox were dating at some point.
Now where this transaction seemingly goes wrong is in who or how it was repaid. While under oath Mr. Chin and Ms. Knox had completely different answers on how the funds were repaid. Ms. Knox indicated that Mr. Chin’s employer; KMJ Associates (Rosegate Assisted Living) repaid the $30,000 in funds. However, Mr. Chin stated the funds were repaid via “Kati Knox’s personal check”. Clearly one of these parties is misleading the courts for reasons that are yet not clear.
According to court records Ms. Knox also admitted concealing from Mr. Chin the $100,000 ELOC she acquired. Ms. Knox stated, “It wasn’t something I talked about”. It appears Ms. Knox intentionally concealed the $100,000 ELOC from both her co-tenant investor and Mr. Chin, as well apparently concealed from Bank of America the fact she had investors other then herself. Ms. Knox also admitted she did not notify Bank of America she was using the funds from the ELOC as a down payment on a personal residence. Such information is required on loan applications, per Bank of America policy.
We found no evidence to indicate how Mr. Chin’s $30,000 contribution was used, or if it was even used towards the real estate transaction, as there is a key disagreement on an important part of that arrangement…the repayment of the funds. However, such a transaction between an employer and employee whereby a personal relationship has or does exist between a superior and subordinate has the potential for a very interesting sexual harassment claim.
We attempted to reach Mr. Chin regarding this matter. He failed to respond.
We attempted to reach Mr. Chin regarding this matter. He failed to respond.
