Los Padres Bank -- the Solvang lender hit by a Rincon Hill real estate scam created by alleged con man Kaushal Niroula --
has been taken over and sold by the Federal Deposit Insurance Corp., according to a Friday press release.
The FDIC estimated the cost to the deposit insurance fund would be $8.7 million, suggesting a scam by accused serial grifter Niroula to take out $2 million in fraudulent home equity loans may have accounted for much of the bank's troubles.
According to detectives, Niroula tricked loan broker Peter de Witte into lending $2 million against three Rincon Hill condos as collateral. The loans were subsequently sold to Los Padres Bank, according to records on file with the San Francisco County Recorder.
According to an Aug. 20 FDIC release, the agency intervened in the bank
in April, a month before de Witte acknowledged to SF
that Los Padres Bank had not yet been repaid for the
If Niroula's antics indeed played a role in the bank's seizure, Los
Padres would add to a growing list of victims enveloped in his
apparent fraud network. Niroula is currently awaiting trial in Palm
Springs on charges he murdered and looted the assets of a retired art
he'd befriended. He's also believed to have played a prominent role in the 2008 demise of
New College of California
, where Niroula tricked the school's president
into believing he would donate $1 million. Niroula is also accused of fooling a technology executive into advancing a $400,000 deposit for nonexistent artwork, and of stealing jewels from an elderly Marin County woman.
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