7 On Your Side
Tikal files for bankruptcy while on trial for fraud
ALAMEDA COUNTY, Calif. (KGO) -- Options are running out for homeowners in the Bay Area and across the country who feel victimized by a mortgage rescue scheme.
Alan David Tikal, a man on trial in the 29-count criminal indictment in Alameda County for real estate fraud, mortgage security fraud, and filing false documents. Tikal appeared in an Alameda County court room Thursday, but it's what's he did outside the court that has many people talking.
Tikal is being held at Santa Rita Jail in Dublin on $780,000 bail. He filed for Chapter 11 bankruptcy earlier this week for the business he runs, KATN Trust.
Prosecutors allege Tikal did business as KATN Trust when he collected upfront fees on the false promise of refinancing home mortgages at a 75 percent savings. ABC 7 legal analyst Dean Johnson says the filing could be bad news for anyone who feels victimized by Tikal and wants to get their money back.
"Civil litigation against a debtor in bankruptcy grinds to a halt. People who have sued the debtor cannot proceed with their suits and people who haven't filed suits aren't allowed to file suits," said Johnson.
That's bad news for people like Willy Ruiz of San Francisco who gave KATN Trust $1,500 in hopes of saving his San Francisco home from foreclosure.
"Probably he knew what he was going to do and that's the reason he took this money from a lot of people," said Ruiz.
Documents obtained by 7 On Your Side indicate KATN did business in at least seven states from California to Florida. Johnson says it's possible if Alameda County successfully prosecutes Tikal, it could win restitution even for victims outside the county.
"The judge's discretion is very broad as to the amount of restitution and it's often up to the prosecutor to bring to the judge's attention victims who may be out of county or possibly even out of state," said Johnson.
That would suit Ruiz just fine.
"I'm hoping that I still can get my money back and that's all that I'm concerned about," said Ruiz.
7 On Your Side contacted Chase Bank about Ruiz's situation. This week he learned the bank had indefinitely delayed the foreclosure on his San Francisco home while it attempts to work out a loan modification. We like to thank Chase for that and I'll let you know how things work out.
bankruptcy, trials, fraud, mortgages, 7 on your side, michael finney
- Bay Area braces for coldest night of the cold snap
- Shooting victim found near school in Vallejo
- Palo Alto man says he was well-fed in North Korea
- Deep freeze grips most of United States
- Paul Walker memorial in California draws thousands
- Harding makes 37 saves, Wild beat Sharks 3-1
- Smith leads Jets to 37-27 victory over Raiders
- Family asks for help in finding SF hit-and-run driver
- Man falls asleep on flight, wakes up in empty plane
- Winter Spare the Air called for Sunday and Monday
- Photos: Record low temperatures freeze the Bay Area
- abcnews: Newlyweds accused in thrill-kill murder
- roundup: Homeless shelter program; Windsor kidnapping
- weather: Bay Area weather forecast for Monday
Most Viewed StoriesMost Viewed Photos