Sacramento- This Kayden Kross-thing is getting really good. Which means it’s getting out of control and there’s foreign guys and talk of death threats. And Mike South now admits that he’s Kross’ paid shill on the Internet with assurances that truth will out.
Well it better for her sake. Because from my conversation Saturday afternoon with Scott Henley who was the broker in the Sacramento real estate deal involving Kross, the facts only tighten the noose if you take them at face value.
It seems that Kross had a cabal of mad genius associates that may have been involved in other smarmy deals where people lost their homes, and where Kross and her minions profited handsomely. Henley couldn’t tell you all that for sure, but the slickness of this operation suggests there were insiders who made it all happen very efficiently.
One of them is apparently a loan officer for Washington Mutual in the Pasadena office. And we’ll get to that.
So far, we only have one instance of impropriety that we know about- involving a Vietnam vet named TJ – because that was the case that prompted indictments against Kross where TJ blew the whistle on Kross.
Henley, a former Eagle Scout [this is no lie], says this is the first time he’s had any scrap with the law. Henley, himself, got hit on two counts. He’s not real happy about it but is more than happy to lend his perspective. In summing it up, Henley says what Kross did was “basically screw over some pretty good people”.
According to Henley, Kross’ actions have also made it pretty much impossible to rectify any situation she caused. I asked him what he meant by that.
“I’ve got no reason to lie and I’m charged with two felony counts that I’m not too happy with,” continues Henley. “My defense is to put it out there the way it is.”
Henley’s business associate Tim Hough, who also faces charges, first brought Kross into the deal. Hough and Kross were fornicating at the time, and Hough introduced Kross to Henley who later found out that Hough had introduced Kross to TJ as his “wife”. What Henley did know was that Hough and Kross had a relationship particularly since Hough leased Kross a Corvette and paid her utilities.
Henley knew Hough from when he worked as a mortgage lender and Hough was a member of the sales team. Henley describes Hough as an aggressive guy who was good at what he did. Regarding Kross, Henley says this:
“She could demonstrate $8,000 a month in income which was enough to qualify her for a line,” says Henley.
“She had a near 800 FICA score but she was young and I was concerned about that. She had already owned a home, and, according to Tim, she wanted to get out of the business of stripping.”
What did impress Henley was the fact that Kross had attended some of his seminars.
“She was into it- absolutely. She seemed very genuine.”
At the time he first met her, Henley thought Kross was a sweet girl who had gotten mixed up in a weird world. Later he discovered she was a raving lunatic when things weren’t going her way. His description.
”At the time, I took her at her word that she wanted to get out of that business,” says Henley.
“She agreed to purchase a property that was in foreclosure and write them a lease with an option to purchase in a year,” Henley also tells me.
“She would buy the property and lease it back to them for $1050 a month and they had the option to buy the house back at the same price she bought it for which was $265,000. In addition the people who sold the house were supposed to get a note for $26,500 securing their equity. At the close of escrow Kim would write that back to them.”
According to the lease-option agreement, Kross couldn’t sell or refinance without written permission from the parties involved. Henley’s role in all this was as an independent consultant.
“I was compensated, but my goal was to make sure it occurred in the way it was expressed to everyone.”
The deal went through, and Kross got an initial check for $16,000. The rent on the property was $1050 and her mortgage was $1500 a month. Henley said she was making a nice piece of change.
“Then she complained within a week after escrow that she didn’t get enough money,” Henley continues.
“She refused to sign the deed of trust to go back to the people. I was furious with that. She was breaking the deal. A month later she was demanding more money. In order for me to protect the integrity of the arrangement I wrote her an additional check for $4,000.”
It was then that Kross signed the deal. According to Henley, three months later Kross transfers title where she signed a grant deed to Tim Ngo which broke the contract, says Henley.
“This is what I meant by her making it impossible to rectify the situation,” he explains. “Now someone else owns the property I don’t know.”
Henley then did a little digging to find out what Kross and Co. allegedly pulled.
“They made it look like it was free and clear,” says Henley. “They took out an equity line from Washington Mutual. Somehow Washington Mutual wrote an equity line for $250,000. Keep in mind that the property is worth $265,000. Kross has a loan for $238,000 plus the $26,500 that was recorded for the owners. So now it’s encumbered by 200%. But Washington Mutual’s not going to be in third position at 200% the value of the property. What they made it look like, instead, was that it was free and clear. And they wrote this guy Tim Ngo a $250,000 equity line.”
In his research Henley also discovered that the loan was written at the Washington Mutual Pasadena branch. Henley tells me the name of the loan officer but I’m going to hold off that one for awhile. But he’s a Persian and Henley tells me there’s a lot of Persians involved in this operation. I thought originally there had been an Ethiopian in the fuel supply, but I may have been mistaken.
“Because Washington Mutual’s a big institution they don’t use title and escrow companies,” Henley explains.
“They do their own title research and they use a trustee which in this case was a company called Optima. Supposedly some connection between Optima and the loan officer existed to make sure the property looked like it was unencumbered, the credit line is issued and the next day it’s cashed. That’s $250,000 basically stolen.”
So with all the monkey business on the part of others, Henley winds up holding the bag.
“Absolutely,” he agrees. “I was the guy that actually went with the people [TJ] who sold the property when they found out that Kayden had transferred title. They contacted me and I went to the authorities. I wrote a complaint and helped draft a complaint. They went to the detective and the detective turned and said I’m basically going to investigate you, Scott, not the rest of this stuff.”
Henley has the entire discovery package because the arraignment is on October 14th. And one must assume that because Mike South is a paid shill he will be there in person in Sacramento to hold Kross’ hand when this all goes down.
But, curiously, Henley finds all the details he just related me to be missing from that package. For instance, it was never mentioned that Henley allowed TJ and his family to live in one his own rental properties for free nor the fact that he helped them with their cell phone bill and other instances.
“They became my friends,” he says. “I told them this deal would work and I was trying to be a man of my word. This was over 2 ½ years ago.”
Also in the discovery package, according to Henley, there’s no connection drawn between Kross, Axelrod and Ngo.
“But she received $10,000 from these guys to sign the deed. I’ll bet if you look at her bank records she got a kickback from the sale, too. Who knows.”
Henley confesses that he didn’t know that Axelrod, the notary on the shady deal, and Ngo had affiliations with a porn company. He was only filled in later by Kross’ OBF [old boy friend] who evidently had been sharing her with Hough without his knowledge. Henley recalls how Axelrod showed up one day at TJ’s house introducing himself as the new property manager.
“TJ called me, and I met Axelrod in my office,” says Henley. “I told Axelrod to get bent. This is not the deal and Kross can’t sell the property. It’s breaking the contract and you can expect ramifications.”
Henley also received death threats from Kross’ people but can’t swear it came directly from Axelrod.
“When I found out that this loan had been done through the Washington Mutual office in Pasadena I called that branch and asked to talk to the manager. I explained the details and said I don’t think it’s your policy to lend 200% in third position on a property. He said absolutely not. I told him, in fact, that’s what one of your loan officers has done. I gave him my cell phone number.”
“Within five minutes I’m getting a call from somebody claiming to be someone named Steve. He says is this about money? I said what do you mean. He said I know where you live. He said I know you got two kids and if you know what’s good for you you’re going to shut the hell up and stop looking for me. This could have been anybody. But to my way of thinking if anybody’s willing to defraud a bank, they’re probably willing to go to great lengths to do whatever they have to do.”