OAKLAND -- A top Seeno company sales executive pleaded guilty Friday to one count of wire fraud in exchange for her testimony against her employer, a dramatic twist in the Seeno saga that could strengthen the criminal case against the powerful real estate empire.
The attorney for Carey Hendrickson, 37, of Martinez, also spoke to Bay Area News Group for the first time, saying his client will testify if called before a grand jury or trial and that she was a small player in the case that began with a 2010 FBI raid of the Seeno family's Concord headquarters.
"I know she's not the biggest cog in this machine," attorney John Runfola said outside a federal courtroom in Oakland.
Hendrickson was indicted last year on three counts of wire fraud, becoming the first casualty from the 2010 FBI raid in which agents carted off dozens of boxes of evidence in their efforts to unravel complicated real estate transactions that stretched across much of the East Bay. The Seeno family empire, which has built homes across the Bay Area for generations and donated to countless political campaigns, has been heavily fined for environmental improprieties, but has avoided criminal wrongdoing.
She is accused of participating in a scheme that inflated the value of four houses she tried to buy in 2008 in a struggling Pittsburg development owned by her employer. Court documents show Hendrickson's alleged activities may have been part of a larger Seeno effort to
As part of the deal, prosecutors dropped two of the counts. She could still face a maximum penalty of 20 years and has agreed to pay $293,000 in restitution, but will not be sentenced until her cooperation with the prosecution is complete. A sentencing hearing was set for Sept. 12.
It has been a stressful year for Hendrickson, who is on disability leave from Discovery Sales, a Seeno company subsidiary, where she worked as district sales manager and managed the Contra Costa sales teams. She told the federal judge Friday that she missed Thursday's planned court date due to an "extreme anxiety attack."
In the half-hour proceeding Friday, a soft-spoken Hendrickson responded to the judge's questions before a nearly empty courtroom, except for a Seeno attorney who took notes.
In her plea agreement, Hendrickson accepted responsibility for hiding within loan documents down payment and mortgage assistance Seeno Homes promised her. In turn, Seeno Homes failed to disclose those builder incentives in the paperwork it submitted to the lender, leading the bank to issue loans based on inflated sales prices, according to the FBI affidavit.
The sales tactic of offering to pay a buyer's down payment and the first year of mortgage payments without disclosing that incentive to lenders is part of an emerging scam called a "builder's bailout," according to mortgage giant Freddie Mac.
Struggling builders often resort to such methods to quickly move inventory at inflated prices to maintain large lines of credit, according to Freddie Mac.
During a 16-month period in 2008 and 2009, various Seeno companies borrowed at least $1.24 billion in construction lines of credit, according to Contra Costa deed of trust notes. A now-settled civil lawsuit also claimed that the Seeno brothers owed $500 million in income taxes around that time.
The affidavit hints that Hendrickson may have preached the scam to her sales staff.
In an Aug. 23, 2007, email from Hendrickson to her Seeno sales staff titled "Appraisers," she told them not to inform appraisers about the incentive program.
"Offering up incentive information to the appraisers has destroyed the scheduled closings on two homes in the last couple weeks and we have been fighting to get new comps (comparable sales data) to appraisers this week," she wrote.
Hendrickson's attorney said his client was ready to move on with her life.
"Her job before this was selling automobiles. She had very little experience in this industry and learned by example and by doing," he said. "A lot of people in the banking and mortgage industry made a lot of mistakes, many of which were criminal in nature. Carey was a lower level person who made some of those mistakes. She's accepted responsibility for the fact that she did do things that were criminal in nature."
Contact Matthias Gafni at 925-952-5026. Follow him at Twitter.com/mgafni.