A San Jose police officer running for a seat on the San Jose City Council is being sued for mortgage fraud, marking another chapter of legal trouble for the political hopeful.
Tam Truong, a sergeant with the San Jose Police Department who’s worked in law enforcement for two decades, allegedly defrauded an employee of Orange Coast Title Company, allowing him to ditch his mortgage and later illicitly collect over $500,000 from the sale of a home. Truong is running for the District 8 seat, the same one he sought through an appointment process earlier this year. He also unsuccessfully ran for council in 2012.
Attorneys for Orange Coast and Real Advantage Title Insurance Company claim Truong “used his position of trust and authority as a SJPD Police Officer to fraudulently convince” an escrow officer that a lien on his property could be removed from a preliminary title document, court documents said.
The complaint filed against Truong in Santa Clara County Superior Court in September 2022 said he showed the escrow officer documents from his 2015 Chapter 7 bankruptcy to help convince her the lien was eliminated from his home on Plumstead Way in San Jose.
The complaint alleges that after defrauding the escrow officer in January 2021, Truong conspired with two others to sell the Plumstead home in July 2021.
Troung’s actions resulted in the sale going through as if he owned the title of the home outright, without any liens, the complaint said. Rather than pay back his mortgage with the money from the sale, he is alleged to have pocketed the cash and later reinvested it in another home.
“Because of his conniving, Truong obtained approximately $538,725.09 which should have been paid to satisfy the deed of trust that remains as a valid lien against the Plumstead Property,” the complaint said. Real Advantage is involved because that company issued a policy of title insurance to the person who bought the home from Truong at the time.
Truong declined comment because the issue is “an ongoing legal dispute.” His attorney, Vinod Nichani, did not immediately return a request for comment. In an April court filing responding to the complaint, Nichani wrote that Truong and the two others named in the lawsuit deny all allegations against them.
Truong is alleged to have continued making payments on the mortgage for the Plumstead home to avoid detection, until he purchased another home in San Jose on Flintwood Court. He allegedly paid for it in part with the money from the sale of Plumstead.
Orange Coast and Real Advantage said the lien holder has threatened to foreclose on the Plumstead home because the mortgage is in default.
The companies said they have paid and will continue to pay “substantial amounts to keep the deed of trust current, and may be required to pay the remaining principal if (Truong and the two others) fail to pay off and satisfy that deed of trust.”
The companies are seeking damages totaling at least what is owed on the mortgage and a court injunction preventing Truong from selling or transferring the Flintwood home, among other requests.
An attorney for Orange Coast and Real Advantage, Jeremy Katz of the Hall Griffin firm, told San José Spotlight the firm does not comment on ongoing litigation.
A San Jose real estate expert, who asked to remain anonymous to comment on the case, said this kind of incident is rare and it seems Truong’s actions were intentional.
“Let’s be clear, this isn’t a whoops. He has enough experience in real estate, he knew what he was doing,” the source told San José Spotlight. “Anyone who has been through Chapter 7 bankruptcy, you become an expert in all kinds of debt.”
But the real estate expert also noted the title company broke from proper procedure.
When Truong asked to have his lien removed from a preliminary title document, the escrow officer should have brought it to a title officer above them for review, and the title officer should have brought it to an in-house attorney, the source said.
“There is a title officer whose sole job is to protect the company and make sure things like this never happen,” the source said. “The title officer should have caught it.”
This is not the first time Truong has been sued. He faced wage theft lawsuits in 2014 from former employees of his now-shuttered private security company, San José Spotlight previously reported. As of January, one former employee claimed Truong still owed him $30,000.
The mortgage fraud case is still active and tentatively scheduled for a trial-setting conference in March 2024, court records show.Truong 09.29.2022 Complaint