Is Winston Lum a criminal mastermind or a patsy?

It's hard to imagine there could ever be a patsy as gullible as Winston Lum, a club tennis pro and occasional shoplifter now facing a possible life sentence for his role in an elaborate Rincon Hill real estate scam.

During a jailhouse interview, he described the tragicomic set of circumstances that led to his predicament. It began a couple of years ago, when a stripper he'd met called his cellphone with the promise of a date and sex. She asked him to meet her at a department store. When he arrived, she asked him to hold her handbag while she took care of some personal business elsewhere. It was filled with merchandise store security believed was stolen. Lum had literally been left holding the bag. Police arrested him for shoplifting.

"I'm stupid. I'll admit it," he said.

Lum looking pensive during a jailhouse interview.
Eartha Goodwin
Lum looking pensive during a jailhouse interview.
Kaushal Niroula, an alleged con man who befriended Lum.
San Francisco Police Department
Kaushal Niroula, an alleged con man who befriended Lum.

In jail, he met a pleasant Nepalese man who instantly became his friend. This was Kaushal Niroula, an alleged con man accused of, among other things, masterminding a scam that resulted in New College of California having to shut its doors. Niroula convinced Lum he was a Stanford Law–educated billionaire in need of tennis lessons and a peculiar sort of financial assistance.

Lum's encounter with the smooth-talking schemer would change his life for the worse. Once out of jail, "we had two relationships: tennis, and signing things into my name," Lum recalls of his dealings with Niroula.

Lum's signatures have become key exhibits in a criminal case in which he, Niroula, and associates including San Jose real estate investor Jay Chandrakant Shah are alleged to have taken out $2.2 million in fraudulent home-equity loans on three luxury condos they didn't own. The condos were on the upper floors of the new 60-story One Rincon Hill building, which towers over the SOMA skyline.

The "scheme to forge documents and claim legal ownership of the victim's properties is an act of hubris difficult to fathom," District Attorney Kamala Harris said in a statement, in reference to the condos' unwitting owner, Shirley Hwang.

But Lum hardly fits the brazen fiend scripted in Harris' press releases. Instead, he's the true-crime equivalent of Chauncey Gardiner, the simpleton in Hal Ashby's movie Being There who stumbles into a vast and strange world of fabulous wealth he doesn't remotely comprehend. In signing documents that turned out to be forged property deeds, Lum says Niroula convinced him he was merely helping his new friend shield his assets in a nasty split with his domestic partner. Such gullibility seems implausible, until you look more closely at Niroula's proven mastery at enthralling victims with unbelievable ruses, and Lum's history of foolish life choices. "I will say that he doesn't really pay close attention to stuff," says Toa Duong, whose daughter took tennis lessons from Lum.

Lum isn't the only one who may not have seen the full picture behind Niroula's Rincon Hill fraud. Records and interviews show that intermediaries recruited to facilitate the Lum loan have been linked to troubling financial dealings that reach well beyond Rincon Hill. The escrow agent for that alleged fraud, Nga Ho Tran, has been implicated in more than a dozen mortgage fraud schemes around the Bay Area.

Indeed, leads emanating from Lum's tale point toward an extraordinary series of seemingly overlapping scams involving half a dozen of the nation's largest banks; a crew of straw-buyers, corrupt attorneys, and notaries; and careless mortgage lenders.

To carry out these schemes, real estate sharpies took advantage of the mortgage market of the mid-2000s, which was characterized by less-than-rigorous lending oversight, to orchestrate fraudulent transactions allegedly designed to bilk millions from banks. The thread connecting these apparent scams is Tran.

Banks alleged in a federal civil court case that the frauds involved at least $35 million in bogus loans. In a separate case, Tran and five purported coconspirators face felony fraud and larceny charges in Alameda County for their involvement in a plot to help an Oakland man steal his grandmother's house. Garrick Lew, who represents Tran on the Alameda County charges, declined comment.

San Francisco investigators and prosecutors on the Lum case appear to have been unaware of these other allegations of real estate fraud.

Records show that the note for Lum's fraudulent home-equity loans was passed on to a bank in Solvang, Calif., which in June was struggling under piles of nonperforming loans. After reviewing documents associated with the loan, Richard Newsom, a retired banking-industry examiner who worked for the Federal Deposit Insurance Corporation, told me the loans could be enough to push the bank into deeper trouble. "A number of questions remain unanswered as to why the little fish is sitting in the slammer when there are all kinds of breadcrumb trails that lead from this to a massive fraud," Newsom says.

Lum, meanwhile, seems to only barely absorb the fact he may spend the rest of his life in prison. He seems more preoccupied with whether his hair will turn out nice in a newspaper photo, and that I refer to him in print as a "tennis pro," not as a "tennis instructor."

He compares the alleged scammers who drew him in to the real estate and financial services professionals behind the 2008 U.S. financial collapse. Facile? Perhaps. But Lum's comment puts his complicated situation in terms even the simplest person might understand. "These are the people who messed up America," he said. "Why am I going to jail for them?"


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