By Khalida Sarwari
For three years, they were the Bonnie and Clyde of the South Bay: a young San Jose couple who ran an elaborate scheme to swindle landlords out of an estimated $60,000 in rental income. But, as was the outcome for the infamous criminal duo of the 1930s, the law would eventually step in and put an end to the couple’s crime spree.
For Timothy August, 35, and Monica Perretta, 31, that fateful day was in December 2011. Authorities arrested the couple on suspicion of defrauding several landlords in three South Bay cities since 2008.
Instrumental in their capture and prosecution was Patrick Mallory, a 73-year-old community college instructor who owns a 1,700-square-foot, three-bedroom ranch-style home at 461 Richlee Drive in Campbell. Mallory met the couple on a Sunday evening in July when they came by to see the house, and over the course of a 90-minute conversation he was roped into their act of being a responsible married couple.
“They had their stories well-honed,” Mallory said, “like a musical duet that had played together for years and knew how to complement each other.”
When August and Perretta handed over a personal check for a deposit and reports indicating they had stellar credit, Mallory abandoned his protocol and took them at their word.
“I got lazy,” said Mallory, who lives in Dixon. “I didn’t want to make another 200-mile trip after work.”
Two weeks later, Mallory realized he’d made a big mistake. The couple had moved in, but a check they gave him for more than $5,000 was from a closed bank account. Still, Mallory gave August and Perretta the benefit of the doubt in hopes that there had been a mistake.
That hope dimmed every time he asked for rent and got excuses instead. What’s more, the couple kept three pit bulls inside the house that ravaged the back yard and a bedroom. August and Perretta were responsible for some of the damage, too, from flat-screen TVs they had mounted on the wall and products they had spilled on the carpets.
After 35 years of being a landlord and hearing horror stories about unruly tenants, Mallory realized one day, “No, I’ve really met the tenants from hell.” Wasting no time, Mallory notified an eviction service and took August and Perretta to civil court. The pair did not show up to the hearing and countered by filing for bankruptcy. Their aim, Mallory said, was to stay in the house without rent for as long as possible.
The couple had practiced the same stalling scheme at three other homes in San Jose and another in Morgan Hill, in each case leaving the landlords so frustrated and exhausted that once they got rid of them, the landlords didn’t want to have anything to do with them. One landlord in San Jose even paid August and Perretta $2,300 to move out.
But not Mallory. He notified the Santa Clara County District Attorney’s Office of his suspicions, and in November attorneys launched an investigation into the case.
Victor Chen, a deputy district attorney in the major fraud unit who spearheaded the investigation, credited Mallory for being the driving force behind the case.
“He really went out of his way to research and find other victims,” said Chen. “I call him the Erin Brockovich of the case.”
Chen found that Mallory was not August and Perretta’s sole victim. The couple had defrauded several other homeowners out of nearly $60,000 since 2008 by using the same scheme: providing falsified income records and credit reports to rent homes ranging from $2,000 to $2,600 a month.
In most of the cases, they found ads for the homes on Craigslist. Once they moved in, they would use bad checks to pay rent and then gave a series of excuses to delay the eviction process. During their squatting periods, August and Perretta also made money by subleasing rooms in the homes to three people to the tune of $700 to $750 per room. By the time they were finally evicted, the landlords were defrauded out of four to six months of rental income.
In Mallory’s case, it was a loss of $10,500 in the three months they stayed at his home, accounting for legal fees and repairs. Two men are now renting the house–a Santa Clara County sheriff’s deputy and a Superior Court clerk–and they had to go through a much more grueling process before they moved in, said Mallory. The experience with August and Perretta, He said the experience “has made me more determined to always follow my protocol even though I feel certain that people are a good bet.”
To be protected from such a scheme, Chen advised landlords to keep their guard up.
“Run your own credit report, call the references they give you. Ask for at least three to four references: an employer, a friend and a previous landlord,” said Chen. “And don’t sign anything on a Sunday.”
He said August was operating out of “sheer greed,” because he had a decent job at the time working as a computer technician at Aicent, Inc., a San Jose-based mobile tech company. August has a prior criminal record that includes theft and passing bad checks and was on probation at the time of his arrest.
For the lease fraud schemes, prosecutors charged him with 17 felonies, including second-degree burglary, grand theft, passing bad checks and extortion. He pleaded guilty to the charges. Perretta, too, pleaded guilty to five counts of felony grand theft.
On April 3, August and Perretta will be sentenced in Santa Clara County Superior Court to one year in jail, followed by five years of probation for him and three years of probation for her, and ordered to pay nearly $60,000 in restitution to their victims.
Campbell ‘renters’ enter guilty pleas to charges of lease fraud
