Ex-Real Estate Agent Held in Alleged Trust Deed Scam

A former Burbank real estate agent was in custody Wednesday on suspicion of bilking more than 30 clients out of at least $2 million in a trust deed scam, authorities said.

David Davidson, 31, who left Burbank in 1994 after several clients accused him of selling fraudulent investments, was arrested Monday night by Burbank police at his home in the San Francisco Bay Area after a two-year investigation, said Det. Cheryl Skinner.

Police allege that from 1991 to 1994 Davidson, as a partner in the now-defunct Leading Edge Realty firm, took between $15,000 and $330,000 each from clients who believed they were investing in second trust deeds. But in fact, the owners of the homes against which the money was lent knew nothing of the transactions and received none of the funds.

“He had a good reputation in the city, and people trusted him,” Skinner said. “He approached people with what appeared to be a good opportunity, but he never invested any of the money.”

Instead, Davidson used the cash to support his “lavish lifestyle,” which included a posh home in the Glendale foothills where he lived with his wife and two children, and to pay debts, police say.

He used part of the money to pay interest to the investors, but the scheme began to unravel when he was unable to keep up the payments, said Skinner.

“When their interest payments stopped coming, some of the investors contacted the property owners, and that’s when they found out the piece of paper he had given them was worthless.”

Davidson, who faces 18 felony counts of grand theft and five felony counts of forgery, is being held at the Los Angeles County Men’s Central Jail in lieu of $1.3 million bail, and is scheduled to be arraigned Monday. If convicted, he could face 12 years in state prison, said Deputy Dist. Atty. Laura Aalto.