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California attorney general charges 8 people in alleged mortgage scam

December 23rd, 2008 12:07 PM by Lehel Szucs

California attorney general charges 8 people in alleged mortgage scam

The 39-count complaint includes felony charges of grand theft, money laundering and conspiracy.
By Tiffany Hsu
November 5, 2008
After falling behind on their house payments, Eleuteria and Arthur Washington of Redlands responded to a flier they got in the mail promising to help them renegotiate their mortgage.

What happened next, says the California attorney general's office, was an example of the kind of mortgage scam that has become rampant amid rising foreclosures.

Bank records indicate that homeowners were bilked of more than $700,000, although state investigators could not estimate the number of alleged victims.

"It's a rising issue just because the sheer volume of foreclosures has grown, so the number of scams has grown alongside it," said Dana Simas, a spokeswoman for the attorney general's office.

Simas said state officials began getting complaints about the alleged fraud in January. She said the alleged fraud ring mailed fliers to hundreds of homeowners offering to renegotiate mortgages, reduce monthly payments and transfer delinquent loan amounts to the revised loan.

They charged a fee of $1,500 to $5,000, and told their victims to stop making mortgage payments and avoid communicating with lenders, Simas said.

When homeowners complained that they were still getting foreclosure notices, First Gov would say that the loans had been renegotiated but that the homeowners still needed to make a "good-faith payment" to accounts with names like "Reinstatement Department" or "Resolution Department," the attorney general's office said.

Group members kept payments in multiple accounts at multiple banks, Simas said. When authorities seized the accounts, they learned that most of the money had been wired to Mexico, she said, adding that authorities hope some of the remaining balance can be returned to the victims.

The 39-count complaint includes felony charges of grand theft, money laundering and conspiracy.

Simas said three people were arrested last week in connection with the case: Rosa Conrado, 51, of San Bernardino; Jesus Flores, 42, of Baldwin Park; and Saul Amador, 22, of West Covina.

Conrado and Amador remained in custody Tuesday in San Bernardino County, Simas said, while Flores was released because of jail overcrowding. None of the three could be reached for comment.

Conrado is set to be arraigned Friday, Flores is scheduled for Jan. 9 and Amador is awaiting a date.

Arrest warrants have been issued for two other men: Juan Perez, 47, of Grand Terrace and David Giron, 43, of Ontario, Simas said. Neither could be reached for comment.

Charges were also filed against three women: Antonia Gonzalez, 65; Isaura Hernandez, 33; and Alejandrina Maldonado, 42. Simas said all three are believed to have fled to Mexico.

Simas noted that the group's fliers -- printed on goldenrod paper in yellow envelopes -- are still circulating.

Homeowners desperate to renegotiate their loans have become easy prey for swindlers, said Ginna Green, a spokeswoman with the Center for Responsible Lending.

Ironically, many lenders and legitimate advocacy groups have reported trouble making contact with struggling borrowers who need help renegotiating their loans. But con artists, Green said, may be more motivated to find these people.

"The more people are in foreclosures means the more people to pick on, and the more likely you'll be able to make money off of them. And people are just so seized up that they can't respond," she said.

Green said borrowers should keep in touch with their lenders and be wary of paying for services before they are completed.

Hsu is a Times staff writer.


Posted in:General
Posted by Lehel Szucs on December 23rd, 2008 12:07 PM



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