In Ventura County, California, federal and local police arrested 13 individuals linked to mortgage fraud operations that filed fraudulent loan applications with several banks and other lenders, generated millions of dollars in loan fees and real estate commissions, and caused millions of dollars in losses when the homes went into foreclosure because the purchasers were unable to make their monthly payments. Those arrested are among 14 charged in two federal indictments that were returned by a federal grand jury in Los Angeles. The indictments outline schemes in which real estate professionals prepared mortgage applications that contained false information about borrowers' income, employment, assets, and intent to occupy the properties. In the first case, which names 10 defendants, investigators estimate that the conspiracy was responsible for banks funding at least $25 million in mortgages. In the second case, which names four defendants, authorities believe that banks funded at least $10 million based on fraudulent loan applications.
The defendants in these cases generated huge commissions and fees through the mortgage application process, with the largest commissions coming when the banks approved loans and paid "yield spread premiums" or "rebates" to mortgage brokers who convinced borrowers to seek high-risk "option ARM" and similar mortgages that started with low monthly payments that dramatically increased after the "teaser" period, leaving many borrowers unable to make their payments.
The arrests were announced at a press conference hosted by Ventura County District Attorney, whose office first began the investigation. “The criminal conduct that is the basis of today's federal indictments is our own Ventura County example of the greed, avarice and fraud that drove much of this nation’s real estate meltdown,” He said.
The Ventura mortgage fraud cases led to arrests on the same day authorities announced a series of federal criminal and civil actions being filed in Southern California as part of a national mortgage fraud crackdown.
“Today we have seen arrests here in Ventura,” said United States Attorney André Birotte Jr. “In recent weeks, we have brought criminal cases alleging mortgage fraud all across the region, from Orange County to the Inland Empire and certainly in Los Angeles County. The perpetrators range from professionals in the industry, people like real estate agents and mortgage brokers, to individual borrowers who wrongly thought they could game the system.”
The first indictment in the Ventura County takedown involves individuals who did business under the name of Mortech Financial, where employees allegedly helped prepare fraudulent mortgage applications to make it appear that borrowers were qualified to obtain and repay loans. The applications were rife with false information, such as false employment, inflated income, and references to bank accounts that the borrowers did not actually hold, but which had been "seeded" by the defendants with funds to make it appear that the borrowers had qualifying assets, according to the indictment. Real estate agents and tax preparers worked with Mortech Financial employees to locate buyers and prepare false documents that were used in the fraudulent mortgage application packages. The indictment charges the 10 defendants in two conspiracies and in various counts of bank fraud and making false statements to financial institutions.
All of the defendants in this case face potential sentences of hundreds of years in federal prison if they are convicted of the charges in the indictment.
The second indictment involves Platinum Power Mortgage in Oxnard, which also allegedly submitted fraudulent loan applications on behalf of borrowers who in many cases lacked the employment, income, and assets to qualify for mortgage loans. In order to convince banks to approve mortgages, the operators of Platinum Power allegedly prepared applications that contained false statements and omitted relevant facts to make it appear, for example, that a borrower was self-employed with high income.
All four defendants named in the second indictment face maximum statutory sentences of at least 70 years in federal prison if they are convicted of all charges.
The investigation was conducted by the Ventura County District Attorney's Office, Real Estate Fraud Section; the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement; the United States Secret Service; IRS - Criminal Investigation; and the U.S. Department of Housing and Urban Development, Office of the Inspector General.
If you have been charged with federal Mortage Fraud, or any federal crime, it’s in your best interest that you obtain the legal counsel of a skilled and experienced Los Angeles & Ventura County Mortage Fraud Defense Attorney. Federal crimes are very serious charges. If convicted, you could be sent to a federal prison for years. For cases this serious, why put your future in the hands of an inexperienced federal criminal lawyer? At Goldstein Law Group, we have been representing clients for more than 46 years in federal criminal defense law. We have defended clients against all different types of federal crimes charges.
At Goldstein Law Group, we are aggressive Los Angeles and Ventura County Federal Mortage Fraud Lawyers who will fight your charges and utilize our experience, knowledge, and insight of the law to help you avoid a conviction. To schedule a free consultation to discuss your case, please contact a Los Angeles Federal Attorney at Goldstein Law Group today!