A federal grand jury in Santa Ana has charged a total of 38 Southern California
residents in a series of mortgage fraud schemes. The charges, contained in 29
indictments returned last Wednesday, include wire fraud, mail fraud, bank fraud and
making a false statement to the Department of Housing and Urban Development.
The indictments allege that the defendants, all of whom worked in the residential
real estate business, engaged in various schemes to commit fraud by submitting
forged documents to lending institutions. Some of the indicted defendants are
forgers who created documents, including bogus pay stubs and W-2s, that were
included in home loan applications. Others are licensed real estate professionals
who, according to the indictments, ordered forged documents and included them in
home loan applications.
Many of the loans made on the basis of the false documents were submitted to the
Department of Housing and Urban Development for mortgage insurance under a program
intended to assist people with moderate incomes purchase homes. All of the false
paperwork was intended to deceive lenders into making loans, or in HUD’s case, into
insuring them.
These cases are the product of an extensive, ongoing investigation by the Federal
Bureau of Investigation into mortgage and real estate-related fraud in Southern
California. Assisting in the investigation was the Department of Housing and Urban
Development’s Office of Inspector General.
If convicted, the maximum penalty under federal law for each offense of wire or
mail fraud is five years in federal prison. The maximum penalty under federal law
for each offense of bank fraud is 30 years imprisonment. The maximum penalty for
making a false statement to the Department of Housing and Urban Development is two
years in federal prison.
All of the defendants will be issued summons to appear for arraignments next year
in United States District Court.
The defendants are listed on the next page.
An indictment contains allegations that a defendant has committed a crime. Every
defendant is presumed innocent until and unless proven guilty beyond a reasonable
doubt.
