Jesse Wheeler, 37, Roseville, California, Jewel Hinkles, aka Cydney Sanchez, 64, Los Angeles, California, Cynthia Corn, 61, Oakland, California, and Brent Medearis, 48, Modesto, California, were sentenced on September 29, 2014, by U.S. District Judge William B. Shubb for their roles in a foreclosure rescue scam.
Wheeler was sentenced to 36 months in prison; Hinkles was sentenced to 60 months in prison; Corn received 30 months imprisonment; and Medearis 22 months in prison.
According to court documents, Hinkles was the founder and general manager of Horizon Property Holdings LLC, Beverly Hills, California. From 2008 through 2010, Hinkles offered a service called “Save My Home” or “Homesaver” that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on homeowners’ mortgages. Horizon offered its program directly to clients and also through several layers of “affiliates,” who promoted and sold the program to clients, mostly in Northern California.
The defendants told homeowners they would save their residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, thereby reducing the homeowner’s principal and monthly mortgage payment. To prevent foreclosure, the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II. In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The purpose of these petitions was to invoke the automatic provisions of federal bankruptcy law that bring to an immediate halt any foreclosure actions against a debtor’s property.
Because the fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, the defendants were able to pretend that they were providing a legitimate service and continue to collect fees from defrauded homeowners. To enroll in the Save My Home program, clients were required to pay an initial payment of approximately $3,500 and monthly fees up to $1,500. The Homesaver program required clients to pay an initial payment ranging from $1,750 to $6,500 and monthly fees up to $850. In total, the scheme collected at least $4.9 million from more than 1,000 homeowners, including homeowners whose mortgages were owned by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). However, according to court documents, the defendants never arranged for the purchase of a single mortgage from any of the clients’ lenders and never negotiated a single mortgage principal reduction for any of Horizon’s clients.
Michael P. Stephens, Acting Inspector General, Federal Housing Finance Agency Office of Inspector General stated: “It is particularly vile for fraudsters to target and take advantage of individuals who are scared, vulnerable and simply trying to protect their families and save their home. Jewel Hinkles, Jesse Wheeler, Cynthia Corn, and Brent Medearis will now have time to reflect on their actions. We will continue to pursue any individual who perpetrates such fraud, and we are proud to have worked with our law enforcement partners on this case.”
“This scheme preyed upon desperate, financially distressed homeowners who were at imminent risk of losing their homes to foreclosure,” said Supervisory Special Agent Todd Irinaga of the Sacramento FBI’s Modesto resident agency. “This demonstrates the success of a multi-agency investigation, and we are thankful for the collaborative efforts of our San Joaquin Valley Mortgage Fraud Task Force partners. The FBI will always work with its law enforcement partners to identify and investigate individuals who flout laws and exploit vulnerable citizens for personal gain.”
This case was the product of an investigation by the Federal Housing Finance Agency, Office of Inspector General; the United States Postal Inspection Service; the Federal Bureau of Investigation; and the Stanislaus County District Attorney’s Office. Assistant United States Attorneys Lee S. Bickley and Matthew D. Segal prosecuted the case.