9 Indicted for Straw Borrower Mortgage Scheme

Allison Tussey —  July 18, 2012 — Leave a comment

Nine people have been charged in a 26-count indictment: Eliseo Jara Jr., 33; Sergio Jara, 31; Antonio Perez Marcial, 40; Lucia Yolanda Chavez, 34; Arlene Jeanette Jara, 29; Candace Shantel Gonzales, 28; Joseph Shawn Chavez Jr., 38; Melissa Rochelle Jara, 31, all of Bakersfield, California, and Ricardo Fabian Salinas, 33, Los Angeles, California, for their roles in a mortgage fraud conspiracy.

The indictment was returned on July 12, 2012 by a federal grand jury in Fresno, California, and the defendants have since been arrested at their residences.

The indictment alleges that Eliseo Jara and Sergio Jara owned and operated Jara Brothers Investments Inc. (JBI), also known as Jara Brothers Development, a property development company. Lucia Chavez, their sister, owned Pershing Partners LLC, a property development business. Eliseo Jara and Sergio Jara also owned and operated Paragon Realty and Paragon Home Mortgage before selling Paragon Home Mortgage in 2007 to Lucia Chavez. Antonio Marcial recruited nominee buyers to purchase properties developed by JBI, Pershing Partners, and another defendant’s business. Arlene Mojardin, Candace Gonzales, Joseph Chavez, Melissa Jara, and Ricardo Salinas worked at various real estate and mortgage businesses.

According to the indictment, from approximately January 2007 to 2010 the defendants carried out a scheme to defraud banks and other mortgage lenders by selling properties owned by JBI, Pershing Partners, and the defendants to nominee buyers, using loans obtained from lenders based on fraudulent loan applications and false supporting documentation. The false statements and omissions in the loan applications frequently concerned the borrowers’ income, assets, employment status, and intent to use the home as a primary residence.

The defendants also often funded large down payments for the buyers of the properties, without disclosing that the down payments were coming from the property developers. Defendants at times paid nominee buyers a fee of $10,000 or more per home purchase. After the property sales closed and the defendants received the loan proceeds, many of the loans ultimately went into default and the lenders either foreclosed on the properties or sold the properties through short sales at a loss.

In some cases, Eliseo Jara used his companies JLE Holdings LLC and Owkins LLC to repurchase the properties from the lenders out of foreclosure or through short-sale agreements. The scheme involved more than $5 million in losses to lenders.

Eliseo Jara, Sergio Jara, Lucia Chavez, and Arlene Mojardin are siblings. Sergio Jara is married to Melissa Jara, and Lucia Chavez is married to defendant Joseph Chavez. Candace Gonzales and Melissa Jara are sisters.

The indictment also seeks forfeiture of the following assets: approximately $110,419 in cash seized from a defendant’s bank account, a 2007 Lexus GS350, and four properties owned by certain defendants.

The maximum statutory penalty for the conspiracy, bank fraud, mail fraud, and wire fraud counts is 30 years in prison and a $1 million fine. The maximum penalty for money laundering is 10 years in prison and a fine of $500,000. The actual sentence, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

United States Attorney Benjamin B. Wagner announced the indictment.

The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III are prosecuting the case.

The announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. One component of the FFETF is the national Mortgage Fraud Working Group, which is tasked with combating mortgage fraud schemes. For more information on the task force, visit www.StopFraud.gov.

Allison Tussey

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