Kathy Chen, 48, Westminster, Richard Salgado Gonzalez, 59, and Daniel Gonzalez, 56, are charged with 154 felony counts including one count of conspiracy, 47 counts of grand theft, one count of attempted grand theft, 40 counts of forgery, 30 counts of recording false documents, 30 counts of identity theft, one count of elder financial exploitation, and four counts of forging an official seal. If convicted, the defendants face a sentence ranging from two years up to 109 years in state prison.
Chen was arrested Monday, June 1st, 2009, on a $3 million warrant and must prove the money is from a legal and legitimate source before posting bail. A warrant has been issued for the arrest of Richard and Daniel Gonzalez.
Chen worked as a real estate broker and owned three businesses including Chen Financial, KC Realty, and SBC Financial. She is accused of conspiring with her then-boyfriend, Richard Gonzalez, and his brother, Daniel Gonzalez, to commit over $17.5 million in fraud by recruiting and paying “straw buyers” to obtain mortgage loans for the purchase of multiple properties. A straw buyer is a person who allows their credit to be used for the purchase of a property they never intended to control.
Between Jan. 13, 2005, and July 10, 2007, the defendants are accused of obtaining 47 fraudulent loans in excess of $17.5 million through the use of straw buyers’ credit on 35 properties. These properties included 13 in Orange County, 16 in San Bernardino County, and 6 in Kern County, California. The defendants are being prosecuted in Orange County for all 35 California properties.
Chen, Richard Gonzalez, and Daniel Gonzalez are accused of acquiring city business licenses for nonexistent businesses under the pretense that the businesses were owned by the straw buyers to make them eligible for higher income loans. They are accused of fabricating loan applications to reflect higher incomes for the straw buyers, forging the names and signatures of straw buyers on various deeds and loan documents, and forging the seal and notary stamp on a variety of notarized documents and deeds, which were then fraudulently filed with the Orange County Clerk-Recorder’s Department.
The defendants are accused of using the personal and credit information of some of the straw buyers, including an 89-year-old woman, on several occasions without the knowledge or consent of the straw buyers, who had only agreed to one property purchase.
Acting as the escrow company, the defendants are accused of making some monthly payments on the loans to prevent suspicion by the lender. They are accused of then defaulting on the loan and keeping the excess loan money.
Warrants have been issued for the arrest of the Gonzalez brothers, both of whom may currently be living in Puerto Vallarta, Mexico.
This case was investigated by the Orange County District Attorney’s Office. The investigation is ongoing. Anyone with additional information regarding the whereabouts of Richard or Daniel Gonzalez is encouraged to contact Supervising District Attorney Investigator Ron Frazier at (714) 347-8691.
Deputy District Attorney George McFetridge of the White Collar Crime Team is prosecuting this case.