Tuesday, July 25, 2006

Three New Defendants in California Foreclosure Rescue Scheme Indictment

A federal grand jury has returned a new indictment that adds three defendants to a case stemming from a $12 million foreclosure scam in which homeowners who were in default on their mortgages were promised refinancing, but ended up having their homes sold to others after the equity had been skimmed.

The superseding indictment alleges a scheme orchestrated by Martha Rodriguez, 35, Downey, California and Edward Seung Ok, 40, Torrance, California who operated real estate and escrow agencies in Downey and Seal Beach, California. Rodriguez and Ok were arrested last November when the grand jury issued its first indictment.

The superseding indictment adds three defendants, as well as additional fraud counts and new identity theft charges. The new defendants are Cynthia Valenzuela, 23, Downey, California who is Martha Rodriguez’s cousin; Vladimir Stefanovic, 35, Lancaster, California who is Martha Rodriguez’s boyfriend; and Maria G. Juarez, 36, Reseda, California.

The indictment outlines a foreclosure scheme that targeted commercial lenders and homeowners in such areas as Artesia, Lakewood, Gardena, Wilmington, Carson, West Covina, La Puente, El Monte, Westminster, Downey, Van Nuys and San Bernardino, California. The scheme victimized more than 100 homeowners and allegedly caused losses of at least $12 million.

By combing databases that list pending foreclosure sales, the defendants located homeowners whose loans were in default. The victim homeowners were told that they could stop the foreclosure of their homes with short-term loans and by refinancing the mortgage with a co-signer who had good credit. However, instead of obtaining refinancing, the defendants submitted loan applications in the names of “straw buyers” who were purportedly buying the property. In some cases, the straw buyers were paid for the use of their personal information; in other cases, the defendants used personal information of people without their knowledge. The loan applications for the straw buyers – which always contained false information about the straw buyers – caused a series of lenders to fund mortgages. The loan proceeds were used to pay off the loan in default, and the remaining proceeds were skimmed off by the defendants.

Even though they were promised that they would keep their homes, the victim homeowners lost title to their homes, and the lenders suffered losses when the straw buyers failed to make loan payments and the second loan went into default.

Rodriguez has been held without bond since her arrest last year. Ok is free on a $1 million bond.  Valenzuela, Stefanovic and Juarez agreed to self-surrender at United States District Court in Los Angeles, California.

The indictment alleges 19 counts of mail fraud, each of which carries a maximum possible penalty of 20 years in federal prison, and seven counts of aggravated identity theft, each of which carries a mandated penalty of two years in prison. Only Rodriguez and Valenzuela are charged in all of the counts.

Rodriguez allegedly ran the foreclosure scam while awaiting sentencing after pleading guilty to defrauding the Department of Housing and Urban Development in another loan fraud scheme. If the jury determines that she committed the foreclosure fraud offenses while free on bond, she could receive another 10 years in prison.

mortgage fraud

1. I was so happy to find your website and see that some of these crooks are being caught!  I have been in the RE industry for years and I have seen so much fraud-which by the way I denied loans for and reported.  Why isn’t there more emphasis on catching and prosecuting these people?  I would love to work with a company/agency to catch these crooks-I know names and schemes and who’s connected to who.....

   Posted by  on  12/12  at  04:59 PM

2. Please remember that when someone is “indicted”, the grand jusry ONLY hears the side of the prosecution AND unfortunately some of these people/defendants plead guilty because the other option could mean the rest of thier lives locked up.  I personally am not involved but also work in the mortgage industry and have seen people WRONGFULLY accused.

   Posted by  on  01/11  at  07:05 PM

3. The hey days of double digit gains in real estate have produced the victims of the fraud and mortgage abuse.

   Posted by  on  07/15  at  03:37 PM

4. The banks bred this type of fraud. They turned the other way for the sake of profits.The banks should be accused! The banks prey on the average homeowners that then default and can’t make payments. It is the banks that lure people with deceitful loan programs designed with one thing in mind, which is greed. They are now crying foul. Shame on the BANKS and the fraud they commit everyday.

   Posted by  on  07/30  at  08:11 PM

5. the spirit of service desires to give mro than it desires to get out of evey transaction in life.

   It is my hope that the despite the fraud-folks that deserve consequence -the financial community continues to rally with a collective efforto serve those that are hurting during this difficult time.

   Posted by  on  05/18  at  03:26 PM

6. I just want to know who posted bond on Vladimir Stefanovic in this case

   Posted by  on  12/22  at  11:20 AM

7. I wonder if these guys were connected to the Federal Loan Modification commercials that run non-stop—perhaps they were selling off the leads? I know I’ve read a lot about them being a complete scam.

   Posted by  on  02/12  at  03:56 AM

8. MSEE & JD: SEEKING HELP: Foreclosure Fraud
   cheryl@medicalworks.com.  TV: RADIO:

   The foreclosure process is unconstitutional because Notice in inadequate and legal fees unconscionable.  IndyMac sent me an application to modify my loan, and at the same time filed a Notice of Default. I did not receive timely Notice. Now, I have to pay $20,000 in legal fees.  The mortgage contract has an open ended clause for up front legal fees to stop a foreclosure.  Banks can collect any amount; and lawyers generate massive paperwork (such as a 1500 pg Motion).

   Banks allege standards lower than consumers; and no duty to ensure a person receives certified mail.  This is unconstitutional because property right is the highest right.  Also, if banks foreclose, they pass the entire mortgage onto the taxpayer as a bad asset; for bailout.  The bank then sells the house and makes money, beyond bailout.  Bank lawyers’ financial incentive is to foreclose.  I would like to speak in WA. I could use some help!

   Posted by  on  04/23  at  09:50 AM

9. good news....new sentence date of 02/17/10...hope it goes through this time for the dirty thieves…

   Posted by  on  10/10  at  01:39 PM