Charges have been filed in two separate cases against predatory real estate companies and loan brokers who conspired to deceive first-time home buyers as well as homeowners seeking to refinance their existing mortgage. In the first case, Joseph Villaescusa, 46, Whittier, California, Isabel Gutierrez, 49, Tony Gutierrez, 52, Downey, California and Ralph Rodriguez, 39, Huntington Beach, California were each charged with nine criminal counts, including conspiracy to commit grand theft, grand theft, and forgery. If convicted on all counts, the defendants each face a maximum penalty of 9 years in jail and $18,000 in fines.
Both suits were filed by Los Angeles City Attorney, Rocky Delgadillo, the city’s chief prosecutor.
Beginning as early as April 2006, the defendants, acting as representatives of Norwalk-based Century 21 Allstars, Inc., deceived and induced five first-time home buyers to apply for and obtain mortgage loans under a fictitious government program that would supposedly pay the difference between what the victims said they could afford, and the actual monthly mortgage.
The defendants targeted low-income, Spanish-speaking victims by flooding Spanish language radio with ads voiced by Isabel Gutierrez that touted the nonexistent government program.
Four separate sets of victims contacted the defendants in response to the radio ads and expressed their desire to Isabel Gutierrez to purchase a home through the non-existent government program. Isabel and Tony Gutierrez – both licensed real estate brokers for Century 21 Allstars – met with the victims and asked how much they could afford in monthly mortgage payments.
The Gutierrez’s assured the victims that the government would assist them in paying the difference between what they could afford, and what their monthly mortgage payments would be. Relying on the promise of free financial assistance, the victims agreed to purchase homes that ranged in price from $409,000- $470,000.
The victims were also told that in order to qualify for the program, they needed to purchase a house from a set of five that were shown to them by Tony Gutierrez.
The defendants chose dilapidated homes they couldn’t sell, in lower-income neighborhoods, and then presented them to the victims as the only homes eligible under the government assistance program. By representing both the buyers and the sellers, they were able keep the truth from either party, all while driving up the sales price – increasing their commissions and broker fees.
The defendants promised to sweeten the deal by offering the services of Tony Gutierrez – who is also a contractor – who would perform necessary repairs to the dilapidated houses by folding the cost of the repairs into the new home loans.
Once a victim agreed to purchase a home, the defendants falsified and forged loan applications by overstating the victim’s income, without the victim’s knowledge, in order to guarantee approval of the loan. These falsified closing documents were drafted in English, while the victims spoke and read only Spanish.
To date, all of the victims have been forced into foreclosure, and all but one lost their homes.
Villaescusa is the President of Maxres, Inc, which does business as Century 21 Allstars. Identical charges were filed against the real estate businesses Maxres, Century 21 Allstars, and Gutierrez & Associates.
In the second case, John DiBona, 22, and Layne Nocera, 53, Northridge, California, Wayne Stimson, 55, Bakersfield, California, Garnik Poghosyan, 30, Van Nuys, California and Vighen Mkrtoumian, 29, Glendale, California were each charged with 21 criminal counts, including conspiracy to commit grand theft, grand theft, forgery, and false advertising. If convicted on all counts, the defendants face a maximum penalty of 18½ years in jail and $35,000 in fines.
On April 1, 2007, DiBona, a loan consultant for Liberty One Financial Group in Van Nuys, “cold called,” Harbor Gateway homeowners Michael and Stephanie Armijo and offered to refinance an existing mortgage loan on their home. Along with Nocera, a Liberty One Sales Director, DiBona, in a classic bait-and-switch, deceived the Armijos into applying for and obtaining refinancing which turned out to be in excess of the amount, interest and monthly payments they were led to believe they would receive from the lender.
The victims later learned that their signatures had been forged on many of the loan documents, and that their income and assets had also been changed on many of the documents. By the time the victims were made aware of all of the discrepancies and tried to get assistance with problems, they were threatened with foreclosure and suffered substantial financial losses.
Mkrtoumian, a notary public, notarized some of the forged or falsified loan documents. Mkrtoumian was not present when the Armijos signed the loan documents. Stimson’s name and title appear on some of the forged and falsified documents, though the Armijos say they never spoke with him. Stimson is also a loan broker at Liberty One Financial. Prosecutors also filed charges against Liberty One Financial Group.
“Today’s filings send a clear message: The City of Los Angeles will not tolerate predatory businesses seeking to make a quick buck by deceiving homeowners who are trying to save their homes in today’s precarious economy,” said Delgadillo. “In addition, we will seek out and hold accountable to the fullest extent of the law those who contributed to our current financial mess by preying on lowincome, first-time home buyers.“
City Attorney Delgadillo encouraged residents of Los Angeles who think they may have been victimized by predatory loan brokers and real estate businesses to contact the City Attorney’s Office using a specially-created email address: firstname.lastname@example.org.
In announcing today’s filings, City Delgadillo was joined by Pastor Herrera, the Director of the Los Angeles County Department of Consumer Affairs; Joel Sayres, the Directing Attorney of the Consumer Law Project at Public Counsel, Robert Levanthal of Public Counsel, and John Fogarty of the law firm Manatt, Phelps & Phillips.