California Man Gets 22 Year After Copping Guilty Plea For Running Ponzi Scheme, Fraudulent Sale Leaseback Equity Stripping Ripoffs

In Los Angeles, California, the Contra Costa Times reports:

• A Downey man whose financial fraud schemes preyed on blue-collar Latinos throughout the Southland was sentenced Monday to 22 years in federal prison for what a federal judge said was a case "close to my heart."(1)

• Juan Rangel, 47, who is already behind bars awaiting sentencing for a 2009 conviction for bribing a Bank of America branch manager, pleaded guilty last October before U.S. District Judge S. James Otero to one count each of mail fraud and money laundering.

• In a three-hour hearing in Los Angeles federal court, about a dozen of Rangel's victims tearfully told Otero of losing their homes, their savings, and their health to a Ponzi scheme that took in nearly $30 million as well as a scam that preyed on homeowners facing foreclosure. [...] Otero recommended Rangel be deported back to Mexico after he is released from prison. A restitution hearing was set for May 6.

• According to a signed plea agreement with prosecutors, Rangel was expected to be sentenced to 15 years in prison, but Otero departed from the deal and added another seven years to the sentence. Outside court, Bowman told the crowd it was the victims' statements that made the difference.

• In the mortgage fraud scheme, Rangel and others targeted Spanish- speaking homeowners who were at risk of losing their homes and offered to help them avoid foreclosure, Bowman said. Rather than assist them, however, Rangel took titles to their homes and drained the remaining equity out of the properties, the prosecutor said.

• As part of that scheme, Rangel arranged to sell the homeowners' properties, usually without their knowledge, to third-party straw buyers, according to Bowman. He then applied for loans in the straw buyers' names and, using a variety of falsified documents, duped mortgage lenders into approving more than $10 million in bogus loans, the prosecutor said.(2)

• The indictment also charges Javier Juanchi, 42, of Sherman Oaks, a vice president at Financial Plus, and Pablo Araque, 40, who owns Downey-based tax preparation and bookkeeping company A-One Tax Pros. Juanchi and Araque, who were charged in the mortgage fraud only, are scheduled to face trial in March before Otero.(3)

For the story, see Downey man gets 22 years in $30M Ponzi scheme.

(1) According to the story, Judge Otero said the Rangel case "comes close to my heart," since he grew up in the blue-collar Hollenbeck neighborhood, just blocks from the downtown courthouse. "I'm familiar with the hard work that most of you put forward to achieve the American Dream," the judge reportedly told the victims after they presented their impact statements to the court. "He has stolen your dreams, your futures (and) your health, both emotional and physical," the judge reportedly said.

(2) See Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals for other incidents that led to criminal prosecutions in sale leaseback deals.

(3) By 'rolling' first and copping a guilty plea, Rangel beat Juanchi and Araque in the "race to the prosecutor's office" to snag the best plea deal. See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observation (made in the context of drug conspiracy cases) on the so-called "race to the courthouse/prosecutor's office" that frequently takes place during the early stages of these "multi-target" criminal probes and prosecutions:

• In practical terms, drug conspiracy cases have become a race to the courthouse. When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

Don't be surprised if Rangel's plea deal requires him to 'throw his buddies under the bus' if they refuse to cop plea deals and insist on going to trial. And if it doesn't, don't be surprised if Rangel "bellies up" to the prosecutor and tells what he knows about his former colleagues in an attempt to shave a few years off his 22-year prison sentence.