Co-Ringleaders In S. California Sale Leaseback Racket Get 15, 10 Years For $12M+ Equity Stripping Ripoff Of Homeowners Seeking Foreclosure Rescue

In Los Angeles, California, Southern California Public Radio KPCC 89.3 FM reports:

• Five participants in a massive fraud scheme were sentenced [] in Los Angeles to one to 15 years in federal prison. The defendants were found guilty of conning homeowners facing foreclosure out of millions of dollars in equity. U.S. District Judge George H. King saved the harshest sentence — and words — for co-defendant Edward Seung Ok, a 43-year-old former resident of Huntington Beach, who was sentenced to 15 years in prison. Ok "is more culpable than all the other defendants'' and "falls far short in the full acceptance of responsibility,'' King said.

• According to prosecutors, Ok and ringleader Martha Rodriguez masterminded the con targeting more than 100 homeowners throughout the Southland who were seeking to avoid foreclosure. By telling the homeowners they could stave off foreclosure with short-term loans and refinancing, she and those working with her skimmed off more than $12 million in equity, Assistant U.S. Attorney Gregory A. Lesser said.

• Although the homeowners were promised the process would allow them to keep their homes, they ended up losing title. In reality, new loans were obtained through the use of "straw buyers'' who lenders were led to believe were real buyers. The new loans were used to buy the homes from the owners by paying off the balance on their existing mortgages, and the ring would pocket the remaining money.

• The banks that funded the new mortgages also lost money when the straw buyers didn't make the loan payments, and the new loans went into default. King sentenced the 38-year-old Rodriguez to 10 years in prison. [...] Under her plea deal, Rodriguez also agreed to forfeit her interest in five homes, a truck and about $900,000 in cash seized by the government, according to the U.S. Attorney's Office.(1)

Source: 5 sentenced to prison for fraud scheme that targeted homeowners.

For the U.S. Attorney (Los Angeles) press release, see Five Who Targeted Homeowners In Default Sentenced To Federal Prison In $13 Million Mortgage Fraud Case (O.C. Man Gets 15 Years for Fraud, Refusal to Account for Off-Shore Money).

(1) Also sentenced were:

• Maria G. Juarez, 38, of Diamond Bar, who received three years in federal prison;
• Vladimir Stefanovic, 38, of Lancaster, who was sentenced to a year and a half behind bars; and
• Cynthia Valenzuela, a 27-year-old Downey resident who worked for Rodriguez as an escrow officer, who was sentenced to a year and day in prison.

Feds Left Holding The Bag On Home Seized From Alleged Equity Stripping Foreclosure Rescue Operator

The Huntington Homes blog at The Orange County Register reports:

• It sounds odd. The home in foreclosure for $3,589,000 at 3281 Bounty Circle in Huntington Harbour is owned by …. Uncle Sam? It’s true. Here’s how it happened:

• When Edward Seung Ok pleaded guilty to his part in a $12 million mortgage fraud ring, the feds took his fancy house, [...] as part of the deal. There was some equity when the case began, but eventually, between the drop in the real estate market and Ok’s failure to make his mortgage payments on the house, the equity disappeared, says Steve Welk, assistant U.S. attorney and asset forfeiture chief.

• “When we go after real property, people usually stop paying their mortgage,” Welk says. “What we do in those situations is we allow the lender to foreclose and we come back in only if there’s money left over.”

For more, see Guess who got left with a $3.59 million foreclosure?

In a related story, see From a harbor-view home to a jail cell.

Go here for earlier posts and any available updates on the alleged $12 million equity stripping scam.

Sentencing In S. California Foreclosure Rescue Scam Postponed To December

In what possibly is one the largest foreclosure rescue criminal prosecutions ever in California (although see the Stanislaus County, CA prosecution, Plea deal for men accused of fraud?) and maybe even the country, sentencing for four of the five individuals charged in the scam has been postponed to December 17, 2007, according to a Stipulation and Order filed last Friday (August 10, 2007) in a Los Angeles Federal Court.

The scheme victimized more than 100 homeowners and allegedly caused losses of at least $12 million. It resulted in the indictments of Martha Rodriguez, of Downey, Edward Seung Ok, of Torrance, Cynthia Valenzuela, of Downey, Vladimir Stefanovic, of Lancaster, and Maria G. Juarez, of Reseda. The indictment alleged 19 counts of mail fraud and seven counts of aggravated identity theft.

Of the five, Juarez has not (as of yet) agreed to plead guilty and her trial is scheduled for November 13. Of the remaining four, Rodriguez and Valenzuela entered plea agreements with the government in February (see Seal Beach escrow operator pleads guilty in fraud case).

Since the last time I visited this case, Ok and Stefanovic have entered plea agreements with the government, according to the case docket reports. The pleas were entered in June, and are currently under seal (ie. unavailable for public consumption).

For earlier reports on this case, see:

• FBI Press Release - November 30, 2005
• FBI Press Release - July 20, 2006
• 5 People In Custody For Scamming Homeowners (Channel 2 - Los Angeles, July 20, 2006)

Go here for other posts on this story.

Bond Revoked For Foreclosure Rescue Operator Facing Criminal Charges; Allegedly Engaged In More Equity Stripping Scams While Awaiting Trial

After being released on bond and awaiting trial (originally scheduled for November 13, 2007) on criminal charges relating to an alleged foreclosure rescue, equity stripping scam that allegedly victimized more than 100 homeowners by stripping them of at least $12 million in home equity, Southern California foreclosure rescue operator Maria Juarez (aka Maria G. Juarez), has been charged again for allegedly engaging in additional equity stripping scams of homeowners facing foreclosure.

She was initially charged back in 2006 by being added as a defendant in a grand jury indictment that was originally handed up in 2005. She was facing charges along with the following four confederates (all from California): Martha Rodriguez, of Downey, Edward Seung Ok, of Torrance, Cynthia Valenzuela, of Downey, Vladimir Stefanovic, of Lancaster. By the summer of this year, her four confederates had agreed to plea guilty and were awaiting sentencing, pending Juarez' November 13 trial (presumably, they were all cooperating with prosecutors and prepared to testify against her).

A superceding indictment adding additional equity stripping charges against Juarez involving transactions occurring after she was released on bond was filed on November 1. Needless to say, she is now in the custody of the U.S. Marshal and is being held with no bail; her November 13 trial has also been postponed. Go here for earlier posts with links to media reports & FBI press releases relating to the initial charges.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Bond Revoked For Los Angeles Area Foreclosure Rescue Operator Facing Criminal Charges; Allegedly Engaged In More Stripping Scams While Awaiting Trial

(original post 11-16-07)
After being released on bond and awaiting trial (originally scheduled for November 13, 2007) on criminal charges relating to an alleged foreclosure rescue, equity stripping scam that allegedly victimized more than 100 homeowners by stripping them of at least $12 million in home equity, Southern California foreclosure rescue operator Maria Juarez (aka Maria G. Juarez), has been charged again for allegedly engaging in additional equity stripping scams of homeowners facing foreclosure.

She was initially charged back in 2006 by being added as a defendant in a grand jury indictment that was originally handed up in 2005. She was facing charges along with the following four confederates (all from California): Martha Rodriguez, of Downey, Edward Seung Ok, of Torrance, Cynthia Valenzuela, of Downey, Vladimir Stefanovic, of Lancaster. By the summer of this year, her four confederates had agreed to plea guilty and were awaiting sentencing, pending Juarez' November 13 trial (presumably, they were all cooperating with prosecutors and prepared to testify against her).

A superceding indictment adding additional equity stripping charges against Juarez involving transactions occurring after she was released on bond was filed on November 1. Needless to say, she is now in the custody of the U.S. Marshal and is being held with no bail; her November 13 trial has also been postponed. Go here for earlier posts with links to media reports & FBI press releases relating to the initial charges.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Two Plead Guilty In Combined Foreclosure Rescue/"Straw Buyer" Mortgage Fraud Scam

(revised 8-16-07)
Two out of five defendants charged in an alleged $12.9 million real estate scam combining a foreclosure rescue scam with a "straw buyer" mortgage fraud scam in which more than 100 Southern California financially strapped homeowners ended up losing their homes have pleaded guilty to their roles in the operation.

Martha Rodriguez entered her guilty plea yesterday, and her cousin, Cynthia Valenzuela, pleaded guilty last week, prosecutors said. Both are scheduled for sentencing on Aug. 20.

The three remaining defendants, Edward Seung Ok, Maria G. Juarez, and Rodriguez' common-law husband, Vladimir Stefanovic, face trial in July.

To read more on the current guilty pleas, see Seal Beach escrow operator pleads guilty in fraud case, reported by The Orange County Register, at ocregister.com.

For an earlier report on this case, see Defendants Face Prison Time for Calif. Foreclosure Scam, reported by DSNews.com.

Click here to read the Stipulated Statement of Facts in the Cynthia Valenzuela Plea Bargain Agreement, pages 15 through 21, describing the specific allegations of foreclosure rescue coupled with a subsequent mortgaging of the victims' homes using straw buyers, and ultimately defaulting on the newly obtained mortgages.

Go here for updated posts on this story.
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100+ Victims Of Sale Leaseback Foreclosure Rescue Operators Get Stiffed; Scammers Left Such A Convoluted Mess That Judge Unable To Order Restitution

In Southern California, The Orange County Register reports:

• The perpetrators of a mortgage fraud scheme involving an ex-Huntington Harbour resident left such a convoluted mess behind that a federal judge was unable to order restitution for the victims, who prosecutors say number more than 100.

• U.S. District Judge George H. King this week agreed with a recommendation from prosecutors and decided not to order restitution in the case because of the complexities surrounding title disputes, questions about equity and unresolved litigation spawned by the actions of the ring.

***

• Assistant U.S. Attorney Gregory Lesser said while there won't be a restitution order, the Justice Department's Asset Forfeiture section would be able to evaluate the claims of victims on an individual basis. He said about $1.3 million was seized once the government stopped the scheme.(1)

• "They created such a consummate and 'ginormous' mess that the restitution is, for practical purposes, incalculable,'' Lesser said. "Paradoxically, (perversely, even), by creating the huge financial mess they did, the defendants now have no restitution order against them. Unfortunately, that is what the law dictates in this situation.''(2)

For the story, see Mortgage cons won't have to pay victims.(3)

(1) Victims in the case can contact the U.S. Attorney’s office at usacac.vnsmail@usdoj.gov.

(2) Edward Seung Ok was sentenced to 15 years in prison for his part in the scheme and his $3 million Huntington Harbour home was seized by the government. Martha Rodriguez, 35, of Downey pleaded guilty in 2007 to 1 count of mail fraud and 1 count of money laundering, and as the “mastermind” of the operation, received 10 years in prison. Others sentenced: Cynthia Valenzuela, 27, of Orange got 1 year and a day in prison; Vladimir Stefanovic, 38, of Lancaster, was sentenced to 18 months in prison, and Maria G. Juarez, 39, of Diamond Bar, was sentenced to 3 years in prison.

(3) For another recent story on over 100 victims of a sale leaseback scam ending uo with little or nothing after the racket participants were prosecuted, both criminally and civilly, see 100+ Victims In Maryland-Based "Money Store" Sale Leaseback Foreclosure Rescue Scam To Get Stiffed In Proposed Civil Suit Settlement.

Southern California Foreclosure Rescue Victims

(revised 8-16-07)
The Orange County Register recently featured a story of some of the victims of a five person foreclosure rescue operation in Southern California. The scam, according to a federal indictment, defrauded about 100 homeowners throughout Southern California out of about $12 million. Those indicted were Edward Seung Ok, Martha Rodriguez, Cynthia Valenzuela, Vladimir Stefanovic, and Maria G. Juarez. Rodriguez and Valenzuela have each entered a plea of guilty; the remaining three face a federal court trial in July. Some of the victims currently have civil lawsuits pending against the rescue operators.

For more, see Let the borrower beware (At least 10 O.C. property owners have lost equity and even their homes in what federal prosecutors call a $12 million scam. As more homeowners get overextended, foreclosure rip-offs will rise).

For a prior post on this case, see Two Plead Guilty In Combined Foreclosure Rescue / "Straw Buyer" Mortgage Fraud Scam.

For the Federal prosecutor's version of the facts in this foreclosure rescue scam, see U.S. vs. Valenzuela - Plea Bargain Agreement; Stipulated Statement of Facts, pages 15 through 21, describing the foreclosure rescue deals, the subsequent mortgaging of the victims' homes using straw buyers, and the ultimate default on the newly obtained mortgages.

For past U.S. Department of Justice Press Releases on this case, see:

• Two Arrested On Federal Fraud Charges In Foreclosure Scam (11-30-05)
• Three Defendants Added To Federal Indictment In Foreclosure Scam (7-20-06)

Go here for other posts on this foreclosure rescue scam.

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Southern California Foreclosure Rescue Operator Faces December Sentencing In Equity Stripping Scam That Screwed Over 100+ Homeowners

In Los Angeles, California, The Downey Patriot reports:

• Martha Rodriguez, 35, of Downey is scheduled for sentencing Dec. 10 in U.S. District Court in Los Angeles for a $12 million foreclosure scheme that victimized commercial lenders and more than 100 homeowners in Southern California. [...] Included in the indictments were Edward Seung OK, of Torrance; Cynthia Valenzuela, 23, of Downey; Vladimir Stefanovic, 35, of Lancaster; and Maria G. Juarez, 36, of Reseda.

***

• The indictment alleges that the homeowners were asked by the defendants to sign documents including loan applications, trusts and grant deeds, while being assured they wouldn’t lose the titles to their homes. Rodriguez and her co-schemers promised the deed would either be held in escrow or that the title would be returned to them once their credit was repaired.

• Instead of obtaining refinancing, loan applications were submitted in the names of “straw buyers” claiming to buy the property. Some straw buyers were paid up to $5,000 for the use of their personal information. In other cases, the defendants used the personal information of others without their knowledge. The false information on the applications caused lenders to fund mortgages to the straw buyers. The defendants would then pay off the loan in default and pocket the rest of the money.

• As a result, homeowners lost the titles to their homes and lenders sustained losses when the second loan would go into default because the straw buyers failed to make the loan payments.

• Rodriguez ran the foreclosure scam while awaiting sentencing after pleading guilty to defrauding the Department of Housing and Urban Development in another loan scheme.

For the story, see Resident awaits sentencing in foreclosure scam.

Go here for earlier posts and any available updates on this foreclosure scam.

Federal Charges Against Eight; 100+ S. Cal. Homeowners Victimized in $12 Million "Rescue" Scam

DSNews.com reports that eight people have been charged with mail fraud and aggravated identity theft involving a 'foreclosure rescue' operation that targeted over 100 homeowners. According to the report,

1. the victims were identified by using databases of current foreclosure actions,
2. approached with offers of short term loans and refinancing with a co-signer with good credit,
3. mortgages were fraudulently placed on the victim's homes which subsequently went into default, resulting in a stripping of the victims' home equity.

The scam took place in several areas of Southern California.

Click here for the whole story.

Go here for updated posts with links to media reports & FBI press releases relating to the initial charges. Seung Ok