California Authorities Bust Up Alleged "Bait & Switch" Predatory Lending Scam Operation, Thousands Victimized

In San Bernardino County, California, the Los Angeles Times reports:

• State and local prosecutors said Tuesday that they had shut down a mortgage fraud ring that allegedly victimized thousands of seniors and others, some of whom lost their homes. The San Bernardino County district attorney's office arrested five people and were waiting for two more to surrender to face charges of conspiracy, grand theft and elder abuse as part of a crackdown on alleged sub-prime mortgage lending scams with the California Department of Justice.

• A related [California AG civil] lawsuit filed in Los Angeles County Superior Court accuses six companies of using predatory lending practices to trap homeowners in illegal and expensive loans.

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• The six companies -- Lifetime Financial Inc., Nations Mortgage Inc., Greenleaf Lending Inc., Virtual Escrow Inc., Olympic Escrow and Direct Credit Solutions Inc. -- were operated by Eric Michael Pony, 25, of Tarzana and family members, the lawsuit said. In a coordinated action, San Bernardino Dist. Atty. Michael A. Ramos announced that Pony, a former real estate salesman, was expected to turn himself in to authorities Tuesday. [...] Also expected to surrender was his sister, Paulette Pony, 23, of Tarzana, a notary public for Lifetime Financial. The California secretary of state's office lifted her license in December in connection with felony conspiracy charges and for failing to disclose a forgery conviction.

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• The criminal and civil actions against the Pony family members and associates and their companies are believed to be the most ambitious by law enforcement since California's once-booming housing industry was hit last year by a crippling downturn that made it difficult for tens of thousands of borrowers to pay soaring sub-prime mortgages with adjustable interest rates. Brown said it was only the first of several legal actions planned to fight mortgage fraud.

For more, see State breaks up alleged sub-prime fraud ring (5 are arrested and 2 sought, accused of victimizing thousands of Californians, some of them elderly and some who lost their homes).

For story update, see Final two suspects in real estate fraud case surrender to authorities:

• The company used telemarketers to sell inflated real estate loans with high fees, using forged documents and crooked escrow agents and notaries. Most of the victims were elderly or did not speak English. [...] Also held are Jacob Shawn "Coby" Franco, 46, of Encino; Eli Hassine, 25, of Sherman Oaks; Carol Binnie Pencille, 57, of Granada Hills; Sibpun Ampornpet, 31, of North Hollywood; and Jason Imperial Burbidge, 35, of West Hills.).

For additional background information on this case, see:

• For the civil lawsuit filed by the California Attorney General, see Complaint - People v. Lifetime Financial Inc., et al.
• California AG press release announcing the civil lawsuit - Attorney General Brown Shuts Down Mortgage Scam Artists,
• San Bernardino County DA press release announcing the criminal charges - District Attorney Arrests 7 in Statewide Predatory Lending Scheme.

Story update (7-22-08):

• Two More Jailed in Mortgage Scam.

Go here for story updates.

Another Defendant In Alleged "Bait & Switch" Predatory Loan Scam Takes Plea, 3 Year Prison Sentence

In San Bernardino, California, the San Bernardino Sun reports:

• Eli Hassine, one of seven defendants in [one of the county's biggest predatory mortgage lending cases], pleaded guilty to four counts and accepted a sentence enhancement [...] in San Bernardino Superior Court.

• Hassine, 25, was originally charged with 47 counts, including conspiracy, grand theft, forgery and filing false documents. As part of the plea bargain, Hassine wrote a four-page letter to the court and admitted that $2.5 million was taken from victims.

• Hassine is the fourth defendant to plead guilty in the case, leaving as remaining defendants Tarzana-based Lifetime Financial owner Eric Pony, 26, his sister Paulette Pony, 24, and Jacob Shawn Franco.

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• The investigation is ongoing, prosecutors have said, and there could be hundreds of other homeowners who have fallen victim to a bait-and-switch scheme by operators of Lifetime Financial.

For the story, see Defendant in predatory mortgage case takes plea bargain.

The California Attorney General has filed a parallel civil lawsuit against this alleged mortgage fraud operation:

• For the AG's civil lawsuit, see People v. Lifetime Financial Inc., et al.,
• AG's press release announcing the civil lawsuit - Attorney General Brown Shuts Down Mortgage Scam Artists,

Go here for earlier posts & any updates on this story.