Washington Man Gets 25 Years In "Bonded Promissory Note" Foreclosure Rescue Ripoff; Pocketed Upfront Fees, Rent From Bogus Sale Leasebacks

In Los Angeles, California, Central Valley Business Times reports:

• Jeff McGrue, 51, of Tacoma, Wash., who was found guilty in January of swindling California homeowners facing foreclosure, has been sent to prison for up to 25 years for running a foreclosure rescue ripoff.



• He had promised to prevent foreclosure through the paying off of their mortgages, but in reality doing no more than sending their lenders fake notes and keeping the money the homeowners sent to him, prosecutors say.

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• Mr. McGrue and the others identified homeowners who were facing foreclosure or who were “upside-down” on their mortgages. Relying on a network of “consultants,” many of whom were real estate agents, he recruited the homeowners into his “Gateway Program.”



• Through the Gateway Program, Mr. McGrue and the others falsely told homeowners that, if they paid an enrollment fee and monthly rent and signed over title of their homes to Gateway, he would use “bonded promissory notes” purportedly drawn on a U.S. Treasury Department account to pay off their mortgages, thereby stopping foreclosure proceedings.



• The homeowners were falsely told that lenders were legally required to accept the notes, that they would be able to buy their homes back from Gateway International at a discount, and that they would receive up to $25,000, even if they chose not to re-purchase their houses.

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• Mr. McGrue and his co-schemers enrolled more than 250 victims in the “Gateway Program,” but they did not save a single home. Instead, he collected approximately $1 million in the form of enrollment fees and rent from these victims, say prosecutors.



• The evidence at trial showed that Mr. McGrue signed bogus documents to make it appear the victims’ outstanding mortgages had been paid off so he could re-sell the victims’ properties, which had been re-titled in Gateway’s name, to unsuspecting buyers.

For the story, see Foreclosure scammer sentenced to prison for $55 Million swindle (Faces a quarter century behind bars for ripping off desperate homeowners).

For the U.S. Attorney (Los Angeles) press release, see Washington State Man Sentenced To 25 Years For Orchestrating Foreclosure-Rescue Scheme.