Thursday, December 15, 2011

Sacramento Feds Indict Five In Upfront Fee, Fractional Interest Deed Transfer Foreclosure Rescue Racket Employing Abuse Of Bankruptcy Courts

From the Office of the U.S. Attorney (Sacramento, California):

  • United States Attorney Benjamin B. Wagner announced that five persons had been charged in a federal indictment, [...] in connection with a foreclosure rescue scheme. The five defendants, Jewel L. Hinkles aka Cydney Sanchez, 61, of Los Angeles; Bernadette Guidry, 43, of Irvine; Jesse Wheeler, 34, of Roseville; Cynthia Corn, 58, of Oakland; and Brent Medearis, 45, of Modesto; were charged in an indictment returned by a federal grand jury on December 1, 2011. Hinkles and Guidry are charged with eight counts of mail fraud. Each of the defendants except Guidry is charged with 16 counts of bankruptcy fraud.(1)


  • The defendants allegedly told homeowners that for a substantial up-front payment and a monthly fee they would save the homeowners’ residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, or would reduce the homeowners’ monthly payment by negotiating a mortgage reduction with the lender.

  • The indictment alleges that contrary to the defendants’ representations, they failed to arrange for the purchase of clients’ mortgages or to negotiate reductions in the mortgage debt owed by clients.

  • To prevent foreclosure and defraud the existing lenders, the indictment alleges that the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II.

  • In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The purpose of these petitions was to invoke the automatic provisions of federal bankruptcy law that bring to an immediate halt any foreclosure actions against a debtor’s property.(2)

  • The fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, during which the defendants collected fees from defrauded homeowners. The indictment alleges that the defendants collected at least $5 million in fees from more than 1,000 clients.

For the U.S. Attorney press release, see Five Defendants Charged In Foreclosure Rescue Scheme.

(1) According to court documents, Hinkles was the founder and general manager of Horizon Property Holdings LC, located in Beverly Hills. From 2008 through 2010, Hinkles offered to the public a service called the “Save My Home” or “Homesaver” program that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on homeowners’ mortgages. Guidry was Horizon’s office manager and assisted Hinkles with promoting the foreclosure and “principal reduction” program. Horizon offered its program directly to clients and also through several layers of “affiliates,” who promoted and sold the program to clients, mostly in Northern California. These affiliates included Property Relief!, operated by defendant Cynthia Corn in South San Francisco, and JW Financial Solutions, operated by defendant Jesse Wheeler in Roseville. Defendant Brent Medearis sold the program out of Modesto as an affiliate of Property Relief!.

(2) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

No comments: