Monday, July 16, 2012

Sale Leaseback Peddler Gets 12 Years In Equity Stripping, Foreclosure Rescue Ripoff That Victimized Homeowners Of $1M+

In Los Angeles, California, The Orange County Register reports:

  • An Anaheim Hills man was sentenced to 12 years in federal prison Monday for his role in a mortgage fraud conspiracy and for evading taxes. Gregory Flores was also ordered to pay more than $1 million in restitution to homeowner victims and more than $98,000 to the IRS, the U.S. Attorney's Office in Los Angeles said. Flores pleaded guilty in February to one count each of wire fraud conspiracy and tax evasion.

    According to the plea agreement, Flores, along with co-conspirators Sheri Gale, a realtor in La Mesa, and Amy Hall, also of Anaheim Hills, a loan processor, executed an illegal scheme to defraud distressed homeowners facing foreclosure and lenders who made mortgage and home equity loans, the U.S. Attorney said.

    From May 2003 through June 2006, Flores managed the satellite offices in Anaheim Hills and Murrieta of All Fund Mortgage, based in Tacoma, Wash. He and the others falsely claimed they could save the homeowners from foreclosure. Homeowners with typically poor credit were solicited through mailings, prosecutors said. At least 21 homeowners were victimized for a total of $1.04 million.

    As part of the conspiracy, Flores and others convinced homeowners to allow an investor, who was really a "straw buyer" with good credit to be added to the title of their homes, and told them they could then refinance under more favorable terms.

    In most cases, title was never transferred back to the homeowner, essentially stealing the equity out of the property, prosecutors said. Few if any payments were ever made and the properties were eventually sold during foreclosure proceedings.

    Most of the time homeowners and their families were evicted without the knowledge they had no title to the property, Assistant U.S. Attorney Ami Sheth said.(1) Gale and Hall were charged with wire fraud; Gale has pleaded guilty, Hall's case is still pending, Sheth said.

(1) For more on this type of foreclosure rescue ripoff, see:

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