Sacramento Feds, California AG Pinch Suspected Foreclosure Rescue Scammer For Allegedly Peddling Mortgage Debt Reduction Scheme; 1,200+ Victims Fell For Ripoffs: Authorities

In Sacramento, California, The Modesto Bee reports:

• Authorities on Friday arrested a Bay Area man accused of running a mortgage-relief scam that reached into the Northern San Joaquin Valley and beyond.
  
  Alan David Tikal, 44, was arrested at his home in Brentwood, in Contra Costa County, on charges that he defrauded more than 1,000 homeowners, U.S. Attorney Benjamin Wagner announced.
  
  He and state Attorney General Kamala Harris said Tikal persuaded homeowners that he could pay off their mortgage debt and replace it with new debt to his company, KATN Trust, reducing the principal to 25 percent of the original.
  
  Victims paid thousands of dollars in fees and made regular payments on their new loans, according to an affidavit filed Friday. Tikal's attorney, Fanya Young of San Francisco, said she could not comment because she had not reviewed the charges. Tikal was scheduled to appear in U.S. District Court in Sacramento on Friday afternoon.
  
  Tikal, who faces numerous counts of mail fraud, could be sentenced to up to 30 years in prison if convicted, Wagner said. Tikal pleaded no contest to fraud charges in a separate Alameda County case last year and was freed to await sentencing.
  
  The affidavit related to Friday's arrest said it involved "approximately 1,215" victims, 95 percent of them in California. About 185 were in the court's eastern district, which covers inland areas from Bakersfield to the Oregon border. The locations were not listed, but officials at the Stanislaus County district attorney's office estimate there are about 25 victims locally. The Stanislaus County district attorney's office helped state and federal agencies pursue the case, Wagner said. The fraud is said to have occurred from January 2010 to the present.
  
  As an example of how it worked, the affidavit says Tikal told "Mr. and Mrs. A.L. of Stockton" that he or his investors "could purchase a participant's home and sell it back to them for 25 percent of their current loan amount." The affidavit was written by special agent Joseph Camillucci of the Troubled Asset Relief Program, created in 2008 as part of the federal response to the financial crisis.
  
  That crisis happened in part because of mortgages on homes that had ballooned in value, then declined, leaving the owners at risk of foreclosure. The north valley was among the hardest-hit areas and still feels the effects in high jobless rates and sluggish home prices.
  
  Camillucci wrote that victims were "counseled to ignore the demands for payment by the original lenders whose claims are purportedly contrary to law … Tikal and his associates are enriched, and the homeowners fall behind or default on their mortgage loans."
  
  The state attorney general is joining in the prosecution. "As the foreclosure crisis continues, we are seeing a rise in scams that target struggling homeowners," Harris said in a news release. "These predators rob innocent families of their life savings and their piece of the American dream."

Source: Mortgage scam affects valley; Stanislaus County homeowners among victims.

For the U.S. Attorney press release, see Suspect Arrested For Multimillion Dollar Foreclosure Rescue Scheme.