Monday’s guilty verdict was in relation to a foreclosure rescue scam that Head ran from Orange County, Calif., between March 2005 and June 2006. Head, along with Benjamin Budoff and Domonic McCarns, used several business entities including Head Financial Services and Creative Loans, to remove more than $5.7 million in equity from the homes of their victims, according to court evidence.
All three defendants were convicted of conspiracy to commit mail fraud through this nationwide foreclosure rescue scam.
Meanwhile, in May, Head and 12 other defendants were convicted at trial with administering an equity-stripping scheme where they found homeowners facing foreclosure and claimed that they could help the borrowers avoid foreclosure and repair their credit.
Instead, through misrepresentations, fraud and forgery, the defendants had the victims complete transactions that substituted straw buyers on the title of the homeowner’s property without their knowledge. These straw buyers were often friends and family members of the defendants or were solicited on the Internet.
Once the straw buyers had title to the homes, the defendants applied for mortgages to extract the maximum available equity from the properties, court evidence revealed. The defendants then split the equity and rent that the victim homeowners paid them.
The victims ultimately were left with no home, no equity, and with damaged credit ratings.
Head was convicted of conspiracy to commit mail fraud and mail fraud as part of the equity skimming scam.
Evidence in the two trials established that Head and his co-conspirators were responsible for at least $15 million in losses to homeowners.
“Unfortunately, today’s verdicts offer little relief to their victims who lost everything to this scheme,” said Monica Miller, special agent in charge of the Sacramento Division of the FBI. “Distressed homeowners unknowingly turned to Charles Head and his fellow fraudsters at a time when they needed the help of a legitimate business to save their homes from foreclosure and preserve what little equity they had. At the expense of their victims, Head and others enriched themselves with total disregard for the impact their actions would have on their victims and the economies of the communities in which the homes stood.”