Brothers Found Guilty for Running Foreclosure Rescue Scam

A federal jury in the Eastern District of California returned guilty verdicts Friday against two defendants who led a national foreclosure rescue scam.

Court evidence from the four-week trial revealed that Charles Head and Jeremy “Mike” Head promised homeowners at-risk of foreclosure that they can help them avoid foreclosure and repair their credit. The scheme operated through an entity called Head Financial, located in Orange County, and ran between January 2004 and March 2006.

Instead, through misrepresentations, fraud and forgery, the defendants led the victims to complete transactions where straw buyers were given title to their properties without the homeowners’ consent. These straw buyers were often friends and family members of the defendants.

Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity form the properties. The scammers then shared the proceeds of the equity and the rent that the victim homeowners paid them.

As a result of this scam, the homeowners lost their property, equity and had damaged credit ratings.

Overall, the scammers netted more than $15 million in fraudulently obtained funds from homeowners, many of whom lived in California.

Both Head brothers were convicted of conspiracy to commit mail fraud in connection with their foreclosure rescue scam. Charles was convicted of four counts of mail fraud, while Mike was convicted of two counts of mail fraud.

The defendants face up to 20 years in prison on each count when they are sentenced this summer.

Nine other defendants also pleaded guilty in relation to this scam.

“The Head brothers preyed on the victims’ fear of losing their homes and then took advantage of those victims’ predicament to steal from them their last remaining equity in those homes, enriching themselves in the process,” said U.S. attorney Benjamin Wagner. “As a result of their conduct, many of the victims who looked to the Head brothers for help were evicted and left destitute.”

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