Glen Ward, a fugitive who fled to Canada in order to continue his scam and avoid being caught by federal authorities, pleaded guilty to three separate sets of charges in the Central and Northern District of California as a result of his operation.
According to the plea agreement, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. The agreement said Ward led a scam that solicited and recruited homeowners whose properties were in danger of imminent foreclosure by promising to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee.
Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided.
Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales, the Department of Justice said. The lenders, which included banks that received government funds under the Troubled Asset Relief Program, could not collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years.
In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they relied upon Ward to send them forged deeds—supposedly signed by the debtors—to re-unify their title as required by most lenders.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.
In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco.
On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.
“Mr. Ward fled the United States years ago in an attempt to keep his fraudulent foreclosure scheme running,” said Andre Birotte Jr., U.S. attorney for the Central District of California. “Today's conviction should serve as a reminder that criminals can run, but they can't hide. The reach of the federal law is long and scammers like Ward, who try to take advantage of distressed homeowners, will be tracked down and prosecuted regardless of their efforts to do otherwise.”
Each count of bankruptcy fraud carries a maximum sentence of five years in prison. Aggravated identity theft carries a two-year mandatory sentence, to run consecutive to any other sentence. Ward will be sentenced on July 29 before United States District Judge Dale S. Fischer, and will continue to be held without bond.