CA Broker Charged in $17.5MM Mortgage Fraud

Former real estate broker Kathy Chen, her ex-boyfriend Richard Salgado Gonzalez and his brother Daniel Gonzalez have been charged with running a $17.5 million mortgage fraud scheme by the Orange County District Attorney's Office. The trio allegedly recruited and paid straw buyers to obtain mortgage loans for the purchase of multiple properties. Between 2005 and 2007, the defendants allegedly obtained 47 fraudulent loans in excess of $17.5 million on 35 California properties, including 13 in Orange County, 16 in San Bernardino County and six in Kern County. The defendants, none of whom were available for comment, allegedly acquired licenses for nonexistent businesses under the pretense that straw buyers owned the businesses to make them eligible for higher income loans. They are accused of fabricating loan applications to reflect higher incomes for the straw buyers, forging the names and signatures of straw buyers on various deeds and loan documents and forging the seal and notary stamp on notarized documents and deeds, which were filed with the Orange County Clerk-Recorder's Department. The defendants used the straw buyers' credit information on several occasions without their knowledge or consent, prosecutors say. After initially making monthly payments on the loans, they defaulted and kept the excess money, according to investigators. Ms. Chen was arrested on June 1 on a $3 million warrant. A warrant has been issued for the Gonzalez brothers, who may be living in Puerto Vallarta, Mexico.