Nine arrests made in alleged California mortgage relief scam
The California attorney general — in tandem with the Federal Housing Finance Agency and the United States Department of Housing and Urban Development — arrested and arraigned a group of nine on 136 felony counts of alleged mortgage fraud.
The charges brought against the defendants accuse them of conspiring in an advance fee mortgage relief scheme across the four Southern California counties of Los Angeles, Orange, Riverside and San Diego. The indictment documents said the scheme ran from 2010 to 2019 and defrauded over 200 mortgaged properties out of a combined $6 million.
The operation targeted distressed borrowers and offered foreclosure and eviction protection for monthly payments. The alleged scammers filed false documentation, bankruptcies and interest grant deeds, resulting in many of those borrowers losing their homes. All nine defendants pleaded not guilty.
Eduardo Toro, who was charged with 98 of the counts, faces a maximum sentence of 66 years in prison if found guilty. His lawyer, Rajan Maline, didn’t return a call for comment.
“Individuals who choose to prey on vulnerable Californians at risk of losing their homes will be held accountable,” California Attorney General Xavier Becerra said in a press release. “The Department of Justice will continue to work with our law enforcement partners to identify and prosecute those who disregard the law in order to make a profit.”
Rooting out foreclosure relief scams rings is especially pertinent with so many distressed borrowers out of work and living under forbearance protection from the pandemic. Recently, a task force made up of the Consumer Financial Protection Bureau, Mortgage Bankers Association, American Bankers Association, Housing Policy Council and NeighborWorks America launched the COVID Help for Home campaign, aimed at directing consumers away from potential scammers.
The mortgage market’s current state of heightened distress and disorder make it primed for fraudsters who take advantage of struggling homeowners and uncertain times.
“Our objective is to ensure that the public is not taken advantage of when they have fallen on hard financial times,” said Michael Gibson, HUD’s special agent in charge of the Office of Inspector General.