A federal indictment was unsealed in Northern District of California federal court charging two former Marin County mortgage brokers with a $2.4 million scam.
Diane Cobb and Paul Davis were both indicted on 15 counts of conspiracy, mail fraud, and
The defendants allegedly operated a financial services company known as DM Financial where they offered investors the opportunity to fund purported short-term “bridge loans” to borrowers who, according to Cobb and Davis, needed financing assistance for residential real estate transactions, according to the indictment.
Cobb and Davis, who were arrested in Las Vegas on Nov. 13, allegedly fraudulently provided these investors the identity of the supposed borrower, a promissory note reflecting the amount and terms of the loan, and a deed of trust securing the loan to the borrower’s real property, the indictment says. Based upon these documents and other representations made by Cobb and Davis, the investors thought the defendants were directing their funds into secured loans with borrowers.
However, the purported borrowers received none of the investors’ money and did not know their identities were supposedly used to solicit investments, the indictment says. Instead, the scammers allegedly diverted approximately $2.4 million for their own personal use or to make interest payments to prior investors to keep them discovering this scheme.
The maximum statutory penalty for each count of mail fraud, wire fraud, and conspiracy, respectively, is 20 years’ imprisonment and a fine of $250,000. Meanwhile, Cobb is facing an additional two years in jail for the aggravated identity theft charge.
