In a major crackdown on mortgage fraud, the California Attorney General’s Office has unsealed an indictment against 14 individuals connected to a $3.6 million scheme that preyed upon aspiring homeowners. As per theindictmentrevealed by Attorney General Rob Bonta, the owners of three mortgage brokerage firms, along with 11 other co-defendants are alleged to have falsified loan applications and financial records to secure loans for properties across several counties including Los Angeles, Orange, Riverside, Sacramento, San Bernardino, and San Diego. The defendants, facing serious charges of mortgage fraud, grand theft, and receiving fraudulent proceeds, appeared in Los Angeles County Superior Court, where 10 of them have pleaded not guilty.
“Those who try to scam, defraud, or cheat Californians will be brought to justice,” Attorney General Bonta said, as stated by theOffice of the Attorney General. The allegation involves fraudulent activities against lenders during home loan origination, with some defendants accused of providing lenders with doctored documents such as pay stubs and divorce papers to mislead financial institutions and obtain mortgage loans unlawfully. Los Angeles Division Inspector in Charge, Matt Shields, highlighted the damaging impact of such schemes, “Criminal acts of mail fraud, like those committed by First Republic Mortgage, not only taint the landscape of financial lending but it also put families at risk by potentially leaving them with unmanageable debt or financial hardship.”
The investigation led by theCalifornia AG’s officein coordination with federal agencies including the Federal Housing Finance Agency-Office of the Inspector General, the U.S. Department of Housing and Urban Development-Office of the Inspector General, and the United States Postal Inspection Service identified numerous fraudulent mortgages originated by First Republic Mortgage, 1st Fidelity Home Loans, and Coastline Properties. This intricate web of deception let the defendants line their pockets with loan origination fees and commissions at the expense of their trusting clients, who were saddled with higher mortgage payments and sham documentation.
At the heart of prosecution for these elaborate financial crimes is the DOJ’s Special Prosecutions Section, known for its vertical approach that includes prosecutors, investigators, auditors, and paralegals working in tandem on multifaceted criminal cases. For consumers and the justice system alike, this situation serves as a vivid reminder of the perils inherent in the sanctity of the homeownership journey and the importance of due vigilance. Reflective of this complexity, the AG’s office reminds the public that every defendant is presumed innocent until proven guilty. Interested individuals can find a copy of the indictment on the Attorney General’swebsite.
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