Industry News

Mortgage broker in 2001 fraud scheme kept ties to lenders

Judge orders 57-month prison sentence, $9 million in restitution

A former southern California mortgage broker sentenced this week to prison for a mortgage fraud scheme that ended in 2001 continued to work in the mortgage lending business after his license was revoked, prosecutors said. Kenneth C. Ketner, 58, was sentenced Monday to four years, 9 months in prison and ordered to repay $9.27 million his former company, Mortgage Capital Resource, fraudulently obtained from banks, the Orange County Register reported. Mortgage Capital, which offered second mortgages for debt consolidation, had a $20 million line of credit from an Illinois bank, Household Commercial Finance, the Register reported. Ketner settled a 2001 civil suit by the bank for $5 million, and the California Department of Real Estate revoked Mortgage Capital Resource's license in when it was refused access to the company's account books, the Register said. Prosecutors indicted Ketner in 2005 on 16 counts of fraud, alleging he had created a Ponzi scheme that netted more than $9 million wh...

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