24 indicted in mortgage fraud ring

Federal prosecutors have indicted 24 people allegedly involved in a San Diego-based mortgage fraud scheme involving 220 properties and more than $100 million in mortgage loans.

The indictment charges that the leader of the mortgage fraud ring, alleged gang member Darnell Bell, reaped at least $9 million in proceeds.

Among the indicted are a real estate broker, Stanley Gentry, who prosecutors said allowed the fraud ring to use his broker's license in exchange for $10,000-a-month payments and a percentage of the real estate commissions and broker's fees generated by the fraudulent sales.

Gentry first obtained a real estate license in 1989, according to California Department of Real Estate records. His regular real estate license was revoked in 1998 though he was allowed a probationary license with restrictions. A petitition to lift the restrictions and reinstate his broker's license was granted in 2000.

Also indicted was Billie Bishop, an escrow officer accused of facilitating purchases of more than 100 properties by straw buyers; appraiser Esteban Valenzuela, who allegedly prepared inflated valuations; and real estate agent Jorge Cortez.

Prosecutors say the mortgage fraud ring used several businesses to perpetrate the scheme between January 2005 and April 2008, including the Ivy House Inc., the Real Estate Center of Southern California, and the Real Estate Center of La Mesa, to facilitate the fraudulent purchase of real estate.

Properties that had been on the market for an extended period with reduced asking prices were targeted for purchase by straw buyers, who allowed their names and credit histories to be used to obtain mortgages and purchase properties.

Prosecutors said lenders were told kickback payments to a shell construction company, Bell Construction, were being made to pay for property upgrades including handicap access to the properties. None of the properties appear to have been upgraded, prosecutors said, and the homes ended up in foreclosure when straw buyers stopped making mortgage payments.

The 24 individuals named in the indictment are charged with using a corrupt enterprise to conduct a pattern of racketeering activity and wire fraud, bank fraud, and money laundering. The charges carry up to 20 years in prison and a $250,000 fine.

A judge entered not guilty pleas on behalf of 19 members of the ring who were rounded up by authorities this week, the San Diego Union Tribune reported.

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