The former chief executive officer of a California mortgage company was arrested Thursday on wire fraud and other charges after he was accused of defrauding lenders out of more than $9 million.
Kenneth Ketner, 57, of Newport Beach, Calif., was named in a 14-count indictment by a federal grand jury alleging that he funneled money meant for borrowers to his now-defunct company, Mortgage Capital Resources, Assistant United States Attorney Andrew Stolper said.
The indictment said Ketner entered into lending agreements with various financial institutions that allowed MCR to originate loans on their behalf. Once the loans were approved, the lenders would transfer the money to Mortgage Capital to disburse to borrowers. But, the indictment said, often the borrowers never got the money.
Among other things, the indictment alleges that Ketner misdirected lenders’ funds to Ferrari of Orange County to help pay for a new $244,000 Ferrari. The indictment also alleges that Ketner took some of the proceeds and laundered it through offshore accounts.
Allen Johnson, 59, a Newport Beach, Calif., lawyer was indicted with Ketner. The indictment said the two are friends who acted together to perpetuate the fraud.
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