The principal of Rotterdam, N.Y.-based Redwood Trust was indicted on charges of mail fraud, wire fraud and money laundering in connection with allegations that he ran a mortgage elimination scheme that defrauded homeowners out of millions, media reports said.
Kenneth G. Titus Sr., 60, a former plumber from Scotia, N.Y., remains free but is scheduled to be arraigned on the indictment Aug. 15 in U.S. District Court in Albany, according to Assistant U.S. Attorney Elizabeth Coombe, told the New York Times Union.
Redwood Trust of Rotterdam, N.Y., has no connection to Redwood Trust Inc. in Mill Valley, Calif. The California company is a publicly traded real estate investment firm.
Titus is accused of collecting more than $4.2 million in fees from nearly 1,000 people in an alleged mortgage-elimination scheme, media accounts said.
Titus is alleged to have claimed that his New York-based firm was a charitable organization that could pay off mortgages for homeowners and churches, as well as erase credit-card debt and child-support payments, according to media accounts.
According to authorities, Titus claimed to have access to humanitarian funds that could be used to provide financial assistance to people who were in debt, media reports said.
The charges against Titus carry potential maximum penalties of 20 years in prison for each count of mail and wire fraud, and 10 years in prison for each count of money laundering. Each count carries a maximum potential fine of $250,000.
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