An Orange County, Calif., man who allegedly bilked lenders out of $9 million has pleaded guilty to federal wire fraud and money laundering charges, prosecutors said.
Kenneth Christopher Ketner, 57, and his company, Mortgage Capital Resource Corp., obtained lines of credit from commercial lenders by purporting to fund home loans for borrowers throughout the country, the U.S. Attorney’s office for the Central District of California said in a press release.
Instead of funding mortgages, Ketner used the money to operate MCR Corp. and to pay personal expenses, such as car, credit card and boat payments, prosecutors said. To conceal the misappropriations and keep the scheme alive, Ketner found new loans that lenders agreed to fund.
Ketner pleaded guilty Tuesday before U.S. District Judge James V. Selna, and is scheduled to be sentenced Dec. 4. The charges carry a maximum possible penalty of 15 years in federal prison. Under the terms of his plea agreement, Ketner could receive a five-year sentence.
A second defendant in the case, 59-year-old attorney Allen Johnson of Newport Beach, pleaded guilty last year to wire fraud and money laundering and is scheduled to be sentenced in early 2007.
This case was investigated by the FBI and IRS.