Five people have been sentenced to prison in Southern California for offering to help homeowners facing foreclosure refinance, then using straw buyers to obtain more than 100 mortgage loans totaling more than $40 million.

Martha Rodriguez, 38, of Downey, allegedly orchestrated the mortgage fraud scheme, and was sentenced to 10 years in prison this week by U.S. District Judge George H. King after pleading guilty to mail fraud and money laundering charges.

Five people have been sentenced to prison in Southern California for offering to help homeowners facing foreclosure refinance, then using straw buyers to obtain more than 100 mortgage loans totaling more than $40 million.

Martha Rodriguez, 38, of Downey, allegedly orchestrated the mortgage fraud scheme, and was sentenced to 10 years in prison this week by U.S. District Judge George H. King after pleading guilty to mail fraud and money laundering charges.

Edward Seung Ok, 44, of Huntington Beach, pleaded guilty to mail fraud, and was sentenced to 15 years in prison after refusing to account for proceeds of the scheme in an offshore bank account that he had agreed to return, prosecutors said.

Ok, who was arrested with Rodriguez five years ago (see story), admitted that he spent more than $1 million during a two-year period when he was free on bond in this case, prosecutors said.

Ok allegedly transferred more than $1.6 million to an account in the Bank of Nevis on the Caribbean island of St. Kitts during the course of the fraudulent scheme. Prosecutors said Ok admitted spending much of the money on golf club memberships, illegal drugs and a $235,000 Lamborghini Gallardo.

Rodriguez was accused of employing her real estate and escrow agencies, Silvernet Properties in Downey and Bellasi Escrow in Seal Beach, in the scheme, which ran from May 2003 until November 2005.

After locating victims using computerized databases of homes entering the foreclosure process, Rodriguez and her co-defendants allegedly submitted loan applications in the names of straw buyers.

In some cases, the defendants paid the straw buyers, and in others, used peoples’ personal information without their knowledge. Loan proceeds were used to pay off the loans in default, and in some cases to make a few mortgage payments on the new loans and provide some instant cash to homeowners.

The remaining proceeds — typically the bulk of the homeowner’s equity — were skimmed off by Rodriguez and her co-defendants, prosecutors said.

Although homeowners were promised they would be able to keep their homes, they usually lost title to them. Lenders ultimately suffered losses when the straw buyers failed to make loan payments and the new loans went into default.

The three other defendants sentenced to prison in the case Wednesday were Cynthia Valenzuela, 27, of Orange, who pleaded guilty to mail fraud, and was sentenced to one year in prison; Vladimir Stefanovic, 38, of Huntington Beach, who was sentenced to 18 months in prison; and Maria G. Juarez, 39, of Canoga Park, who was sentenced to three years in prison.

Juarez received a longer sentence in part because she continued to perpetrate loan fraud after she was arrested and free on bond, prosecutors said.

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