Five defendants from California have been charged with a foreclosure rescue scheme: Jewel L. Hinkles aka Cydney Sanchez, 61, Los Angeles; Bernadette Guidry, 43, Irvine; Jesse Wheeler, 34, Roseville; Cynthia Corn, 58, Oakland; and Brent Medearis, 45, Modesto; were charged in an indictment returned by a federal grand jury on December 1, 2011. Hinkles and Guidry are charged with eight counts of mail fraud. Each of the defendants except Guidry is charged with 16 counts of bankruptcy fraud.
Hinkles was arrested in Los Angeles by Special Agents with the FBI, the U.S. Postal Inspection Service, and the Federal Housing Finance Agency, Office of Inspector General. She made an initial appearance before a U.S. Magistrate Judge Friday in Los Angeles. Medearis was arrested by FBI Special Agents in Modesto on Friday and appeared before U.S. Magistrate Judge Gregory G. Hollow in Sacramento. Wheeler, Corn were arraigned in Sacramento and an arrest warrant has been issued for Guidry.
According to court documents, Hinkles was the founder and general manager of Horizon Property Holdings LC, located in Beverly Hills. From 2008 through 2010, Hinkles offered to the public a service called the “Save My Home” or “Homesaver” program that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on homeowners’ mortgages. Guidry was Horizon‘s office manager and assisted Hinkles with promoting the foreclosure and “principal reduction” program. Horizon offered its program directly to clients and also through several layers of “affiliates,” who promoted and sold the program to clients, mostly in Northern California. These affiliates included Property Relief!, operated by defendant Cynthia Corn, South San Francisco, and JW Financial Solutions, operated by defendant Jesse Wheeler, Roseville. Defendant Brent Medearis sold the program out of Modesto as an affiliate of Property Relief!.
The defendants allegedly told homeowners that for a substantial up-front payment and a monthly fee they would save the homeowners’ residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, or would reduce the homeowners’ monthly payment by negotiating a mortgage reduction with the lender. The indictment alleges that contrary to the defendants’ representations, they failed to arrange for the purchase of clients’ mortgages or to negotiate reductions in the mortgage debt owed by clients.
To prevent foreclosure and defraud the existing lenders, the indictment alleges that the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II. In many instances, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The purpose of these petitions was to invoke the automatic provisions of federal bankruptcy law that bring to an immediate halt any foreclosure actions against a debtor’s property. The fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, during which the defendants collected fees from defrauded homeowners. The indictment alleges that the defendants collected at least $5 million in fees from more than 1,000 clients.
United States Attorney Benjamin B. Wagner announced the charges.
“The defendants in this case stand accused of profiting off of the desperation of people who were trying to hold on to their most valuable asset — their homes. This office is deeply committed to tracking down and prosecuting those who prey on vulnerable homeowners. Homeowners should be wary of those who solicit fees based on promises that they can prevent foreclosure or modify your loan. To learn more about foreclosure rescue and loan modification schemes, go to www.StopFraud.gov/protect-mortgage.html.”
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant United States Attorney Dominique N. Thomas is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of up to 20 years in prison for each mail fraud count, and up to five years in prison for each bankruptcy fraud count, and a $250,000 fine on each count. If convicted, however, the actual sentence will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.