Broker Sentenced to Over 68 Years in Prison

Allison Tussey —  October 21, 2010 — 3 Comments

Kathy Chen, 49, Westminster, California, a real estate broker, was sentenced to 68 years and six months in state prison for conspiring with her boyfriend and his brother to commit $17.5 million in real estate fraud by purchasing 35 properties using stolen identities and intentionally defaulting on loans in order to steal the loan money.

Chen was found guilty by a jury May 18, 2010, of 136 felony counts including one count of conspiracy, 47 counts of grand theft, one count of attempted grand theft, 37 counts of forgery, 27 counts of recording false documents, 15 counts of identity theft, one count of elder financial exploitation, four counts of forging an official seal, and three counts of filing false state income tax returns. The sentencing enhancements for causing loss in excess of $2.5 million and $100,000 were found true. Chen will face a restitution hearing on Nov. 8, 2010, at 9:00 a.m. in Department W-9, West Justice Center, Westminster.

Chen‘s boyfriend, Richard Salgado Gonzalez, 60, and his brother, Daniel Gonzalez, 57, face the same charges and sentence as Chen. Fugitives Richard and Daniel Gonzalez have outstanding arrest warrants. Both may currently be living in Puerto Vallarta, Mexico.

The People presented the following information to the jury during the trial against Chen:

Chen worked as a real estate broker and owned several businesses including Chen Financial, Western Escrow, Nationwide Tax Services and SBC Financial. She conspired with her then-boyfriend, Richard Gonzalez, and his brother, Daniel Gonzalez, to commit over $17.5 million in fraud by using the identities of unsuspecting or unqualified victims to obtain mortgage loans for the purchase of multiple properties. Chen and her co-defendants recruited these victims in order to hide their own identities. These victims often spoke little or no English, were unemployed or had limited incomes, and had no intention of ever residing in or repaying any loan on properties in their names.

Between Jan. 13, 2005, and July 10, 2007, the defendants obtained 47 fraudulent loans from 13 lenders on 35 properties in excess of $17.5 million through the use of the fraudulently obtained identities. These properties included 13 in Orange County, California, 16 in San Bernardino County, California, and six in Kern County, California. The defendants are being prosecuted in Orange County for all 35 properties.

The defendants used the fraudulently obtained personal and credit information of some of the fake buyers, including a 92-year-old woman, on several occasions without their knowledge or consent. Chen, Richard Gonzalez, and Daniel Gonzalez acquired city business licenses using the stolen identities for nonexistent businesses in order to obtain higher income loans. They fabricated loan applications to reflect higher incomes for the fake buyers, forged the fake buyers’ names and signatures on various deeds and loan documents, and forged seals and notary stamps on a variety of notarized documents and deeds. They fraudulently filed these fabricated and forged documents with the Orange County Clerk-Recorder’s Department.

Acting as the escrow company, the defendants made some monthly payments on the loans to prevent suspicion by the lender. They then defaulted on the loan and kept the remaining loan money.

This case was investigated by the Orange County District Attorney’s Office. The California Franchise Tax Board assisted in the investigation into the filing of false tax returns. Deputy District Attorney Bill Overtoom of the Major Fraud Unit prosecuted this case.

Be Sociable, Share!

Allison Tussey

Posts Google+

3 responses to Broker Sentenced to Over 68 Years in Prison

  1. THE CONN ARTIST GOT WHAT THEY DESERVE.BUT THE CONN ARTIST ARE STILL AT WORK.THEY ARE NOW TAKING ADVANTAGE OF THE BANK FAILURES AND FRED AND FANNY.THEY HIDE THEIR SHAM DEALS BY MOVING THEIR PAPER TRAIL OUT OF STATE,LETS SAY FROM CALIFORNIA TO TEXAS AND TRY NOT TO LEAVE A PAPER TRAIL.IN OTHER WORDS,DONT LET CA. KNOW THEY EXIST.NOW IF YOU BACK TRACK THESE HOT SHOTS TO THE STATE CAPITOL FROM WHICH THEY CAME YOU FIND THE STATE HAS NO RECORD OF THEM.THEY HAVE NO REALESTATE LIC. AND NO CORPORATION PAPERS IN THEIR HOME STATE.THEY TAKE OUT CORP PAPERS JUST LONG ENOUGH TO DO A DEAL AND THEN DESSOLVE THE CORPORATION.HELLO I.R.S. GEORGE UBER USN RETIRED

  2. Everyone talks about mortgage fraud. But, what about a cash buyer who is defrauded by the seller and his agent, former owner also. And, moreso, the buyer’s agent and the inspector helped the seller’s agent commit these acts of fraud? What rights does a buyer, consumer, have in a situation like this. Aren’t realors just as repsonsible as sellers for real estate fraud when it can be proven their part in it? Is this considered a crime?

  3. Stephen Garner mytitleguy.net October 22, 2010 at 3:57 am

    You have no idea how much I smile when I hear about someone going to jail for the fraud they perpetuated on others. This just proves that the justice system works. I have heard the FBI is still investigating cases from 2004,2005, 2006 of fraud here in Phoenix, there are people here already in jail, they just don’t know it yet. This should serve as a warning To those that are now committing short sale fraud

Leave a Reply

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong> 

*