Jury Returns Guilty Verdict in Nationwide Foreclosure Rescue and Equity Stripping Scams

Allison Tussey —  December 3, 2013 — 1 Comment

Charles Head, 36, Pittsburgh, Pennsylvania, Benjamin Budoff, 46, Colorado Springs, Colorado, and Domonic McCarns, 39, Irvine, California, were found guilty after a five-week trial by a federal jury in Sacramento, California.

All were convicted of conspiracy to commit mail fraud in connection with a nationwide foreclosure rescue scam. Charles Head was convicted of three additional counts of mail fraud. For Charles Head, the trial conviction is his second this year in this district stemming from a major mortgage fraud investigation. McCarns was remanded into custody immediately after the verdict. Charles Head remains in custody following a violation of the terms of his release after his conviction in May 2013 in the first trial.

According to evidence presented at trial, Charles Head was the leader of a scam that operated from Orange County between March 2005 and June 2006. The defendants used several entities, including Head Financial Services and Creative Loans, to extract more than $5.7 million in equity from the homes of their victims, many of whom were in California. Evidence in the two trials established that he and his co-conspirators were responsible for at least $15 million in losses to homeowners.

In March 2008, a federal grand jury indicted Charles Head, Domonic McCarns, Benjamin Budoff, and other defendants with violations of conspiracy to commit mail fraud, mail fraud, and other charges in a separate case related to the Head Financial Services equity-skimming scheme. The evidence at trial established that the defendants found homeowners facing foreclosure and claimed that they could help the homeowners avoid foreclosure and repair their credit. Instead, through misrepresentations, fraud and forgery, the defendants led the victims to complete transactions that substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants or were solicited on the Internet. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then split the equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

Two other defendants pleaded guilty in this case before the trial and are scheduled for status regarding their sentencing on December 18, 2013. Those defendants are Keith Brotemarkle, 45, Johnstown, Pennsylvania; and Lisa Vang, 27, Westminster, California.

The first indictment charged Charles Head and 12 other defendants with operating a separate equity-stripping scheme. On May 30, 2013, Charles Head and his brother Jeremy “Mike” Head, 33, Huntington Beach, California, were convicted at trial of conspiracy to commit mail fraud and mail fraud related to that scheme. Jeremy Head is scheduled for sentencing on March 26, 2014. Eleven other defendants have pleaded guilty in the first case and are awaiting sentencing: Elham Assadi, aka Elham Assadi Jouzani, aka Ely Assadi, 33, Irvine, California; Leonard Bernot, 54, Laguna Hills, California; Joshua Coffman, 33, North Hollywood, California; Akemi Bottari, 31, Los Angeles; Sarah Mattson, 30, Phoenix, Arizona; Omar Sandoval, 35, Rancho Cucamonga, California; Xochitl Sandoval, 32, Rancho Cucamonga; Andrew Vu, 42, Santa Ana, California; Justin Wiley, 31, Irvine; Kou Yang, 35, Corona, California; John Corcoran, 55, Anaheim, California.

Domonic McCarns and Ahn Nguyen, Los Angeles, California, were also charged in the first indictment. McCarn’s second trial is scheduled for February 24, 2014.

United States Attorney Benjamin Wagner announced the verdict.

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris are prosecuting the case.

U.S. Attorney Wagner said, “Charles Head, Domonic McCarns and Benjamin Budoff preyed on the victims’ fear of losing their homes and then took advantage of those victims’ predicament to steal from them their last remaining equity in those homes. As a result of their conduct, many of the victims who looked to the Head brothers for help were evicted and left destitute. Few white-collar crimes are as cruel or as devastating to victims. This investigation has already yielded 16 convictions, and our work is not yet done.”

“Today’s guilty verdict sends a clear message to those committing mortgage fraud that this type of activity will have a criminal consequence, which will include a felony conviction and a prison term to serve,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The defendants in this case quite literally stole the American Dream of owning a home from many people. The loss of a home represents a loss of a family’s shelter and its most precious financial resource. These types of crimes have a devastating impact on both homeowners and the community.”

“Unfortunately, today’s verdicts offer little relief to their victims who lost everything to this scheme,” said Special Agent in Charge Monica M. Miller of the Sacramento Division of the FBI. “Distressed homeowners unknowingly turned to Charles Head and his fellow fraudsters at a time when they needed the help of a legitimate business to save their homes from foreclosure and preserve what little equity they had. At the expense of their victims, Head and others enriched themselves with total disregard for the impact their actions would have on their victims and the economies of the communities in which the homes stood.”

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Allison Tussey

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One response to Jury Returns Guilty Verdict in Nationwide Foreclosure Rescue and Equity Stripping Scams

  1. One has to wonder, what were these people thinking? Did they really think they were going to get away with it? Were they bold or just incredibly stupid? Why do people in the real estate world think there is no boundary?

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