Man Charged with Defrauding Homeowners and Mortgage Lenders

Allison Tussey —  April 4, 2014 — 1 Comment

William Barry Blythe, 67, Murrieta, California, has been arraigned and pled guilty to carrying out a scheme to defraud homeowners, mortgage lenders, and the U.S. Bankruptcy courts in the Southern and Central Districts of California. He also admitted that he willfully failed to adequately report over $175,000 in taxes owed on his income.

According to the criminal Information, Blythe created multiple trusts, including “R-C Business Trust,” “Phoenix Business Trust,” “GB Business Trust,” “GBB1,” “GBB2,” “GBB3,” and others. Blythe approached homeowners who were behind on their mortgage payments and offered to take ownership of their homes and negotiate better terms on their mortgages. To carry out his scheme, he directed the homeowners to deed their homes to one of Blythe’s trusts. Blythe then generously allowed the homeowners to stay in the homes if they paid a monthly fee to the trust that owned the house.

But the defendant knew that the trusts did not assume responsibility for the mortgages and, accordingly, that he could not negotiate better terms with lenders. In fact, when homeowners gave Blythe the monthly payments, he deposited the payments into his own Blythe Family Trust Account, instead of the bank accounts for the trust entity that supposedly held title to that homeowner’s property.

Blythe then filed bankruptcy for each of his trusts, first in the Central District of California and then in the Southern District of California. In each of the San Diego bankruptcy petitions, Blythe misrepresented to the U.S. Bankruptcy Trustee that the trust seeking bankruptcy protection had purchased real properties, owed mortgages on those properties, made no income from the properties, and had numerous unsecured debts. Ultimately, each of the bankruptcy petitions was dismissed.

As part of his scheme, Blythe misrepresented to mortgage lenders that he had purchased the properties encumbered by mortgages, when in fact he had paid nothing for the properties but instead had duped homeowners into deeding those properties to him by misrepresenting that he would assume responsibility for their mortgages.

Blythe admitted in his plea agreement, which remains sealed, that the monthly payments he received from homeowners as part of his scheme constituted income to him. He admitted that he filed false tax returns for tax years 2010, 2011, and 2012, omitting a total of at least $177,499 in taxes.

Blythe agreed to pay restitution to any victims of his bankruptcy fraud. He also agreed to pay a total of $320,257.25 in restitution to the IRS for back taxes, interest, and penalties. He is scheduled to be sentenced by U.S. District Judge Anthony J. Battaglia on June 13 at 9 a.m.

United States Attorney Laura E. Duffy announced the arraignment.

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One response to Man Charged with Defrauding Homeowners and Mortgage Lenders

  1. Patrick Farrell April 7, 2014 at 3:52 am

    IN THE CIRCUIT COURT AND 20TH JUDICIAL DISTRICT
    IN AND FOR LEE CO. FLORIDA
    PATRICK LORNE FARRELL©,Plaintiff, possessor, Droit-Droit,vs. G.M.A.C.; WELLS FARGO;IMPAC SECURED ASSETS, et al Defendants_____________________WELLS FARGO, as trustee..purported plaintiffvs.PATRICK FARRELLpurported defendant CASE NO.07-CA-14942_______________________________________CASE 07-CA-16767
    FARRELL’S VERIFIED OPPOSITION TO MOTION FOR SUMMARY JUDGMENT, MOTION TO DISMISS-MEMORANDUM-NOTICE OF FRAUD -DISPUTED FACTS
    Comes now purported defendant Patrick Farrell in propia persona by special appearance only for the limited purposes of opposing a fraudulent motion for summary judgment by a phony plaintiff.
    DEC 7,2007 GMAC filed this case on behalf of Wells Fargo with a Lost Note affidavit and WITHOUT a purported note, mortgage, or Assignment the DATE the complaint was filed and cannot cure the defect after, VOIDING standing and jurisdiction. They never claimed to be the Owner
    Affidavit filed with the motion names IMPAC MORTGAGE HOLDINGS –2005-6 as due debt.
    As of FEB 11, 2010 the complaint must be verified per Fla. R.Civ. P. 1.110(b)
    As of JULY 1, 2013 Florida Statutes 702.015 requires new specificity in pleading standing.
    Their affidavit Voids Verification, Burden has not been met, the complaint fails to state a claim upon which relief can be granted, and the Court never acquired subject matter jurisdiction.
    Plaintiff’s lack of standing at the inception of the case cannot be cured by the acquisition of standing after the case is filed; a party is not permitted to establish the right to maintain an action retroactively by acquiring standing to file a lawsuit after the fact.
    McLean v. JPMorgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 174 (Fla. 4th DCA 2012)
    WHEREFORE, this Court should deny the motion for summary judgment as a Sham Pleading per F.S.1.150 and Form 1.944 and dismiss this case with prejudice and without leave to amend.

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