Man Indicted for Mortgage and Social Security Fraud

Allison Tussey —  June 20, 2012 — Leave a comment

Kenneth Manuel Martin, 63, formerly of Modesto, California, was arrested in Houston, Texas, on a nine-count superseding indictment charging him with wire fraud in connection with a Guatemalan real estate investment scheme and theft of Social Security benefits.

As Customs and Border Protection agents processed Martin at the airport, they found an active warrant for his arrest based on the federal indictment and called the Houston Police Department. Houston PD verified Martin’s identity and the warrant and took him into custody. Martin is in jail awaiting an appearance in U.S. District Court in Houston.

The superseding indictment, which was filed on October 27, 2011, alleges that between December 2005 and August 2008, Martin persuaded investors to give him money to fund mortgage loans for homebuyers in Guatemala. He falsely represented to investors the longevity of the Guatemalan real estate venture, falsely promised a high interest rate of return, and consistent monthly interest payments. He claimed that once the Guatemalan mortgage loans matured, investors would have the option to pull out their principal or continue lending the money to other Guatemalan homebuyers.

When investors failed to receive consistent interest payments or could not pull out their investment principal when they requested it, Martin gave varying and conflicting explanations. As a result of the scheme, investors lost at least $250,000.

The superseding indictment also alleges that Martin began receiving Social Security Title II Disability Insurance benefits (SSDI) in April 2007. As a recipient of SSDI benefit payments, Martin was required to truthfully report his employment status and history at the start of his disability claim.

Martin submitted false statements to the Social Security Administration indicating that he had not word and was unable to work since first becoming disabled in December 2005, and that he had no other business other than an eviction business closed by his then-wife in August 2006. Martin provided these statements knowing they were false because, from December 2005 until August 2008, he operated the Guatemalan real estate investment scheme. As a result, Martin stole more than $108,660 in Social Security benefits.

United States Attorney Benjamin B. Wagner announced the charges.

This case is the product of an investigation by the Federal Bureau of Investigation and the Social Security Administration, Office of Inspector General. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.

The maximum statutory penalty for a violation of wire fraud is 20 years in prison. The maximum statutory penalty for theft of public money is five years in prison. The actual sentence, if convicted, 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 defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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Allison Tussey

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