A federal grand jury returned second superseding indictment adding seven new counts of money laundering against individuals who had already been charged in two previous indictments in connection with a foreclosure scheme, executed from approximately May 2003 through August 2005, that victimized more than 100 homeowners and allegedly caused losses of at least $12 million.
Previously, in November 2005, the grand jury originally charged Martha Rodriguez, 35, Downey, California and Edward Seung Ok, 40, Torrance, California with orchestrating a real estate fraud scheme that targeted commercial lenders and homeowners in southern California areas such as Artesia, Lakewood, Gardena, Wilmington, Carson, West Covina, La Puente, El Monte, Westminster, Downey, Van Nuys, and San Bernardino.
Then, in July 2006, the grand jury returned a First Superseding Indictment adding Cynthia Valenzuela, 23, Downey, California; Vladimir Stefanovic, 35, Lancaster, California; and Maria G. Juarez, 36, Reseda, California as defendants for their participation in the scheme. The superseding indictment added additional fraud counts and new identity theft charges.
According to the indictment, the defendants researched public filings and database lists of pending foreclosure sales to identify homeowners whose mortgage loans were in default. They made unsolicited contacts with such homeowners to pitch the scheme. The defendants explained that they could stop foreclosure on the delinquent mortgages by providing short-term loans to cover outstanding debts and then refinancing the mortgage loans with the co-signature guaranty by an “investor” with good credit standing.
Instead of obtaining refinancing, the defendants submitted loan applications in the names of “straw buyers” who were purportedly purchasing the property as a residence to occupy. In some cases, the straw buyers were paid for the use of their personal information on the loan applications. In others, the defendants used the information of individuals without their knowledge, making those individuals victims of identity theft. All of the loan applications contained false information about the straw buyers’ employment and income, which the financial institutions relied upon when funding the new loans.
Loan proceeds went to pay-off the loans in default with most of the remaining amounts being skimmed-off by the defendants. To disguise and conceal the amount of money that she was getting, Martha Rodriguez wrote at least seven checks to third party payees and then deposited those checks back into accounts under her own control or the control of a family member. Those checks form the basis of the new money laundering charges.
Rodriguez is charged in all counts of the indictment, including the seven new money laundering counts. Ok is charged with 16 counts of mail fraud and four counts of identity theft. Valenzuela is charged in all 19 fraud counts and all six identity theft counts. Juarez is charged with seven counts of mail fraud, and three counts of identity theft. Stefanovic is charged with eleven counts of mail fraud.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.