Kenneth Germain, 64, is charged with one count of violating the Colorado Organized Crime Control Act (F2), one count of theft (F4) and sixty counts of securities fraud (F3). The indictment was handed down on January 2, 2008, and alleges that Germain, through his company EQ Invest, solicited numerous investors over the last few years to buy distressed properties for eventual resale. According to the indictment, Germain solicited investors to put 5% down to buy the property, which EQ promised to manage, fix up and rent to a tenant.
The proposal included EQ making the mortgage payment until selling the property. The indictment alleges that in August 2006, Germain stopped making mortgage payments, leaving investors with unexpected mortgage obligations. Many defaulted, and their credit was ruined. According to the indictment, Germain used some of the money for personal expenses.
An arrest warrant has been issued for Germain.
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.