Nine Indicted in $6 Million Foreclosure Scheme Targeting Distressed Homeowners in Southern California

Nine individuals have been indicted in a $6 million scheme that targeted distressed homeowners in Southern California, promising to prevent foreclosures but ultimately causing them to lose their homes. California Attorney General Xavier Becerra announced the 136-count indictment on Oct. 30, charging the defendants with crimes including grand theft, identity theft, and conspiracy to commit grand theft.

The defendants allegedly operated by convincing homeowners to make monthly payments in exchange for stopping foreclosures, but instead filed fraudulent bankruptcy documents and false court documents to delay the process. Despite receiving hundreds of dollars a month from victims over several years, many homeowners still lost their properties.

The scheme impacted over 200 properties, including those with loans insured by the Federal Housing Administration and loan servicers Freddie Mac and Fannie Mae. The case was the result of a joint investigation by the California Department of Justice, the FHFA-OIG, and the HUD-OIG.

“This type of fraud not only affects individual families, it also affects the housing market,” said Michael Gibson, the Special Agent in Charge of the HUD-OIG. “An important message has been sent today to those who prey upon homeowners who are seeking financial assistance with their mortgage, and we will remain vigilant to hold them accountable.”

The attorney general emphasized that those who exploit vulnerable homeowners will be held accountable, and that the Department of Justice will continue to work with law enforcement partners to prosecute such individuals.