An indictment was unsealed Tuesday in the Southern District of California, charging a local real estate agent and eight others with multiple counts of conspiracy, wire fraud, money laundering and criminal forfeiture, for an alleged mortgage fraud scheme.

Eric Elegado, and eight other mortgage industry professionals, Charmagne Elegado, Theodore Cohen, Minh Nguyen, Regidor Pacal, Alexander V. Garcia, Roman Macabulos, Ramin Lotfi and Roderick Huerto, were allegedly involved in a scheme to defraud low-income immigrants in San Diego, California.

According to the indictment, Eric Elegado owned and operated real estate and mortgage brokerage businesses in San Deigo, and the other individuals were all employees. Allegedly, the individuals conspired together to obtain mortgage loans for unqualified buyers by falsifying and assisting others in falsifying the employment and salary information on the loan documents.

In this case, it is unclear whether the mortgage borrowers were aware of the allegedly falsified employment and income documents used to obtain these loans. As always, any person who willfully participates in a scheme to defraud has opened themselves up to a potential investigation and prosecution.

The documents would then be submitted to mortgage lenders. The mortgage lenders allegedly loaned more than $50 million dollars during the course of the scheme. According to the FBI press release, the mortgage companies, lending institutions, and financial institutions lost more than $15 million dollars.

Although the government’s focus has mostly been on large corporations involved in subprime mortgage lending, this does not mean that investigations of smaller companies and individuals has fallen to the wayside. Whether the case involves a financial institution or an individual, the U.S government has stepped up their investigative efforts to seek out those whom they believe are defrauding the system. One significant difference must be mentioned – corporations are punished by fines, such as the recent $26 billion dollar settlement between the big banks and the U.S. government for foreclosure abuses, whereas individuals must face potential prison time.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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