California Attorney General Rob Bonta has announced the unsealing of a grand jury indictment against 14 individuals, including the owners of three mortgage brokerage firms and their affiliates, for alleged involvement in a $3.6 million mortgage fraud scheme. The indictment claims that fraudulent loan applications and financial documentation were used to secure eight loans across several counties in California.
Thirteen of the defendants appeared in Los Angeles County Superior Court, with ten arraigned on charges such as mortgage fraud, receiving proceeds from mortgage fraud, and grand theft. These defendants have pleaded not guilty. The remaining defendants will be arraigned at a later date.
Attorney General Rob Bonta stated, “Those who try to scam, defraud, or cheat Californians will be brought to justice.” He emphasized that those exploiting homeownership dreams for personal gain would face consequences.
Matt Shields, Los Angeles Division Inspector in Charge, highlighted the impact of these crimes: “Criminal acts of mail fraud... put families at risk by potentially leaving them with unmanageable debt or financial hardship.”
The indictment specifically names the owners of First Republic Mortgage, 1st Fidelity Home Loans, and Coastline Properties. It accuses them of misusing their licenses to secure fraudulent home mortgage loans. One defendant is charged with originating these loans using the licenses of both First Republic Mortgage and Coastline Properties while operating from Riverside. An escrow agent for 1st Fidelity Escrow allegedly used another owner's license to facilitate further fraudulent activities.
The investigation involved collaboration between California's Attorney General’s Office and various federal agencies such as the Federal Housing Finance Agency-Office of the Inspector General (OIG), U.S. Department of Housing and Urban Development-OIG, and United States Postal Inspection Service. They discovered that some defendants submitted false information regarding clients' income and employment details during loan applications.
Prosecution is being handled by the Special Prosecutions Section of the California Department of Justice. This section focuses on complex criminal cases involving financial fraud among other offenses.
A copy of the indictment is available for public viewing. All defendants are presumed innocent until proven guilty.