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Law enforcement officials today announced charges against the alleged ringleaders and two associates of a foreclosure fraud scheme that potentially victimized more than 400 homeowners in San Diego County.
The defendants held seminars for dozens of homeowners in foreclosure at a time, where homeowners were allegedly offered methods to sign over their properties into a program that they were told would protect them from losing their homes to foreclosure.
The defendants allegedly convinced homeowners that a loophole leftover from the 1872 Spanish land grant allowed them to deed over their property to the company, which would shield it from foreclosure.
To convince the homeowners of their program’s legitimacy, the defendants allegedly showed them an antiquated document that showed property transfers to the United States by a foreign entity hundreds of years ago.
The defendants earned their money by charging homeowners $10,000 up front or by setting up leases with the homeowners, charging them monthly “rent” in order to stay in their homes, officials allege.
But, in the end, the foreclosures weren’t thwarted, the homeowners were evicted from their homes anyway and they retained no legal ownership of their property. The defendants likely netted “hundreds of thousands of dollars,” the District Attorney’s Office said, and will be arraigned tomorrow.
The program, though allegedly coated in legalese by the defendants, has no legitimacy in the state for privately held land, the Attorney General’s Office said.
The defendants allegedly scammed distressed homeowners — mostly non-English-speaking, Hispanic homeowners — by acquiring grant deeds to homes in foreclosure. They allegedly told victims their “land grant program” would keep the homeowners from losing their homes in foreclosure, the D.A.’s Office said.
The scam targeted additional victims in other counties, officials allege.
Law enforcement last night arrested William J. Hutchings, Xiaoke Li, Edgar Martinez and Diego Gil who, under the umbrella of three LLCs, preyed on homeowners in default, according to the D.A.’s Office. An arrest warrant was issued and is still outstanding for another defendant, Shawna Landis.
The companies involved were called Land Grant Services LLC, Federal Land Grant Company LLC (or FLG Co. LLC), and KBS Resources LLC. They’d been operating the alleged scam in one form or another since January 2006, though it especially ramped up in the last six months, officials said.
The defendants face more than 100 felony charges. The law enforcement operation was a joint undertaking by the district attorney, the state attorney general and the FBI.
Check back for more on this later this evening. If you know someone who was potentially victimized, please send me an e-mail.