Five defendants have pleaded guilty to charges arising from a mortgage fraud scheme in which lenders funded $16 million in loans for properties that have entered foreclosure.
Defendants Rafael Santiago and Angel Armendariz pleaded guilty today to conspiring to commit wire fraud, and defendants Abner Betech, Said Betech and Aviva Betech pleaded to those charges on Nov. 13.
One defendant, Lucette Montane, remains at large.
The majority of the 21 properties examined by the FBI and the IRS as part of the scheme were in San Diego County, and at least three were condo units in downtown San Diego.
Here’s more from my June story, which describes in more detail the scheme:
The group, operating under the name Creative Financial Solutions Inc., allegedly obtained mortgages for unqualified or unknowing borrowers.
The alleged scheme fits the profile of a variety of mortgage fraud against lending institutions called “cash back at closing.” Such a scheme centers on inflating purchase prices, obtaining loans for the inflated amount and distributing the difference in cash among some or all of the parties in the transaction after the seller’s asking price has been paid. Then, the buyer walks away from the property, leaving the bank with a house that was never worth what it lent the borrower to buy it in the first place.
The defendants face 20 years in prison, fines of $250,000 and three years of supervised release, according to the U.S. Attorney’s Office. The defendants also agreed to pay restitution, said Christopher M. Alexander, assistant U.S. Attorney.
The defendants are scheduled to be sentenced in April 2009.
Abner Betech also pleaded guilty to filing a false tax return.