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Soon after signing the documents, Greenspan got an e-mail telling her that she had qualified for three mortgages, which McConville would use to buy condos in Sommerset Villas in her name. She was directed to forward her mortgage bills as they came in the mail, so that McConville could make the payments.

The process went much the same way for Jenkins and five others interviewed for this story: Over several weeks, they signed documents, answered questions and sent copies of their personal information and financial records to McConville’s team.

The team was collecting straw buyers — people who allow their credit to be used to purchase properties they never intend to live in or rent out.

All of the parties in a real estate deal have a legal responsibility, throughout all stages of the transaction, to explain all of the true facts to the banks that are lending money to make the deals possible. Federal law prohibits any party from misleading a bank about the true nature of the purchase.

In addition to Jenkins and her friends, McConville cobbled together a diverse group of buyers from around the state to buy the 81 condos.

He recruited Mark Lassagne, a professional bass fisherman and magazine publisher from the Bay Area, who had never invested in real estate before, but thought the deal was foolproof. Then there was Afsar Shamlou from San Diego, who learned about the deal from her niece, Bahareh Shamlou, McConville’s former employee.

Some of the buyers heard about the program through Craigslist.

Norman Johnson, owner of a small moving company in the Bay Area, last year stumbled upon an ad on the website that read: “Make $50,000 in 3-4 months for 10 hours of work- NO Joke.”

He soon attended an evening seminar in a restaurant in the Bay Area, where he met McConville. Johnson now owns three condos in Sommerset Villas and two in Westlake Ranch.

He’s never been to either city and he’s never seen his condos.

‘We Had to Be Innovative’

As his team readied the buyers, McConville searched out properties for them to buy.

In late 2007, with the local housing market in freefall, Premier Coastal Development, a prolific local condo conversion company, struggled to sell condos in three projects in San Marcos and Escondido.

The developers of the projects were under pressure from banks to make sales and pay back their loans. The banks agreed to consider selling the units at a discount price if an investor was willing to buy in bulk, said Rob Chemaly, a Premier representative.

A local broker came to Premier with a willing buyer — McConville.

In a 2008 letter provided by Premier, McConville cited a 43-year career in real estate and said he had recently made deals work despite the tough financial environment.

“In order to be successful we had to be innovative in our selling techniques and creative in our financial placements in loans,” he wrote. He pointed out that he had “acquired 47 new buyers ready and willing to purchase in the San Diego area. At this time we do not have any product to sell.”

In three separate deals, McConville agreed to buy almost all of Premier’s remaining units in the three projects at bulk prices. The developers agreed to accept between $109,000 and $187,560 per condo, said Chemaly, who was involved in all three of the sales. The rest, after closing costs, would go to McConville’s company for what was labeled a “marketing fee,” according to the developers’ documents.

Meanwhile, McConville’s team arranged for the straw buyers to purchase the condos at prices far higher than the cheaper bulk prices McConville had negotiated with the developers.

For one of Vicki Jenkins’ $337,000 condos in Sommerset Woods, for example, $187,560 went to the developers while $124,760 was sent to McConville’s company, according to Premier’s records of the sale.

McConville agreed to pay a discount price for the condos and then sold them for higher prices to the buyers he’d rounded up — the people who never expected to make any payments themselves.

‘Some of the Cleanest Loans We’d Seen’

After striking the bulk price with the developers and assembling the willing buyers, McConville needed money to close the deals — money that would come in the form of individual mortgages in the buyers’ names.

McConville’s team had Frances Greenspan, for example, sign six mortgage applications to see how many could get funded. The team tried to boost the loans’ chances of being accepted, having Greenspan sign a handwritten letter that stated she believed the investment would reap “benefits in a very short time,” and that buying several condos in the same complex “makes sense for me.”

By 2008, the mortgage lending business was hurting. Loose standards on who could qualify for loans had devastated the industry, shuttering countless lenders and crippling some of the nation’s largest banks. The surviving investors willing to fund mortgages tightened their guidelines to lower their risk.

McConville’s buyers were the sort who could still qualify for loans last year.

Their loan applications were spotless, said Allen Nazari, owner of All American Finance, a San Jose-based mortgage lender that made 16 of the loans. The borrowers had first-rate credit scores and financial portfolios showing their ability to pay 20 percent down payments on the fixed-rate, 30-year loans, Nazari said.

“Everything was just absolutely perfect — some of the cleanest loans we’d seen,” Nazari said.

However, the information on at least one of the applications appears inconsistent with the buyer’s own account.

Norman Johnson’s mortgage application to one of the lenders, Pacific Residential Financing, claimed an income of $11,000 a month, said Rick Gundzik, managing broker. But Johnson estimates he earns between $40,000 and $50,000 per year — about one-third of the income on his application.

The lenders said they didn’t know the buyers weren’t planning on making the payments themselves. They said they also hadn’t known that while they processed these applications, the borrowers were simultaneously obtaining mortgages from other banks. Had they known, the lenders said, the loans would’ve appeared much riskier.

Gundzik said it was astonishing how McConville’s team synchronized the loans to get them through the various lenders’ procedures at the same time. He said the process — from getting loan approvals to obtaining appraisals to ordering forms — would all have to have been arranged within about a two-week period.

To get all of the loans to the final stage at once, without any lenders knowing about the borrowers’ other loans, is very difficult to orchestrate, he said.

“It’s a work of art in fraud to get all the loan docs signed at the same time,” said Gundzik, whose company made 10 of the loans to McConville’s buyers. “This is what ruins the industry for us.”

Nazari and Gundzik said they were also not aware that McConville’s company, 3 MAC Asset Portfolio, was to receive at least $120,000 from every sale.

“There was no way they would’ve represented any of that to the lenders because no one would have made those loans,” Nazari said.

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