Santa Paula man arrested in connection to wide-ranging mortgage fraud scheme
By Peggy Kelly
Santa Paula News
Published: August 07, 2013
By Peggy Kelly
Santa Paula Times
A Santa Paula man was among those arrested July 31 in connection with a wide-ranging mortgage fraud scheme that targeted low-income Spanish-speaking people as well as lenders. The lenders lost millions of dollars and the homebuyers their homes through foreclosure in the scam that also included false sales so mortgage brokers could pocket the loans, according to the investigation that was started by the Ventura County District Attorney’s Office.
The investigation into the operation - which included loan officers allegedly cold-calling potential clients by going door-to-door - resulted in the arrest by the FBI of eight people, seven of them Ventura County residents. Numerous unnamed co-conspirators were also noted in the 44-page indictment.
According to Ventura County Chief Deputy District Attorney Miles Weiss, loans “for more than 100 homes, a conservative safe number” of the fraudulent transactions, totaled more than $11 million dollars.
The investigation covered the time period from December 2004 into October 2008, “at that time the height of the mortgage run up,” to the eventual failure that led to record foreclosures after a home-buying frenzy that later contributed to the collapse of the nation’s economy.
Cesar Rodriguez Azamar, 36, of Santa Paula was arrested for suspicion of taking part in the scheme allegedly led by Jose “Joe” Garcia, 46, of Camarillo, through an Oxnard-based business called New Concepts Home Loans. According to a joint Ventura County District Attorney’s Office and FBI news release Garcia is a broker who also owned Century 21 Premier Realty.
The indictment alleges that New Concepts employees prepared mortgage applications that contained false information about borrowers’ income, employment and assets.
Lucy Ann Garcia, 46, of Camarillo, who is married to Jose Garcia, and others obtained fake CPA letters from tax preparers that falsely stated the applicants were part of a business, officials allege. Using the falsified financial information the defendants generated commissions and fees through the mortgage application process, at least $10,000 per mortgage.
Among the banks that suffered losses were Washington Mutual, Wells Fargo, Countrywide, IndyMac, SunTrust, World Savings Bank and JPMorgan Chase.
Garcia, who was arrested in Camarillo and not his Santa Paula home, was a New Concepts loan officer. Other arrested were: Jose Fernando Murguia, 47, of Oxnard; Jose Garcia’s sister, Sesilia Garcia, 30, of Oxnard; Lili Ayala Hernandez, 41, of Oxnard; Gregg Scott Quinn, 40, of Camarillo; and Lidubina “Lido” Mendoza Perez, 41, of Moreno Valley, who worked at New Concepts’ Bakersfield office.
FBI Assistant Director in Charge Bill L. Lewis noted Garcia “allegedly directed his workforce, including unlicensed individuals acting as Realtors, to peddle the dream of home ownership in the poorest neighborhoods of Oxnard, where they easily found people eager to buy. This case and others were made based on the cooperative relationship among federal and local investigators working as a team to combat mortgage fraud in Ventura County.”
The defendants each face a maximum sentence of 30 years in prison if convicted of the conspiracy count in the indictment. They were scheduled to make their initial court appearances last week in U.S. District Court in Los Angeles.
Said Ventura County DA Gregory Totten, “These arrests for serious federal crimes illustrate the tenacity of state and federal law enforcement to continue our years-long effort to bring to justice those who perpetrated real estate fraud-based crimes against unsuspecting, often monolingual, victims in our communities.”
Chief Deputy District Attorney Weiss noted, “Part of the conspiracy was very aggressive efforts to find the borrowers and get them loans in spite of their inability to repay.”
The DA’s Office began the investigation in 2010, shortly after the conclusion of “Operation Stolen Dreams,” when three Camarillo residents were found guilty of filing fraudulent loan applications. That case involved more than 1,200 criminal defendants across the country and more than $2.3 billion in losses. In Ventura County alone, two indictments charged 14 people with conspiracy to commit bank and wire fraud.
Although different people were involved in the older case Weiss said this latest case is an offshoot. “This has been a multi-year investigation,” that began with complaints in March 2006 and, said Weiss, “continued until 2012 actually. Realistically, it is a case that is five-plus years in the making... you know the old saying about the long arm of the law.”
The latest round of indictments is “an important chapter than we’re glad to see to come to fruition in the form of arrests and indictments.” Weiss added, “None of the borrowers were investigated, we had no true suspects” of wrongdoing among those who wanted to own a home.
Borrowers “had no idea... they were all told here’s a house you can afford, come sign papers and here are your keys.... Then they found themselves in severe distress,” said Weiss, “but by that time the commission was earned and the door closed” on the financing for the house they discovered they could not afford in the first place.
The FBI, Ventura County DA’s Office, Federal Housing Finance Agency, Office of Inspector General, U.S. Department of Housing and Urban Development and the Secret Service conducted the investigation.