Man Sentenced to 144 Months For Mortgage Fraud Scam
Gregory Flores, former manager at All Fund Mortgage, Anaheim Hills, California, was sentenced to 144 months imprisonment and three years of supervised release. U.S. District Judge J. Virginia Phillips also ordered Gregory Flores to pay over $1 Million in restitution to homeowner victims and over $98,000 in restitution to the IRS for his role in a mortgage fraud conspiracy and evading taxes.
On February 24, 2012, Gregory Flores pleaded guilty to one count of wire fraud conspiracy and one count of tax evasion. According to the plea agreement, Flores, along with other co-conspirators including Sheri Gale, a real estate agent in La Mesa, and Amy Hall (also known as: Amy Truijillo) also of Anaheim Hills, a loan processor, executed an illegal scheme by wire communication to defraud distressed homeowners facing foreclosure and lenders who made mortgage and home equity loans.
According to court documents, beginning around May 2003 through around June 2006, Flores managed satellite "All Fund Mortgage" offices, a mortgage company based in Tacoma Washington, in Anaheim Hills and Murrieta. Flores or his co-conspirators, using various names including "All Fund," "Advantage 2000," "Crown and Associates," "Ichthommol Trust," "B Owned," or "Right Way, Inc." contacted numerous homeowners, mostly in San Bernardino and Riverside counties, to sell or refinance their homes to others controlled by co-conspirators. Flores and others falsely claimed they could save the homeowners from foreclosure. Homeowners were also solicited through advertisements in mailings such as the "Penny Saver" or by conducting "knock and talk" and typically had poor credit.
As part of the conspiracy, Flores and others would convince the homeowner to allow an "investor" (who was really a "straw buyer") with good credit to be added to the title of their home, sometimes forging homeowner documents, telling the homeowner they could then refinance under a more favorable term. In most cases, title was never transferred back to the homeowner, essentially stealing the equity out of the property. Few if any payments were ever made and the properties were eventually sold in the course of foreclosure proceedings.
In furtherance of the scheme, Flores and others recruited individuals with good credit to act as straw buyers, offering an opportunity to purchase an investment property with an instant tenant and receiving a "kickback" between $1,000 to $25,000 per property. Flores and others also submitted false documents and provided false statements to lenders inducing them to give mortgages and home equity loans for the properties based upon false documents and statements submitted for loan applications to lenders on behalf of straw buyers. At escrow closing, coconspirators caused the homeowners equity and/or loan proceeds to be deposited by means of the Fedwire system, into bank accounts they controlled and kept the escrow proceeds for themselves.
At least 21 homeowners were victimized in a total of $1,042,866.08.
According to court documents, for calendar year 2004, Flores received approximately $340,000 in taxable income. Flores also opened a bank account in the name of Advantage 2000 for which escrow checks were deposited to conceal this income and nevr filed a tax return or paid the tax. Flores agreed he concealed this income for the purpose of evading the income tax due by creating a shell company in the name of Advantage 2000 for the purpose of disguising and diverting funds paid out of escrow. Flores received approximately $264,000 in taxable income and upon that he owed income tax of owing approximately $98,862.93 in tax.
The criminal investigation of Gregory Flores was conducted by the U.S. Attorney's Office in Riverside, IRS - Criminal Investigation and the Federal Bureau of Investigation.
source: Mortgage Fraud Blog