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Owner of a Pasadena Mortgage Company Sentenced to Nine Years in Federal Prison in $30 Million Mortgage Fraud Scheme

U.S. Attorney’s Office September 21, 2012
  • Central District of California (213) 894-2434

SANTA ANA, CA—The owner of a Pasadena mortgage brokerage firm was sentenced today to 108 months in federal prison for participating in a mortgage fraud scheme that obtained more than $30 million in loans.

Eduardo Ruiz, 33, of Santa Ana, was sentenced this morning by United States District Judge David O. Carter. In addition to the prison term, Judge Carter ordered him to pay $5.7 million restitution.

Ruiz has been in custody since March, when a federal jury found him guilty of conspiracy and mail fraud related to his operation of Premier One Lending, a mortgage brokerage firm.

The evidence presented during a three-day trial showed that while operating Premier One Lending in 2005 and 2006, Ruiz and other Premier One employees fraudulently obtained more than 100 loans from lenders in Los Angeles and Orange Counties.

As part of the scheme, Ruiz and his employees prepared mortgage loan applications that inflated borrowers’ income—often by as much as 10 times over their true income. Ruiz and other Premier One employees also obtained phony bank statements and CPA letters, which they provided to the lenders in support of the bogus income figures.

According to witnesses that testified in trial, many of the borrowers did not speak English and did not realize that their income had been inflated. As a result of the scheme, the borrowers obtained large mortgage loans that they were unable to make payments on.

More than 20 loans went into foreclosure, causing lenders to sustain millions of dollars in losses.

“Shameless con artists like Eduardo Ruiz and his cohorts prey on the most vulnerable victims they can find,” said United States Attorney André Birotte, Jr. “The lengthy federal prison sentences for Ruiz and his cohorts signal the damage caused by this scheme—both to individual borrowers and to lending institutions.”

Judge Carter this morning sentenced two others involved in the scheme. Ruiz’s siblings—Gilma Ruiz, 36, and Francisco Ruiz, 26, both of Las Vegas, Nevada, both of whom were recruited to help in the scheme and prepare fraudulent bank statements—received sentences of two years and 18 months, respectively.

The investigation into the Premier One fraud scheme was part of Operation Inflated Income, an initiative by the Federal Bureau of Investigation, IRS-Criminal Investigation, and the United States Postal Inspection Service that targeted mortgage brokers who fraudulently obtained loans by inflating the borrowers’ income and assets and supporting those bogus claims with fake supporting documents.

“This case exemplifies the financial devastation caused by individuals who exploit a lending system in which lenders rely on mortgage brokers to fulfill fiduciary responsibilities with honesty and integrity,” said Timothy Delaney, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Ruiz and his co-schemers greedily violated that trust for no other reason than to make money off the backs of borrowers who otherwise could not afford loans and who ultimately had their credit ruined. The FBI and our partners are committed to pursuing fraud in the housing market, as in this case, which resulted in lenders losing millions of dollars.”

Leslie P. DeMarco, Special Agent in Charge of the IRS-Criminal Investigation’s Los Angeles Field Office, stated, “Eduardo Ruiz and his cohorts knew the borrowers never had a prayer of making their mortgage payments and that many of the loans would go into foreclosure. Mortgage fraud crimes drive buyers into foreclosure, leave lenders burdened with bad loans, and leave neighborhoods with abandoned and deteriorating properties.”

“Fraudulent mortgage fraud schemes affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said B. Bernard Ferguson, Inspector in Charge of the U.S. Postal Inspection Service-Los Angeles Division. “The U.S. Postal Inspection Service will continue to investigate these crimes to protect consumers and our nation’s mail system from being used for illegal or dangerous purposes.”

This prosecution is part of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 United States Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

source: FBI

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • September 21 2012 06:34PM


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