David Saks: Jury Returns Guilty Verdict in Nationwide Foreclose Rescue Scam

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Jury Returns Guilty Verdict in Nationwide Foreclose Rescue Scam

Jury Returns Guilty Verdict in Nationwide Foreclose Rescue Scam
Second Trial for Defendants Who Operated from Southern California $15 Million in Fraudulently Obtained Funds Taken from Scores of Homeowners

U.S. Attorney’s Office December 02, 2013
  • Eastern District of California (916) 554-2700

SACRAMENTO, CA—After a five-week trial, a federal jury in Sacramento returned guilty verdicts against Charles Head, 36, of Pittsburgh, Pennsylvania, (formerly of Los Angeles); Benjamin Budoff, 46, of Colorado Springs, Colorado; and Domonic McCarns, 39, of Irvine, California, United States Attorney Benjamin Wagner announced.

All were convicted of conspiracy to commit mail fraud in connection with a nationwide “foreclosure rescue” scam. Charles Head was convicted of three additional counts of mail fraud. For Charles Head, the trial conviction is his second this year in this district stemming from a major mortgage fraud investigation. McCarns was remanded into custody immediately after the verdict. Charles Head remains in custody following a violation of the terms of his release after his conviction in May 2013 in the first trial.

According to evidence presented at trial, Charles Head was the leader of a scam that operated from Orange County between March 2005 and June 2006. The defendants used several entities, including Head Financial Services and Creative Loans, to extract more than $5.7 million in equity from the homes of their victims, many of whom were in California. Evidence in the two trials established that he and his co-conspirators were responsible for at least $15 million in losses to homeowners.

In March 2008, a federal grand jury indicted Charles Head, Domonic McCarns, Benjamin Budoff, and other defendants with violations of conspiracy to commit mail fraud, mail fraud, and other charges in a separate case related to the Head Financial Services equity-skimming scheme. The evidence at trial established that the defendants found homeowners facing foreclosure and claimed that they could help the homeowners avoid foreclosure and repair their credit. Instead, through misrepresentations, fraud and forgery, the defendants led the victims to complete transactions that substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants or were solicited on the Internet. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then split the equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

U.S. Attorney Wagner said, “Charles Head, Domonic McCarns and Benjamin Budoff preyed on the victims’ fear of losing their homes and then took advantage of those victims’ predicament to steal from them their last remaining equity in those homes. As a result of their conduct, many of the victims who looked to the Head brothers for help were evicted and left destitute. Few white-collar crimes are as cruel or as devastating to victims. This investigation has already yielded 16 convictions, and our work is not yet done.”

“Today’s guilty verdict sends a clear message to those committing mortgage fraud that this type of activity will have a criminal consequence, which will include a felony conviction and a prison term to serve,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The defendants in this case quite literally stole the American Dream of owning a home from many people. The loss of a home represents a loss of a family’s shelter and its most precious financial resource. These types of crimes have a devastating impact on both homeowners and the community.”

“Unfortunately, today’s verdicts offer little relief to their victims who lost everything to this scheme,” said Special Agent in Charge Monica M. Miller of the Sacramento Division of the FBI. “Distressed homeowners unknowingly turned to Charles Head and his fellow fraudsters at a time when they needed the help of a legitimate business to save their homes from foreclosure and preserve what little equity they had. At the expense of their victims, Head and others enriched themselves with total disregard for the impact their actions would have on their victims and the economies of the communities in which the homes stood.”

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris are prosecuting the case.

Two other defendants pleaded guilty in this case before the trial and are scheduled for status regarding their sentencing on December 18, 2013. Those defendants are Keith Brotemarkle, 45, of Johnstown, Pennsylvania; and Lisa Vang, 27, of Westminster, California.

The first indictment charged Charles Head and 12 other defendants with operating a separate equity-stripping scheme. On May 30, 2013, Charles Head and his brother Jeremy “Mike” Head, 33, of Huntington Beach, were convicted at trial of conspiracy to commit mail fraud and mail fraud related to that scheme. Jeremy Head is scheduled for sentencing on March 26, 2014. Eleven other defendants have pleaded guilty in the first case and are awaiting sentencing: Elham Assadi, aka Elham Assadi Jouzani, aka Ely Assadi, 33, of Irvine; Leonard Bernot, 54, of Laguna Hills; Joshua Coffman, 33, of North Hollywood; Akemi Bottari, 31, of Los Angeles; Sarah Mattson, 30, of Phoenix; Omar Sandoval, 35, of Rancho Cucamonga; Xochitl Sandoval, 32, of Rancho Cucamonga; Andrew Vu, 42, of Santa Ana; Justin Wiley, 31, of Irvine; Kou Yang, 35, of Corona; John Corcoran, 55, of Anaheim.

Domonic McCarns and Ahn Nguyen of Los Angeles were also charged in the first indictment. McCarn’s second trial is scheduled for February 24, 2014. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case was part of the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

source: FBI

http://www.fbi.gov/sacramento/press-releases/2013/jury-returns-guilty-verdict-in-nationwide-foreclose-rescue-scam?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=278944

 




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Comment balloon 0 commentsDavid Saks • December 03 2013 12:55PM

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