Federal Indictment In Foreclosure Scam Targeting Homeowners

A federal grand jury has returned a new indictment that adds three defendants to a case stemming from a $12 million foreclosure scam in which homeowners who were in default on their mortgages were promised refinancing, but ended up having their homes sold to others after the equity had been skimmed.

The superseding indictment, which was returned late Wednesday, alleges a scheme orchestrated by Martha Rodriguez and Edward Seung Ok, who operated real estate and escrow agencies in Downey and Seal Beach. Rodriguez, a 35-year-old Downey resident, and Ok, a 40-year-old Torrance resident, were arrested last November when the grand jury issued its first indictment.

The indictment returned today adds three defendants, as well as additional fraud counts and new identity theft charges. The new defendants are Cynthia Valenzuela, 23, of Downey, who is Martha Rodriguez's cousin; Vladimir Stefanovic, 35, of Lancaster, who is Martha Rodriguez's boyfriend; and Maria G. Juarez, 36, of Reseda.

The indictment outlines a foreclosure scheme that targeted commercial lenders and homeowners in such areas as Artesia, Lakewood, Gardena, Wilmington, Carson, West Covina, La Puente, El Monte, Westminster, Downey, Van Nuys and San Bernardino. The scheme victimized more than 100 homeowners and allegedly caused losses of at least $12 million.

By combing databases that list pending foreclosure sales, the defendants located homeowners whose loans were in default. The victim homeowners were told that they could stop the foreclosure of their homes with short-term loans and by refinancing the mortgage with a co-signer who had good credit. However, instead of obtaining refinancing, the defendants submitted loan applications in the names of "straw buyers" who were purportedly buying the property. In some cases, the straw buyers were paid for the use of their personal information; in other cases, the defendants used personal information of people without their knowledge. The loan applications for the straw buyers - which always contained false information about the straw buyers—caused a series of lenders to fund mortgages. The loan proceeds were used to pay off the loan in default, and the remaining proceeds were skimmed off by the defendants. Read more at fbi.gov