Written by The Business Journal Staff
Three defendants involved in a foreclosure rescue scam that operated in Visalia, Bakersfield and Salinas were sentenced in a federal court in Fresno today to prison terms of two to nine years.
The three men operated Star Reliable Mortgage, which targeted distressed homeowners with a fraudulent “loan elimination scheme” — charging clients up front fees of $2,500-$4,500 and monthly fees for helping the clients own their homes “free and clear.”
Martin Calzada, 30, of Norwalk, received the heaviest sentence of nine years in the scheme, which netted him at least $300,000 that was transferred from Star Reliable into his own bank account, according to court documents.
Juan Curiel, 38, of Visalia received three years and five months in Prison and Santiago Palacios-Hernandez, 48, of Salinas, received two years and one months.
To advance the scheme, the three men filed fraudulent documents at county recorders’ offices on behalf of homeowner-clients, replacing the legitimate property trustees with fictitious trusts in an effort to “cloud title” and halt or stall the foreclosure process.
Clients were instructed to stop paying their mortgages, and were falsely told they had $1 million in a U.S. government account that could be used to pay off a homeowner’s mortgage.
As part of their sentences, the defendants were ordered to pay more than $1.1 million dollars in restitution to former Star Reliable clients and mortgage loan owners Fannie Mae and Freddie Mac, which suffered financial losses upon the foreclosure of several clients’ homes.
These cases were the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Christopher D. Baker and Patrick J. Suter prosecuted the cases.