Ed Bedford 11:44 p.m., June 19
Two Dozen Charged with Operating Largest Real Estate Scam in Local History
The U.S. attorney's office today (April 7) unsealed an indictment charging 24 individuals with running a mortgage fraud scheme involving 220 properties that collectively sold for $100 million. One of the lead defendants, Darnell Bell of Chula Vista, is currently in federal custody on a charge of cocaine distribution. According to the U.S. attorney's office, the defendants would find phony "straw" buyers for deeply discounted properties on the market. They would make offers on the properties based on inflated appraisals. Then they would prepare false loans applications for the straw buyers. The defendants fallaciously told lenders that the amount of money exceeding the asking price would go to pay for handicapped accessing. But the money didn't go there; it became a kickback to a member of the conspiracy, charges the government. The straw buyers failed to make payments and the properties were foreclosed upon, inflicting financial damage on the lenders.