LOS ANGELES -- On Thursday, Jan. 23, the United States Secret Service arrestedseven people suspected of carrying out an elaborate mortgage fraud scheme. Thesuspects have been charged with conspiracy to commit bank fraud.
Dubbed "Operation Golden Financial," the 20-month investigation uncovered a multifacetedfraud scheme that has been in existence since 1995, primarily in Kern, Los
Angeles and San Diego Counties.
The actual loss to consumers in this case may exceed $350,000, with the total amount ofloans funded by fraudulent means approaching $13.4 million.
To date, the investigation has led to the discovery of 85 fraudulent mortgage loans. Thesuspects manufactured loan documents, such as W2 forms, 1040 forms, and verificationsof employment, rent and bank deposits, all of which were used to support fraudulent loanapplications. The suspects also created fictitious personal checks, money orders andcashiers checks that were submitted with the fraudulent loan documentation. Furthermore, some of the suspects notarized documents without ever verifying theidentity of the signatories.
Preying on victims who both lacked English language-skills, and a knowledge of theAmerican financial system, the suspects convinced some of their victims to makemortgage payments directly to the suspects. In some cases, the victims invested theequity from their homes in fictitious investment schemes created by the suspects. Thesefunds were laundered through multiple accounts and were also wired out of the United States to Mexico.
"Based on the nature of these crimes, we believe that there are many more victims outthere who are hesitant to come forward," said Special Agent in Charge Rosa Alvarado ofthe Los Angeles Field Office.
The U.S. Secret Service is hoping to hear from others targeted by the scheme. Potentialvictims should call the Secret Service at 805-339-9180.
The suspects were charged the U.S. Attorneys Office for the Central District ofCalifornia with a violation of 18 USC 371, conspiracy to commit bank fraud in violationof include violations of 18 USC 1344.
The U.S. Secret Service was created in 1865 with the sole purpose of suppressingcounterfeit currency. While the agency's responsibilities have expanded to includepresidential protection, its investigative mission still focuses on protecting theinfrastructure of the nation's financial systems.
Source: U.S. Secret Service