Home Foreclosure Rescue
Scam Ring Broken Up, Leaving Approximately 400
Victims
San Diego County District Attorney Bonnie
M. Dumanis, California Attorney General Edmund G. Brown,
Jr., and San Diego FBI Special Agent in Charge Keith
Slotter announced today that a huge real estate fraud
scheme has been broken up after victimizing potentially
400 homeowners in San Diego County alone, with additional
victims in other counties. There are many more victims
throughout the state who have not yet come forward
or do not yet realize they have been scammed.
Investigators from the District Attorney’s Office
and FBI agents served arrest warrants and three simultaneous
search warrants on May 21. Arrested were the ringleader
William Hutchings, 62, Xiaoke Li, 43, both of San Diego
(Scripps Ranch); Edgar Martinez, 30 and Diego Gil Gil,
38 on charges of conspiracy, grand theft, and deceitful
practices as Foreclosure Consultants. An arrest warrant
for Shawna Landis, 29, of Sorrento Valley, has been
issued and is outstanding. When investigators served
the search warrant, Martinez and Gil were in the middle
of giving a presentation to more than 50 new prospective
victims.
“The defendants preyed on mostly non-English
speaking, Hispanic homeowners who were in foreclosure,
claiming to offer assistance in preventing the victims
from losing their home,” District Attorney Dumanis
said. “These
transactions were illegal and left the victims even
worse off than they were before. Some of the victims
have been evicted from their own homes when this scheme
failed.”
The defendants are facing more than 100 felony charges
and that number is expected to increase. Also filed
were allegations that the scheme resulted in significant
financial losses to the victims. They could face up
to 44 years in prison if convicted. The District Attorneys
Office also took action to freeze the assets and bank
accounts of the suspects to preserve assets for restitution
for the victims.
In addition to the criminal case being prosecuted
by the San Diego District Attorney’s Office,
the Attorney General served a civil injunction and
temporary
restraining
order.
“There hasn’t been a legitimate use of
the land grant since the conclusion of the Mexican-American
war,” Attorney General Brown said. “If
some fast talking scam artist offers a quick escape
from foreclosure using archaic documents, be extremely
suspicious.”
The defendants also used the business names of Federal
Land Grant Company; Land Grant Services; and KBS Resources.
Some of the victims who have been evicted from their
homes and are difficult to locate and more victims
are being sought. The District Attorney’s
Office and FBI are asking all victims who signed the
properties
over to the defendants and/or the companies, to call
a District Attorney hotline at (619) 531-4475 to
provide current contact information for purposes of
prosecution
and
restitution.
“The arrests should be seen as a warning,” FBI
Special Agent in Charge Slotter said. “Those
who consider similar scams should know this: When individuals
who are already facing an extreme financial crisis
are preyed upon by the very people from whom they are
seeking help, the FBI will aggressively investigate
and pursue prosecution of these individuals.”
The defendants were allegedly engaged in a widespread
foreclosure rescue scam by which they acquired grant
deeds to homes in foreclosure based on untrue or misleading
statements that their “land grant program” would
prevent homeowners from losing their homes through
foreclosure.
Two methods were used for inducing owners of residences
in foreclosure to participate in a so-called land grant
program. One method required homeowners to pay a one-time
fee of up to $10,000 to put their property in a land
grant. The second method was a lease back scheme in
which homeowners paid the suspects $500 or more and
then transferred their property via grant deeds to
the defendants for no consideration and then made monthly
payments to the defendants, purportedly to rent their
homes back from the defendants.
In both scenarios, the homeowner was typically evicted
from their property at the completion of foreclosure
proceedings and retained no legally recognized title
to their property. While the total loss is still being
tallied, the defendants probably got away with hundreds
of thousands of dollars.
