Tulare and Monterey County Business Partners Charged in Fraudulent Foreclosure Rescue Scheme
|U.S. Attorney’s Office May 29, 2013|
FRESNO, CA—An 11-count indictment was unsealed yesterday charging Juan Curiel, 34, of Visalia, and Santiago Palacios, 44, of Salinas, in a foreclosure rescue scheme, United States Attorney Benjamin B. Wagner announced. The indictment was returned on May 2, 2013, by a federal grand jury in Fresno; Curiel was arraigned on the indictment this afternoon, and Palacios was arraigned yesterday.
The indictment alleges that Curiel and Palacios were the principal operators of Star Reliable Mortgage, a business in Bakersfield, Visalia, and Salinas, through which they offered prospective clients a home loan “elimination” service. The defendants falsely represented to clients that the government had allocated to each of their Social Security accounts $1 million, which could be used to pay off their mortgages. The defendants also falsely represented to clients that they could own their homes “free and clear” by paying fees to defendants, who, in turn, would conduct forensic audits of the clients’ mortgage lenders’ files to uncover supposed fraud by the lenders.
According to the indictment, between August 2010 and October 2011, Curiel and Palacios charged clients an upfront fee for their services—ranging from $2,500 up to $4,500—as well as monthly fees. Curiel and Palacios then fraudulently recorded and mailed to the clients’ mortgage lenders deeds and re-conveyances supposedly replacing the lender-trustees with fictitious trusts affiliated with the defendants. On at least one occasion, Curiel fraudulently filed bankruptcy on behalf of a client. The scheme involved more than $2.5 million in losses to private homeowners and lending institutions.
This case was the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant United States Attorney Christopher Baker is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty for the conspiracy and mail fraud counts is 30 years in prison and a $1 million fine. The maximum penalty for bankruptcy fraud is five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is part of the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.