San Francisco Man Sentenced to 12 Years in Federal Prison for Orchestrating Mortgage Fraud Scheme

SAN FRANCISCO—Sergio Gutierrez was sentenced Tuesday to 12 years in federal prison after a jury convicted him of running a scheme in which he defrauded victims by telling them to stop paying their mortgages, United States Attorney Melinda Haag announced.

“Our office is hopeful that the sentence handed down in this case will serve as a powerful deterrent to those who would take advantage of the economic downturn in the housing market to prey upon the most vulnerable stakeholders in the system,” U.S. Attorney Haag said.

Gutierrez defrauded investors by falsely telling them that they would be able to own their homes outright if they paid him for documents that he claimed would dispute the validity of their mortgages that various banks held on their properties. The lawsuits filed by the victims were dismissed by various courts throughout California, and most of the victims ended up losing their homes through foreclosure. Gutierrez’s purported mortgage elimination program specifically targeted victims who had little or no ability to read or write English. From 2008 to 2009, Gutierrez received more than $89,000 from individual victims who paid him for this program.

Gutierrez, 49, of San Francisco, was indicted by a federal grand jury on April 29, 2010. He was charged with one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349; and seven counts of mail fraud, in violation of Title 18, United States Code, Section 1341. On August 17, 2012, Gutierrez was remanded into the custody of the U.S. Marshals Service before trial, after the court found that he violated the conditions of his pre-trial release. He remains in custody pending designation to a Bureau of Prisons facility.

The sentence was handed down by U.S. District Court Judge Jeffrey S. White following the defendant’s conviction by a jury of seven counts of mail fraud and one count of conspiracy. Judge White also sentenced the defendant to a three-year period of supervised release.

Robin Harris and Natalie Lee are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Rawaty Yim. The prosecution is the result of a one year investigation by the Federal Bureau of Investigation.