Business Partners Plead Guilty to Running Multi-Million-Dollar Foreclosure Rescue Scam in Bakersfield, Visalia, and Salinas
FRESNO, CA—Juan Ramon Curiel, 36, of Visalia, pleaded guilty today to conspiracy to commit mail fraud and bankruptcy fraud in connection with a foreclosure rescue scheme he orchestrated, United States Attorney Benjamin B. Wagner announced. Curiel’s co-defendant and business partner, Santiago Palacios-Hernandez, 45, of Salinas, pleaded guilty to the same conspiracy charge last week.
According to court documents, Curiel and Palacios-Hernandez operated Star Reliable Mortgage, with offices in Bakersfield, Visalia and Salinas. Between August 2010 and October 2011, Curiel and Palacios-Hernandez conspired to defraud homeowners and lenders by offering clients a purported “loan elimination” program that would enable homeowners to own their homes “free and clear” of any loans or mortgages.
Curiel and Palacios-Hernandez charged clients upfront fees ranging from $2,500 up to $4,500 and additional monthly fees and told their clients to stop paying their mortgages. Curiel and Palacios-Hernandez filed various fraudulent documents at county recorders’ offices on behalf of the clients supposedly replacing the legitimate trustees with fictitious trusts affiliated with the defendants or documents that transferred the property to a bankruptcy debtor all in an effort to “cloud title” and halt or stall the foreclosure process. Because foreclosures were stalled, clients continued to pay the monthly fees to defendants believing that their services were legitimate and successful. Instead of owning their homes “free and clear,” however, many of the clients lost their homes in foreclosure.
Curiel and Palacios-Hernandez admitted in their plea agreements that their criminal conduct caused losses of more than $2.5 million. Curiel separately admitted in his plea agreement that he fraudulently filed bankruptcy for one of his clients.
This case is the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant United States Attorneys Christopher Baker and Patrick Delahunty are prosecuting the case.
Curiel and Palacios-Hernandez are scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on March 9, 2015, and February 23, 2015, respectively. The maximum statutory penalty they face for conspiracy to commit mail fraud is 30 years in prison and a $1 million fine. Curiel additionally faces a maximum statutory penalty of five years in prison and a $250,000 fine for the bankruptcy fraud conviction. The actual sentences, however, will 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.
This announcement was done in connection with 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’s 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. For more information on the task force, please visit www.stopfraud.gov.