California Man Targeted Vulnerable Homeowners
Michael Henschel offered to help financially struggling individuals save their homes.
Instead, he stole their American dream.
Henschel, 70, preyed on unwitting victims in the Los Angeles area—often elderly people or people who did not speak English. Once they trusted him, he promised to help them if they agreed to work with him.
“He was a very charismatic guy,” said Special Agent Heather Stachnik, who investigated the case out of the FBI’s Los Angeles Field Office. “He would connect with people and then use and exploit them.”
Once clients signed on with Henschel, he filed illegal fake deeds on their properties. He used these deeds to steal properties outright, charge homeowners illegal fees for foreclosure and eviction delay services, or extort money from the homeowners to clear their titles.
Henschel sometimes used the high cost of civil litigation and his knowledge of the legal system to force settlement payments from his victims.
Henschel collected more than $7 million from the scheme and took control of millions of dollars’ worth of property through the fraudulent court filings.
The results were disastrous for the numerous victims. Some lost homes that had been in their families for generations, ended up in nightmarish civil litigation, or had to scramble to avoid homelessness. Several of the victims said they have struggled to make ends meet since Henschel swindled them.
“This scam is so severe because he preyed on people who were already struggling financially.”
Heather Stachnik, special agent, FBI Los Angeles
One victim was so desperate for cash after Henschel bilked her out of her rental properties that she went back to remove the coins from the laundry machines—until Henschel changed the locks.
“This scam is so severe because he preyed on people who were already struggling financially,” Stachnik said. “He left some of them with nothing, and the elderly victims especially are not really in a position to recover from it.”
Henschel and those who worked with him covered their tracks. They used aliases, shell companies, and numerous accounts with different business names to try to hide the crimes. But FBI investigators meticulously followed the money and paper trails to uncover the scheme.
In May, Henschel pleaded guilty to mail fraud. In September, he was sentenced to 20 years in prison. The government is pursuing restitution and asset forfeiture in hopes of returning money to the victims.
The Federal Trade Commission says homeowners should watch out for warning signs of real estate scams like this one. These warning signs may include pressure to sign things you don’t understand, a requirement to transfer your deed, or upfront fees. It’s illegal for companies to charge you in advance for loan modifications, and you should always review real estate documents with trusted professionals.
Internet research may help you avoid a scam, too. Henschel had a criminal record, and some victims were able to find information about him online.
“It’s cliché for a reason—read before you sign,” Stachnik said. “Many of the victims couldn’t read or speak English, and they didn’t know what they were signing. Get a trusted family member or attorney to help you with a major financial transaction like this.”