Ringleader of foreclosure scam sentenced to 35 years in prison
09/03/2014 4:21 PM
09/03/2014 4:22 PM
A former Southern California man, described as the ringleader of one of the largest foreclosure rescue scams in the nation, was sentenced Wednesday in federal court in Sacramento to 35 years in prison.
Charles Head, 40, currently of Pittsburgh, Pa., was sentenced by U.S. District Judge Kimberly J. Mueller. A hearing to determine the amount of restitution has been set for Nov. 22.
In sentencing, Mueller said that Head had “created and implemented a very cynical scheme” and had “shown an inability to respect the law,” according to a federal Department of Justice news release.
The case against him affected about a half-dozen Sacramento-area residents and came to a Federal Bureau of Investigation agent’s attention when a North Highlands victim contacted an FBI economic crimes agent on a complaint line.
In 2013, Head was convicted in two jury trials of two conspiracies to commit mail fraud in connection with nationwide “foreclosure rescue” scams. He was also convicted of seven counts of mail fraud. According to evidence presented at trial and at his sentencing hearing, Head was the CEO of a group of brokerage and financial companies – Head Financial Services, Creative Loans and others – in Orange and Los Angeles counties.
Evidence presented during the trial established that the defendants solicited homeowners facing foreclosure, promising to help them avoid foreclosure and repair their credit. Instead, through misrepresentations, fraud and forgery, the defendants helped complete transactions that substituted straw buyers on the property titles without the homeowners’ knowledge.
These straw buyers were often friends and family members of the defendants, or were solicited on the Internet. Once the straw buyers held title to the homes, the defendants applied for mortgages to extract the maximum available equity. The defendants then shared the proceeds and the “rent” that victim homeowners paid them, authorities said. In the end, the victimized homeowners were left with no home, no equity and damaged credit ratings.
Head initially focused his scam on distressed homeowners in California, then expanded throughout the United States. Between January 2004 and June 2006, the defendants obtained more than $90 million in fraudulent loans, caused estimated losses of more than $50 million and stole title to more than 300 homes, authorities said.
Sixteen other defendants, most from Southern California, also have been convicted in the two related cases and are awaiting sentencing.
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