Michael Keatts and Lillian Marquez were indicted in November 2013 by a federal grand jury in Sacramento on charges of conspiring to commit mortgage fraud and mail fraud.
They were arrested and subsequently released on bond. According to U.S. District Court online records, their next court date is a status conference set for Sept. 16.
According to a news release issued by the U.S. Attorney’s Office at the time of their arrest, Keatts and Marquez operated Colonial Home and Business Services in Stockton from February 2007 through at least August 2012. Both were licensed real estate agents who assisted clients in purchasing and selling homes. The indictment alleges that Keatts and Marquez participated in supplying false information to mortgage lending institutions, indicating that their clients were employed by various businesses set up and controlled by the defendants. In fact, authorities said, these clients were not employed by those businesses and their actual incomes were far less than what was represented to the lending institutions.
Keatts and Marquez are accused of engaging in short-sale fraud. They allegedly helped clients facing default on their current loans arrange for short sales of their properties. Unbeknownst to the the lenders, the defendants arranged for the properties to be sold to straw buyers. As a result, authorities said, the original owners remained in their properties and enjoyed the benefits of new loans that the lenders assumed were made to other individuals.