A Roseville resident and three co-defendants have been sentenced in federal court in Sacramento for their roles in a scheme that victimized homeowners facing foreclosure.
U.S. District Judge William B. Shubb on Monday sentenced Jesse Wheeler, 37, of Roseville to three years in prison. The judge also sentenced Jewel Hinkles, also known as Cydney Sanchez, 64, of Los Angeles to five years in prison; Cynthia Corn, 61, of Oakland to two and a half years in prison; and Brent Medearis, 48, of Modesto to one year and 10 months in prison, according to a U.S. Attorney’s Office news release.
Court documents show that Hinkles was the founder and general manager of Horizon Property Holdings LLC in Beverly Hills. From 2008 through 2010, Hinkles offered a service called “Save My Home” or “Homesaver” that promised to rescue financially distressed homeowners from foreclosure and reduce the principal on the homeowners’ mortgages. The firm offered the program directly to clients and through “affiliates,” who promoted and sold the program to clients, mostly in Northern California.
Wheeler was one of the affiliates and his company, J.W. Financial Solutions, was located in Roseville. According to court documents, he collected approximately $2,133,376 from more than 600 victims. He refunded approximately $146,626, for a total loss of $1,986,750.
Assistant U.S. Attorney Lee S. Bickley, who prosecuted the case with colleague Matthew D. Segal, said the defendants preyed on victims who were at their most vulnerable as they faced the loss of their homes.
“They took their last dime when they actually needed it to pay their mortgage,” she said.
Authorities said the defendants told homeowners they would save their residences from foreclosure by arranging for investors to purchase their existing mortgage at a discounted price, reducing the homeowner’s principal and monthly mortgage payment. To prevent foreclosure, the defendants filed fraudulent deeds transferring an interest in the homeowner’s property to a fictitious entity called Pacifica Group 49/II.
In many instances, authorities said, the defendants also filed fraudulent petitions in bankruptcy court, often naming both the homeowner and Pacifica Group 49/II as the debtor. The petitions were intended to invoke the automatic provisions of federal bankruptcy law that immediately halt any foreclosure actions against the debtor’s property.
Because the fraudulent deeds and bankruptcy petitions delayed foreclosure proceedings, the defendants were able to pretend that they were providing a legitimate service and continue to collect fees from defrauded homeowners. To enroll in the Save My Home program, clients were required to make an initial payment of approximately $3,500 and to pay monthly fees up to $1,500. The Homesaver program required an initial payment ranging from $1,750 to $6,500 and monthly fees up to $850.
Bickley said she is not aware of any instances in which homeowners have benefited from such “foreclosure rescue” offers. She advised homeowners to investigate the individuals and firms offering such programs and to also check out any purported success stories. But even due-diligence efforts can prove futile, she said, because perpetrators of such schemes often recruit other people to lie about the benefits of their programs.
In total, authorities said, the scheme collected at least $4.9 million from more than 1,000 homeowners, including homeowners whose mortgages were owned by the Federal National Mortgage Association, Fannie Mae, and the Federal Home Loan Mortgage Corp., Freddie Mac. But according to court documents, the defendants never arranged for the purchase of a mortgage from any of the clients’ lenders and never negotiated mortgage principal reduction for any of Horizon’s clients.
The case was referred by the U.S. Trustee’s Office and resulted from an investigation by the Federal Housing Finance Agency, Office of Inspector General; the U.S. Postal Inspection Service; the Federal Bureau of Investigation; and the Stanislaus County District Attorney’s Office.