Curmudgeon’s Weblog

ABC News 10

Charles Head Jeremy Michael Head

SACRAMENTO, CA – Nineteen people have been indicted in a major mortgage fraud case federal agents call Operation Homewrecker, where at least 115 victims lost their homes as they tried to save them from foreclosure.

Many of the alleged victims are in the greater Sacramento region, from Tracy and Modesto up to North Highlands.

“We had to tell victims they didn’t own their homes. The stories were heartbreaking,” said federal prosecutor Ellen Endrizzi.

United States Attorney McGregor W. Scott announced the indictment in Sacramento Monday morning. In two separate indictments now unsealed, the charges include mail fraud, conspiracy to commit mail fraud, conspiracy to commit money laundering and other related offenses.

The first indictment involved an alleged “foreclosure rescue” scam, reportedly netting approximately $6.7 million in fraudulently obtained funds taken from 47 homeowners, nearly all of whom were located in California, federal investigators said.

Investigators say defendants would seek out desperate homeowners and offer a way for them to avoid foreclosure. A so-called “investor” would be added to the property title, with the homeowner paying rent lower than the original loan payment to give the owner time to repair credit and eventually gain back the house.

“Unfortunately, all of this was a scam,” according to Scott. He said the investor was actually a straw buyer paid a fee to put his or her name on documents. The defendants would then allegedly draw out all the equity left in the home and either sell the house or stop making mortgage payments.

“At the end of this you’re gonna have your home, you’re gonna have your equity and you’re gonna have your credit restored,” Scott said people were promised. “And guess what? At the end of it they don’t have their home, they don’t have their equity and they don’t have their credit restored.”

“These are cruel and callous crimes which took from the victims something that for many is their most personal and cherished possession: their home,” said Sacramento FBI Agent in Charge Drew Parenti.

Charles Head, 33, of La Habra, California and Jeremy Michael Head, 30, of Huntington Beach were among 16 people named in the first indictment which investigators call “Head One.” Charles Head, who federal investigators said was the leader of the scheme, was also among seven indicted under “Head Two,” what prosecutors are calling an equity stripping scheme.

That second indictment alleges 68 more victims from other states with losses of $5.9 million. Both indictments claim the fraud began as far back as January 1, 2004 through June of 2006.

“We had the elderly, we had the young, it went across gender lines, racial lines,” said Endrizzi. “These were just basically people who were desperate and they saw this as the last ditch effort. And Head was counting on that.”

“Many of these victims were unaware of what was going on until it was too late,” said IRS investigator Scott O’Briant. A map displayed by investigators show victims all over California, in the northwest and on the east coast.

Scott said Charles Head was taken into custody in Southern California on Friday and will be brought to Sacramento federal court for proceedings this week. Head faces more than 20 years in prison if convicted, according to Scott.

Also charged are: