A Gilroy man was one of six people indicted Wednesday in San
Jose for his role in a multimillion dollar mortgage scheme.
A Gilroy man was one of six people indicted Wednesday in San Jose for his role in a multimillion dollar mortgage scheme, according to U.S. Attorney Melinda Haag.
Jesus Chavez, 52, and five others fraudulently induced banks to extend millions of dollars in loans to unqualified buyers, while pocketing more than $1 million in real estate and mortgage commissions, according to the indictment.
A federal grand jury also indicted San Jose residents Norma Valdovinos, 45; Claudia Valdovinos, 27; Linda Dung Tran, 33; Elaine “Queenie” Ly, 32; and Pablo Curiel, 71, for their parts in the scam, according to the news release.
They face charges of bank fraud, conspiracy to commit bank fraud and making false statements to a bank, which carry a maximum of 60 years in prison, $2 million in fines and restitution.
Norma Valdovinos and Tran were also charged with money laundering and conspiracy to commit money laundering, which carry up to 40 years in prison and $1 million in fines.
Chavez, Tran and Curiel are scheduled to make their initial court appearances before U.S. Magistrate Judge Howard Lloyd at 1:30 p.m. Thursday in San Jose.
From 2004 through August 2007, Norma Valdovinos and Chavez were employed as real estate agents with Century 21 Golden Hills Real Estate and sought out low-income home buyers to purchase properties – usually single-family residences priced in excess of $500,000, according to the 32-count indictment.
The indictment also alleges they knew the borrowers had insufficient incomes and assets to qualify for the mortgages they needed to buy the properties.
Norma Valdovinos and Chavez often referred their clients to Palacio Mortgage, a company owned by Tran, knowing she would falsely inflate borrowers’ incomes, assets and employment information to allow the borrowers to qualify loans needed to purchase properties, according to the press release.
Tran also arranged for Curiel to offer funding for down payments required on the borrowers’ loans without the banks’ knowledge, a practice that resulted in abouty $40 million in fraudulent loans, according to the indictment.
As of Wednesday, 10 defendants have been charged in this case. In late 2010, Lita Delara, Guadalupe Perez Nieto, John Nguyen and Zosimo Reyes were charged separately for conspiracy to commit bank fraud.