Mortgage Brokers Arrested for Stealing $1M
United State Attorney General Edmund G. Brown Jr. announced again today the indictments of three mortgage brokers based in Simi Valley, California for their part in a mortgage scam that cost homeowners millions.
Michael McConville, 31; Garrett Holdridge, 23, and Alan Ruiz, 28 all worked for ALG, Inc. a mortgage brokerage based out of Los Angeles, California. The three men have been indicted on twenty eight counts of grand theft; fourteen counts of forgery; one count of elder abuse; one count of conspiracy to commit grand theft; three allegations of aggravated white-collar crime in excess of five hundred thousand dollars; and taking an excess of three million two hundred thousand dollars.
McConville, the Sale Manager for ALG, Inc along with Holdridge and Ruiz, both Loan Officers for Inc used their positions in the mortgage field to knowingly defraud borrowers and lenders by misrepresenting mortgage terms to all victims involved. The trio enticed mortgage borrowers with low interest rate and broker fee guarantees for the purpose of defrauding them. The trio had borrowers’ complete applications for one interest rate and terms of mortgage and then submitted to lenders a second application with another interest rate and terms of mortgage. They proceeded to add outrageous fees and never disclosed them to borrowers. The fee’s ranged from loan to loan from twenty thousand to over fifty seven thousand dollars.
McConville and his conspirators received the closing documents from the lenders with the correct interest rates and mortgage terms. They removed the all the closing documentation that included information about the interest rates and the mortgage terms with fraudulent closing documentation that had a lower interest rate and the mortgage terms promised to the borrower. They also forged the signature of some borrowers on the documents they submitted back to the lender with closing package.
The borrowers were unaware of the fraud until they received the true loan documents from the lenders and realized that their signatures had been forged in some cases and that interest rate and terms where different from those initially presented at closing. They also learned they had not received the cash out amounts on the refinance transactions that they were promised. The borrowers learned that the cash out had actually gone into the pockets of the trio.
The victims of this fraud have been forced to either come out of retirement to try to maintain the payments, tap into savings accounts and some simply have been forced to sell. One victim was forced to pay a pre-payment penalty over twenty one thousand dollars in order to fix the mess.
One couple had signed on for a 5.5 percent fixed rate, cash out for fifty eight thousand with forty five hundred in closing cost through McConville. They signed the closing documentation that was presented to them with the agreed terms. Indymac Bank discovered that the couples’s signatures appeared to be forged. The bank sent them a copy of the mortgage documentation it had received showing the couple had agreed to a 7 percent interest rate, no cash out, with fifty thousand in closing cost and forty two thousand in origination fees paid to ALG, Inc. It was then the couple realized that the copies of the original mortgage papers they had received at closing where missing from their copy.
A retired woman was contacted by ALG, Inc in July of 2007 about refinancing the terms of her mortgage with a fixed rate of 5.25 percent. A notary showed up at her home one month later with documents that stated the correct loan terms. She discovered after closing that the loan was really an adjustable arm with an initial rate of 8.65 percent, a twenty two thousand dollar origination fee and over twenty two hundred dollars in additional fees. Her signature had been forged on the majority of the documents.
The trio made off with more than one million from seventy mortgage borrowers in the scam that left its victims holding over thirty million dollars in loan terms they never agreed to in the first place.
McConville was arrested on Thursday September 10 at his home in Simi Valley, California. He bail was set at two million dollars and he is currently in the Ventura County Jail.
Holdridge was arrested; his bail was set at two million dollars. He is currently being held at the Los Angeles Country Jail.
Ruiz was arrested at this home in Huntington Beach, California on September 10. His bail was set at two million dollars and he is currently being held in the Orange County Sheriff’s Main Jail.
McConville was recently sued by United States Attorney General Brown on another case involving his brother Sean McConville. The bothers carried out a Property Tax Reassessment scam that targeted California homeowners looking to lower their property tax. They sent out mailers that looked official in nature that demanded hundreds of dollars from property owners for payments of property tax. The flyer warned homeowners that if no payment was made they would face additional fees and their property tax file would we marked non responsive and ineligible for future tax reassessments.
Brown is committed to shutting down these fraudsters and has made mortgage fraud a priority in the Attorney General’s Office; to date Brown has filed law suits against twenty one individuals and fourteen companies involving mortgage fraud scams. He has effectively shut down thirty two to date.
