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SOUTHERN CALIFORNIA / A news summary

Woman Charged With Fraud in Equity-Skimming Case

August 05, 2000

WESTLAKE VILLAGE — A Westlake Village woman who authorities say took advantage of the recession in the mid-1990s to skim rent off homes facing foreclosure has been charged with fraud.

Charlene Kay Kalk, 43, was indicted this week on nine counts of bankruptcy fraud and eight counts of mail fraud. Her arraignment is scheduled Aug. 28.

Federal officials say Kalk allegedly obtained property deeds from homeowners facing foreclosure. She would stop mortgage payments and then file for bankruptcy--effectively delaying foreclosure proceedings--but continue to collect rent from residents.

Lucy Koh, assistant U.S. attorney, said some of the victimized homeowners contacted Kalk after seeing ads in various newspapers, while in other cases Kalk had someone feeding her the names of people who were having difficulty making house payments.

"This occurred when a lot of people were going through hard times," said Koh, adding that the victims included "a number of newly divorced women with kids."

Once in touch with the owners, Kalk allegedly obtained the deeds to their properties with the promise that her company, Densmore Investments, could save them from foreclosure and a bad credit rating, Koh said.

The 50 to 60 properties involved were scattered from Yorba Linda to Malibu. She said Kalk rented them back to the original owners or found new tenants.

Koh said Kalk would stop mortgage payments altogether. Later, using many fictitious business names, she would allegedly deed interests in the properties to herself, then forestall foreclosure by filing for bankruptcy. Meanwhile, she would continue to collect rent, a practice commonly referred to as "equity skimming."

Phone calls Friday to Densmore Investments, listed in the phone directory with a Glendale-area prefix but no address, were answered by a message machine.

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