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Mortgage Broker Is Charged With Fraud

Courts: Lending agency's former owner accused of bilking millions from investors. Many victims were elderly and on fixed incomes.

January 28, 2002|TIMOTHY HUGHES | TIMES STAFF WRITER

A Ventura mortgage broker has been charged in federal court with three counts of mail fraud in a lending scheme that allegedly bilked California investors out of more than $4 million.

Larry Curtis Waltz, the former owner of a Ventura lending agency, will plead guilty to the charges Feb. 4 in federal court in Los Angeles, said his attorney, Gary Lincenberg.

Federal prosecutors allege that while operating Larry Waltz and Associates, Waltz put together an elaborate scheme over several years that bilked real estate investors out of thousands of dollars each.

Waltz told investors, many of whom were elderly and on fixed incomes, that they could expect monthly interest dividends if they agreed to loan money to people buying a home or refinancing property, said Assistant U.S. Atty. Angela Davis.

They signed money over to Waltz after he showed them paperwork from alleged applicants, Davis said. However, most of the names were made up or used without the person's permission, she said.

"[Waltz] would tell [potential investors] of an opportunity and he would provide a borrower's name, but he had made up the borrowers," Davis said.

Monthly interest payments, supposedly from the borrowers, actually were cash payments pulled from the accounts of other investors doing business with Waltz, Davis said.

In a letter to the more than two dozen investors as well as in subsequent conversations with Lincenberg, Waltz acknowledged his guilt.

"You have wrongfully entrusted money to me to invest on your behalf," Waltz wrote in the letter, dated Jan. 12, 2001. "I have wrongfully placed this money in risky investments which you did not authorize. These investments failed. I have only a limited ability to repay you."

Waltz wrote that he "no doubt violated a number of laws" but expressed hope that two investments "still have a chance of producing funds which would enable me to pay back you and other investors."

He was not available for comment.

Lincenberg said Waltz has resigned from the company he started and has lost his real estate broker's license. "This is hard on him, and it's not going to be easy to deal with," Lincenberg said. "It was eating at him and he felt bad. He didn't want to continue the wrongdoing."

Under federal sentencing guidelines, Davis said, she will ask Judge Margaret Morrow to sentence Waltz to at least 18 months in prison. Waltz would also be forced to pay back in full the nearly $4.6 million lost by the investors, she said.

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