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Federal Jury Indicts Officer in $3.5-Million Real Estate Scam

Fraud: Authorities say Sergio Fernandez posed as an attorney and advised home buyers to submit phony loan documents. He now faces conspiracy charges.

September 28, 2002|RICHARD MAROSI | TIMES STAFF WRITER

A federal grand jury has indicted a Maywood police officer for his alleged role in a sophisticated real estate scheme that bilked $3.5 million from a federal home loan program.

Authorities said Sergio V. Fernandez was a key player in the operation that involved 150 fraudulent home loans across Los Angeles and San Bernardino counties.

The 43-year-old Fernandez, according to authorities, would pose as an attorney and advise unsuspecting buyers to sign loan documents filled with phony information.

Profits from the sales would go to Fernandez's alleged co-conspirators, Joe Zamorano, 70; his son, Mario Zamorano, 38; and Patricia A. Lopez, 55, according to the indictment that was unsealed late Thursday.

The operation, authorities said, ruined many people's credit, and some were eventually evicted from their houses. "It was an elaborate scheme," said Assistant U.S. Atty. Christine Adams. "Fernandez counseled [buyers] to sign the documents and assured them not to worry."

Fernandez was arrested Sept. 18 while on duty. He and the others were released after pleading not guilty and posting bail ranging from $50,000 to $200,000.

Fernandez was indicted on conspiracy and wire fraud charges and faces a possible 15-year prison term if found guilty. The other defendants were charged with money laundering.

Fernandez's standing in the 27-member Police Department that covers Maywood, a small city in southeastern Los Angeles County, is unclear. Police Chief Bruce Leflar was not available for comment.

The alleged scheme, which started in 1996, generally worked this way, according to the indictment:

Joe Zamorano or his son would buy homes in Los Angeles and San Bernardino counties, then search, with Lopez's aid, for buyers to purchase the homes at a higher price.

Lopez, a licensed real estate agent, would then steer buyers with modest incomes toward a home loan program offered by the Department of Housing and Urban Development.

To qualify for the HUD loans, buyers were given down payment money by the Zamoranos. Also, their mortgage applications were filled out with false employment, income and other information to make them appear eligible for the loans.

At signing time, the buyers would arrive at one of Zamoranos' real estate offices. There they would be greeted by Fernandez. Dressed in a suit, Fernandez, authorities said, would tell them he was Zamorano's attorney. Fernandez, a notary public, would then notarize and sign the loan documents.

Upon the close of escrow, profits from the sale would be forwarded to the Zamoranos.

Authorities were alerted by a homeowner who said her daughter's Social Security number had been misused by the suspects.

A trial was scheduled for Nov. 12. The defendants' attorneys declined or were not available for comment.

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