A Riverside credit-repair firm bribed corrupt employees at credit bureaus in an unprecedented scheme to inflate the financial standing of hundreds of clients, causing lenders to lose at least $6 million, federal prosecutors said Monday.
Prosecutors said insiders expunged damaging credit information from files at TransUnion, Equifax Inc. and the Experian subsidiary of GUS -- companies whose credit scores are crucial to about 30,000 lenders and other businesses across the nation.
A federal indictment returned by a Santa Ana grand jury this month named three Southern Californians and two New Jersey residents in the alleged fraud that took place for a year beginning in February 2001.
Costa Mesa-based Experian said it triggered the probe in early 2002 after it caught and fired a Dallas employee who was part of the scam.
The employee, Dolores Guerrero, was paid $300 to $500 a week to falsify files, said Assistant U.S. Atty. Douglas F. McCormick. She pleaded guilty to fraud in May and is serving a prison term of more than three years, McCormick said.
The Aug. 4 indictment, listing 16 counts of fraud and conspiracy, named Mickey Lynn Manning, 44, the alleged ringleader, and her husband, Ross Smith, 37. They allegedly operated the scam through their Riverside-based company, Second Chance Financial Services, a firm specializing in improving people's credit ratings.
The couple's attorney, Howard Beckler, said they planned to surrender, plead not guilty and be released on bond Thursday. He declined to comment further.
Also charged was former TransUnion employee Marcus Brandon Betts, 31, of Ontario, who was arrested Friday and released on $20,000 bond Monday. He didn't return a call seeking comment, and his attorney couldn't be reached.
The other defendants are New Jersey residents Jamila Takiyah Davis, 26, and Jose L. Crespo, 38, who were arrested Thursday and released on bond.
They were charged with working through legitimate financial firms in New Jersey to inflate consumer credit scores by reporting phony loans and loan payments to the credit bureaus. Their attorneys said they expected to plead not guilty in Santa Ana federal court. .
Crespo's attorney, Rene Medina, declined to comment further, saying he hadn't had time to study the indictment or discuss it with his client. Davis' attorney, Thomas Nooter, said her role in the case was negligible.
