SACRAMENTO — Federal prosecutors Monday charged 19 individuals, mainly from Southern California, with defrauding homeowners in trouble partly by using "foreclosure rescue pitches" and an equity-draining technique called equity stripping.
Two indictments made public Monday accused Charles Head, 33, of La Habra; his brother, Jeremy Michael Head, 30, of Huntington Beach; and others of taking part in a nationwide mortgage scam that stole $12.6 million and fraudulently obtained the titles to more than 100 homes.
For The Record
Los Angeles Times Saturday, March 29, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 68 words Type of Material: Correction
Foreclosure: An article in Tuesday's Business section about federal prosecutors breaking up an alleged nationwide mortgage fraud ring said Pamela Graham of Los Angeles contended in a lawsuit that her signature was forged on a deed of trust that transferred ownership of her home. The ownership actually was transferred through a second document -- a grant deed -- on which her signature also was forged, the suit alleged.
Prosecutors said they found victims of the mortgage scam in California, Oregon, Washington state, Nevada and at least 14 other states.
Consumer advocates, who have been trying to help people with high-interest sub-prime mortgages stay in their homes, said they hoped the federal criminal indictments would scare would-be con artists out of the troubled market.
People who try to victimize strapped homeowners "are the worst of the worst, the ultimate vultures, looking to mop up whatever is left from people who have already been victimized," said Kevin Stein of the California Reinvestment Coalition in San Francisco. "The more people are in despair, the more vulnerable they are to the person who says, 'I'm here to help.' "
The defendants have been charged with fraud and conspiracy. They could face fines and sentences of as much as 20 years in prison, prosecutors said.
Charles Head was being held without bond as a flight risk in Santa Ana, where he appeared in federal court Friday, prosecutors said. His attorney did not return a call seeking comment.
Jeremy Michael Head's court-appointed attorney, Christopher Haydn-Myer, declined to discuss the case but described his client as making a modest living at an auto maintenance shop. He said Head rides to work by bicycle because "he doesn't even own a car."
John Balazs, an attorney for defendant Joshua Coffman, 29, of North Hollywood, said his client would plead not guilty to any role in the alleged conspiracy.
"This case is not anywhere near as clear-cut as the government makes it sound in their papers," Balazs said. "Some of these people in fact did manage to keep their homes."
Additional charges are expected to be filed in a widening probe, said Assistant U.S. Atty. Ellen Endrizzi.
Focus on 'insiders'
