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L.A. mortgage brokers are accused of stealing nearly $1 million

The California attorney general's office says that beginning in 2007, the three co-workers conspired to forge clients' signatures on phony refinance documents and pocket fees based on bigger loans.

September 12, 2009|Nathan Olivarez-Giles

Three Southern California mortgage brokers have been arrested on suspicion of stealing nearly $1 million from borrowers seeking to adjust their home loans.

Michael McConville, 31, and co-workers Garrett Holdridge, 23, and Alan Ruiz, 28, are scheduled to be arraigned Monday in Los Angeles County Superior Court on charges of bilking more than 70 homeowners, said Scott Gerber, a spokesman for the California attorney general's office.

The three were arrested Thursday after a complaint listing 44 criminal charges was filed by the attorney general's office.

Normally, that office files civil complaints, but the investigation in this case led to a criminal complaint, Gerber said.

"This is essentially grand theft," he said. "We looked at the evidence and that's what it showed, and that warranted criminal charges."

McConville, a sales manager at ALG Inc. in Los Angeles, and Holdridge and Ruiz, who were loan officers at the mortgage company, lured dozens of homeowners into refinancing by falsely promising low interest rates and brokers' fees and other attractive terms, the complaint said.

The state accused the three of conspiracy, forging clients' signatures and stealing money as far back as 2007.

Borrowers would agree to one set of terms, investigators said, but the mortgage brokers would then accept different terms from lenders and forge their clients' signatures on the new documents. This allowed the brokers to increase the size of the loans and pocket the difference in the form of fraudulent fees, the attorney general's office said.

The differences in the loan amounts borrowers thought they were getting and what they actually got were taken by McConville, Holdridge and Ruiz as origination and brokerage fees, ranging from $20,000 to $57,000 each, the documents said.

Only when the borrowers received their loan documents, after the refinance had been finalized, did they discover that their names had been forged and that they owed the lenders money they hadn't agreed to, court documents said.

In total, the three used money from the refinanced mortgages to pay themselves more than $950,000, leaving homeowners holding about $30 million in loans with terms they didn't agree to, Gerber said.

McConville, of Simi Valley, was arrested at his home and is being held at Ventura County Jail on $2-million bail, Gerber said.

Holdridge, of Palmdale, is being held at the Los Angeles County Jail's Palmdale Station on $2-million bail, and Ruiz, of Huntington Beach, is being held at Orange County Jail on $2-million bail, Gerber said.

In May, the attorney general's office sued McConville and his brother Sean for alleged roles in a property tax reassessment scam that targeted Californians looking to lower their property taxes.

The McConville brothers sent out thousands of mailers, adorned with official-looking logos, demanding hundreds of dollars for property tax reassessment services, the suit said.

The mailers told homeowners that if payments were not received by a due date, they faced late fees or would have their tax files marked "ineligible for future tax reassessments," court documents said.


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