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Orange County 'foreclosure rescue' fraud ring convicted

December 03, 2013|By Marc Lifsher
  • U.S Attorney Benjamin Wagner at recent Sacramento press conference. Wagner's office announced convictions in a foreclosure fraud case.
U.S Attorney Benjamin Wagner at recent Sacramento press conference. Wagner's… (Rich Pedroncelli / AP )

SACRAMENTO -- A federal jury in Sacramento after a five-week trial has returned guilty verdicts against three men who operated an Orange County-based "foreclosure rescue scam," according to U.S. Atty. Benjamin Wagner.

Convicted on Monday were Charles Head, 36, a former Los Angeles resident; Benjamin Budoff, 46, of Colorado Springs; and Domonic McCarns, 39, of Irvine.

Wagner described Head as the leader of the operation that extracted more than $5.7 million in equity from victims' homes, many in California. Evidence in the just-completed and a previous trial revealed that Head and his co-conspirators caused more than $15 million in homeowner losses.

The scam used several names, including Head Financial Services and Creative Loans, from March 2005 to June 2006.

All three defendants were convicted of conspiracy to commit mail fraud. Head also was convicted of three additional counts of mail fraud. In May, he was convicted of running a separate "equity-skimming scheme," Wagner said.

According to evidence presented at the trial, Head, McCarns, Budoff and other defendants approached homeowners facing foreclosure and offered to help them stay in their homes and repair their credit. Through misrepresentation and fraud they substituted straw buyers for the victims on property titles without the knowledge of the homeowners.

Once the titles were switched, the defendants obtained new mortgages to extract maximum equity from the homes. The victims were left with no home, no equity and with damaged credit ratings, Wagner said.

"Charles Head, Domonic McCarns and Benjamin Budoff preyed on the victims' fear of losing their homes, and then took advantage of those victims' predicament to steal from them their last remaining equity," Wagner said in a statement.

The ongoing investigation has yielded 16 convictions, and "our work is not done," Wagner said.

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