Officials arrested seven people on Thursday in connection with a $140 million mortgage and security fraud that was responsible for driving 200 Riverside County homes to foreclosure. The scam also crippled hundreds of investors from Arizona and California, many of which were forced into bankruptcy.
James Benjamin Duncan, who was considered by investigators as the operation's mastermind and his two associates Hendrix Montecastro and Maurice Mcleod, all residents of Murrieta, were among those arrested. San Diego residents Cindy Kelly, Thuan Nhan Du, and Charlie Sung Mok Choi were also taken into custody as well as Helen Pedrino of Yucuipa. Duncan's bail was set at $144 million, Montecastro,s at $20 million and the others' at $17 million.
All seven were scheduled to appear in arraignment court today, where they would enter pleas to a total of 249 felony counts of securities fraud, elder abuse, corporate identity theft, and grand theft. The defendants stand accused of the creation of an intricate system of shell companies including Pacific Wealth Management, Total Return Fund, and Stonewood Consulting. They would lure investors by promising wealth within three years. Many of the victims were found at the churches attended by the defendants, local military bases, or the general Riverside County Filipino community.
Investors were convinced to refinance their homes to purchase investment properties, many located within Riverside county. Pacific Wealth Management was to rent the properties and supply the funds to cover mortgage payments. Stonewood, acting as a broker, misrepresented the investors' incomes and assets on loan applications in order to secure financing. Whenever lenders would question an application, they would be directed to call one of the shell companies and one of the defendants would confirm the false info.
In addition to refinancing mortgages, some investors were convinced to invest life savings or retirement funds or max out credit cards acquired by the defendants in investors' names. The defendants, who were not even licensed to sell investments, each face up to a maximum of 97 years in prison for the crimes they are charged with. In addition to making the arrests, officials have seized assets and bank accounts of the defendants in the hope of providing restitution to the victims. Only 39 were named as victims in the complaint, but officials say ther are hundreds more who may be eligible for restitution. Duncan has previously been asked to leave the states of Iowa, Wisconsin, and Washington amidst allegations of securities fraud, though he has never been convicted.
The investigation leading to the arrests has been ongoing since April 2007. It was a collaborative effort between the district attorney's office, the FBI, the Internal Revenue Service, the US Postal Service, and the US Attorney's office. Three other suspects, Christopher Oetting, Linda Brooks, and Steven Kayden have been charged in the case. The three are expected to serve as witnesses for the state and will enter guilty pleas to lesser charges for their cooperation with the investigation.
James Benjamin Duncan, who was considered by investigators as the operation's mastermind and his two associates Hendrix Montecastro and Maurice Mcleod, all residents of Murrieta, were among those arrested. San Diego residents Cindy Kelly, Thuan Nhan Du, and Charlie Sung Mok Choi were also taken into custody as well as Helen Pedrino of Yucuipa. Duncan's bail was set at $144 million, Montecastro,s at $20 million and the others' at $17 million.
All seven were scheduled to appear in arraignment court today, where they would enter pleas to a total of 249 felony counts of securities fraud, elder abuse, corporate identity theft, and grand theft. The defendants stand accused of the creation of an intricate system of shell companies including Pacific Wealth Management, Total Return Fund, and Stonewood Consulting. They would lure investors by promising wealth within three years. Many of the victims were found at the churches attended by the defendants, local military bases, or the general Riverside County Filipino community.
Investors were convinced to refinance their homes to purchase investment properties, many located within Riverside county. Pacific Wealth Management was to rent the properties and supply the funds to cover mortgage payments. Stonewood, acting as a broker, misrepresented the investors' incomes and assets on loan applications in order to secure financing. Whenever lenders would question an application, they would be directed to call one of the shell companies and one of the defendants would confirm the false info.
In addition to refinancing mortgages, some investors were convinced to invest life savings or retirement funds or max out credit cards acquired by the defendants in investors' names. The defendants, who were not even licensed to sell investments, each face up to a maximum of 97 years in prison for the crimes they are charged with. In addition to making the arrests, officials have seized assets and bank accounts of the defendants in the hope of providing restitution to the victims. Only 39 were named as victims in the complaint, but officials say ther are hundreds more who may be eligible for restitution. Duncan has previously been asked to leave the states of Iowa, Wisconsin, and Washington amidst allegations of securities fraud, though he has never been convicted.
The investigation leading to the arrests has been ongoing since April 2007. It was a collaborative effort between the district attorney's office, the FBI, the Internal Revenue Service, the US Postal Service, and the US Attorney's office. Three other suspects, Christopher Oetting, Linda Brooks, and Steven Kayden have been charged in the case. The three are expected to serve as witnesses for the state and will enter guilty pleas to lesser charges for their cooperation with the investigation.
SHARE
