Mortgage fraud charges filed against 18 residents 

Real estate and mortgage brokers were among 18 Bay Area residents arrested and charged Wednesday as part of a federal effort to protect financial lenders from fraud.

The U.S. Department of Justice charged 10 defendants with conspiracy to commit mail fraud, one defendant with conspiracy to commit wire fraud and seven were charged with the more serious crime of bank fraud.

The crimes carry penalties of up to 30 years in prison plus restitution payments and large fines if the defendants are found guilty.

All of the charges related to false information allegedly provided on loan applications between 2005 and 2009 that led to a loss of more than $10 million, U.S. Attorney Joseph Russoniello’s office said in a statement.

The group of 18 defendants shuffled bleakly into a San Francisco federal courtroom in handcuffs early Wednesday afternoon wearing hoodies, T-shirts and other street clothes.

Many of the defendants were granted public defenders, with some of them said to owe more money for various properties than the assets are currently worth.

Most were ordered by federal Magistrate Bernard Zimmerman to surrender passports, given court dates and released on unsecured bonds of $50,000 or more.

Most have no criminal record, a prosecutor said in court. Some were students or unemployed, and their ages ranged from 27 to 66.

A 66-year-old woman suffering from health and financial problems was arrested at 6 a.m. Wednesday at her San Francisco home, which prosecutors said bore a “for sale” sign.

Two of the defendants were described as life partners by one of their attorneys.

The ethnically diverse defendants are accused of such crimes as obtaining or using false documents to submit to lenders, exaggerating income and assets, understating financial liabilities and providing false employment records or banking information, according to the Justice Department.

Current or former employees of Washington Mutual and Countrywide Home Loans were among those arrested and charged, according to the department.

The cases are being prosecuted as part of President Barack Obama’s Financial Fraud Enforcement Task Force, according to the department. They followed federal grand jury indictments and a seven-month investigation by the FBI, the U.S. Postal Service and other federal agencies.


8 Licensed real estate agents

1 Holder of an expired real estate license

1 Licensed mortgage broker

10 Without a mortgage or real estate license

Source: U.S. Department of Justice

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