A longtime Chula Vista resident was sentenced July 18 to 57 months in federal prison and ordered to pay back 289 families after they lost money when using his company’s loan modification scheme which ultimately left many people losing their homes to foreclosure.
Jose Ruiz, 38, had been free on $40,000 bond, but was remanded into federal custody after U.S. District Court Judge William Hayes sentenced him. He will get credit for 18 days previously served.
Ruiz’s sentence is the same one handed down to Christian Hidalgo, 37, of Chula Vista, in May. Hidalgo left the firm owned by Ruiz and Isidro Velasquez Jr., 39, of San Diego, and started a new business that also ended with people losing their homes to foreclosure. Velasquez will be sentenced July 29.
The plight of the victims and the stories about what they did after losing their homes were detailed in court documents. It includes the story of a National City family which was forced to have their son live with relatives while they searched for a place to live.
An El Cajon couple had to move in with their daughter and son-in-law after they lost their home.
An 80-year-old woman lost the home that her family had for 55 years and is searching for new living arrangements.
U.S. Attorney Laura Duffy issued a statement and said authorities seized computers, a large-screen television, a diamond ring and “luxury items” from Ruiz’s home. They will be sold at auction with the proceeds going to the victims.
“We are dismayed by the continued suffering of many innocent victims who have suffered the loss of their home and significant funds as a result of this repugnant scam,” said Duffy. “They were targeted both because of their financial predicament and their Hispanic surnames.”
Duffy said the defendants misled victims into believing the businesses were affiliated with the U.S. Department of Housing & Urban Development or other federal agencies.
The scheme was discovered in part because of 750 undeliverable solicitation letters in April 2011, sent by Ruiz and his associates, that had non-existent or incorrect return addresses. The firms offered to negotiate mortgage loan modifications with the victims’ mortgage lenders.
Ruiz and Hidalgo urged the victims to stop sending payments to the mortgage lender and instead send it to their firms. While the defendants promised to negotiate and send the payments to the lenders, most of the money was kept within the businesses.
Ruiz obtained his real estate salesperson license in 2003 and in January 2009 he created Equity Choice, a loan modification business with access to a database that identified homeowners who were delinquent on house payments.
Ruiz’s attorney, Richard Medina, said he did save some clients’ homes from foreclosure, and some were clients who had quit Hidalgo’s business.
Medina said his client came up with $10,000 for restitution after he decided to live with his parents to save money on housing after his wife divorced him immediately after his arrest.
Medina said Ruiz and a local businessman have put together a plan that has Ruiz paying all $1.12 million restitution within 10 years. Ruiz, Hidalgo and Velasquez are expected to share some of the same restitution to victims, so the total figure will go down if they all start paying the victims back.