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Scammer must repay money Neal Putnam | Sat, Jun 15 2013 12:00 PM

A Chula Vista man has been sentenced to 57 months in federal prison for his role in a mortgage loan scam that defrauded 120 people out of $687,684 and resulted in foreclosure for some homeowners.

Christian Hidalgo, 37, who is the first person among three in the scheme to be sentenced, was ordered to pay $687,684 restitution, which will be shared after the other two are sentenced.

Hidalgo had been free on bond, but was remanded into custody by U.S. District Court Judge William Hayes in San Diego last month. He received the sentence recommended by the U.S. Attorney’s Office.

Jose Ruiz, 37, of Chula Vista, and Isidro Velasquez Jr., 39, of San Diego, remain free on bond for their separate sentencing on July 15 and July 22 respectively.

U.S. Attorney Laura Duffy issued a statement after Hidalgo’s sentencing, saying they were glad the U.S. Postal Inspection Service and the U.S. Department of Housing & Urban Development uncovered “this dreadful practice of targeting victims in the Latino community who merely sought assistance to maintain their homes.”

“Although many have suffered economically in the last few years, those in dire straits should not be targeted in their time of need,” said Duffy. “We hope that the sentence imposed in this case, and the restitution ordered, can bring some relief to the victims and serve as a strong deterrent to others conducting fraudulent home loan modification scams.”

Hidalgo’s attorney argued he was only learning the business from Velasquez and Ruiz, and he left their company to form a new one. He did issue some refunds former clients, his attorney wrote.

The U.S. Attorney’s Office says the men misled victims into believing their businesses were affiliated with the U.S. Department of Housing & Urban Development or other federal agencies.

The defendants represented they would put their mortgage payments in a reserve account and later send them to the lenders, but prosecutors say no such account was used and none of the money was forwarded to lenders.

The three men separately operated businesses known as Casa Nuestra, Expo Enterprises, Retro Management and UHUD National Reserve.

A federal prosecutor has recommended Ruiz also receive 57 months in prison along with a restitution order of $1.12 million, according to court records.

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