A tip to Stanislaus County authorities prompted a 2½-year mortgage and bankruptcy fraud investigation with more than 1,000 suspected victims throughout California, leading to the arrest Friday of an Empire man.
Brent Medearis, whose Web site says he is chief executive officer of Modesto-based VIP Financial Services, and four others preyed on people desperate to keep from losing their homes in foreclosure, says a U.S. Department of Justice release. They collected more than $5 million in fees from victims, the document says.
Medearis could not be reached Monday.
The five were indicted by a federal grand jury after a lengthy probe by county district attorney's investigators, the FBI, the U.S. Postal Service and other federal agencies. All but one of the defendants is facing 16 counts of bankruptcy fraud and two also have been charged with eight counts of mail fraud.
Authorities initially were tipped off in June 2009 when the Stanislaus County clerk-recorder's office detected suspicious filings.
Defendants recorded fraudulent deeds transferring interest in property to a fictitious company called Pacifica Group 49-II, the indictment says. Sometimes they filed phony petitions in bankruptcy court to throw off foreclosures while collecting fees from defrauded homeowners, the document says.
"It was all done just to stall the foreclosures," said Glenn Gulley, an investigator with the district attorney's real estate fraud unit.
Medearis, 45, was not licensed as a real estate broker in California and was ordered in August by the state Department of Real Estate to "desist and refrain" from acting as such, according to the state order, which appears unrelated to the federal probe.
The state order says Medearis modified loans for properties in Modesto and Linden.
Gulley said the foreclosure rescue and bankruptcy scam may have duped as many as 30 victims in Stanislaus County, but he and the FBI soon uncovered hundreds more in other areas, many near Roseville.
People threatened with losing houses responded to "Save My Home," "Homesaver" and "Property Relief" pitches, lured by promises that investors would purchase their mortgages at a discounted price or reduce monthly payments by negotiating a reduction with the lender.
Gave 'substantial' payments
Homeowners came up with "substantial" payments and monthly fees and got nothing in return, the indictment says.
Also indicted were Jewel L. Hinkles, also known as Cydney Sanchez, 61, of Los Angeles; Bernadette Guidry, 43, of Irvine; Jesse Wheeler, 34, of Roseville; and Cynthia Corn, 58, of Oakland.
"The defendants stand accused of profiting off of the desperation of people who were trying to hold on to their most valuable asset their homes," said U.S. Attorney Ben Wagner in the release.
Convictions for mail fraud and bankruptcy fraud can fetch prison terms of 20 years and five years, respectively, plus fines of $250,000 for each count of bankruptcy fraud.
On the Net: www.stopfraud.gov/protect-mortgage.html.
Bee staff writer Garth Stapley can be reached at email@example.com or (209) 578-2390.