Bankruptcy filed in $10 million fraud case

A former owner of Century 21 Apollo in Modesto, facing federal fraud charges since September 2010, recently filed for bankruptcy protection.

Jim Lankford, 73, listed $1.17 million in assets and said he owes various creditors $2.2 million, according to his Chapter 7 liquidation petition, filed Jan. 31.

Lankford and his roommate, Jon McDade, are scheduled to appear March 26 at a pretrial status conference in federal court in Fresno. Authorities say they bilked $10 million from lenders and elderly homeowners in Modesto and Hughson over 11 years.

Lankford is charged with 49 counts of mail fraud or using the U.S. Postal Service in an illegal scheme, and McDade faces 10 fraud counts. The men had moved to Pacific Grove before FBI agents and Stanislaus County fraud investigators arrested them 17 months ago.

Authorities say the men gained the trust of elderly homeowners and enriched themselves by obtaining multiple fraudulent loans on properties. Sellers and banks, deceived by forgeries and lies, provided loans without knowing about other debt, authorities say.

In some cases, elderly sellers lost property to foreclosure, court papers show.

Having reviewed recorded documents, The Bee reported in October 2010 that the men had obtained loans worth a combined $654,000 on one property acquired for $530,000, and separate loans worth a combined $274,900 on another home acquired for $140,000. One recorded document purporting that Lankford had paid off an elderly couple appeared to be signed by a man and his wife three months after the man died.

Lankford is unemployed and receives $2,700 a month in Social Security plus $2,077 for adopted children with special needs, his bankruptcy petition says. Other sources bring his monthly income to $5,766, and his average expenses come to $11,124, the document reads.

The petition says Lankford lost a dozen Modesto properties to foreclosure, mostly in 2008 and 2009. He is involved in six pending civil lawsuits in Stanislaus County, all alleging fraud and breach of contract.

Lankford attached to his petition a police report made in November in which he reported that "boxes of client mortgage loan papers" had been stolen from the garage of a Modesto property.

Bee staff writer Garth Stapley can be reached at gstapley@modbee.com or (209) 578-2390.