Convicted Modesto fraudster re-offended before sentencing, authorities say

A Modesto man out of custody while awaiting the resolution of a federal fraud case bilked $6,000 from a new Modesto victim, authorities say.

Xue Heu, 37, recently pleaded guilty in federal courts in Fresno and in Texas after scamming more than $1 million from real estate investors; he was arrested again Friday and charged with two felony counts of grand theft.

Heu had pleaded guilty to the California charges on March 31 and to the Texas charges on May 11 in San Antonio, and is likely to draw a federal prison term of five to 20 years at his sentencing, which is scheduled for July 20. He was ordered in August not to participate in real estate activities without the approval of a federal judge, but used the same ruse to swindle money again in two batches on April 3 and April 17, an affidavit says.

The Modesto Bee published a story about Heu’s plea deal in April. The 37-year-old believed to have been a new victim told The Bee on Monday that he read the article on The Bee’s Facebook page and notified the FBI, leading to Heu’s most recent arrest.

“Xue Heu defies the court order and continues to defraud victims,” reads a document filed in Stanislaus Superior Court by Glenn Gulley, an investigator with the district attorney’s real estate fraud unit. A judge set Heu’s bail at $250,000 and he remained in custody as of Monday.

Heu, at times using the alias Michael Chan, and conspirators pretended to represent government-sponsored Fannie Mae and Freddie Mac in selling distressed properties, often using portfolios showing foreclosed homes to be purchased but that in reality already had been sold. They tried to cover their tracks with forged deeds and other phony documents, according to their plea deals.

The latest incident involved two Sacramento properties whose owners told Gulley they had no intention of selling them to Heu.

Upon learning of the new charges, a federal judge in Fresno issued an arrest warrant for Heu and the San Antonio court was notified of the developments, according to federal court documents. How the new charges might affect Heu’s plea deal is yet to be determined.

This story was originally published May 18, 2015 at 12:22 PM with the headline "Convicted Modesto fraudster re-offended before sentencing, authorities say."