Statewide mortgage fraud case began in Stanislaus County; the scheme bilked millions

A case initiated by the Stanislaus County District Attorney’s Office eight years ago ended this week with the sentencing of the last of six defendants convicted in a statewide mortgage fraud scheme that scammed desperate homeowners facing foreclosure and resulted in losses of about $4 million.

Prakashumar Bhakta on Wednesday was sentenced to seven years and eight months in prison, the state Attorney General’s Office announced in a news release. Bhakta also was ordered to pay $256,000 in restitution.

Bhakta was the last defendant to admit in court to his involvement in the scheme. On Nov. 28, he pleaded guilty to 113 felony charges, including conspiracy, grand theft and filing false or forged documents.

His co-defendants, Jacob Orona, Aide Orona, John Contreras, Marcus Robinson and David Boyd, also pleaded guilty in the case. They received prison sentences ranging from four years to seven years and four months, state prosecutors said.

The defendants claimed they could provide legal help to save homes facing foreclosure for a price. State prosecutors said the defendants convinced these homeowners to pay for this legal help with an initial $3,500 fee; then $1,000 monthly payments. That was followed by separate fees for filing legal documents; all to keep their homes from being sold at public auction.

The scam also defrauded lenders and other owners of their rightful possession of the homes.

The state prosecutors said the defendants filed and recorded numerous fraudulent documents, including false bankruptcies and false court filings. The scheme victimized homeowners in San Diego, Riverside, San Bernardino, and Los Angeles counties.

All six defendants were believed to be Southern California residents, but it was the Oronas’ interaction with a Turlock couple that first aroused the suspicion of Stanislaus County authorities.

Turlock couple

The Real Estate Fraud Unit of the District Attorney’s Office first uncovered the scheme in 2011, after Blas and Nancy Arreola of Turlock tried to stall foreclosure of their home and a rental home they owned. The local prosecutors said in court documents and reports that the Arreolas filed false documents with the county recorder.

The Arreolas paid for coaching from the Oronas on ways to escape foreclosure based on fraudulent theories of lender misconduct, according to a filed 2012 arrest warrant affidavit. Plea bargains in 2014 brought a one-year jail term for Blas Arreola, and Nancy Arreola was sentenced to 60 days in jail.

In July 2016, authorities arrested the six defendants who have now been convicted in the mortgage fraud scheme.

State prosecutors said Bhakta was an “integral part” of the fraud scheme. They said he falsely notarized numerous fractional interest grant deeds without the presence of the person whose signature was being notarized.

Attorney General Xavier Becerra said Bhakta’s sentence should serve as a warning to those who prey on homeowners and betray their trust.

“We have zero tolerance for scam artists who cheat vulnerable families by stealing their life savings and shattering their dreams of owning a home,” Becerra said in the news release.

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Rosalio Ahumada writes news stories about criminal court cases in Stanislaus County for The Modesto Bee, issues related to immigration and immigrant communities and breaking news related to crime and public safety. From time to time, he covers the Modesto City Council meetings. He has worked as a news reporter in the Northern San Joaquin Valley since 2004.