By Khalida Sarwari
Two men have been sentenced for running a foreclosure fraud scheme and stealing more than $2 million from nearly 400 homeowners.
Rene Alvarez, 42, and Mariano Ortega, 38, were sentenced July 16 to five years in state prison and ordered to pay $2.2 million in restitution. They were convicted of five counts of grand theft and two counts of accepting advance fees, said Santa Clara County deputy district attorney David Lim.
They will serve two years in custody in the county jail and the three remaining years in mandatory supervision, Lim said.
The pair were co-owners of M & R Contemporary Solutions, a Campbell foreclosure consulting firm, where from 2008 to 2009 they ran a scheme that ultimately swindled homeowners out of $2.2 million.
“They would charge upfront fees and tell home-owners that they could postpone or stop them from foreclosure and then embezzle the money–anywhere from $3,000 to $5,000 a month–and not perform any services,” said Lim.
According to the district attorney’s office, the men would tell homeowners facing foreclosure that they would save their homes by facilitating the purchase of their existing lender’s loan by a third party at a discounted price. The clients were promised a new reduced principal loan that would have significantly lowered their monthly payments. No client ever received a new loan, however.
Their victims ranged from homeowners who received letters from banks but hadn’t formally gone into foreclosure to homeowners who had lost the title to their homes. About 95 percent of the homeowners were Hispanic and lived all over the country, from Campbell and other cities in California to cities in Florida and Hawaii, according to the district attorney’s office.
The two men collected up to $10,000 from each of their clients in upfront fees, an act that is illegal under California law.
A trial is still pending for Cydney Sanchez, a third defendant in the case, according to Lim. Prosecutors claim Sanchez had her own business in Beverly Hills and deceived Ortega and Alvarez into thinking that she had a pool of investors who would be willing to provide new loans at reduced principal and interest rates. She has pleaded not guilty to grand theft and foreclosure fraud charges and is scheduled for a pre-trial hearing on Aug. 8.
M & R Contemporary Solutions began crumbling in August 2009 following a successful first year in business. Their downfall was prompted by Rock Disessa, a third co-owner who went to authorities after learning that Alvarez and Ortega were accepting advance fees, according to the district attorney’s office.
Ortega and Alvarez were arrested in September 2009 and charged with 83 counts, including conspiracy. In March, Alvarez pleaded guilty and Ortega pleaded no contest to seven of those charges.
Owners of Campbell’s M & R Contemporary Solutions sentenced to jail for fraud scheme
