FRESNO, Calif. (CN) - An Angeleno accused of defrauding more than 100 homebuyers of $875,000 pleaded not guilty to federal mail fraud charges Wednesday.
Martin Calzada, 28, and other employees of Star Reliable Mortgage conspired to charge homeowners facing foreclosure thousands of dollars for the fraudulent program, the U.S. attorney says in the complaint. It was filed and sealed on Dec. 31, and unsealed on Jan. 11.
Star Reliable, co-founded by Calzada, has offices in Bakersfield and Visalia. Calzada claimed he could help homeowners avoid foreclosure without fully paying outstanding mortgage payments, according to the indictment.
Under his "loan elimination" program, homebuyers paid money up front to Star Reliable, which promised it would help the customers own their homes "free and clear" of any loans or mortgages, the indictment states.
According to the agreement clients had to sign, Star Reliable would demand revision of their loans and audit of their lender agreements and associated loan payments.
In addition to the upfront fee of $2,500 to $4,500, customers had to pay a monthly fee that Star Reliable called a "required donation:" a fixed percentage of the monthly mortgage payment, according to the indictment.
Star Reliable told its clients to stop paying their mortgages, the U.S. attorney says.
Calzada and his employees then filed fraudulent documents at county recorders' offices on behalf of their clients that purported to replace the legitimate property trustees with fictitious trusts affiliated with Calzada and Star Reliable in an effort to cloud title and stop or stall the foreclosure process, the indictment states.
Star Reliable falsely represented that each client had $1 million in a U.S. government account that could be used to pay off a homeowner's mortgage, prosecutors say.
Calzada's clients did not get their homes "free and clear;" many of them lost their homes in foreclosure, according to the indictment.
More than 100 homeowners paid a total of about $875,000 to Star Reliable, and at least $270,000 of it was funneled back to Calzada, prosecutors say.
Lending institutions lost more than $4 million to the conspiracy, according to the indictment.
The grand jury charged Calzada with conspiracy and eight counts of mail fraud. He pleaded not guilty on Wednesday.
His next court date is March 21.
If convicted, he could be sentenced to up to 30 years in prison and fined $1 million.
Calzada was sued four times on similar charges in California courts since 2011, according to the Courthouse News database. The plaintiffs included homebuyers, E*Trade Bank, and a title insurance company.
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