SAN DIEGO (CN) – Federal prosecutors accused two Chula Vista telemarketers of defrauding hundreds of victims of $1.5 million by falsely claiming they were affiliated with the government and could get them home loan modifications.
The criminal indictments accuse Jose Ruiz, 37, and Christian Hidalgo, 36, of mail fraud and money laundering. Ruiz faces six counts, including wire fraud; Hidalgo faces five counts.
“Ruiz and Hidalgo executed similar schemes in which they sent misleading solicitation letters that contained false claims about their ability to obtain loan modifications for homeowners unable to make their payments,” prosecutors said in a statement announcing the two indictments, which the U.S. Attorney’s Office released together. (Click document icon on Courthouse News home page.)
“Among other things, the solicitation letters fraudulently indicated that the defendants were affiliated with the United States Department of Housing and Urban
Development (‘HUD’) and other governmental agencies, and directed potential victims to contact one of the defendants’ entities operating in San Diego,” the U.S. Attorney’s Office said. “Both Ruiz and Hidalgo also operated websites that used similarly misleading advertisements for mortgage loan modification services.
“According to the indictments, Ruiz and Hidalgo would often use aliases or pseudonyms to conceal their true identities, and would falsely represent to victims that they would negotiate a mortgage loan modification on the victim’s behalf for little or no money. The indictments allege that the defendants would then direct the victim homeowners to send their monthly mortgage payments directly to business entities controlled by the defendants, rather than to their mortgage lenders. As a result, many of the victims’ mortgages went into default.
“According to the indictments, many of the victim homeowners would forgo sending their mortgage payments to their lenders based upon the defendants’ representation that the mortgage payments would be segregated in a ‘reserve’ or ‘escrow’ account. But as alleged in the indictments, the victims’ funds were not secured in this manner, but were actually used to pay the defendants’ personal expenses, provide commissions to the defendants’ employees, and purchase items for the defendants’ personal use, including vehicles and jewelry.”
If convicted, both men face long stretches in prison and stiff fines: 20 years for wire fraud, 20 years for mail fraud, with $1 million fine for each, and 10 years for money laundering, plus a $250,000 fine.