Guilty Plea in Foreclosure-Rescue Scam

(CN) - An Austin, Texas man pleaded guilty to bankruptcy fraud and aggravated identity theft in a $1.6 million foreclosure-rescue scam based in Southern California.

Frederic Alan Gladle, 53, pleaded guilty to the federal charges in Los Angeles.

Gladle admitted that from October 2007 through October 2011 he made more than $1.6 million from his foreclosure-rescue frauds upon distressed homeowners.

Gladle used five aliases to avoid detection, stole the identity of at least one person and set up a mobile phone account in that victim's name.

"Gladle admitted that he recruited homeowners whose properties were in danger of imminent foreclosure and falsely promised to delay the foreclosures for up to six months, in exchange for a fee of approximately $750 per month," prosecutors said in a statement.

"Gladle, directly or through salespersons, directed homeowners to sign deeds granting fractional interest in their properties to debtors in bankruptcy proceedings whose names Gladle found by searching bankruptcy records. The debtors were unaware that their names and bankruptcy cases were being used by Gladle in his scheme. Gladle then sent the unsuspecting debtors' bankruptcy petitions, and the deeds that transferred fractional interests to the debtors, to the homeowners' lenders to stop foreclosure proceedings."

Bankruptcy filings result in automatic stays that protect debtors' properties, so lenders are forced to cancel foreclosure sales and wait for court permission to collect on the debts. When homeowners wanted to void the deeds to the unsuspecting debtors, Gladle would forge the debtors' signatures.

Gladle faces up to 5 years in federal prison for bankruptcy fraud, and 2 years for identity theft.

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