BROKER, BOYFRIEND, AND BROTHER CHARGED WITH CONSPIRACY TO COMMIT $17.5 MILLION IN REAL ESTATE FRAUD BY PURCHASING HOMES UNDER “STRAW BUYER” NAMES AND INTENTIONALLY DEFAULTING ON LOANS

OCDASeal

Orange County District Attorney
Press Release


Tony Rackauckas, District Attorney
401 Civic Center Drive West
Santa Ana, CA 92701

For Immediate Release
Case # 09CF1208

 


 

June 1, 2009

Susan Kang Schroeder
Public Affairs Counsel
Office: 714-347-8408
Cell: 714-292-2718

Farrah Emami
Spokesperson
Office: 714-347-8405
Cell: 714-323-4486

BROKER, BOYFRIEND, AND BROTHER CHARGED WITH CONSPIRACY TO COMMIT $17.5 MILLION IN REAL ESTATE FRAUD BY PURCHASING HOMES UNDER “STRAW BUYER” NAMES AND INTENTIONALLY DEFAULTING ON LOANS

*One defendant has been arrested and a warrant has been issued for the arrest of two others

 

SANTA ANA – A real estate broker, her boyfriend, and his brother have been charged with conspiring to commit $17.5 million in real estate fraud for purchasing 35 properties in the names of “straw buyers” and intentionally defaulting on loans in order to steal the loan money.  Kathy Chen, 48, Westminster, Richard Salgado Gonzalez, 59, and Daniel Gonzalez, 56, are charged with 154 felony counts including one count of conspiracy, 47 counts of grand theft, one count of attempted grand theft, 40 counts of forgery, 30 counts of recording false documents, 30 counts of identity theft, one count of elder financial exploitation, and four counts of forging an official seal. If convicted, the defendants face a sentence ranging from two years up to 109 years in state prison.

 

Chen was arrested today on a $3 million warrant and must prove the money is from a legal and legitimate source before posting bail. A warrant has been issued for the arrest of Richard and Daniel Gonzalez. Chen is expected to be arraigned tomorrow, Tuesday, June 2, 2009, at 9:00 a.m. at the Central Justice Center in Santa Ana. The Department is to be determined.

 

Chen worked as a real estate broker and owned three businesses including Chen Financial, KC Realty, and SBC Financial. She is accused of conspiring with her then-boyfriend, Richard Gonzalez, and his brother, Daniel Gonzalez, to commit over $17.5 million in fraud by recruiting and paying “straw buyers” to obtain mortgage loans for the purchase of multiple properties. A straw buyer is a person who allows their credit to be used for the purchase of a property they never intended to control.

 

Between Jan. 13, 2005, and July 10, 2007, the defendants are accused of obtaining 47 fraudulent loans in excess of $17.5 million through the use of straw buyers’ credit on 35 properties. These properties included 13 in Orange County, 16 in San Bernardino County, and six in Kern County. The defendants are being prosecuted in Orange County for all 35 properties.

 

Chen, Richard Gonzalez, and Daniel Gonzalez are accused of acquiring city business licenses for nonexistent businesses under the pretense that the businesses were owned by the straw buyers to make them eligible for higher income loans. They are accused of fabricating loan applications to reflect higher incomes for the straw buyers, forging the names and signatures of straw buyers on various deeds and loan documents, and forging the seal and notary stamp on a variety of notarized documents and deeds, which were then fraudulently filed with the Orange County Clerk-Recorder’s Department.

 

The defendants are accused of using the personal and credit information of some of the straw buyers, including an 89-year-old woman, on several occasions without the knowledge or consent of the straw buyers, who had only agreed to one property purchase.