Visalia residents were part a Valley-wide crime that defrauded more than 100 homeowners out of thousands of dollars each from Bakersfield to Salinas, Calif.
Martin Calzada, 28, of Los Angeles, pled not guilty to charges of conspiracy to commit mail fraud and mail fraud during an arraignment in federal court in Fresno on Jan. 20. United States Attorney Benjamin B. Wagner said the scheme defraud homeowners facing foreclosure, in a released statement last week.
According to court documents, between August 2010 and October 2011, Calzada, and other employees of Star Reliable Mortgage, which had offices in Bakersfield, Visalia, and Salinas, targeted distressed homeowners with a fraudulent “loan elimination” scheme. Star Reliable charged clients an upfront fee — ranging from $2,500 to $4,500 for those with delinquent payments — as well as monthly fees, based on false promises that the clients could own their homes “free and clear” as a result of Star Reliable’s services.
In furtherance of the scheme, Calzada and other employees filed at county recorders’ offices fraudulent documents on behalf of the homeowner-clients that purported to replace the legitimate property trustees with fictitious trusts affiliated with Calzada and Star Reliable, all in an effort to “cloud title” and halt or stall the foreclosure process. These dummy corporations – including Advanta Mortgage Trust, Kingdom Ventures Inc., Baker Group, Cal Enterprises, Kelbaker Inc., Shoshore Partners and Narang Telefilms – were set up as bankruptcy debtors so that the filings would temporarily halt or stall the foreclosure process under the protection of the Bankruptcy Code and require the lender to take legal action against the filings, which further delayed the process. To add insult to injury, the fees that Star Reliable had to pay to file the reconveyances were then passed on to the homeowners.
Additionally, Calzada, and other employees working at his direction, told clients to stop paying their mortgages. They also falsely represented that each client had one million dollars in a U.S. government account that could be used to pay off a homeowner’s mortgage.
Instead of owning their homes “free and clear,” many of Star Reliable’s clients lost their homes in foreclosure. In a little more than a year, the scheme caused more than 100 homeowner-clients to pay approximately $875,000 to Star Reliable and lending institutions to lose more than $4 million. At least $270,000 of the money paid to Star Reliable by homeowner-clients was funneled back to Calzada.
Calzada will return to court for a status conference on March 21 in U.S. District Court in Fresno. This case is the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.
If convicted, Calzada faces a maximum statutory penalty of 30 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.