Three men have been found guilty by a federal jury for their roles in a nationwide foreclosure-rescue scheme.
Defendants Charles Head, Benjamin Budoff and Dominic McCarns were convicted of conspiracy to commit mail fraud in connection with the scheme, according to a press release Monday from the U.S. Attorney's Office in the Eastern District of California.
Head was the founder of several California companies, including Head Financial Services and Creative Loans, that allegedly defrauded homeowners of more than $5.7 million in equity between 2005 and 2006. Budoff and McCarns were employees of Head's companies.
The companies allegedly promised distressed homeowners that they could stay in their homes and repair damaged credit by enrolling in a foreclosure-rescue program. The companies then paid straw buyers to replace the troubled homeowners on the titles and apply for mortgages to extract as much equity as possible from the homes. Meanwhile, troubled homeowners made monthly payments to the companies, mistakenly believing that the funds would go toward improving their credit scores.
The homeowners suffered at least $15 million in losses, according to the release.
The defendants "preyed on the victims' fear of losing their homes and then took advantage of those victims' predicament to steal from them their last remaining equity in those homes," U.S. Attorney Benjamin Wagner said in the release. Many homeowners who enrolled in the program were eventually "evicted and left destitute," he said.
Head, Budoff and McCarns are scheduled for sentencing on March 19, 2014, and face up to 20 years in prison and a $250,000 fine for each count of mail fraud, according to a spokeswoman at the U.S. attorney's office.
The investigation into the foreclosure-rescue scam has already resulted in 16 convictions, according to the release. Head was convicted earlier this year of mail fraud in a separate equity-stripping scheme, along with his brother Jeremy "Mike" Head, the U.S. attorney's office said in an earlier release. Thirteen other defendants have pleaded guilty to charges related to the scam and await sentencing.