Ringleader of mortgage Ponzi scheme sentenced to six years - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Ringleader of mortgage Ponzi scheme sentenced to six years behind bars

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SAN DIEGO (CNS) - The ringleader of a scheme in which Filipino homeowners struggling to make mortgage payments were urged to transfer property titles into a bogus trust was ordered Thursday to spend six years in prison and make restitution of $71,000.

Edmundo Rubi, 53, pleaded guilty last month to five felony counts, including grand theft and perjury, stemming from the Ponzi scheme.

The defendant also pleaded guilty to attempted foreclosure consultant fraud and using a scheme to defraud with the offer of the sale of a security.

Another 49 counts were dismissed.

Deputy District Attorney William La Fond told Judge Louis Hanoian last month that Rubi convinced more than 20 people to "quitclaim" more than 30 properties into his fraudulent trust, telling them that he would maximize their investment through his expertise, which he didn't have.

The defendant convinced one woman to "quitclaim" two properties into trusts called "Apocalypse Trust" and "Amerisian Trust" and had her write him a check for $400, the prosecutor said.

A "quitclaim deed" allows a person to transfer their interest in a property to another person.

When the woman asked that the deal be undone, Rubi filed a lawsuit against her and others, La Fond said.

Rubi also filed court documents stating that he had been to prison for drug convictions, when in fact he had served 70 months in federal prison for swindling 425 mostly Filipino victims out of $24 million in 2005 in another Ponzi scheme, La Fond said.

Before his arrest in July 2009, Rubi met with undercover agents posing as investors and requested that they put up between $20,000 and $30,000 for projects such as a high-speed rail between Las Vegas and San Francisco, low-income housing in San Diego and construction of a nursing home in Northern California, guaranteeing a 3 percent return.

La Fond said authorities were able to catch the defendant before he was able to victimize more people through his fraudulent scam.

Co-defendant Joseph Mariano Encarnacion pleaded guilty to helping Rubi in the scheme and was sentenced to four years behind bars. Husband-and-wife real estate agents Ben and Gloria Hebron also admitted their roles and were sentenced to probation and ordered to give up their real estate licenses.

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