SAN DIEGO (CNS) - Two telemarketers accused of defrauding more than 400 victims of $1.5 million in loan modification schemes were arraigned Monday on mail and wire fraud charges at the downtown San Diego federal courthouse.
Jose Ruiz, 37, and Christian Hidalgo, 36, are also charged with attempting to illegally launder the proceeds of their alleged fraud schemes, according to two separate indictments handed down in the case.
The defendants -- both from Chula Vista -- allegedly sent misleading solicitation letters that contained false claims about their ability to obtain loan modifications for homeowners unable to make their payments.
Among other things, the solicitation letters fraudulently indicated that the defendants were affiliated with the U.S. Department of Housing and Urban Development and other governmental agencies, and directed potential victims to contact one of the defendants' entities operating in San Diego, according to court papers.
Prosecutors allege Ruiz and Hidalgo would often use aliases or pseudonyms to conceal their true identities, and would falsely represent to victims that they would negotiate a mortgage loan modification on the victim's behalf for little or no money.
According to the indictments, the defendants would then direct the victim homeowners to send their monthly mortgage payments directly to business entities controlled by the defendants, rather than to mortgage lenders, As a result, many of the victims' mortgages went into default.
According to the indictments, many of the victim homeowners would forgo sending their mortgage payments to their lenders based upon the defendants' representation that the payments would be segregated in a "reserve" or "escrow" account. The victims' funds were not secured in that way, but were actually used to pay the defendants' personal expenses, provide commissions for their employees and purchase items for the pair's personal use, including vehicles and jewelry, prosecutors allege.
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