Fresno, California - Two Bakersfield residents were sentenced Tuesday by Senior United States District Judge Anthony W. Ishii in connection with a mortgage fraud scheme in Bakersfield, United States Attorney Benjamin B. Wagner announced.
Lucia Yolanda Chavez, 37, was sentenced to four years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $1.8 million in restitution. Joseph Chavez, 41, was sentenced to three years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $1.44 million in restitution. Lucia Chavez was also ordered to forfeit her interest in approximately $110,000 seized from a bank account, and to pay a personal forfeiture money judgment of $1.6 million. Joseph Chavez was ordered to pay a personal forfeiture money judgment of $3 million.
According to court documents, from 2007 to 2010, the Chavez defendants conspired with other co-defendants to use straw buyers to purchase residential properties in Bakersfield developed by Pershing Partners LLC (Pershing Partners), owned by Lucia Chavez, and by Jara Brothers Investments (JBI), owned by co-defendants Eliseo Jara and Sergio Jara. The conspirators paid straw buyers to purchase the properties from Pershing Partners and JBI, and funded the purchases using loans they obtained for the straw buyers from lenders based on false and fraudulent loan applications. The conspirators used Paragon Home Mortgage to obtain and process loans in furtherance of the conspiracy. Lucia Chavez had also been employed at Paragon Home Mortgage since approximately August 2006, and acquired ownership of Paragon Home Mortgage from co-defendants Eliseo Jara Jr. and Sergio Jara in 2007. Joseph Chavez was employed as a loan officer and office manager at Paragon Home Mortgage from approximately June 2006 to October 2007. Joseph Chavez and Lucia Chavez pleaded guilty on April 10, 2015.
The loan applications in the names of straw buyers frequently contained false statements concerning the straw buyers’ employment status, income, assets, intent to occupy the properties as their personal residences, and source of down payments for the purchase of the properties. The conspirators concealed from the lenders that the property developers funded certain of the straw buyers’ down payments. The conspirators also submitted false supporting documentation to lenders such as false and altered bank account statements purporting to show that straw buyers had high bank account balances, false verifications of the straw buyers’ bank account funds, false verifications of rent purporting to be from straw buyers’ landlords, false pay stubs, and false verifications of employment.
This case is the product of an investigation by the Internal Revenue Service—Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III prosecuted the case.
On October 13, 2015, co-defendants Eliseo Jara and Sergio Jara were each sentenced to six and a half years in prison, and co-defendant Melissa Jara was sentenced to five years on supervised release. Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014, to three years and 10 months in prison, and co-defendant Arlene Jeanette Mojardin was sentenced on May 18, 2015, to two and a half years in prison, for their roles in the conspiracy. Co-defendant Candace Gonzales previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and her sentencing hearing is currently set for October 26, 2015. Co-defendant Ricardo Salinas previously pleaded guilty to bank fraud, and his sentencing is also currently set for October 26, 2015.