Carlsbad Real Estate Company Involved in $8M Mortgage Fraud

A Carlsbad real estate agent and her son, an Orange County attorney and loan broker, were convicted Wednesday of wire fraud for targeting Spanish-speaking borrowers in an $8 million mortgage fraud scheme involving 16 homes in Oceanside, Escondido, Lakeside, San Marcos and Menifee.

Aida Agusti Castro, 67, and Stephen K. Chrysler, 46, will be sentenced
July 30 by U.S. District Court Judge Jeffrey Miller.

Chrysler, an attorney and loan broker licensed with the California State
Bar and Department of Real Estate, was the owner and CEO of SKC Real Estate
in Carlsbad. His mother, who was licensed by the California Department of Real
Estate, was an officer of SKC Real Estate and worked as a real estate agent for
the company.

Evidence showed that between 2005 and 2007, the defendants created 30
separate false loan applications, along with other fraudulent supporting
documents that they submitted to mortgage lenders in order to obtain $8 million in mortgages to unqualified borrowers, including:
   -- creating phony businesses and claiming that borrowers were the self-
employed owners of those companies;
   -- inflating borrowers' monthly incomes;
   -- creating false rental histories and citing a sham management company
as the landlord; and
   -- fabricating rental agreements, with made-up tenants and lease terms
and forging borrowers' signatures on the agreements.

Documents introduced into evidence showed that through SKC Real Estate, the defendants received about $350,000 in loan fees and real estate commissions from the fraudulent transactions.

Several borrowers testified that the defendants told them to simply sign
the loan documents, and did not translate the documents into Spanish.

As the borrowers were not financially qualified to obtain the loans,
many of the mortgages went into default and the properties were foreclosed
upon, according to federal prosecutors.

–City News Service