Family of six all participate in massive fraud scheme -- prosecutors

by Ryan Smith25 Sep 2014
When experts recommend that families stay close by finding things to do together, they probably don’t mean massive mortgage fraud. But that’s how one Colorado family passed the time, according to the state’s attorney general.

Six members of the same family have been indicted in a $4.6 million mortgage fraud scheme. The indictment totals 37 counts, ranging from forgery and theft to criminal impersonation and attempting to influence a public servant. The family is accused of using straw buyers to fraudulently buy and sell foreclosure-bound properties.

“Through an elaborate scheme of falsifying documents and identities then propping up straw buyers, this family played on gullible people wanting to live the dream of homeownership,” said Colorado Attorney General John Suthers. “Properties were illegally acquired, money was stolen, credit histories ruined, and houses ended up in foreclosure.”

The attorney general’s office said the scheme’s ringleaders were 33-year-old Jose Ricardo Sarabia-Martinez and his 30-year old wife, Lauren Maes Sarabia. Also accused are Jose Sarabia-Martinez’s younger twin brothers, 28-year-olds Pablo and Pedro, and his parents, Ricardo Sarabia-Salcido, 53, and Teresa Martinez, 50.

The family owned a company called Worldwide Realty. According to prosecutors, the company frequently recruited straw buyers to purchase properties, then deposited money into the buyers’ accounts to falsely inflate their net worth. The family profited from the fraudulent loans and from real estate commissions, but left the buyers trapped in mortgages they couldn’t afford to pay.   

Jose Sarabia-Martinez is also accused of falsifying documents to procure a Small Business Administration loan when Worldwide Realty faced financial problems.

“These individuals engaged in a fraudulent scheme to gain access to an SBA guaranteed loan program and further their criminal enterprise,” said SBA Inspector General Peggy E. Gustafson. “SBA’s guaranteed loan programs are only eligible to persons meeting specific character standards to guard against those driven by greed or other criminal motives.  I want to thank the Colorado Office of the Attorney General and our law enforcement partners for their cooperation in bringing these individuals to justice.”



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