FBI arrests eight in broker fraud case

by Adam Smith01 Aug 2013

Federal and local authorities in Ventura, Calif., have arrested eight people linked to a fraudulent mortgage brokerage that targeted low-income borrowers and cost some of the nation's biggest lenders millions.

The FBI has alleged that Oxnard-based New Concepts Home Loans, led by real estate broker Jose Garcia, targeted lower-income, primarily Spanish-speaking home buyers, falsifying borrowers' income, employment and assets to obtain loans from lenders such as Washington Mutual, Wells Fargo, Countrywide, IndyMac, SunTrust, World Savings and JPMorgan Chase.

"The defendants in these cases generated huge commissions and fees through the mortgage application process—typically at least $10,000 per mortgage," the FBI said.

The indictement alleges that Garcia's wife and others involved in the scheme obtained bogus CPA letters that falsely stated that mortgage applicants were engaged in a particular business.

“Jose Garcia and his cohorts are alleged to have lured unsophisticated borrowers with promises of putting them into homes they clearly could not afford, but this American dream quickly turned into a nightmare for these borrowers when they realized they could not afford their new homes. All the while, real estate professionals like Jose Garcia reaped huge profits from the fraudulent loans that they brokered,” United States Attorney Andre Birotte, Jr., said.

FBI Assistant Director in Charge Bill Lewis said Garcia allegedly directed his employees, including unlicensed individuals acting as realtors, "to peddle the dream of home ownership" to poor communities in Oxnard.

If convicted, defendants in the case face a maximum prison sentence of 30 years.


  • by Jack | 8/1/2013 9:44:42 AM

    As a broker, I applaud the FBI for cleaning up our business. There is still not enough of a barrier to entry to do mortgages but things seem to be getting better. I know the FBI has some good people who are continuing to work on cleaning things up in our industry.

  • by Karen | 8/1/2013 9:55:46 AM

    I agree. Brokers such as those mentioned in the article give those of us who are honest a very bad reputation.

  • by mark | 8/1/2013 9:58:38 AM

    it seems that BROKERS played a HUGE role in the downfall of the mortgage industry.. We always blame the CEO's of big banks, but in reality, it's the small guy doing most of the damage!


Should CFPB have more supervision over credit agencies?