Four people have been indicted in connection with a mortgage-fraud scheme that federal prosecutors say landed more than $20 million in bogus loans used to control residential-care home facilities for the elderly in Contra Costa and San Mateo counties.
Edith and Ronald Nelson; Nelda Asuncion; and Criseta Lagarejos were arrested Monday and appeared in federal court in Oakland.
Edith Nelson is free on a $1 million bond, and each of the others on $750,000 bonds. If convicted, they could face years in federal prison and millions in fines. They're due back in court Aug. 5.
The Nelsons own and operate Pleasant Hill-based Placement Services, a referral service placing elderly people in residential-care facilities. The state Department of Social Services in 1998 had barred them from involvement in licensed care facilities due to violations including deficient care of residents.
But the 126-count, 42-page indictment — filed July 17 and sealed until Monday — says that between December 2002 and January 2007 they used straw buyers to get at least 63 mortgage loans totaling more than $20 million based on false representations. The loans allegedly were used to buy residential-care home facilities and other properties controlled by the Nelsons in Concord, Walnut Creek, San Ramon, Antioch, Danville, Pittsburg and Pacifica.
As part of the scheme, the indictment says, the straw buyers were told properties would be bought in their names and then sold after about a year, and all expenses associated with the properties — including mortgage payments, property taxes and capital gains taxes — would be paid by Edith Nelson. In exchange, Edith Nelson generally paid the straw buyers $5,000 or $10,000 per purchase, and at times, $5,000 or $10,000 when the properties were sold.
Asuncion, of Realty World Pacific West in Concord, and Lagarejos, of Legacy Financing in Pleasant Hill, prepared the loan applications based on bogus data such as overstated monthly income, the indictment says.
Edith Nelson and Ronald Nelson also are charged with 12 counts of harboring illegal aliens. Search-warrant affidavits say the Nelsons hired caregivers, mostly Filipinos in the United States illegally, for the facilities they'd bought with the bogus loan proceeds. These workers allegedly worked long hours at less than minimum wage, and often lived in the same facilities where they worked.
The maximum penalty for conspiracy to commit wire fraud and bank fraud, and for each count of wire fraud and bank fraud, is 30 years in federal prison and a fine of up to $250,000. The maximum penalty for conspiracy to commit money laundering is up to 20 years and a fine of up to $500,000, and the maximum penalty for each money-laundering count is 10 years and a fine of up to $250,000.
Each income-tax evasion count is punishable by up to five years and $100,000, and each count of harboring illegal aliens is punishable by up to five years and $250,000.
Reach Josh Richman at 510-208-6428 or firstname.lastname@example.org.