OAKLAND -- A 47-year-old Fremont woman was arrested Wednesday for conspiring to commit bank fraud in connection with a fraudulent short-sale home scheme, according to a statement from the U.S. Attorney's Office.

Minerva Sanchez was arraigned Wednesday in a San Jose federal district court and pleaded not guilty to the charges. If convicted of the charges, Sanchez faces up to 30 years in prison and a $1 million fine.

In March 2010, Sanchez, a licensed real estate agent, represented Agustin Simon, 52, of Gustine, in the sale of his home in Patterson. Sanchez recommended that he do a "short-sale" of his home using her son as a straw buyer, according to court documents. Simon submitted fraudulent short-sale applications that were approved.

Sanchez and Simon made false statements about Simon's assets and ownership of other real estate. Sanchez wrote a "hardship letter" for Simon to include with the short-sale application that misrepresented his inability to make his monthly mortgage payments, court documents show.

They made other false statements to conceal their agreement that Simon would give Sanchez's son money for the short-sale but ultimately would regain ownership of his home following the short-sale, prosecutors said.

With Sanchez's knowledge, Simon provided her son with $355,000, the purchase price of the home. In addition to her commission as the listing agent, Sanchez received 75 percent of the commission paid to her son's real estate agent. As a result of her conduct, Tri Counties Bank suffered a loss of $247,000 and Freddie Mac lost $107,348, according to court documents.


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Last June, Simon pleaded guilty to conspiring to commit bank fraud in connection with the scheme. He is scheduled to be sentenced on October 6.

Reach Kristin J. Bender at kbender@bayareanewsgroup.com. Follow her at Twitter.com/kjbender.