Investigators from Santa Clara County arrested two San Jose real
estate consultants in an alleged wide-ranging loan modification
scam in which hundreds of homeowners, including about 20 in South
County, were victimized.
Investigators from Santa Clara County arrested two San Jose real estate consultants in an alleged wide-ranging loan modification scam in which hundreds of homeowners, including about 20 in South County, were victimized.
Rene Alvarez, 39, was arrested Thursday, and Mariano Ortega, 34, was arrested Friday, according to Santa Clara County District Arrorney’s office spokesperson Amy Cornell. Both were arrested by investigators from the DA’s office.
About 20 people in South County reported being victims of a scam in which Alvarez and Ortega targeted mostly Hispanic homeowners whose properties were approaching foreclosure, according to Deputy DA Mike Fitzsimmons.
Through their company, M & R Contemporary Solutions, Inc., a Campbell foreclosure consulting firm, the suspects offered clients a “principal reduction program.” They said they would negotiate purchases of the homeowners’ loans at more affordable prices, and promised this would save the properties from foreclosure and reduce the homeowners’ monthly payments.
“The problem is, that was never done. The only money that was reduced was from the victims’ bank accounts,” Fitzsimmons said.
The duo charged clients an up-front fee for the service, which is prohibited by California state law, he added. The victims were mostly scattered throughout California, though some were homeowners from Florida, Arizona, Texas and Nevada.
The DA’s office was alerted to the scam by “whistle blowers” who used to work for M & R Contemporary Solutions, Fitzsimmons said.
It is estimated that the company collected up to $2 million in advance fees from homeowners electing to employ M & R’s services, even though the services were never delivered.
Each of the two defendants face 22 felony counts centering around 10 victims so far. They are accused of one count of collecting an illegal advance fee and one count of theft by false pretenses for each victim. Additionally, each is charged with two counts of conspiracy, Fitzsimmons said.
Alvarez was arraigned in Santa Clara County Superior Court Friday afternoon. His bail was set at $2 million, and he had not posted bail as of Friday afternoon.
Ortega’s arraignment will likely take place early next week.
Alvarez’ attorney, Joe Benincasa, said he did not yet have enough information on the case to comment. Ortega’s counsel had not yet been identified as of Friday afternoon.
Calls to M & R offices were met with an automated greeting offering an employee phone directory. Both men were still listed on the directory Friday, but Alvarez’ voicemail-box was full.
The DA’s office reported the company’s bank accounts have been frozen by court order for possible payment of restitution and fines following court proceedings. Investigators also served search warrants at both of M & R’s offices in Campbell.
