Five charged with operating a fraudulent loan mod scheme that targeted Latinos

ORANGE COUNTY DISTRICT ATTORNEY PRESS RELEASE

Case # 14CF4090

January 21, 2015

THREE MEN AND TWO WOMEN CHARGED WITH OPERATING FAMILY RUN LOAN MODIFICATION FRAUD RING AND TARGETING HISPANIC VICTIMS

SANTA ANA – Three men and two women have been charged with committing loan modification fraud by targeting Hispanic victims throughout Southern California. Three of the defendants are family members and are charged with leading a family-run home loan modification ring and illegally charging victims for services that they did not provide.

Four of the defendants have been taken into custody and one defendant remains a fugitive. In addition to the charges below, each of the defendants face sentencing enhancements for aggravated white collar crime over $100,000 under $500,000, taking funds exceeding $50,000 and theft exceeding $150,000. The defendants’ sentences range from eight years and four months to 77 years in state prison if convicted, and each must prove that the money comes from a legal and legitimate source before they are released on bond.

Defendant, Age, City, Charges, Maximum Prison Sentence, Custody Status, Court Date

Carlos Jose Centeno, 37, Yorba Linda. 121 felony counts of grand theft, one felony count of conspiracy to commit a crime, and five felony counts of unlawful advance fee by a foreclosure consultant. 77 years. In custody, held on $300,000 bail. Pre-trial scheduled for Jan. 26, 2015, at 8:30 a.m., Department C-55, Central Justice Center, Santa Ana.

Ricardo Torres Centeno, 31, Anaheim, brother to Carlos Centeno. Eight felony counts of grand theft, one felony count each of acts constituting forgery, and conspiracy to commit a crime. 15 years and four. Fugitive.

Lizeth Garcia Arzate, 32, Anaheim, wife of Ricardo Centeno. 12 felony counts of grand theft and one felony count each of conspiracy to commit a crime and unlawful advance fee by a foreclosure consultant. 15 years. Released on $300,000 bail. Pre-trial scheduled for Feb. 20, 2015, at 8:30 a.m., Department C-55, Central Justice Center.

Hector Alfredo Valdivia, 50, Lake Elsinore. Three felony counts of grand theft, and one felony count of conspiracy to commit a crime. Eight years and four months. Released on $10,000 bail. Pre-trial scheduled for Feb. 20, 2015, at 8:30 a.m. in Department C-55, Central Justice Center.

Susie Rabadan, 31, Anaheim. 13 felony counts of grand theft and one felony count each of conspiracy to commit a crime, and unlawful advance fee by a foreclosure consultant. 15 years. Released on $10,000 bail. Pre-trial scheduled for Feb. 20, 2015, at 8:30 a.m., Department C-55, Central Justice Center.

Circumstances of the Case

Carlos Centeno is accused of owning and operating the Foreclosure Prevention Department in Irvine, and co-defendants Ricardo Centeno and Lizeth Arzate are accused of owning and operating Debt Settlers of America (DSA) in Orange, which advertised assistance for the renegotiation of home loans. The defendants are accused of advertising DSA on Hispanic radio stations throughout the state in order to target victims. Co-defendants Hector Valdivia and Susie Rabadan are accused of being office managers and consultants at DSA. Valdivia and Rabadan are accused of knowingly assisting Carlos Centeno, Ricardo Centeno and Arzate in charging and accepting illegal upfront fees from victims for services that they did not provide by collecting and processing loan modification applications.

Between December 2009 and December 2012, the defendants are accused of contacting 23 victims and promising them assistance with negotiating their home loans after the victims paid DSA an upfront fee. Carlos Centeno, Ricardo Centeno, and Lizeth Arzate are accused of collecting illegal upfront fees from victims ranging between $2,000 and $2,500 per modification. The defendants are accused of directly collecting several victims’ monthly mortgage payments and depositing them into their personal bank accounts.

Between December 2009 and December 2012, all five co-defendants are accused of accepting and depositing illegal upfront loan modification fees and home mortgage payments from the victims into their personal bank accounts totaling over $390,000 and using the money for the payment of personal bills and expenses.

After having never received modifications on their home loans, and in some cases losing their homes to foreclosure, several victims reported the crimes to the Ventura County Sheriff’s Office (VCSO), who investigated this case.

Anyone who may have additional information or who may have been a victim is encouraged to contact Supervising District Attorney Investigator Andy Terhorst of the Major Fraud Unit at 714-347-8691.

Senior Deputy District Attorney Pete Pierce of the Major Fraud Unit is prosecuting this case.

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Roxi Fyad, Spokesperson
Office: 714-347-8405
Cell: 714-323-4486