Sixteen indicted in huge foreclosure case

The Sacramento Bee reports:

Federal officials announced the indictment of 16 people Monday morning in what they call the largest "foreclosure rescue" scam in the nation.

The mortgage fraud case was announced at the federal courthouse in Sacramento, where a grand jury charged the defendants with mail fraud and money laundering and conspiracy to commit both.

In February, The Bee obtained a search warrant for the case, which victimized at least 256 homeowners throughout the nation, 61 in California and seven in the Sacramento area.

Officials with the FBI, IRS and the U.S. Attorney's office say the defendants ran an "equity stripping" scam targeting people on the brink of foreclosure.

According to the indictment, the defendants "made varying misstatements," telling homeowners they could enter a program to repair their credit, refinance their home and keep it. The defendants paid straw buyers who took title to the homes and used those people to siphon equity out of the home, the indictment states.

Meanwhile, the homeowners paid rent to the defendants, believing it would repair their credit. After a year or less, the homeowners were left without their homes, equity or repaired credit, the indictment says.

The lead defendant in the case is Charles C. Head, a Southern California man who ran Head Financial Services and several other companies in Costa Mesa.