Man Sentenced to Prison for Abusing Bankruptcy System to Operate Fraudulent Foreclosure Rescue Scheme

A Long Beach man was sentenced on Monday to four years in federal prison for running a fraudulent foreclosure rescue scheme that raked in nearly $3 million in fees from distressed homeowners.

Story continued below.

Karl Robinson, 52, was sentenced by United States District Judge Manuel L. Real and ordered to pay a $10,000 fine.

In August, the defendant pleaded guilty to one count of bankruptcy fraud, relating to the five-year operation he ran under his own name and companies titled “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation.”

“This scheme was never about providing assistance to distressed homeowners,” said United States Attorney Eileen M. Decker in a statement. “It was about lying to distressed homeowners and collecting fees based on false promises. This defendant abused the bankruptcy system and stole identities to perpetrate his fraudulent scheme.”

The criminal case against Robinson is the result of an investigation by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of the Inspector General (FHFA-OIG).

The defendant convinced his clients who were facing foreclosure that he could save their homes. Instead, he filed hundreds of fraudulent bankruptcy petitions that only delayed foreclosure and eviction proceedings, as well as filed falsified grant deeds with county recorders and other fake documents in state court eviction proceedings to make it seem like fictional debtors had interests in the properties.

“Mr. Robinson lured homeowners with empty promises and used his ties to a church to gain their trust and steal their hard-earned money,” said Deirdre Fike, the assistant director in charge of the FBI's Los Angeles Field Office in a statement. “The FBI and our partners with the FHFA-OIG and the U.S. Attorney's Office will continue to combat schemes that manipulate government rules and target victims faced with losing their homes.”

Robinson admitted to misusing notary stamps of other individuals in order to fake signatures on legal documents and charging distressed homeowners additional fees if they wanted to unwind fake filings in a plea agreement filed in federal court.

“Karl Robinson selfishly preyed on the misfortune of others and as a result has been sentenced to prison,” said Leslie P. DeMarco, Special Agent in Charge of FHFA-OIG’s Western Region in a statement. “He now has ample time to reflect on his behavior. FHFA-OIG will continue to work with our law enforcement partners to prevent more innocent victims from falling prey to similar schemes and to protect the housing market.”

The case against Robinson was prosecuted by Special Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.

City News Service contributed to this report.

Share this: