A Long Beach man pleaded guilty Tuesday to running a fraudulent mortgage rescue scheme that involved almost $3 million in illegal fees charged to distressed homeowners and about 200 fraudulent bankruptcy petitions, according to the U.S. Attorney’s Office.
Karl Robinson, 52, pleaded guilty to one count of bankruptcy fraud, a federal charge, before U.S. District Judge Manuel Real, a release stated.
Authorities said that between 2008 and 2013 Robinson operated a foreclosure rescue scheme under “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation,” as well as his own name. Through the businesses, he provided illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages, according to the release.
Robinson profited by charging the distressed homeowners in exchange for hindering, delaying or obstructing lawful foreclosure and eviction actions against property owners who had defaulted on their mortgages, officials stated.
“As part of the scheme, Robinson filed bogus grant deeds in county records offices and other fake documents in formal eviction proceedings to make it appear that fictional people held interests in distressed properties,” the release stated. “He then fraudulently filed bankruptcy petitions in the names of the fictional people to trigger an “automatic stay” in the bankruptcy cases.”
When filing a bankruptcy petition, one can essentially suspend all creditor actions, including foreclosure proceedings started by mortgage lenders and eviction actions commenced by purchasers of foreclosed properties.
“This defendant filed scores of fraudulent bankruptcy actions – sometimes on multiple occasions in relation to a single property,” U.S. Attorney Eileen M. Decker said in a statement. “He took advantage of distressed homeowners by stealing identities and lying to them about what he could do for their properties as long as they continued to pay his fees.”
As part of the scheme, Robinson said he obtained nearly $3 million from distressed homeowners and filed more than 200 fake bankruptcies.
“Mr. Robinson used his position as a pastor gain the trust of distressed homeowners, only to lure them with false hope while he worked the system to get rich,” stated Deirdre Fike, assistant director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners with the FHFA-OIG and the U.S Attorney's Office will continue to combat schemes targeting vulnerable homeowners.”
Robinson faces a statutory maximum sentence of five years in federal prison. His sentencing is set for November 28.
The case was investigated by the FBI and Federal Housing Finance Agency, Office of the Inspector General (FHFA-OIG), and prosecuted by Special Assistant U.S. Attorney Kerry L. Quinn of the Major Frauds Section.