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Jergler: Real estate scammers caught in D.A.'s web

February 14, 2012|By Don Jergler

This is the second of an occasional series of stories on the Real Estate Fraud Advisory Board and the Orange County District Attorney's fraud unit.

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When Kathy Chen purchased 35 properties around Orange County using stolen identities and then intentionally defaulted on loans in order to steal the loan money, it must have seemed like a bright idea.

It must have also seen like an opportune time, seeing as it was only a few years ago, during the heart of the real estate downturn. Banks were overloaded with foreclosures and toiling to fix their own financial troubles, and defaulting was anything but uncommon.

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But Chen, a 49-year-old real estate broker, was caught and convicted of conspiring with her boyfriend and his brother to commit $17.5 million in real estate fraud and found guilty by a jury of 136 felony counts, including one count of conspiracy, 47 counts of grand theft, one count of attempted grand theft, 37 counts of forgery, 27 counts of recording false documents, 15 counts of identity theft, one count of elder financial exploitation, four counts of forging an official seal, and three counts of filing false tax returns, according to the O.C. district attorney's office.

Actually, her scam was not so original, and little did she know that Orange County has a team of real estate experts that advise the Orange County district attorney on such potential scams.

Elizabeth Henderson, an assistant district attorney and head of the major fraud unit in the Orange County district attorney's office, has behind her the Real Estate Fraud Advisory Board.

Henderson and the board meet roughly every three months at the D.A.'s office to talk about new scams, and how to better catch perpetrators of real estate-related fraud. There are roughly 20 people on the board, which is organized by the D.A.'s office.

The D.A.'s real estate fraud unit, which has two attorneys and three investigators who work full time in the area of real estate fraud, has 37 active cases in which charges have been filed. Since it was launched in 2009, the unit has amassed 49 felony convictions, many of which have received assistance or real estate expertise from the advisory board.

"What we're doing in Orange County is not unique," said Wally Malesh, a member of the task force. "Many other counties have put together other task forces."

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