Man Sentenced For Foreclosure Fraud Scheme

John Zepeda Sentenced To 12 Years In Prison

A man was sentenced on Tuesday to 12 years in state prison for participating in a multimillion-dollar foreclosure fraud scheme in which notaries' identities were stolen and hundreds of deeds forged across California.

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John Zepeda, 60, pleaded guilty last year to multiple felony charges, including rent skimming, forgery, identity theft and conspiracy to commit grand theft.

Zepeda agreed to pay $6 million in restitution, but further hearings are needed to verify the loss amount.

Zepeda's 59-year-old brother, David, is charged in a related case with co-defendants Carlos M. Torres and Patricia Torres.

Escondido resident Benito Cristobal said he lost his house after getting involved with the defendants.

"To me, this is like a band, like a mafia," Cristobal told San Diego Superior Court Judge David Danielsen.

Outside court, Cristobal warned the public to be wary of people who want money for supposed help with foreclosure problems.

"You have to be careful with those people," Cristobal said.

Prosecutor Valerie Tanney said the public should be aware of scams like Zepeda's.

"Look for the red flags and make sure (to) consult with the various nonprofit agencies that are out there to assist with this type of situation that do not take money up front for giving advice to homeowners who are facing foreclosure," Tanney told reporters.

The conspiracy, which prosecutors called "huge" and "brazen," involved hundreds of victims in San Diego, Santa Barbara, San Bernardino, Orange, Ventura, Riverside and Los Angeles counties, as well as Nevada's Clark County.

According to prosecutors, the defendants would hold seminars for people hoping to save their homes from foreclosure.

Authorities allege the Zepeda brothers identified properties in foreclosure and acquired title either by forging a quitclaim deed – which transfers the property into a trust – or convincing homeowners to transfer the property to them by promising the homeowner they would help avoid foreclosure.

Once they had acquired the title, the Zepedas would rent out the property, prosecutors said.

John Zepeda's attorney, Kathleen Coyne, said her client was employed by his brother to work in the office in San Bernardino.

"He worked in the office of the trust," Coyne said. "He did not personally solicit any homes. He did not personally come to San Diego County."

Coyne said John Zepeda is remorseful and wants restitution to go first to people who lost their homes, not banks and other institutions.

In the scam, money was diverted away from the lenders and owners and into accounts, where the cash was used to support the defendants' lavish lifestyle, including the purchase of exotic, high-end cars, prosecutors said.

During a search of David Zepeda's home in San Bernardino, where the defendants were arrested in September 2010, investigators seized $335,000 in uncashed checks; a gold Geneva watch; a gold Rolex watch; diamond bracelets and rings; $33,000 in cash; more than $8,000 in silver coins; and a Bentley automobile.

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