3 Southern Californians accused of running foreclosure rescue scam

Federal prosecutors have accused three Southern California residents of running a massive foreclosure rescue scam that used phony bankruptcy filings to stall foreclosures of nearly 1,500 homes, involving $750 million in mortgages.

The three suspects allegedly found homeowners on the verge of foreclosure and promised to ward off the proceedings for fees usually amounting to $1,500 a month.

Prosecutors said the suspects secretly assigned partial ownership of the participating homes to fictitious people and filed bankruptcies using the fake names, forcing lenders to delay foreclosures for months or in some cases years.

Irving Cohen, 74, of Van Nuys and Robin Phillips, 53, of Claremont have agreed to plead guilty to bankruptcy fraud charges, according to the U.S. attorney’s office of the Central District of California.

A third suspect, Darwin Bowman, 74, of Van Nuys was indicted in September and is awaiting a Feb. 8 trial at the federal courthouse in Los Angeles.

The scheme ran from December 2006 through July of this year, federal prosecutors said. During that time, the three suspects collected nearly $550,000 in fees and caused banks to lose millions of dollars in interest payments.

“The Cohen scheme was one of the largest foreclosure avoidance scams operating in Southern California and has caused incalculable harm to lenders big and small,” said Assistant U.S. Atty. Evan Davis, who is the lead prosecutor in the case.

Phillips’ attorney, Summer McKeivier, declined to comment. Attorneys for Cohen and Bowman could not be reached.

The homeowners, who responded to advertisements placed by the suspects, did not know about the false bankruptcies or that fractional ownership of their homes had been transferred to fictitious people, prosecutors said.

“The defendants in this case exploited bankruptcy rules as they methodically victimized lenders in their scheme and targeted vulnerable homeowners while enriching themselves,” said Steven Martinez, assistant director in charge of the FBI’s Los Angeles office, which investigated the case.

Prosecutors did not specify which banks were victimized in the scam or how much they lost individually.

In his plea agreement, Cohen admitted transferring one-eighth ownership of one home to a bogus name, Marcus Lamont Collins, and then filing a bankruptcy petition under that name. He then used the bankruptcy filing to force Texas-based lender Ndex West to halt a planned foreclosure sale of the property for several months, Cohen acknowledged in the plea agreement.

Authorities had not yet calculated the banks’ total loss because of the scheme. One month of principal and interest on $750 million could amount to several million dollars. Prosecutors said that some lenders lost interest payments for three years.

stuart.pfeifer@latimes.com