Police Arrest 2 in Mortgage Scheme : More Than 50 Investors Allegedly Bilked Out of $2 Million

La Palma police arrested two people Wednesday in connection with a real estate scheme involving non-existent second mortgages that allegedly bilked more than 50 Southern California investors out of $2 million.

Police Lt. Dave Barr said a tip from an investor led to a four-month investigation that culminated in the arrest of Clifford Dale Keller Jr., 46, of Cerritos and Darlien C. Breeze, 53, of Norwalk at their homes. They were being held Wednesday night in the Orange County Jail. Keller was being held on $500,000 bail, and Breeze’s bail was $100,000.

Police said 50 people had invested in second trust deeds, or mortgages, over the last four years on property--most of which was located in Los Angeles County--through Old Ranch Management & Investment Inc. of La Palma. But, police said, most of the second trust deeds were fakes, and the La Palma firm actually had no claim to most of the property involved.

Old Ranch Management paid the investors monthly interest at a rate considerably higher than prevailing rates, police said. In addition to the non-existent mortgages, Keller and Breeze created fraudulent documents, including trust deeds, promissory notes and even title insurance documents for the investors, police said.

“We were very surprised to learn that over the last four years, with nearly 50 investors and hundreds of transactions, only one person was suspicious enough to place a call to the owner of the property on which he had purchased a second (mortgage) and ask him if he had done business with Old Ranch Management,” Barr said. “Had everybody done that before they purchased, the plan would never have worked.”