Four San Fernando Valley residents face felony charges for their part in a scheme going back at least to 1984 to defraud homeowners through phony "creative financing" home purchases, the Los Angeles County district attorney's office said.
The four, who were charged with fraud and grand theft, allegedly got homeowners to trade their homes for worthless promissory notes.
One of the group is charged alone with cheating five homeowners, four in the San Fernando Valley, out of hundreds of thousands of dollars, authorities said.
All four were charged Monday with conspiring to cheat two Valley homeowners by giving them unsecured promissory notes at escrow rather than the trust deed the homeowners had been led to expect, according to Al Albergate, a spokesman for the district attorney's office.
Members of the group would take out loans, using the homes as collateral, then fail to pay for the property, leaving the homeowners responsible for the loans, he said.
One of the group, Budd Barry Branca, 40, of Sun Valley, also is accused of cheating four other San Fernando Valley homeowners and an El Monte resident out of an average of $68,000 each by purchasing the homes for Benjamin Christensen Corp., which he partly owned. The company filed for bankruptcy and Branca bought the properties himself at little cost, Deputy Dist. Atty. John K. Spillane said.
Because the homeowners were given promissory notes rather than trust deeds, it will be extremely difficult for them to regain title to their homes, he said.
A trust deed gives the holder the right to quickly foreclose on property if payment is not made. A promissory note, by contrast, is enforceable only through a time-consuming lawsuit against the buyer.
Branca and the three others were each charged Monday with two counts of grand theft and one count of conspiracy to commit grand theft for allegedly cheating a Sun Valley widow in the creative financing scheme, Spillane said.
The other defendants are Debi Jean Roemer, 32, of Van Nuys, who allegedly acted as escrow officer on the sale, Jose Ruben Solares, 28, of Woodland Hills, the alleged "straw buyer" who pretended to buy the home, and Aaron Shopnick, 42, of Northridge, who obtained the loan on the property, Spillane said.
Solares, a former Los Angeles city firefighter, was fired from the department after an internal investigation of his involvement in the real estate dealings, Albergate said.
Got Property Back
The Sun Valley woman managed to get her property back, but it is encumbered by a large loan for which she is legally responsible and she now faces foreclosure, Spillane said.
In a similar case, Branca, Roemer and Shopnick are accused of trying to buy a Canoga Park home, then leaving the seller responsible for loans taken out using the home as collateral, Spillane said.
Some of the scheme's victims may lose their property, and several have filed civil suits seeking to recover their losses, he said.
Branca and Roemer pleaded not guilty Monday and face a Feb. 3 preliminary hearing. Shopnick and Solares face arraignment Jan. 12.