4 Convicted in ‘Largest’ Equity Skimming Case

In what a prosecutor described as the largest real estate equity skimming case ever tried in the United States, three men and a woman have been convicted by a federal jury of a real estate fraud involving 343 homes in Southern California worth $41 million.

After five weeks of testimony, it took the jury two days to return guilty verdicts against Mark Christopher Meng, 35, of Signal Hill, Marcel Fernando Jordan, 31, of Long Beach, Carol Ann Hays, 34, of Long Beach, and Meng’s brother, Charles H. Meng Jr., 37, of Long Beach.

The four formed a real estate company, Suma Properties Ltd., in July, 1982. By the time the State of California and Long Beach police closed the company down in February, 1985, they had bought 343 residences.

Under the purchase agreement, they paid little or nothing down on the homes. But they promised to later pay each home owner a sum of money equal to their equity in the home, based on market value, and to take over the remaining mortgage.

Once title was obtained, Suma leased the properties immediately and collected rents, but almost never made the payments promised to the owners or to the mortgage companies that held the deeds on the properties.

“They collected the rents . . . until the properties were lost in foreclosure,” said a statement issued Thursday by the U.S. attorney’s office in Los Angeles.

“Suma ultimately paid only $60,000 for those properties and collected at least $1.2 million in rents,” the statement said. Most of the properties were in Los Angeles and Orange counties.

The statement said soon after Suma was shut down, “Jordan threatened to kill a Suma employee who Jordan suspected was cooperating with the police. When that employee thereafter moved out of state, Jordan attempted to contact that employee, eventually traveling to her home, in a further effort to intimidate her.”

Deputy Dist. Atty. Albert H. MacKenzie, who prosecuted the case jointly with Assistant U.S. Atty. Paul L. Seave, described the cases as “the largest real estate equity skimming case ever prosecuted in the United States.” He said the case came to light when federal, state and local agencies were inundated with complaints from people who had lost their homes.

“The case mushroomed very quickly. In a short time, we had several investigative agencies involved and they did a superb job of uncovering what had happened,” MacKenzie said.

Mark Christopher Meng, president of Suma, and Jordan, the chief financial officer, were each convicted of 22 counts of mail fraud. Hays, a vice president, was convicted of 18 counts of mail fraud. Charles Meng, also a vice president, was convicted of nine counts of mail fraud. In addition, each of the four defendants was found guilty of one count of equity skimming.

After the verdicts were returned on Wednesday, District Judge J. Spencer Letts ruled that the three men should remain in custody pending sentencing on April 23. Hays was released on bail.

Federal officials said Mark Meng and Jordan each face a maximum penalty of 113 years in prison and fines of $27,000. Hays faces a maximum penalty of 93 years and a fine of $23,000, and Charles Meng could be sentenced up to 48 years in prison and fined $14,000. Al Albergate, information officer for the district attorney’s office, said the investigation was conducted by the Long Beach Police Department, the inspector general’s office of the U.S. Department of Housing and Urban Development and the inspector general’s office of the U.S. Veterans Administration, in conjunction with the U.S. attorney and the district attorney.