Pair Arraigned in Alleged Scam Over Trust Deeds
Two Irvine businessmen were arraigned in federal court Monday on mail fraud charges in connection with an alleged scheme to sell millions of dollars of mostly fake second-trust deeds to investors.
The two are James R. Anderson, 41, and Richard Shane, 40, both top officers of Equity Securities Inc. of Newport Beach. Federal prosecutors have alleged that investors in the firm lost $7 million between 1983 and 1986.
The alleged real estate scheme involved the production of false documents, such as appraisals and title insurance policies, prosecutors say.
Investors were told that they would realize returns of 20% or more per year on what were described as delinquent trust deeds, prosecutors say. But a majority of the deeds were never recorded, leaving investors with no security, according to Assistant U.S. Atty. William F. Fahey.
If convicted of all four mail fraud charges, Anderson and Shane each could be sentenced to a maximum of 25 years in prison and fined $5,000.
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