A bogus home loan obtained on an expensive Newport Beach residence during the Persian Gulf War earned a Los Angeles man a 46-month prison term Tuesday.
John Gary Rinaldo, 52, posed as a lawyer representing three Kuwaiti clients whose money was supposedly trapped in their homeland after the fighting began in the Gulf in January.
According to Assistant U.S. Atty. Paula A. Mabrey, Rinaldo, under the alias of lawyer Lee Alpert, persuaded Sterling Home Loans, a mortgage broker in Santa Ana, to make a loan to his imaginary clients using their $1.25-million property as collateral. The Newport Beach residence is actually owned by three Iranian brothers, now residents in San Jose and Toronto, who have put the property up for sale.
Sterling Home Loans arranged for a $362,000 loan with Mission Viejo National Bank. In February, when Rinaldo attempted to exchange the money for gold coins at Gold & Silver Emporium in Encino, he was arrested, Mabrey said.
The owner of Gold & Silver, Barry Stuppler, said he became suspicious when Rinaldo did not negotiate an exchange rate for the gold coins, which is the normal practice. Stuppler then called in FBI agents, who posed as couriers delivering the coins to Sterling Home Loans' office, where Rinaldo was arrested.
During the trial, the Iranians testified that they did not know Rinaldo and that their signatures were forged on the loan documents Rinaldo presented to Sterling Home Loans. A jury convicted him in May on three counts of bank fraud and two counts of money laundering.
At the sentencing Tuesday, U.S. District Judge Stephen V. Wilson called Rinaldo "an educated criminal" who used his knowledge of financial institutions to perpetrate sophisticated frauds.
Rinaldo was convicted of mail fraud in 1985 in connection with a loan brokerage he owned at that time. He served most of a three-year prison term, Mabrey said.