Insurance Broker Held in Fraud Case

In an investigation involving more than 160 real estate agents and mortgage bankers, a Rancho Cucamonga insurance broker was arrested Tuesday on charges that she helped obtain $100 million in fraudulent loans from the federal government.

Maggie Cuevas, 52, faces charges that she helped unqualified borrowers get federally guaranteed home loans set aside for low-income buyers. Cuevas had pleaded guilty to a similar scam and was on probation for that as she continued running a document-forging business, according to an indictment issued Thursday by a federal grand jury in Los Angeles.

Investigators said Cuevas made a business of selling forged tax forms, check stubs and credit documents that could be used to get real estate loans insured by the Department of Housing and Urban Development. She also created companies, some real and some fake, to verify the documents, according to the indictment.

She allegedly sold the documents to real estate professionals for $75 to $300.

“The real estate people definitely knew what was going on,” said Stephanie Yonekura, the special U.S. attorney investigating the matter. “They are requesting the false documents.”

As a result, authorities said, HUD issued about $100 million in fraudulent loans and lost about $20 million.

Cuevas’ attorney, Manuel Araujo, said most of the allegations in the indictment predate his client’s guilty plea last year and involve the same scam.

“This indictment rehashes old stuff,” Araujo said. “I don’t see any reason to put this old woman in prison.”

According to the indictment, the documents were sometimes created in the real names of buyers and sometimes using false names. They allegedly included phony Social Security cards and driver’s licenses.

HUD insures the loans of buyers who otherwise might not get a mortgage from a traditional lender. The loans typically require only a 3% down payment.

Cuevas was denied bail Tuesday and is in federal custody. She is scheduled to be arraigned Monday.

The indictment also charges two of her employees with fraud. Graciela Salgado, 51, and Sarai Mora, 30, have been ordered to appear in court Jan. 14.

The brokers and agents who allegedly paid Cuevas to produce the false documents were not named, and Yonekura would not say whether they will be indicted. However, Thom Mrozek, spokesman for the U.S. attorney’s office in Los Angeles, said, “This is an ongoing investigation, and there is a very significant likelihood of more indictments in the future.” The investigation involves the FBI, HUD auditors and IRS agents.

Araujo speculated that prosecutors pushed to have Cuevas held so she would cooperate with their investigation into her customers.

“The guys really making money in these cases are the real estate agents and brokers,” he said.

Cuevas faces six counts of wire fraud and two counts of bank fraud. Mora, who is Cuevas’ niece, and Salgado were charged with six wire fraud counts. Salgado was charged with three bank fraud counts.