2 arrests in fraud case

Times Staff Writer

Michael D. Henschel of Van Nuys, who has had a long history of legal run-ins, was arrested Thursday by Los Angeles County authorities, who accused him of operating foreclosure scams that took in hundreds of homeowners, costing some their houses.

Henschel, 59, faces 71 federal charges, including forgery and conspiracy counts, in an alleged scheme to defraud homeowners from 2000 to 2004. Canoga Park resident Alan Mitchell, 70, also was arrested and faces 32 charges.

Scammers posing as foreclosure specialists are becoming increasingly common in California, with some blatantly posting fraudulent offers online, said Los Angeles County Sheriff’s Det. Chris Christopher, who arrested the pair and has tracked them for years.


“There’s so much real estate fraud out there and we’re working like crazy, but we’re not even putting a dent into it,” he said.

Henschel and Mitchell are accused of offering to save homeowners from foreclosure if they paid a monthly consulting fee and transferred part-ownership of the properties -- often to a fictitious entity.

While pretending to renegotiate loans, the pair charged rent to homeowners, Christopher said. The two men would file for bankruptcy protection using phony debt and made-up names to hold off the banks and extend the “rental” period for several months, he said.

After a protracted, expensive process, the banks would reclaim the properties and evict the homeowners anyway, Christopher said. Although only seven victims are mentioned in the complaint, the scheme extended to hundreds of homeowners, he said.

Deputy Dist. Atty. David L. Fleck, listed as a prosecutor in the complaint, did not return calls for comment. It was unclear whether Henschel or Mitchell, who were to be arraigned today, had retained attorneys. Bail was set at $800,000 for Henschel and $400,000 for Mitchell.

William D. Pangburn, a Ventura attorney who has represented several of Henschel’s alleged victims, said Henschel was a real estate expert who manipulated bankruptcy courts and “gullible, financially distressed people” for years.


“Mickey’s cases never seem to be big enough to get the proper attention,” Pangburn said. “They’re so hard to unwind, you really have to persevere, and authorities feel like there are bigger fish to fry.”

In the past, Henschel has faced a slew of misdemeanor and felony charges and has been convicted at least five times, but he has always managed to dodge prison time.

In 1995, he was charged and acquitted in Los Angeles of stealing nearly $90,000 from family friends by filing phony bankruptcies and deed transfers against two properties.

In an Arizona case that mirrors the current one, Henschel pleaded guilty in federal court in 2004 to filing more than 200 fraudulent bankruptcies and pocketing more than $50,000 in rental income and fees from homeowners with shaky mortgages. He was sentenced to probation, community service and restitution.

According to the latest complaint, Henschel knocked at the door of one man’s North Hollywood home in 2001 and offered to purchase it, starting with a $1,500 payment and an additional $3,500 after escrow closed. The complaint said Henschel then transferred title to the man’s residence to a cover trust and signed the man’s name without his knowledge over the next two years to eight deeds that transferred partial interests in the property.

In 2002, according to the complaint, Mitchell sent fliers to a Rolling Hills woman advertising “foreclosure relief services” for $500 a month. Mitchell and Henschel transferred partial interests in her home to fictitious names until the woman’s home was foreclosed on, the complaint says.

In yet another case, the complaint accuses Mitchell of falsely representing himself as an attorney to a couple while Henschel promised to land them a new loan. The men collected $2,500 while the homeowners lost their property.