Local residents caught in widespread fraud scheme

Three Newport Beach residents have been charged in connection with an alleged fraud scheme that led to more than $20 million in losses for several lending institutions, federal prosecutors announced Wednesday.

Newport Beach residents Kirk McMahan, 31, who worked for Brickbanc; James Breedlove, 51, who worked for Santa Fe Equipment; and Troy Worrell, 47, who worked for Piniche, were among nearly two dozen Southern Californians involved in the scheme, prosecutors said.

The charges stem from an FBI investigation dubbed “Operation Lease Fleece,” in which the accused allegedly made lenders believe they were financing equipment leases.

Citicapital, the leasing branch of Citibank, lost an estimated $9.5 million from the scam and assisted with the FBI investigation. Wells Fargo Bank, GE Capital, American Enterprise Leasing, Key Bank, Bank of America and U.S. Bank were also victims.

The 23 defendants were scheduled to appear in court over the next several months.

— Joseph Serna

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