A federal grand jury has accused a Corona del Mar attorney of being part of a mortgage fraud ring that inflated home prices to get larger home loans and pocket the money.
Gerald Lawrence Wolfe, 41, a former licensed real estate broker, was indicted Wednesday at the federal courthouse in Santa Ana on one count of conspiracy to commit wire fraud. He faces up to 20 years in prison.
Prosecutors said that between at least summer 2005 and January 2006, Wolfe and two other men worked with straw buyers, or people who allowed their names and credit information to be used for home loan applications without ever intending to live in the homes.
Wolfe and the others would take the loans and buy homes in Southern California at inflated prices, according to the indictment. They'd buy them above market value because the seller would return the excess money to one of Wolfe's companies for future home improvements, prosecutors said.
Some of the money actually went to home improvements. Where the rest of it went, authorities aren't sure, said Assistant U.S. Atty. Shashi Kewalramani.
When the homes foreclosed, banks lost an estimated $2 million, officials said.
Wolfe's scheduled to be back in court Tuesday. Two other men have pleaded guilty in the case.