A former realtor from El Monte was sentenced Tuesday to four years behind bars for running a mortgage fraud scheme that conned distressed homeowners out of nearly $4 million.
Ernesto Diaz, 66, was also ordered to pay over $3 million in restitution to his victims, according to the U.S. Attorney’s Office.
Diaz was found guilty in September in Los Angeles federal court of conspiracy and mail fraud charges.
After entering into a plea agreement in 2012, Diaz fled to Mexico and remained a fugitive for seven years until the FBI arrested him in October 2019. He pleaded guilty two months ago to a separate count of failure to appear in court while released on bond.
Diaz and co-defendant Maria Marcella Gonzalez, 51, of Whittier, ran a fraudulent mortgage-elimination program that operated in Montebello. The pair advertised to distressed homeowners that their program could eliminate whatever balance existed on their mortgages.
Diaz and Gonzalez also offered seminars describing their program to prospective customers but refused to say exactly how they planned to eliminate clients’ mortgages.
After customers signed up and paid a fee of about $15,000 per property, the defendants had associates mail packets of information to the clients’ lenders that falsely stated that the clients’ mortgages were invalid and that the claims would become worthless if the lenders did not respond. Many of the documents used the notary stamp of Diaz’s sister without her knowledge.
The pair’s mortgage program had no success in eliminating mortgage debt and many customers — including Diaz’s brother — lost their homes.
“Many, though not all, of (Diaz’s) victims could have qualified for loan modifications or legitimate foreclosure forbearance programs to save their homes but, in reliance on (Diaz’s) lies, were never able to avail themselves of these options,” prosecutors wrote in a sentencing memorandum.
Gonzalez pleaded guilty in July 2015 to federal charges of making a false statement in a bankruptcy declaration. She was sentenced to almost six years in federal prison.