A former realtor who lived in El Monte faces decades in federal prison when he is sentenced Nov. 15 for ripping off homeowners with a scheme that falsely promised to eliminate mortgage debts in exchange for a $15,000 fee.

The scheme caused many struggling homeowners to lose money and, in many cases, their homes.

Ernesto Diaz, 66, who operated the so-called mortgage elimination program in Montebello, was found guilty Monday of three counts of mail fraud and one count of conspiracy to commit mail fraud. Prior to the start of the trial he also pled guilty to one count of failure to appear, according to the U.S. Attorney’s Office.

Evidence presented at trial in Los Angeles federal court showed that Diaz and his accomplices conducted seminars to convince homeowners that his Crown Point program could eliminate all or part of the existing balances on mortgages, as well as save homes that were in or near foreclosure.

Diaz told clients and prospective clients that the program involved sending of a series of documents to lenders and others to eliminate the clients’ mortgages. Homeowners were falsely told that the Crown Point program would result in the elimination of their mortgage within six to eight months and that they would be able to obtain up to hundreds of thousands of dollars from their lenders.

After clients signed up for the program and paid the fee, Diaz and a co-defendant directed others to mail packets of information to the clients’ lenders which falsely asserted that the mortgages were invalid and would be extinguished if the lenders did not respond.

Many of the mailed documents were notarized to create the appearance of legitimacy, at times using a notary’s stamp without that notary’s knowledge or consent. Clients were instructed not to make their mortgage payments while the program was implemented.

Bankruptcy petitions and other legal papers were filed in order to delay foreclosure and eviction actions brought by mortgage lenders. These delays had the effect of lulling homeowners into believing that the Crown Point program had been effective. In some cases, Diaz would cause some clients to unknowingly execute quitclaim deeds that would convey ownership of their homes.

Crown Point obtained nearly $5 million from about 400 clients who paid to participate in the program. Numerous clients lost their properties in foreclosure sales and were evicted from their homes despite having participated in the program.

Diaz entered into a plea agreement in 2012, but failed to appear on Oct. 15, 2012, for a change-of-plea hearing following his arraignment. Diaz remained a fugitive for seven years until his arrest two years ago, when he was arrested by the FBI in Santa Ana, according to the U.S. Attorney’s Office.

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