Loan Fraud: Ensure that Your Home Broker Is not Like Chen
Just like in other professions where hardworking and trustworthy professionals are damaged by the corrupt activities of their colleagues, the real estate profession is also sometimes damaged by the deceitful actions of even just one home broker like 48-year-old Kathy Chen.
So the next time you think of hiring a home broker to facilitate your real estate needs, make the needed background checks and obtain reliable referrals.
Chen, a home broker based in Westminster, California, her former partner Richard Salgado Gonzalez and his sibling Daniel Gonzalez have been charged by the Office of the Orange County District Attorney with taking out 47 fraudulent home loans amounting to more than $17.5 million on 35 residential properties from January 2005 to July 2007 using straw buyers.
Straw buyers are individuals who allow their credit records to be used by another person, such as a home broker, for a property purchase in exchange for money or some favors.
The properties Chen fraudulently purchased are located in the counties of San Bernardino, Orange and Kern, but the case will be handled in Orange County.
Chen was arrested on June 1 on an arrest warrant of $3 million and held in Santa Ana’s Central Justice Center as she waits for arraignment. She can post bail if she can prove that the money she will use for bail is from a legitimate source.
All together, home broker Chen and her two partners face 154 felony counts and jail sentences ranging from 2 years to 109 years. The charges included forgery, use of false documents, conspiracy, identity theft and financial exploitation of older people.
Orange County has released arrest warrants for the Gonzalez brothers who are believed to be already in Mexico.
Chen founded three real estate businesses: KC Realty, Chen Financial and SBC Financial. She, together with the Gonzalez brothers, obtained business licenses from the city of Santa Ana and then used these licenses to enhance the income documents of straw buyers.
According to the office of the district attorney, Chen and her partners forged names, signatures, seals and notary stamps on various loan documents and deeds and then filed them in the counties where the properties are located.
Chen also used the documents of some straw buyers for several purchases even if the straw buyers agreed to only one purchase. Chen even involved an elderly woman into her fraudulent activities by making her one of her straw buyers.
If Chen is convicted and given the maximum jail sentence, she would represent just one home broker eliminated from an industry still filled with brokers and realtors engaged in fraud.
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