Tim's Blog: Mortgage Fraud and Bankruptcy

Tim's Blog: Mortgage Fraud and BankruptcyMortgage Fraud and Bankruptcy
Today in the Orange County Register there is a report on Lorenzo Espinoza who committed mortgage fraud and filed for bankruptcywithout telling authorities he purchased tow Ferraris and a Lamborghini. He was sentenced to 5 years in federal prison.

This is really taking advantage of the laws. However, Lorenzo Espinoza did get caught. He is 43 years old and lived in Newport Coast. He was also ordered by the United States District Judge Stephen V. Wilson to pay the Department of Housing and Urban Development restitution of more than $614,000.

Espinoza and his friends purchased over 100 homes and managed to do so by mortgage fraud. The properties were sold at inflated market values to straw buyers. Espinoza and his associates made the down payments and in some cases submitted bogus tax returns and paycheck stubs with the loan applications. When the straw buyers defaulted on the home loans and the lenders foreclosed. HUD reimbursed the lenders for their costs.

The HUD losses alone came to $2 million when it sold the homes for much less than the fraudulent purchase prices.

In 1999 Espinoza committed bankruptcy fraud when he filed for bankruptcyand failed to tell the United States Trustee that he owned a Rolex Daytona watch, two Ferraris and a Lamborghini. In late 2002 Espinoza laundered the proceeds of his bankruptcy fraud when he sold the Ferrari automobiles for $127,500.

If that were not enough he also plead guilty to willfully failing to pay income tax, admitting that he did not pay $199,053 due for the 1996 tax year. He also had not filled tax returns for well over 10 years and owes the IRS more than $5 million in taxes, interest and penalties.

So let's see Espinoza has committed tax fraud, mortgage fraud and bankruptcy fraud. I think that is the tri-fecta.

Tim Lorenz

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5 comments • Tim Lorenz • April 11 2010 02:06PM
Comments

...and he only got 5 years for ALL that? How/when will he pay his tiny fine?

Posted by KATHY OPATKA Ocean City, MD & Bethany Beach, DE (RE/MAX By The Sea) about 1 year ago
Good post. Do you think Mr. Espinoza might sell his exotic cars in a garage sale? Just kidding, of course. Charlie Gantz, Greenwood, IN; J.D., M.B.A.; Owner/Principal Broker, Atlas Commercial Real Estate, LLC

Posted by Charles Gantz (Atlas Property Group, LLC) about 1 year ago
Kathy,

I cannot believe he only got 5 yrs either. Look at the damage he did to everyone.

Posted by Tim Lorenz (TIM LORENZ of Keller Williams Realty) about 1 year ago
Charles,

This is outrageous I think. Not many wood have the nerve to do what he did. His motto was probably go big or go home.

Posted by Tim Lorenz (TIM LORENZ of Keller Williams Realty) about 1 year ago
leave him alone hes already going through alot

u guys dont even know anything what if that were u in his postion leave the poor man and mind ur own business dont u have anything better to do

Posted by kristen about 1 year ago