A Johnstown man is among seven defendants indicted Monday in Sacramento, Calif., in a mortgage-fraud scheme that targeted homeowners in dire financial straits, U.S. Attorney McGregor W. Scott said.
The local man was identified as Keith Brotemarkle, 42, a broker on at least one of the allegedly illegal transactions – although he’s never had been licensed in California, according to the indictment.
The conspirators – in what was described as an “equity stripping” scheme – reportedly netted $5.9 million in stolen equity from 68 homeowners in states nationwide from March 19, 2005, until at least June 30, 2006.
Brotemarkle could not be reached Tuesday for comment.
The U.S. Attorney’s Office said he would be served with a summons notifying him when he is to appear for a bail/detention hearing in California.
The boss of the scheme was Charles Head, 33, of Los Angeles, federal prosecutors contend.
Brotemarkle is the only defendant from Pennsylvania.
In the fraud, strangers were recruited via the Internet to become straw buyers.
The defendants contacted desperate homeowners offering two options to avoid foreclosure and to obtain thousands of dollars up-front for mounting bills. But virtually all of them could qualify only for an option in which an “investor” would be added to the title of the home.
The homeowners then would make a “rental” payment of an amount less than their mortgage payment, thereby allowing homeowners to repair their credit by having the mortgage payments made on time.
“Unfortunately all of this was a scam,” prosecutors said. “The defendants would recruit straw buyers as the ‘investors’ and, oftentimes, these individuals would, in fact, replace the homeowners on the titles of the properties without the homeowners’ knowledge.
“Once the straw buyer had title to the home, the defendants immediately applied for a mortgage to extract the maximum available equity from the home. The defendants then would share (both) the proceeds of the ill-gotten equity and the ‘rent’ being paid by the victim-homeowner,” they said.
When the defendants ultimately would sell the houses, stop making the mortgage payment or pursue an eviction, “the victim-homeowner was left without their home, equity or repaired credit,” prosecutors said.
Brotemarkle was identified in the indictment – handed down by a federal grand jury – as one of the employees in companies created to carry out the scheme. Authorities said he made contact with brokers via the Internet and phone to solicit referrals of homeowners in distress.
In turn, brokers provided contact information for the defendants to homeowners in distress.
For each homeowner that completed a transaction with the defendants, the broker was paid a $4,000 referral fee.
Brotemarkle also solicited the phony buyers, authorities said, who were given $5,000 per transaction. He’s specifically identified as having solicited “B.G.” of Corona, Calif., as a straw buyer.
In the indictment, the defendants are to be charged with mail fraud, conspiracy to commit mail fraud, conspiracy to commit money laundering and other related offenses.
Many of the transactions dealing with deeds, loan applications and money transfers were done by mail or wire, according to the indictment.
Local News
City man indicted in housing-fraud scheme
- Local News
-
-
Mild winter speeds work: Entertainment venue may be complete by end of May
An unusually mild winter has accelerated construction of a new outdoor entertainment venue in Johnstown.
-
Man jailed on rash of charges
A Patton man is being held on $100,000 bond after police said he threatened to kill a woman, her family and himself unless she talked to him about a protection-from-abuse order.
-
Cambria abolishes 16 jobs
Following through on promises to cut budget costs, the Cambria County commissioners voted Thursday to abolish 16 positions, including nine full-time jobs.
-
Blogging with heart
Anyone else have this issue: The more I know, the more I want to learn.
As I am writing my heart month stories for this week’s packages, I occasionally come across a term or description unfamiliar to me. So I look it up. And then the definition or article has something else that sounds important, so I look that up. -
Wozniak defends his support of drilling bill
State Sen. John Wozniak, D-Westmont, one of only seven Democrats to support the Marcellus Shale legislation adopted this week, said the bill protects the environment and provides help to local communities impacted by the natural gas drilling.
-
Businessman hoping to unseat Wozniak
Tim Houser uses two words – “challenging opportunity” – to describe his goal in this year’s elections.
-
Judge tosses evidence in robbery
A Cambria County prosecutor said he’ll have to drop robbery charges against a Twin Rocks woman after much of his evidence was suppressed by a judge.
-
Shooting defendant pleads to attempted murder
A Philadelphia man pleaded guilty Thursday in county court to attempted murder and theft in a Nov. 18 home invasion in which the homeowner was shot.
-
Garrett man sought in Somerset crime
An arrest warrant has been issued for Samuel McFarland Jr., 33, of Berlin Street in Garrett in connection with Saturday’s robbery of two boys outside Dollar General on East Main Street in Somerset.
-
City man shot during alleged burglary
A Johnstown man was shot during a burglary attempt in Indiana County and then burglarized a home in Armstrong County before he was arrested, authorities said Thursday.
- More Local News Headlines
-
Denver's Largest-Ever Drug Bust Nets Dozens
Marines: No Punishment for Nazi-like Flag
Vets Look to Translate Military Skills Into Jobs
Expert: Removing LA School's Staff 'Appropriate'
Raw Video: School Bus Burst Into Flames
LA School Reopens Amid Sex Abuse Scandal
$25B Settlement Reached Over Foreclosure Abuses
Pentagon: Allow Women Closer to Front Lines
Obama Gives Education Waivers to 10 States
Giffords Aide to Run for Her Seat
LA School in Sex Abuse Scandal Reopens
Winter Slamming North Asia, Parts of Europe
Syrian Forces Renew Bombardment of Homs
States, Banks Reach Foreclosure-abuse Settlement
Raw Video: Italy's Mount Etna Bursts Into Life
Greeks March; Angry Despite Debt Deal
Raw Video: U.S. Pullout Celebration
Raw Video: Annual Empire State Building Run-Up
Man Killed in Courthouse Shootout
Air Force Airlines: Leaders Get Polished Service
