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OC real estate broker guilty in $17.5M fraud

ABC7 Eyewitness News HD covering Los Angeles and Southern California.

May 19, 2010 12:00:00 AM PDT
A 49-year-old Orange County real estate broker was convicted Tuesday of conspiring with her boyfriend and his brother to commit $17.5 million in real estate fraud by purchasing 35 properties using stolen identities and intentionally defaulting on loans in order to steal the loan money.Kathy Chen of Westminster was found guilty of 136 felony counts including one count of conspiracy, 47 counts of grand theft, one count of attempted grand theft, 37 counts of forgery, 27 counts of recording false documents, 15 counts of identity theft, one count of elder financial exploitation, four counts of forging an official seal and three counts of filing false tax returns.

Chen faces a sentence up to 111 years in state prison at her sentencing on July 9.

Chen's boyfriend, Richard Salgado Gonzalez, 60, and his brother, Daniel Gonzalez, 57, are both fugitives and are facing the same charges as Chen. Prosecutors say they may currently be living in Puerto Vallarta, Mexico.

Prosecutors say Chen worked as a real estate broker and owned several businesses including Chen Financial, Western Escrow, Nationwide Tax Services and SBC Financial. Prosecutors add that Chen conspired with her then-boyfriend, Richard Gonzalez, and his brother, Daniel, to commit over $17.5 million in fraud by using the identities of unsuspecting or unqualified victims to obtain mortgage loans for the purchase of multiple properties.

Investigators say Chen and her co-defendants recruited their victims in order to hide their own identities and that the victims often spoke little or no English, were unemployed or had limited incomes, and had no intention of ever residing in or repaying any loan on properties in their names.

Between Jan. 13, 2005, and July 10, 2007, prosecutors say the defendants obtained 47 fraudulent loans from 13 lenders on 35 properties in excess of $17.5 million through the use of the fraudulently obtained identities. These properties included 13 in Orange County, 16 in San Bernardino County, and six in Kern County.

The defendants are being prosecuted in Orange County for all 35 properties.


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