Real Estate Broker Faces $17Million ID Theft Conspiracy Charges

Posted By CotoBlogzz 03-30-2010 11:30 AM

WESTMINSTER, CA - Kathy Chen  faces trial today for 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. 

Chen, 49, Westminster, is charged with 157 felony counts including one count of conspiracy, 47 counts of grand theft, one count of attempted grand theft, 40 counts of forgery, 30 counts of recording false documents, 30 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.  She faces sentencing enhancements for causing loss in excess of $2.5 million and $100,000. If convicted, she faces a sentence ranging from two years up to 109 years in state prison. Opening statements are expected to begin today.

Chen's boyfriend, Richard Salgado Gonzalez, 60, and his brother, Daniel Gonzalez, 57, face the same charges and sentence as Chen. Fugitives Richard and Daniel Gonzalez have outstanding arrest warrants. Both may currently be living in Puerto Vallarta, Mexico.

Chen worked as a real estate broker and owned several businesses including Chen Financial, Western Escrow, Nationwide Tax Services and SBC Financial. She is accused of conspiring with her then-boyfriend, Richard Gonzalez, and his brother, Daniel Gonzalez, 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. Chen and her co-defendants are accused of recruiting these victims in order to hide their own identities. These 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, the defendants are accused of obtaining 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.

The defendants are accused of using the fraudulently obtained personal and credit information of some of the fake buyers, including a 92-year-old woman, on several occasions without their knowledge or consent. Chen, Richard Gonzalez, and Daniel Gonzalez are accused of acquiring city business licenses using the stolen identities for nonexistent businesses in order to obtain higher income loans. They are accused of fabricating loan applications to reflect higher incomes for the fake buyers, forging the fake buyers' names and signatures on various deeds and loan documents, and forging seals and notary stamps on a variety of notarized documents and deeds. They are accused of fraudulently filing these fabricated and forged documents with the Orange County Clerk-Recorder's Department.

Acting as the escrow company, the defendants are accused of making some monthly payments on the loans to prevent suspicion by the lender. They are accused of then defaulting on the loan and keeping the remaining loan money.

This case was investigated by the Orange County District Attorney's Office. Deputy District Attorney Bill Overtoom of the Major Fraud Unit is prosecuting this case.