Real estate agent Eric Elegado, 47, and his wife Charmagne, 47, – a former account executive at New Century Mortgage – were sentenced to 41 months each in prison for the scheme that ended in more than $10 million in bank losses, according to U.S. Attorney Laura Duffy.
Prosecutors said that starting in 2005 and continuing until early 2007, the Elegados worked with seven co-conspirators to secure $50 million in home loans for unqualified buyers by falsifying their job and salary information on loan applications.
Getting the loans primarily through New Century Mortgage, the Elegados said their co-conspirators were paid about $500 for allowing their companies to be fraudulently listed on a buyer’s loan application.
They also created false documents like W-2s, pay stubs and bank statements to submit to mortgage lenders like Charmagne.
The Elegados were getting at least $40,000 a month in commissions, while they got loans that exceeded the sales prices and profited from the extras.
With that illegal cash, they bankrolled a lavish lifestyle, Duffy said, including expensive houses, cars, watches and clothing – all the while living a double life as respected community leaders and philanthropists.
Their crumbling scheme led to scores of foreclosures during the U.S. financial meltdown in the mid-2000s.
Duffy called this kind of mortgage fraud a long-lasting, devastating crime to the San Diego real estate market, which have ramifications across the nation’s economy.
The Elegados will return to court on May 27 for a restitution hearing, at which time the couple will surrender to the Bureau of Prisons. The government is expected to seek more than $10 million in restitution from them.
Their co-conspirators -- Theodore Cohen, Minh Nguyen, Regidor Pacal, Alexander V. Garcia, Roman Macabulos, Ramin Lotfi and Roderick Huerto – have all admitted in plea agreements that the Elegados orchestrated the fraud, and they’ve pleading guilty to their roles in it.
Cohen, Pacal, Macabulos and Huerto will be sentenced Friday, Garcia and Lotfi will be sentenced April 10, and Nguyen will be sentenced Aug. 11.