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Colorado Pair Indicted in Immigrant Loan Fraud
April 22, 2005
John Accola

A Cherry Hills Village real estate agent and a Denver loan counselor have been charged with running a mortgage fraud ring that duped illegal immigrants into buying homes they couldn't afford.

Arvin Weiss, 55, and Jesus Guevara, 52, were indicted late Wednesday by a federal grand jury in Denver on charges of mail and wire fraud and witness tampering.

The U.S. attorney's office said the pair, doing business as Fairfax Homes and a sister company called Reserve Capital Funds, lured first-time buyers in predominantly Hispanic neighborhoods to apply for mortgages using bogus credit histories, income statements and job information.

Weiss, a licensed agent, and Guevara could not be reached for comment Thursday. Both were issued a summons to appear in Denver federal court May 5.

The alleged scheme used a strategy that cheated lenders, the federal government and buyers alike. The indictment said Weiss would buy low-priced properties, make minor improvements and then resell at dramatically higher prices to "unsophisticated low-income buyers."

Mortgages were insured by the Federal Housing Administration, and to speed up the lending process, Weiss "frequently gave mortgage company employees 'under the table' payments," the indictment said.

The indictment doesn't say how many loans were fraudulently obtained or provide a loss estimate from defaulting borrowers, some of whose homes presumably went into foreclosure. But it lists 18 Denver properties that Weiss and Guevara were linked to over a four- year period that ended in February 2002.

"I can't go beyond what is in the indictment," said Dick Weatherbee, spokesman for the U.S. attorney in Denver.

The FHA has reported similar schemes targeting immigrant home buyers who know little or no English and have turned to so-called "cultural brokers" - real estate specialists who provide guidance in Spanish of an unfamiliar, often bewildering home-buying process.

In this case, the indictment charges the defendants operated essentially a one-stop shopping service that showed properties, secured loans and arranged closings - all at a significant markup and using false information on loan forms.

Guevara, who is bilingual, assisted the buyers through the loan process and paperwork, the indictment said.

The defendants also would provide the down payments for many borrowers but conceal their participation from the mortgage companies and the U.S. Department of Housing and Urban Development, the indictment said.

To be eligible for an FHA-insured loan, HUD requires borrowers to be U.S. citizens or legal permanent residents and to make down payments with their own funds.