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Two Arrested in California for Foreclosure Scam Targeting Latinos

NationalMortgageProfessional.com
Jun 08, 2012

California Attorney General Kamala D. Harris has announced the arrest of two individuals in a $1.3 million Ponzi scheme that targeted Latino investors, many of whom were seniors. Edwin G. Salazar of Downey, Calif. and Michael Z. Zuniga of Fullerton, Calif. were arrested on 57 counts of elder abuse, grand theft and securities fraud. Salazar's bail was set at $100,000 and Zuniga's at $50,000. From January 2007 through June 2008, licensed insurance agents Salazar and Zuniga, doing business as OMEGA Investment Group of Downey, Calif. issued more than $1.3 million in fraudulent securities to individual investors they befriended through their insurance business. "The defendants defrauded investors with promises of guaranteed returns and even convinced some victims to re-finance their own homes in order to participate in the scheme," said AG Harris. "What victims thought was a resourceful real estate investment only brought them losses and heartbreak." The case is being investigated by Department of Justice Special Agent Debra Gard, along with the California Department of Insurance Los Angeles Investigation Division. "These agents conspired to rip-off trusting members of their own community," said Insurance Commissioner Dave Jones. "Preying on senior citizens for financial gain is deplorable and it will not go unpunished." The scheme targeted Latino investors, many of whom were seniors. Investors were promised that their investments were secure and "risk-free" because of the company's strong track record of buying and selling homes in foreclosure. Investors were guaranteed a return of 15 percent. In many cases, the defendants convinced investors to refinance their homes and take out money to invest in the foreclosed properties. OMEGA had actually not been buying and selling foreclosed properties with the money, was never a profitable company, could not secure any funds raised, and diverted funds to other investments and to the personal uses of Salazar and Zuniga. As OMEGA continued raising and diverting money, it began to operate like a classic Ponzi scheme, paying interest to previous investors from capital raised from new ones. Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute crimes related to mortgages, foreclosures, and real estate. This case is being prosecuted by California Deputy Attorney General Ed Skelly.
Published
Jun 08, 2012
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