Santa Clara DA busts foreclosure scam

September 4, 2009 6:52:17 PM PDT
A number of homeowners in the South Bay facing foreclosure were ripped off. According to the Santa Clara County district attorney's office, they say they busted a multi-million dollar foreclosure scam.

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People who know 39-year-old Rene Alvarez say he always dressed nice and drove a Mercedes. He promised to help his clients avoid foreclosure. Instead, investigators say his company called M and R Contemporary Solutions, Inc., in Campbell preyed on people who were desperate emotionally and financially.

People like Maria Aguilar who gave Alvarez $10,000 nearly three weeks ago.

Aguilar didn't know that upfront fee is illegal. The office is now closed, Alvarez is dressed much differently, and on Friday morning, prosecutors also arrested his business partner 34-year-old Mariano Ortega.

"Right now they are charged with 22 separate felonies accepting advanced fees, which is a felony, and theft by false pretense as well as a couple of conspiracy counts," said Mike Fitzsimmons, the deputy district attorney.

Those felonies stem from just 10 clients and the D.A.'s office thinks there could be as many as 1,000 victims out there, primarily from the Latino community.

None of the neighboring businesses wanted to go on camera, but several people told ABC7 this company was so busy they would hold group seminars and overflow parking was a constant problem.

Investigators say they were tipped off to the fraud by employees with a conscious, whistleblowers who didn't want to see people like Aguilar victimized any longer.

Alvarez 's family and friends stood up in court Friday afternoon, but they preferred not to make any statements.

M & R also ran a slick website that offered, among other things, a money back guarantee. Prosecutors have seized both company and personal bank accounts in an effort to make good on that promise.

"There is a significant amount of money in those accounts. Whether it's going to cover all the money lost by these victims, probably not," said Fitzsimmons.

The judge Friday ordered Alvarez held on $2 million bail. His business partner is scheduled to be in court next week.

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