Prosecutors hope to win restitution for the victims after filing real estate fraud charges against four suspects. This comes as at least 22 victims have filed a civil lawsuit seeking restitution.
These are much happier times for Ben and Molly Ostroff for several reasons. First the Novato couple is now current on their mortgage. Second, the man they accuse of stealing $10,000 from them with empty promises is facing 16 criminal counts of grand theft, real estate fraud and perjury.
"It finally felt like somebody with higher authority was able to hear us and to do something about it," said Ben.
William Hogarty entered a courtroom in Pleasanton on April 22 for a hearing on charges of attacking a former roommate. Our cameras were not allowed inside the courtroom. But a judge announced at the hearing a warrant for his arrest had been issued for real estate fraud and he was immediately taken into custody.
Hogarty is president and founder of OF Lending in Pleasanton. He lived a lavish lifestyle in a 13,000-square-foot mansion in Livermore.
It was the scene of several Playboy-style parties over the years. A promotional video posted on YouTube intended to advertise those parties. Those parties included the "Naughty Lingerie Pajama Mansion Party."
Hogarty voluntarily surrendered his real estate license and shut down OF Lending after the Department of Real Estate found Hogarty and his company violated California's ban on advanced fees. Hogarty also filed for bankruptcy, but federal authorities challenged it and the court refused to relieve him of his debts.
John Richards is an attorney for the Ostroffs. He says it was information obtained by federal attorneys during the bankruptcy hearing that enabled the county to press charges.
"So once they gathered enough facts to really know that a viable case was there, that basically made the job easier for the county prosecutors," said Richards.
The criminal charges come three years after Alameda County received its first complaint about OF Lending. The wait was a long one for many of the alleged victims.
"It was very frustrating. I'm pretty much a nobody, so it was someone like me hoping that someone would listen higher up on the food chain," said Ostroff.
Michael Cardoza is the attorney for Hogarty. He told us, "He's willing to pay, from my understanding, that money back to these people, even though within the four corners of that contract he may not be liable for that."
Despite that offer, Cardoza maintains everything Hogarty did was legal and according to the letter of the contract. He says Hogarty has no control over promises his sales people might have made.
"So what they complain about is again outside the four corners of the contract and it might will be some salesman just puffing, 'Well, we can do a real good job. We can probably get this for you,'" said Cardoza.
A former employee OF Lending agreed to talk to 7 On Your Side if we did not reveal her identity. She said, "I feel that he stole from people. He led me to believe that 70 to 80 percent of the time that if I signed people up, that 70 percent to 80 percent of the time, my customers receive a principle reduction."
Prosecutors maintain the success rate was closer to three percent.
The former employee also told us, "So I've later learned they took in files and accepted payments from people who never qualified for the program at all."
Cardoza accuses former employees of going on a witch hunt against his client. Three other defendants face similar charges, but fewer counts in this case.
The attorney for former OF Lending employee Greg Lomba told 7 On Your Side he just got the case and declined to comment.
James Torpey's is another former employee. His attorney Michael Herman said his client "denies making any promises to any victims that were not true. He was only paid if the short pay was successful."
Attempts to reach a third suspect and former employee James Rivera's attorney were unsuccessful. The alleged victims look forward to when the case is finally over.
"That people like me and the others victims will finally get justice and we can be just done with this whole mess," said Ben.
The next court hearing for the defendant is set for June 26.