7 On Your Side: Sonoma County DA says mortgage fraud case out of jurisdiction

SONOMA COUNTY, Calif. (KGO) -- Scores of homeowners have been waiting 18 months for a decision from the Sonoma County District Attorney's office. Despite the lengthy investigation, prosecutors concluded the case was not in their jurisdiction and that decision has some of the alleged victims miffed.

Sonoma County District Attorney Jill Ravitch is embroiled in a controversy over her office's decision not to prosecute what some are calling the largest mortgage fraud case in Sonoma County history.

Bob Gilles, a Tiburon resident, called this decision prosecutorial misconduct.

That's just one of the many sentiments expressed by a handful of the people who were taken by Miguel Angel Lopez-Soleta and his wife Heidi.

Lopez ran a company known as Mortgage Modifiers in Petaluma.

In April 2013, Petaluma police told ABC7 News Lopez was breaking the law.

"He is asking for an advanced fee to do either some type of mortgage modification, or to seek information on doing modification and that is illegal in the state of California," said Petaluma police Lt. Tim Lyons.

ABC7 News did a report in 2013 and 10 days after the story aired investigators from the State Department of Justice raided the offices of Mortgage Modifiers.

They seized computers and records from both the office and Lopez' home. The evidence was turned over to the office of the Sonoma County District Attorney Jill Ravitch.

One and a half years later, the case has been sent back to the State Attorney General.

Bob Gilles said his mother is one of the victims.

"It's the biggest single mortgage fraud case in Sonoma County history," Gilles said. "It's egregious and Jill's trying to bury it."

Despite being given 72 hours notice, Ravitch did not make herself available for an interview.

Ravitch's spokesperson Christine Cook said over the phone, "We dedicated sufficient resources to this matter." She said State Attorney General Kamala Harris' office agreed Sonoma County did not have jurisdiction in this case even though Miguel Lopez and Heidi both live in Sonoma County, and Mortgage Modifiers office was in Sonoma County.

"The law doesn't want to stand up for what the law is supposed to stand up for," said Dan Steele, a Santa Rosa resident said.

Lopez' victims said they paid at least $1,995 each to Lopez for help getting a mortgage modification and got nothing in return.

Lopez has denied being a mortgage modification service. He says clients pay him money in exchange for an education package, he wrote in an email to ABC7 News last year. Clients paid for the package and nothing more, he said.

His attorney Paul Jamond said Tuesday he didn't think Lopez did anything criminal. "He is completely broken, destitute," Jamond said.

Some clients of Mortgage Modifiers have already lost their homes, or could lose their homes.

"My husband's lost his job since this and I don't even know if I'll be able to keep my house," said Santa Rosa resident Beverly James Nowlin.

The State Attorney General's office could not be reached for comment. Meanwhile, the U.S. trustee on Friday will ask for an extension of time to challenge Lopez' bankruptcy filing.