Man Sentenced in Murrieta-Based Mortgage Fraud

A Murrieta-based mortgage lender who defrauded more than 20 financially distressed Inland Empire homeowners by persuading them to sign over their properties and then pocketing all the proceeds from refinancing—on which he never paid taxes—was sentenced Monday to 12 years in federal prison.

Gregory Flores pleaded guilty in February to wire fraud, conspiracy and tax evasion in connection with a scam he ran between May 2003 and June 2006 while at the helm of All Fund Mortgage, also known as "Advantage 2000," "Crown and Associates," "Ichthommol Trust," "B Owned" and "Right Way Inc."

Along with imposing the prison term, U.S. District Judge Virginia Phillips ordered Flores to pay more than $1 million in victim restitution.

According to the U.S. Attorney's Office, Flores and several co- conspirators targeted homeowners on the verge of foreclosure by advertising assistance via the mail and making impromptu house calls.

The defendants would persuade victims that they could refinance their unaffordable loans by agreeing to add "investors" with top-tier credit ratings to their property deeds, prosecutors said.

Twenty-one people were persuaded to participate, unwittingly signing over their properties to "straw buyers," who received between $1,000 and $25,000 for their involvement, according to court papers.

All Fund Mortgage, which had offices in Murrieta, Anaheim Hills and Tacoma, Wash., according to the FBI, took control of the homes, using the available equity to obtain generous lines of credit and refinancing at lower rates.

However, the company did not share any proceeds with the victims, who ended up back where they started, eventually losing the properties in foreclosure proceedings, according to the U.S. Attorney's Office.

Flores pocketed $340,000 and attempted to conceal it in a shell company, never paying the roughly $98,000 owed in income taxes, prosecutors said.