Southern California breaking news and trends

9 arrested in mortgage loan scheme to defraud banks out of $2.3 million


Jesus Vega Jr.

This time it was the borrowers ripping off the banks.

Sheriff’s officials announced today they have arrested nine people, most of them Los Angeles County residents, on charges stemming from an alleged mortgage loan scheme that defrauded two banks -- CitiMortgage and MetLife -- out of a total of $2.3 million.

According to the L.A. County Sheriff’s Office, Gerard Bueno, 35, of La Habra Heights and Jesus Vega Jr., 28, of Hacienda Heights used front companies to buy six residential properties in the county. “They then obtained loans against the properties in the names of straw buyers, two of which were identity theft victims, and in effect ‘sold’ the properties to themselves at inflated prices that they themselves set,” authorities said.

The alleged fraud occurred between October 2007 and June 2009. All six of the properties later went into default, authorities said.