A 44-year-old man pleaded not guilty Friday in connection with a $15 million mortgage fraud scheme out of Orange County.
Jimmy Phan — arrested by Garden Grove police on Thursday– pleaded not guilty in the county’s jail courtroom in Santa Ana and was ordered to return to court Tuesday for a pretrial hearing in the West Justice Center in Westminster.
Co-defendants Vinh Phan, 44, and Stephen Nguyen, 56, have been charged, but have not yet been arrested.
Phan faces 38 counts of forged signatures, 19 falsely recorded deeds, 17 counts of mortgage fraud and single counts each of a forged notary, false loan application and grand theft by embezzlement, according to a petition to boost his bail.
Phan and the co-defendants are accused of acquiring property “and using them as collateral to borrow large amounts of money from lenders and private parties for short terms and high interest,” an Orange County District Attorney’s investigator said in the bail petition.
Some of the payments were made, but the lenders did not know the defendants “would record forged conveyances (an instrument to indicate that the loan was paid),” prosecutors alleged.
“Then they would take the advantage of the title being free from the first loan and obtain a second loan,” prosecutors alleged.
“The second lender would fund the loan with the belief the property was free and clear,” prosecutors alleged.
The second loans were sometimes used to finance acquisition of property with an “arms length buyer,” who was “in fact in collusion with the seller to inflate the value of the property or to give the appearance of legitimacy,” prosecutors alleged.
Prosecutors allege 12 victims were duped in 10 separate real estate transactions with total losses of about $15 million.
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