State makes arrests in what it says is mortgage rescue scam

SACRAMENTO
January 28, 2013 10:06am

Three people are being charged in what the state of California is calling a mortgage fraud scheme targeting struggling Northern California homeowners.

Six websites allegedly used by the suspects to advertise their scheme have been intercepted and redirected to a resource page on the California Attorney General’s website.

The felony complaint alleges that Ronald Vernon Cupp, 58, of Santa Rosa, deceived homeowners by falsely advertising a way to “kill” their mortgage debt on six websites.

The state says Mr. Cupp was assisted by Randall Gilbert Heyden, 69, of San Rafael, and Angelle Wertz, 38, of Santa Rosa, a public notary who allegedly certified phony legal documents. Mr. Cupp allegedly recorded fraudulent documents, which would only delay a foreclosure, not actually satisfy the preexisting mortgage debt.

“Vulnerable California homeowners thought they were working to save their homes but were actually the victims of a fraudulent scheme,” says Attorney General Kamala Harris. "Today, it's not enough to dismantle the brick-and-mortar aspect of a criminal operation; we need to shut down criminal operations in cyberspace as well."

The three are charged in a 57-count complaint alleging theft, forgery, notary fraud and recording of false documents.

Here is what the state is alleging: Through Mr. Cupp’s business, North Bay Trust Services, homeowners would often allegedly pay upfront fees of between $1,000 and $10,000 and sign a promissory note or new mortgage for a phony offer to eliminate their mortgage debt. Requiring up-front fees is illegal in California.

The suspects would then allegedly record fraudulent documentation purporting to be the attorney for the homeowner’s actual lender and then relinquish the mortgage and record a new deed of trust in favor of North Bay Trust Services. The debt to the original lender was never actually satisfied, Ms. Harris says.