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Fallbrook property impacted by $1.5 million foreclosure fraud scheme operated by brothers - Suspects fraudulently obtained Alta Vista home title

A foreclosure fraud scheme that impacted individuals across California and parts of Nevada also had an impact on a property located in Fallbrook.

Brothers John and David Zepeda, aged 59 and 57 respectively, were arrested at a San Bernardino home on Sept. 2 and charged with a $1.5 million foreclosure fraud scheme in which they allegedly stole the identity of several notaries and forged hundreds of deeds across several California counties, including San Diego, on Sept. 8.

The brothers were each charged with 106 felony counts, including identity theft, forgery, grand theft and rent skimming. They both face up to 72 years in prison if convicted, according to prosecutors.

According to recent news reports, more than 300 victims from San Diego, Santa Barbara, San Bernardino, Orange, Ventura, Riverside and Los Angeles counties, as well as Clark County in Nevada were involved in the scheme, including two individuals who were involved with a home on the 2700 block of Alta Vista Drive in Fallbrook.

In San Diego, more than 40 alleged victims have been identified, with losses totaling approximately $100,000, said San Diego County District Attorney Bonnie Dumanis.

In the fraud scheme that dates back to 2006, the defendants would hold seminars for people hoping to save their homes from foreclosure, according to prosecutor Deputy District Attorney Valerie Tanney.

Authorities said the Zepeda brothers identified properties in foreclosure and acquired title either by forging a Quit Claim deed, which transfers the property into a trust, or convincing homeowners to transfer the property to them by promising the homeowner they would help avoid foreclosure.

Once they had acquired the title, the Zepedas would rent out the property, and would forestall the foreclosure process and extend the period over which they collected rent by filing bankruptcy petitions.

This was what had occurred with the Alta Vista property earlier this year.

According to the official complaint filed with the court, the Zepeda brothers violated penal code section 530.5 (a) when they “did willfully and unlawfully obtain information of another person” in order to use the information to fraudulently obtain a title to the home on Alta Vista Drive on March 1, 2010. The duo then used another individual’s identifying information to “fraudulently obtain record title to the property” located on Alta Vista.

The Zepeda brothers are also charged “with the intent to defraud, falsely make, alter, forger and counterfeit, utter, publish, pass and attempt and offer to pass, as true and genuine a Quitclaim Deed” for the property, a violation of penal code 470(d).

Finally, around April 1, the Zepeda brothers “did knowingly and unlawfully procure and offer a false and forged document to be filed, registered and recorded in a public office in the State of California to wit: a Quitclaim Deed.”

Money was diverted away from the lenders and owners and into accounts, where the cash was used to support the defendants’ lavish lifestyle, including the purchase of exotic, high-end cars, prosecutors allege.

The defendants allegedly purchased gold coins, silver bullion and a Bentley automobile with the proceeds from the foreclosure fraud scheme.

The Zepeda brothers were arrested Sept. 2 at a home in San Bernardino.

During a search of the residence, investigators seized $335,000 in un-cashed checks; a gold Geneva watch; a gold Rolex watch; diamond bracelets and rings; $33,000 in cash; more than $8,000 silver coins; gold troy ounces; boxes of rolled half-dollar coins; and a Bentley.

“The scope of this particular real estate fraud and the defendants’ purchases from their ill-gotten gains are extraordinary,” said Dumanis in a press conference. “But unfortunately, this is yet another example of the various types of foreclosure scams we continue to see in the county.”

Notary stamps, forged deeds and weapons were also found during the search of the home and an office building, Tanney said at John Zepeda’s arraignment.

The District Attorney’s Office sought and received a court order to seize and freeze all of the assets as a source of restitution for the victims, investigators said.

John Zepeda pleaded not guilty at his arraignment before Judge David Szumowski, who set bail at $5 million. David Zepeda is hospitalized in San Bernardino, and will be arraigned at a later date.

According to Tanney, there are additional victims of the brothers’ alleged foreclosure fraud in San Diego. Anyone who thinks they may have been victimized should call the San Diego County District Attorney’s Office.

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