San Fernando Valley Residents Arrested In Real Estate Scheme

LOS ANGELES (CNS) - Four San Fernando Valley residents -- one of whom was previously indicted for allegedly posing as a real estate investor and attorney -- were arrested Friday on federal charges stemming from a $17 million scheme that defrauded distressed homeowners, many of whom were elderly, the U.S. Attorney's Office announced.

Michael "Mickey" Henschel, 68, of Van Nuys, Camerino "Mino" Islas, 40, of North Hollywood, Claudia "Jessica" Islas, 42, of Reseda, and Juan Carlos Velasquez, 43, of Sylmar, are each charged with one count of conspiracy and eight counts of mail fraud.

Henschel, who was previously indicted in a bankruptcy fraud scheme and who allegedly continued to defraud homeowners while free on bond, is additionally charged with eight counts of bankruptcy fraud.

A fifth defendant, Eugene "Gene" Fulmer, 83, of Encino, was also named in the updated indictment returned Thursday by a federal grand jury in Los Angeles. He is currently a fugitive.

Those in custody were expected to be arraigned in downtown Los Angeles on Friday afternoon.

Henschel and his co-defendants allegedly tricked homeowners into signing fraudulent deeds on their properties, then used the bogus deeds to extort money from homeowners, charge illegal fees to delay foreclosure and eviction actions, and steal some homes outright, federal prosecutors allege.

The revised indictment adds charges based on the alleged fraudulent deeds and accuses Henschel and the others of collecting more than $17 million from the scheme.

Henschel and his co-conspirators allegedly identified distressed homeowners who were in default on mortgages or were experiencing financial troubles, even though some had large amounts of equity in their properties.

Prosecutors in Los Angeles allege that those homeowners were told that Henschel was a sophisticated investor and attorney interested in purchasing their properties, or, if they wanted to keep their homes, he could help protect the homes from creditors.

Henschel and his co-defendants convinced homeowners to sign fraudulent documents that were recorded on titles to their homes, including trust deeds that recorded secured interests in their homes based on fictional loans that the homeowners supposedly guaranteed, and grant deeds that supposedly conveyed properties to entities that Henschel controlled, the indictment alleges.

The defendants allegedly used the fraudulent filings to steal some properties outright. In other cases, they exploited the fraudulent filings in a number of ways, including by initiating foreclosure proceedings on the properties, demanding money from homeowners before properties sold, and making extortionate settlement demands based on the filings, according to the indictment.

They also allegedly used phony filings to charge homeowners fees to delay foreclosure and eviction actions.
If convicted, the defendants each would face up to five years in federal prison on the conspiracy count and 30 years for each of the mail fraud counts. Henschel would also face five years in prison for each of the eight bankruptcy fraud counts if convicted.

Two others -- Shara Surabi, 34, of Burbank, and Lidia Alvarez, 54, of Bell Gardens -- previously pleaded guilty to federal charges related to the scheme and are awaiting sentencing, according to the U.S. Attorney's Office.

--City News Service/Photo via Shutterstock