SJC Sports Rink Manager Sentence to 3 Years in Prison for Fraud

The former manager of SJC Sports Rink in San Juan Capistrano was sentenced to 37 months in federal prison Monday.

Michael Schwartz pleaded guilty to two counts of fraud, taking $1.8 from investors and lenders in connection with his mortgage company, Service First. In addition to his 3-year prison sentence, Judge David O. Carter ordered Schwartze to pay 1.8 million in restitution to his victims.

Schwartz is best known in San Juan Capistrano for his role as manager of the SJC Sports Rink, where he turned a dilapidated building leased from the city into an indoor rink and home to the local roller hockey team, the SJC Nightmare. He made headlines for his efforts to turn the facility into a thriving sports arena that would house indoor hockey and lacrosse teams.

Schwartz was granted a license to rebuild the dilapidated facility and run it with teams and events; it quickly became home to a local roller hockey team, the SJC Nightmare.

“We’re working on getting soccer teams to play here. Lacrosse programs also run here,” said Schwartz at the time.

“We will be the only rink that is an official National Hockey League roller hockey rink size.”

But this summer, the city gave him 30 days to vacate the premises following his guilty plea.

At the time, Schwartz begged the city to put off the eviction. “I can only say how sorry I am for the mistakes I’ve made in the mortgage industry,” he told the council.

“My apologizes for putting everyone in this position,” Schwartz added.

According to court papers, Schwartz took money from investors -- ostensibly to make hard loans and secure them with real property -- instead he used the money to pay off other investors and for personal expenses, such as rents, dining and shopping.

Court documents state that Schwartz had one victim transfer $80,000 from her bank account; then he had the woman’s financial institution, Bank of America, run the transfer through the Federal Reserve Bank to quickly clear the funds.

He also convinced at-risk property owners -- including friends and family members -- to put their homes in the names of so-called ”straw buyers,” telling them to pay rents to the buyers but neglecting to tell the banks that his buyers were in name only.

He secured loans for these buyers, while having the homeowners also pay the buyers rent, court papers state.

The rent was supposed to go to the banks for mortgage payments, documents state.

Photo Credit: Jackie Connor

Patch staffer Mirna Alfonso contributed to this report.