Federal authorities on Wednesday arrested a Bay Area real estate agent accused of helping a Gustine man commit fraud in the short-sale of his Patterson home four years ago, costing banks more than $350,000.
Minerva Sanchez, 47, was arrested at her Fremont home, according to the U.S. attorney’s office in Sacramento. She was later arraigned in San Jose federal court, where she pleaded not guilty to conspiring to commit bank fraud.
A federal grand jury in Fresno indicted Sanchez on Dec. 19. The court unsealed the indictment Wednesday.
In March 2010, Sanchez represented Agustin Simon, 52, in the sale of his Patterson home. Sanchez recommended that he undertake a short sale of his home using her son as a straw buyer, federal prosecutors said.
Simon submitted fraudulent short-sale applications to Tri Counties Bank and Freddie Mac that caused them to approve the funds for the short sale of his home, according to court documents.
The prosecutors said Sanchez and Simon falsely claimed that the transaction was “arm’s length,” and that they made false statements about Simon’s assets and ownership of other real estate. Sanchez wrote a “hardship letter” for Simon to include with the short-sale application that misrepresented his inability to make his monthly mortgage payments.
Sanchez and Simon made other false statements to conceal their agreement that Simon would provide Sanchez’s son with the money for the short sale, prosecutors said, and that ultimately Simon would regain ownership of his home.
With Sanchez’s knowledge, Simon gave Sanchez’s son $355,000 to buy the home, according to the allegations. The prosecutors said Sanchez also received 75 percent of the commission paid to her son’s real estate agent.
As a result of the alleged scheme, Tri Counties Bank suffered a loss of $247,000 and Freddie Mac lost $107,348.
If convicted, Sanchez faces a maximum sentence of 30 years in federal prison and a $1 million fine.
On June 10, Simon pleaded guilty to conspiring to commit bank fraud in connection with the alleged short-sale scheme. He is scheduled to be sentenced Oct. 6.