A Long Beach, California man pleaded guilty last week to charges related to operating an illegal $3 million foreclosure rescue scam, according to the United States Department of Justice (USDOJ).

Karl Robinson, 52, pleaded guilty to one count of bankruptcy fraud for filing 200 fraudulent bankruptcy petitions from 2008 until 2013 for struggling homeowners who were facing foreclosure.

The USDOJ said that Robinson perpetuated the fraud his own name and other names, including “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation.”

The defendant’s companies obtained money illegally from homeowners seeking to avoid foreclosure with eviction-delay services. Robinsons filed bogus grant deeds with the county recorders office and other bogus paperwork in formal eviction proceedings to make it appear that fictional entities held interests in the homes.

He then fraudulently filed bankruptcy petitions in the names of the fictional people to trigger an “automatic stay” in the bankruptcy cases. The filing of a bankruptcy petition has the effect of suspending all creditor actions, including foreclosure proceedings commenced by mortgage lenders and eviction actions commenced by purchasers of foreclosed properties.

United States Attorney Eileen M. Decker had said, “This defendant filed scores of fraudulent bankruptcy actions – sometimes on multiple occasions in relation to a single property. He took advantage of distressed homeowners by stealing identities and lying to them about what he could do for their properties as long as they continued to pay his fees.”

“This defendant filed scores of fraudulent bankruptcy actions – sometimes on multiple occasions in relation to a single property. He took advantage of distressed homeowners by stealing identities and lying to them about what he could do for their properties as long as they continued to pay his fees,” said U.S. Attorney Eileen M. Decker.

“Mr. Robinson used his position as a pastor gain the trust of distressed homeowners, only to lure them with false hope while he worked the system to get rich,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners with the FHFA-OIG and the U.S Attorney’s Office will continue to combat schemes targeting vulnerable homeowners.”

Robinson is scheduled to be sentenced on November 28, and faces a maximum sentence of five years.

“Karl Robinson engaged in a complicated fraud scheme that preyed on others misfortune to line his own pockets,” stated FHFA-OIG’s Special Agent in Charge Leslie Demarco. “Today’s guilty plea is the first step toward taking responsibility for his criminal activity.”

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.