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Feds Arrest California Real Estate Agent Accused of Short-Sale Fraud

Federal authorities arrested a California real estate agent accused of helping a homeowner commit fraud in the short-sale of his home. 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.

In March 2010, Sanchez represented Agustin Simon, 52, in the sale of his home. The homeowner agreed to sell the home to a person that would assist in letting Simon stay in the home and/or rent it back after the short sale was complete. 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 and Simon knew that Simon was not selling the home to an unrelated party and that the transaction was an attempt to allow Simon to stay in the home as a renter or to allow the later repurchase of the home by Simon.

With Sanchez’s knowledge, Simon gave the new buyer funds to assist in the purchase of the home in the short sale. As a result of the alleged scheme, the 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.