FROM:
Stephen Gibbons, Assistant District Attorney   CONTACT PERSON:
Dale B. Lohman, Deputy District Attorney
Major Fraud Unit
(408) 792-2599 
 
For release on August 1, 2007   MORTGAGE BROKER PLEADS NO CONTEST IN MULTI-MILLION DOLLAR REAL ESTATE LOAN SCAM
Michael Schneider, 44, of Hillsborough, California, plead no contest Tuesday afternoon to all 173 felony counts in a criminal complaint that had been filed jointly by the Santa Clara County and Santa Cruz County District Attorney’s Offices.  The case, which was investigated by the Santa Clara Police Department’s financial crimes unit and the Santa Cruz County District Attorney’s Office, included charges of residential burglary, elder financial abuse, embezzlement, grand theft and forgery.  The victims’ loss in the case exceeds $43 million.    Schneider, who operated California Plan, a business based in Santa Clara, California took money from elderly investors who relied on his representations that the money invested would be used to fund residential loans secured by first and second deeds of trust on real property in the Bay Area.  The victims later learned that deeds of trust had not been recorded as promised and that their security interests in the properties did not exist.  In several cases, Schneider sold multiple deeds of trust for the same loan.  Several victims lost their life savings to the fraudulent scheme.  The scam was discovered when victims failed to receive interest payments as scheduled.   Sentencing is set for November 8, 2007.  Schneider could face 169 years in state prison.   ###

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