Two Roseville residents were arrested today in connection with a loan modification and foreclosure rescue scheme.
Martin Wayne Flanders, 48, and Ligia Sandoval Spafford, 46, were arrested on a federal complaint charging them with conspiracy to commit bankruptcy fraud for filing sham bankruptcy petitions as part of the scheme, according to a federal Department of Justice news release. The complaint was filed in Sacramento on Friday and unsealed today after the couple's arrest.
According to court documents, Flanders charged clients advance fees in exchange for a number of financial services, including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings and a program to sell homes to "investors" with a rent-to-own option.
Flanders and Sandoval allegedly marketed these services to economically distressed homeowners, focusing on those who were Spanish speakers. Sandoval promoted the services during a twice-weekly radio program aired by a Bay Area Spanish-language Christian radio station, Radio Luz. Flanders also advertised on a Spanish-language television station, Univision, and in Spanish-language magazines, according to court documents.
About 98 percent of Flanders and Sandoval's clients were of Hispanic descent, some of whom spoke little or no English, officials said.
The investigation to date has identified 25 to 30 individuals who paid for services that they did not receive, for a total loss of approximately $120,000. Some homeowners who were not able to obtain relief were foreclosed upon by their lenders, officials said.
The case resulted from an investigation by the federal Bureau of Investigation.