Realtor gets prison time

December 19th, 2007 at 03:55pm Alex Gary

A Rockford Realtor was sentenced to 20 months in prison Wednesday afternoon for his role in falsifying documents to help Hispanic families qualify for loans backed by the United States Federal Housing Authority.

Cesar Arenas was the fourth person sentenced in the five-person mortgage fraud ring that operated from 2001 through 2003 and the second to receive prison time. Rhonda Torossian, the loan officer in the scheme was sentenced Monday to 20 months in federal prison.

The Arenas sentencing took place just a few hours after the U.S. District Attorney’s office announced three more people were indicted for mortgage fraud in a separate scheme that ran from 2002 through 2004.

At Arenas’ sentencing, Assistant U.S. Attorney Scott Verseman argued the native of Colombia deserved prison time rather than probation, which two people in the ring received, as a deterrant because “the number of cases we’re prosecuting shows mortgage fraud is widespread in this community.”

Arenas’ attorney, Christopher Taylor, argued that Arenas should receive probation or, at the very least, less prison time than Torossian. Whitehead Inc. Realtors, the real estate company that holds Arenas’ license, even submitted a letter saying it would give Arenas a job other than selling real estate so that he could pay restitution.

“He didn’t do this to enrich himself. If you look at the amount he received in commissions, it was something like $17,000,” Taylor said. “That was less than 10 percent of what he made in those years. He genuinely felt he was doing this to help people. It just wasn’t very well thought out.”

Arenas pleaded guilty in September to recruiting two owners of a local business to sign false employment verification forms and bogus credit letters to make it appear his clients had income to make payments and a good credit history.

Instead of helping, though, of the 19 loans Arenas helped provide false documentation for, 14 of the families already have lost the houses through foreclosure and a 15th is in default. All of the loans were to Latin American custormers. Versemann estimated the U.S. Housing and Urban Development has lost more than $330,000 on the loans, including attorneys fees.

U.S. District Court Judge Phillip G. Reinhard said instead of helping, Arenas benefitted from the commissions he received and hurt the families involved and the neighborhoods where the houses were sold. He also said he considered Arenas as culpable as Torossian because he recruited business owners to take part in the scheme and all they received “was a felony conviction.

“I do give (Arenas) some benefit of the doubt that he was trying to help Latinos,” Reinhard said in the hearing. “In fact he was placing them in a position they couldn’t win.”

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