South El Monte man admits role in defrauding distressed homeowners

LOS ANGELES — A South El Monte man has agreed to plead guilty in connection to a scam that allegedly bilked about 200 distressed homeowners out of more than $2.5 million by falsely promising to eliminate their mortgage debt for a large fee, authorities announced Friday.
Ernesto Diaz, 57, agreed to admit a single count of mail fraud for his role in a scam operated by his company, Crown Point Education, which has offices in Montebello and El Monte, California Department of Justice spokesman Thom Mrozek said in a written statement.
Diaz solicited homeowners to pay fees of about $15,000 each to, promising he and his organization could force banks to forgive their mortgages, Mrozek said. He further promised clients their mortgages would be forgiven within six to eight months.
“Instead of working on behalf of the homeowners, the man simply sent worthless ‘Sovereign Citizen’ paperwork to lenders — paperwork that did nothing to affect the mortgage of a single homeowner,” according to the statement.
As part of his plea agreement, officials said, Diaz promised to cooperate in an investigation into Crown Point Education, Inc., which began operating in early 2009.
While pitching the fraudulent scheme to clients, which he admitted in his plea agreement had never been successful, “Diaz failed to tell distressed homeowners that earlier Crown Point clients — including Diaz’s own brother — has lost their houses to foreclosure and been evicted from their houses,” Mrozek said.
Additionally, authorities allege, Diaz and other Crown Point representatives filed bankruptcy documents on behalf of homeowners to delay foreclosure or eviction without their knowledge, often forging signatures in the process.
Diaz was scheduled to appear in federal court Sept. 13.
If convicted as charged, Diaz faces up to 20 years in federal prison.
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