Mortgage Broker Sentenced to 28 Years in Prison After Multi-Million Dollar Loan Scam
NEWS RELEASE
FROM:
Amy Cornell, Public Information Officer
CONTACT PERSON:
Amy Cornell, Public Information Officer
(408) 792-2997
For release on February 1, 2008
MORTGAGE BROKER SENTENCED TO 28 YEARS IN PRISON AFTER MULTI-MILLION DOLLAR LOAN SCAM
45-year old Michael Schneider was sentenced to 28 years, 4 months in prison today. He was also ordered to pay restitution to his victims. Schneider was convicted of 173 felony counts filed jointly by the Santa Clara County and Santa Cruz County District Attorney’s Offices. He stole more than $43 million from investors, most of them elderly, in the mortgage scam. Schneider’s charges included residential burglary, elder financial abuse, embezzlement, grand theft and forgery.
Schneider was operating the Santa Clara County business California Plan when he took money from investors. He would tell the victims that the money they invested would be used to fund residential loans secured by first and second deeds of trust on Bay Area properties. Schneider did not record the deeds of trust, and he used forged documents to cover that fact. Schneider also sold the deeds of trust for individual properties to multiple investors.
The victims learned the investments had not been recorded, and their security interests in the properties therefore did not exist. The scam was revealed when victims did not receive their scheduled interest payments on their loans. Schneider was arrested in May, 2006.
Many of the victims lost their entire life savings due to the scam, and all of them had an opportunity to address the judge and Michael Schneider in court in January.
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