Benvin was indicted by the federal grand jury on Wednesday, August 10, 2011, and charged with two counts of wire fraud, 39 counts of mail fraud, five counts of aggravated identity theft, one count of money laundering, one count of embezzlement and theft from an employee benefit plan, and two counts of making false statements and concealment of facts in employee benefit plan records. Benvin was summoned to appear before a federal magistrate judge in Reno on Thursday, September 1, 2011, at 3:00 p.m., for an arraignment and plea hearing.
The indictment alleges that from approximately 1996 to 2008, Benvin lived and worked as a mortgage broker in Reno, and was the President and operator of Cetus Mortgage, Ltd. (Cetus). Cetus was in the business of providing and servicing loans made by private investors to borrowers, primarily for residential construction and development projects. Cetus promised investors that their monies would be secured by first deeds of trust. Cetus loans paid monthly interest payments to investors, and Cetus typically received a three percent origination fee on the total loan amount. The loans were typically interest-only for a 12-month period, and were funded by one or more investors.
The indictment further alleges that Benvin failed to invest the loan monies she received from investors in the manner promised, and made false and misleading statements to the investors about the financial condition of the loans and the borrowers, and the purpose of the loans. Benvin also allegedly provided false documents and information to investors, and forged signatures of investors, borrowers, and Cetus employees. Benvin personally benefitted from the fraud through loan origination fees and commissions, and the misappropriation of investor funds for herself.
By about 2006, many of the loans Cetus/Benvin made were in default, but Benvin failed to disclose that information to investors and continued to solicit more funds through new loans or refinances, thereby increasing the loss to investors. By June 2008, Cetus had received over $35 million from over 150 investors and made more than 70 loans. By July 2008, Cetus had closed its business and filed for bankruptcy.
If convicted, Benvin faces up to 20 years in prison for each wire fraud, mail fraud, and money laundering count, up to five years on the embezzlement and false statements counts, and a two-year consecutive sentence for the identity theft counts. Benvin also faces fines of $250,000 to $500,000.
Daniel G. Bogden, United States Attorney for the District of Nevada, announced the indictment.
The case is being investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Labor Employee Benefits Security Administration, and is being prosecuted by Assistant U.S. Attorney Brian L. Sullivan.An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.