Texas Man Gets 61 Months in Prison for Foreclosure-Rescue Scheme
By: Esther Cho
An Austin, Texas, man was sentenced Thursday to 61 months in prison for his role in a foreclosure-rescue scam that took place in Southern California and elsewhere, Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced Friday.
Frederic Alan Gladle, 53, was charged in the Western District of Texas and ordered to forfeit $84,010 and 63 prepaid debit cards he used for his scheme, in addition to this sentence. Gladle pleaded guilty on January 6, 2012, to one count of bankruptcy fraud and one count of aggravated identity theft and was originally charged on December 9, 2011.
Gladle admitted that from October 2007 until October 2011, he ran a foreclosure-rescue fraud scheme in which he netted more than $1.6 million in fees from distressed homeowners, according to a statement issued by SIGTARP.
Gladle engaged homeowners whose properties were in danger of foreclosure and falsely promised to delay the foreclosures up to six months in exchange for monthly fees approximating $750.
Gladle directed homeowners to sign deeds giving fractional interest in their properties to debtors in bankruptcy proceedings. Gladle found the debtors by searching bankruptcy records, with the debtors unaware their names and bankruptcy cases were being stolen and used by Gladle.
Gladle then sent the unknowing debtors’ bankruptcy petitions and the deeds that transferred fractional interest to the debtors to the homeowners’ lenders to stop foreclosure proceedings.
When in bankruptcy, debtors are protected from losing their property, so the receipt of the bankruptcy petitions and deeds in the debtors’ names prevented lenders from foreclosing on the properties.
The lenders, which included banks that received government funds under TARP, also could not move forward to collect money that was owed to them without permission from the bankruptcy courts.
When homeowners wanted to void the deeds to the unsuspecting debtors, Gladle would forge the debtors’ signatures on papers voiding the deeds.
Another defendant was charged in a similar foreclosure rescue scheme in California Glen Alan Ward. According to court documents, Ward, who also goes by Brandon Michaels, is alleged to have worked with and taught Gladle the scheme. Ward was arrested in Canada, where he is detained pending his extradition to the U.S
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