FOR IMMEDIATE RELEASE	CONTACT: Lauren Horwood
May 12, 2011	PHONE: (916) 554-2706
www.usdoj.gov/usao/cae	usacae.edcapress@usdoj.gov
Docket #: 2:11-cr-172-MCE

                SACRAMENTO, CA – United States Attorney Benjamin B. Wagner announced today that Royce Lee Newcomb, 49, of Roseville, pleaded guilty today to one count of wire fraud.

                This case is the product of an extensive investigation by the United States Secret Service and the Placer County Sheriff’s Office. Assistant United States Attorneys Matthew D. Segal and Todd Pickles are prosecuting the case.

                According to the plea agreement, from January 1, 2009 until February 19, 2010, Newcomb solicited 22 investors to purchase real property, primarily foreclosed homes. He instructed them to send their money to Contour Escrow Services that was operated by co-schemer Barry Winnett, who had no license to perform escrow services. In total, investors transferred $2,975,352 into Contour Escrow Services, thinking that Newcomb was using it to invest in real estate and that Newcomb’s co-schemer Winnett was a legitimate escrow officer.

                In his plea agreement, Newcomb admitted that at his direction or with his knowledge, Winnett disbursed at least $564,241 to Newcomb, $160,458 to himself, and the remainder to earlier investors. Newcomb falsely represented to victims that these disbursements were returns on investment when, in fact, Newcomb knew they were derived from monies transferred to Contour Escrow Services from later victims. At Newcomb’s direction, Winnett also created false documents to assure victims that more than a million dollars was held by Contour Escrow Services, when, in fact, Contour Escrow Services had virtually no money at all.

                Newcomb also violated Title 11 of the United States Code with respect to filing of bankruptcy cases. Newcomb marketed himself as offering foreclosure "rescue" services through Paradigm Foreclosure Specialists, which Newcomb registered by using his middle name as his surname. Newcomb solicited individuals to pay him between $1300 and $3800 to avoid or delay the foreclosure process by filing serial bankruptcy petitions without supporting documentation. In one case, Newcomb accepted a woman's wedding ring, valued at $5000, in lieu of payment. Newcomb, through associates and friends, filed the bankruptcy petitions on behalf of individuals, on occasion without the knowledge of the individual. Newcomb had previously been sanctioned by the United States Trustee for similar abuse of the bankruptcy process.  Thus, he was aware that the filings were insufficient and in violation of bankruptcy law.

                Winnett pleaded guilty on January 27, 2011 and is scheduled to be sentenced by United States District Judge Morrison C. England, Jr. on June 9, 2011 at 10:00 a.m.

                Newcomb is scheduled to be sentenced by United States District Judge Morrison C. England, Jr. on July 28, 2011 at 9:00 a.m. He faces 20 years in prison and a fine of $250,000 or both. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. 

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