FOR IMMEDIATE RELEASE	CONTACT: Lauren Horwood
September 29, 2011	PHONE: (916) 554-2706
www.usdoj.gov/usao/cae	usacae.edcapress@usdoj.gov
Docket #: 2:11-cr-172-MCE

            SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that Royce Lee Newcomb, 49, of Roseville, was sentenced today by United States District Judge Morrison C. England Jr., to five years and 10 months in prison, to be followed by three years of supervised release for a real estate fraud scheme. The amount of restitution will be determined at a future hearing. Newcomb pleaded guilty to the charges on May 12, 2011.

            According to court documents, from January 1, 2009 until February 19, 2010, Newcomb solicited 22 investors to purchase real estate, 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.

            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.

            This case is the product of an investigation by the United States Secret Service, Placer County Sheriff’s Department, and the United States Trustee’s Office for the Eastern District of California.  Assistant United States Attorneys Todd Pickles and Matthew Segal prosecuted the case.

 

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