Three Plead Guilty to $29 Million Bank Fraud Scheme
DALLAS — Three defendants charged with offenses stemming from their roles in a six year bank fraud scheme that caused $29,000,000 in fraudulent funding of loans, credit lines, and/or credit cards, have pleaded guilty to their respective roles in the scheme, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
Yesterday, the lead defendant, Eddie Contreraz, 48, of Frisco, Texas, pleaded guilty before U.S. Magistrate Judge Renee Harris Toliver to one count of bank fraud. The maximum penalty for that offense is 30 years in federal prison, a $1 million fine and restitution. Sentencing is set for June 11, 2018.
Last week, co-defendants Stephanie Loraine Contreraz, 27, of Frisco, Texas, and Abraham Valdez, 53, of Frisco, Texas, each pleaded guilty to one count of conspiracy to commit bank fraud. The maximum penalty for that offense is 5 years in federal prison, a $250,000 fine and restitution.
All three defendants will remain on bond pending sentencing. Later this month, three additional defendants charged in the same case are also scheduled to plead guilty to one count of conspiracy to commit bank fraud. The seventh defendant, Kwanghee Anh, remains a fugitive with an outstanding arrest warrant.
According to the factual resume filed in the case, from January 2011 through March 2016, Contreraz was the owner and operator of Preferred Marketing Group, Inc. (PMG), also known as PMG Business Solutions. PMG assisted its clients with credit repair and obtaining funding from lenders in the form of loans, lines of credit, and credit cards. The majority of PMG’s clients were unable to obtain funding on their own due to insufficient income and/or employment; as well as the client’s inability to provide certain documents required by lenders.
Beginning in about 2011, according to the factual resume, Contreraz produced and used many fraudulent documents to obtain loan approvals. Contreraz created consistently high quality fraudulent documents that Contreraz knew banks and other lending institutions accepted as valid and genuine documents. Contreraz and his employees then electronically transmitted these fraudulent documents to lenders.
During the period from about January 2011 through March 2016, approximately 95 percent or more of PMG’s clients obtained funding while using false and fictitious documents. Contreraz normally met with the clients and reviewed the information in their loan applications. Some clients did not have jobs, some did not have the necessary documents that banks required in the loan applications, and some did not have high enough income levels to qualify for a loan. When a client had such issues that might prevent loan approval by the bank, Contreraz told these clients that their loan would not be approved unless the client/borrower was willing to submit false information to the bank. False information provided included, inflated false income figures; false representations that the loan applicant's position was the manager of a company; false and fraudulent corroborating pay stubs, W- 2 tax documents, and/or utility bills.
Contreraz caused PMG employees Stephanie Contreraz, Abraham Valdez, Bryce Armijo, and Elizabeth Flint to use false financial information when clients applied for loans and credit cards over the telephone and the internet. These four codefendants worked with clients to insure that the clients reported the agreed-upon false information. These defendants also escorted clients to obtain the maximum number of loan approvals in a short period of time on the same day. The employees would take clients to meet with specific lender representatives that Contreraz already had established a relationship with and who agreed to help PMG clients.
Contreraz admitted that he caused all six of his co-defendant employees to assist borrowers fraudulently obtain at least 2,300 loans, credit lines, and/or credit cards from at least ten FDIC insured banks and at least another 140 loans, credit lines, and/or credit cards from three non-FDIC insured consumer lenders. During this period, all seven defendants participated in this bank fraud scheme that resulted in the fraudulent funding of loans, credit lines, and/or credit cards in the total amount of at least $29,000,000.
The Federal Bureau of Investigation, Fort Worth Division is investigating this fraud. Assistant U.S. Attorney David Jarvis is prosecuting.
# # #