A man who acquired distressed properties throughout the Inland Empire by tricking homeowners into believing that he could help them avoid foreclosure, only to keep their houses and rent them for profit, will have to pay a $5 million fine, the government announced today.
Terrill L. “Terry” Meisinger of Seal Beach was sued in 2011 by the U.S. Justice Department, which alleged he violated the federal Financial Institutions Reform, Recovery and Enforcement Act by committing mail and bank fraud to perpetrate a property investment scheme between 2000 and 2004.
At least 100 property owners were impacted by Meisinger’s actions, according to the U.S. Attorney’s Office.
As part of a civil settlement with prosecutors, the defendant agreed to fork over $5 million. Additionally, an order signed by U.S. District Court Judge Virginia Phillips in Riverside on Tuesday bars him from active participation in the home loan or real estate industries for 10 years.
Under the agreement, Meisinger did not admit any violation of federal law.
A civil complaint against him alleges numerous instances of fraud.
City News Service asked the U.S. Attorney’s Office for a statement as to why Meisinger was not criminally charged, but there was no immediate response.
According to the civil suit, Meisinger targeted property owners in default on their mortgages, convincing them to deed their houses to him to save their credit. The defendant allegedly promised to retire their mortgages by selling their properties, with $5,000 to $10,000 in sales proceeds given back to them for their trouble.
Instead, according to the U.S. Attorney’s Office, Meisinger turned around and leased the properties — sometimes for as long as three years –retaining the rental payments for himself while declaring the houses as assets in bankruptcy petitions.
Over five years, about 300 false federal bankruptcy filings were submitted by the defendant, according to prosecutors.
The complaint alleges that Meisinger used the names of other people whose identities had been stolen on the bankruptcy petitions, which led to the immediate stoppage of any foreclosure proceedings.
No mortgage payments were ever made.
“When lenders were finally able to secure dismissal of these fraudulent bankruptcy petitions and complete foreclosure, the renters lost their deposits and rent payments and, in some cases, were evicted and left homeless,” according to a U.S. Attorney’s Office statement.
In addition to homeowners and banks, the U.S. Department of Housing and Urban Development suffered financial losses stemming from the scam, prosecutors said.
“Our objective is to ensure that the public is not taken advantage of when they have fallen on hard financial times,” said HUD Office of Inspector General Agent James Todak. ”Distressed homeowners are particularly vulnerable to this type of fraud. An important message has been sent … to those who prey upon homeowners who are seeking financial assistance with their mortgage. This type of fraud not only affects individual families, it also affects the housing market.”