Watch Live: Officials From State, Defense Departments Testify in House Impeachment Probe

Van Nuys Man Pleads Guilty in $10M Scam That Stole Properties From Financially Distressed Homeowners

A "bank foreclosure sale" sign is posted in front of townhomes in Los Angeles on Aug. 12, 2010. (Credit: Kevork Djansezian / Getty Images)

A "bank foreclosure sale" sign is posted in front of townhomes in Los Angeles on Aug. 12, 2010. (Credit: Kevork Djansezian / Getty Images)

A Van Nuys con man was convicted Monday for his role in a multi-million dollar scheme that used fraudulent deeds to steal properties and initiate foreclosure proceedings from vulnerable homeowners, federal prosecutors said.

Michael “Mickey” Henschel, 70, pleaded guilty to mail fraud in the scam that raked in $17 million in profits by targeting financially distressed homeowners, many of whom were elderly people who wound up losing their residences, the U.S. Attorney’s Office for the Central District of California said in a news release.

The victims suffered around $10 million in losses by losing titles to their homes and equity they had built up over the course of years or generations, and sometimes directly paying Henschel and his co-conspirators illegal fees to delay foreclosure and eviction, officials said.

Mortgage lenders and the buyers of foreclosed properties also lost money due to the fraud.

All seven defendants in the case have now pleaded guilty, prosecutors said. They include:

• Camerino “Mino” Islas, 42, of North Hollywood
• Claudia “Jessica” Islas, 43, of Reseda
• Juan Carlos Velasquez, 44, of Sylmar
• Eugene “Gene” Fulmer, 84, of Encino
• Shara Surabi, 35, of Burbank
• Lidia Alvarez, 55, of Bell Gardens

Henschel allegedly worked under several aliases — including “Frank Winston,” “Steve Lopez” and “Ron Berman” — to con homeowners into signing fake deeds under the impression it would help protect their properties from creditors. Those involved in the scheme would then use the deeds to fraudulently file documents on the titles to the homeowners’ properties, authorities said.

The co-conspirators made money by outright stealing properties, obtaining mortgages on the properties and collecting rent from tenants renting them. They also demanded payments to clear up the title and settlement payments obtained through fraudulent state court civil actions, according to prosecutors.

Henschel is facing a maximum possible penalty of 20 years in federal prison at sentencing, scheduled for Aug. 12. He’s also agreed to forfeit money and property obtain through the scam, including more than $100,000 in cash seized from a bank account and residential properties in the San Fernando Valley, Glendale and Pasadena, officials said.

The other six defendants each face up to five years in prison. Camerino and Claudia Islas, Velasquez and Fulmer are expected to be sentenced on Aug. 26, while Surabi and Alvarez’s sentencing is expected later this year.

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.