Van Nuys Man Sentenced to 20 Years in $17M Scam That Conned Elderly Out of Their Homes, Money

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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)

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A Van Nuys man was sentenced Monday to 20 years in federal prison for a long-running scheme in which he used fake deeds to con elderly and vulnerable people out of their homes, prosecutors said.

Michael “Mickey” Henschel, 70, of Van Nuys, pleaded guilty in May to one count of mail fraud after years of using the fraudulent documents to extort monthly payments and threaten homeowners with bogus litigation. The scam ultimately netted $17 million in profits, the U.S. Attorney’s Office for the Central District of California said in a news release.

Henschel — who used various aliases, including “Frank Winston,” “Steve Lopez” and “Ron Berman” — is scheduled to return to court for a restitution hearing on Dec. 2.

Henschel and his six co-conspirators usually targeted elderly people and those in financial distress, some of whom spoke limited English.

They would sometimes steal homes outright, using the fraudulent deeds with fake loans secured by their houses as collateral. At other times, they would bully victims into paying settlements in actual or threatened litigation, officials said.

The victims were left devastated, and some of them penniless, according to prosecutors.

“Many other victims had to face financial insecurity – even homelessness – in their old age as they struggled to pay for basic necessities such as food and clothing,” the news release states. “Several victims lost homes that their families had owned for generations.

Officials say one woman who taught developmentally disabled students spent decades paying down her mortgage before it was stolen from her in the scam.

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

Henschel was successful in part because he exploited his knowledge of the state court system — he went to law school but was never admitted to practice — to drag homeowners through stressful lawsuits, prosecutors said.

“Assault by legal paperwork, unscrupulous litigation tactics, and low-ball settlement demands were all part of the scheme, as victims often found it cheaper to pay defendant than to fight him,” the government wrote in its sentencing memorandum.

All six of Henschel’s alleged co-conspirators have pleaded guilty in the case and are expected to be sentenced later this year. 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

The co-conspirators made money by 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 phony court actions, according to prosecutors.

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