Pair allegedly duped banks into cashing out mortgages, indictment alleges, through home equity borrowings

Tricking banks into cashing out the mortgages of homeowners whose identities were apparently stolen – to the tune of $2.2 million – is the charge contained in a grand jury indictment handed down in California early this month.

In a release dated Aug. 1 but issued publicly Thursday, the Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General (OIG) said two Orange County, Calif., residents have been charged in the alleged fraud. They are Thao Thi Kim Nguyen, 47, of Garden Grove, and Nghiep Chinh Nguyen, 55, of Westminster. They were arraigned Aug. 1 in U.S. District Court in Santa Ana, Calif.

Both have pleaded not guilty to the accusations. The agency said the charges carry a statutory maximum sentence of 30 years in federal prison for each conspiracy and fraud charge and a mandatory sentence of two years in federal prison for each aggravated identity theft charge, the agency said.

According to the OIG, the pair allegedly obtained a type of mortgage that allows homeowners to convert home equity into cash by borrowing against the value of the property. The indictment, the OIG said, notes that during a four-month period in 2018, Thao Nguyen opened accounts in her name at two banks. The alleged purpose of these bank accounts was to collect the scheme’s ill-gotten gains.

“Thao Nguyen then would visit the bank, accompanied Nghiep Nguyen and other co-schemers. Nghiep Nguyen and other co-schemers posed as the victim homeowners – whose identities they allegedly had stolen – and forged the victims’ signatures to fraudulently obtain cash-out mortgages on the victim-owned properties, which otherwise were unencumbered,” the OIG said. It also stated that those whose identities were allegedly stolen were primarily elderly Vietnamese Americans.

“To pursue the fraud, Nghiep Nguyen allegedly used counterfeit California driver’s licenses and Social Security cards containing the victims’ names, and forged the victims’ signatures on documents, including bank and mortgage forms as well as grant deeds for the victims’ real estate properties. The victims’ names also were added to the Thao Nguyen-controlled bank accounts.

“Thao Nguyen allegedly used her accounts to receive wire transfers totaling more than $2 million in fraudulently obtained cash-out mortgage proceeds. She allegedly would transfer the fraudulently obtained mortgage proceeds to other bank accounts she controlled and would make cash withdrawals totaling approximately $1 million. The remaining funds were distributed to the co-schemers,” the OIG said.

The agency said the indictment alleges that the defendants fraudulently obtained approximately $2,182,753 through the scheme.

Orange County Woman and Man Charged with Running $2.2 Million Scheme that Tricked Banks into Cashing Out Victims’ Mortgages