SUBMITTED BY ELLIOT ENOKI, U.S. ATTORNEY’S OFFICE, U.S. DEPARTMENT OF JUSTICE
HONOLULU, HAWAII – JOHN GILBERT MENDOZA, age 58, appeared in federal district court yesterday morning and was sentenced to seventy-two (72) months confinement, five years of supervised release, and to pay a special assessment of $1,875.
MENDOZA was also ordered to pay restitution in the amount of $881,514.98 to three different victims. MENDOZA was originally indicted on May 15, 2008, for conspiracy, mail and wire fraud, and loan fraud. On July 1, 2009, a superseding indictment charged MENDOZA with additional counts involving money laundering and failure to file tax returns. On February 10, 2010, after two weeks of testimony, a jury convicted MENDOZA of all twenty-two felony counts.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to the evidence admitted during the trial, MENDOZA, as President of a Nevada “shell” corporation with bank accounts in Hawaii, befriended Hawaii homeowners who were facing foreclosure and told them that he had a plan for stopping the foreclosure proceedings and for allowing them to keep title to their homes. Contrary to what he told these homeowners, the evidence showed that MENDOZA organized the sale of the homes to third party straw buyers, or, buyers who never intended to reside in the property. To purchase the properties, the straw buyers
took out loans in their name. The loans contained false statements about how much income the buyers earned, about who was going to reside in the property, and about who was going to make the monthly payments. According to testimony from lending institution representatives, had they known the truth, the loans would not have funded. After the loans were funded, MENDOZA deposited the proceeds, which exceeded $431,000, into his own accounts. The loans went into default and the properties were both sold as part of foreclosure proceedings. MENDOZA’s conviction was for his role in five such fraudulent loan transactions related to two properties located on Oahu.
United States Attorney Nakakuni said that crimes involving mortgage fraud are serious offenses that undermine the integrity of our financial sector and severely threaten the health of our economy. Accordingly, the federal government is committed to the investigation and prosecution of these crimes, and to ensuring effective deterrence of future crimes of this sort.
The case resulted from a joint investigation by the Federal Bureau of Investigation and IRS – Criminal Investigation Division. The prosecution was handled by Assistant United States Attorney Clare Connors.