Man held in Southern California mortgage fraud case
A Los Angeles judge Friday ordered a 36-year-old British citizen who allegedly defrauded mortgage lenders out of millions of dollars held without bond.
Authorities said Matthew Paul Kay was arrested last month in the Pacific island nation of Samoa. Kay used to live on Los Angeles' Westside and in the Park La Brea district and “participated in a wide-ranging and sophisticated conspiracy from 2006 to 2007,” according to a news release from the office of U.S. Atty. André Birotte Jr.
Kay recruited “straw borrowers” to fraudulently obtain mortgages, authorities said. “Straw borrower” is a term generally used to describe someone whose personal and financial information is used to apply for mortgages and hide the identities of those running such a scheme.
Kay and other conspirators “falsely stated that the straw borrowers were wealthy individuals with high incomes and that they intended to live in the homes being purchased. In reality, none of the straw borrowers was wealthy, successful or intended to repay the loans,” according to the release.
“On the basis of these false statements, Kay and his co-schemers convinced the lenders to fund nearly $6 million in mortgages on five Southern California properties,” the release said.
Kay was arrested Aug. 20 in Samoa, where authorities said he had been living and working at a beach resort since leaving Los Angeles in 2010. He was returned to L.A. under escort by FBI special agents.
Kay has been charged with, among other things, 21 counts of wire fraud and two counts of aggravated identity theft, authorities said.
He pleaded not guilty during arraignment earlier this week. Trial is scheduled to begin Nov. 1.
-- Ari Bloomekatz