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Roseville woman goes to prison for mortgage fraud

Wife sentenced to 2 years, 3 months for participation in husband’s scheme
By: Andrew Westrope,
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Five months after her husband was sentenced to prison for his involvement in a home finance scheme that targeted Hispanic communities, Roseville resident Ligia Sandoval Spafford (Sandoval) was sentenced April 7 to two years and three months in prison for her role.

According to the office of U.S. Attorney Benjamin Wagner of the Eastern District of California, Sandoval, 48, and her then-husband Martin Flanders of Roseville pleaded guilty to mail fraud in February 2015. Flanders was sentenced in October to six years and five months in prison.

Working under the auspices of European Debt Resolution, Inc., Sandoval and Flanders marketed their services from 2008-2010 mostly to Spanish-speaking and economically distressed homeowners, charging fees in advance for various financial services like loan modifications, mortgage loan audits, credit repair, debt relief and bankruptcy filings, which they did not perform. An investigation found that they filed fraudulent paperwork and didn’t offer refunds when investment programs failed to deliver what they promised.

Lauren Horwood, a spokeswoman for Wagner’s office, said in some cases the couple would offer to help struggling families get out of debt by selling their homes to “investors” who would in turn offer the families a rent-to-own plan.

“People couldn’t make their payments. (Flanders) would say, ‘Sign it over to me, I’ll find someone that will buy it from you, and then rent it back to you until you get on your feet and you can take it back,’” she said. “But he didn’t do that.”

In other cases, investors actually bought the distressed homeowners’ homes, but not with an agreement to sell the homes back as Flanders promised.

Wagner’s office said the couple explicitly targeted people for whom language barriers might be an issue: Sandoval, a licensed real estate agent who speaks Spanish, promoted these fraudulent services on a biweekly radio program on Lulz, a Spanish-language Christian station in the Bay Area. Flanders, a UK native who does not speak Spanish, advertised on the Spanish TV station Univision and in various Spanish-language magazines. The news release said that roughly 98 percent of the clients who paid for the couple’s services were of Hispanic descent, and some of them spoke little to no English.

A statement from Wagner’s office added that Flanders and Sandoval made “numerous false statements to investors” about the success of their programs, and about refunds that would be available if the programs failed. To stall home foreclosures, the couple made “ghost offers,” or fictitious offers to purchase the victim’s property through short sale, and “skeleton bankruptcies,” or fake bankruptcy petitions which the bankruptcy court quickly dismissed.

The news release said at least 25-30 people paid for services they never received, or did not get refunds when Flanders and Sandoval’s programs failed to deliver as promised. The victims lost at least $115,000 in total, and lenders foreclosed upon some of those homeowners.

Sandoval has paid $115,065 in restitution, the full amount ordered by the court, to compensate the victims for the losses that they incurred as a result from this fraud scheme. But in sentencing Sandoval last week, U.S. District Judge Troy Nunley said the payment was not atonement for the illegal deception.

“(The victims) trusted her … She ruined some peoples’ lives,” he said. “That she paid restitution does not do anything ..."