Lorenzo Espinoza, 43, also was ordered to pay the Department of Housing and Urban Development restitution of more than $614,000.
In sentencing him, United States District Judge Stephen V. Wilson said Espinoza demonstrated “extreme greed.”
Espinoza pleaded guilty in 2006 to conspiracy to defraud HUD, bankruptcy fraud, money laundering and failing to pay federal taxes. Prosecutors said he didn’t pay them for more than a decade and owed more than $5 million in taxes, interest and penalties.
Here’s how the U.S. Attorney’s office described the crimes:
- Espinoza and his associates fraudulently purchased nearly 100 residential properties.
- The properties were sold at inflated market values to straw buyers. Espinoza and his associates made the down payments and in some cases submitted bogus tax forms and paycheck stubs with the loan applications.
- When the straw buyers defaulted on the home loans and the lenders foreclosed, HUD reimbursed the lenders for their costs. HUD’s losses came to $2 million when it sold the homes for much less than the fraudulent purchase prices.
The news release stated:
“In addition to defrauding lenders and HUD, Espinoza committed bankruptcy fraud in 1999 when he filed for bankruptcy and failed to tell the United States Trustee that he owned a Rolex Daytona watch, two Ferraris and a Lamborghini. In late 2002, Espinoza laundered the proceeds of his bankruptcy fraud when he sold the Ferrari automobiles for $127,500.
“Espinoza also pleaded guilty to willfully failing to pay income tax, admitting that he did not pay $199,053 due for the 1996 tax year. In court papers filed in relation to the sentencing, prosecutors pointed out that Espinoza had not filed tax returns for well over 10 years and owes the Internal Revenue Service more than $5 million in taxes, interest and penalties.”