A California man will spend the next five-plus years in federal prison for presenting himself as a representative of the government and leading a scheme that sold what he fraudulently claimed were “TARP-owned” properties to individuals.
In reality, the properties sold by Xue Heu, 38, of Modesto, Calif., were not owned by the government, nor were the properties Heu’s to sell.
And instead of using the buyer’s funds for the supposed properties in question, Heu and his partners pocketed the money used it for personal expenses, according to Christy Romero, Special Inspector General for the Troubled Asset Relief Program and Benjamin Wagner, United States Attorney for the Eastern District of California.
According to Romero, Heu solicited investors through LinkedIn to invest in real estate businesses that purchased and sold real estate and guaranteed them a certain positive return on their investments.
Participating investors were instructed to transfer funds to bank accounts set up and controlled by others involved in the fraud scheme, and Heu created sham deeds and paperwork to give the appearance of transferring ownership of the properties to the investors, an authority that no one involved in the scheme actually possessed.
According to court documents, Heu claimed to be an officer of Liquid Assets & Land Investments Inc. and Capital Land Investments LLC.
To further persuade the investors that the investment opportunities were legitimate, Heu gave investors fraudulent documents, like forged and fictitious grant deeds, fraudulent HUD-1 settlement statements, and portfolio listings of properties he claimed he intended to purchase, including properties that had already been sold and were no longer available to purchase.
In his plea agreement, Heu admitted to defrauding investors of approximately $412,896.
But that wasn’t Heu’s only scheme.
According to SIGTARP, Heu and others executed a second scheme to defraud real estate investors.
Heu, using the alias “Michael Chan,” represented himself as a representative of TARP and an authorized seller of property that had been foreclosed on by the United States government.
Heu and a co-defendant reportedly persuaded investors to place funds into escrow accounts established by another co-defendant and then converted the money to their own use.
In his plea agreement, Heu admitted he was responsible for a loss to victims of $762,897 for this portion of the scheme.
For his crimes, Heu received a 63-month sentence in federal prison. Upon his release, Heu is also subject to three years of supervised release.