Valley Residents Arrested in $17 Million Real Estate Scam

Five San Fernando Valley residents allegedly extorted more than $17 million from cash-strapped homeowners through a real estate scheme involving fraudulent deeds, according to federal authorities. Four of the defendants – Michael Henschel of Van Nuys, Camerino Islas of North Hollywood, Claudia Islas of Reseda and Juan Velasquez of Sylmar – were arrested on Friday and charged with multiple felonies, including conspiracy and mail fraud. The fifth defendant, Eugene Fulmer of Encino, is being sought by authorities, according to the U.S. Justice Department. Henschel was charged last summer with eight counts of bankruptcy fraud and allegedly continued to defraud homeowners while out on bond, prosecutors said. The defendants targeted distressed homeowners – many of them elderly – who were behind on their mortgages or were in some type of financial trouble, prosecutors claim. They allegedly had homeowners sign fraudulent grant or trust deeds giving Henschel’s entities a stake in the properties on the basis of loans that the homeowners had supposedly guaranteed. The documents were used to extort funds from the homeowners and, in some cases, steal the properties outright, the Justice Department alleged. If found guilty, the defendants would be sentenced to five years in prison for conspiracy and 30 years for each count of mail fraud. Henschel will face an additional five years in prison for each of the eight counts of bankruptcy fraud. Two other people – Shara Surabi of Burbank and Lidia Alvarez of Bell Gardens – previously pleaded guilty to federal charges related to this scheme. Investigation of the scam was performed by the FBI and the Federal Housing Finance Agency’s Office of Inspector General.