Central District of California | Orange County Woman and Man Charged with Running $2.2 Million Scheme that Tricked Banks into Cashing Out Victims’ Mortgages

SANTA ANA, California – Two Orange County residents have been charged by a federal grand jury with fraudulently obtaining more than $2 million by stealing the identities of homeowners – primarily elderly Vietnamese Americans – and duping banks into “cashing out” mortgages on those properties, the Justice Department announced today.

Thao Thi Kim Nguyen, 47, of Garden Grove, and Nghiep Chinh Nguyen, 55, of Westminster, were arraigned Monday afternoon in United States District Court in Santa Ana.

Both defendants, who have been granted bond, are charged with one count of conspiracy to commit bank fraud and wire fraud. Thao Nguyen additionally is charged with seven counts of bank fraud and three counts of aggravated identity theft. Nghiep Nguyen is charged further with two counts of bank fraud and one count of aggravated identity theft.

At their arraignments, the defendants pleaded not guilty to the charges against them. A September 26 trial date was scheduled in this matter.

The schemers allegedly obtained a type of mortgage that allows homeowners to convert home equity into cash by borrowing against the value of the property.

According to an indictment returned on July 26, during a roughly four-month period in 2018, Thao Nguyen opened accounts in her name at two banks. The alleged purpose of these bank accounts was to collect the scheme’s ill-gotten gains.

Thao Nguyen then would visit the bank, accompanied Nghiep Nguyen and other co-schemers. Nghiep Nguyen and other co-schemers posed as the victim homeowners – whose identities they allegedly had stolen – and forged the victims’ signatures to fraudulently obtain cash-out mortgages on the victim-owned properties, which otherwise were unencumbered.

To pursue the fraud, Nghiep Nguyen allegedly used counterfeit California driver’s licenses and Social Security cards containing the victims’ names, and forged the victims’ signatures on documents, including bank and mortgage forms as well as grant deeds for the victims’ real estate properties. The victims’ names also were added to the Thao Nguyen-controlled bank accounts.

Thao Nguyen allegedly used her accounts to receive wire transfers totaling more than $2 million in fraudulently obtained cash-out mortgage proceeds. She allegedly would transfer the fraudulently obtained mortgage proceeds to other bank accounts she controlled and would make cash withdrawals totaling approximately $1 million. The remaining funds were distributed to the co-schemers.

In total, the defendants fraudulently obtained approximately $2,182,753 through the scheme, the indictment alleges.

For example, in July 2018, Thao Nguyen opened a bank account in her name. Later that month, Nghiep Nguyen and another co-schemer, accompanied by Thao Nguyen allegedly posed as two homeowners at the bank branch in Orange.

Two days later, Nghiep Nguyen allegedly forged the two victim homeowners’ signatures on a grant deed for properties in Garden Grove and Long Beach. Nghiep Nguyen and another co-schemer allegedly then used fake IDs in the victims’ names to add those names to Thao Nguyen’s bank account. While doing so Thao Nguyen told bank personnel that the victims were her parents, according to the indictment.

In August 2018, Thao Nguyen allegedly received a wire transfer of approximately $623,196 in fraudulent mortgage proceeds. She then transferred most of the ill-gotten funds to accounts she and another co-schemer controlled, according to the indictment.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

If convicted of all charges, the defendants would face a statutory maximum sentence of 30 years in federal prison for each conspiracy and fraud charge, and a mandatory sentence of two years in federal prison for each aggravated identity theft charge.

The FBI, the Federal Deposit Insurance Corporation Office of Inspector General, and IRS Criminal Investigation are investigating this matter. The Long Beach Police Department, the California Attorney General’s Office, and investigators with the Alameda County District Attorney’s Office provided assistance.

Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office and Special Assistant United States Attorney Gregory B. Wagner are prosecuting this case.