Many people who are on the brink of losing their homes to foreclosure are willing to do anything and trust anyone who offers them the tiniest bit of hope that there is a way out of their financial difficulties. Brothers David and John Zepeda took advantage of many in Southern California who were in this desperate situation, setting up a sophisticated criminal fraud ring that targeted Spanish-speaking families whose homes were on the verge of foreclosure.
The Zepedas and their associates told victims that they could save their homes from foreclosure and convinced them to sign contracts written in English only. Because these people could neither read nor speak English, they did not know that the documents they were signing were actually quitclaim deeds that transferred the titles of their homes over to the Zepedas. The families paid the Zepedas hefty fees up front, as well as monthly mortgage payments, under the assumption that the brothers were negotiating loan modifications with the banks. In reality, the Zepedas were pocketing the money, and in some cases even renting out the homes they had stolen. Several hundred families were victims of these crimes before the Zepedas were arrested in Fall 2012.
After being referred by Public Counsel, Kaye Scholer provided pro bono representation to three families who were wronged by the Zepedas, suing the brothers for damages as well as to reclaim the titles of our clients’ homes. The Zepedas defaulted in our civil suits. On June 21, 2013, we put on live testimony from each of our clients to prove that they were the rightful owners of their homes. The judge ruled in our favor and cancelled the fraudulent quitclaim deeds signed by our clients. In addition, the judge also granted our clients out-of-pocket damages, costs and prejudgment interest. Total judgment for all cases combined was $41,835.04. According to several California State officials, the vast majority of the Zepedas’ victims have not yet reclaimed the titles to their homes, making our clients among a very lucky minority who have done so.
The Kaye Scholer team who advised the three families consisted of Associates Oscar Ramallo, Robert Estrin and Daniel Paluch, as well as Legal Assistants Lisa Mammone and Judy Ehrlich. Partner Dan Grunfeld provided initial supervision, while Director of Administration Aurel van Iderstine assisted on the matter as translator.
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