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Man Misused Bankruptcy Courts to Operate Foreclosure Rescue Scheme

A Long Beach man was sentenced today to four years in federal prison in relation to a mortgage rescue scheme that brought in nearly $3 million from fees from distressed homeowners.

Karl Robinson, 52, was sentenced today by United States District Judge Manuel L. Real, who also ordered the defendant to pay a $10,000 fine.

Robinson pleaded guilty in August to one count of bankruptcy fraud in connection with a five-year scheme he operated under his own name and companies with names such as “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation.”

Robinson solicited clients who were facing foreclosure with false promises that he could save their homes. Instead of providing legitimate services to his clients, Robinson filed hundreds of fraudulent bankruptcy petitions that delayed foreclosure and eviction proceedings.

As part of the scheme, Robinson filed falsified grant deeds with county recorders and other fake documents in state court eviction proceedings to make it appear that fictional debtors held interests in the distressed properties. In a plea agreement filed in federal court, Robinson admitted that he misused notary stamps of other individuals in order to fake signatures on legal documents and that he charged distressed homeowners additional fees if they wanted to unwind fake filings.