A federal judge on Thursday ordered an Escondido couple to serve nearly 3 1/2 years in prison each for masterminding a mortgage-fraud scheme that resulted in millions of dollars worth of bank losses along with scores of foreclosures.

In handing down the punishment to Charmagne and Eric Elegado, both 47, U.S. District Judge Anthony Battaglia directed them to surrender to the Bureau of Prisons on May 27, the date of a hearing during which the federal government intends to seek more than $10 million in restitution from them.

Eric Elegado in a 2011 marketing video for his real estate business.

Charmagne Elegado, a former account executive for New Century Mortgage, and her husband, once a prominent San Diego real estate agent, pleaded guilty to heading a conspiracy to obtain $50 million in home loans for unqualified buyers by falsifying job and salary information on applications.

They pocketed at least $40,000 a month in commissions from the illicit transactions and used the proceeds to fund a lavish lifestyle that included high-end homes, clothing, jewelry and cars—among them a Rolls Royce, a Bentley and a Hummer—while posing as respectable community leaders and philanthropists, according to prosecutors.

Beginning in about 2005 and continuing until February 2007, the couple worked with others to defraud lenders in order to obtain money and property by obtaining mortgage loans, primarily through New Century Mortgage, for unqualified buyers, according to the U.S. Attorney’s Office in San Diego.

The Elegados conceded that their co-defendants were paid fees of about $500 for allowing the finance and real estate companies they owned to be fraudulently listed on buyers’ loan documents. The co-conspirators falsified documents, such as W-2 forms, pay stubs and bank statements, for submission to mortgage lenders, including Charmagne Elegado.

The Elegados’ accused co-conspirators have also pleaded guilty to taking part in the crimes. Four of them— Theodore Cohen, 54, Roderick Huerto, 34, Roman Macabulos, 38, and Regidor Pacal, 51, all of San Diego— were scheduled to be sentenced Friday.

A judge is slated to hand down punishments to two other defendants in the case—San Diego residents Alexander V. Garcia, 38, and Ramin Lotfi, 36—on April 10.

— City News Service

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.