Martin Wayne Flanders, Mortgage Modification Scam, California 2015

Roseville Man Convicted in Mortgage Modification Scam

SACRAMENTO, California – Martin Wayne Flanders, a 51-year-old former Roseville resident, was sentenced to 6 years and 5 months in prison for his role in a mortgage modification scam that targeted Spanish-speaking homeowners, announced U.S. Attorney Benjamin B. Wagner.

In February 2015, Flanders and his wife, Ligia Sandoval Spafford (Sandoval), a 48-year-old Roseville resident, pleaded guilty to mail fraud for their participation in the scam.

According to court documents, between 2008 and 2010, Flanders charged upfront fees to his clients for a number of financial services including mortgage modifications, mortgage refinance reviews, credit recovery, debt relief, bankruptcy petitions, and a program to sell homes to ‘investors’ who rented them with the option to buy. Flanders and Sandoval marketed these services to homeowners in financial distress, particularly targeting Spanish-speaking individuals. During a weekly radio show on Radio Luz, a Christian Spanish-language radio station in the Bay Area, Sandoval promoted the services offered by Flanders and herself. Flanders also advertised on Univision, a Spanish-language television channel, and Spanish-language magazines. Nearly 98% of Flanders’ clients were of Hispanic descent, with some speaking little to no English. Sandoval speaks Spanish, but Flanders does not.

Flanders and Sandoval gave false testimonies to investors about the success of the plans offered or, in some cases, the refunds available if the plans failed to materialize. In an attempt to delay the foreclosure process, Flanders and Sandoval used fake offers to buy the homes of the victims at reduced prices, a process known as ‘short sale,’ as well as fake bankruptcy petitions that were quickly dismissed by the bankruptcy court, known as ‘skeleton bankruptcies.’ At least 25 to 30 individuals paid for services they never received or did not receive refunds when the plans failed to deliver. The total losses for the victims were at least $125,000.

“By targeting individuals in financial distress and with limited English proficiency, Flanders sought to enrich himself at the expense of those who could least afford it,” U.S. Attorney Wagner said. “We are grateful for the sentence imposed by the court, and we will continue to focus our efforts on prosecuting predatory and fraudulent schemes.”

This case is a product of an investigation by the Federal Bureau of Investigation (FBI). Assistant U.S. Attorneys Todd A. Pickles and Shelley Weger are prosecuting the case.

Flanders has been in custody since his arrest in October 2012. Sandoval is currently free on bail. Sandoval is scheduled to be sentenced by Judge Troy L. Nunley on March 3, 2016. She faces a maximum sentence of 20 years in prison and a fine of $250,000. The court, however, reserves the right to determine the sentence, taking into account applicable factors under the law and Federal Sentencing Guidelines.

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