Two former Marin County mortgage brokers have been indicted in a $2.4 million loan fraud scheme, federal authorities announced Monday.
Paul Sloane Davis and Diane Cobb, who ran a company called DM Financial, were arrested in Las Vegas and released on bond. They are scheduled to make an initial appearance Nov. 26 in federal court in San Francisco.
Davis, 74, and Cobb, 56, are accused of lining up investors to fund short-term "bridge loans" for home buyers, authorities said. The defendants allegedly provided the investors with the names of the borrowers, as well as promissory notes and deeds that purported to secure the loans.
Authorities allege that the supposed borrowers received no money and were unaware their identities had been used to solicit loans. Davis and Cobb allegedly diverted the $2.4 million for personal use or to pay off earlier investors.
The alleged scheme was carried out from 2009 through December 2012.
The defendants were indicted by a federal jury on Oct. 31, and the government unsealed the indictments on Monday. Both defendants are charged with 15 counts of conspiracy, mail fraud and wire fraud, while Cobb faces an additional five counts of aggravated identity theft.
Each count of conspiracy, mail fraud and wire fraud carries a maximum penalty of 20 years in prison, while each aggravated identity theft charge carries a potential two-year term, prosecutors said. Davis and Cobb could also be ordered to pay restitution and hundreds of thousands of dollars in fines if convicted.
Neither Davis nor Cobb could be reached for comment Monday evening, nor could the lawyers who initially appeared with them in Las Vegas.
©2013 The Marin Independent Journal (Novato, Calif.)
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